Redundancy: summary of the provisions of Amendments No.5 and No.6 to the Employment (Jersey) Law 200310 Mar 2011
This briefing provides a summary of the key provisions of Amendments No.5 ("Amendment No.5") and No.6 ("Amendment No.6") to the Employment (Jersey) Law 2003 (the "Law"). Please note that the amendments are complex. If employment issues arise to which these amendments could be relevant, it is recommended that legal advice is taken at an early stage.
Amendment No.5 introduces a number of important changes to the Law in relation to redundancy, including statutory redundancy pay provisions.
Amendment No. 6 tidies up aspects of the Law which were not addressed in Amendment No. 5 or which otherwise needed to be re-considered.
Amendment provisions effective from 1 January 2011
Statutory notice periods
Article 56(1) of the Law sets out the minimum periods of notice which employers are required to give in order to terminate an employee's employment, determined by reference to the employee's length of service. Article 56(1) has been changed by Amendment No. 5. From 1 January 2011:
- the minimum statutory notice period applicable to staff with less than 2 years' continuous employment is 1 week for all such staff (previously, staff with between 26 weeks' and 2 years' continuous employment were entitled to 2 weeks' minimum statutory notice);
- thereafter, for staff with 2 years' or more continuous employment, an employee will accrue 1 week's additional statutory notice entitlement for each complete year of continuous employment, up to a maximum of 12 weeks' statutory notice for staff with 12 years' or more continuous employment (down from the previous maximum of 16 weeks' statutory notice for staff with 15 years' or more continuous employment).
A contractual notice period can still be longer than the relevant statutory minimum and, subject to the requirements of unfair dismissal legislation, an employer still has the right to terminate without notice in cases of gross misconduct.
Rights on redundancy
Amendment No.5 introduces a new Part 6A to the Law, entitled "Rights on Redundancy". From 1 January 2011:
- a qualifying employee dismissed by reason of redundancy will be entitled to a statutory redundancy payment (Article 60A);
- in order to qualify for the right to receive a statutory redundancy payment, an employee must have been continuously employed for a period of not less than 2 years, ending with the effective date of termination (Article 60B);
- the statutory redundancy payment will be calculated on the basis of one week's pay (subject to a cap, as specified in an Order or, where no Order is in force, based on average weekly earnings) for each year of continuous employment (NB. there is no cap on number of years' service) (Article 60C);
- a redundant employee has a right to a statutory redundancy payment if any of the following occurs within 6 months of the effective date of termination of employment (which period may be extended by the Tribunal, at its discretion, to up to 12 months from the effective date of termination of employment);
- a redundancy payment has been agreed and paid (Article 60D(1)(a)); or
- the employee writes to the employer claiming a redundancy payment (Article 60D(1)(b)); or
- the employee refers to the Tribunal a claim concerning his or her right to receive a redundancy payment (Article 60D(1)(c)); or
- the employee has lodged a complaint with the Tribunal under Article 76 of the Law in relation to his or her dismissal (Article 60D(1)(d));
- an employee is not entitled to a redundancy payment in circumstances where, within 4 weeks of the end of the previous employment, the employee's contract of employment is renewed or he or she is re-engaged in the same employment (Article 60(E));
- a redundant employee is entitled to a reasonable amount of paid time off (at least 40% of the working week, so that a person working a 5 day week would be entitled to 2 working days' paid leave) during work hours prior to the end of his or her notice period to look for work or arrange for training (Article 60K);
- such job hunt/training leave will be paid in accordance with the employee's hourly rate, taking into account the employee's weekly pay and normal working hours (Article 60L); and
- in the event that the employer unreasonably refuses to grant such paid time off, an employee may lodge a claim with the Tribunal in relation to this failure, such claim to be lodged within 8 weeks of the date on which the paid time off should have been permitted (Article 60M).
Further future provisions under Amendment No. 6
On 18 January 2011, the States of Jersey passed Amendment No. 6, which is likely to come into force later in 2011. Amendment No. 6 will make the following further changes:
- an amendment to Article 60B will mean that all employees who have the requisite period of continuous employment will qualify for a statutory redundancy payment, including those working less than 8 hours per week;
- it will be confirmed that, if a reasonable offer of the same or similar suitable employment, to start within 4 weeks of termination, is made and rejected, the individual will not be entitled to a redundancy payment (Article 60E);
- where an employer is proposing to make 12 or more staff (whether unionised or not) redundant within a 30 day period, collective consultation must be carried out in accordance with statutory requirements (Articles 60F and 60G) and any failure in this regard could lead to a maximum protective award to each employee of 9 weeks' pay (Article 60H); and
- where the collective consultation requirement applies, an employer will be required to notify the Social Security Minister of the proposed redundancies at least 30 days prior to the first of the redundancy dismissals taking effect (Article 60N).
Postponed: removal of age cap on unfair dismissal claims (Article 74)
It was originally proposed that, under Amendment No. 5, the age cap on unfair dismissal claims would be removed. However, this has not been pursued under Amendments No. 5 or No. 6 and, therefore, it appears that this proposal is on hold.