A year later and the temporary termination extension has finally ended. Sources within the Ministry of Natural Resources and Labor have confirmed that the Temporary Termination date which expired on February 28th, 2021 will not be extended, forcing employers to make hard decisions.
On May 29th, 2020 the Minister responsible for Immigration and Labor, the Hon. Vincent Wheatley announced plans to amend the Labour Code (Amendment) Act, 2020 to make provisions for an extension to October 31st, this was then approved by cabinet.
Once the October 31st deadline approached, the Minister further stated that the October 31st temporary termination deadline will be extended to November 15th, 2020 in an attempt to benefit employers and employees.
However, the November 15th tentative date was rejected by some residents who said they have persons ready to work, and further requested the date be extended to December 15th or 31st.
In response to community appeals from both employers and employees, Minister Wheatley said he was trying to find a middle ground by seeking a balance for both parties stating, “The current pandemic in mind and the harsh realities being faced by both employers and employees inspired Cabinet’s decision to extend to 2021.”
While this worked to the benefit of business owners, many were also concerned about the employees who have been displaced since March 2020 without jobs, as the tourism industry remains closed and the reopening of the sea ports has again been deferred to April 2021.
Based on the labor code of Virgin Islands, the Temporary Termination period is done on a three (3) month period and is usually used in instances where an employer is experiencing hardships for example the Hurricanes of 2017. This period is used to allow employers to get back on their feet. After the three (3) months, the labor code speaks to if an employer does not rehire an employee their employment would have to be severed, making way for the employer to pay the employee severance pay based on the years worked with the company; as well as any benefits they may have accumulated such as vacation days among other benefits as agreed upon in an employment contract.
In the era of COVID, most employers that knew of this clause would have reverted to it when lock downs began. The first three (3) month period would have begun in March, when the first lock down was sanctioned. The Government of the Virgin Islands would then extend for another three months as they realized locks down could become continuous based on the pandemic and the economy of the Virgin Islands was essentially shut down. Some believe this was the Governments way of assisting employers so they would not have been a liability, as at the end of that three months, employers would have then been forced to sever their employees and that in of itself is a liability, many could not afford.
From an employer’s perspective, the temporary termination is a perfect situation, as it extends the liability. Employers did not have to pay out severance one time, as severance could be very costly and range to thousands of dollars. From an employee’s perspective, it is not the ideal situation as employees are not being paid. During the extension periods employees are essential just holding on and waiting, hoping that one day their employer would say come back to work, with no surety as to exactly when. Every time there was an extension, the Government of the Virgin Island would state specifically when and how long the extension will last for.
No official announcement has been forthcoming from officials informing that they have formally ended any further extensions of the deadline. However, officials did state upon the last extension that it would not be extended again. This now means that employers are forced to make a decision, will they sever these employees or return them as full time employees.
The labor code does not specify the number of terminations an employer can issue during a period of time, so employers not desirous of having to pay severance could very well bring an employee on for one day then restart the three months, when that three months has ended, return the employee for one day then restart again. This will only frustrate employees and if an employee decides to quit employment they then walk away from any severance they would have been eligible to receive, which then removes the employer from any liabilities.
Employers who have employees with work permits, should have expired. With the extension, the Government of the Virgin Islands also extended the immigration status despite some persons not having a permit, that option has also expired in February 2021. Work permit holders now have to regularize their status by renewing their work permits, while being temporary terminated which has ended, meaning that they have to now renew their work permits. In many cases employees are responsible for their work permit fees and that can range from a thousand dollars onward.
Why then would an employee willingly want their work permit renewed knowing that an employer could sever them the next day the work permit is received.
With the sea ports still closed this heavily affects persons working in the tourism industry. While employers may not deliberately do this, it is a strategic business move which some may choose. How does an employer pay employees when they don’t have revenue coming in and in many cases don’t have revenue to sever these employees?
Severance equals a lump sum with a deadline by which it is to be paid. There is a very short grace period and a payment plan for severance is only possible once agreed upon by the employee. For employers with expat employees, they have signed an immigration bond, which holds them liable to pay repatriation fees including air fare and hotel accommodations for repatriation of said employees.
When considering large hotels or organizations who have a number of expat workers, this is a significant cost to employers in addition to severance pay.
When considering both sides, some would side with the Government in ending the temporary termination deadline, instead of having persons wait in vain, not knowing their employment fate. Both employers and employees have experienced significant losses as a result of the situation.