The Tribune

By NEIL HARTNELL

Tribune Business Editor

The Chief Justice has ruled that six employees released by FirstCaribbean International Bank (Bahamas) cannot receive redundancy payments under BOTH their industrial agreement and the Employment Act, describing their arguments as “not sustainable”.

Outlining the reasons for his ruling, Sir Michael Barnett said the six former FirstCaribbean staff members’ rights to a redundancy payment were “limited” to what was set out in the industrial agreement between the bank and the Bahamas Financial Services Union (BFSU), their trade union and bargaining agent.

Noting that the industrial agreement’s terms were better than those contained in the Employment Act, a statute designed by Parliament to provide a ‘minimum’ when it came to redundancy payments, Sir Michael ruled that there was nothing in law that entitled the employees to both sets of benefits.

All the Employment Act did was avoid placing any obstacles or limitations on a Bahamas-based employee’s right to sue, at common law, their employer for greater benefits that they believed they were due over and above the law. The Act also does not bar trade unions from negotiating better terms for their members.

Sir Michael’s ruling will further develop local jurisprudence on the Employment Act, setting a precedent for future such cases. It will also likely come as a relief for Bahamian employers, as a verdict the other way would have considerably increased redundancy/downsizing costs.

Setting out the background to his ruling, Sir Michael said FirstCaribbean decided in November 2010 to reduce staffing levels “and make redundant certain employees”. The bank’s Siobhan Lloyd said this was communicated to the BFSU.

“The bank then sought to engage in discussions with the union but, according to Ms Lloyd, their efforts to meet with the union in April 2011 on the matter were unprofitable as the union walked out of the meeting,” the Chief Justice recalled.

The six former FirstCaribbean employees who brought the action - Cheryl Smith, Ketley Brown, Akina Donawa, Tabitha Haye, Inderia Whyms and Meredith Munnings - were sent letters in May 2011 informing them of the bank’s decision to make them redundant.

“In a nutshell, the plaintiffs claim that in addition to redundancy payments as set out in Article 20.7 of the industrial agreement, they are also entitled to the redundancy payments as set out in section 28 of the Employment Act,” Sir Michael found.

“With respect, the plaintiffs’ argument is not sustainable. In my judgment, the plaintiffs’ entitlements are limited to those set out in Article 20.7 of the industrial agreement. Those provisions are better than those set out in section 28 of the Employment Act.

“The plaintiffs are entitled to the better provisions in the industrial agreement, but are not entitled to those better conditions in the industrial agreement as well as the provisions in the Employment Act.”

The ex-FirstCaribbean staffers also claimed they were entitled to monies under article 20.1 of the industrial agreement, arguing they were entitled to pay equivalent to 35 working days because the bank was supposed to give a notice period of that length when informing the BFSU of plans to make specific employees redundant.

But the Chief Justice disagreed, saying all that did was oblige FirstCaribbean to consult the union and give 35 days’ notice of any impending redundancies. The bank had alleged it first approached the BFSU on November 2010 on the issue, far in advance of the 35-day requirement, and the union had “refused to engage” in any talks.

Sir Michael ruled that FirstCaribbean was not in breach of its obligation to the BFSU, and even if it was, this did not give rise to any financial claim by the former employees as they had “suffered no loss as a result of any such breach”.

Finally, the six ex-FirstCaribbean staff alleged they were due payment under Article 20.4 of the industrial agreement, which obliged the bank to notify affected employees within 90 days after first informing the BFSU.

Sir Michael, noting that FirstCaribbean had alleged that the BFSU walked out of an April 18, 2011, meeting after two presentations, said this was likely when the bank would have identified the affected employees.

Even if that was not the case, the Chief Justice said a breach of this obligation did not mean the six employees were entitled to damages.

He said their “right to payment is limited to the redundancy payments under Article 20.7 and any accrued vacation entitlement”. The only area where Sir Michael ruled in favour of the former employees was that they were not obliged to sign the ‘release’ FirstCaribbean was demanding. They were also to be paid interest on the monies due to them from May 13, 2011, t0 February 24, 2012, the date of the judgment.