The current economic climate has prompted employers to reassess the structure and staffing requirements of their businesses, with the result that some employees have been dismissed. In some cases, the employee may feel that the employment was ended unfairly, either because of the reason for dismissal, or the process that was used.

In Bermuda protection is offered to both the employee and the employer by the Employment Act 2000 (the "Act"). Any dismissal of an employee must be in relation to ability, performance or conduct, or the operational requirements of the employer's business (unless it is a dismissal due to redundancy). Once the criteria for dismissal have been established, the employer must notify the employee in writing and follow the notice period provisions of the Act.

If an employee is dismissed for reasons other than those above, the dismissal may be deemed unfair in accordance with the Act, which provides that an employee has been unfairly dismissed if the basis for dismissal is:

¦ an employee's race, sex, religion, colour, ethnic origin, national extraction, social origin, political opinion, disability or marital status;

¦ an employee's age, subject to any other enactment or any relevant collective agreement regarding retirement;

¦ any reason connected with an employee's pregnancy, unless it involves absence from work that exceeds allocated leave entitlement;

¦ an employee's trade union activity;

¦ an employee's temporary absence from work because of sickness or injury, unless it occurs frequently and exceeds allocated leave entitlement;

¦ an employee's absence from work to serve a public duty as defined by the Act, being a Government Board, the Bermuda Regiment, the Reserve Police, the Senate or House of Assembly, or a volunteer fire officer;

¦ an employee who removes himself from a work situation that he reasonably believes presents an imminent and serious danger to life or health;

¦ an employee's participation in any industrial action that takes place in conformity with the Labour Relations Act 1975;

¦ the filing of a complaint or the participation against an employer involving an alleged violation of the Act.

Complaints by employees regarding the reason for their dismissal are dealt with in the first instance by an Employment Inspector (the "Inspector"), who has the task of investigating the complaint and, if appropriate, attempting to facilitate a reconciliation between the parties. Should such a resolution not be possible, the Inspector may refer the complaint to the Employment Tribunal (the "Tribunal"). Should the Tribunal conclude that an employee has been unfairly dismissed there are several remedies that it may award the employee.

The burden is on the employer to prove the reason that the employee was dismissed, except in a case where an employee claims constructive dismissal (this is where the employee claims that the employer's conduct is such that it is unreasonable to expect the employee to continue the employment) in which case the Act deems the employee to be unfairly dismissed and the burden is on the employee to prove that the circumstances that resulted in the employee leaving the employment were unreasonable.

When the Tribunal concludes that an employee was unfairly dismissed, it may make an order for reinstatement, an order for reengagement, and/or a compensation order.

Reinstatement puts the employee back in the position that the employee would have been in had his employment not been terminated; the employee must be treated in all respects as if they had never been dismissed. The employee will also be entitled to any wages that would have paid since the unfair dismissal, as well as any pay increases, bonuses or other benefits conferred on other employees.

Reengagement requires an employer to take back an employee into work of a comparable nature to that in which he was engaged prior to the dismissal, or other reasonably suitable work. This remedy is not the same as reinstatement and allows the Tribunal to decide and impose such terms as may be necessary or agreed by the parties for the reengagement of the employee. A compensation order may be awarded as well as, or instead of, a reinstatement or reengagement.

When calculating a compensation order, two things are taken into consideration – the financial loss suffered by the employee as a consequence of the dismissal, and the extent to which the employee's actions contributed to the dismissal. A compensation order shall be not less than two weeks' wages for each completed year of continuous employment up to two. For all other employees, the award shall be four weeks' wages for each completed year of continuous employment, with the maximum award being equivalent to 26 weeks' wages.

The Act requires that the Tribunal consider reinstatement or reengagement of the employee in the first instance.

The Tribunal must also take into consideration the wishes of the parties and the circumstances in which the dismissal took place including any contribution of the employee to the dismissal.

It is vital in an employment relationship that both parties are clear about the requirements of the Act, as the legislation's object is to protect both parties in employment matters and guide them in a fair working relationship.

Attorney Anna Knapman-Scott is a member of the Litigation and Insolvency Practice Group at Appleby. A copy of Ms Knapman-Scott's column can be obtained on the Appleby 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.