Court ruling in Nht/marksman case causing jitters in private security sector
PRESIDENT of the Jamaica Society for Industrial Security (JSIS), Lieutenant Commander George Overton has warned that the recent decision by the court in the case involving Marksman Limited and the National Housing Trust over statutory deductions is going to change the relations between companies and their security officers significantly and could lead to significant job loss.
In its judgment, which was handed down on Friday September 23, the court ruled that effective then, third-party security guards employed by Marksman Security Limited are employees and not independent contractors, and that the company should immediately begin paying over their three per cent National Housing Trust statutory contributions.
During a media briefing last Friday, officials of JSIS — which represents 28 security companies in the local private security sector — said the consequences of the ruling are far-reaching in the private security industry.
“A number of our clients have spoken to me and said, ‘We have a budget for the rest of this year, and I have an expense directed by the court that I can’t vary.’ So, you are going to have to either find a way to increase your budget or how you are going to cut the service to match your budget — and that’s the unfortunate part because at the end of that is loss of revenue but also potential loss of jobs. There is a strong possibility of that,” Overton told the Jamaica Observer.
According to the JSIS president, as much as the entity is grateful that security officers will be receiving some of the benefits that it has talked about and has wanted to give over time, the financial fallout will be great.
He said the JSIS cautioned the Government before the court ruling that there would be unintended casualties.
According to Overton, “there are many industries and organisations today that are having to review their contractual arrangements to ensure that it is not conflicting with the ruling in any way. Even some of the Government’s own contracts will have to be reviewed”.
“The Government is the largest consumer of private security services across the island and it is going to have a severe impact on them; it is going to have severe impact on the purchasers of private security services,” added Overton.
The JSIS president said while it has no quarrel with the court’s ruling, the immediacy has thrown the sector into turmoil.
JSIS is further warning that failure by the Government to intervene, albeit after the fact, will result in an increase in unregulated operators and a reduction in security services due to the inability of some of its clients to contract the critical service.
Furthermore, it said the ongoing viability of the sector would be at risk without this intervention.
In the meantime JSIS Director Major Richard Reese, addressing journalists, said for more than 35 years Marksman Limited and other private security companies — with the full knowledge of the Government of Jamaica — have treated the security officers that they have engaged as independent contractors, or self-employed individuals.
While pointing out that prior to the trial the JSIS had submitted several proposals to the Government regarding the restructuring of the private security industry, Resse argued that the Government did not see it fit to engage the industry about resolutions before the trial resulting in this situation.
According to Reese, since the court’s decision JSIS officials again met with Government representatives to inform them of the significant and immediate financial impact of the ruling that will result in a 50 per cent increase in the cost to private security providers, which will have to be passed on to clients.
“The industry recognises that the most efficient model is a 12-hour shift, and given logistical and other challenges it would not be in the security officer’s interest to be rostered for 40 hours per week,” said Reese.
He added that the JSIS, in an attempt to avert disruption in the sector, made several proposals, some of which are not new, to include a moratorium on all employee statutory contributions pending the finalisation of an equitable framework for all stakeholders.
The JSIS has called for the immediate enactment of legislation to change the workweek from 40 to 60 hours by way of an amendment to the Minimum Wage Act, and for consideration of its proposal to establish a category known as dependent contractor which provides for a hybrid arrangement that includes specific benefits.
It also called for the enactment of legislation to provide a single regulatory body for the private security industry. Currently, four ministries and eight associated agencies administer aspects related to a regulatory function of the private security industry.