Sources of regulation
The Jamaican law on termination of employment is based on, and governed by, the English common law, except to the extent the common law has been modified by statute. There are two central statutes dealing with termination of employment:
- the Employment (Termination and Redundancy Payments) Act, 1974 (as amended) (ETRPA), and
- the Labour Relations and Industrial Disputes Act, 1975 (as amended) (LRIDA).
In addition, the Labour Relations Code, 1976 (promulgated pursuant to the LRIDA), while not having the force of law, is a supplementary source of regulation to the extent its provisions influence the decisions of the courts or are embodied in contracts of employment. Collective agreements, while taken into account, play only a minor role as a source of regulation on termination of employment in Jamaica.
Jamaica is a member of the Caribbean Community (CARICOM) whose Standing Committee
of Ministers responsible for Labour adopted in April 1995 the Model Harmonisation
Act regarding Termination of Employment, drafted with the assistance of the
International Labour Office (see below "Further Information").
Scope of legislation
The LRIDA applies to "workers", who are defined as all individuals who
work under a "contract of employment", which in turn is defined as including
express, implied oral and written contracts, and apprenticeships (sec. 2, LRIDA).
The ETRPA definition of an "employee" largely mirrors the LRIDA definition
of worker, except that public servants are expressly excluded, as well as any
person employed by the Council of the Kingston and St. Andrew Corporation,
or any Parish Council (sec. 2, ETRPA).
Contracts of employment
The ETRPA excludes employees under fixed-term contracts for less than two years, from those eligible for redundancy payments (sec. 5(1)). However, an employee on a fixed-term contract which continues for four weeks after the stated expiry date is deemed to be employed for an indefinite period (sec. 3(5)(b), ETRPA).
If the contract of employment specifies a probationary period, either party to the contract may terminate the contract without notice during the probationary period, or during the first 90 days if the probationary period is more than 90 days (sec. 3(4), ETRPA).
Jamaican legislation does not expressly distinguish between casual or part-time employees and other employees. Seasonal workers are defined as working a minimum of 90 days per year.
Termination of employment
Termination of employment, other than at the initiative of the employer, is largely governed by common law. Accordingly, employment will terminate when:
- the employee dies;
- there is agreement between the employee and employer to that effect;
- the employment contract is frustrated (i.e. becomes impossible to perform due to an event external to the parties);
- the employer, if a natural person, dies (however, sec. 11 of the ETRPA deems the death of an employer to be a dismissal for the purposes of redundancy benefits, unless the employer’s personal representative offers the employee continued employment);
- the employer, if a company, is wound up; and
- the employer, if a natural person, is declared bankrupt. [1]
Dismissal
Jamaican legislation does not contain an express statement that all dismissals
must be justified by the employer, but, as the LRIDA enables a dismissed employee
to seek reinstatement if the dismissal was "unjustifiable" (sec. 12(5)(c)),
the courts have used this standard, as developed by case law, to protect employees
from arbitrary dismissals.
In addition, are prohibited dismissals on the grounds of:
- "race, place of origin, political opinion, colour or creed" (art. 24,
Jamaican (Constitution) Order in Council, 1962);
- pregnancy or taking maternity leave (Maternity Leave Act, 1979); or
- trade union membership or activity (sec. 4, LRIDA).
Sec. 5(5)(c) of the ETRPA codifies the common law rule on constructive dismissal and provides that when an employee is compelled, by reason of the employer’s conduct, to terminate the contract without notice, this is deemed to be a dismissal.
The common law rule on summary dismissal is also retained. Thus, an employer
is entitled to terminate the contract without notice, in the case of serious
misconduct, and an employee so dismissed is not entitled to a redundancy payment
or to a period of notice (sections 5(5) and 6(2), ETRPA). However, an employer
is not entitled to terminate employment without notice after four weeks from
when he or she became aware of the employee's conduct justifying dismissal
(sec. 3(5)(a), ETRPA).
A dismissal is also justifiable, under common law, if it is on the grounds of poor performance or misconduct not justifying summary dismissal, and notice is given, or a payment in lieu of notice is made.
Moreover, a dismissal is justifiable if the employee is dismissed by reason
of redundancy (using the common law definition of redundancy; that is, the
dismissal is attributable wholly or partly to the employer having ceased to
carry out that business, or the requirements for the employee's work having
ceased or diminished). However, dismissals on the grounds of redundancy, unless
excluded (see below) mandate a redundancy payment.
The ETRPA also contains an extended definition of "dismissal", which
deems a dismissal due to the employee having suffered an accident or developed
a disease in the course of his or her employment to be a redundancy, so as
to allow such employees to obtain redundancy payments (sec. 5(2)(c), ETRPA).
Notice and prior procedural safeguards
The ETRPA contains statutory minimum notice periods which apply in the absence of an agreement more favourable to the employee (sec. 3). These are as follows:
- two weeks notice for employees with less than five years
of continuous employment;
- four weeks for between five and ten years of continuous employment;
- six weeks for between ten and 15 years of continuous employment;
- eight weeks for 15 to 20 years of continuous employment; and
- 12 weeks for 20 or more years of continuous employment.
As under the common law, notice periods may be waived, or payments in lieu of notice are allowed (sec. 3(3)(a), ETRPA). Greater notice periods will apply if the contract of employment so provides, or if custom requires a longer notice period (sec. 3(3)(c), ETRPA).
As mentioned above, dismissal on the grounds of misconduct must be within four weeks from the date when the employer is aware of the employee’s act entitling the employer to dismiss him or her.
The Labour Relations Code sets out a model disciplinary procedure for employers and recommends that employers institute disciplinary rules. The provisions of the Code, or other provisions governing the procedure for termination of employment, may be included in collective agreements. However, in practice, collective agreements are less important than statute as a source of dismissal regulation.
The Jamaican courts have also taken cognizance of the development of the common law requirements of procedural fairness and natural justice for dismissals.
Severance pay
Subject to the exclusions mentioned below, employees with not less than two
years continuous employment, who are dismissed on the grounds of "redundancy"
(see above) are entitled to a redundancy payment. "Dismissal" is also
defined, for this purpose, to include the expiry of a fixed-term contract of
less than
two
years and constructive dismissals (sec. 5(5), ETRPA). An employee employed
on a fixed-term contract for more than two years will not be entitled to a
redundancy payment if he or she has agreed in writing not to receive a redundancy
payment (sec. 8(2), ETRPA).
Other exclusions from the right to receive a redundancy payment include cases in which the employee:
- resigns;
- is retired and is eligible for a pension;
- is justifiably summarily dismissed;
- receives an offer made in writing by the employer to renew the contract employment before it is terminated (sec. 6, ETRPA).
After the two-year qualifying period, the rates of redundancy payments are:
- for one to ten years of service, two weeks pay per year;
- for service beyond ten years, two weeks pay per year for years one to ten,
then three weeks pay per year for each year of service beyond ten years
of service (ETRPA regulations).
Avenues for redress
There are two central avenues for redress in Jamaica in cases involving termination of employment:
- to the Industrial Disputes Tribunals set up under the LRIDA, and
- to the civil courts for claims of wrongful dismissal or breach of contract.
Both reinstatement and compensation are available from the Industrial Disputes Tribunal (sec. 12, LRIDA), if a dismissal is found to be unjustifiable. In contrast, reinstatement is not generally available for wrongful dismissal and the claim is limited to compensation for the notice period the employee would have received.
Further information
[1] There is some controversy whether, at common law, an employer’s bankruptcy terminates the employment contract: in any event, it operates as a statutory suspension of the employer’s liability to pay wages to the employee.
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