Employment Law Update: Covid Implications & Amendments to the Act

Employment Law Update: Covid Implications & Amendments to the Act

It was unfortunately all too clear that once the pandemic was declared there would be immediate consequences for the employment market. We saw this across the globe, but in Bermuda, our hospitality industry was hit particularly hard with layoffs being made in March. We discussed the implications of Covid-19 on employment law in Bermuda at that time, the Government’s unemployment benefit package and the importance of having a clear understanding of when circumstances for layoff or redundancy have arisen.

Since that time, Bermuda entered a four-week period of Shelter in Place which saw even more businesses closing their doors and employees out of work. The knock on effect of this was clear and notwithstanding the reopening of the borders, employers have been taking steps to reduce the size of their workforce, either out of immediate need or prudence to try to weather the storm.

We have seen an increase in requests from our clients, both employers and employees, for advice regarding redundancies, severance allowances, managing exits, review of separate agreements, etc. Thankfully, there are also opportunities arising from amongst the challenges of this year and we have also seen clients entering new business sectors and taking on new roles and seeking our advice for entering into new employment arrangements as well.

Amongst the changes of this year was the roll out in late November by the Minister of Labour of major changes to Bermuda’s employment legislation, The Employment Act 2002 (the “Act”), as well as some changes to trade union legislation to consolidate the existing nine (9) labour tribunals into one disputes resolution panel. It is anticipated that these changes brought by the Employment Amendment (No. 2) Act 2020 (the “Amendments”) will take effect on 1 June 2021.

There are several amendments to the Act, but we will highlight those which we consider key amendments of which to take note. The Amendments introduce definitions for both “bullying” and “sexual harassment” at clause 10B and require employers to have a policy statement against both of these, the content of the policy statement being outlined in the Schedule.

The Amendments will increase support and benefits to employees with the widening of definition of immediate family for the purposes of bereavement leave to include a person’s grandparent, great-grandparent, grandchild or great-grandchild and the removal of the requirement for employees to have completed a full year of employment in order to be entitled to paid time off work to attend ante-natal appointments.

Section 19 of the Act is to be repealed and replaced a new section addressing probationary periods. The Amendments seek to introduce a cap on the length of probationary periods to avoid long periods which are extended multiple times.

The Amendments indicate that probationary periods are not more than six months, that a review must be conducted on or before the completion of one half of the probationary period and that the probationary period may only be extended after completion of the review and for a maximum period of three months. Further, and of particular note, the Amendments leave in place the employee’s ability to terminate during probationary for any reason but put restrictions on the employer’s ability to terminate. Specifically, the Amendments indicate, “During the probationary period…a contract of employment may be terminated without notice – (a) by the employer for any reason relating to the employee’s performance review, performance, conduct, or operational requirements of the employer’s business…”

The Amendments additionally seek to change the basis upon which employees may be terminated for repeated misconduct. Currently under the Act, an employer may give a written warning for misconduct which is not serious and if, within six months, the employee is again guilty of misconduct and may be terminated without notice or severance pay.

If the employer does not act within a reasonable time period, they shall be deemed to have waived their right to terminate. The Amendments seek to add that a written warning must specify the conduct complained of and address how it may be remedied. Further, they refer (in additional to the six-month period and termination on the second act of misconduct) to a twelve-month period and that written warnings should be given and after the fourth further occasion of misconduct, an employer may terminate. With the Amendments, the employer is said to waive his/her right to terminate if they do not do so within fourteen days of their knowledge of the second further misconduct instance or the fourth as set out therein.

Regarding section 27 which addresses unsatisfactory performance, the Amendments again require employers to specify the unsatisfactory performance complained of and further mirror the misconduct provisions whereby employer is said to waive his/her right to terminate if they do not do so within fourteen days of the expiry of the six-month period.

Additionally, the Amendments seek to extend the period by which an employer must wait in order to serve notice of termination on an employee during their absence. Specifically, the Act indicates that notice shall not be served when an individual is on sick leave unless their period of sick leave extends beyond four weeks. The Amendments seek to change this such that notice may not be given to an employee on sick leave unless their period of sick leave extends beyond six weeks.

While one can certainly see the rationale for updating Bermuda’s employment laws, there does appear to be an increased burden on the Island’s employers, and consequently business owners, in circumstances where many of them are already struggling to keep their doors open as a result of the economic effects of Covid-19. We will continue to watch the development and implementation of these changes and the impact on Bermuda’s employment laws.