References to "the Act" means the Employment Rights Act 2012 (Barbados). And references to “paragraph 1(a), 1(b), 1(c) and 2(5)” means paragraph 1(a), 1(b), 1(c) and 2(5) of the 5th Schedule of the Act respectively.
Basic Award For Unfair Dismissal
In Chefette v Harris, the Caribbean Court of Justice (CCJ) ruled that a basic award for unfair dismissal compensates an employee for their loss of wages. Therefore, the employee is not entitled to an additional award for such a loss. And the CCJ reduced the total award for Mr Harris’ unfair dismissal from $95,089.13 to $31,274.78 (i.e. the basic award for his unfair dismissal).
What is a Benefit Under Paragraph 1(b)?
The CCJ also ruled that an award for an employee's loss of benefits under paragraph 1(b) does not include wages.
The CCJ said that a “salary increase” is a benefit. But it seems more appropriate to classify a “salary increase” as wages. Hence, there is a powerful argument that a benefit under paragraph 1(b) does not include a “salary increase”. And it is unlikely that a “salary increase” will be a contractual term of employment.
See paragraphs 125 and 126 of the case transcript.
In Chandler v BTMI, the Employment Rights Tribunal ruled that a pension or a travel allowance is a benefit under paragraph 1(b).
Why Bother Consulting About Redundancies?
A basic award for unfair dismissal is calculated in the same manner as a Statutory Severance Payment (SSP) under the Severance Payments Act. And a basic award for unfair dismissal will be reduced by the amount of any severance payment paid by an employer to a redundant employee: see paragraph 2(5).
Therefore, an unfairly dismissed redundant employee (UDRE) will not get a basic award for unfair dismissal – if a SSP has been paid to them. And if the UDRE did not successfully claim any other compensatory award under the Act. The CCJ's ruling means that the UDRE may receive the same payments as a fairly dismissed redundant employee, e.g. a SSP, pay in lieu of notice or pay in lieu of holidays. Because the UDRE has received a basic award for unfair dismissal in the form of a SSP.
Also see the news item entitled Redundancy Consultation.
Please note that the Government may suspend or revoke a concession (e.g. a tax exemption) that has been granted to an employer – if the employer has failed to follow the consultation requirements in section 31 of Act. See the news item entitled The Labour Clauses (Concessions) Act 2024.