September 15 2011

Labour Act amended

Courtenay Coye LLP | Private Client & Offshore Services - Belize

Christopher Coye

Notice periods
Dismissal for gross misconduct
Unfair dismissal
Redundancy
Holiday pay
Facilities
Severance payment
Complaints


The Labour (Amendment) Act will make significant changes to the law relating to employer/employee relationships in Belize. While some of the changes are not as extensive as originally drafted and therefore are unsatisfactory to the unions, they have still caused concern among employers which are already facing challenges in keeping their businesses afloat. This update summarises the main changes introduced by the amended act.

Notice periods

The notice periods required to terminate a contract of employment are as follows, except where the contract has more favourable provisions, the contract is for a fixed period and expires, or termination is during a probationary period or for good and sufficient cause:

  • Where the employment is for more than two weeks but not more than six months, the notice period is one week.
  • Where the employment is for more than six months but not more than two years, the notice period is two weeks.
  • Where the employment is for more than two years but not more than five years, the notice period is four weeks.
  • Where the employment is for more than five years, the notice period is eight weeks.
  • If notice is not given, the employer must pay the employee for the equivalent period in lieu of notice, while if the employee fails to give notice, he or she should give the employer a sum equal to half the wages payable in respect of the period of notice (Section 37).

Dismissal for gross misconduct

An employer may dismiss an employee without notice or severance payment where the employee commits an act of gross misconduct directly related to the employment relationship, such that it is unreasonable to expect the employer to continue the relationship. The employee may also terminate without notice, or with less than the prescribed notice, where the employer's conduct makes it unreasonable to expect the employee to continue the employment relationship (Section 43).

Unfair dismissal

'Unfair dismissal' is defined as dismissal based on one or more of the following factors:

  • union membership, participation in a union or industrial activities, seeking office as or acting as a worker's representative;
  • race, colour, sex, marital status, religion or nationality;
  • political opinion which does not interfere with work performance;
  • age, disability or physical structure;
  • pregnancy or absence due to pregnancy;
  • sexual harassment;
  • HIV status;
  • absence due to illness or injury not due to the worker's negligence – temporary absence may extend up to 12 months, except in the case of employees employed for a specific task or period, or who are employed on a probationary or casual basis; and
  • conduct on the part of the employer that makes it unreasonable to expect the employee to continue the employment relationship (Section 42).

Redundancy

The act also makes special provision for the procedure to be adopted by an employer where it terminates an employee for redundancy. 'Redundancy' is defined as termination as a result of, among other things:

  • modernisation;
  • automation;
  • discontinuance;
  • sale or reorganisation of a business;
  • impracticability of carrying on business;
  • reduced operations; or
  • any other prescribed reason.

In such cases, prior to termination the employer must inform the relevant trade union or workers' representative and the labour commissioner of:

  • the circumstances of the termination;
  • the persons likely to be affected;
  • the time period involved;
  • a list of claims for benefits; and
  • any other relevant matter.

Employers must inform the relevant trade union or workers' representative and the labour commissioner within one month of the relevant circumstances leading to the redundancy occurring, and consult with them with regard to possible measures to avert, minimise or mitigate such events or their effect. They must also consult on plans to settle the claims of employees. The minister responsible for labour may also require the employer to provide financial security to satisfy existing claims by employees (Section 45).

Holiday pay

The amendment clarifies the sums payable for work done on public holidays. The employee is entitled to one-and-a-half times his or her ordinary pay for work done on public holidays other than Christmas Day, Good Friday and Easter Monday, when they fall on a scheduled work day. For work done on Christmas Day, Good Friday and Easter Monday, when they fall on a scheduled work day, the employee is entitled to receive double his or her ordinary pay (Sections 117(3) and (4)).

Facilities

Every employer must provide clean drinking water and appropriate sanitary facilities at every work site, which must be maintained in proper working order. Non-compliance will result in a fine of up to $1,000; however, if the default continues for more than two months, a daily fine of up to $50 may be imposed by the labour commissioner.

Severance payments

New provisions for severance payments are introduced as follows:

  • one week's pay for every year of service, where an employee has been continuously employed for a period of five to 10 years and his or her employment is terminated by the employer (except where termination is for good and sufficient cause), or the employee retires after reaching the age of 60 years or on medical grounds; and
  • two weeks' pay for every year of service, where an employee has been continuously employed for over 10 years and:
    • his or her employment is terminated by the employer for reasons not amounting to dismissal;
    • he or she has abandoned his or her employment for good and sufficient cause;
    • the defined period of employment has expired and the contract does not provide for or makes less favourable provision for severance pay;
    • the employee has retired on reaching the age of 60 years or on medical grounds; or
    • the employee resigns.

However, where an employee has been continuously employed for over 10 years as above, only one week's pay is payable for the period served prior to the amendment of the act, and two weeks' pay is payable for the period served after the amendment (Section 183).

Complaints

The act establishes a Labour Complaints Tribunal to provide an impartial appeal process from complaints of unfair dismissal or wrongful termination. The tribunal has the power to order reinstatement of the employee as well as compensation and other remedies. The tribunal will consist of an attorney at law nominated by the chief justice, a representative of workers nominated by the National Trade Union Congress of Belize, and one representative from each of the Belize Chamber of Commerce, the mnister responsible for labour and the commissioner of labour (ex officio, without a right to vote).

For further information on this topic please contact Christopher Coye at Appleby by telephone (+1 345 814 2013), fax (+1 345 949 4901) or email ([email protected]).