EVERYDAY LAW: Fair reasons for dismissal
One of the provisions of the unfair dismissal section of the Employment Rights Act, 2012 (“the act”) that seems not to be fully understood by some employers is that relating to fixed term contracts.
Section 26 (1) (b) of the act reads: For the purposes of this part an employee is dismissed where:
“(b) he is employed under a contract for a fixed term and that term expires without being renewed under the same contract.”
Section 27(1) of the act provides that: “An employee has the right not to be unfairly dismissed by his employer.”
Section 29(1) deals with the question of fairness.
It reads: “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.”
Section 29(2) of that act lists the potentially fair reasons for dismissal. There are capability, conduct, redundancy and ineligibility. Along with “some other substantial reason of a kind such as to justify the dismissal”, these are the fair reasons for dismissal.
Despite the above provisions, some employers argue that the expiry of the contract is not a dismissal. Others argue that the expiration of the contract cannot amount to unfair dismissal since that was what was agreed by the parties.
On this view, if an employee was employed on a four-year contract and was permitted to work the full period of the contract, there can be no issue of unfair dismissal.
Before I consider the meaning of the provisions of the Barbados legislation, it is useful to consider what is provided in some other unfair dismissals regimes in the Caribbean.
For example, in Antigua and Barbuda, Section C57 of their Labour Code states: “For the purposes of this part an employee will not be deemed to have been dismissed unfairly if his employment is terminated at the expiration of the term specified at the time of his hire.”
In St Vincent and the Grenadines, Section 6(1) of the Protection Of Employment Act provides:
“The services of an employee who has been specifically employed for a fixed period may, notwithstanding anything contained in this act, be terminated on the expiration of the term so stipulated.”
Provisions similar to those referred to above can be found in some of the other Caribbean jurisdictions which have enacted unfair dismissals legislation.
Since in Barbados the non-renewal of a fixed term contract is a dismissal, an employee employed under such a contract has the same rights to unfair dismissal protection as permanent employees, provided the qualification period of one year’s continuous employment has been met.
For the non-renewal of the contract to be fair, it must be for one of the potentially fair reasons for dismissals mentioned above.
I should point out that fixed term contracts are not all the same. Sometimes an employee is employed for a particular task. His employment to that extent would be temporary and would end when that task is completed and his “dismissal” would be “for some other substantial reason”.
On the other hand, if you choose, for example to employ your accountant on a three-year contract, and then you decide not to renew his contract, then you must establish a fair reason for its non-renewal.