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THE ruling by the Supreme Court that any employee can lose their job with a maximum of three months pay will surprise most people, opens up a loophole for unscupulous employers, and turns much of present Government labour policy on its head. There has been a lot of debate recently on labour laws with general agreement that a more flexible and less bureaucratic system than our present retrenchment rules allow is required. The debate has centred on how to be fair to both employers and employees. But the newly discovered loophole ends that debate abruptly, with all power granted to employers and very few rights given to employees losing their jobs, unless Parliament acts swiftly to amend the labour law.

We think that there might be need for a temporary amendment moving the existing law into line with what was the common perception followed quickly by a permanent revamp that reflects the debate taking place on labour law.

Most people, including both parties at the beginning of this latest case before the Supreme Court, had assumed that ending a contract of employment where there was no disciplinary reason meant that the retrenchment procedures had to be followed. Now it is clear that there is another method, and one that costs an employer very little and gives very little protection to the honest, hardworking employee.

The Supreme Court has ruled that the Labour Act and labour regulations do not take away an employer’s common law right to end a contract of employment although they do modify the amount of notice that must be given, ensuring that long-term staff are given at least three months notice or pay in lieu of notice. This judgment confirms an earlier judgment by the Labour Court.

This ruling on what our law states now is definitive; there is no appeal from the Supreme Court on a matter of law. But it does go against how most people have interpreted the right of an employer to dismiss staff, and it does conflict with the retrenchment law where the payout for a long-term employee is usually considerably more than three months salary and allowances.

We agree with the present legal position that an employer should not have to keep someone on the payroll if they do not want them, for whatever reason. Overstaffing, personality clashes, and the like have to be resolved, usually by the employee leaving the employer. Where we disagree is with the amount that employees have to be paid when their contracts are ended without cause. Three months pay for someone with say 20 or 30 years of loyal service is unfair to the employee.

There is a great deal of protection for employees being summarily dismissed, that is fired without notice, and the law insists that a proper disciplinary process is followed but, it is now apparent, there is very little protection for the hardworking competent employees who can be sent on their way with little money.

What is now urgently needed is a revamp of labour law to ensure that dismissal of long-term staff without cause will result in a higher payout than just three months salary.

We agree that the present retrenchment rules are cumbersome and probably limit the number of new jobs created by making employers think very seriously before taking on a new full-time employee. They tend to give employees all the advantages. But clarifying that an alternative exists through modest notice is unfair to employees and gives employers all the advantages. A workable system has to be fair to both.

It has been clear for several years that a simple system, fair to both employers and employees, is needed to cope with changing demands for labour, and that this system should not involve a lot of bureaucracy. Discussions and debate on such a system has been in progress for some time and there is a growing measure of agreement.

It is now urgent that the debate is moved into law by Parliament. A simple amendment extending notice periods beyond three months for staff with more than three years service would be a start and might answer the problem of giving employers labour flexibility without being unfair to employees.