When the Employment Amendment Act 2006 (?the Amendment Act?) was passed, it introduced a new regime for employers and employees to follow in the areas of termination, and the winding up of a company, but made no change in the provisions regarding overtime.

The overtime provisions, in particular, had attracted the attention of business leaders, who were concerned about the bottom line impact of any proposed changes to the legislation.

The legislation provides that an employee is entitled to be paid overtime for work in excess of 40 hours a week. Professional or managerial employees whose statement of employment indicates that their annual salary has been calculated to reflect that regular duties are likely to require them to work, on occasion, more than 40 hours a week, are not eligible to claim overtime. Any employee who agrees with their employer that overtime provisions do not apply is also not eligible to claim overtime.

Any application by an employer or industry sector to modify the overtime hours can be made to the Minister who may, after consultation with the Labour Advisory Council, modify the 40 hours per week starting point at which overtime becomes payable by prescribing a different number of hours for specified types of industry/commerce. In doing so, the Minister must have regard to the seasonal nature of the work and the effect of the different number of hours on the health and safety of employees and the public.

If any employee works in excess of 40 hours a week, or the modified number of hours per week, then he must be paid at the overtime rate or at the employee?s normal rate and compensated by being given the equivalent number of hours as time off in lieu. Section three of the Employment Act (?the Act?) defines the overtime rate as one and a half times the employee?s normal hourly rate.

With regard to termination, the Amendment Act introduced certainty to this area of employment law. Under section 18 of the Act, an employee?s contract of employment may only be terminated by an employer for a valid reason connected with the ability, performance or conduct of the employee or the operational requirements of the employer?s business. Any termination has to be in accordance with the notice provisions of section 20 of the Amendment Act or the contract of employment whichever is more favourable to the employee.

The Amendment Act stipulates that employers should apply the progressive disciplinary provisions of sections 26 or 27 before giving notice of termination.

Section 26 of the Act relates to acts of repeated misconduct that are not serious enough to warrant summary dismissal. If an employee is guilty of repeated misconduct the employee must be given a written warning which details the conduct complained of. If there is further misconduct within six months of the warning, the employee can be dismissed without notice.

Similarly, section 27 of the Act requires a written warning to the employee should the employee not be performing his duties in a satisfactory manner. The written warning must set out details of the performance issues and the manner in which the employer has to improve.

If there is no improvement in performance during six months from the date of the warning, the employee can be dismissed without notice.

The Amendment Act preserves for employers the ability to dismiss an employee summarily for serious misconduct.

The Amendment Act has clarified the position with respect to payments made to employees on the winding up of the employer?s business. Payments to employees of vacation accrued but not taken, payment for wages earned but not paid and severance allowance up to a maximum of 26 weeks? wages shall have priority over all other claims including claims of the Crown.

This is subject to the costs, charges and expenses of the winding up and priorities conferred by section 236 of the Companies Act 1981 or other enactments.

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qAttorney E. Kelvin Hastings-Smith, FCIArb, is Counsel and Manager of the Litigation Practice Group at Appleby Hunter Bailhache. A copy of Mr. Hastings-Smith?s column can be obtained on the Appleby Hunter Bailhache website at www.applebyglobal.com. This column should not be used as a substitute for professional legal advice. Before proceeding with any matters discussed here, persons are advised to consult with a lawyer.