NCC ordered to compensate dismissed workers
Over two years after they were unceremoniously dismissed from the National Conservation Commission (NCC), a verdict has been issued in favour of the former workers at the statuatory corporation.
The Hal Gollop-led Employment Rights Tribunal (ERT) has not only deemed their dismissal to be unfair, but has ordered that they be paid 52 weeks compensation.
Following is the decision issued last Friday by the Tribunal in the NCC matter:
Cases were filed on behalf of a number of workers who were members of the Nartional Union of Public Workers 9NUPW and the Barbados Workers Union (BWU). As a result the ERT is here being called upon to adjudicate the two cases brought.
The Case of Miss Cutie Lynch
The complainant, a former employee of the NCC was employed in the temporary post of general worker. She had been employed in that post for the last five years. She brought the instant action in a representative capacity on behalf of herself and those workers who at the time of termination were employees of the NCC and who were members of the NUPW and whose termination was a result of the measures taken by Government to reduce the workforce as earlier mentioned.
Miss Lynch alleged in her Witness Statement and in evidence before the Tribunal that on 30 April 2014 she, along with several of her colleagues employed at the NCC, attended a meeting called by the NCC based on the information passed on to them by their Superintendent. She found out at the meeting that she and a number of her said colleagues were being made redundant and that their services were being terminated with immediate effect.
The complainant Cutie Lynch gave evidence before The Tribunal stating inter alia that:
i. She commenced her employment in the temporary post of general worker from 16 February 2004.
ii. She was paid a weekly wage of $447.01.
iii. At termination she was paid $2,879.36 which represents one week’s wages, one week’s wages in lieu of notice and four week’s wages in lieu of notice.
Miss Lynch’s Claim
Miss Lynch claims on behalf of herself and the 93 other employees, members of NUPW, who have an interest similar to hers and who were made redundant from the NCC, that they were unfairly dismissed by the NCC without prior consultation pursuant to Section 31 (4)(5) and (6) of the Employment Rights Act, 2012-9 (ERA).
The Tribunal must now therefore determine the validity of Miss Cutie Lynch’s claim. In so doing, an analysis of the various issues which surfaced during the hearing of the evidence given by the witnesses and submissions made by Counsel for the respective parties must be made.
The Position Of The National Conservation Commission In Its Claim Of Redundancy
The claim in support of the respondent’s position that redundancy was the reason for termination of the claimant et al and it did not unfairly dismiss them was ventilated through its sole witness, Mr. Neblett, the General Manager while giving sworn evidence. The basis of that claim was that the NCC carried out the mandate ordered by Government through the Circular No. 1/2014, MP 6205 Vol. 1T3 of 22 January 2014.
The NCC maintained also that it acted squarely within the provisions of s.31(4)(5)(6) of the ERA having regard to s.29(1)(b) and s.29 (2)(c). In that regard it rejected the claims made by the claimant.
The Tribunal finds that the respondent, like all other Government agencies, had no discretion in respect of its decision to apply the policy enunciated in the circular; in this regard its hands were tied; it was simply forced to reduce its workforce as ordered. It is therefore our view that the respondent has justifiably placed reliance on s.31 of the Statute.
The claim by the respondent that the claimant was terminated by reason of redundancy is therefore sustained.
This finding however does not dispose of the action since the ERA requires that a number of related factors must also be observed to give validity to any claim of redundancy as the justification for termination.
The Tribunal will now seek to address the statutory requirement of consultation.
The unambiguous and emphatic claim made by Miss Lynch and her fellow workers is that they were made redundant by the NCC without prior consultation being held pursuant to s.31(4), (5) and (6) of the ERA.
The ERA therefore requires that consultation with affected workers or their representatives be carried out when redundancy arises; the provisions of the statute are obligatory. By s.31 (6) (a) consultation must commence no later than six (6) weeks prior to the dismissal of the affected workers and must be completed within reasonable time. The section also takes into account the procedure to be employed for the dismissals and the employer must, where possible, implement measures regarding alternative employment for those made redundant. This is set out in s.31(6)(ii)(iii).
It must be noted that a failure to consult with the employee or his representative would not automatically be regarded as an unfair dismissal. This view was expressed in Forman Construction Ltd v Kelly (1977) IRLR 468. However, where the employer fails to consult with the dismissed worker or his representatives, he must give reasons for such failure: Holden v Bradville Ltd. (1985) IRLR 483.
s.31(6) c. Special Circumstances
The ERA makes provision for the application of “special circumstances” where it might not be “reasonably practicable” to comply with the requirement for consultation.
Section 31(6)(c) gives to the employer a defence in respect of the consultation requirement. However the fact that an employer genuinely believes that it does not recognize a trade union for collective bargaining purposes does not constitute a special circumstance that would render it not reasonably practicable to comply with the obligation to consult: Joshua Wilson & Bros Ltd. v Union of Shop Distributive & Allied Workers (1978) IRLR 120.
In examining the principles of recognition and the law relating thereto, the Tribunal is aware that in Barbados there is no statute which provides for trade union recognition. This being the case, reliance must be placed on the common law for guidance.
The Tribunal dismisses the submission of counsel for the respondent Mr. Codrington, that the complainants can find no support for their claim that the NCC by its conduct over the years gave implicit recognition to their union the NUPW as a bargaining agent for its membership among the workforce.
Counsel referred to a number of cases on recognition of trade unions . . . and none of these cases challenges the assertion that recognition may be inferred from a course of dealing between the parties.
The Tribunal on the evidence before it and the principals discussed, finds that the NUPW was justified in regarding itself as a recognized bargaining agent for those workers at the NCC who formed part of its membership, Miss Cutie Lynch the complainant being one of them. The failure to consult with either the employees individually or their union the NUPW in accordance with the ERA therefore constituted a breach of their statutory right not to be unfairly dismissed. As such, the claim by Miss Cutie Lynch and her colleagues that they were unfairly dismissed because there was a lack of consultation by the NCC with them or on their behalf is therefore sustained.
Procedures For Selecting Employees For Redundancies
It is the principal duty of the Tribunal to examine the employer’s procedures taken for selecting employees for redundancies to ensure that there was fairness in the process. The factors which should be taken into consideration include:
(i) The criteria for selection should be objective;
(ii) employers must demonstrate that such objectivity is geared
towards producing a legitimate aim. Examples are:
a. encouraging and regrading staff;
b. retraining skills; and
c. use of knowledge that has been developed overtime.
So that where Last-In-First-Out (LIFO) is employed by considering the various qualities of staff being considered for redundancy, there will less likely be a successful challenge to the applied procedure once the employer can show its use and application were justifiable and fairly executed.
The criteria reasonably applied should include such considerations as attendance at work, discipline, knowledge, skills, ability, aptitude and performance.
Turning to the evidence, the Tribunal was however faced with the submission by counsel for the complainant that the LIFO principle was arbitrarily applied and not within the spirit and intendment of the said principle. Mr. Neblett for the Respondent suggested that such a claim could not be substantiated and that among the considerations taken into account were:
i) Persons who were close to retirement age were identified for termination;
ii) persons who were on sick leave on a regular basis were also selected for termination;
iii) persons who voluntarily requested to be made redundant were accommodated by the NCC; and
iv) socio-economic situations affecting some workers were taken into account.
The Tribunal, after careful assessment of the submissions, found there was no evidence adduced to displace the claim by the Complainant that arbitrary selection was the essence of the determination of the employees selected for redundancy; the claim that the employees that were retained, contrary to the LIFO principle and other criteria in respect of length of service, came from a particular geographical location, was however not substantiated by the evidence.
The directive to Ministries/Departments of Government set out in the Circular No. 1/2014N.P.6205 Vol1T3 was the method by which employees were to be selected for termination. The circular expressive of Cabinet’s Policy in respect of the termination directed that:
“The retrenchment policy should generally be Last-In-First-Out.”
It was agreed by counsel on both sides that the phrase “should generally be” in relation to the LIFO principle empowered the NCC with a degree of discretion in the selection process, so long as that discretion was exercised reasonably.
It was further agreed in discussion between counsel and the Tribunal that the NCC could exercise that discretion in a manner that would ensure fairness in the selection process while further ensuring that a level of efficiency in the administration of the NCC’s programme of work was maintained since the discretion of the respondent could not be fettered.
The principles emanating from the learning on LIFO will now be discussed.
The Implementation of an unfair selection process for the purpose of terminating employees in a redundancy will inevitably result in an unfair dismissal. Employers should therefore adopt a genuine exercise for selection of employees whom they intend to make redundant.
Where there is no pre-arranged procedure in place the employer can resort to LIFO.
LIFO has really been shown to be a very crude tool; it does not ensure that the organization retains the most skilled, experienced or best performing employees. It therefore presents a grave risk that employers would be discriminatory in the selection process.
It must be accepted that the LIFO principle is quick and simple to apply but it must be admitted that evaluating skill and performance against the future needs of the employer are more likely to leave an employer with a more productive and efficient workforce than LIFO would.
LIFO used to be one of the most commonly used methods for objectively determining who should be terminated by virtue of a redundancy. However, even thought it might be objective it might not be a fair method if it is used as the sole selection criterion.
It generally tends to discriminate against younger employees especially in cases where the younger employees are the ones who would have been the last additions to the staff and by extension the employees with the shortest work record and least experience on the job.
It would therefore be advantageous to both employer and employee if in the application of LIFO that it be undertaken in conjunction with an evaluation of other mentioned criteria.
A major weakness in the respondent’s ability to demonstrate that it had considered some of the criteria that could have allowed it to show that it was not actuated by extraneous considerations in its choice of employees to be made redundant, but had rather acted reasonably in the exercise of its discretion to ensure that the best available persons were retained in the workforce, was the revelation by Mr. Neblett that the NCC had documentation on the performance of workers but that it was never used. Based on the evidence the Tribunal finds that the failure of the respondent to demonstrate in its evidence that it did in effect use objective criteria for the purpose of selecting those employees to be affected by the redundancy, it failed to displace the claim made by the claimants that it implemented an arbitrary process in its selection.
Having reviewed the evidence taken in this matter and analysed the submissions of counsel, the Tribunal finds that there was in fact circumstances existing within the NCC that forced it to adopt the institution of redundancy measures at the corporation. The NCC however while executing the said measures failed to give effect to the statutory requirement of consultation and was unable to demonstrate that during the process of carrying out the redundancy of the complainants it applied the LIFO principle objectively and fairly.
This being the case the tribunal finds that the complainants were unfairly dismissed.
The tribunal must now go on to consider what compensation may be made to the complainants in accordance with the provision of the ERA, and will first consider the remedy of re-instatement or re-engagement.
Re-Instatement and re-engagement Two Of The Remedies For Unfair Dismissal
The tribunal first addressed the remedy of re-instatement and re-engagement in the case: Joel Leacock and PMM Services Limited (also known as KPMG), ERT/2014/56.
In that case, it was pointed out that the tribunal has a discretion whether to make an order for re-instatement or re-engagement depending on the circumstances of the case. In exercising the discretion there is a need to consider whether it is practicable for the employer or its successor to comply with the order. It must also consider whether the claimant caused or in any way contributed to his dismissal.
In the present case before the tribunal no claim has been made of any contribution being made by the claimants to their dismissal. The dismissals were due to a redundancy.
An analysis of the statutory provisions of the ERA will now be made.
The remedies for unfair dismissal are set out in section 33-37 ERA 2012. Where the Tribunal establishes that a complaint under s.32 is well founded the tribunal under s.33 shall, explain to the employee the orders that the tribunal may make under subsection (2) and the circumstances in which the orders may be made; and
(a) inquire of the employee whether he wishes the tribunal to make similar orders.
Under s.33(2) where the employee indicates that he wishes the tribunal to make an order pursuant to this subsection the tribunal may, subject to subsection (3), (4) and (5) make an order for
(a) the re-instatement of the employee in accordance with s.34; or.30.
(b) the re-engagement of the employee, these in accordance with s.35.
Where neither an order for the re-instatement of the employee nor his re-engagement is made the tribunal shall make an award of compensation for unfair dismissal to be paid by the employer to the employee: s.33(5).
Section 34(1) provides that an order for re-instatement is an order that the employer treat an employee in all respects as if he had not been dismissed.
(2) On making an order for the re-instatement of an employee the tribunal shall specify-
(a) an amount payable by the employer in respect of any benefit which the employee might reasonably be expected to have had but for the dismissal (including arrears of wages) for the period from the date of termination of employment to the date of re-instatement;
(b) any rights and privileges, including seniority and pension rights, which must be restored to the employee; and
(c) the date by which there must be compliance with the order
Section 36 provides that:
In calculations for the purposes of section 34 or 35 any amount payable by an employer, the tribunal shall take into account so as to reduce the liability of the employer.