| NEWS BULLETIN |
3rd February 2002 |
Issue No: 4/2002 |
Correction to "Provisions of the Employment Act, 2001" Article
A correction has been made to the article "Provisions of the Employment Act, 2001" in the section dealing with Sick Leave. The original article read employees are entitled to "7 days sick leave" while the revised article reads "one week sick leave", which are the words taken directly from the Act. An early interpretation was given that the one week mentioned in this section of the Act refers to 7 days, however later interpretations are based on the week being one work week. The latter interpretation is strengthened by the fact that if vacation leave is based on 7 days, then 14 days basic pay would be required for two weeks vacation. The corrected article is available on BECon's web site.
Frequently Ask Questions About the New Labour Legislation
| Q: | | When do the new labour laws go into effect? |
| A: | | The new labour laws are now in effect. The Employment Act went into effect on the 1st of January, The Minimum Wages Act went into effect on the 21st of January, and the Health and Safety at Work Act went into effect on the 1st of February. The standard hours of work reduced to 44 hours on 1st February and will go to 40 hours after the 1st of February 2003. |
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| Q: | | With the reduction of the standard hours of work, what pay entitlement do my employees have? |
| A: | | The obligation of the employer is to pay their employees the same rate of pay after the reduced hours. If the employee is salaried, i.e. paid by the week, the weekly rate of pay would remain the same, therefore the employee will take home the same pay at the reduced hours. On the other hand, if the employee is paid by the hour then the hourly rate of pay would stay the same, so the take home pay would be reduced as a result of the reduced hours per week. |
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| Q: | | If an employee freely agrees and signs a contract to work in excess of the standard hours of work at their regular rate of pay without overtime, is the contract binding? |
| A: | | No, the contract would not be binding. It is illegal to contract out of Statutory provisions. |
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| Q: | | My business is open 5 1/2 days per week. How can I operate without having to pay overtime or having to hire a large number of part time staff? |
| A: | | If those 5 1/2 days are not more than 44 hours, you have until February 1st 2003 to plan for the reduction to 40 hours per week. At that point, although the law requires that each employee be given one full day off per week, the other day off can be two half days. If you have some slow periods during the week, you can stagger your staff to have their half day off during the slow periods. |
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| Q: | | The new legislation provides employees who work on Public Holidays to be paid double time, but does not appear to provide Holiday pay to workers who do not work on Public Holidays? |
| A: | | Legal precedent provides that salaried workers are to be paid for Holidays that they do not work. On the other hand, hourly paid workers do not have any legal claim to be paid for Holidays they do not work, however, if your company policy is to pay hourly paid workers for Public Holidays they do not work, then you are bound to continue to do so. |
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| Q: | | If an employee brings in a sick certificate, is he or she supposed to be paid for all the days on the certificate? |
| A: | | The employee should be paid sick leave only for those days they would have normally worked if they were not sick, up to the maximum of sick days allowed either by law or your company policy. For example, if the sick certificate is for four days, and the time period covers three working days and a normal day off of the employee, only three days sick leave is payable. |
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| Q: | | I provide a base pay and commissions to my employees. Do I need to raise the base pay to the minimum wage? |
| A: | | Unlike tips, which are excluded from wages, commissions form a part of wages. You can continue to pay a base rate of pay that is lower than the minimum wage, however, when the amount of base wage and commissions fall short of the minimum wage, you would have to make up the difference in order for the employee to be paid at least the minimum wage. |
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| Q: | | According to the law, where I fall short I have to raise my standards to what the law now requires, but I cannot change any of the other terms and conditions of employment that are higher than the law requires. What happens if I do change some of the other terms and conditions? |
| A: | | If an employer unilaterally changes the terms and conditions of employment the employee can claim "constructive dismissal" and be entitled to notice pay, which under the Act can be quite expensive. The employee can make this claim up to one year after the event, and therefore be entitled not only to notice pay, but to the value of the terms and conditions that were lost during that time period. If employees do not claim constructive dismissal, but feel that the changed terms and conditions of employment are to their detriment, staff moral may be substantially lowered, resulting in loss of productivity. |
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