Risk and Redundancies: the Case of Kayla Ward v the Gaming Board
In Kayla Ward & Others v The Gaming Board for The Bahamas Supreme Court Action No. 2017/CLE/gen/1506 (dated 17th February 2020, unreported), the Supreme Court of the Commonwealth of The Bahamas considered (i) the interrelationship between section 29 of the Employment Act (the “EA”), (ii) the redundancy provisions introduced by the Employment (Amendment) Act 2017 (the “Amendment”) and (iii) wrongful and/or unfair dismissal within the context of a restructuring exercise effected by the Gaming Board for The Bahamas (“the Gaming Board”).
Thirty-six (36) plaintiffs (the “Plaintiffs”) brought proceedings against the Gaming Board seeking damages for breach of contract and/or wrongful dismissal and/or unfair dismissal and, in some cases reinstatement, after their employment was terminated by the Gaming Board between October 2017 and February 2018. This note focuses particularly on the unfair dismissal claims of two categories of Plaintiffs, viz.: those Plaintiffs that had managerial/supervisory status (the “Managerial Plaintiffs”) and those Plaintiffs that were part of The Bahamas Public Services Union (the relevant bargaining agent) (the “Bargaining Agent Plaintiffs”) (together the “Relevant Plaintiffs”).
An action for unfair dismissal is a statutory cause of action which may be invoked by an employee in circumstances where there is an issue in relation to the substantive or procedural fairness of their dismissal. The expression “unfair dismissal” itself is not defined in the Employment Act. Save in certain cases which are deemed unfair by statute, the fairness of a dismissal must be assessed in accordance with the substantial merits of the case. The remedies, which the court may award to an aggrieved employee who has been unfairly dismissed, include reinstatement, re-engagement and compensation.
The Relevant Plaintiffs alleged that, although their dismissal had not been expressly characterised as such by the Gaming Board, their dismissal had in substance been a redundancy and appropriate procedures had not been followed by the Gaming Board. The Relevant Plaintiffs received termination letters that indicated that their dismissal was the effect of a restructuring exercise aimed at achieving organisational efficiency. The background to their dismissal was that the regulatory needs of the industry had become “more techno-centric than labour intensive”.
The Amendment introduced enhanced provisions regulating redundancy, lay offs and short-time working which were incorporated into Part VI of the EA. Section 26 of the EA (as amended) states that an employer may lawfully dismiss an employee on the ground of redundancy provided that the employer is compliant with the provisions of Part VI of the EA. An employee is deemed to be dismissed because of redundancy if his dismissal is wholly or mainly attributable to:
- the fact that his employer has ceased, or intends to cease, to carry on the business for the purposes of which the employee was employed by him, or has ceased, or intends to cease, to carry on that business in the place where the employee was so employed; or
- the fact that the requirements of that business for employees to carry out work of a particular kind, or for employees to carry out work of a particular kind in the place where he was so employed, have ceased or diminished or is expected to cease or diminish.
Section 26A of the EA (as amended) stipulates a procedure to be followed when an employer is considering or has determined that employees will be made redundant. In broad terms, the procedure involves informing the relevant trade union or employees’ representative of prescribed matters, consulting with the relevant trade union or employees’ representative on prescribed matters and consulting with and informing the Minister of Labour.
[N.B. Without prejudice to the statutory provisions, in this case the Bargaining Agent Plaintiffs also benefitted from express provisions in an Industrial Agreement entered into between the Gaming Board and the Bargaining Agent which addressed redundancy situations.]
The Gaming Board’s defence to the Relevant Plaintiffs’ claims was (essentially) that the Plaintiffs had been dismissed in accordance with section 29 of the EA. Therefore, there had been no unfair dismissal. Section 29 of the EA prescribes minimum periods of notice and severance pay which, in the absence of more favourable contract terms, must be provided by employers when terminating an employee without cause.
The Supreme Court of the Commonwealth of The Bahamas held that the Relevant Plaintiffs had been made redundant as the Gaming Board had embarked upon a restructuring exercise in an effort to decrease its staffing on account of a change in the requirements of its business for administrative work.
The Court found on the evidence that the provisions of section 26A of the EA (as amended) and (in relation to the Bargaining Agent Plaintiffs,) Article 25 of the Industrial Agreement had not been complied with by the Gaming Board. The Court affirmed the view expressed in persuasive authority that “consultation is one of the pillars of modern industrial relations practice…” and held that the Gaming Board’s default made the dismissals of the Relevant Plaintiffs unfair.
On the issue of remedies, the Court ordered that the Relevant Plaintiffs be reinstated if they so wished pursuant to section 42 of the EA. The Court remarked that, if the Gaming Board could not find any suitable positions for the Relevant Plaintiffs, it could dismiss them on the ground of redundancy, but this time ensuring that it complied with the provisions of section 26A. In addition, the Court found that the Relevant Plaintiffs were entitled to compensation (consisting of a basic award and a compensatory award) pursuant to sections 45 to 48 of the EA.
Kayla Ward provides a salutary reminder of the importance of abiding by mandatory statutory procedures and binding contractual procedures when effecting dismissals. It is also a striking instance of the Court ordering the relatively uncommon remedy of reinstatement. Going forward, employers would be well advised to carefully consider the potential application of the provisions of Part VI of the EA whenever considering the potential dismissal of employees in circumstances where such dismissal would amount to redundancy.
About the Author
Jonathan Deal is an associate in the firm’s litigation practice group. His practice focuses on complex trust and estate advice and litigation, and commercial law.