10 Dec COVID-19 AND THE TEMPORARY LAY OFF OF EMPLOYEES
The outbreak of the Covid-19 coronavirus has presented new challenges for employers. Many businesses are already feeling the crunch due to supply chain issues, decreased demand for their goods or services or other issues relating to Covid-19. Although not ideal, a temporary lay-off is one of the options available to employers to deal with a downturn in business.
It is important to note that the current situation is dynamic and uncertain. This is particularly true in Trinidad and Tobago, because much of our employment requirements are determined, not by legislation or regulation, but by the principles of ‘good industrial relations practice’. These principles are not codified, but instead must be gleaned from decisions of our Industrial Court. There is, understandably, little precedent for the current situation.
It is difficult to conclusively predict the view that the Industrial Court, looking at an employer’s actions with the benefit of hindsight, might take. However, the Court has recognised the temporary lay-off of employees as a valid industrial relations practice that is available to employers. Many of the Judgments dealing with temporary lay-offs are of some vintage. In more recent times, the Court has placed greater emphasis on pre-consultation, at least in redundancy/retrenchment cases, and in this writer’s view it is likely to adopt a similar approach in any new temporary lay-off cases that come before it. In these circumstances, it is important to note the following:
The Court has recognised temporary lay-offs as a valid industrial relations practice. However, it has held that a decision to temporarily lay-off employees should not be abused, made whimsically or result from the employer’s own poor management. Should a decision to temporarily lay-off employees be challenged at the Industrial Court, it would be important for the employer to be able to demonstrate to the Court, with evidence, that the decision was genuine, properly thought out, and necessitated by circumstances that were outside of its control. In these circumstances, it would be advisable for an employer, before embarking on any temporary lay-off exercise, to conduct and prepare a thorough business justification into if and why a temporary-lay off is necessary.
In the event that circumstances require the temporary lay-off of only a portion of the workforce, it would be important for the employer to demonstrate that it utilised objective and fair selection criteria in order to select which employees would be laid off. ‘Last In First Out All Things Being Equal’ is the accepted standard in redundancy/retrenchment cases and can also be applied to a temporary lay-off. Where possible, an employer should also consider alternatives to a temporary lay-off, such the voluntary utilisation of vacation leave, voluntary salary decreases or voluntary reduction in paid working hours, before implementing a temporary lay-off.
Pre-consultation can be difficult to manage, given that a decision may need to be made within a relatively short time frame. However, at minimum employees should be kept up to date on what the employer’s plans are, be given an opportunity to be heard and provided with as much notice of the decision as is practicable in the circumstances. Again, utilising a progressive approach, where alternative options are considered and implemented before a temporary lay-off, and maintaining open communication with employees throughout the process, is recommended.
The Industrial Court has held that a temporary lay-off must be for a ‘reasonable’ duration and cannot be indefinite. If it is possible to give the employees advance notice of how long the temporary lay-off will last, then this would be ideal. If this is not possible due to the uncertainty of the surrounding circumstances and the employees are sent home without a set return date, the onus is on the employer to keep them informed and provide periodic status updates. The Court has held that, as a general rule of thumb, a temporary lay-off should not last longer than three months, save in exceptional circumstances. Where it does, then the employees may be entitled to claim constructive dismissal.
In a unionised environment, the collective agreement may contain additional requirements that employers are required to follow.
Employees are not paid during a temporary lay-off and no formal notice to the Ministry of Labour is required.
On 23rd March 2020, the Prime Minister announced that a ‘Salary Relief Grant’ of $1500 per month over a three month period would be provided to citizens who lost income as a result of the impact of Covid-19. This benefit will be paid through the National Insurance Scheme, and in theory should be available to employees who are temporarily laid off as a result of Covid-19. Further guidance on the application process is expected to be provided by the Ministry of Labour.
It is important to note that employment in Trinidad and Tobago involves many nuances that are beyond the scope of this Article. We have attempted to set out, albeit in broad strokes, the general principles that would apply. Please contact a suitably qualified attorney if you require legal advice and before taking any action.