1 Why is the legislation needed To ensure the rights of workers are protected, to a set standard, in genuine situations where the employer has become insolvent and therefore cannot pay what the employers are entitled to in law. It follows existing practice in other jurisdictions, including the UK and the Isle of Man. 2 Outline the changes/ new provisions to be included in the legislation The new law would define legal insolvency, set out what statutory entitlements are protected (including notice pay, holiday pay, wages owed, redundancy payments), define the employee qualifying criteria, provide a mechanism to transfer the debt to the States (or a Minister), make adjustments to the Bankruptcy Law regarding the priority of employees as creditors (in particular regarding statutory redundancy payments owed), set out how claims are paid and administered, possibly including any application forms required, decision-making powers and method of appeal, and the funding of the scheme (which may require an amendment to the Social Security Law in regard to the collection of contributions). At this time it is anticipated that the scheme would be based upon insolvency funds set up in the UK and Isle of Man, (although other jurisdictions will be reviewed). 3 How does the legislation link to the strategic plan objectives The legislation links with the aim of supporting the island through the economic downturn, as set out in the latest draft Strategic Plan. It accords with 3.1.1 of the 2006-2011 Strategic Plan – Promoting a safe, just and equitable society by having legislation in place that provides rights to employees and employers in line with best practice worldwide - and extends the existing legislation to provide a comprehensive range of basic rights to employees and employers by moving into the second phase of employment law reform, as approved by the States in P.99/2000. 4 How will the legislation benefit Jersey The legislation will provide a basic minimum standard in employee protection and will provide some security for employees (and employers) in difficult economic times. Such protection is also important for Jersey’s international reputation. 5 Is there known support for, or known or expected opposition to, the legislation There is widespread support amongst States members that this legislation should be brought as soon as possible and a commitment has been given by the Social Security Minister that it will be dealt with as soon as possible in 2009. - What would happen if no action were taken
States Members would continue to lobby the Minister to bring the legislation. Strong public objection to the lack of action would be likely, particularly in the increasingly difficult economic situation with further redundancies likely where employers have become insolvent. The recent States’ decision to make ex gratia payments of notice pay owed to former employees of Woolworths has set a moral precedent and created an expectation that compensation will be available to other employees. |