I got an individual to clean around the business coming in three days per week on a casual basis. I did not give him a contract because I did not consider him an employee but a casual worker and I would pay him per hour when he worked
He started making himself useful to the other staff so he came to work on other days to complete tasks assigned by various supervisory staff.
During COVID, my business was forced to close. While the employees were laid off and given Termination/Layoff Certificates, he was told that due to COVID and the closure there was no work available for him. By then he had been working for 13 months and the number days he worked per week varied from 3 to 5 days. After the business re-opened, I did not call him back due to our financial circumstances at this time.
He is now claiming that he was an employee and that I failed to provide him with Termination/Layoff certificate and vacation pay. I never deducted NIS from him nor paid NIS on his behalf. I don’t understand the need to meet these requirements.
Should I give him what he is asking for?
In this instance, based on the information provided, the individual was an employee of the business.
He is entitled to receive vacation pay, notice pay and a Termination/Layoff Certificate.
Though not given a written contract, he was given a verbal contract from the date he started to work at your business. He did not control his hours or place of work as he was scheduled for three days and came on other days as offered by your supervisory staff. Further, he was dependent on the business for his wages which was paid to him on a periodic basis.
As an employee then, he is entitled to be given notice when the contract of employment is being terminated – whether the contract of employment is verbal or written. In the case of this individual, if he was hourly, daily, or weekly paid and continuously employed for one year (12 months), he must be paid not less than one week’s notice.
Who is an employee?
This is an excellent example of understanding the difference between a contract of service and a contract for services. The business owner and the supervisory team must be clear on the nature of the relationship with the service provider and what type of contractual arrangement exists. If everyone who interacts with the service provider is not aware, it is possible that the service provider can be considered to have been engaged under one type of arrangement when in fact the terms and conditions were in fact under another.
The first question for the practitioner is whether the cleaner was an employee (engaged under a contract of service) or a contractor (engaged under a contract for services). Did the business owner hire a new employee even though that may not have been the intention?
Once that individual worked under a contract of employment he is considered an employee and as such all rights attributed to that status must be adhered to.
A contract of employment is any contract of service or apprenticeship. The contract terms can be expressed or implied i.e. the terms are spelt out or suggested based on the actions. Where spelt out, the terms can be expressed orally or in writing.
In determining whether a contract of employment exists there are some factors that you must take into consideration. These include whether:-
- The person being engaged is expected to give personal and exclusive service – i.e. whether he/she is expected to work for your business alone during particular or specific hours;
- The person being engaged is being given instructions on how the work is done and whether you control and direct how the work is done;
- The work has continuity (is ongoing), and this continuity creates a situation in which the person being engaged is dependent for wages and not in business on his own account;
- The work is carried out within fixed hours or at a workplace or workplaces specified or agreed by the person requesting the services;
- The work involves the person being engaged becoming integrated in the organisation, including subjection to its policies;
- The person being engaged is subject to the business’ grievance handling and disciplinary procedures;
- The person being engaged is in receipt of periodic remuneration, payable on a stipulated basis e.g. at hourly, weekly or monthly intervals and all such payment;
- The employee is entitled to holidays with pay; and
- The employee makes no, or only nominal, investment in tools and equipment.
Termination/Layoff Certificate
If you terminate the employment of an employee or if the employee voluntarily leaves your employment (resigns) you must give a Termination of Services/Lay-off Certificate to the employee and send a copy to the National Insurance Office within one week of the date of termination. You must give the Termination of Services/Layoff Certificate to the employee even if he/she was only employed for a day or part thereof.
NIS Contributions
Contributions must be paid for all eligible employees.
All persons between the ages of 16 and 67, who is gainfully employed in Barbados under a contract of service, and who earns more than the minimal insurance earnings (currently $21.00) must be insured under the National Insurance and Social Security Act. These contributions must be paid even if the employment is casual, part-time or temporary.
Takeaways!
- As practitioners, we must be clear on the status of persons who are engaged by our organisations. What can be done and how it should be done will differ from territory to territory.
- Employee status is determined not by intentions but by employment terms and conditions.
- A contract of employment can be oral.
- The Termination/Layoff Certificate must be given to an employee leaving the organisation even if they worked one day.
- National Insurance Contributions must be paid for all employees between 16 -67 whether casual, part-time or temporary.
