Masters: Knowing Your Employment Rights

May 12, 2011

[Written by attorney Kyle Masters, an associate at Trott & Duncan]

It is important to note that the answers contained in this article are not intended to be relied upon as professional legal advice. If you have an issue that requires legal advice, it is not wise to use the contents of this article as a substitute for a good, old fashioned one-on-one with the attorney of your choice. Visit the Bermuda Bar Association website for a listing of its members.

Here are a few questions received from Bernews readers about employment. I will do my best to answer them:

Q: My employer has asked me and others at my workplace to sign a new employment contract. One of the terms of the new contract is a reduction in pay. Do I have to sign the new contract and take less pay?

A: The short answer is no.

You do not have to agree to do anything you do not want to agree to. The basis of any employment relationship is the law of contract. Either party is within his or her rights to require the other party to uphold their end of the bargain.

The law of contract also allows for parties to agree to anything (subject to the minimum requirements under the Employment Act 2000 where applicable). This would include the possibility of agreeing to a new employment contract.

However, there must be an agreement on both sides. An employer cannot legally force an employee to agree to a pay cut or any other changes in his or her Employment Contract without consent. If you are terminated as a result of not agreeing to the new terms, seek legal advice immediately.

Q: My employer says that if we do not take a pay cut and sign up to the new conditions of employment the business may not survive and some of us could lose our jobs. If I don’t agree to the new contract can my job really discontinue my employment?

A: This question appears to be dealing with the concept of something called redundancy.

For employees whose contracts are governed by the Employment Act 2000 (‘the Employment Act’), the redundancy is regulated by section 30 of the Employment Act.

One of the conditions, or triggers, of redundancy is that the economic conditions have affected the employer’s business in such a way that it is not possible to continue with the effective running of the business without shedding employee(s). It is arguable that this would be the condition that your employer is relying on in this instance.

It is important that your employer informs you clearly, and in terms that you can understand, of the exact basis under section 30 of the Employment Act they rely on which they say makes your redundancy necessary.

Bermuda’s law on the issue of redundancy since the implementation of the Employment Act is scant. There is no clear cut answer about what steps an employer is obligated to take before a redundancy is legal.

What is clear is that there must be a legitimate basis for redundancy in order for it to be lawful. What counts as a legitimate basis, as far as I can tell, has not been fully developed by the law. There is very little Bermudian legal authority on what makes a redundancy illegal. There are requirements under the Employment Act for a lawful redundancy, but a lot of those have not been tested by the cCourts.

You may want to ask for more information about the economic condition your employer finds its self in.

In fact, I would argue that, in accordance with section 30 of the Employment Act, you are also entitled to be informed by your employer of the factors leading up to and contributing to the decision to make you redundant before the redundancy can lawfully take effect.

These factors include; the reasons the redundancies are being considered, what steps your employer has taken to prevent or minimise redundancies at your work, and what other classes of employees at your work have the potential to be affected by the redundancies.

Because the issue of redundancy, by its nature, is normally specific to the employer who is attempting to affect it, I am not able to say if your employer would be acting lawfully in terminating your employment in the circumstances you have described in your question without more details.

If you are not willing to sign the new employment contract and are not willing to accept a redundancy package, my advice is to see a lawyer as soon as possible.

Q: A reader asks in reference to my last article on summary dismissal; why does the Employment Act 2000 disregard casual and part-time employees?

A: In my article on summary dismissal I wrote: “The terms and conditions of employment provided in the Employment Act [2000] do not apply to every employee. Casual and part time employees (terms which are defined by the Employment Act), for example, are not afforded the same protection under the Employment Act as full time employees.”

This reader questions why there seems to be no protection under the Employment Act 2000 (‘the Employment Act’) for certain classes of employees.

First, I think it is important to define the terms “part-time employee” and “causal employee”. These terms are defined in section 3 of the Employment Act.

A part- time employee is a person who is employed by an employer for less than 15 hours per week. If you work at the same job for more than 15 hours per week, your contract of employment should meet the minimum standard set out in the Employment Act.

A casual worker is a person who works from time to time for pay. This person could work for more than one employer at the same time and does not seek the rights and obligations of a contract of employment. In common parlance, a causal worker is also known as a person who “does hustles”.

I have been told of instances where an employee works for an employer for 35 or 40 hours per week but is still defined as “part-time” by their employment contract. It seems to me that this is incorrect. That employee, according to the Employment Act is not a part-time employee at all.

If the benefits contained in this employee’s contract are equal to or better than the terms of the Employment Act then the difference is more apparent than real. However, as is sometimes the case, if the benefits are not at least as good those required by the Employment Act, there is reason for concern.

As to the reasons why the Employment Act 2000 does not provide protection to part-time and casual employees; this is really an answer that could (and in my view should) be provided by Parliament. As is usually the case, the application of an Act of Parliament is based on a policy decision taken by the legislature at the time of its passing.

There could be a host of reasons why a decision was made to exclude certain classes of employees from the Employment Act 2000. I do not care to guess at any of them.

If you are unsure about whether your employment is protected by the Employment Act or not, ask your employer. If you would rather not do that, you may want to speak with the people at the Department of Labour and Training on a confidential basis.

Q: Being not covered by the Employment Act 2000, what recourse does a casual/part-time employee have if things go wrong.

A: If you find out that your terms of employment are not regulated by the Employment Act 2000 (‘the Employment Act’), the fallback position for enforcement is the law of contract.

The law of contract normally applies whenever there is an agreement between two parties which includes the passing of a benefit and a detriment between them.

In the employment context, the employer agrees to pay an employee in exchange for the employee’s application of his or her time and expertise to the employer’s business. The law will find terms of an agreement between you and your employer even if the agreement is not in writing and some of those terms are not explicitly agreed between you.

Generally, the terms of your employment will govern the conditions of payment (i.e. how much and when) and the conditions of your work (i.e. work hours and description of work and who you are to report to). If there is a breach of any of those terms, the party who is not accused of committing the breach can sue the other for damages.

The difference between an employment contract governed by the Employment Act and one which is not is that there will be no recourse to the Employment Act for minimal protection; it will be limited to the protection provided by the common law only.

I should warn you however, that the best way to protect yourself as an employee who is not protected by the Employment Act is to agree to a written employment contract before beginning work. You don’t always need to consult an attorney for that. However, as a rule of thumb, the more valuable the contract is to you, the more precise the agreement should be. I cannot recall a time when good professional advice has been a detriment to a client.

If you have any other questions about employment law or law in general for Mr. Masters, please send them to info@bernews.com.

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  1. *** says:

    Is it right that a human resource manager can blame on employee on why another employee got fired; to call the ex-employee and tell them to blame the other employee on why the ex-employee got fired? Can the HR manager give a warning that the employee may be fired due to getting the other person fired?