Layoffs subject to new Rights Act
The recent announcement that 3 000 public sector jobs will be cut requires that I devote a final article to the topic of redundancy.
Arguably, with the enactment of the Employment Rights Act 2012, Barbados’ labour law offers the greatest protection in the Caribbean region to employees who are terminated by their employers.
The act even extends protection to employees on fixed term contracts, since an expiry of such a contract constitutes a dismissal and consequently is subject to the overriding obligation of substantive and procedural fairness that underpins the legislation.
Even though redundancy is a fair reason for dismissal, who is made redundant and how it is done will have to pass the test of reasonableness. Redundancies should also be effected in accordance with the specific provisions of the statute.
In this regard, the Barbados provisions are a bit different from those in most countries that have instituted legislation with respect to unfair dismissal.
For the purposes of this article I reproduce parts of the main sections that will impact on redundancy. These sections are S29(1), 29(2)(c) and 31(1) to (6).
“29(1) In determining for the purposes of this part whether the dismissal of an employee is fair or unfair, it is for the employer to show:
(a) the reason, or, if more than one, the principal reason, for the dismissal; and
(b) that it is either a reason falling within subsection (2) or some other substantial reason of a kind such as to justify the dismissal of an employee holding the position which the employee held.
29(2) An employer shall have the right to dismiss an employee for a reason which falls within the subsection if it
(c) is that the employee was redundant, but subject to Section 31.
31(1) A dismissal of an employee does not contravene the right conferred on him by Section 27 where
(a) the reason for his dismissal is that he was redundant; and
(b) the requirements of subsections (4), (5) and (6) were complied with in relation to his dismissal for redundancy.”
Sections 31(4), (5) and (6) require the employer to carry out consultations with the affected employees or their representatives not later than six weeks before any of the affected employees are dismissed.
The act sets out the specific areas that the consultations must cover and focuses on the method of selecting the employees, the proposed method of carrying out the dismissals and any measures that the employer might be able to take to find alternative employment.
Consultations are mandatory where it is contemplated that the workforce of the business will be “reduced by ten per cent or any other significant number . . . .”
In Section 2 of the act, “business” is defined to include “any trade or profession and any activity carried on by a body of person, whether corporate or incorporated”.
Since the act applies to employees of statutory corporations, where ten per cent of the employees of a corporation or any other significant number are terminated, the statutory requirements for consultation must be followed, otherwise the dismissals will be unfair.
An issue that may arise for determination is the meaning of “any significant number”. This will be for the Employment Rights Tribunal to determine.
On the face of it, an obvious unequivocal meaning of “any significant number” does not come to mind. Unless this is clarified by amendment, it seems like the type of provision that may engage the attention of the Court of Appeal sooner rather than later.
There are a number of English cases that have considered the issue of what is required to satisfy the statutory requirements of redundancy. However, because the wording of the statutory provisions in England is different from ours, applying those precedents to our legislation will take some legal skill.
It is for this reason that I will refrain from citing those authorities lest they be taken out of context by affected employees or others in search of a remedy for their difficulties.
Finally, I must emphasise it is important that the Employment Rights Tribunal be functioning as soon as possible after the commencement of the new year. In the current economic environment, it will have a lot of work to do!
Cecil McCarthy is a Queen’s Counsel. Send your letters to Everyday Law, Nation House, Fontabelle, St Michael. Send your email to [email protected]