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.

understanding-unfair-dismissal-laws

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.

 

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Keeping On Side in 2017

statutory-obligationsFor 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