Apart from its political stability, strategic location and significant natural resources (particularly natural gas), Trinidad & Tobago is attractive to foreign investors because it has a skilled and productive labour force. The population is well-educated with high literacy levels. As the most industrialised Caribbean nation, Trinidad & Tobago has a human resource base with experience in a wide variety of activities including all aspects of the oil, gas and petrochemical industries.
Gregory Pantin and Catherine Ramnarine, Partners in Hamel-Smith’s Dispute & Risk Management Department, provide an overview of the basic rules regarding hiring employees and establishing terms, conditions and benefits of employment.
Personnel may be hired through private employment agencies which charge for their services, or by placing advertisements in the newspaper. As well, there are several labour contractor companies which handle employment of an entire workforce for a flat fee.
Employees may also be recruited through the Ministry of Labour which operates several employment exchanges throughout Trinidad and one (1) in Tobago. Potential employees register with the Exchange which maintains a data bank of persons skilled in all types of trade and who have technical and technician qualifications.
Generally, foreigners may enter Trinidad & Tobago without a work permit either (i) as a tourist or visitor; or (ii) to engage in a legitimate profession, trade or occupation for a single period not exceeding 30 days in every 12 consecutive months. Entry is on the basis of a “certificate” stamped in the passport allowing entry for a specified period. A person who wishes to remain for a longer period as a tourist or visitor is required to submit to an examination and an Immigration Officer may extend, limit, or vary the time or conditions of the entry stated on the certificate.
If a person wishes to stay in Trinidad for a period exceeding thirty (30) days to engage in a legitimate profession, then he must obtain a Work Permit which may be sought by the prospective employer and which is issued for a fixed period. Generally, Work Permits will not be granted to non-residents unless there are no locals who are capable of filling the specified post. Work Permits are issued for a specific timeframe during which a local resident will be expected to be trained to assume the post held by a foreign employee.
Special provision is made for nationals of Caribbean Community (“CARICOM”) member states, of which Trinidad and Tobago is a member. The Immigration (Caribbean Community Skilled Nationals) Act allows for the entry, without work permit requirements, of CARICOM nationals falling within certain categories of skilled labour including graduates of recognised universities, media workers, artists, musicians and sportspersons. Entry is on the basis of a Certificate of Recognition of CARICOM Skills Qualification. A CARICOM national must first obtain certification from their home state, which entitles them to entry into Trinidad and Tobago for six (6) months, during which time they must apply for certification from Trinidad and Tobago. Once they have obtained such certification, they are entitled to indefinite entry.
Employment relationships are governed by:
Ideally, employment contracts should be in writing, however, there is no general rule to this effect. In practice, they are often partly oral and partly in writing. Frequently the basic terms and conditions of employment are set out in a letter of appointment which usually contains a job description or indication of the required tasks along with a general provision that the employee is to do such other tasks as may be required. Where employees are represented by a recognised majority union, the terms of any collective agreement between the employer and the union may also govern the employment relationship.
Careful consideration should be given to the terms of the contract of employment as it provides the opportunity to clarify many important matters such as the period of Notice which will be required on termination, as well as the conditions which the employer considers necessary for the protection of its intellectual property rights and trade secrets. Where appropriate, the contract may include restrictive covenants prohibiting an ex-employee from setting up a business in competition or working for a competitor within a defined area for a specified period of time.
Though such clauses are prima facie void as contrary to public policy, they may be enforceable if they are reasonable as between the parties as well as reasonable with reference to the public interest. A restraint purporting to operate after termination of the employment will not be reasonable unless it protects certain proprietary interests of the employer which are recognised by the law. Even where these recognised interests are concerned, the restriction imposed upon the employee must not be greater than is reasonably necessary for the protection of that interest otherwise they will be void.
The basic principle of contract law that a contract cannot be varied without the consent of the other party applies to contracts of employment. Care should, therefore, be exercised in drawing up all contracts of employment. Also, proper procedures should be followed whenever it becomes necessary to renegotiate any aspect of the employment relationship. In addition to the contract of employment, certain terms of employment and/or duties and rights of the employer and employee may also be prescribed by statute or implied under the common law, including those relating to, for example, minimum wages, retrenchment and severance, maternity protection and health and safety.
Wages and salaries vary considerably between industries. However, the Minimum Wages Act empowers the Minister responsible for labour to make Minimum Wage Orders in relation to specific trades. The current general minimum hourly wage (exclusive of gratuities, service charges and commissions) as prescribed by the Minimum Wages Order 2014 is TT$15.00 or approximately US$2.22 and effective December 1, 2019 it will be increased to TT$17.50. Industry specific Orders have also been issued in relation to employees in the restaurant and catering, petrol station, security, shop and household assistant trades.
The Equal Opportunities Act generally prohibits employers from discriminating against employees or prospective employees on the basis of their sex, race, ethnicity, geographical origin, religion, marital status or disability. While the Act does not expressly speak to equal pay, it does generally prohibit employers from discrimination in the terms and conditions of employment afforded to their employees.
The Act contains several exceptions to the general prohibition against discrimination in employment such as where being of a particular race or sex is a “genuine occupational qualification” for employment or where, having regard to the nature of the employment, a disabled person would pose a risk to himself or others, be unable to carry out the requirements of the job or require special services or facilities that it would pose unjustifiable hardship to the employer to provide. These exceptions are of general application and do not specifically treat with equal pay. However, in considering whether an exception applies so as to justify the selection or exclusion a particular category of employee from particular kinds of work it is important for an employer to consider the potential impact of same on an employee’s potential earnings and whether, in that context, it would amount to unjustifiable discrimination against a protected class.
Under the Minimum Wages Act and Minimum Wages Order, 2014 the normal working hours exclusive of meals and rest breaks are eight (8) hours per day; forty (40) hours per week and/or 173.3334 hours per month. Employees are entitled to a meal break and rest period during the day. Employees who are required to work beyond the normal hours are entitled to overtime which is calculated in accordance with a prescribed statutory formula outlined in the Order.
However, the Order does not apply to employees who receive an hourly rate of at least 1.5 times the minimum wage.
As a general rule, employees are entitled to join a trade union. The Industrial Relations Act prohibits an employer from making employment conditional on the employee not being a union member and/or from dismissing, threatening to dismiss, altering a worker’s position or otherwise prejudicing him because he is or proposes to become a union member.
The Act provides for the certification and formal recognition of majority unions for certified “bargaining units” at the workplace. A trade union which represents more than fifty percent (50%) of the workers in a given bargaining unit is entitled to be certified as the recognised majority trade union for that bargaining unit. Under the Act, the employer and the recognised majority trade union are required in good faith to treat and enter into negotiations with each other for the purposes of collective bargaining. The Act provides a mechanism for the registration of collective agreements. A registered collective agreement is binding and directly enforceable, but only by the Industrial Court.
The Act also provides for the compulsory arbitration of trade disputes between an employer and its employees connected with the dismissal, employment, non-employment, suspension, refusal to employ, re-employment or reinstatement of any such employees and includes disputes connected with the terms and conditions of employment. Under the Act, a trade dispute can only be initiated by (i) the employer (ii) the recognised majority union for the bargaining unit to which the employee belongs or (iii) where there is no recognised majority union, any union in which the employee or employees who are parties to the dispute are members of good standing. For employees who are not members of a trade union, or matters falling outside the jurisdiction of the Industrial Court, disputes are usually settled amicably or by a traditional legal action for breach of the contract of employment.
Vacation leave is generally governed by the terms of the employment contract or collective agreement. In general, in practice employees are typically entitled to between two to five (2-5) weeks paid vacation after completing one (1) full year of service, depending on the nature of the job and the particular market practice within the industry. Upon termination, employees are entitled to payment in lieu of accrued vacation.
Employees are generally entitled to paid time off on national public holidays and to be paid at overtime rates if they work on national public holidays. There are fourteen (14) official national public holidays in Trinidad & Tobago. Additionally, although not official public holidays, most businesses close on Carnival Monday and Tuesday.
Under the Workmen’s Compensation Act, an employer is liable to pay compensation for injury or death of an employee arising from a workplace accident. The value of such compensation is calculated using a prescribed formula and depends in part on a medical assessment of the employee’s permanent partial disability. Where death or serious and permanent disablement occurs, the employer remains liable even though the accident may have been caused by the employee’s own serious and wilful misconduct. The sums payable for workmen’s compensation are relatively modest. However, the payment of workmen’s compensation to an employee does not prevent the employee from pursuing any other course of action that he might have against the employer (e.g. for negligence). The Court, in assessing the damages to be paid to the employee, will, however, take into account the amount paid to him as workmen’s compensation.
An employer has a general common law duty to take reasonable care for the safety of his employees during the course of their employment, including a duty to provide competent staff, proper plant and equipment, a safe workplace and a safe system of work.
In addition to this general common law duty, the Occupational Safety and Health Act (“OSHA”) sets out a legislative framework governing health and safety in the workplace. The purview of the Act extends beyond traditional industrial establishments and includes shops, offices and other places of work.
OSHA imposes a duty on employers to ensure the safety and health of their employees as well as persons not in their employment but who nevertheless may be affected by their business undertaking. Aside from imposing this general duty, OSHA lays down a series of regulations in five (5) main areas, namely:
Safety: which includes regulations relating to the provision of protective clothing and devices, removal of dust and fumes and safeguarding of machinery;
Fire: which includes regulations relating to the provision of a means of escape in case of fire;
Health: which includes provisions relating to cleanliness, lighting, overcrowding, noise and vibration and the medical examination of employees;
Welfare: which includes provisions relating to drinking water, washing facilities, canteens, restrooms and first aid appliances; and
The Employment of Young Persons.
Compliance with these regulations is critical as, aside from carrying certain criminal penalties, OSHA bestows upon workers the right to refuse to work where there is a safety or health danger.
Along with prescribing a general code for heath and safety the Act also imposes an obligation on every employer to make a suitable and sufficient annual assessment of:
In addition, OSHA imposes reporting obligations on employers to give notice of accidents and occupational diseases to the OSH Agency established under OSHA. In the event of a workplace accident causing death or critical injury, an employer is required to immediately notify the Chief Inspector, to submit written notice with particulars of the accident within forty-eight (48) hours and, save in exceptional circumstances, ensure the preservation of the scene. Where an employer is advised by or on behalf of an employee that the employee suffers from an occupational disease, it must give notice to the Chief Inspector within four (4) days of being so advised. The Act contains a Schedule specifying the diseases and/or medical conditions that are considered occupational diseases for the purposes of the Act.
The Equal Opportunity Act prohibits discrimination in employment and establishes a Commission and Tribunal to investigate and determine discrimination complaints.
The Act prohibits discrimination on the grounds of “status”, which includes: (i)sex (but not sexual preference or orientation) (ii) race (iii) ethnicity (iv) origin, including geographical origin (v) religion (vi) marital status (vii) disability (including mental or psychological disease or disorder). Age is not a protected category under the Act.Discrimination occurs where an employer treats one employee or prospective employee less
Discrimination occurs where an employer treats one employee or prospective employee less favourably than another due to his “status” or a characteristic that appertains or is generally imputed to people of that status. In particular, discrimination can arise during recruitment, in the terms and conditions of employment, opportunities for promotion, transfer, training, benefits, facilities or services that are afforded to an employee or where an employer dismisses or subjects an employee to any other detriment because of his status.
An exception applies in cases where:
Employed persons in Trinidad and Tobago are required to pay Income Tax and Health Surcharge Tax. The incidence of these taxes falls on the employee. However, the employer is responsible for deducting same from the employee’s earnings and remitting it to the Board of Inland Revenue (BIR), and is required to register with the BIR for this purpose.
Income tax is deducted on a Pay As You Earn (PAYE) basis, based on the employee’s chargeable income, determined after various tax credits and deductible factors are considered. Tax Returns must be submitted annually by April 30 following the tax year, and all employers are required to remit the PAYE payments monthly.
Health Surcharge Tax is applied towards the funding of public health care services. The amount of tax payable varies depending on the income of the employee but generally does not exceed TT$8.25 (about US$1.30) weekly.
Independent contractors are responsible for the determination and submission of their own tax which must be submitted on a quarterly basis to avoid accumulation of interest.
The National Insurance Board (“NIB”) operates a compulsory scheme of National Insurance, known as “NIS”, for all employed persons between the ages of sixteen (16) and sixty-five (65). Contributions are paid partly by employers (two-thirds) and partly by employees (one-third). However, the employer is responsible for deducting and remitting the contribution to the NIB and will be subject to penalties and interest if it fails to do so. Employers are required to register with the NIB within fourteen (14) days of hiring their first employee.
Contributions are calculated based on a prescribed formula set out in the National Insurance Act. In essence, the Act establishes several “earning classes”, each of which carries an “assumed average weekly earnings”. Earnings include more than just basic wage or salary and include acting allowances, overtime, stipends, allowances, commissions, production or efficiency bonuses, payments for standby duty, danger or dirt money and allowances for dependents. The contribution payable in respect of an individual employee is based on the assumed average weekly earnings for the earning class into which he belongs and a statutory rate which is revised from time to time. Effective September 2016, the statutory rate was increased to 13.2% of the insurable income.
Participation in the NIS Scheme entitles employees to receive benefits including sickness and invalidity benefits for employees rendered incapable of working, maternity grants, retirement grants, pension, funeral grants and survivor benefits. No contributions are payable while employees are receiving any short-term benefits.
There are two parallel regimes for the determination of employment disputes, including those relating to termination. The requirements for valid termination and the basis upon which termination can be challenged differ between the two (2) regimes.
The Industrial Court established under the Industrial Relations Act has jurisdiction to hear and determine, by way of compulsory arbitration, “trade disputes” between an employer and its workforce, including disputes relating to termination of employees. The Court exercises its jurisdiction in accordance with the principles of equity, good conscience and good industrial relations practice. However, this specialist Court does not replace the traditional jurisdiction of the High Court to hear and determine claims for breach of the employment contract or unfair dismissal.
In order to access the Industrial Court’s jurisdiction, an employee must fall within the definition of “worker” under the Act, which excludes several categories of individuals, for example, those who might be described as part of management. Under the Industrial Court regime, a worker’s employment can only be validly terminated for valid reason connected with his capacity to perform the work for which he was hired or founded on the operational requirements of the employer’s business, in general – misconduct, poor performance, incapacity or redundancy.
Additionally, unless there are exceptional circumstances, the Court requires that prior to termination, an employer engage in a fair and reasonable disciplinary process with the following characteristics:
In the event that the Court finds that a worker has been unfairly dismissed, it can grant the worker reinstatement and/or monetary damages including both compensatory and punitive damages. The Industrial Court is empowered to make an award that it considers fair and just having regard to the interests of the persons immediately concerned and the community as a whole, the substantial merits of the case before it and the principles of good industrial relations practice.
An award or finding of the Industrial Court can only be challenged on grounds that the Industrial Court lacked or exceeded its jurisdiction, that the order was obtained by fraud, that it was erroneous in point of law or that there was some specific illegality in the course of the proceedings. A finding by the Industrial Court that a worker was dismissed in circumstances that were not in keeping with the principles of good industrial relations practice is not open to appeal.
For employees falling outside the definition of “workers” or otherwise precluded from accessing the Industrial Court regime, redress is limited to the High Court. The High Court is governed by common law principles, which generally allow an employer to terminate an employee provided that it is done in compliance with the employee’s terms and conditions of employment under the employment contract. As a general rule under the common law, employment contract for an unspecified or indeterminate term is terminable on the provision of ‘reasonable’ Notice or payment in lieu thereof. The High Court is empowered to order monetary damages for wrongful dismissal, including exemplary damages where the conduct of the employer in carrying out termination is considered unreasonable or harsh.
In addition to the general principles of good industrial relations practice, redundancy, retrenchment and severance are governed by the provisions of the Retrenchment and Severance Benefits Act. The provisions of this Act only apply to employees falling within the statutory definition of “worker” under the Industrial Relations Act who have completed at least one (1) year of service.
The Act outlines a specific process that an employer should utilize when it proposes to terminate five (5) or more employees on the grounds of redundancy, including the provision (save in exceptional circumstances) of forty-five (45) days’ notice in writing to each of the workers, the recognised majority union and the Minister with responsibility for labour. The Act prescribes minimum severance benefits payable to workers on redundancy as follows:
Severance benefits under the Act are applicable only upon termination for redundancy and not on termination for any other reason.
Severance benefits are treated as priority payments in a winding up. There is a tax exemption on severance benefits of up to three hundred thousand dollars ($300,000.00) with the remainder being separately chargeable to tax at the employee’s average rate for the year preceding receipt of payment.
The form which this takes depends to a great extent upon whether the employment contract is in respect of a “worker” as defined in the Industrial Relations Act. Where a trade dispute arises, “workers” may fall into either of 2 categories:
Where workers are represented by a recognised majority union, the dispute resolution process contained in the collective agreement must first be applied.
Where the dispute remains unresolved, either the employer or the recognised majority union can report it to the Minister of Labour not more than six (6) months after the issue giving rise to the dispute arose (subject to any extension of time granted by the Minister on application). In the event that the Minister is unable to resolve the dispute, a Certificate of Unresolved Dispute is issued which enables either party to commence formal proceedings at the Industrial Court.
The Industrial Relations Act has established procedures for settlement of both “rights” and “interest” disputes. A Non-Recognised Majority Union can only pursue “rights disputes”, and is not entitled to take strike action. Unrepresented workers cannot report a dispute to the Minister and consequently cannot take strike action in accordance with the Act.