UNIVERSITY OF THE WES T INDIES

FACULTY OF LAW

LAW 3020 - EMPLOYMENT LAW

Worksheet No. 6

ECONOMIC DISMISSAL- REDUNDANCY, RETRENCHMENT

AIMS:
This topic seeks to develop in you
 an understanding of the various forms of dismissal
 an understanding of the different ways in which a dismissal can occur
 an appreciation of the legal implication that are likely to flow form any form of dismissal
 an appreciation of the reasons for dismissals and the consequences which are likely to
follow
 a recognition of the different legislations that are in place to cushion the worker in the
event of his or her dismissal

OBJECTIVES:
At the end of this topic you will be able to
 clearly distinguish the different forms of dismissal
 critically assess the influence of legislations in this area of the law

INTRODUCTION
The termination or severance of one’s contract of employment is potentially the most devastating
event in the life of a worker and certainly the subject of voluminous litigation. There are several
ways in which this can occur. A worker may terminate the contract the contract at her own
initiative, through resignation or retirement, or even death! The consequences of such events will
usually be the subject of the collective agreement or national legislation such as on pension
payments, gratuity, NIS etc. Much more contentious is termination of the contract at the initiative
of the employer. An employer may do so for ‘economic reasons’, which have to do with the
functioning or non-functioning of the enterprise, and which necessitates a reduction in the
workforce for reasons of cost etc. Such an event will often affect more than one worker. We call
this redundancy or retrenchment. Where the termination for economic reasons is of a temporary
nature, we label this ‘lay off’. Where the termination is for reasons which have to do with the
conduct of the worker, we term this ‘dismissal’ at the initiative of the employer. Dismissals may
affect one worker or a group of workers but will be individualistic in focus. We look at the two
types of termination separately, although there is some overlap when attempting to define
dismissal.

In the region, most jurisdictions have enacted legislation which seeks to cushion workers from
the harsh effects of redundancy by granting an entitlement to a redundancy ‘payment’.
LEGISLATION
Jamaica Employment (termination and Redundancy Payments) Act 1974
The Bahamas Employment Act 2001
Guyana Termination of Employment and Severance Pay Act 1997
T &T Retrenchment and Severance Payments Act 1985
St Lucia Contracts of Service Act 1975
Dominica Protection of Employment Act
Barbados Severance Payments Act 1973
Antigua & Barbuda Labour Code 1975 (Rev 1992) Part C

CASES
MEANING AND SCOPE OF REDUNDANCY AND RETRENCHMENT

Moon v. Homeworthy Furniture (Northern) Ltd. [1977] ICR 117, 121

Smith et al v. C’bean Hotel Mgment Services Ltd AG 1999 IC 1
NUGFW v. Universal Projects T&T In Ct No 265 of 2003

Redundancy a ‘Fair’ Termination

Jamaica Flour Mills Limited v. IDT and Nat’l Workers Union (Intervenor) PC
Privy Council Appeal No. 69 of 2003

Whether Redundancy Genuine

Nat’l Mtce Training and Security Co Ltd. v. TIWU TT 1995 IC 120
Transport & Ind Workers Union Bata TT 1994 IC 16
Cove Hotels (Antigua) Ltd. v. Walling AG 1995 CA 14

Place of Work, Particular Kind of Work, Cessation, Reorganization etc.

High Table v. Horst [1997] IRLR 513

Baxter v. Limb Group of Companies [1994] IRLR 572
Sundry Workers v. Agua Port Authority AG 2003 CA 2
Private Power Operators Ltd. v. Nat’l Workers Union JM 2003 IDT 2
Haye v. Fiscal Services EDP, JM 2001 (fixed contract)
US Navy Facility v. Lewis (1983) 31 WIR 191 (cessation)
A’gua Workers Union v. Joseph Dew Div of Dantzler WI AG 1993 CA 5. (Proof of cessation-CF
the cases under Lay off)

Diminshed Requirements-Method of Working

(Read this together with the contracting out section & ‘particular kind of work cases)
The courts have been willing to give some leeway to employers who wish to introduce
technological changes or other cost cutting measures in the interest of efficiency, even if they
change terms and conditions of work.

Chapman v. Goonvean and Rastowrack China Clay Co. Ltd. [1973] ICR 310
North Riding Garages Ltd. v. Butterwick [1967] 2 QB 56
MacFisheries Ltd. v. Findlay [1985] ICR 160
Nelson v. BBC [1977] ICR 649 (contractual test)
Murray v. Foyle Meats Ltd. [1999] IRLR 56 (HL)

Surplus Work-Contracting out

Church v. West Lancashire NHS Trust [1998] IRLR 4, 9
OWRU v. Schulberger Idad TT 1995 IC 109
OWTU v. Ramtally Brothers TT 1991 IC 28
Smith, supra
Murray v. Foyle, supra
Seamen & Waterfront Workers TU v. Port Authority of T&T TT 1994 IC 43

Distinction with Gratuity, Retirement Benefits etc.

Scholar v. Hess Oil St Lucia Ltd. LC 1987 HC 3
Nat’l Union of Gov’t and Fed Workers Union v. Y Delima & Co. Ltd. TT 1993 IC 21
Rudder v. Int’l Aeradion (C’bean) Ltd. TT 1989 CA 16

OFFER OF SUITABLE ALTERNATIVE EMPLOYMENT

Where the employer offers alternative employment which is ‘suitable’ or substantially the same,
he may escape his redundancy obligations. The employee may not unreasonably reject such an
offer.

Taylor v. Kent CC [1969] 2 QB 560

Managers & Supervisor v. T&T Insurance Co. TT 1994 IC 53
Johnrose v. Dominica BC KM 1998 HC 18
Cambridge & DCS Ltd. v. Ruse [1993] IRLR 156
Assoc of Technical, Admin and Supervisory Staff v. Caroni TT 1995 IC 64
Abbot v. Liat AG 1995 CA 4
Alleyne, Arthur and Hunte Ltd. Griffith (1992) 42 WIR 53
Comm. Transport and Gen Workers Union v. T&T BWIA TT 1996 IC 69
Darlington v. Burley et al BB 2000 CA 35

LAY OFF
Under the common law, lay off is an exception to redundancy. This may be retained by
statute

Clifton v. Edhill Assoc BB 1990 HC 14

ATS & GTU v. Carib Int’l Co. TT 1996 IC 8
Western Cement Co. Ltd. v. Bustamante ITU JM 2003 IDT 8 (Lay off for more than 120 days)
OR Economy Hotels Ltd. v. Harding JM 1997 CA 16

CHANGE OF OWNERSHIP-TRANSFERS OF BUSINESS

Noakes v. Doncaster Amalg Collieries Ltd. [1940] AC 1014, 1019 (Common law position)
Lister v. Forth Dry Dock & Eng Co. Ltd. [1989] IRLR 161, 169
Downie v. Hill’s Supermarket (Oistins) Ltd. (1978) 30 WIR 69 (HC, Barbados)
Berriman v. Delabole Slate Ltd. [1985] ICR 5461
Kowla et al v. Versailles & School GY 1992 CA 3
Silver Sands Resorts Ltd. v. Ryan BB 1980 HC 2 (work in the same capacity)

INSOLVENCIES AND WINDING UP

Insolvencies also introduce the question of employees as creditors
Wilson v. St. Helens BC [1998] IRLR 706

See the special line of cases from Trinidad &Tobago per the Privy Council
Commercial Finance Co. Ltd. v. Ramsingh-Mahabir TT 1994 PC 2
Khan v. Summit Finance Corp. of T&T TT 1994 IC 80

New Collective Agreement

OWTU v. Geddes Grant Ltd. TT 1993 IC 33

RELATIONSHIP BETWEEN UNFAIR/WRONGFUL DISMISSAL AND REDUNDANCY

OR SEVERANCE
Evans v. Elemta Hlgs Ltd. [1982] ICR 715 CF

See the controversial line of cases in Barbados

Barbados Plastics v. Taylor (1981) 16 Barb LR 79, discussed in Clarke below
Grosvenor v. The Advocate Co. Ltd. (Civ App No 29 of 1991)
Clarke v. AM Life Insurance Co. BB 2002 CA 21
Fuller v. Revere J’ca Alumina Ltd. (1980) 31 WIR 304
Ambo et al v. WI Aggregates KM 2004 HC 15

NOTICE AND OTHER PROCEDURES FOR REDUNDANCY

OWTU v. Readymix TT 1993 IC 32. Procedure under the collective agreement. Failure to meet
and treat
Nat’l Mtce Training & Sec Ltd. v. TIWU TT 1995 IC 120
TIWU v. PTSC TT 1991 IC 45
Simon v. Charter and Simon v.Pierre et al GD 2001 HC 6
Clarke v. AM Life Insurance Co. BB 2002 CA 21
Agard v. C’bean data Services Ltd. BB 2003 CA 15
Correia’s Jewelry Store v. Forde BB 1992 CA 49; (1992) 46 WIR 57

CONSULTATION
Re NA Energy Services (Jamaica) JM 2002 IDT 11

CALCULATION OF SEVERANCE PAY

Smith v. Dew AG 1004 CA 10

What is Pay
Advocate Co. v.Wood BB 1993 HC 20

Abolition of a Post

This relates only to public servants

Braithwaite v. Poet Authority of T&T TT 1998 HC 118

General Readings
Deakin and Morris Labour Law, 5th ed., Chap. 5
Smith & Wood’s Employment Law, 10 ed., Chap. 8
Gwyneth Pitt Employment Law, 6th ed., Chap. 9
Antoine, R-M.B. The CARICOM Harmonization of Labour Law Report, 1992;
CARICOM Sec’t.
R Bacchus Developments in the Law of Wrongful Dismissal
Antoine, R-M.B. Redundancy in the Context of Unfair Dismissal (1994) 4 Carib LR 412
Case Note TUPE and Transfers (redundancies) on Todd 32 ILJ
Jill Murray Work Choices and the Radical Revision of the Public Realm of Australian
Statutory labour law [2006] 35 Ind LJ 343