Barbados Caught in COVID-19 Scam

RADICAL INVESTMENTS LTD V. GOOD VIBRATIONS ENTERTAINMENT LLC (United States District Court Southern District of Florida West Palm Beach Division Case No.: 9:21cv81761: September 17, 2021)

Radical investments Ltd. a St. Lucia company based in Barbados has filed a law suit in the Florida, United States Courts against a company called Good Vibrations Entertainment LLC along with six other co-defendants. The 300, 000 citizens of Barbados are cited to be at the core of this case in the midst of the Corona Virus pandemic and efforts to secure vaccines.

INTERPOL has issued a global alert of organised groups attempting to defraud governments with fake offers to sell COVID-19 vaccines. The warning follows some 60 cases in 40 countries around the world where health ministries, governments, and hospitals have received offers for COVID-19 vaccines approved for distribution in their country.

The Plaintiff Radical Investments Ltd.’s Claim is that it was deceptively lured into an elaborate scam to advance the sum of 10.2 million U.S. dollars for one million non-existent doses of AstraZeneca vaccine.

The Claim alleges that on or around late March or early April, 2021, Mr. Mark Maloney, the principal of the Plaintiff, Radical Investments, was introduced by Cheryl Chamley, a Trinidadian national who resides in the United States and works in the PPE Sector to the principal of Good Vibes Mr. Alex Lee Moore.

Ms. Chamley and Mr. Maloney  are said to be business associates in the Claim. It is also asserted it the Claim that Radical had been  authorized by the Barbadian Government’s Ministry of Health and Wellness to procure vaccines on its behalf. The purchase price for the vaccines was to be USA $10.2 million.

As of the date of the filing of the Complaint, Radical Investments had been returned approximately $5.4 million of its initial deposit, leaving approximately $6.7 million in arrears. Radical Investment’s Claim is based on Civil Conspiracy, Deceptive and Unfair Trade Practices and Fraud and Negligence. The Claim alleges that Good Vibrations at no time possessed the ability, or the intent to procure let alone deliver the vaccines to Radical.

Radical had entered into a valid and enforceable purchase and sale agreement on April 16, 2021, for the sourcing and delivery of 1 million doses of AstraZeneca vaccines by Defendants in exchange for money payments by the Plaintiff. The vaccines were never delivered. By virtue of this material breach of the agreement Radical alleges that it has suffered substantial economic damages. Radical is further claiming that it is entitled to an award of compensatory damages, including consequential damages, together with interest and costs, and an injunction prohibiting the Defendants from continuing to engage in the alleged tortious conduct.

First published September 21, 2021

New Data Protection

 OVERVIEW

With the increased ease of storing and dissemination of data, the Parliament of Barbados proclaimed on March 26th, 2021. The legislation seeks to protect individuals in Barbados from negligent or reckless handling of their information by those who collect, hold or process that information. The Act is comprehensive and is worth special review if your collection of data is caught by the Act.

Entities are required to get the consent of the individual before taking their information. For children consent of a guardian is required. If there is any disclosure of information and the individual suffers any harm he or she is entitled to compensation.

Entities which are considered data controllers or processors are required to register. If they do not register they are liable to a fine of $10,000.00. If the entity is a public entity or a private entity which has a core business of processing data then it must appoint a Data Privacy Officer.

In order to protect the individual the legislation seeks to ensure that those who collect, hold or process information are properly regulated. The data controller/processor must put in place security measures commensurate with the risk associated with the data. The Entity must also develop binding corporate rules containing the entity’s data protection policy.

The legislation establishes a Data Protection Commissioner along with Staff. Their functions include (i) oversight of registrants (ii) taking investigative action where there is a suspicion that a breach has occurred (iii) penalizing entities which may be in breach. The largest penalty is $500,000.00 for failing to respect the individual’s right to have his personal information protected. There is also a Data Protection Tribunal which deals with any matters of litigation arising out of the Act such as appealing decisions of the Data Protection Commissioner.

BACKGROUND

Protection of data in Barbados has for many years occurred by default because of the difficulty in disseminating largely paper-based content. With the advances in information technology and the ease with which collected information can now be distributed the need for data protection legislation had become critical. The legislation comes against a backdrop of Government over decades now, working to improve its ability to collect and process data. Examples include the National Insurance Scheme, the Barbados Revenue Authority and the Customs and Excise Department.

Within the private sector we have seen the introduction of loyalty cards which collect a considerable amount of personal information about individual customers.

In addition businesses considered to be gate keepers for anti-money laundering purposes are required to collect more personal information from individuals than previously. These gatekeepers include financial institutions, lawyers, real estate agents and accountants.

Political parties have also developed databases which can identify individual’s political affiliations and how they are likely to vote during an election.

DATA PROTECTION PRIVILEGES

Section 4 of the Act identifies certain data protection privileges which those who collect, hold and process data must observe:

1. In relation to each individual, the data must be processed lawfully, fairly and in a transparent manner.
2. It must be collected for specific, explicit and legitimate purposes and must not be processed further than for the purposes identified.
3. The data can be adequate and relevant to the purpose and must be limited to that purpose.
4. The data must be accurate and kept up to date and if inaccurate must be deleted as soon as possible.
5. It should be kept in a form where the individual can be identified only for the purpose of processing the data.
6. Security measures must be utilized for the protection of the personal data including but not limited to accidental loss.
7. Individuals have a right to access information about processing their personal data. The data controller must advise the individual of the purpose for which the data is required.

SENSITIVE PERSONAL DATA

Entities must be even more careful in the collection and manipulation of information which is defined as sensitive personal data. This includes information concerning racial or ethnic origin; political opinions; religious beliefs or other beliefs of a similar nature; membership of a political body; membership of a trade union; genetic data; biometric data; sexual orientation or sexual life; financial record or position; criminal record; or proceedings for any offence committed or alleged to have been committed by him, the disposal of such proceedings or the sentence of any court of competent jurisdiction in such proceedings.

TO WHOM THE ACT APPLIES

Which data Controllers/Processors

The Act addresses persons who are termed data controllers and data processors. These are owners  who determine whether and how data should be processed as well as third parties who are authorized processors of data for owners. 

Data controllers/processors which are established in Barbados are subject to the Act. Those which are not established in Barbados but which sell goods or services to individuals in Barbados are also subject to the Act.

What is data?

The definition section is critically important. Firstly is the information which you collect considered data? Well data seems to be information which is subjected to an automated process and from which you are able to identify an individual. Or any relevant process from which an individual can be identified even though not automated.

After the information is collected and the person carries out any process adapts, organizes or alters the information and then uses it for any number of purposes including the profiling of the individual then one would be engaged in data processing.  

Entities which collect data from individuals and do not engage in the processing of the data in any way would not be subject to the Act. Those which engage in manipulation of the data would be subject to the Act.

HOW TO PROCESS DATA LAWFULLY

• The data controller/processor must get the consent of the individual who is giving his/her data or must be required by law to process the information. It must be clear that consent is requested and given.

• Entities which are data controllers/ processors must be registered and The Commissioner of Data Protection is required keep an up to date register of data controllers and processors.

• They are also required to put security appropriate measures commensurate with the risk of loss destruction or damage in place to protect the data in their possession.

• The entity must establish binding corporate rules especially concerning data security.

Appointment of a Data Privacy Officer

• Public Authorities responsible for processing a large body of private information must appoint a Data Privacy Officer or Officers as is necessary to ensure compliance with the Act. One would imagine that this includes entities such as those mentioned previously such as NIS and BRA, but must now also include entities such as the Queen Elizabeth Hospital.

• A Data Processing Officer must also be appointed where the core activity of the data controller/processor is the processing of data. Thus the processors working on behalf of data controllers must also appoint one.

Data Impact Assessment

• Where the processing of the data and it is likely to result in a high risk to the rights and freedoms of an individual, the data controller must, prior to the processing, carry out an assessment of the impact of the envisaged processing operations on the protection of personal data.
• An appropriate notice must be sent to the individuals whose data is being processed as well as to the Commissioner of Data Protection.

Responsibility for Inaccurate Information

• The data controller will not be responsible where the information is received inaccurately from the individual or from a third party where the data controller took adequate steps to ensure its accuracy. Any inaccuracies must be corrected immediately

EXEMPTIONS

• There are certain general exemptions to the Act which are National Security, Crime and Taxation.

ADMINISTRATION OF THE ACT

Commissioner of Data Protection

• The Act has provision for a Commissioner of Data Protection who is responsible for administering the Act. Staff is also to be appointed to work with the Commissioner. The Commissioner also has a duty to educate the public on the Act, including children.

• Quite interestingly section 96 of the Act allows anyone to provide the Commissioner with information even if the law prevents it. This seems to provide the Commissioner with considerable access to information, one might even say unwarranted. It is not clear however whether it protects the individual providing the information.

• The Commissioner may not serve an enforcement notice on a data controller with respect to the processing of personal data for the purposes of journalism or for artistic or literary purposes.

• The Commissioner under a warrant from the High Court has a right to enter premises and examine computers, other equipment and data. Lawyers are exempt from the warrant in circumstances of client confidentiality.

• The Data Controller and Data Processor are required to cooperate with the Data Commissioner since the process inherently requires quite a bit of self regulation with the appropriate notices being given to the Commission. For example where a data impact assessment is required due notice must be given to the Commissioner and the Commissioner must have them published in the Official Gazette. The Commissioner must also be notified of any breach of data security.

Data Protection Tribunal

The Act establishes a Data Protection Tribunal to hear matters concerning breach of the Act. It has the power to impose penalties. A person on whom an enforcement notice, an information notice or a special information notice has been served may appeal to the Tribunal against the notice. Data Controllers and Processors may also appeal against determinations and orders made against them.

 PENALTIES AND REMEDIES

Penalties

• The fine for not following the data protection principles is $500,000.00, three (3) years in prison or both.

• A person who fails to comply with an enforcement notice, an information notice or a special information notice is guilty of an offence and is liable on summary conviction to a fine of $15 000 or to a term of imprisonment of 6 months.

• There is a fine of $10,000.00 where the person is not registered.

• Unlawfully obtaining, selling and offering for sale data is an offence where one may be liable to a fine of $10,000.00.

• Where after a hearing there is an administrative breach under sections 52(1), section 57(1) and sections 60 to 67 there can be a penalty of

Notifications

• Individuals are entitled to know the entity which will be processing their data.
• Where there is any breach of the security system, the data controller must notify the individual immediately and at least 72 hours after he becomes aware of the breach. A Notification must also go to the Commissioner.

• Where the Commissioner of Data Protection is of the view that there is a breach of the Act an Enforcement Notice can be issued which among other things, can prevent the person from continuing to process the data.

Remedies

• Where an individual suffers damage or distress as a result of the contravention of the Act that individual is liable to be compensated.

COVID-19 Legal Considerations

On January 30th 2020 the World Health Organisation identified the spread of the novel coronavirus as a public health emergency as the virus spread to engulf the entire world. Barbados has not been spared and has seen the closure of all non-essential businesses until May 3rd 2020. This will have an impact on all commercial activity in Barbados. and will change how we interact socially. In this article our aim is to raise some of the legal issues which individuals and businesses might have to consider at this time.

FAMILY

Given the disruption which COVID-19 has caused many arrangements made between mother and father with respect to a child may have been interrupted. The Courts of Barbados are making every effort to ensure that urgent matters are facilitated . Where it is practical to do so cases will be heard remotely using technology The Courts always look to the best interests of the child as a priority.

Bearing this in mind it is important for families to seek to have these matters mediated without putting additional stress on the child who might be anxious about the fact that his or her routine has changed dramatically. Implementing social distancing will provide a challenge but parents must try their best to meet their obligations and the orders of the court while respecting the emergency guidelines implemented by Government.

We are of course available to provide any guidance in this regard.

SAFETY, HEALTH AND OTHER CONSIDERATIONS AT WORK

The Safety and Health at Work Act 2005 was proclaimed in Barbados in 2013 and requires business owners to provide a safe place of work for employees and those required to work on their premises. There is a general duty on the employer to provide appropriate safety equipment. The following are some of the issues which one may wish to consider for discussion and possible implementation:

1. Restrictions may be placed on travelling and especially to countries known to be “hotspots” and quarantining for 14 days after travel.
2. If employees are required to work remotely it then becomes the duty of the employer to ensure that they can do so.
3. Consider that even after the “shut down” is lifted schools and daycare for children may still be closed or some parents may still consider it risky. The employer should consider how to deal with such issues especially in terms of long term absences, continued remuneration and NIS benefits.
4. Within the workplace one may still need to mitigate the infection and spread of COVID-19. The employer should not assume that the employee will follow guidelines which have been distributed through public service announcements. The employer must draw them to the attention of the employee most effectively by delivering them directly to each employee and by ensuring that they are followed. The employer should also make any changes within the workplace to ensure that the guidelines can be implemented.
5. Employers should also set out a plan for the steps which the business will take if a member of staff tests positive for COVID-19. The implications for business survival as a result of further testing, tracing and possible quarantining of employers and employees should be considered

CONTRACTS

A number of contracts will be affected by the COVID-19 event and the public emergency actions which Government was required to take. It is important to review all contracts in order to determine:

• Whether there are any unmet obligations;
• Determining the consequences of any breach;
• Determining how any obligations can still be performed; and
• If entering into new agreements consider whether COBID-19 should be taken into account in the agreement

Force Majeure

Contracts should be reviewed in order to determine whether Force Majeure (Acts of God) is included in the agreement. If the provision does exist then it would have to be examined to determine whether the COVID-19 pandemic as it affects Barbados qualifies under this clause. If one wishes to rely on this provision then it is important to bring it to the notice of the other party. It would be prudent not to rely on the provision unilaterally as a reason for non-performance.

Frustration

 There is a possibility that given the circumstances of the COVID-19 outbreak that it was impossible to perform the contract. The other party should be notified and an attempt made to settle the matter.

REGULATORY FILING DEADLINES

Within the law there are many limitations placed on filings of many kinds for example the time frame within which major changes to companies are filed with the Registrar, tax returns with the Barbados Revenue Authority and reports to the Financial Services Commission. Even in cases where those providing services may work remotely this might not be possible for all members of staff who would have been engaged in facilitating such filings. Where filings can be done electronically this should be done but it will require Government intervention to address all of the various deadlines across all legislation.  

The FSC’s COVID-19 response can be found on its website at http://www.fsc.gov.bb. For Corporate Affairs scroll to the bottom of the page at http://www.caipo.gov.bb and the Barbados Revenue Authority at http://www.bra.gov.bb

There are also implications for the timing of holding Annual General Meetings and the notices for such meetings. Especially for publicly traded companies the Directors must take into account the impact which the COVID-19 pandemic will have on business and this must be disclosed to shareholders in their projections.

COMMERCIAL AND BUSINESS INTERRUPTION INSURANCE

Businesses must examine their insurance to determine if the terms of their insurance contract provides for business interruption. Since it might not have provided specifically for a global pandemic, then it is important to determine whether the policy can be interpreted to cover the outbreak.

We are not able to address every issue here. What we hope is that this article will cause you to think about your own circumstances. We are here to provide assistance where necessary. As the responses to the public emergency develop we will continue to monitor and advise of the legal developments.

Sweeping Powers Granted Cabinet

On March 26^th 2020 Barbados reported that it had 24 coronavirus cases, up from the last official figure of 17. This precipitated the Barbados Parliament to convene on March 27^th, 2020 to amend the Emergency Management Act, Cap 160A of the laws of Barbados.  This Act gives the Government power to declare emergencies in certain circumstances and to establish a structure for their management.

As one would imagine the existing legislation focused on the potential emergencies known to Barbados such as hurricanes, floods and other meteorological hazards.  The amendment to the Act therefore contemplates the declaration and management of public health emergencies in order to address the issues arising from this coronavirus.

Section 2 is amended to change the definition of “emergency” to include a public health emergency declared under section 28A(1) of the Act. Section 28A being a new section which was inserted as we shall discuss further below. New definitions are also inserted at section 2 to accommodate (i) communicable diseases (ii) notifiable diseases (iii) public health emergencies.

The newly inserted Section 28A gives the Governor-General the power to declare a public emergency for one month and no longer than six months as may be determined by the House of Assembly although it can be extended as warranted. When a proclamation of a public health emergency  is in force, it becomes lawful for the Cabinet to make any orders whatsoever it considers desirable in the public interest.

When such a proclamation is made the Chief Medical Officer becomes responsible for emergency management as opposed to the Director of Emergency Management as is the case with respect to other emergencies.

Orders can also be made pursuant to the Emergency Powers Act, Cap. 161; section 6 and 7 of the Quarantine Act, Cap. 53; section 3 of the Miscellaneous Controls Act , Cap. 329; and regulation 11, 12, 13, 14, 15 of the Heath Services (Communicable and Notifiable Diseases) Regulations, 1969 (S.I. 1969 No. 179).

This amendment to the legislation was debated and passed in one day. While Barbados wishes to do all necessary to ensure that residents are protected from COVID-19 whenever freedoms are to be circumscribed it merits wide public debate.  There was virtually none in this case.

Economic Substance Act Passed

Photo by thevibrantmachine on Pexels.com

BUSINESS COMPANIES (ECONOMIC SUBSTANCE) ACT 2018-41

[Subsequent to the passage of the Act (2018-41) the Act was repealed and replaced by the Companies (Economic Substance) Act No. 43 of 2019.]

WHY THIS LEGISLATION?
Barbados has passed into law the Business Companies (Economic Substance) Act 2018-.41 The legislation came into effect on January 1, 2019. Bermuda, British Virgin Islands, Cayman Islands, Guernsey, Isle of Man and Jersey have all done the same. The legislation is one of the features of the EU/OECD attempts to prohibit base erosion and profit shifting.

WHAT TYPE OF BUSINESS DOES IT AFFECT?
Barbados had for many years sought to distinguish itself as a jurisdiction which focused on attracting business of substance. Arguably the legislation is consistent with this policy – in a sense. The legislation seeks to target what may be considered the core of the international business sector as follows:

1. banking business;
2. insurance business;
3. fund management business;
4. finance and leasing business;
5. headquarters business;
6. shipping business;
7. holding company business;
8. intellectual property holding business;
9. distribution and service centre business; and
10. such other activities as the Minister may by order prescribe to be relevant activities

WHAT IS THE ECONOMIC SUBSTANCE TEST?
In examining the core business of the entity, a resident company meets the economic substance test in relation to the activities identified in the legislation in connection with the following circumstances:

1. where the company is directed, managed and controlled in Barbados in relation to that activity;
2. having regard to the level of relevant activity carried on in Barbados there is an adequate number of employees in relation to that activity who are physically present in Barbados, whether or not employed by the resident company or by another entity and whether on temporary or long-term contracts;
3. there is adequate expenditure incurred in Barbados;
4. there are adequate physical assets in Barbados;
5. the company conducts its core-income generating activities in Barbados;
6. and in the case of Barbados core-income generating activity carried out for the relevant company by another entity, it is able to monitor and control the carrying out of that activity by the other entity

WHAT HAPPENS WHEN THE TEST IS NOT MET?
Where the Director determines under section 7 that a resident company has failed to meet the economic substance test for a financial year, the Director must within 21 days of the date of that determination
a. issue a notice to the company notifying it that he has determined that the resident company does not meet the economic substance test for that year;
b. state the reasons for that determination;
c. state the amount of penalty imposed on the company and the date from which the penalty is due, being not less than 28 days after the issue of the notice;
d. advise what action he considers should be taken by the company to meet the economic substance test.

The Director may impose a penalty not exceeding $300 000 payable within 30 days of the date of notice of the imposition of the penalty.

COMMENT
Fundamentally this legislation was implemented in Barbados in order to satisfy the Organisation for Economic Cooperation & Development. As such it is not grounded in any Barbados policy mandate. The legislation therefore does not sit right within the legal framework of Barbados. It is early days yet as we wait to see how it will be enforced.

On-Line Taxation for Barbados

On June 11th, 2018 the Prime Minister of Barbados stated as follows: “I announce the intention of my Government that effective October 1st, 2018 we intend to make all online transactions for the purchase of goods and services by Barbadian residents subject to the Value Added Tax. The Barbados Government has announced the taxation of online transactions.” This date has subsequently been shifted to December 15, 2018 and then to April 2019.

It comes as no surprise that this initiative comes hand in glove with the OECD Base Erosion and Profit Shifting (BEPS) initiative. In March 2017, the G20 Finance Ministers mandated the OECD, through the Inclusive Framework on BEPS, to deliver an interim report on the implications of digitalisation for taxation by April 2018. It is however the case that what suits the rich countries of the world does not necessarily suit developing countries like Barbados which have an underdeveloped innovation and entrepreneurial base.

THE SAVIOUR OF SMALL BUSINESS
The reality of Barbados is that many have turned to sourcing products on line because often they were unavailable, the choices were poor and the mark –ups were exceptionally high. In addition Barbados against all the odds has established a cadre of small businesses which use websites, Facebook and other social media as a means of getting their products noticed. The high cost of advertising in the traditional media would have meant that these small businesses would not have existed or would be far less successful.

THE CREATIVE AND DIGITAL ECONOMY
The Creative Economy which is seen as a new growth sector for Barbados and which has been appropriated in the name of the Ministry responsible for Culture is highly dependent upon information technology and the digital economy for its success. Developed countries do not tax anything before it can run successfully, so while this might suit them with the advent of power houses such as Microsoft, Apple, Amazon, Facebook, Twitter and Reddit. Barbados is not there as yet. The Creative Economy has experienced a boom in many countries because of the ability to sell a range of cultural and creative products online.

VALUE ADDED TAX PRINCIPLES
VAT is a tax on consumers and is meant to pass through businesses unless of course the business is the final consumer. Exports are usually exempt from VAT. Imports are usually subject to VAT at the official ports of entry. Thus online purchases will be captured at the ports. We have heard that if one pays VAT online there would be a refund when one collects at the Port. However one recoups the VAT it must be that customs must be able to tell without doubt that the documentation produced matches the good in their possession and the value of the good declared is consistent with that of Customs.

SERVICES PRODUCTS AND DIGITISED GOODS
The products that the Government is most concerned with then are not tangibles but intangibles. This includes items that can be downloaded from the Internet to the Computer like software for computers and other equipment, music, beats, and the services like website hosting and Facebook boosting. All of these are critical to the emerging Creative Sector with its focus on culture and technology. Since the intention of VAT is to tax the consumer and not the supplier then it does not matter that the supplier is outside the jurisdiction.

THE TAXATION MECHANISM
This is the big question. The two main methods of buying products from overseas are through the use of credit cards and wire transfers. One would expect that the Government would be examining these two systems which fall within the purview of the banking system. This banking system already levies a 2% tax on all foreign exchange transactions. Barbadians must also be mindful that credit cards carry draconian interest rates often as high as 25%. The difficulty here is whether a distinction can be made between any of the transactions to determine whether they should be subject to VAT or not. Will educational material such as books enter freely at the Port be taxed on line if downloaded? The Government can of course take the position of insisting on the payment of the VAT and leaving it to the purchaser to get that refund.

CONCLUSION

Very few countries have found an efficient way of imposing this tax on online transactions and Barbados is not ready for the increased compliance and administrative costs which would result. There can be no doubt that this would be yet another burden for small businesses and especially those operating in the cultural and creative space. The Creative Economy has never had a fair chance to be an engine of growth. An online tax would stymie these individual efforts. Small businesses are already reeling from the petrol tax and the reintroduction of a tax much like the solid waste tax. There is not much more that small businesses can bear, many of them have closed their doors; some professionals have had no choice but to carry on their practice from at home. This measure may very well be problematic and will do more harm than good.

How Chefette Restaurants ended up paying $106,630.01 plus legal fees for both sides of an unfair dismissal dispute all because of a $40.00 cheque.

Hi All,

It’s been a while!  Anyway…

I was reading http://www.barbadoslawcourts.gov.bb/wp-content/uploads/2017/08/CVA-No-11-of-2016-Chefette-Restaurants-limited-v-Orlando-Harris.pdf today and thought you would be encouraged in your battle against human frailty by the fact that even our favourite fast food outlet can make a mistake.

This story is really about Mr Orlando Harris, a dedicated assistant manager of 14 years at the said fast food restaurant.

This assistant manager was a good worker by all accounts, earning every cent of his $4,200.00 per month salary.  He was commended and awarded up to the highest level – yes, including by the owner – for being punctual, polite, competent, exhibiting excellent attendance, and so on.  Basically, the sickening type of employee that would get his car keyed.

Anyhow, one day, while the assistant manager was busy assistant managing, an APB goes out for a missing envelope.  You see, it contained a cheque for forty dollars ($40.00) to another manager at Chefette.  She had called in to say she did not get her cheque.  The APB was unsuccessful.  However, upon Chefette’s investigations the cheque turned up as having been cashed at the Chefette branch at which the assistant manager was on duty, and with having “O Harris” written on the back – seemingly indicating he’d given his permission to cash the cheque at the restaurant, against company policy.  He’d also approved that day’s takings by the cashiers as having balanced.

The manager was hauled into a contentious meeting with his superiors over the $40.00 cheque.  The manager insisted he did not sign the cheque.  He demonstrated his signature and pointed out the differences.  Chefette was unimpressed.  It next suspended him with pay and then asked him to come to a disciplinary meeting.  That meeting was objected to by the assistant manager for procedural reasons.  He was invited to a second meeting, which for some reason he missed.  After that, he was dismissed.  He was given two months’ salary in lieu of notice and some vacation pay.  The assistant manager complained to the Chief Labour Officer and proceedings before the Employment Rights Tribunal (ERT) were started.

Despite Chefette’s pleas that they had lost trust and confidence in the manager and they were justified in dismissing him for “failing to follow the Company’s cash handling procedures”, the ERT found that they were not so justified.  For one, Chefette had not completed the investigation into the cashing of the cheque – like who signed the back? Who has the money? I’d like to know – and two, they did not complete the disciplinary hearing.  Once you had not done these things, it is hard to convince any arbiter of fact that your dismissal exercise was fair.  He was awarded $106,630.01, which looks to include the rest of his due vacation pay and two years’ salary.

Chefette appealed to the Court of Appeal (COA).  The judgment by Burgess JA is lengthy but essentially he agreed with the ERT, just not upon how they had arrived at the decision.

The ERT, deducing that our provisions are similar to theirs, delved into English law, wading neck deep into the turbulent waters of Halisbury’s Laws of England and other English-decided cases, as we like to do. The ERT was all about, “what would a “reasonable employer” do with these set of facts?”  The COA was like, “Huh? Why? Aren’t you supposed to look at section 29 which defines what is (un)fair and construe the facts accordingly?  Like, duh!”

Please bear with me for the following.  This is a legal article and the COA wrote it so clearly I dare not chop it up and well, if I read a 63-page judgment, you can read a few paragraphs of legalese.

Burgess JA states at paragraph 96 of the judgment, “The crucial point, though, is that, on its plain language, our section 29 (4) is not “identical” to the United Kingdom section 98 (4) as was claimed by the ERT. There may be “commonality” between the two subsections but there exists a gulf of difference between them. The most obvious difference is that our section 29 (4), unlike the United Kingdom section 98 (4), makes no provision that the reasonableness or unreasonableness of a dismissal “shall be determined in accordance with equity and the substantial merits of the case”.” It is apparent from the foregoing, then, that section 29 (4) and section 29 (5) are in form, substance and intent very different from the relevant provisions in the United Kingdom Act. All that said, we hasten to underline that the meaning and operation of section 29 (4) and section 29 (5) can only be found in the revealed intention of our Parliament in enacting those provisions and that that intention is not to be sought in English judge-made law. As Simmons CJ stated in Wood v Caribbean Label Crafts Ltd (Unreported) Magisterial Appeal No. 11 of 2001 (16 July 2003), our task in approaching English decisions is to read them with “a discerning eye and an analytical mind”. We would add that the approach advocated by Simmons CJ is especially apposite where, as is the case with the ERA [Employment Rights Act], the relevant law is contained in an Act of our Parliament. ‘’

Wha-pax!!  As a certain Bajan personality would say.

So, the COA looked at the preamble (the paragraph which explains the point of the Act) and the whole Act and forged ahead with what it had gleaned was the point of our Act from actually reading it.

At paragraph 114 Burgess JA continued, “It is our judgment that the jurisprudential urge of our Parliament in enacting the ERA was to shift employment relations in Barbados away from the traditional contract of employment model and the ever lurking spectre of the master and servant relationship to a model which views employment law as ultimately being about workplace justice. The procedure established in section 29 (5) is, in our view, an example of such a shift. It has introduced into the work place in Barbados an overriding employee right to natural justice. To be compliant with section 29 (5), an employer must strictly follow the steps set out in that sub-paragraph.”

Then at paragraph 117 “By section 29 (5), Chefette was therefore bound to follow the procedural requirements in Part B of the Standard Disciplinary Procedures. We agree with the ERT’s decision that Chefette failed to do so. The legal effect of that failure is that Chefette is disentitled from raising the defence that Mr. Harris’ dismissal was fair pursuant to section 29 (4).”

At paragraph 126 Burgess JA makes it clear that, “In a word, the English “reasonable employer” is replaced in our ERA by a set of statutory rules which must be followed by a dismissing employer.” Further, at paragraph 131, “section 29 (4) (b) does not contemplate any contracting out of compliance with the rules in Part A of the Fourth Schedule.”

You cannot make your employee agree to disciplinary procedures that exclude the ones outlined in the Act!

Therefore, employers are under a legal duty to import natural justice into their dealings with their employees by following, to the letter, the ERA provisions.  Otherwise, well, a $40.00 cheque mishap becomes a $106,630.01 (which now includes the two months he got previously) plus costs, plus legal fees, plus embarrassment, plus loss-of-a-stellar-employee (even though you done know he get his tyres slashed at least once) matter.

Also, anyone who thought “as opposed to a sexual urge” when you read “jurisprudential urge” above does not get a mint – you know who you are.

Until next time,

Karis

 

Updated: to remove all references to “summary dismissal”.  It was an error on my part and I apologise.  Summary Dismissal or “getting fired” is reserved for gross misconduct and, as is implied, is without notice or payment in lieu of notice.  Thanks to Mr Jeff Cumberbatch for the correction.

 

Keeping On Side in 2017

For some it has been a difficult year! As a new year approaches all business people must keep in mind their statutory obligations and seek to meet them.

When you are in business paying taxes is very much a part of the enterprise. However there are some obligations which you may have a tendency to forget:

1. If you own an international business company please remember that the annual return must be filed by December 31, 2016
2. If you are an International Business service provider you must renew your licence by the same date.

3. If you have a domestic (ordinary) company of any kind please remember that there is now an annual return to be filed with a penalty of $10.00 per day. There are some who might not have met this obligation in 2016. If so penalties would be accumulating so this needs to be addressed immediately.

4. Penalties are now being enforced for failure to notify the corporate registry of any fundamental changes to the company.
5. All those involved in certain businesses and professions such as lawyers, real estate agents and hairdressers must apply for a renewal of their licence by the end of January 2017.
6. For those who are members of non-profit companies please remember that the requirement to file financial statements will now be enforced.
7. Know Your Customer procedures for gate keepers are also being enforced. Gate keepers are not simply financial institutions but includes lawyers, accountants and real estate agents amongt others. Broadly speaking one must be conscious of ensuring that one is not a part of a larger money laundering, financial crime or terrorist scheme.

Lynette Eastmond