Thursday, 01 April 2010 00:00

THINKING OF SACKING YOUR WORKERS? THINK AGAIN! – Legal Notes 2010

Legal Notes, Volume VII Issue No 1, April 2010

 Author: Augustin Mabushi

Email: This email address is being protected from spambots. You need JavaScript enabled to view it.

The Burundian Labor Code of 1993 (the “Labour Code”) provides for a worker’s right to claim unfair dismissal.  Unfair dismissal is defined in the Labour Code as dismissal “which is not based on a lawful reason”.  It isleft up to the courts to consider the reasons or facts which it may deem lawful. Apart from some specific situations of gross negligence, it is open to a court to qualify the “nature” of the dismissal.

 It goes without saying that in most cases, the court may deem as “unlawful” a dismissal which is not based on a gross negligence.

Essentially, a worker who has been unfairly dismissed is entitled to compensation of an amount fixed by the court, considering the loss suffered.

Article 63 of the Labor Code provides as follows: “The unfair dismissal is sanctioned, if parties agree on this remedy, by reinstatement in work. If no agreement is reached on this point, the penalty is damages. The amount of such damages is determined by the judge, according to the damage suffered. These damages should not be confused with the compensation for lack of notice”.

Article 63 provides an alternative to payment of compensation, which consists of reinstatement of the worker. This option is hardly ever exercised. Indeed, dismissed workers often prefer the compensation package to reinstatement and employers will rarely agree to reinstate a worker who had been dismissed. The solution remains, in almost all cases, the payment of damages.

The difficulty faced by the court has always been to assess the actual damage suffered by the dismissed worker, considering the actual circumstances of the case and the consequences which would result directly from the dismissal. There is no provision in the Labour Code limiting or providing guidelines on the amount of compensation that should be granted by the courts. According to judicial practice that has developed over the years, compensation is calculated according to two criteria: seniority of the worker and the wages payable on the date of his dismissal.

The practice by the courts has been to award a lump sum equivalent to six (6) months of salary per year of seniority. This practice is very favourable to workers and workers unions but has considerable economic consequences to employers who are found liable for unfair dismissal.

In many of their judgments, confirmed by the Supreme Court of Burundi, labor courts do not feel obliged to give reasons why they have granted the particular amount of compensation. The court merely holds that such is the jurisprudence. The only option left for an employer who does not wish to pay the huge amount of compensation granted is to challenge the court’s decision that the dismissal was unlawful.

Employment litigation based on claims of unfair dismissal is quite frequent in Burundi and employers are finding themselves in a desperate situation especially since the Labor Code places the burden of proof on the employer to prove that the dismissal was not unfair.

The economic burden placed on employers who are held liable for unfair dismissal could ultimately have adverse consequences in the employment market. Firstly, this could have a negative impact on the employer’s assets and consequently lead employers to downsize or freeze employment of new employees. Secondly, the risk of unfair dismissal claims could lead employers to look for other alternatives to dismissal even in cases where a worker has been found to have committed gross misconduct and this would ultimately affect the employment relationship.

The courts need to assess compensation payable for unfair dismissal taking into account, in addition to seniority of the employee, other objective factors, including the worker’s age and his current family situation, qualifications, chances of being employed in another enterprise, his disciplinary record, the current economic situation of the country among other factors. The idea is that the amount of compensation should be calculated on a case by case basis, not only in term of seniority, but also and above all, the particular situation of each employee whose dismissal has been found to be unfair.

The courts need to reassess how they deal with unfair dismissal litigation in order to develop a practice that is fair to both employees and employers alike. Compensation should not exceed what the dismissed employee has really suffered. This principle was previously applied in Burundi labor law about two decades ago.

There is also a need to revisit the law as it relates to unfair dismissal in order to provide clear guidelines on how compensation should be granted in cases of unfair dismissal.

Having said this, it is in all cases essential for employers to seek legal advice prior to any termination of an employment contract. The lawyer would advise on the manner in which employment may be terminated by the employer including the wording to be used in the letter of termination, having checked all the facts of the case. This would also place the lawyer in a better position to defend the employer in any unfair dismissal claim which may subsequently arise.

It is also advisable for employers to seek legal advice in putting in place internal regulations and guidelines on what would constitute lawful reasons for termination of employment in order to ease the employer’s burden of proof in unfair dismissal.