24.03.12

Is the Ministry of Labour minding your business?

Gavin Goffe
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Some time ago we received a letter, on behalf of one of our clients, demanding notice pay on behalf of an employee who had been summarily dismissed. The letter warned, "...if your client somehow fail (sic) to have this matter settled by [x date] the matter will by (sic) referred to the Kingston Resident Magistrates Court where we have successfully dealt with similar cases." This letter was not sent by the worker's union or his lawyer. It was signed on behalf of the Permanent Secretary in the Ministry of Labour and Social Security.

In another case, a worker had been dismissed for misconduct and complained to the Ministry of Labour. The Minister at the time invited the employer to a meeting to determine whether the dispute could be amicably settled. Neither the worker nor her union representatives were invited to that meeting. After hearing the employer's reason for dismissing the worker, the Minister urged the employer to reinstate her. He then went on to say that he wished that he could argue the matter himself before the Industrial Disputes Tribunal (IDT) as he knew that he would win. He later referred that matter to the IDT where, after several hearings, the worker was ordered to be reinstated. The IDT's ruling was subsequently quashed by the Supreme Court, but only after the employer had duly complied, reinstated the worker and paid her over $1M in back-pay (which it is yet to recover).

Based on these 2 stories alone, which are by no means isolated events, it is no wonder that the Ministry of Labour and Social Security continues to battle with the perception that it is biased towards employees. Part of the Ministry's role is to attempt to settle industrial disputes through non-binding conciliation. If those efforts are unsuccessful and if certain other conditions are satisfied, it is responsible for referring the dispute to the IDT. The Ministry of Labour has no business representing the interests of any party in an industrial dispute, nor should any member of the Ministry ever threaten a party with court action. By doing so, they eliminate the neutrality that is absolutely necessary to successfully perform their functions. Rather than being mindful of the employer's business, often the Ministry's actions tend to undermine it.

Apart from the obvious fact that the Minister of Labour is a public office, when one considers that the Minister is responsible for referring disputes to the IDT and for appointing the members of the IDT who hear those disputes, the need for perceived and actual independence of the office cannot be overstated. Mrs Alexis Robinson, in her article entitled "Don't Kill the Goose" published in this space last week, lamented the fact that when it comes to the resolution of industrial disputes, there is a real sense that our labour laws are unfairly applied to employers who are, figuratively, the geese whose golden eggs will lead to economic growth. So strong is the view that the playing field is not level, that the fear of being taken to the Ministry of Labour and/or the IDT drives many employers to settle with workers who completely deserved their dismissals. From a risk and cost management perspective, it's sometimes a good business decision to pay employees to ensure that they don't complain to the Ministry. If the employer loses at the IDT, he could pay millions in back-pay as a result of the delays in getting the matter heard, regardless of whether it's the Ministry or the employee who was responsible for the delay. Even if the IDT confirms that the employer was justified in dismissing the worker, the employer is unable to recover the legal fees spent defending the complaint, or the man hours spent in meetings at the Ministry or in hearings at the IDT. The lesson here is that prevention is better than cure. Businesses that invest in getting the right advice from the start are always better prepared for the moving goalposts that are occasionally encountered on the unlevel playing field.

One such moving goalpost came to light in a recent IDT ruling. The IDT found there to be a serious conflict of interest if the President of an organisation sits as the chairperson at an employee's disciplinary hearing. This decision raises the important question of the fine distinction between independence and objectivity. To help explain the difference, consider this story. A young lad was beaten with a wooden ruler by his Grade 4 teacher for being disobedient. He went home and complained to his mother and told her why he didn't deserve the punishment. After listening carefully to her son's side of the story, she gave him another beating. When he asked how his own mother could take the teacher's side over his, she explained that she would always side with him - once he learned to behave himself at school. This is an illustration of the principle that someone doesn't always need to be independent to be objective. It is also a true story.

When it comes to arranging a disciplinary hearing, size matters. A company with more than 200 employees may be expected to have disciplinary panels and appeals. But the small businessman who is President, CEO, Chairman of the Board and HR Manager all in one cannot reasonably be expected to be 'independent' in the way that a judge (or the Minister of Labour) ought to be. Whoever conducts a disciplinary hearing, whether it's the President or someone else, is expected to be fair to the worker and consider his response to the charges laid against him as objectively as he can. In fact, the Labour Relations Code expressly prefers that dismissals be dealt with by senior management. This is in line with international best practices that prescribe that a disciplinary hearing should, in general, be conducted by the persons within the organisation who have the power to dismiss the employee. The rationale for this is that management personnel who hold the power to dismiss should not unnecessarily delegate the discretion that is vested in them to anyone else. The creation of a specific rule that a president will have a conflict of interest if he or she were to chair a disciplinary hearing is an unfortunate development that will hopefully not take root in industrial relations practice in this country that is counting on small and medium-sized businesses to lead its economic recovery.

That said, the IDT's position on avoiding conflicts of interest should not be dismissed, not least of all by the Ministry of Labour and Social Security. After all, what's good for the goose...

Gavin Goffe is a Partner at Myers, Fletcher & Gordon and is a member of the firm's Litigation Department and Labour Law Practice Group. Gavin may be contacted via gavin.goffe@mfg.com.jm. This article is for general information purposes only and does not constitute legal advice.