Burrill et Al v Schrader et Al

• Jurisdiction: British Virgin Islands
• Court: Court of Appeal (British Virgin Islands)
• Judge: Floissac, C.J.
• Judgment Date: 18 September 1995
• Neutral Citation: VG 1995 CA 5
• Docket Number: No. 11of 1994
• Date: 18 September 1995

Court of Appeal

Floissac, C.J., Byron, J.A., Singh, J.A.

No. 11of 1994

Burrill et al

and

Schrader et al

Mr. S. Bennett for the appellants

Mr. L. Inniss Q.C. and Mr. S.J. Husbands for the respondents

Industrial law - Dismissal — Labour Code (the Labour Code Ordinance 1975, Cap. 293) — Labour Code supplements common law rights not to be wrongfully dismissed by a statutory right not be unfairly dismissed — Employee has a common-law right and statutory right — Code provides for conciliation — Procedure prescribed under ss. C59, C60, C61 and B6 of the Labour Code.

Floissac, C.J.

1 Sir Vincent The first respondent (Schrader) is the holder of a leasehold interest in the island of Marina Cay in the British Virgin Islands. That island has developed into a tourist resort where Schrader operates the businesses of a hotel, bar and restaurant.

2 On or about 18 ^th May 1986, Schrader and the appellants entered into a verbal contract of employment “hereunder Schrader employed the appellants as joint managers of the resort for a fixed term of two years commencing 1 ^st November 1986. Under the terms of the contract, the appellants were entitled to a joint salary of $3,000.00 per month and a commission based on 5 % of the gross profits of the resort. The appellants were also entitled to accommodation rent free in a cottage (called “Milkwood”) erected on the island.

3 On 20 ^th January 1987, Schrader summarily terminated the employment of the appellants and appointed the second respondent (Lankford) and his wife Wanda Lankford to be the new managers of the resort. The appellants resisted the dismissal and refused to vacate the cottage and to surrender the keys and other instruments of control of the resort. Whereupon the respondents (Schrader and Lankford) instituted suit No.3 of 1987 in the High Court and therein claimed injunctions and damages in respect of the appellants' continued occupation of the premises. The appellants then filed a Defence and Counterclaim and therein claimed damages for breaches of the contract of employment. The actions were tried by Bishop, J.

4 At an early stage in the proceedings, attention was drawn to section C 10 of the Labour Code (the Labour Code Ordinance 1975, Cap. 293) which requires an employer who terminates an employment to furnish the employee with a written statement of the precise reason for the termination. At the request of counsel for the respondents, the learned judge ruled on the consequences of Schrader's failure to furnish such a written statement to the appellants. Counsel for the parties then agreed that as a result of the ruling, the respondents' Statement of Claim had to be dismissed and that the damages which the appellants claimed in their Counterclaim to be recoverable for the unfair or wrongful dismissal survived as the sole live issue in the action. The trial thus proceeded on that basis.

5 In his closing address, counsel for the respondents submitted in effect that the appellants' exhaustion of the procedure for conciliation prescribed by sections C59, C60, C61 and B6 inclusive of the Labour Code was a prerequisite to the appellants' recourse to the High Court.

6 Those sections provide as follows:

“C59. (1) Should any question arise as to whether an employee has been unfairly dismissed, the employee may seek a resolution of the question by filing a Complaint of Unfair Dismissal with the Labour Commissioner.

(2) …………………………………………………….

C60. (1) Immediately upon receipt of the said Complaint, the Labour Commissioner, using the means described in section B5(2)(a) shall call all interested parties together or otherwise seek to settle the matter by voluntary adjustment or settlement.

(2) Within twenty-one days after the filing of the Complaint if he has failed to achieve a voluntary adjustment or settlement, the Labour Commissioner shall transmit the matter, with a full report thereon, to the minister.

C61. On transmittal of the matter to him, the Minister shall seek to settle the matter as called for by section B6(1) and, should he fail to effect a voluntary adjustment or settlement of all issues within thirty days after the filing of the Complaint, he shall take one of the steps open to him under section B6(2).”

7 Accordingly, when the issue of an unfair dismissal of an employee is referred to the minister, he is required to perform and exercise the duties, powers and functions prescribed by section B6 which provides as follows:

“B6. (1) In addition to his other duties, the Minister upon receipt of a report of the Labour Commissioner transmitted under section B5(2)(b), shall himself attempt to achieve voluntary adjustments or settlement of the matter by taking whatever steps he deems appropriate.

8 (2) Failing to achieve voluntary adjustment or settlement –

• (a) he may remand the matter back to the parties for private negotiations or resort to any machinery for resolving the issues which they have established or may establish, or for the pursuit of any legal action which may be available to them; and

• (b) he may refer the matter to the proper authorities if he believes prosecution for the commission of an offence is indicated.”

9 The learned judge accepted the submission based on these provisions of the Labour Code and by judgment delivered on 14 ^th July 1994, he dismissed the appellants' Counterclaim on the ground that it was premature. The learned judge said:

“As I interpret the Code it is only after the minister has made his attempt to achieve voluntary adjustment or settlement of the matter by taking such steps as he deems appropriate, and after such effort has resulted in failure, and he has remanded the matter back to the parties that legal action in the High Court might be taken, and in my view this is necessary even where the parties may agree that the dismissal was unfair. Indeed, a settlement may be more readily obtained. Any short circuiting of the statutory procedure must be, in my view, wrong in law. I would hold therefore that in the instant matter the filing of this action by counterclaim was premature. The counterclaim of the defendants ought therefore to be dismissed. I so order. The plaintiff to have his costs to be taxed.”

10 The appellants are dissatisfied with that decision and have appealed against it. The issues in this appeal are (1) whether an employee's exhaustion of the procedure for conciliation prescribed by sections C59, C60, C61 and B6 of the Labour Code is a prerequisite to the employee's recourse to the courts for the vindication and enforcement of the employee's rights and (2) whether the appellants are entitled to judgment in their favour on the Counterclaim.

11 The procedure for conciliation

12 At the time of the enactment of the Labour Code, an employee had a common law right not to be wrongfully dismissed. The Labour Code did not abolish that right. The Code merely supplemented that right by a statutory right not to be unfairly dismissed. The statutory right was created by section C55 of the Code which provides that:

“Every employee whose probationary period with an employer has ended shall have the right not to be unfairly dismissed by his employer; and no employer shall dismiss any such employee without just cause.”

13 The result is that an employee now has a common law right and a statutory right. The common law right is based on contract and the statutory right is based on social policy. The provisions of sections C57 and C58 of the Code ensure that the two rights harmoniously co-exist.

14 In Surrey C.C. v Lewis [1987] 3 All E.R. 641 at 643, Lord Hailsham (commenting on analogous British legislation) said:

“My Lords, by a series of statutes now consolidated in the Employment Protection (Consolidation) Act 1978, as subsequently amended, Parliament conferred two important new rights on employees against their employers which arise independently of any rights or obligations contained in their contracts of employment. The first is a right not to be unfairly dismissed and if unfairly dismissed to receive an award either of reinstatement or compensation (see ss 54 and 67 to 69). The second gives a right to an employee to receive redundancy payments in case of dismissal on the grounds of redundancy (see s 81). …Like most such rights which have marked the move from contract to status characterising so much modern social legislation, these rights arise independently of the rights and obligations arising under the terms of the relevant contract of employment, and, by s 140, may not be excluded or abridged by anything in the contract which is inconsistent with their exercise.”

15 The employee also has an auxiliary common law right of access to the courts for the purpose of vindicating and enforcing his common law and statutory rights. Subject...