CCJ Reduces Award for Unfair Dismissal

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 (CCJ), 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).

Analysis 

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).

An employee's redundancy dismissal will be unfair - if the workforce will be reduced by 10% or more - and their employer did not follow the consultation requirements set out in section 31 of the Act

Surprisingly, there is no financial penalty for an employer’s failure to follow the consultation requirements in section 31 the Act. Therefore, if an employer fails to consult a redundant employee (RE) - but pays a redundancy payment (RP) to the RE. And the RP includes any monies (e.g. a SSP, pay in lieu of notice) and benefits (e.g. a travel allowance) that would be due to the RE as per paragraph 1(a), paragraph 1(b) and section 22 of the Act. The RE may successfully claim that their dismissal was unfair - but they may not receive any monetary award from the Employment Rights Tribunal. See paragraphs 119 - 124 of Chefette v Harris (CCJ).

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.