The redundancy process – what’s changed since COVID-19? |14 July 2020

Many businesses are looking to make positions within their organisation redundant and many employees are in fear that this will happen to them. The below will outline exactly what the redundancy procedure is and what the employer and worker can expect when going through it.

The Employment (Amendment) Act 2020 has made some very minor changes which will also be highlighted below.

The criteria a business must meet in order to apply for redundancy is that either it has stopped operating completely or partly, or the operation of the business is being suspended entirely or partly, or the business is reorganising itself so that it is more streamlined, or as a result of new technology the business needs less workers. [s51(1) Employment Act]

All businesses that are looking to make their workers’ posts redundant and as a result terminate the workers contract must follow the procedure below.

Before the Amendment

The employer must first write to the labour department notifying them of its intention to make certain positions within the business redundant. This letter will need to contain the reasons for the redundancy, the names, ages, occupation, starting date and wages of each and every worker whose post will be made redundant. This letter will need to justify the criteria used for selecting the workers whose contracts will be terminated/posts made redundant. [1(3) of Schedule 1, Part A].

The labour department will then register the employers’ application, a fee will be payable and the labour department will then issue a document to the effect that an application was made.

The competent officer then has time to make consultations and must issue a determination within twenty-one (21) days of the registration of the application. If the competent officer approves the redundancy, notice of this will be sent to the employer and worker. [Schedule 1, Part C].

The employer must wait 72 hours from the date of the competent officer’s decision approving the redundancy before giving the workers notice of termination of their contracts.

The notice of redundancy is sent by the employer to the worker explaining the situation and giving the worker notice as per his contract and if no notice period is stipulated in the contract, then the minimum period of one month will apply. The worker can be paid the equivalent of his salary in lieu of notice as well.

The worker will also be entitled to his salary, accumulated annual leave, accumulated public holidays if any as well as compensation as specified by the competent officer (or minister on appeal). In addition to that the worker shall be given paid leave for half a day each week during the notice period to allow the worker to find a new job.

Appeals

Both the employer and the worker have a right to appeal the determination of the competent officer and must exercise that right within seven (7) days from receiving the notice of the decision of the competent officer. The minister shall decide, within thirty (30) days, whether to uphold the decision of the competent officer or not.

If the competent officer decided to approve the redundancy, the worker appeals and the minister upholds the decision of the competent officer to approve the redundancy then the process carries on as if there was never any appeal.

If the competent officer decided to approve the redundancy, the worker appeals and the minister rejects the decision of the competent officer to approve the redundancy then the redundancy process ends here and the worker’s contract remains valid.

If the competent officer decided to reject the redundancy application, the employer appeals and the minister upholds this decision that is the end of the matter.

If the competent officer decided to reject the redundancy application, the employer appeals and the minister approves the redundancy application then the process carries on. Interestingly here the law deems the period of notice of termination to the employee to have started 72 hours after the decision of the competent officer.

After the Amendment

An employer cannot make redundant a post in which a Seychellois worker is employed if at the same time a non-Seychellois worker is also employed in the same or similar post and the employer has not also done the same for the non-Seychellois worker. [s51A Employment Act]

For applications that have been made between March 16, 2020 and June 30, 2020, an employer can only give notice of termination of a worker’s contract as a result of the post being made redundant as from July 1, 2020. And this is on condition that the competent officer (or the minister on Appeal) has approved the redundancy application. [s81A(1)(b) Employment Act]

The restriction in the paragraph above does not apply to non-Seychellois workers and also does not apply to the worker in respect of whom the employer did not receive the full salary support from the government. [s81A(3) Employment Act]

A word of caution – the above are very general guidelines, each of your circumstances are different and even small differences often lead to different conclusions. It is therefore a MUST for each person to seek legal advice in any law related matter before making any decisions.

Send us your questions about this topic or any other topic and we will look for answers.

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