Employment Act, 2001 - Deceptions & Misconceptions

Up front, the bottom line of the Employment Act, 2001, is: 1) as of the 2nd of February, 2003, the legal standard hours of work will be 40 hours per week; 2) meal periods are not included in the legal standard hours of work, and 3) employers who provide a paid meal period to their staff are required to continue this practice in accordance with the "saving of more favourable terms of employment" section of the Act.

During the last few weeks a lot of hype has been generated as a result of the phase-in of the 40 hour work week, and employers recommendation that the phase-in be delayed until our economy improves so that the reduction in the work week hours can more readily be absorbed. In order to set the record straight, this news letter will comment on some of the remarks that have appeared in the media and been made to employers.

Employers agreed to the Employment Act, 2001 - This remark makes it appear that employers ratified and approved the Act prior to its passage into law, and by extension, the other labour laws introduced in 2001. This is far from the truth. During the creation of the Employment Act and the other labour laws, through the Coalition of Private Sector Organizations, employers vigorously lobbied government on the provisions of these Acts.

Government refused to even hear recommendations on some of the provisions that concerned employers, saying no changes would be made. In most cases, successes of employers were that very onerous provisions were made less onerous, such as the one year phase-in period before the implementation of the 40 hour work week. The one major success of employers was the removal of the provision that required meal periods to be included in the standard hours of work. Employers did not "agree" to the labour laws, instead they incorporated their provisions in accordance with the "rule of law".

Employers attempt to delay 40 hour work week at last minute - The President of the Trade Union Congress (TUC) made this indication in the press, however, if he attended instead of boycotting the meeting at the Ministry of Labour on Monday, 13th of January, to discuss a possible delay in the implementation of the 40 hour work week, he would have seen that the employers recommendation of delay was made in writing to the Minister of Labour and Immigration on the 17th of June, 2002, more than seven months before the legislated implementation date.

Employers should have consulted with unions months ago on delay of 40 hour work week - Again indicated in the press by the President of the TUC. Firstly, unions do not make the law of the land, the government does, and therefore recommendations of amendments to law are properly made to government, as was done on the 17th of June, 2002. Secondly, a tripartite committee was formed by the Hon. Vincent Peet, M.P., Minister of Labour and Immigration, and the first meeting of the committee was chaired by the Minister on the 30th of September, 2002. At that meeting, concerns and recommendations of employers and worker representatives were shared with each other, which included the employers' recommendation to delay the 40 hour work week. The President of the TUC attended this meeting; therefore he had documentation of this recommendation four months prior to its intended implementation.

Employers attempt to delay the 40 hour work week in order to keep the masses down - This remark, and others like it, are based on emotion, not fact. At the meeting with Minister Peet and union officials to discuss a possible delay of the 40 hour work week, employers presented spreadsheets showing that the reduction in the work week from 44 to 40 hours represents a 9.09% loss of productivity, (the reduction from 48 to 40 hours spread over one year is a 16.67% loss of productivity). The spreadsheets also showed that salaried workers reduced from 44 to 40 hours at the same rate of pay will receive an effective 10% pay increase, (the reduction from 48 to 40 hours spread over on year represents an effective 20% pay increase for salaried workers). Also presented were the Findings and Conclusions of the Economic Outlook & Labour Legislation Survey conducted by the Coalition of Private Sector Organizations in June of 2002 showing that over 20% of businesses were expecting a net loss for the year; sales and profits were down at 65% of businesses with the expectation that these trends would continue for at least the next six months; and, that 90% of business reported that the new labour laws had a negative impact on the economy.

It was stated by employers that the Bahamian economy has been down for almost a year and a half; that economic indicators are such that recovery is not in the foreseeable future; and the fear of a possible war between the United States and Iraq, which can have a very immediate and negative effect our economy, are very real concerns of employers. It was admitted that the majority of Bahamian workers would not be affected by the reduction in the work week as they are currently at 40 hours or less per week, but that those businesses that would be affected would see lower weekly production, or increased employment costs, at a time when they would be difficult to absorb. Due to the poor economy, many businesses are not generating the earnings, nor do they have the excess capital needed to survive these types of cost increases.

The affected marginal businesses that cannot survive these increased costs will add to the number of unemployed, and the fact that the reduced hours are purely inflationary will increase the cost of living in The Bahamas at a time when the economy is poor. The unsuccessful attempt of employers to delay the implementation of the 40 hour work week was not to "keep the masses down", but to do, in our opinion, what was in the best interest of the citizens of Commonwealth of The Bahamas.

The Employment Act is silent on meal periods - This remark was made to the President of BECon on January 15th by the Acting Director of Labour. When pressed on his meaning, the Acting Director stated that the law was not clear on this point, therefore the courts would need to interpret whether meal periods should or should not be included in the standard hours of work. This remark was also made at a press conference on January 21st by Minister Peet. The day after, Minister Peet and the President of BECon spoke, and the Minister clarified his remark to mean that since the law is silent on meal periods, they are not included in the standard hours of work. BECon agrees with this.

BECon's position is that the definition of "standard hours of work" in the new law is exactly the same as the definition in the old Fair Labour Standards, Act, with the exception of "eight hours" and "forty hours" in the new Act replacing the "eight and one half hours" and "forty-eight hours" of the old Act. Ample legal precedent exists to show that meal periods were not included in the Fair Labour Standards Act, therefore by using the same language meal periods are not included in the Employment Act, 2001.

Custom and practice should be continued to be observed whereby a paid lunch period … is included in the daily hours of work - This remark was made by the Minister during his press conference of January 21st. Although "custom and practice" can be used to describe the policy of an individual business establishment, when it comes to the Labour Tribunal, "custom and practice" is used for employment in general, generally referring to entire industries or sectors. For example, the old Fair Labour Standards Act required notice to be "reasonable". Since the actual amount of notice was not provided in legislation, the Labour Tribunal would look at "custom and practice" in the sector or industry to which the business belonged in making awards of notice pay.

In the conversation between the Minister and BECon's President, the Minister stated that this remark was based on the policy of individual business establishments that provided paid meal periods. This again agrees with BECon's position that employee benefits cannot unilaterally be reduced by the savings section of the Employment Act, 2001, therefore employers who currently pay for staff meal periods should continue to do so.

The Bahamas has ratified an International Labour Organization (ILO) Convention that requires meal periods to be paid - The ILO has passed 184 Conventions, of which 27 have been shelved or withdrawn, leaving a total of 157 active Conventions. Not one of the ILO Conventions, including the ones shelved or withdrawn, provide for paid meal periods. In fact, a cursory look at the Conventions shows that meal periods are not mentioned in any, including the 13 Conventions dealing with work time standards. The Bahamas has ratified 33 ILO Conventions, denounced 3 of them, and 4 have been shelved or withdrawn, leaving a total of 26 active Conventions The Bahamas is party to.

Closer to home, meal periods are not mentioned in the Employment Act, 2001. The custom and practice of providing unpaid meal periods is practiced throughout the globe.

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