First Published in The Royal Gazette, Legally Speaking, May 2020
As Bermuda takes the first tentative steps in its phased reopening plan, we review some of the key practical issues that employers must address as and when they are ready to welcome employees back into the workplace.
The cornerstone of any return to work plan will be the measures that employers put in place to protect their employees' health and safety, as they are required to do by law. The Ministry of Health has recently issued detailed guidance to help employers devise effective protocols to safeguard employees returning to work, as well as an online training course for employers and employees on the fundamentals of infection prevention and control. Employers would be well-advised to review this guidance and to keep abreast of further Government updates.
Even with appropriate safety measures in place, it is understandable that there may be reluctance among employees to enter public spaces, including their workplace. Employers should engage with employees' concerns, considering each individual employee's specific health issues where appropriate. In some cases, it may also be appropriate to seek advice from a medical practitioner. Ultimately, disciplinary action may be merited where it is reasonable to insist that the employee returns to the workplace, but employers should proceed with much caution.
Many employers will have already responded to the economic pressures caused by COVID-19 by taking measures to reduce costs, including by reducing hours or implementing pay cuts, and this trend will surely continue. Although the current economic conditions are virtually unprecedented, the extraordinary circumstances do not mean that ordinarily legal principles can be disregarded or sidestepped. Employers will need to consider whether any proposed amendments to working conditions, such as reducing pay and benefits or changing hours, can be made lawfully.
In general, a change to a contractual term is only permitted if it is made with the consent of the employee. Consent could either be express or implied, although there are significant risks in seeking to rely on implicit consent and this approach needs careful consideration. Contractual documents can sometimes provide the employer with discretion to make certain changes without needing consent. Very clear language is required in order to reserve such unilateral powers to the employer and even then, courts can be reluctant to uphold changes made in this manner so, again, care should be taken before embarking down this path.
One immediate step some employers are taking is to implement a pay freeze. However, cancelling scheduled pay rises that have already been announced could amount to a breach of contract. Similarly, employers need to exercise care if they choose to cancel offers of employment. Any contract that has already been signed will need to be reviewed, to understand what notice the employer is required to give and whether the individual is entitled to any payment.
Unfortunately, many organisations will need to reduce headcount as a result of the present economic environment. Under the Employment Act 2000, redundancy is one of the grounds on which employers can lawfully terminate employment. However, before making redundancies the employer will need to inform and consult with any relevant trade union or other employee representatives. The company should also ensure that any criteria used to select staff for redundancy are non-discriminatory.
Redundant employees should be given notice of termination in accordance with the minimum notice periods in the Employment Act, or any longer period set out in contractual documentation. The legislation provides that redundant employees who have accrued one year of continuous service are entitled to a severance payment of at least two weeks' wages for each year of service up to the first ten years, and three weeks per year thereafter, up to a maximum 26 weeks. Employees may have enhanced severance rights in their employment contract or a collective agreement.
Some organisations have already laid off staff temporarily but may find that they need to permanently downsize. In this scenario, employees have the same legal rights as employees who have not previously been laid off. If the layoff period exceeds four months then the employee will be deemed by law to be redundant and will be entitled to the statutory severance payment set out above, as a minimum.
Even in these early days of phased reopening, it seems likely that the repercussions of the current pandemic will give rise to new ways of working. Many employees will have become used to working from home and organisations may have seen benefits from more flexible working arrangements during the lockdown. If they haven't already, employers could consider implementing a formal flexible working policy.
Employers may also be reviewing their existing business continuity plans, mindful of the potential impact of a future spike in infections or another pandemic. This could include reviewing employment contracts and HR policies to ensure they reflect any lessons learnt from the current outbreak.
The Employment and Immigration team at Appleby has been advising on various coronavirus-related HR matters during the pandemic and is available to assist with any queries you may have.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.