Legal News & Views

Forums For Adjudicating Employment Disputes

As the sources of law which govern employment contract are contained in both legislation and common law, the forum for adjudicating employment disputes will vary based on the cause of action.

Under Grenada’s Employment Act and Labour Relations Act, an aggrieved employee may have recourse to the Labour Commissioner, the Minister of Labour and/or an Arbitration Tribunal.

The High Court of the Eastern Caribbean Supreme Court, Grenada, also has jurisdiction over certain employment and trade disputes, provided that the complainant is not precluded from bringing an action by any applicable legislation; for example, complaints of unfair dismissal are confined to the dispute resolution mechanism of the Employment Act, which does not include recourse to the High Court.

The Main Sources Of Employment Law

The main sources of law are statute and common law (case law), though international principles and conventions, such as the ILO Convention are also applicable.

Grenada’s Employment Act and Labour Relations together constitute the Labour Code, which is the primary legislative source of employment law.

Other supporting and applicable legislation include Grenada’s National Insurance Act, Factories Act, and Foreign Nationals and Commonwealth Citizens (Employment) Act.

Grenada also follows a common law system of binding case law authorities, in which general contract law, employment law and tort are applicable to the employment relationship.

Accordingly, case law decisions from the Eastern Caribbean, England and the wider Commonwealth are relevant, applicable and binding to varying degrees, to the interpretation, application and enforcement of employment law in Grenada.

Employment contracts conteplate oral agreements or agreements by custom, written contracts with individual employees and collective bargaining agreements with trade unions regarding a bargaining unit.

National Law And Employees Working For Foreign Companies

Employees working in Grenada will not be subject to Grenada’s employment law regime if they are temporarily based in Grenada, receiving wages outside of Grenada and employed by a foreign company that does not have a branch or permanent presence in Grenada.

Conversely, Grenada’s employment law regime ( including social security and applicable taxes) may be triggered if the employee is considered to be permanently based in Grenada, and or if the foreign company makes payment in Grenada, and or has a place of business in this jurisdiction.

There is no specific set of rules which speak to this issue, which must be ascertained based on fact specific circumstances.

National Law And Employees Of National Companies Working In Another Jurisdiction

There is no specific rules which speak to employees of a national company working in another jurisdiction. Generally, Grenada’s employment laws are applicable to employment conducted within the jurisdiction, Grenadian employees working in another jurisdiction and employed by a Grenadian company may be subject to the minimum requirements of Grenada’s legislation, but may also be entitled to benefits on the jurisdiction in which they conduct the services. The benefits which the employee is entitled will be based on the specific facts in issue.

Data privacy

There isn’t specific data privacy legislation relating to employment which is applicable, and Grenada’s Data Protection Act is not yet in force ( as at August 2024)..

Data privacy (and actions for breach of privacy) is therefore governed, for the time being, by express or implied contractual terms and the common law tort of breach of confidence.

Legal Requirements As To The Form Of Agreement

There is no specific legal requirement as to the form of an employment contract.

Contracts may be oral, express or implied, however, a written statement of particulars must be provided to each employee within one month of beginning employment, which sets out certain information including the names of the employee and of the employer, the date of commencement of the contract, the rate of remuneration and the method of calculating remuneration, the intervals at which remuneration is paid, the nature of the work to be performed, normal hours of work, and any provisions for termination.

Mandatory Requirements

• Trial Period

Probationary (trial) periods which are not specifically stipulated by contract, are mandated by the Employment Act to be not more than one (1) month in the case of unskilled workers and three (3) months in the case of other workers.
During the probation period, under the Employment Act, either the employer or the employee may terminate the employment contract without notice, unless otherwise specifically stated in the contract.

• Hours Of Work

Grenada’s Employment Act governs the maximum hours of work that are applicable to employees, and also governs overtime outside of ordinary working hours. Specifically, excluding overtime and exceptions for specific categories of workers, employees are not required to work in excess of eight (8) hours a day, exclusive of a one (1) hour lunch period.
If an employee is required to work for any period in excess of the eight (8) hour work day, they are entitled to overtime compensation, which must be agreed between the employer and the employee, and paid at a rate that is not less than 1.5 times the employee’s hourly rate, or twice the rate if the overtime is in respect of work conducted on a Sunday or public holiday.

• Special Rules For Part-time Work

There are no special rules related to part-time work, and the legislative provisions applicable to full-time work will apply to part-time employees who are employed for an unspecified period of time.
However, there are different types of employment contract, which include contracts for a specified task and for specified period of time, to which different termination provisions, amongst others, are applicable.

• Earnings

Employees are entitled to be paid at least once every two weeks where their wages are calculated on an hourly or weekly basis, or based on a work out-put basis; and, once a month in all other cases.
Certain categories of employees are entitled to minimum wage protections, which require employers to pay at least the statutory minimum wage.
Employees are also entitled to receive pay certificates which outline the gross wages, legitimate deductions and net wages payable to the employee.

• Holidays/Rest Periods

In addition to one (1) hour per day for rest/lunch, employees are entitled to annual leave with pay of two (2) weeks for the first week of employment and three (3) weeks thereafter.
Employees who are employed on an hourly or daily basis are entitled to one working day for every period of one hundred and twenty (120) hours or fifteen (15) days, as applicable.
Annual leave does not include any period of sick leave or public holidays.

• Minimum/Maximum Age

Except for holiday jobs and approved job training, persons under sixteen (16) years old are prohibited from being employed, and employers are required to keep a record of all employees under the age of eighteen (18) years old.
There is no maximum working age, though employees over 60 are not entitled to termination allowance if they are terminated by their employer.

• Illness/Disability

Under the Employment Act, employees are entitled to paid sick leave after completing twelve (12) months of continuous service and submitting a medical certificate from a registered medical practitioner.
Employers may include more flexible provisions in employment contracts that permit limited days of absence without producing a medical certificate, but under the Employment Act, an employee is not obligated to pay for more than five occasions during a one-year period that the employee does not supply a medical certificate.
The employer may also require an employee to attend a medical practitioner for assessment, where sick leave extends for a period longer than two (2) months. The employer will have the discretion at that point to determine whether more sick leave will be granted to the employee.

• Location Of Work/Mobility

There are no rules or specific legislation regarding where employees are required to work. This term is typically reflected in the employment contract, though changes from the employee’s usual location of work which renders attendance onerous or unusually difficult in the context of the original agreement, may constitute a breach of contract and/or grounds for constructive dismissal.

• Pension Plans

Employers are not obligated, either under common law or statute, to provide pension plans for their employees, unless this is a term of a collective agreement or other employment contract. Any employer-established pension plan must be approved by the Grenada Authority for the Regulation of Financial Institutions as Supervisor of insurance, and registered under Grenada’s Insurance Act. It will also be subject to the provisions of the Income Tax Act.
Outside of pension plans which are established by an employer, each employee is subject to the compulsory national insurance scheme, pursuant to the National Insurance Act.
Under this Act, employees contribute 5.75% of their salary, and employers contribute 6.75% of the employees’ salary towards national insurance. These contributions are subsequently paid out to employees who have attained the pensionable age (currently 61 years old) as age/retirement benefits (amongst other applicable benefits).

• Parental Rights (Pregnancy/ Maternity/ Paternity/ Adoption)

Employment contracts may include rights and benefits to employees ( such as study leave) in addition to those rights and benefits which are enshrined in statute. The minimum standard set by the Employment Act for employees’ parental rights are as follows:

• • Pregnancy/Maternity leave – female employees are entitled to three (3) months maternity leave, which starts on a day chosen by the employee. Maternity leave is paid leave if the employee was employed with the employer for more than eighteen (18) months, and will be unpaid leave if she has been employed for less than eighteen (18) months.
  • Paternity leave – there are no specific paternity leave rights, but employees may be granted ‘supplementary family leave’ for reasons of family responsibilities, with consent not to be unreasonably withheld by the employer.
  • Adoption leave – likewise, ‘supplementary family leave’ will apply in circumstances of adoption for which there is no specific leave entitlement.

Employers are prohibited from giving notice of termination of employment at any time during a leave of absence while the employee is on any of the above leave entitlements. Employees are expected to return to their substantive posts after they return from leave.

• Compulsory Terms

Except with respect to the particulars of employment to be set out in a written statement given to employees (as discussed in the section above on ‘Requirements as to Form of Agreement’), there are no compulsory terms to be included in an employment contract under Grenada’s laws.

• Non-Compulsory Terms

As with other contracts generally, the employer and employee are free to agree to any terms and conditions, subject to proviso that such terms must not be less favourable than those which are set out in the Employment Act, and that they must not be illegal, contrary to public policy or otherwise legally incapable of being valid.

Types Of Agreement

The Employment Act contemplates employment contracts for an unspecified period, contracts for a specified period, contracts for a specific task, and seasonal employment. Based on the applicable employment contract type, an employee may be entitled to certain benefits, such as termination allowance.

Additionally, collective agreements with trade unions ( bargaining agents) must also be considered if the employees are unionised.

Secrecy/Confidentiality

There are no statutory provisions governing secrecy/confidentiality in an employment relationship. These terms may be contained in a written employment contract, or in the absence of such express terms, secrecy and confidentiality will be governed by the implied terms of good faith, trust and confidence, loyalty, and fidelity.

Ownership of Inventions/Other Intellectual Property (IP) Rights

The parties are free to agree on the ownership of inventions and intellectual property rights; however, in the absence of express agreement, pursuant to the Copyright Act, the original owner of the work shall be the employer.

Pre-Employment Considerations

Generally, no pre-employment considerations are mandated by law. Employers are free to request criminal background checks before offering employment.

Hiring Non-Nationals

Work permits must be obtained in order for foreign nationals to work in Grenada. An application must be made to the Ministry of Labour for a work permit to be granted, together with all necessary supporting documents and the relevant application fee.

Hiring Specified Categories Of Individuals

There are no rules regarding hiring specified categories of individuals, except children, though there are rules which prohibit termination of employment due to race, religion and other factors.

Outsourcing And/Or Sub-Contracting/Temporary Agency Work

There are no rules regarding outsourcing, sub-contracting or temporary agency work. However, the facts of the relationship will determine whether the individual becomes an employee versus an independent contractor, and accordingly, whether the employment law regime will be applicable.

Changes To The Contract

Employers are not entitled to unilaterally change the terms of an employment contract, unless this ability to make changes unilaterally has been previously agreed upon between the parties.

Change In Ownership Of The Business

The Employment Act provides that if a business is sold, transferred or otherwise disposed of, the employees will have the right to either be terminated and receive their benefits, or continue with the successor employer.

Those employees who continue with the successor employer will be treated as having continued their employment, constituting one single continuous period of employment with the old and new employers.

Social Security Contributions

Each eligible employee is subject to the compulsory national insurance scheme, pursuant to the National Insurance Act. Under this Act, employees contribute 5.75% of their salary and employers contribute 6.75% of the employees’ salary towards national insurance, which contributions are subsequently paid out to employees as sickness benefits, invalidity benefits, and retirement benefits, amongst others.

Accidents At Work

Accidents at work are largely determined by common law actions for negligence and or breach of contract, as there are currently no specific legislative provisions regarding occupational health and safety, except in relation to employment at factories, which is dealt with under the Factories Act.

In addition to common law damages, employees may also be entitled to employment workplace injury benefits under the National Insurance Act.

Discipline And Grievance

Under the Employment Act, the employer is entitled to take disciplinary action, including termination, when it is reasonable in all the circumstances to do so. These actions may include a verbal warning, written warning, suspension, demotion and dismissal, but may not include monetary penalties or fines.

Harassment/Discrimination/Equal pay

The Employment Act prohibits discrimination against any employee on the grounds of race, colour, national extraction, social origin, religion, political opinion, sex, marital status, family responsibilities, age or disability in respect of recruitment, training, promotion, terms and conditions of employment, termination of employment or other matters arising out of the employment relationship.

The Employment Act specifically stipulates equal pay to men and women for work of equal value.

Harassment is not dealt with under Employment legislation, and employees must seek recourse under the criminal code, and or for breach of express or implied terms of their contract with respect to the employer’s duty to provide a safe working environment.

Compulsory Training Obligations

There are no compulsory obligations for training under statute; though training requirements may be included in individual employment contracts and collective agreements.

Offsetting Earnings

The Employment Act provides that employers are not entitled to deduct or offset employees’ earnings, unless the employer has first received the approval of the Labour Commissioner, subject to certain statutory exceptions.

These exceptions include repayment of loans granted by the employer to the employee, and monies owed to a savings, pension or similar fund.

Payments For Maternity And Disability Leave

Employees who have completed eighteen (18) months of employment are entitled to paid maternity leave at their full rate of salary for two of the three months of maternity leave, less any amounts to which the employee is entitled as a maternity benefit pursuant to the National Insurance Act.

Payments for disability leave are the same as sick leave entitlements under the Employment Act, that is, that the employer is obligated to pay the full rate of wages during a period of certified sick leave, less the sickness benefits to which the employee is entitled under the National Insurance Act.

Disability/ invalidity benefits are also available under the National Insurance Act to employees who have exhausted their entitlement to sickness benefits or who, after being examined by a doctor, have been diagnosed as being permanently incapable of work.

Compulsory Insurance

Outside of compulsory social security, as discussed above, there is no compulsory insurance, such as workers compensation insurance, that is required under Grenada’s employment legislation.

Absence For Military Or Public Service Duties

The Employment Act provides that an employee’s continuity of employment and benefits are not affected by absence due to public duty, such as serving on a jury. (Military duties are not applicable in Grenada)

Works Councils or Trade Unions

Pursuant to the Labour Relations Act, each employee has the freedom to be a member of a trade union and participate in its activities. Likewise, employers are free to be members of and participate in employers’ federations.

The provisions related to the certification of a trade union as a bargaining agent of a particular unit in an enterprise, as well as provisions related to trade disputes and industrial action are also contained in the Labour Relations Act.

Employees’ Right To Strike

An employee has the right to strike, as long as it is in compliance with the provisions of the Labour Relations Act, and any applicable collective agreement.

Employees On Strike

An employee has the right to strike, as long as it is in compliance with the provisions of the Labour Relations Act, and any applicable collective agreement.

Employers’ Responsibility For Actions Of Their Employees

Under the common law principle of vicarious liability, an employer is responsible for the actions of its employees which are taken during the course of his duties as an employee, and which are connected with the employment.

However, an employer may not be responsible for the employee’s actions if the employee has gone on a frolic of his own outside of and unconnected with his employment duties.

Procedures For Terminating the Agreement

When terminating an employment contract, the Employment Act requires that the process is both procedurally and substantively fair. Accordingly, termination must be for a justifiable reason, in accordance with that Act, related to the conduct or capacity of an employee, due to breach of contract or disciplinary rules, or based on the operational requirements of the enterprise.

An employer must also be able to show in all circumstances that he/she acted with justice and equity in dismissing the employee. This may include holding a meeting/consultation with the employee prior to termination to hear the employee’s views on the contemplated termination.

Notice is to be given or is payable to employees who are not terminated summarily or whose employment has not expired due to the natural effluxion of time or the completion of a specified task.

Express and implied contractual provisions (individually and or in a collective agreement) regarding termination, including notice periods and severance payments must also be complied with, or may result in breach of contract actions.

Wages and other remuneration are payable within seven (7) days of termination, under statute, and where requested, a certificate of termination setting out the particulars of employment as well as the reason for termination is to be provided to the employee.

The above does not apply to termination during the probation period, which is discussed below.

Instant Dismissal

Instant or summary dismissal is possible where the employee has engaged in serious misconduct of such a nature that it would be unreasonable to require the employer to continue the employment relationship.

Dismissal may also be instant, and without the need for justification, if it takes place during the probationary period.

Employee’s Resignation

An employee is able to resign in accordance with the Employment Act by giving two (2) weeks’ notice if he has been employed for longer than three (3) months, and one (1) months’ notice where he has been employed for longer than a year.

Termination On Notice

While the employer and the employee are free to agree to longer periods of notice, pursuant to the Employment Act, there are statutory minimum periods of notice to be given by an employer to an employee based on the length of their employment. Employees are also able to provide employees with pay in lieu of notice.

In addition to the statutory provisions on notice, common law requires ‘reasonable’ notice to be given the employee. What is reasonable notice will depend on the employee’s position, length of service, and age, amongst other factors.

Termination By Reason Of The Employee’s Age

Generally, the Employment Act prohibits discrimination on the basis of age in respect of termination, however, an employee may be justifiably terminated for reasons related to his ‘capacity’ to conduct his duties as an employee, which may be affected by or related to the employee’s age.

Automatic Termination In Cases Of Force Majeure

There are no statutory rules in respect of automatic termination in the case of force majeure, though the parties may agree to automatic termination as a result of force majeure in the employment contract. Contracts may also be terminated as a consequence of frustration, though the courts are generally slow to find that an employment contract has been frustrated.

Collective Dismissals

There are no statutory provisions in relation to collective dismissals, and no Government reporting requirements are applicable.

Collective agreements often contain procedures regarding redundancy and retrenchment of employees. These agreements ordinarily contain provisions regarding consultation with the union and the employee(s) and considerations of other suitable positions within the enterprise.

For non-unionised employees, best practices regarding consultation, notice, last in, first out, and the opportunity to seek alternative employment are encouraged, but not mandated. Otherwise, statutory provisions on individual terminations will apply equally to collective dismissals.

Termination By Parties’ Agreement

There are no statutory provisions regarding termination by mutual consent, and this will be governed by ordinary contractual principles.

Where an employment contract is terminated by mutual consent, the employee is not entitled to statutory termination allowance.

Directors Or Other Senior Officers

Generally, the termination of directors or officers is governed by the Companies Act and the by-laws of the company. There are no specific rules/legislation which are appliable to termination of directors under employment law.

Senior officers such as CEOs and CFOs (and to the extent that a director is also an employee) will be subject to the ordinary legislative provisions regarding termination of employment, subject to their contracts, and also bearing in mind the ‘reasonableness of notice’ based on their position in the enterprise.

Special Rules For Categories Of Employee

There are no special rules for categories of employees.

Specific Rules For Companies in Financial Difficulties

The Employment Act provides that a company’s insolvency or winding up will cause the termination of an employment contract, and the employee will be entitled to a termination allowance under that Act. The Employment Act also stipulates that employees will have priority over all creditors with respect to their wages and other remuneration.

Restricting Future Activities

There are no statutory provisions which restrict future activities. Parties are free to include contractual terms which govern restraint of trade, non- solicitation and non-competition, though in order to be enforceable at common law, these terms, particularly restraint of trade provisions, must be objectively reasonable bearing in mind the type of trade, the size of the population and restricted area, and the length of the restraint.

Whistleblower Laws

While there is no specific whistleblowing statute, certain legislative provisions protect whistleblowing employees, e.g., in relation to proceeds of crime, anti-money laundering, and counter-terrorism purposes.

Special Rules For Garden Leave

There are no legislative provisions addressing garden leave in Grenada, but the parties may agree on contractual terms addressing this consideration.

Outside of mutually agreed terms regarding garden leave, such a practice at common law, may be considered a breach of the implied term to provide an employee with work, and may also result in a claim of constructive dismissal.

Severance Payments

Subject to provisions in an employment contract which may be more favourable than the legislative provisions, an employee engaged for an unspecified period who is terminated by an employer outside of summary dismissal is statutorily entitled to notice of termination ( or pay in lieu ) based on the length of service, and termination allowance equal to one week’s wage for each completed year of service ( subject to certain exceptions).

Special Tax Provisions And Severance Payments

Grenada’s Income Tax Act provides that when an employee is terminated due to administrative downsizing, income taxes are not applied to the severance payment.

Allowances Payable To Employees After Termination

All allowances and other benefits are payable to an employee up to the actual date of termination. Employees may be entitled to keep receiving payments if they work through their notice period. Alternatively, an employer may pay all wages, benefits and other remuneration due to the employee that would have been due up to the end of the notice period, together with pay in lieu of notice.

All payments must be made within seven (7) days of termination of the employment.

Time Limits For Claims Following Termination

A complaint of unfair dismissal must be made within three (3) months of the date of dismissal. Common law actions for breach of contract (including wrongful dismissal) may be brought within six (6) years for breach of contract.

Specific Matters Which Are Important Or Unique To This Jurisdiction

Legislation repealing and replacing the current Employment Act and introducing occupational health and safety legislation has been passed, though not commenced, for a number of years. It is anticipated that amendments will be introduced to those bodies of legislation before they are passed, including, for example, recourse to the courts for actions for unfair dismissal, which are currently precluded.

It is also anticipated that the Data Protection Act will soon be commenced, which will address matters concerning the privacy of information, amongst other privacy issues, which will have an effect on employers and employees.