Snelling & Horseman On Employment Rights

March 28, 2020

[Written by lawyers Juliana Snelling and Richard Horseman]

Whilst Mr. Sanderson’s Bernews article no doubt is well-intentioned to provide free legal advice to the public, we take issue with some of the advice contained in his article with which we do not agree and therefore alert the public of our legal views:

We take issues with the following statements:

  1. Employers enjoy the profits from employees’ labour during the good times and have a duty to continue to pay employees during the bad times

Not agreed. Employees also benefit from full pay and excellent benefits during the good times as well as bonuses, summer parties and other fringe benefits.  The right to layoff exists in the bad times so that employers can keep their employees employed [and not have to terminate them by making them redundant].

  1. An employee cannot be laid off unless it is clearly set out in the employment contract.

Strongly disagree. Section 32 of the Employment Act 2000 gives employers the right to lay off employees in accordance with the Act’s requirements [up to 4 months, if the layoff exceeds 4 months it becomes a termination by reason of redundancy].  Note that notice is not required although a good employer will give their employees some notice as a courtesy.

Union collective agreements, if they apply, will usually compel the employer to consult with the Union before layoffs.

  1. If an employment contract does not provide for laying off, an employer will have to give immediate notice of termination and severance pay in order to end their obligation to pay the employee and avoid a constructive dismissal situation.

Strongly disagree.  See Answer to 2.  We do not agree that the right to lay off must be in the contract – contracts rarely if ever provide for the right to layoff – the Employment Act governs and gives the employer the right to lay off which protects the employee’s employment status and helps them in hard times to maintain employment and benefits.  If they are terminated, then their benefits terminate [subject to what is said below].

  1. Similarly, health insurance will continue for four weeks following the end date of the employment contract.

It is correct that after an employment contract terminates, as a matter of law, health insurance will extend at the employer’s cost but only at the lowest level of statutory hospital insurance benefit cover.  It is not correct that the same level of benefits [eg. major medical or HIP] must be extended 4 weeks after termination.

  1. If an employer gives payment in lieu of notice, they will normally still have to maintain health insurance and other benefits for the period of the notice and for 28 days thereafter.

Not agreed for 28 days thereafter – the obligation is limited as per Answer 4 – only the lowest level of statutory health cover extends as a matter of law for 28 days [at the employer’s cost] and is automatic.

  1. If the employee is ready and willing to work but is unable to do so due to circumstances beyond their control, it seems likely that the employer would still be obliged to pay them …

Not agreed.  If an employee has to stay at home [eg. forced Government Order] and there is no work that they can sensibly do from home for the employer because of the nature of the work that they do, then the employer may exercise its right to lay them off without pay.

This is no substitute for legal advice and employees should consult with attorneys in light of their own contractual provisions as set out in their contracts, Statements of Employment, Employee Handbooks, etc.

Finally, the Government is asked to immediately clarify the $500 financial assistance benefit – is this only for employees whose employees have been ordered by Government to shut [eg. gym staff] or for all employees who fall within the definition of “employee” under the Employment Act who have been laid off by their employers because there is no work for them to do?

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Officials are urging everyone to please follow all guidance like washing your hands, adhering to self quarantine if relevant, and practicing social distancing, and they have asked that if it is not urgent, a necessity or work, to please stay home to prevent the spread of the coronavirus.

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