Union Leader's Legal Threat On Severance Pay Suspend


Tribune Business Reporter


A trade union leader is threatening to take legal action over the Government's COVID-related suspension of the Employment Act's full termination pay clauses.

Obie Ferguson, the Trades Union Congress (TUC) president, told Tribune Business that the suspension created by the COVID-19 Emergency Orders amendment (No.6) 2020 was "all wrong" and that the Government had made a mistake.

The Emergency Orders amendment, dated May 26, 2020, states that for the duration of the state of public emergency and thirty days thereafter, section 28C of the Employment Act will be suspended.

However, there is no section 28C in the Act - only sections 28 (1) through (3), which talk about redundancy payment for employees and how it should be treated in the eyes of the law. It says specifically in the section 28 (1) that “payment of redundancy pay shall be made on or before the date of the employee’s redundancy”, while 28 (3) says: “A redundancy payment shall be a preferred debt in all cases involving bankruptcy or liquidation.”

Mr Ferguson responded: “Obviously they aren’t referring to anything in the Act of substance. If you are referring to the Act then you have to refer to the Act. You can’t invent a provision in the Act, they can’t do that.”

Labour union executives, including Mr Ferguson, have been calling for full termination payments to be made to workers - some of whom have been furloughed for 11 months. They argue that these employees will fare better receiving what is due to them rather than continuing to wait on a job that may never return.

However, the Government and employers are arguing that it is better to still have a job even if staff are not working, and that taking a full severance package now means that post will not be waiting for them when business resumes. And many companies, struggling amid COVID-19's economic devastation, simply lack the liquidity, cash flow and financial resources to afford severance payments.

Mr Ferguson said: “If you look at section 26A in the Act, it specifically makes provisions for how you make a worker redundant, but the employers are not following that. That obviously creates a legal issue.” He has advised workers that employers are obligated to follow this.

He added: “We will certainly do something about this. I am having a meeting with the majority of the trade union leader leaders to discuss these points on the application of the amendment and how it has been defused.

“For example, under section 26A, you cannot just willy nilly on your own decide to terminate workers without meeting with the union and go through a process of selection and look at the priority with who they select, why are they going to select them, and then you have to look at the years of seniority. This is not done just by the employer, this is done in collaboration with the union, or if not by the union a representative of the grouping.”

“I intend to go to court on some of these matters and we are going to get the court to make a determination on these issues because these issues have consequences on the average worker.”


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