MOrsel: Can a lay off provision defeat a claim for unpaid wages?
16 December 2020
Yes, Jersey's Employment and Discrimination Tribunal has decided. Rejecting an employee's claim for unpaid wages, the Tribunal ruled that the employer was entitled to rely on a "lay off" provision in its staff handbook in defending its actions during the Covid-19 lockdown this year.
Lay off provisions were once common in industrial sectors but until recently have not typically been used in modern times. In this case, asked to consider a provision in the staff handbook allowing the employer to lay off employees for short periods of time, the Tribunal noted that:
• The Employee had signed his employment contract, which included a warning to read the document carefully and sign to indicate understanding and acceptance of its terms;
• The Employee had therefore agreed to a term of his employment contract which referred to the handbook and highlighted that certain parts of the handbook (including the lay off provision) also had contractual effect; and
• The Employee confirmed that he had received a copy of the handbook.
Based on these factors, the Tribunal found that the lay off provision had been adequately signposted by the employer and agreed by the employee, and was "incorporated" into the employment contract.
The Tribunal then concluded that the provision was "apt" to be a contractual term because it set out the parties' rights and duties on a temporary cessation of work. As the employer was unable to offer work as a result of lockdown, the Tribunal decided that the lay off provision applied to the period for which the employee sought his unpaid wages.
Although the employee's claim failed, the employer's explanation of its actions, particularly its interpretation of the Government's payroll co-funding scheme as the reason for why the employee was not paid, was criticised by the Tribunal.
As such, this is an important early decision arising from the handling of workforce issues during the pandemic. It shows that stripping away the overarching themes of what continues to be an exceptional time, the Tribunal will examine the minutiae of a particular employment relationship.