ERVEN MARIN & ors v BELIZE TELEMEDIA LIMITED

Summary. This is an appeal from the Court of Appeal of Belize, in the case of ten former employees of Belize Telemedia Ltd (‘BTL’) who claimed entitlement to severance payments under the Belize Labour Act (‘Labour Act’). There are two main ways in which the Labour Act is of interest in this appeal. The first is that s 183 of the Labour Act entitles an employee who retires after 60 years of age to certain minimum severance benefits, as long as that employee worked for a continuous period of 10 years. But an employee who is younger than 60 years will still be entitled to that severance payment if the employer terminated that employee before age 60. Notably, retirement by the employee and termination by the employer are not the only ways that the Act imposes an obligation to pay terminal benefits to an employee who is less than 60 years: an employee who simply resigns is entitled to ‘gratuity’ that is equivalent to severance pay. The second main way that the Labour Act is of interest to the case is that s 194 requires employers to ensure that severance payments that accrued to employees are accounted for in any pension plan that may be in place in the workplace. The appellants in this case had either compulsorily retired at age 55 pursuant to the Collective Bargaining Agreement (‘CBA’) between the BTL and its employee’s union or voluntarily retired under individual voluntary retirement agreements with BTL. All the appellants had served BTL for over ten years. Following the amendment of the Labour Act in or around 1995, BTL transitioned from the regime of severance payments to a pension plan, on the hypothesis that the pension plan had legally displaced BTL’s statutory severance obligations. As part of that transition, all employees (including the appellants) were paid the statutory severance up to 1994; thus clearing the way for the pension plan as the only terminal benefits scheme that BTL recognised for its employees. The appellants’ claim is that the pension payments they received either did not account for the severance pay mandated by the Labour Act or that BTL has not shown that to be the case. At first instance, the High Court ruled in favour of all claimants, including a third group of resigners, finding that they were all entitled to severance or ‘gratuity’ equivalent to severance pay. The trial judge held that mandatory retirement under the CBA amounted to termination by the employer, and that voluntary retirement was effectively a resignation, both of which qualified for severance under s 183 of the Labour Act as noted earlier. The trial judge also found that BTL had failed to prove that severance was accounted for in the pension benefits under s 194 of the Labour Act and declared that a clause in the voluntary retirement agreements purporting to waive severance as void under s 190 of the Labour Act which has that effect. The Court of Appeal partially overturned the High Court’s decision. It upheld the claims of the resigners but not those of the mandatory and voluntary retirees. The appellate court reasoned that retirement under the CBA or individual voluntary retirement agreements was not termination by the employer but rather a bilateral agreement, and thus did not trigger severance entitlements under s 183. It also held that the voluntary retirees did not qualify under the resignation provision of s 183(2), and instead of nullifying the retirement agreements, it severed the clause that purported to waive severance. On appeal to the Caribbean Court of Justice (‘CCJ’), the central issues were whether the appellants’ retirements constituted termination by the employer under s 183 of the Labour Act, and if the answer is yes, whether the appellants are still entitled to severance pay under s 183 notwithstanding that the appellants received payments under the BTL Pension Plan. In the Court’s lead judgment, Eboe-Osuji J adopted the purposive approach to the interpretation of the Labour Act. According to that approach, he considere