Instrument not subject to ratification;¹ Foreign case law² 

Triangular employment relationship/ Constructive dismissal/ Demotion/ Establishment of a jurisprudential principle based on international law 

The Banking, Insurance and General Workers’ Union, in name of Mr. Hazel, called on the Industrial Court to order the defendants to pay compensation to the worker for their constructive dismissal. The trade union based their arguments on the fact that the worker had been demoted without prior notice from the position of Team Leader in a Pilot Project with operation supervisory responsibilities to the one of Emergency Medical Technician, which also incurred a salary reduction that affected the worker’s living conditions. Following three years working in the new job, the worker resigned.

Once the Court had reviewed the evidence submitted by the parties in the case, it concluded that none of the defendants’ evidence challenged the evidence submitted by the trade union to prove that there was no justification for the demotion and that the worker had not been afforded the opportunity to know the reasons behind the decision or defend himself against the decision. Moreover, there was no doubt that the worker had suffered a salary reduction and that the defendants’ actions were not in keeping with the principles and practices of good industrial relations practices established in the Industrial Relations Act. Based on the above, the Court declared the constructive dismissal to have been proved.

The Court found that the only controversy in the case lay in the existence of an employment relationship between the worker and the defendants, since all of the enterprises involved denied having employed the worker. This point had to be resolved in accordance with Section 10 (3) (b) of the Industrial Relations Act, which establishes that the Court is required to act having regard to the principles and practices of good industrial relations. In this regard, the Court indicated that in so doing, ILO Recommendation No. 198 and other international and local precedents can be considered and applied to the circumstances of the case.

The Court referred to paragraph 9 of ILO Recommendation No. 198 which establishes that:

“the determination of the existence of such a relationship should be guided primarily by the facts relating to the performance of work and the remuneration of the worker, notwithstanding how the relationship is characterized in any contrary arrangement, contractual or otherwise, that may have been agreed between the parties.”³

The Court also highlighted how recommended indicators of the existence of an employment relationship in Recommendation No. 198 are the periodic payment of the remuneration to the worker and the fact that such remuneration constitutes the sole or principal source of income.

Considering all evidence submitted by the parties and “applying current principles of good [industrial] relations practices”, including those derived from Recommendation No. 198, it concluded that at the time of the demotion the enterprise that employed Mr. Hazel was Tri-Star Latin-America Ltd., and that this enterprise was the sole employer of the worker.  It, thus, ordered Tri-Star Latin-America Ltd to pay damages to the worker for constructive dismissal.