The two-year itch

Guernsey's Employment Protection Law gives more rights to workers who have been continuously employed for two years, but there are still creases to be ironed out. Robert Shepherd reports

The Employment Protection (Guernsey) Law 1998 introduced the concept of unfair dismissal into Guernsey. It gave employees who have been continuously employed for two years or more a conditional right not to be unfairly dismissed. A review of the 1998 law by Peter Syson (the Syson Review) has recommended a number of reforms.

Early problems

The case of Milford v Seaward Marine in 2000 was the first case considered by the Royal Court on appeal from an employment tribunal. The bailiff took the opportunity to expressly disagree with assertions that had been made by the Board of Industry in the 'Billet D'Etat' (the equivalent of a white paper) that the 1998 law would assist in resolving disputes in a non-adversarial manner. The bailiff observed that when strong words were exchanged between an employer and employee, the advent of the new legislation meant the matter could no longer be dismissed as a row between two strong-willed Guernseymen that might have been resolved by the apprentice moving to pastures new and which would have been forgotten by all concerned in a few days. Quite rightly, the bailiff recognised that employment had gone judicial.

An employee, except in certain defined circumstances, must be continuously employed for two years to benefit from the 1998 law. Unfortunately, the law does not define 'continuously' and the protection afforded to employees employed by successive undertakings under the UK's TUPE legislation was not mirrored in the more simplistic 1998 law.

The anomaly was given some clarity by the recent Royal Court decision in Garenne Group Limited v Maura Falla (2002). In this case, the employee had commenced working for one company in 1997. The employer had changed its name less than two years before the termination date of employment and became a different entity. The employer objected to the employee's claim for unfair dismissal on the basis that the same employer had not employed her continuously during the two years.

The bailiff held that 'continuous' meant two years either with the same employer or in the same job. He added: “To construe the provision in the artificially restrictive way advanced by [the employer's counsel] would fly in the face of the expressed wish of the States… to address the issue of employment protection in typical Guernsey fashion.''

The Syson Review recommended defining the notion of 'continuous employment' to partially address the problem and TUPE laws are being considered. State workers in the privatised utilities already benefit from special legislation granting them continuous employment.

Human rights

Human rights legislation in the UK has now been in force for just over two years. Similar legislation exists in Guernsey, but is not yet in force. Any argument that such considerations are irrelevant in Guernsey was scotched by the recent landmark decision of Ogier v The Law Officers of the Crown. Lieutenant Bailiff Talbot adopted the arguments of Ozannes' advocate St John Robilliard and held that, “although the European Convention on Human Rights has not yet been incorporated into the municipal law of Guernsey, Guernsey [should] take account of the jurisprudence relating to the convention, unless existing Guernsey legislation or binding decisions of the courts of Guernsey appear to operate to an effect contrary”.

Human rights legislation is unlikely to have any greater impact on Guernsey employment matters than it did in England. Rather, what has become best practice among certain Guernsey employers – which is already infused with notions familiar to English practitioners – should spread to others. The 1998 law and the way in which the courts have interpreted it might already be regarded as human rights compliant. For example, the bailiff sent the Milford v Seaward Marine complaint back for a rehearing because of a private conversation between the adjudicator and one of the parties during a break. It was 'other than in accordance with the principles of natural justice'. There was no need to invoke Article 6, the right to a fair and public hearing.

Similarly, in the case of Micropublishing Limited t/a Hamilton Brooke v Solway, the bailiff underlined the importance of fairness of procedure irrespective of the size of the employer. Even in a small company, there must still be a clear and structured procedure for an initial warning and dismissal – again a potential Article 6 point.

The Syson Review

The Syson Review also acknowledged the generally human rights complaint nature of the existing systems and its recommendations have focused on other areas, in particular: reducing the qualifying period to one year; increasing the time limit for bringing a claim to three months from one month; introducing basic and compensatory awards to give the tribunal greater discretion – at the moment an employee receives the maximum award of three months wages, irrespective of their own degree of fault; introducing tape recordings of hearings and the publication of full reasons; and raising the financial limit for ancillary issues to £25,000.

International significance

The 1998 law has direct relevance to Guernsey-based companies, of which there are countless banks and other financial institutions. However, service companies incorporated in Guernsey are frequently used by multinationals to employ staff engaged worldwide. In that regard, and particularly where compromise agreements are being negotiated with employees located in other jurisdictions, it is all too easy to overlook the fact that the 1998 law will impact upon the lawfulness of that agreement and the procedures adopted. A number of City law firms are ensuring that their compromise agreements satisfy the requirements of the 1998 law and this task will become more important if some or all of the Syson recommendations are adopted.

Robert Shepherd is an advocate at Ozannes in Guernsey