EMPLOYMENT
LEGISLATION
_______________
Lodged au
Greffe on 20th June 2000
by the
Employment and Social Security Committee
______________________________
STATES OF JERSEY
STATES
GREFFE
180 2000 P.99
Price code: C
PROPOSITION
THE STATES are asked to decide whether they are of opinion -
to refer to their
Act dated 16th March 1999 in which they approved the introduction of
legislation to provide for the introduction of a minimum wage and a trainee
wage and the establishment of a Jersey Advisory and Conciliation Service and an
Employment Tribunal; and
1. to approve the introduction of
legislation as detailed in Part Two of the report of the Employment and Social
Security Committee dated 8th June 2000, to -
(a) facilitate the introduction of the minimum
wage, including provisions to introduce pay statements, and to offer protection
from unfair dismissal;
(b) establish acceptable contractual minimum
standards;
(c) revise the Industrial Disputes (Jersey) Law
1956, as amended, as described in the said Report;
2. to charge the Committee to develop such
further measures as may be necessary, as detailed in Part Three of the Report
of the Employment and Social Security Committee dated 8th June 2000, to deal
with the issues of -
(a) the status and activities of trade unions
in the Island;
(b) redundancy, maternity, equal pay and equal
opportunities and any issues regarding discrimination in the work place;
(c) flexible working and family friendly
policies and the protection of employees involved in business mergers and
acquisitions.
EMPLOYMENT AND SOCIAL SECURITY COMMITTEE
REPORT
PART ONE
1. The history
In 1997 the Employment and Social Security Committee
(“the Committee”) took over responsibility for industrial relations from the
former Industrial Relations Committee. In November of that year the States
approved the Policy and Resources Committee’s proposition, which included
action to be taken by the Committee to develop an industrial relations
strategy.[1] In addition to this initiative, the Committee was
also charged in that same debate with introducing minimum wage and maternity
policies for the Island.
2. The minimum wage and “Fair Play in the
Workplace”
Minimum wage
In 1997 the Committee had already commissioned some
research into the need for and the impact of a minimum wage policy in the
Island. The result of that research and extensive consultation was placed
before the States in a report and proposition that was debated in March 1999
(P.227/98). During the debate the States voted not only in favour of the
introduction of a minimum wage policy but also the establishment of an ACAS
style advisory and conciliation service to be known as the Jersey Advisory and
Conciliation Service (JACS), supported by a Tribunal type service and a
consultative body to be known as the Employment Forum. The draft for the
Minimum Wage Law was subsequently sent to the Law Draftsman, who has indicated
that the Law cannot be effectively implemented until such time as basic employment
legislation supporting it and also a system to deal with its enforcement are in
place.
“Fair Play in the Workplace”
The Committee responded to the request for improved
employment legislation by producing a comprehensive publication, “Fair Play in
the Workplace” (“Fair Play”), which was circulated Islandwide to inform the
debate. This continued throughout last year with numerous consultative meetings
and seminars. The publication aimed to -
· promote
modern employment relations practices in the Island;
· outline
the issues commonly affecting employers, employees and trade unions;
· ask
Islanders’ views as to whether or not change or improvement was needed in
workplace practices to take the Island into the 21st century and beyond.
3. The focus
Three clear messages were given in the Fair Play
document and referred to throughout the consultation process. Those were that -
· “The
Committee firmly believes that fair play in the workplace is enhanced by a
partnership approach underpinned by a legal safety net of rights,
responsibilities and protections. Jersey cannot justify remaining one of the
few states that denies its citizens such basic rights as protection from unfair
dismissal and freedom from discrimination. At the same time we should not
become as heavily regulated as some other states within Europe and elsewhere. A
sensible balance needs to be struck.”[2]
· “The
purpose of the consultation process is to reach consensus in our society on a
legal framework which will provide standards of decency and fairness in the
workplace but not undermine the social and economic benefit that we have from a
healthy economy and full employment.”[3]
· “Jersey’s
existing employment laws are out of date, fragmented and ineffective. There is
a pressing need for a workable legislative framework which will reflect the
Island’s particular circumstances and introduce rights and responsibilities
both for employers and employees……. the employment relationship is now highly
regulated and becoming more so, particularly in Europe. This poses a problem
for small jurisdictions like Jersey which do not have the infrastructure
required to support such legislation.”[4]
These statements present an enormous challenge and the
task ahead should not be underestimated. The survey results and consultation
showed that a large majority of Islanders want to see a new employment law in
Jersey. It should be remembered however that other jurisdictions worldwide have
taken 20 - 30 years to establish their infrastructures of employment legislation.
Jersey cannot catch up overnight and nor would it be right for the Island to
imitate the types of legislation found in larger jurisdictions.
When formulating these proposals the Committee has
attempted to follow the guiding principles, as stated in Fair Play[5], that any new employment legislation -
· is easily
understood;
· is
effective in tackling the real problems;
· supports
cohesion in the workforce;
· lays down
clear standards of decency;
· supports
a competitive economy;
· is affordable.
4. Trends for the 21st century
Any new legislative structure has to be designed to
suit the workplace of the 21st century. The following changes that are taking
place in the workplace in Jersey and throughout the world were considered by
the Committee when formulating these proposals -
Globalisation
Worldwide there is a definite move towards the
internationalisation of corporate structures. Jersey already has many
businesses with international connections and the widely divergent gap in the
Island’s employment standards compared with that of other jurisdictions with
whom the Island works is not easy to explain. For some, there may be
attractions in setting up businesses in an unregulated environment. However, as
has recently been seen in the Finance Sector, there is an expectation amongst
OECD countries that the Island should apply decent standards in all its
dealings.
Equally, as an island that relies on imported labour,
the Island has to address the needs of those who come here to work from other
jurisdictions, whether they be seasonal or employed on a longer term basis.
Redistribution of labour
There is a growing move away from traditional
industries. Growth is generally apparent
in the service industries such as leisure and finance, whilst there is a marked
decline in manufacturing industries, which are becoming increasingly automated.
Locally these have had their effect and there is little doubt that e-commerce
developments will also have a considerable impact on the workplace.
Recruitment/Training
Growing importance is being given to recruitment and
training procedures as these can prevent many problems from arising later in
employment relationships.
Greater emphasis is also being placed on the training
and development of staff. There is a recognition of the need to improve skills
in all sectors as low skilled work diminishes, computerisation expands and
global competitiveness increases. Most enlightened firms recognise that a sound
industrial relations policy helps increase productivity and profitability.
Flexibility
There is
an increasing trend in the need for both business managers and staff to be
flexible in the way they work and approach their work. Such flexibility is
reflected not only in the variety of arrangements now made concerning the hours
that people work, but also in the changes caused and likely to be caused by the
impact of information technology.
Female participation
The number of women in the workforce is increasing -
Jersey already has the highest female participation rate in Europe.
Consultation
Increasingly, the need for consultation between all
partners in the employment relationship is being recognised. Consultation
fosters partnership within relationships and can help focus business direction,
as well as being a considerate way of advising those to be affected by business
change. Some jurisdictions make consultation between the parties obligatory in
some business circumstances.
5. The framework
In determining how best to establish the legal
framework, the Committee has borne the following advice in mind -
· take a
step-by-step approach which adheres to an agreed agenda to give all parties
time to prepare for change;
· consult
with all interested parties at each stage of the development of the legislation;
· use codes
of practice in conjunction with and supported by legislation (the use of codes
of practice without a legal framework to support them is not likely to be
effective);
· use lay
members in arbitration and tribunal procedures as such people can have broad
background experience of the “local” workforce and a non-legalistic approach to
the issues at hand;
· choose
suitable remedies that will be both workable and used when legal enforcement is
required;
· avoid
heavy-handed legislation as it can have a detrimental and stifling effect.
Small pieces of disjointed legislation can also be ineffective.
In the report that follows, the Committee is proposing a framework which sets minimum standards reflecting the views expressed during the consultation process as acceptable and representative of what might reasonably be expected as part of any working relationship in the 21st century.
Throughout the consultation process it was clear that Islanders wished to retain their freedom to negotiate their own contractual terms. Indeed that is the default position in Jersey law where the maxim “la convention fait la loi des parties” so long as “elles ne contiennent rien de contraire aux lois et aux bonnes moeurs, et qu’elles interviennent entres personnes capables de contracter” is still followed in the courts so far as contractual matters are concerned (i.e. the agreement made by the parties is binding upon them - so long as it contains nothing illegal or immoral and the parties themselves are legally capable of entering into a contract - Pothier.) In reality the benchmarks provided by the proposed legislation should provide a default position for those entering into an employment contract, but nothing should prevent the parties from negotiating their own better terms.
6. Who is the legislation to protect?
Jersey has a wide selection of employers and working
groups to which the new legislation will apply, and the Committee is aware of
the need to assess the effect and workability of its proposals with each group.
It recognises that careful consideration will have to be given to their likely
impact as the details develop during the law drafting stages.
The Committee believes that it is important to
continue its consultation with all concerned, and it has already established an
Employment Forum made up of nine members representative of the community: three
employers, three employee and union, and three independents, through whom
consultative meetings will be arranged at which views can be expressed by all interested
parties and organisations.
7. “Fair Play in the Workplace”
“Fair Play in the Workplace” listed the following
points for consideration -
· terms and
conditions of employment;
· equality
of opportunity and treatment, including discrimination;
· maternity
arrangements;
· payment
of wages and salaries;
· termination
of employment, including dismissal; redundancy and the transfer of
undertakings;
· flexible
working practices;
· advice,
conciliation and enforcement ( the Jersey Advisory and Conciliation Service
(JACS) and an Employment Tribunal);
· trade
unions and collective employment rights and obligations.
The sections
which follow in Parts Two and Three of this Report demonstrate some of the thinking
and reasoning that has evolved around each topic and which has led to the
formulation of the proposals put forward by the Committee. The Committee has sought to satisfy the criteria it set
itself in the Fair Play document[6] whilst also taking heed of the results of
the Fair Play survey and the consultation meetings, the findings of its
international research and the recommendations it received on what approaches
did or did not work when establishing a new legal infrastructure.
In addition, the Committee believes that it is
inevitable that the needs and desires of some sectors will be different to
those of others. However, in drafting these proposals it has tried to balance
those needs and to introduce the proposed legislation in a manner that will not
be perceived as overtly favourable to any one group over the other. As stated
previously, the Committee believes that the new legal infrastructure should lay
down a set of legal minimum standards and safeguards for all involved in the
workplace whilst not stifling the Island’s business economy.
8. Summary of proposals
The Committee proposes that the new infrastructure
should have four components -
· a legislative framework that will set
minimum standards by which all those in the workplace will be bound. The
framework is intended to reflect common standards of decency and fairness on
behalf of all parties to the employment relationship. It is intended to provide a sound basis of acceptable standards that
will enhance and support the functioning of the Island’s business community as
it moves into the 21st century. The legislation is also intended to promote
discussion between the parties and discourage adversarial relationships;
· an advisory and conciliatory service,
to be known as the Jersey Advisory and Conciliation Service (JACS) which will
be supported by an Employment Tribunal, in its work; (As has been stated
previously the States have already approved the setting up of these bodies and
proposals in connection with their establishment and functioning do not form
part of this report.)
· an Employment Handbook which will
contain advice and guidelines on all aspects of the employment relationship;
good practice and the effect of the new laws that are proposed. Where
appropriate the guidelines will be referred to by those who ultimately work for
JACS and the Employment Tribunal as evidence of what constitutes good practice.
It is proposed that this document will be a “living document” which will be
continuously monitored, reviewed and updated as required.
· an Employment Forum consisting of nine
representatives from employee and employer groups and independents.[7] The Forum has already been set up to be responsible
for consulting all interested parties on all major issues in connection with
the Minimum Wage Law and the new employment legislation. It will also be
responsible for making recommendations to the Committee as a result of evidence
and opinion received during its consultations. The Committee will have a duty
to explain to the States why it has not followed the recommendations of the
Employment Forum in any policy it brings forward to the States for debate if
this is shown to be the case.
As far as
the legislation framework is concerned, the Committee proposes that it be
introduced in two distinct phases and within those phases the Committee is
proposing that the legislation be introduced in further tiers. The phases will approximate with Parts Two and Three of this Report and are summarised below -
· the first phase should have regard to
the minimum wage legislation already approved by the States and therefore -
(i) include legislation relating to payment of
wages issues and unfair dismissal (including protection from dismissal on
pregnancy-related grounds) and the establishment of JACS and its supporting
enforcement body all of which, as the Law Draftsman has said, will be
fundamental to the efficient functioning of the Minimum Wage Law;
(ii) introduce legislation focusing on the
contract of employment. Such legislation should emphasise the key rôle the
parties themselves play in the negotiation of their own contracts and should
establish the minimum standards that the Committee has recommended, such as one
obligatory rest day per week and two weeks’ annual paid leave as well as the
minimum wage;
(iii) introduce legislation to revise the
Industrial Disputes (Jersey) Law 1956 in accordance with the proposals outlined
on page 24 of this Report [nos. (a); (b); (c)] with the intention that an
enhanced system of dispute resolution will result from the use of the Law and
enable JACS to function more effectively.
· the second phase should include
measures as deemed necessary in dealing with the issues of -
(i) trade union;
(ii) redundancy;
(iii) maternity and equal pay and equal
opportunities as well as all other discriminatory issues in so far as they have
not already been dealt with or are to be dealt with by any other Committee;
(iv) flexible working and family friendly
policies such as unpaid leave for domestic emergencies;
(v) employees involved in merger or acquisition
situations.
For various reasons, some of which are listed below,
the Committee does not think that it is feasible or necessary to address all
the issues discussed in the Fair Play document coincidentally.
· Firstly,
it does not wish to overburden employers with new legislation, for it believes
that change must be assimilated gradually if it is to be acceptable and
workable and enforceable. The Committee also believes that there is a vital
educative function to be performed if the proposed changes are to be
implemented smoothly, and it proposes that the educative programme will run
whilst the legislation is being drafted so that Islanders are well aware of the
changes to be made, why they are being made and how they will impact.
· Secondly,
the Committee has to balance the likely resource and manpower implications of
the proposed changes against the availability of such resources. However the
Committee believes that it is of paramount importance that the new laws are
monitored and enforced otherwise they will lose credibility. In addition, it
wishes to avoid overburdening the JACS service as a result of too many issues
being addressed at once.
· Thirdly,
the Committee believes that protection from discriminatory practices based on
race and age may well be granted in the workplace as a result of new overall
policies to be promoted by the Policy and Resources Committee. The Committee
therefore feels that the prime responsibility for strategy and policy on all
discriminatory issues should rest with the Policy and Resources Committee and
that an overall approach, co-ordinated by that Committee, would achieve a
better and more sensible result.
· Fourthly,
the Committee hopes that acceptable and decent contractual standards and good
working practices will gradually become the norm without the need for
overpowering legislation if the proposed new minimum standards and good
practice guidelines are put in place, backed up by an effective dispute
resolution system.
However, most importantly in the Committee’s view, the
States have already approved the introduction of a minimum wage policy in the
Island. The Minimum Wage Law will of itself be a major piece of legislation.
The Committee has always maintained that the introduction of the minimum wage
should be an integral part of the new employment law infrastructure. For
example, some of the strongest messages received during the consultation period
were requests to introduce pay statements and to afford protection from unfair
dismissal. Accordingly, if legislation on all these issues is introduced as a
priority Islanders will already have a considerable amount of new legislation
to contend with. They will, however, see the introduction of legislation
dealing with some of the key issues highlighted in the survey and minimum wage
legislation which is long overdue.
PART TWO
Issues proposed for Phase One of the new legislation
1. Terms and conditions of employment (pp.15-16; 52-54 Fair Play)
The contract
During the
consultation period it became apparent that people still view the employment
contract as the anchor of any employment relationship. It was often stated that
the parties should be free to negotiate their own terms without government
interference and that the better use of contracts would ensure greater clarification
of both the employer’s and the employee’s rights and responsibilities. There
was a conviction that if better enforcement procedures existed then more could
be achieved through the use of contracts alone without the need for weighty
legislation.
As a result of the international research it carried
out, the Committee learnt of the particular emphasis given to the rôle of the
contract in New Zealand employment legislation. The New Zealand Employment
Contracts Law 1991 emphasises the importance of the parties’ freedom to
negotiate their own contract terms, subject to some statutory minimum standards
(e.g. holiday pay). The Committee believes that an approach similar to that
adopted in New Zealand is one that Islanders would find acceptable. It would
satisfy the wishes of those who emphasised the need for individuals to retain
the right to negotiate their own contractual terms, but it would also allow for
minimum standards to be set in law. This approach appears also to marry well
with both the Jersey customary law maxim referred to earlier and the States
decision to approve a minimum wage policy. (The setting of minimum contractual
standards in law is not in itself uncommon - the setting of a minimum wage, for
example, is the setting of a minimum standard.)
In the following two paragraphs the Committee proposes
two other minimum standards that it considers desirable for Jersey.
Provisions
for a weekly day off and paid annual leave
It is quite clear that anyone working excessive hours
will not perform to the best of their ability and indeed accidents may occur.
The Committee therefore recommends that every person be entitled to one rest
day per week. Provision for this should be included in the contract. The
Committee appreciates that for some groups alternative provisions may be
necessary, for example for part-time workers who work seven days per week or
shift workers on seven-day shifts.
However the principle of officially allowing for rest
time on a weekly basis should be recognised. The Committee does not propose
that the day be specified in law, though most contracts would probably include
Sunday as the rest day. The law would have to allow the contracting parties
some flexibility, especially as many jobs require Sunday working and different
religious beliefs recognise different holy days.
In addition, the Committee believes that all workers
should be entitled to a minimum of two weeks’ annual paid leave, such leave to
be taken on a pro rata basis if a period of less than one year is worked.
Review
procedures
It is widely acknowledged that some form of procedure
is needed in the workplace to address situations where work-related issues of
concern to either party arise. Such procedures are usually termed “grievance”
or “dismissal” procedures. The Committee is of the view that all employers need
to have review and consultation procedures as a matter of good employment
practice, and accordingly a clause referring to the employer’s review procedure
should be included as a minimum standard in the employment contract. The
Committee does not propose to dictate the form of procedure to be followed. It
recommends only that it will be necessary for an employer to establish a fair
review procedure that is workable for the size and type of business concerned
and will enable either party to address issues of concern in a reasonable
manner. A failure to follow a fair review procedure will be a factor that will
be taken into account when assessing whether any action taken was fair. The
Committee does not propose to introduce detailed legislation on review
procedures and consultation requirements, but advice on the setting-up and use
of different forms of procedure appropriate to the size of business and on the
use of consultation procedures will be provided in the Employment Handbook.
The Committee intends that conciliation will be
available through JACS when review discussions break down, as there is evidence
to prove that conciliation can radically reduce the number of claims brought to
a tribunal. For example, in Spain, the number of unfair dismissal claims
settled by conciliation is estimated to be between 60 per cent - 70 per cent.
2. Payment of wages and salaries (pp.28-30; 51 Fair Play)
The methods by which workers are paid have
grown in complexity over the years. The Payment of Wages (Jersey) Law 1962 was
designed to ensure that workers received the full benefit of their wages.
Currently Jersey law does not require an
employer to issue an employee any regular, standardised record showing how his
or her pay is calculated. In order that employees know how their pay is
calculated, the Committee is proposing that a pay statement should be mandatory
and should include details of -
· the gross amount of the wages or salary;
· the amounts of any fixed deductions and the purposes for
which they are made (e.g. social security; pension);
· the amounts of any variable deductions and the purposes for
which they are made;
· the net
amount of the wages and the salary payable (including details of a bonus; profit
share; overtime);
· the method of payment (e.g. paid in cash; bank standing
order);
· the pay reference period.
There was a call for specific legislation to deal with
the issue of unauthorised deductions from wages during the consultation period.
The issue of guarantee payments (whereby a worker is entitled to receive a
fixed level of remuneration when he is contracted to be at work but there is no
work) also received support during the consultation period, though to a lesser
extent. The Committee believes that such issues, along with specific provisions
dealing with cash shortages in the retail industry, will need to be addressed
in conjunction with the minimum wage proposals for,
without clear legal guidelines concerning them, that Law will not function
effectively. (e.g. An employee may not be able to calculate whether he has
received the minimum wage if his employer is not obliged to give him a detailed
pay statement.)
3. Termination
of employment (pp.31-36
Fair Play)
There are several ways in which a contract
of employment can be terminated. Everyone is familiar with the concept of
notice provisions in a contract which enable either party to end the employment
contract upon the giving and serving of the relevant notice. However, employment
contracts can also be terminated both fairly and unfairly; by reason of
redundancy and as a result of company mergers or acquisitions. No legislation
exists in Jersey dealing with redundancy and unfair dismissal, and only limited
protection is given in transfer and merger situations.
Termination
in accordance with the contractual notice period (p.32 Fair Play)
The minimum
periods of notice to be given by employers or employees to terminate an
employment contract under the provisions of the Termination
of Employment (Minimum Periods of Notice) (Jersey) Law 1974 are roughly
comparable with those of the United Kingdom and the Isle of Man, but on balance
considerably better than those in Guernsey. The Committee does not therefore
propose any changes to the current provisions regarding termination of notice
periods.
Unfair
dismissal ( pp.32-34 Fair Play)
The consultation period showed that the need for
legislation offering protection from unfair dismissal was considered a very
high priority. The Committee has been advised by the Law Draftsman that such
legislation is needed in order to support the enforcement of the forthcoming
minimum wage legislation. It is also needed to underpin both current and future
legislation relating to employment issues.
If trends elsewhere can be relied upon, it is
anticipated that many more claims will be brought on the ground of unfair
dismissal than on any other issue.
The Committee acknowledges that there are some
recognised circumstances in which dismissals should automatically be treated as
unfair and it proposes that these be specified in the law. For example dismissal on the grounds of union
membership or activities, and pregnancy or pregnancy-related issues, are
normally accepted as automatically unfair. In contrast the dismissal of a
temporary employee recruited on a short-term contract to do the job of someone
on maternity or extended sick leave, or a dismissal on the grounds of
misconduct or incompetence can, depending on the circumstances, be regarded as
fair. The Committee proposes that any such
legislation should be supported by good practice guidelines to be contained in
the Employment Handbook.
After much consideration, the Committee
has taken the view that an unfair dismissal is unfair whenever it occurs, and
accordingly it does not propose to recommend that a qualifying period be served
in unfair dismissal situations.
Penalties
The Committee wishes to emphasise the importance to be
attached to the decision that must be taken on the type of penalty or sanction
to be levied in cases where an unfair dismissal is proven to have occurred. Two
very different approaches can be used by way of alternative solutions -
In unfair dismissal cases the United Kingdom system
grants a discretion to members of Employment Tribunals to make compensatory
awards to individuals who are found to have been unfairly dismissed. As a
result of recent changes to the United Kingdom law, the maximum award payable
to any one individual has been increased to £50,000 with effect from 25th October
1999. It should be noted that the compensation ceiling cannot be exceeded.
Debate over the extent to which a dismissal is unfair can become lengthy and
costly in terms of both court efficiency and legal representation, as the
parties seek to prove the reasonableness of their respective cases.
By way of comparison, Guernsey has adopted
a simpler approach to the unfair dismissal issue which, although limited, is
perhaps a clear-cut way of dealing with the issue in a small jurisdiction. The
Employment Protection (Guernsey) Law 1998, which came into effect in January
1999, introduces the concept of unfair dismissal into the Bailiwick. Under the
law, unfair dismissal cases are heard by a sole adjudicator. If the adjudicator
decides that an unfair dismissal case is proven, the compensation payable to
the employee is fixed at a rate of three
months of the employee’s salary. There is no additional award to reflect the
number of years’ service completed by the employee, but this sum is paid in
addition to any monies owing to the dismissed employee under his contractual
notice provisions. There is no appeal based on the decision unless it is on a
point of law, and by virtue of the fixed penalty system the level of
compensation payable is not affected by any argument as to the reasonableness
of the claim.
The Committee proposes that a system
offering a fixed penalty sanction based on a multiplier of an employee’s
monthly salary be introduced so far as all forms of unfair dismissal are
concerned, with an additional award to be made based on a fixed scale relating
to the number of years’ service completed by an employee. The Committee accepts
that this course of action, as in Guernsey, will not allow for debate as to the
level of the compensation based on the reasonableness of the claim, but it will
take recognition of an employee’s length of service. It is proposed that any
such awards would be in addition to any monies due to the claimant under his
contractual notice provisions. (i.e. someone who was unfairly dismissed and who
had an agreed one-month notice period and had worked for two years for the
company would be entitled to a total of four month’s salary (one month’s
contractual notice pay and the three months’ unfair dismissal award) plus the
scale payment for longevity of service).
4.
JACS/Employment Tribunal (pp.43-44
Fair Play)
The States agreed at the time of the debate on the
minimum wage proposition that an independent advisory/conciliatory/enforcement
system should be established. The Committee has been researching the various
approaches in other jurisdictions that have been adopted, with the intention of
setting up the JAC’s service this year.
There can be no doubt of the importance of the rôle of
both advisory and conciliation services at all stages in the employment
relationship, whether advice be sought prior to the drawing-up of a contract,
during its existence or after its termination, or just generally in relation to
good employment practice.
The rôle to be played by JACS’ enforcement body is
equally important. Lack of enforcement of the Island’s current employment
legislation was seen as a major concern in the Fair Play consultation exercise.
It should be remembered that the majority of all claims arising out of
employment issues will be heard through the JACS system and its enforcement
body, and not through the court system. It is envisaged that appeals will be
heard by the Royal Court only in specific circumstances.
It has been recognised that this new service will be
able to operate more effectively if the current Industrial Disputes (Jersey)
Law 1956 is revised as part of an enhanced dispute resolution system in which
JACS would play a major part[8] and this has been discussed more fully in the next
sections.
The Committee is concerned to encourage resolution of
disputes at all stages between the parties, supported where necessary by JACs.
It may be that if legal representation were to be allowed at Employment
Tribunal hearings, the Tribunal members would not be granted the power to award
legal costs to anyone so represented. This approach was adopted by the Guernsey
authorities when they set up the framework for the hearing of unfair dismissal
claims in the Island’s new Employment Protection (Guernsey) Law 1998, and the
Committee believes that it would be one way of trying to ensure that the Jersey
system operates as quickly and straightforwardly as possible. During the
consultation period, the Committee received pleas that it avoid creating a
legal framework that would give rise to a “lawyer’s charter”. The Committee is
aware that many companies and individuals already seek legal advice on the
drafting of their contracts of employment, for it is generally known that there
is little employment legislation in the Island and many people check to see
what provisions are in place and seek help drafting their contracts
accordingly. The Committee acknowledges that any new legislation will give rise
to greater consideration of all employment issues, but advisory services will
be available through JACS.
It is obvious that there is a resource implication to
be considered if the JACS/Employment Tribunal system is to work efficiently,
and if any laws that are introduced are to be enforced and respected. This
matter was addressed in the proposition and report on the minimum wage that
went to the States and is referred to later in this document. However, the
experience of Jersey’s Industrial Relations Officer and that of ACAS style
bodies in other jurisdictions suggests that a professional advisory/conciliation
service is a worthwhile investment. It was also apparent from the Fair Play
consultation that Islanders want to see an increased advisory and conciliation
service with a supporting enforcement body in place as soon as possible. The
Committee therefore proposes that the work of the Industrial Relations Officer
should be absorbed by JACS and that the post in its current context should
cease.
The Committee wishes to ensure that the services
offered by both JACS and the Employment Tribunal will be as efficient as
possible. As part of that process, the Committee will be looking at measures to
prevent cases based on tactics rather than genuine argument being brought to
hearing. In addition the Committee believes that the system will function most
effectively if new legislation is introduced in phases, thereby allowing
Islanders time to gradually familiarise themselves with the new provisions and
their purpose.
Resource
implications
The likely running costs of both JACS and the
Employment Forum to cover all advisory, conciliation, arbitration and appeals
work under all aspects of the proposed employment law framework, have been
budgeted for within the Employment and Social Security Department’s year 2000
budget in accordance with the minimum wage report and proposition approved by
the States.
5. Trade Union
issues (pp.45-47 Fair Play)
The Committee wishes to deal with the trade union
issue in the same way that it has dealt with all other aspects of the
employment infrastructure, in a simple, straightforward manner, by introducing
minimum standards and building on good practice to encourage fair play in the
workplace.
It fully recognises the concerns felt by many about
the lack of local laws or regulations dealing with either the establishment of,
or the rights and responsibilities of, the Island’s trade unions, other than
the common law right of association which is granted so long as the association
is not for illegal purposes.[9] However, having carried out considerable
international research on dispute resolution and enforcement issues, the
Committee is persuaded by the growing opinion which highlights that
confrontation is neither a civilised nor beneficial way to resolve a difference
or a dispute, whether it be a collective or individual concern. Instead, throughout
the world, different jurisdictions are promoting systems to help prevent
disputes escalating, and to assist with the facilitation of discussion and
negotiation, with the intention that the majority of disputes will be resolved
using conciliatory methods without recourse to enforcement legislation.
Introducing legislation is rarely a quick procedure,
for apart from any consultation process the law drafting process itself takes
time, and legislation then has to go before the States for approval and then to
the Privy Council in London for sanction. The Committee therefore believes that
detailed trade union legislation would take a long time to introduce into the
Island, and it would be an enormous challenge to introduce it as simple,
workable and accepted by all.
It is for this reason that the Committee has looked
again at the Island’s Industrial Disputes Law. Although the Law was written in
1956 and its style is somewhat convoluted, the Committee believes that it is
far from redundant. It does, in fact, specifically provide for a system to
manage the resolution of collective disputes which is beyond anything provided
for within the United Kingdom system[10].
In brief outline the Law provides for the appointment
of an Industrial Disputes Officer, who is given power “to take any steps which
seem to him expedient to promote a settlement” of any dispute or issue that is
reported to him (Article 7). This Article enables the Industrial Disputes
Officer to refer matters for conciliation, mediation and arbitration.
The Law also establishes an Industrial Disputes
Tribunal which can be constituted as a final forum to make a binding decision
on any collective issue that comes before it for adjudication.
Article 10 of the Law provides that the Industrial
Disputes Officer must refer any matter that is reported to him to the
Industrial Disputes Tribunal for adjudication within fourteen days of its being
reported.[11] This provision effectively allows the Industrial
Disputes Officer, if he deems it appropriate, to implement a “cooling-off
period”, during which time attempts at settlement can be made. Article 10 also
grants the Industrial Disputes Officer the power to extend the fourteen-day
period by a further fourteen days “ if he thinks it desirable to do so”.[12]
The Committee believes that an inhibiting factor in
the use of the process established under the Industrial Disputes Law has been
the fact that the Industrial Disputes Officer has to be a States member, and it
is therefore proposing to remedy this situation. It also believes that if two
other amendments were made to the Industrial Disputes Law, the result of a
combined use of the JACS service and the Law would be the creation of an
enhanced and effective system of dispute resolution. The proposed amendments will
be described shortly, but before doing so it is worth noting the results of the
Committee’s research in Guernsey.
Guernsey has, over a period of time, developed a very
successful industrial relations strategy based on conciliation and arbitration.
The Island has no specific trade union legislation, but it does have an
Industrial Disputes Law that is not dissimilar to the Jersey one. The Guernsey
Law creates the post of an Industrial Disputes Officer and establishes an
Industrial Disputes Tribunal. The Industrial Disputes Officer has various
powers to deal with matters that are notified to him, and he can refer matters
to the Tribunal, which acts as an adjudication and decision-making body if
needed. The Island also has two Industrial Relations advisers who offer
advisory and conciliatory services. It is apparent that all parties to
workforce arrangements in the Island, whether they be union, employer or
employee, both trust and use the facilities available to them for advice,
consultation, conciliation, mediation and arbitration purposes, and the
Tribunal is called only infrequently as a result of the success rate achieved
by the conciliation services.
The Committee has come to the conclusion that despite
the similarity in the Island’s two Industrial Disputes Laws, there are some key
differences which have probably resulted in the Guernsey Law being respected as
part of a workable system, whereas the Jersey Law does not appear to be so. The
first is that the Guernsey Law excludes States members from holding the posts
of either the Industrial Disputes Officer or Deputy, whereas the Jersey Law
requires the Industrial Disputes Officers to be States members. Secondly, the
Guernsey Law allows the Industrial Disputes Tribunal to adjudicate upon a
dispute once industrial action has commenced or during such action, whereas the
Committee believes that Article 10 of the Jersey Law prevents the Industrial
Disputes Tribunal from adjudicating upon a dispute in such circumstances.
Therefore, as an initial stage, the Committee proposes
that the Industrial Disputes (Jersey) Law 1956 be amended as part of Phase One
of its proposals to include the following -
(a) that States Members be precluded from
holding the posts of Industrial Disputes Officer and Deputy. The Committee believes
that such a step would grant the postholders greater independence;
(b) that the Industrial Disputes Officer be
granted authority to offer his services in any situation where he apprehends
the possibility of a dispute in addition to his current authority to become
involved only when a dispute is reported to him;
(c) that Article 10.3 of the current Law be
repealed so that the Industrial Disputes Officer can still refer a matter to
the Industrial Disputes Tribunal once industrial action has started, and that
the Tribunal can continue to hear a dispute if such action starts after the
hearing has commenced.
The Committee does
not believe that any referral for conciliation by the Industrial Disputes
Officer should be compulsory. Advice has been received from the Chief
Conciliator of ACAS and from other advisers that conciliation systems work best
when the parties choose to use the services offered voluntarily. Trust and
respect are not established if people are forced to do something against their will.
Technically speaking the parties’ time could be wasted if one or other were
unwilling to discuss the issues and simply attended upon the conciliator with
no intention of taking part in realistic discussion.
The Committee is of the view that, given time, the
changes proposed above would make a major contribution to modernising
employment relations on the Island and preventing strikes. The Committee is
convinced that the partnership approach is a vital component in successful
modern-day business relations, and it has been encouraged by the apparent
growing awareness of this ethos in the Island. Accordingly the Committee firmly
believes that a reasonable amount of time ought to be allowed for these various
changes to take place and be assessed before any further legislation is
introduced.
However, if, after a reasonable period of time, the
proposed system was deemed not to be working, and it was felt that additional
measures were required, then further legislation could be introduced. Any such
legislation that was introduced could, for example, contain provisions dealing
with ballot procedures; restrictions on the use of secondary action and the
granting of workers’ representation rights. However the Island would be
starting from the beginning, and provisions regulating the establishment of
trade unions in the Island would also need to be included. Trade union
legislation is currently being expanded in the United Kingdom, and in Europe
generally there is a move towards the establishment of “Works Councils”. This
development is adding another dimension to the whole area of trade union
legislation which is already complex.
States
Legislation Programme 2000 - 2001
The Law Draftsman has advised that the
above Programme could accommodate the legislation proposed for the first phase.
PART THREE
Proposed
issues to be encompassed in Phase Two of the new legislation
1. Equality of
opportunity (pp.19-21
Fair Play)
Many people probably assume that men and women receive
equal pay for equal work already. However there is no local legislation to this
effect, and as a social concept it is probably fair to say that the principle
of equal pay for equal work has wide support. The intention of such legislation
would be to provide equal pay and equal opportunity for both men and women and
to prevent discrimination as regards their terms of employment.
The Committee believes that this issue is
intrinsically related to other discrimination issues. Indeed, the Equal Pay Act
was implemented in the United Kingdom at the same time as the statutes dealing
with sex and race discrimination. However, it should also be noted that equal
pay is not only an issue between men and women. It can also be an issue between
people of the same sex doing the same job, and it can also be a productivity
issue.[13]
The Committee is conscious of the fact that the issue
of equal pay was regarded, quite rightly, as a high priority in the survey.
However, whilst acknowledging that the issues of equal pay and equal
opportunity do need to be considered, the Committee has taken the view that
they will only be effectively addressed as part of an overall discrimination
policy. (see “Discrimination” below). In support of this view, the Committee
has noted that the Equal Opportunities Commission is of the opinion that
experience in the United Kingdom has shown that the Equal Pay Act would have
been more effective if it had formed part of legislation dealing with both sex
and race discrimination.
2.
Discrimination (pp.19-24
Fair Play)
Discrimination may be defined as “detrimental
treatment received as a result of something beyond the individual’s control”.
The survey and consultation results indicated that
only a small majority of islanders felt that an anti-discrimination law was a
priority. Discrimination on the grounds of age was the area of most concern.
That fact in itself raises some separate issues, and it may be that new States
policies in connection with manpower will be adopted to indirectly help prevent
some of the discriminatory problems based on ageism that arise in the
workplace.
However, it was also recognised that discrimination,
whether it be on the grounds of sex, race, disability, gender, religion or age
is not an issue that occurs only in the employment relationship. The Policy and
Resources Committee, through the Legislation Committee, has already
commissioned a working party on race relations, with a view to a Race Relations
Law being drafted during 2000.
It is known that the draft proposals of that working
party include reference to the employment scenario.[14] As mentioned above, the Equal Opportunities Commission
is of the view that matters such as sex and race discrimination should be dealt
with coincidentally with equal opportunities issues, and this view was also
voiced during the consultation period. The Committee believes that it would be
possible for any anti-discrimination legislation dealing with discrimination
based on the grounds of sex or race to be extended to deal with discrimination
on the grounds of disability. The Committee has noted that the grounds upon
which it is unlawful for an employer to discriminate against applicants and
employees in each of the United Kingdom Sex Discrimination Act 1975; the Race
Relations Act 1976 and the Disability Discrimination Act 1995 are the same.
The Committee is convinced that legislation dealing
with anti-discrimination issues in the workplace should be dealt with as part
of a broader anti-discrimination policy. It believes that work on such a
strategy has been effectively started by the Policy and Resources Committee
through its instigation of the forthcoming Jersey Race Relations Law and the
establishment of the Racial Discrimination Forum. Accordingly, it strongly
suggests that the possibility of extending this Law to cover sex and disability
discrimination should be addressed prior to the Committee embarking upon a
separate policy to deal with discriminatory issues, other than race, in the
workplace only. However, if this proposal is not found to be the most logical
approach, the Committee would wish to reconsider the position in relation to
discrimination in the workplace in due course.
3. Maternity (pp.25-27; 55 Fair Play)
As part of the States’ Strategic Policy Review and
Action Plan the States, in principle, agreed to the introduction of a maternity
policy throughout the Island to match that offered by the States of Jersey.
Since that debate the States’ employees maternity policy has now been
consolidated across all sectors, and entitles a female States’ employee who has
been employed on a permanent basis for a period of at least one year (including
a satisfactory probation period) to have 18 weeks’ maternity leave and to
receive maternity pay at a rate of 90 per cent of her salary for a period of 12
of the 18 weeks. Her employer’s liability (i.e. the States of Jersey, as her employer) is to make up the
difference between the amount she receives by way of Social Security maternity
benefit and the figure representing 90 per cent of her earnings.
During the consultation process, the Committee heard
of the genuine concerns felt by many small businesses that they simply could
not afford to pay an employee maternity pay as well as pay for a replacement
during the employee’s period of maternity leave.
Another real fear is the detrimental impact that might
result if a maternity policy is introduced in isolation. Opinion demonstrated
that unless some anti-discrimination provisions are introduced, some businesses
may simply avoid employing women of childbearing age. Also, until protection is
afforded by an unfair dismissal law, women might more readily be dismissed by
their employer once they announce their pregnancy.
Having considered all the above issues, the Committee
recommends that any maternity policy be introduced in phases, so as to allow
the business community time to adapt to its inevitable impact. However, it does
believe that legislation protecting a woman from dismissal on the ground that
she is pregnant or for any other reason connected with her pregnancy should
have priority. Accordingly, measures are proposed to grant such protection in
the Committee’s unfair dismissal proposals.
In addition, although the Committee does not propose
at this stage to introduce specific legislation guaranteeing a woman a right to
return to work and to the same or a similar job, the Committee believes that
its unfair dismissal proposals will, to a large extent, result in the creation
of such a situation.
An employee’s eligibility to receive maternity pay and
paid time off for ante-natal care are issues that the Committee proposes be
addressed after the unfair dismissal provisions are in place. The Committee
believes that the issue of a woman’s right to return to her former job at the
end of her maternity leave period is in reality a discrimination issue. In
addition, women may want to reduce to part-time hours when they return to work
from maternity leave. Accordingly the Committee feels that any legislation
specifically dealing with these two issues should be introduced at the same
time as any legislation dealing with discrimination, part-time and flexible
working issues.
4.
Redundancy (p.31 Fair Play)
When considering the issue of redundancy,
the Committee considered both the philosophy behind the awarding of redundancy
payments and then the relevance of that philosophy in the Jersey workplace.
Historically, a redundancy payment is a
payment made to an employee who has lost his job as a result of redundancy, and
who becomes eligible for a compensatory payment based on his length of service.
It is a payment made in addition to any remuneration payable under the notice
provisions of the employee’s contract.
The policy of awarding redundancy payments was not introduced to award bonus
payments to employees for long service, but rather to compensate them for the
loss of their jobs.
However, some may question the need for
the automatic payment of redundancy awards when redundancies occur in a labour
market such as currently exists in Jersey where demand for labour is high.
Indeed, many believe that the current
notice periods granted under the Termination of
Employment (Minimum Periods of Notice) (Jersey) Law 1974 were drafted in
recognition of the fact that there are no redundancy provisions under Jersey
law.
The Committee believes, in principle, that a
redundancy policy should form part of any employment law framework that is
designed to address the 21st century. It believes that any provisions that are
introduced in relation to redundancy and length of service in Jersey should be
calculated against what is felt to be best in Jersey’s interests, and after a
fresh comparison of what is happening in other jurisdictions. Currently there is no evidence of large numbers of
redundancies in Jersey. Most people who are made redundant appear to find
employment fairly quickly, and the Committee believes that problems relating to
age discrimination or the requirement to re-skill are best addressed as
discrimination or “lifelong learning” issues.
However, although Jersey’s labour market is currently
buoyant, the situation may not continue. Even now if businesses close in
certain industries where there is little or no further demand in the Island for
the skills of those made redundant, genuine hardship can result. In addition,
the situation may well change if the skills needs of the Jersey economy were to
radically alter, if the economy were to decline or “outsourcing” and
rationalisations were to noticeably increase as a result of business
competition, population policies etc. Therefore, the Committee feels that provisions
to provide for employees who are made redundant should be introduced in
recognition of the fact that employees can suffer hardship as a result.
The Committee proposes that a redundancy policy should
be introduced with redundancy payments based on a scale based on length of
service. As part of its philosophy of making any legislation easy to understand
and workable, the Committee would envisage the length of service scale to be
applied in redundancy situations being the same as that applied in unfair
dismissal cases for length of service awards. As with unfair dismissal claims,
the redundant individual would also be entitled to the normal termination of
notice payment due under his contractual terms.
5.
Merger and acquisition of businesses (p.16-17 Fair Play)
The employees of a business that either sells or
transfers its assets face the possibility of either redundancy or continued
employment in the new business but perhaps on different contractual terms.
There is currently no protection in Jersey
to ensure that staff who are transferred
with a business do not suffer any detrimental change to their contracts. Some
jurisdictions make it obligatory upon the management of the new business to
continue the employment contracts of the transferred staff on either the same
or better terms. Such legislation has shown that lengthy and complex legal
argument can arise in connection with its application, and the Committee has
been advised to avoid this type of legislation. Given the complexity of the
issue, the Committee does not consider it is a high priority at this stage to
provide such protection in law in the Jersey workplace where labour and skills
are at a premium. However, the Committee realises that factors such as
e-commerce may have a considerable impact in this area in future, and it will
continue to research the issue in order to find a way of addressing it to suit
Island needs.
However, the Committee does believe that provision
should be made to ensure that management consults so far as is reasonably
possible and in good time before a transfer takes place with staff who will be
either effected by or involved in the transfer of a business or in a business
where redundancies are to be made. This principle also applies to any other
redundancy situation. Accordingly, the Committee proposes that guidelines on
good consultative practice will be included in the Employment Handbook,
although the Committee accepts that provision may need to be made for
exemptions where sensitive information is involved.
6. Written statements of reasons for dismissal
There is currently no legislation requiring an
employer to provide a written statement of reasons for dismissal at the time of
an employee’s dismissal. The Committee feels that it is good employment
practice for an employer to provide such a statement if so requested by the
dismissed employee.
Although the Committee does not propose to legislate
on this matter, it does propose to include guidance on it in the Employment
Handbook. It also proposes that a failure to issue a written statement of
reasons for dismissal should be taken into consideration in any unfair
dismissal claim. The Committee accepts however that there will be circumstances
where an employer is unable to provide such a statement due to the sensitivity
of information and it proposes that this situation should be recognised.
7. Insolvency
fund (pp.32 and 36 Fair Play)
The Committee believes that an Insolvency Fund would
only be necessary if a redundancy policy such as that outlined above were to be
introduced, but it wishes to consult further on the issue of its setting-up.
The Viscount has advised that this matter has been addressed before but that it
was not progressed. The Committee understands that legislation to set up such a
fund might be complex and difficult to administer.
8.
Family-friendly and flexible working policies (pp.15-18 and 37-41 Fair Play)
Many flexible approaches to working are now commonly
used throughout the developed world. The challenge is not to limit such
opportunities where they are to the benefit of employers and their employees
but to safeguard against potential misuse at the same time.
With a thriving economy and a labour
shortage, the Island’s business community needs to seek out means by which it
can most effectively use the Island’s available manpower. Flexible working
practices such as flexi-time and part-time work and the extension of the
retirement age are possible approaches. Another is to adopt “family friendly”
policies such as those referred to below, which are in part intended to
encourage women with family commitments back into the workplace.
New
rights in the United Kingdom and Europe
The United Kingdom is currently introducing
legislation which will put into effect the new social policies contained in
directives issued by the European Union. Additional unpaid leave is granted to
parents as a result of the birth or adoption of a child and leave is also to be
allowed at the time of a family emergency. Hitherto there has been no
legislative protection granting part-time workers the same employment rights as
full-time workers. This too is to be changed by the introduction of
legislation.
Protection from unfair dismissal is to be given to
those who assert their rights under any of these new provisions.
It has been suggested that since Jersey has such a
shortage of labour and since so many women are included in the workforce,
legislation such as that referred to above ought to be introduced in the
Island, especially if the employment laws that are being considered are aimed
to suit changing working trends.
The Committee supports the view that all workers
should be treated the same, pro rata for those working less than a full working
week. However, the Committee recognises that the introduction of rights such as
those detailed above may have an economic impact at this stage. It therefore
believes that these aspects should be addressed more fully after its proposed
fundamental minimum employment standards have been put in place.
Time off
provisions
Details of the Committee’s recommendation that every
person be allowed one rest day per week are given on page 14. However,
Islanders’ views on the need for legislation to control the issues of time off
work for trade union duties, honorary service, ante-natal care and protection
from Sunday working were also sought.
The Committee believes that protection from Sunday
working is an issue to be addressed and agreed at the time the contract is
entered into by the parties.
The Committee prefers that the issue of time off for
trade union duties should also be dealt with as a contractual issue.
Alternatively it should be addressed as part of any legislative programme
introduced to deal with the trade union issues in Phase Two.
Its proposals for provision for time off for
ante-natal care should, as previously stated, be dealt with after its unfair
dismissal proposals are in place.
The feedback relating to time off for honorary service
was that the local honorary system seemed to work comparatively well at present
and that it should not be interfered with. The Committee feels that in an
Island that relies so heavily on honorary systems and that has such a diversity
of business it is best to leave the issue of time off for public duty to be
dealt with by the parties as a contractual issue, the terms of which are to be
negotiated upon between them.
9. Conclusion
There is no doubt that these proposals will eventually
bring Jersey into line with best practice in developed countries whilst
recognising that, as a small Island, it cannot reasonably cope with too much
complex legislation. In essence, the proposals map out the route ahead, giving
all parties time to absorb and adapt to the changes.
8th June 2000