Phase-in of 40 Hour Work Week in February

In accordance with the Employment Act, 2001, the standard hours of work will be reduced to 40 hours per week after February 1st, 2003. The word "after" implies that the 1st of February will be the last day that the 44 hour work week will be in effect. Therefore, as of the calendar week beginning Sunday, the 2nd of February 2003, the standard hours of work shall be 40 hours per week.

Some of the ambiguity of Part III of the Employment Act that deals with Standard Hours of Work will be cleared up with the phase-in of the 40 hour work week. Some employers have interpreted the 44 hour work week to be up to 44 hours over five days, while others have interpreted the 44 hour work week to be five and one-half days. The 40 hour work week makes it clear that any employee who works over 8 hours in any day is entitled to overtime pay at the rate of time and one-half for those hours worked in excess of the standard 8 hours per day, irregardless of whether 40 hours were worked for the week.

The ambiguity of the 48 hours of rest during each seven day period contained in the Act is also alleviated somewhat. The reference to "48 hours of rest" is rather confusing; however, using 24 hours as one full day the intent appears to be that there should be two days of rest per week. It is required that one of those days be 24 consecutive hours, which is referred to as a "day off". An employee who works on their day off is entitled to double time pay for all hours worked. The only other time that double time pay is applicable is when an employee works on a public holiday.

The other day of rest is referred to as "hours of rest" in the Act. The hours of rest need not be consecutive. What this means is that although the 40 hour work week represents five work days, those five days can be five full days, or four full days and two half days. An employee who works during their hours of rest is entitled to time and one-half pay for all hours worked.

Note: Sections 8 (2), 8 (3) and 8 (4) as well as Section 10 (b) of the Employment Act, 2001, provides some exceptions to the regulations outlined above.

It is important to note that the Act requires that an employee's rate of pay not be reduced as a result of the reduced hours. What this means is that salaried workers who are paid a weekly to a monthly rate of pay should receive the same rate of pay for the reduced hours, therefore their take home pay will not be affected.

On the other hand, although the rate of pay cannot be reduced for hourly employees, the amount of take home pay will be reduced by going from a 44 hour work week to a 40 hour work week. This can be demonstrated as follows: an hourly paid employee who is paid at the rate of $10 an hour will continue to earn the rate of $10 per hour, however at 44 hours the pay totals $440 while at 40 hours the pay totals $400. Conversely, an hourly paid employee who continues to work 44 hours per week will see his take home pay increase since he will be paid 40 regular hours and 4 overtime hours at the rate of time and one-half, resulting in $460 of earnings.

Another important note is that contrary to rumours, nowhere in the Act is it required that employees be paid for their meal periods. Prior to the passage of the Employment Act, a provision was made for this in the Employment Bill, however it was removed several months before the legislation was enacted. The 40 hour work week is based on 40 productive hours. If your work day is 7:30am to 4:00pm with a 30 minute meal period, or 8:00am to 5:00pm with a one hour meal period, and you pay your staff for the 8 productive hours of work, continue to do so.

The Act does not allow you to reduce benefits currently given to your staff, so if you do pay for your employee's meal periods you should continue to do so.

Tripartite Committee - Review of Labour Legislation

The Hon. Vincent Peet, Minister of Labour & Immigration, formed a small tripartite committee which began meeting in October, 2002, to review proposed amendments to the labour legislation. Although several meetings have been held, the work of the committee is going very slowly; therefore the concerns of employers have not yet been addressed.

Last year employers were requested to submit to the Ministry of Labour and Immigration by the 17th of June 2002, concerns and recommendations regarding the labour legislation. These were submitted by the requested date. Concern was expressed over the phase-in of the 40 hour work week in February of 2003 as being the most costly aspect of the Act that is faced by those employers affected by the reduced standard hours of work. BECon's position at that time was that due to the current state of our economy, and the uncertainty of our economic future, it was our opinion that a fixed date to reduce the standard hours of work was not fiscally prudent. Our recommendation was that the implementation of the 40 hour work week not take effect until the economic health of our nation is such that the 40 hour work week can more readily be absorbed.

Our position was then, and still is now, that the overall economy should be the guide to the effective date of the reduced hours, not an arbitrary date set in stone. It is our opinion that economic recovery has not progressed to the point where the implementation of the 40 hour work week is fiscally prudent.

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