Deca Penn Claimant v Scotiabank (British Virgin Islands) Ltd Defendant

• Jurisdiction: British Virgin Islands
• Court: High Court (British Virgin Islands)
• Judge: Ellis J
• Judgment Date: 28 February 2013
• Judgment citation (vLex): [2013] ECSC J0228-2
• Docket Number: BVIHCV: 2009/0277
• Date: 28 February 2013

[2013] ECSC J0228-2

EASTERN CARIBBEAN SUPREME COURT

IN THE HIGH COURT OF JUSTICE

BVIHCV: 2009/0277

Between:

Deca Penn

Claimant

and

Scotiabank (British Virgin Islands) Limited

Defendant

Appearances:

Dr J S Archibald of J.S. Archibald & Co for the Claimant

Mr Terrance Neale and Sonjah Smith of McWTodman & Co for the Defendant

Ellis J

1 This is a very straightforward case of wrongful dismissal. Neither the Claimant's pleadings nor her witness statement discloses that she takes any issue with underlying basis for the termination of her contract of employment. Rather, the Claimant alleges that her dismissal was wrongful because the Defendant dismissed her with insufficient notice under her contract of employment. In the premises she claims damages for breach of contract, interest and prescribed costs.

2 The evidence in this matter discloses that the Claimant entered into an employment agreement with the Defendant on 3 ^rd June 1997. By letter dated 25 ^th November 2008, the Defendant terminated the Claimant's employment with immediate effect. She was paid three months salary totalling $14,799.81 in lieu of notice.

3 The Claimant's contract of employment was for an indefinite term and made no provision for termination. The Claimant contends that in such circumstances she is entitled at common law, to a reasonable period of notice on termination. Based on all of the circumstances of the case she contends that a reasonable period of notice would have been twelve months. She therefore asserts that she was legally and contractually entitled to twelve months notice and claims the sums of $53, 499.79 representing the salary which she would have earned over a period of 9 months (the difference between the salary she should have received over 12 months and that which she actually received in lieu of the three month notice period) plus vacation pay for 20 days.

4 The Defendant does not dispute that the Claimant's employment agreement had no specific provision dealing with notice upon termination or payment in lieu such notice. However, the Defendant asserts that under section C9 (3) (c) of the British Virgin Islands Labour Code Cap 293 of the Revised Laws of the Virgin Islands (the Code), the Claimant was legally entitled to no more than one month's notice. The Defendant contends that the Claimant was in fact paid three months salary in lieu of notice which was in excess of her statutory entitlement. It contends that this was done as an act of generosity and in recognition of her length of service.

5 Section C9 of the Code provides as follows;

(1) An employer may without advance notice terminate the employment of any person who had engaged in misconduct related to his work within the limitations of C58 or (2).

(2) With respect to a person who has been engaged for a specified term of employment of less than one week's duration, the employer need give no further notice of his intention to terminate said employment at the end of the specified term unless the terms of his employment specify otherwise.

(3) In all other cases the employer must give advance notice to the affected employee of an intention to terminate that person's employment, as follows -

• (a) With respect to an employee within his probation period, an employer must give at least 24 hours advance notice of his intention to terminate said employee's employment;

• (b) With respect to all other employees, the period of said advance notice shall be at least equivalent to the interval of time between the affected employee's pay days;

• (c) In no case need the period of said advance notice exceed 30 days unless an employment contract calls for a longer notice period.

(4) Having given due advance notice to terminate employment, an employer may terminate the employment prior to the effective date of termination under the notice provided that he pay the employee a sum equivalent to that he would have paid if the employee had worked throughout the period.

6 The Respondent contends that the section C9 (3) (c) of the Code prescribes the maximum rather than the minimum periods of notice to which the Claimant would be entitled upon termination. Counsel for the Respondent therefore submitted that in circumstances where the Claimant admittedly received three months salary in lieu of notice, which far exceeded the maximum prescribed statutory entitlement of one month; she cannot maintain that she was wrongfully dismissed. He urged the Court to conclude that the Defendant did not act in breach the employment agreement.

7 In support of this contention, Counsel for the Respondent referred the Court to the case of Ray A. George v British Virgin Islands Port Authority1 where Barrow JA in considering section C9 (3) of the British Virgin Islands Labour Code stated as follows:

"That provision settles the matter to my mind it specifically permits an employment contract to provide for termination by giving advance notice not exceeding 30 days. It mentions nothing about and imposes no limitation on reasons for termination. Limitations on reasons for termination arise only in the context of unfair dismissal."

8 The Court is not satisfied that this authority provides the assistance which Counsel for the Respondent posits. At that point in the judgment the Court of Appeal was clearly concerned with the central issue of whether an employer was obliged to provide reasons for termination and not whether the section prescribed statutory maximum notice periods. In fact later on in the judgment, the Court of Appeal was definitive in confirming the strength of the notice of termination provisions under the Code. After referencing section C9 (employer's notice of

termination) and C11 (employee's notice of termination) of the Code, Barrow JA made the following statement;

"The two sets of provisions concerning notice of intended termination, it seems to me, are the minimum employment standards established by the Code relevant to termination. Therefore, the termination clause in this case, which provided for a greater notice period than the Code required, was a perfectly valid provision of the contract." 2

9 It is clear that this statement contradicts the position advanced by Counsel for the Defendant. The Defendant's defence is in any event trenchantly opposed by the Claimant who contends that this claim seeks recognition and enforcement of her common law rather than statutory rights. Counsel for the Claimant submitted that under common law, where a contract of employment makes no provision for termination, the law will imply a term that an employee is entitled to reasonable notice of termination. He submitted that in such circumstances what constitutes reasonable notice is to be decided by the Court. The Court is satisfied that this general statement of the law cannot be faulted. 3

10 Counsel for the Defendant however contended that the Labour Code must in any event be taken as superseding the common law in all circumstances where the concept for reasonable notice becomes relevant. He submitted that the Code provides the legal benchmark unless there is a contractual obligation to give more.

11 The Court must therefore consider the statutory legal framework relevant to termination of employment within the Territory, vis-à-vis the common law position. How these two legal systems interact is in the Court's view critical to determining the principal issue which arises in this case.

Employment — The Relationship between Statute and Common Law

12 In the British Virgin Islands the employment contract is governed both by statute and common law. At the time of the filing of this action the operating statutory regime regulating employment in the

Territory included the Labour Code Cap 293 of the Revised Laws of the Virgin Islands (the Code) 4 as well as certain constitutional provisions 5.

13 Section A5 of the Code set out the general application the Code as follows:

(1) To the extent that provisions of this Code purport to apply to employers, they shall apply to employers operating or doing business in the Virgin Islands including the Government as the employer of its non-established employees, but they shall not bind the Government as the employer of its other employees.

(2) To the extent that the provisions of this Code apply to employees, they shall apply to all employees of employers operating or doing business in the Virgin Islands, including the non-established employees of the Government; but they shall not apply to

• (a) established employees of the Government;

• (b) persons in the naval, military or air forces of the Government

• (c) the Police Force

• (d) persons holding status of diplomatic agents or

• (e) persons employed by the United Nations or its specialized agencies.

14 The Code takes into account applicable international standards, in prescribing minimum conditions of employment covering the hiring of employees, wage and hours of work, employment discrimination, leave of absence, individual rights, benefits and termination. Section A7 of the Code therefore provides that;

Nothing in the Code shall be construed as prohibiting an employer, either unilaterally by individual contract with an employee or with employees, or by collective agreement with employees' representatives, from establishing working conditions more advantageous to employees than those minimum standards which are set forth in the Code.

15 It follows that all employers operating or doing business in the British Virgin Islands have an obligation to adhere to and maintain the minimum standards which are set forth in the Code. This would include any minimum standards prescribed in regards to termination of employment — in particular the notice period. Consequently, while it is open to the parties to contractually agree to a notice period that exceeds the prescribed minimum, where there is a...