NEW YEAR, NO JOB?
By Advocate Zoe Blomfield, partner of Viberts Jersey Lawyers
The loss of one’s job can be a stressful event. Even where this is through no fault of your own there may be feelings of bewilderment and loss of self-esteem. The three most common reasons for job losses are redundancy, misconduct and the incapability of the employee.
The latter half of 2009 saw a sharp increase in the number of redundancies in Jersey which is a trend set to continue into 2010, with businesses struggling in the face of the current economic downturn.
As Jersey law stands there is no statutory entitlement to redundancy pay, though this is likely to change later in 2010. Therefore, an employee will not receive redundancy pay unless their contract of employment entitles them to it or the employer exercises its discretion to make a redundancy payment.
Notwithstanding this, employers must follow a fair and reasonable procedure when making redundancies. This involves identifying a fair basis upon which employees are selected for redundancy and ensuring that an appropriate consultation with employees has taken place. Failure to do so may entitle an employee to bring a claim before the Employment Tribunal for unfair dismissal under the Employment (Jersey) Law 2003.
In cases of employee misconduct the employer is required to follow a disciplinary procedure including a number of warnings (save in cases of gross misconduct). In situations where the employee may be incapable of performing the contract of employment either due to sickness related absence or lack of competence or skill a procedure must also be followed. In cases of sickness related absence the employer should follow a capability procedure which will differ depending upon whether the illness is short term or long term. Clearly warnings are inappropriate in such situations. Where the employee lacks competence or skill the employer is required to follow a capability procedure which involves appraising the employee, discussing any concerns, giving the employee an opportunity to improve and offering training and supervision where required. It is only after such procedures have been correctly followed and proved unsuccessful that the employer can fairly dismiss the employee.
Redundancy, disciplinary and capability procedures can take months to complete. The employer will be keen to resolve matters quickly and efficiently without the possibility of a claim by the employee for unfair dismissal through the Employment Tribunal or otherwise. The employee may feel that it is time to move on and generally the relationship of confidence and trust between the parties may have broken down. In such situations a Compromise Agreement may be the solution.
A Compromise Agreement is an agreement between the employer and employee whereby the employer agrees to make a compensation payment to the employee in return for the employee undertaking not to bring certain claims against the employer, usually including a claim for unfair dismissal through the Employment Tribunal.
To be legally valid a Compromise Agreement must comply with the requirements of Article 79 of the Employment (Jersey) Law 2003. The Agreement should be in writing, specify the claims that the employee is agreeing to compromise and the employee must have obtained advice from an independent legal adviser as to the terms and effect of the Agreement and in particular the effect on the employee’s right to pursue a claim before the Employment Tribunal.
When an employer serves a Compromise Agreement on an employee, it is notice of termination of the employee’s contract of employment and therefore potentially unfair dismissal in itself. Employers would do well therefore to consider whether the compensation payment offered to the employee is in line with what could be recovered if a claim for unfair dismissal were successful at the Employment Tribunal.
The Employment Law sets out the levels of compensation which the Employment Tribunal has the power to award in cases of unfair dismissal, which generally is related to the employee’s length of services. There are however two important points to note. Firstly, the Employment Tribunal may not entertain claims where the employee has refused a reasonable settlement offer from the employer. Secondly, the Employment Tribunal does not have the power to award legal costs to the successful party.
The employer will however usually offer a set amount as a contribution towards the cost of employee obtaining the independent legal advice on the Compromise Agreement required under the Employment Law. The terms of the Agreement are open to negotiation between the parties however, the employee’s lawyer will check their contract of employment to ensure that the terms offered are in line with their contractual rights, particularly in so far as concerns notice periods and benefits.
Whilst the above is intended to be an accurate, albeit limited guide, it is no substitute for seeking proper legal advice or alternatively, you may seek advice or assistance from JACS (the Jersey Advisory & Conciliation Service) telephone 730503.
As part of our working for the community project, Viberts would like to invite parishioners to attend our Free Legal Clinic at the St. Lawrence Community Centre on Thursday 4th March 2010 between 4:00 p.m. and 6:00 p.m. (or later by appointment). At this Clinic, parishioners may seek advice in relation to employment law, personal injury claims and wills and probate matters. No appointment is necessary, but should you wish to make one, please contact the Personal Law Team on 632205.