Can an em­ployee be laid off with­out con­sent?

Jamaica Gleaner - - OPINION & COMMENTARY - Patrick W. Foster CON­TRIB­U­TOR Carla-Anne Har­ris-Roper CON­TRIB­U­TOR Patrick W. Foster, QC, is an at­tor­neyat-law and a part­ner at the law firm Nunes, Sc­hole­field, DeLeon & Co. Car­laAnne Har­ris-Roper is an at­tor­ney-at-law and prin­ci­pal of Em­ploy­ment Mat­ters C

THE SO­CIAL and eco­nomic up­heavals brought on by the COVID-19 has also cre­ated a whole list of le­gal prob­lems in many spheres of eco­nomic ac­tiv­ity, but the im­pact has been acutely felt in em­ploy­ment re­la­tion­ships. Em­ploy­ers whose busi­nesses have been widely af­fected by re­duced de­mand for their goods and ser­vices, have had to cut ex­penses be­cause of the dras­tic re­duc­tion in rev­enue, and one crit­i­cal area has been at­tempts to re­duce the wage bill by lay­ing off work­ers.

How this is to be dealt with, is guided by the min­i­mum stan­dards laid out in the Em­ploy­ment (Ter­mi­na­tion and Re­dun­dancy Pay­ments) Act and, to a de­gree, the Labour Re­la­tions and In­dus­trial Re­la­tions Act and its at­ten­dant Labour Re­la­tions Code, if em­ploy­ees claim un­jus­ti­fi­able dis­missal. But what of lay-offs in the cur­rent dis­pen­sa­tion, and can you do it with­out be­ing met with a claim for un­jus­ti­fi­able dis­missal?

LAY-OFFS BY EM­PLOY­ERS

Sec­tion 5A of the Em­ploy­ment (Ter­mi­na­tion and Re­dun­dancy Pay­ments) Act (ETRPA) pro­vides the em­ployer with the right to lay off an em­ployee with­out pay, if it is done in ac­cor­dance with the terms of the con­tract of em­ploy­ment, or if the cir­cum­stances of his em­ploy­ment are changed so that for some pe­riod he re­ceives no pay, pend­ing the em­ployer’s de­ci­sion to re­in­state him on pre­vi­ous cir­cum­stances of em­ploy­ment, or one that is sim­i­lar. The em­ployee, how­ever, has the right to elect to be made re­dun­dant if he has been laid off in excess of 120 days.

Em­ploy­ers have posed many ques­tions as to their rights and that of the em­ploy­ees in this con­text of lay­ing off. Are they man­dated to con­sult with the em­ployee be­fore do­ing so, and should they get the em­ploy­ees’ agree­ment be­fore lay­ing off? While in an ideal sit­u­a­tion these steps would be de­sir­able in the in­ter­est of good labour re­la­tions, it is not nec­es­sary to con­sult with, or seek the agree­ment of, the em­ployee be­fore lay­ing him off.

If the em­ployee is laid off in ac­cor­dance with the terms of his con­tract of em­ploy­ment, the em­ployer is en­ti­tled to do so, and the act is very clear in this re­gard on the em­ployer’s rights. The em­ployer also has the right to lay off, un­der the act, if the cir­cum­stances of the em­ployee’s em­ploy­ment have changed. The changed cir­cum­stances may be var­ied and many, but there is no doubt that the cur­rent COVID-19 may very well con­sti­tute such changed cir­cum­stances as con­tem­plated by the Par­lia­ment when this pro­vi­sion in the act was en­acted in 1986.

Back then, there was great eco­nomic dis­lo­ca­tions which saw em­ploy­ees some­times be­ing placed on lay-off in­def­i­nitely, which was un­fair and un­con­scionable. The ob­jec­tive of the amend­ment was to en­sure that af­ter at least 120 days of be­ing laid off, the em­ployee could seek re­dress via be­ing treated as be­ing made re­dun­dant. The amended law did not cre­ate an obli­ga­tion for no­tice, agree­ment or con­sul­ta­tions in the lay-off process.

JOB PRESER­VA­TION

In fact, the leg­isla­tive in­tent was to al­low em­ploy­ers the abil­ity to sus­pend cer­tain re­quire­ments of the em­ploy­ment con­tract in the face of ad­verse cir­cum­stances, to en­cour­age job preser­va­tion, since work­ers re­main ‘on the books’ dur­ing the lay-off, al­beit with­out pay or, at the em­ployer’s op­tion, be­ing pro­vided with lim­ited pay and ben­e­fits. In­deed, the em­ployee can choose to re­main on lay-off even past the 120 days, if they be­lieve that in due course, the busi­ness will once again be­come vi­able and they will be re­called to their nor­mal or sim­i­lar du­ties.

To there­fore say that the Ja­maican Court of Ap­peal de­ci­sion in Branch Developmen­ts Lim­ited v Tay­lor (2016) is of general ap­pli­ca­tion to all gen­res of lay-off would be er­ro­neous. To be­gin with, the case sur­rounded the em­ployer’s de­ci­sion to utilise the lay-off pro­vi­sion to fa­cil­i­tate a dis­ci­plinary in­ves­ti­ga­tion. The court was clearly of the view that the wrong le­gal tool was used in the con­text of a dis­ci­plinary process. The court, there­fore, cor­rectly de­cided that this ap­proach was un­law­ful, as there was no con­trac­tual or statu­tory right to do so.

Em­ploy­ers should rest as­sured that lay­offs in the light of changed cir­cum­stances, such as COVID-19, would not amount to breach of the em­ploy­ment con­tract, if these mat­ters are cov­ered in the con­tract or the act.

DIS­CI­PLINARY PRO­CEED­INGS

In the Branch Devel­op­ment case, where the em­ployer pur­ported to lay off the em­ployee, it was not be­cause of changed cir­cum­stances, but it was to re­move the em­ployee from the work­place with­out pay, for the pur­pose of con­duct­ing dis­ci­plinary pro­ceed­ings. The Court of Ap­peal ruled that the com­pen­sa­tion due to Ms Tay­lor should not take ac­count of the pe­riod she re­mained un­em­ployed up to 120 days, since she was ef­fec­tively dis­missed at the date the un­law­ful lay-off was in­sti­tuted. A lay-off that is law­fully done sus­pends the con­tract of em­ploy­ment but does not bring the con­tract to an end, and in such a con­text, it al­lows the em­ployer to tem­po­rar­ily re­duce the work­force and the wage bill in a sit­u­a­tion where pro­duc­tion has dropped or op­er­a­tions have closed tem­po­rar­ily. These cir­cum­stances never ex­isted in the Branch Devel­op­ment case.

Ad­di­tion­ally, ac­cess to the In­dus­trial Dis­putes Tri­bunal (IDT) make any claim for mone­tary com­pen­sa­tion will not be pos­si­ble, un­less an em­ployee (unionised or not) can claim an in­dus­trial dis­pute un­der the Labour Re­la­tions and In­dus­trial Dis­putes Act? Since the em­ployee has not been dis­missed by lay-off, it could prove chal­leng­ing them to fit this pre­req­ui­site, given that con­struc­tive dis­missal is not in the ju­ris­dic­tion of the IDT.

WHAT NEXT?

In light of the fore­go­ing, and since even among lawyers there are con­tend­ing views, now is an op­por­tune time for the pol­i­cy­mak­ers and Par­lia­ment to ur­gently ad­dress this is­sue, by clar­i­fy­ing the statu­tory pro­vi­sions for the avoid­ance of doubt. Oth­er­wise, a de­fin­i­tive in­ter­pre­ta­tive pro­nounce­ment from the court could also be of as­sis­tance.

In the mean­time, it is sub­mit­ted that em­ploy­ers would not be out of line with the statute in lay­ing off em­ploy­ees, given the changed cir­cum­stances of em­ploy­ment oc­ca­sioned by COVID-19. This prac­tise could also be jus­ti­fied by set­tled cus­tom and prac­tice and op­er­a­tion of an im­plied con­trac­tual term in the Ja­maican em­ploy­ment and labour law en­vi­ron­ment. Em­ploy­ers are, how­ever, en­cour­aged to com­mu­ni­cate with their em­ploy­ees what is hap­pen­ing in the busi­ness, so that a shared ap­proach to deal­ing with this un­prece­dented cri­sis will enure to the ben­e­fit of all con­cerned.

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