Major Changes to the Employment Act 2000

Major Changes to the Employment Act 2000

As we highlighted at the end of last year, major changes were to be made to Bermuda’s employment legislation this year. On 1 June 2021 the Employment Amendment (No. 2) Act 2020 (the “Amendment”) became operative. This amended the Employment Act 2000 (the “Act”) with significant changes that strengthen the rights of employees and place additional requirements on employers in contracts of employment, disciplinary procedures and termination. We provide an overview of these changesfor you.

Additional Particulars Required in Statements of Employment

Employers must provide a written statement of employment setting out additional prescribed particulars within a week of commencement of employment including meal breaks, rest periods, overtime pay, work permit particulars and the employer’s policy against bullying and sexual harassment.

Under the Amendment, if an employer fails to comply they may be liable for a civil penalty of up to $5,000 if awarded by the Manager of Labour Relations and up to $10,000 if awarded by the Employment and Labour Relations Tribunal.

In addition to employees, other categories of workers must be provided with statements. This includes casual workers, temporary employees, part-time employees, students and voluntary workers although the requirement of a written statement does not provide rights they would otherwise not have enjoyed.

New Requirement for a Written Policy against Bullying and Sexual Harassment

Employers must have a compliant written policy statement in place against bullying and sexual harassment and include reference to it in the statement of employment. They must also provide employees with a copy and help them to understand it if required. The Amendment provides for the required content of the policy at schedule 1. Failure to comply may result in a civil penalty of up to $10,000. We have advised clients on both the wording of the policy statement, but also bullying and harassment claims since the Amendment.

Maximum duration set for probationary periods

The Amendment provides for a maximum duration of 6 months for employee probationary periods, extendable by a further 3 months provided the employee’s performance is reviewed by the employer before the expiry of the first 6 months. Employees are also entitled to receive a review of their performance on or before completion of half the probationary period. Previously there was no set maximum duration and no obligation to provide a review.

The Amendment introduces a new requirement for employers to provide a valid reason to terminate during the probationary period which includes performance, conduct, or the operational requirements of the business. In practice, this is unlikely to present a difficulty to employers but they must still give a reason or employees may challenge the termination.

Broader criteria for bereavement leave

All employees are entitled to unpaid leave in the event of the death of a member of a broadened definition of their ‘immediate family’ which now includes grandparent, great-grandparent, grandchild or great grandchild. Previously, it only included a spouse, child, parent or sibling.

Time off for ante-natal appointments

The requirement for 1 years’ service before employees are entitled to time off to attend ante-natal appointments has been removed.

New entitlement to meal breaks

A new requirement that employees should not be required to work for more than 5 hours continuously without a meal break of at least 30 minutes or work during this meal break without their consent.

Extended period for termination for repeated misconduct

The Amendment allows employers to dismiss for misconduct taking place over an extended period. Previously, the employer had to provide 2 written warnings, with the second incident taking place within 6 months of the first. If the employee committed the second incident of misconduct after the expiry of the 6 month notice period the process reset.

In addition to allowing termination for 2 incidents within 6 months, the Amendment provides if an employee is guilty of misconduct on 4 separate occasions with 12 months and receives a written warning for each of the first 3, after the fourth incident the employer may terminate without notice or the payment of severance within 14 days of the final incident.

Termination for unsatisfactory performance to include description of the poor performance

The Amendment requires that the written warning to the employee describes the unsatisfactory performance it relates to. Most employers will have already done this but under previously the employer had only to provide instructions on how to improve.

Changes to consultation prior to redundancy

Previously, the employer had to consult with the employee’s trade union or other representative (if any) before termination for redundancy and as soon as practicable.

The Amendment provides that the employer must also inform and consult with the employee to ensure that non-unionised staff are included in the process. The timeframe for consultation of ‘as soon as practicable’ has been fixed at not less than 14 days prior to giving notice to terminate to the employee.

Extended prohibition on giving notice to an employee on sick leave

The Act prohibited giving notice to terminate during a period of sick leave of 4 weeks or more. The Amendment extends that period to 6 weeks.

New deadline for payments on termination

The Amendment provides that payments due on termination must be made on whichever is the later of 7 days after termination or the next payroll date had their employment not been terminated.

Lay offs

Before a lay off, the employer must provide employees or their trade union or other representative with additional information as soon as possible. This includes the relevant condition giving rise for the need for redundancy, reasons for the lay off and the period during which the lay off is likely to take place.

Increased limitation period for complaints to an inspector

The time for an employee to make a complaint in writing to an inspector increases from 3 to 6 months. This will give employees a significant increase in time to take advice on claims, obtain evidence and could result in additional complaints.

Compensation for unfair dismissal increased

Employees found to have been unfairly dismissed with up to 2 complete years of continuous employment receive increased compensation of 3 weeks remuneration, up from 2 weeks.  Employees with more than 2 complete years of continuous service receive the same 4 weeks for each complete year, up to a maximum of 26 weeks.

Conclusion

The Amendment imposes additional obligations on employers and extends existing requirements to the extent that it can certainly be viewed as a radical change to the law. Much of the changes strengthen employees’ rights with perhaps the only employer centric change being to widen the scope for disciplinary action in cases of misconduct, allowing dismissal for incidents taking place over a longer period. It remains to be seen whether doubling the limitation period for employees to make complaints to the inspector will result in more tribunal claims as employees have time to take advice and potentially gather evidence. 

The most important changes requiring immediate action from an employer’s perspective are the new civil penalties for failing to provide the additional particulars in the statement of employment or the written policy on bullying and sexual harassment. Employers should review their contracts of employment to ensure they comply. Some may require radical overhaul as a result.