Published On: Thu, Oct 6th, 2022

Minister Ottley intends to tackle abuse of short-term contracts even more

PHILIPSBURG — Minister Omar Ottley (Public Health, Social Development and Labor) is not satisfied with the changes to the Civil Code that aim to put an end to the abuse of short-tem labor contract. The changed Civil Code was published in October 2021, and Minister Ottley has now decided to let the new rules go into effect per October 1, 2022. In the meantime, he works on improvements of the legislation.

The amendment to the Civil Code was approved by Parliament in 2019. “It will not end the longstanding abuse of short-term contracts,” Ottley said in a press statement. “I do not believe that the new amendment to the Civil Code will curb the abuse of short-term labor contracts because the option to send employees home for three months and a day still stands.”

Ottley said that the current civil code still contains some benefits for employees, such as extended maternity leave (from 12 to 16 weeks), the introduction of paternity leave (for 7 days), equal treatment (prohibition of discrimination between men and women), a restriction for employers to unilaterally change labor contracts and protection for employees if their company is sold to a new owner.

The Civil Code that has now expired per October 1, states that employees who received three consecutive contracts without intervals of leave of more than three months would become permanent if they get a fourth contract. The code also allowed employers to keep employees working for up to 36 months with interruptions of no more than three months without making the employee permanent.

The minister’s press statement contains five examples to clarify under which conditions an employee becomes permanent – or not.

An employee who received her or his third annual contract per August 1, 2022, will not automatically become permanent. This will only happen if the employee receives a fourth contract (in 2023).

An employee with an annual contract that started on August 1, 2022, followed by a contract from February 1, 2023, until September 30, 2023, will become permanent only if the employer offers a third contract  without an interval of leave of more than three months.

An employee who receives her or his third annual contract on August 1, 2022, will not become automatically permanent per October 1 2022. This will only happen if the employee gets a fourth contract without an interval of leave of more than three months.

An employee who started working on an annual contract per August 1 2022 and who would receive a second contract starting on August 1 2023, will become permanent if the employer grants another contact without an interval of leave of more than three months.

An employee who received a 3-year contract per July 1, 2022 will still fall under the rules of the previous civil code.

Minister Ottley remains concerned about loopholes in the new Civil Code. “It allows the employer to send an employee home for more than three months before rehiring. This makes it possible to prevent that an employee becomes permanent. Employers can send employees home for three months and one day and not be in violation of the law.”

The minister’s objective is regulating under which conditions short-term labor contracts can be used. If he gets his way, employers will only be able to hire temp workers based on a written fixed-term employment contract. Such a contract can be used “to meet a need for temporary workers, which need only exists in part of the calendar year,” the press release states. Other possibilities are the replacement of a temporarily absent employee or the execution of a precisely defined project.

However, project based work has a definite start and end date. “Many persons have been in the same job for more than five years but were never made permanent. This is a sad reality that affects their ability to improve their socio-economic standing within our community. These persons cannot purchase a new car or acquire a mortgage to buy or build their own homes, because they do not have what is considered a secure enough income to offer a bank.”

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While Ottley is bent on making changes that put an end to the abuse of short-term contracts, he is well aware of the positions of both employers and employees. “We must be mindful of the need to make provisions that do not burden employers with unproductive employees or a labor market that is too rigid which hampers productivity. Ignoring these facts will have a crippling effect on businesses and the economy of St. Maarten.”