Who is responsible for paying severance to former KFC workers?
1. Section 20: SALE OF BUSINESS NOT TO AFFECT THE RIGHT OF EMPLOYEE:
Subsection (20)(1) The change of ownership by sale or other disposition of a business or any part thereof shall not affect the rights accruing or accrued to an employee at the time of sale or other disposition and the buyer{{more}} and the seller shall be jointly and severally responsible for such rights.
Subsection (20)(2) The rights and obligations accrued or accruing together with the name and address of the new owner shall be recorded with the Commissioner (Labour Commissioner) at the time of sale or disposition of the business where the services of the employee are continued in section 23.
2. Section 21: WINDING UP:
Subsection (21)(2) states: This section shall not apply where, notwithstanding the winding up or insolvency, the business continues to operate or has been transformed.
Subsection (21)(3) Where an employerâs business is wound up or a receiver has been appointed, an employee or any person legally entitled to claim on his behalf payment to which he is entitled shall have priority over all other creditors including the Crown for the following sums:
(21)(3)(b) Holiday pay that is owing as a result of work performed during the two years precedings the date of the institution of winding up proceedings or the appointment of a receiver;
(21)(3)(d) Severance pay, compensation for unfair dismissal and other payments that are owing in respect of the termination of employment.
3. PART 111 SEVERANCE PAY:
Section 23(b) includes service with any previous employer where ownership of the business was changed by sale or other disposition as provided by section 20.
3. Section 26: WHERE SEVERANCE NOT DUE AND PAYABLE:
Where there is a change in ownership or operation of a business or where the employer dies, the employee shall not be entitled to severance pay if the contract of employment continues or if he is offered a new contract of employment by the new owners or operators of the business or the personal representative of the deceased employer on terms and conditions of employment and at a place of employment no less favourable than in his earlier contract of employment.
WHY THE DEBATE
Firstly, the SEARCHLIGHT of Friday, 26th June 2015, under the caption: 450 PERSONS RESPONDED TO KFCâs OPEN JOB CALL, states: “Well over 450 persons turned up at the Blue Lagoon Hotel on Tuesday in answer to an open job call which had been put out by the new owners of the local KFC franchise, Kelly and Tessa Glass, the new owners of the franchise by Yum Restaurants Inc and called on interested job seekers to apply⦠KFC had operated in St Vincent and the Grenadines for 29 years under a franchise owned by KFC (St Vincent) LTD, a subsidiary of St Clair Investment. On March 9, 2015, the doors of the franchiseâs three restaurants in St Vincent were closed when the company went into receivership, placing approximately 100 workers on the breadline.â
Secondly the SEARCHLIGHT of Tuesday, September 1st, 2015, under the caption: KFC IS BACK states: “It is still, however, not clear if the former workers have been paid severance.â
My own investigation shows that no severance has been paid. Why is this so? Is it that the receiver and/or the new franchise holder have totally disregarded the laws of the land? It is quite clear from the foregoing that:
1. KFC under the management of St Clair Investments went into receivership; hence it can neither jointly nor severally be responsible for severance.
2. The business of KFC continues as it was, except under new management, hence, the new manager is duty bound by the requirements of sec (20)(1), (20)(2); (20)(3), (20)(3)(b)(d) and (23)(b).
When I learnt that severance was not paid and that interviews were conducted for new staff, I couldnât understand the logic, since the PROTECTION OF EMPLOYMENT ACT is quite clear on the issue in which the former employees would have been automatically reinstated, except for the few who for reasons could not continue employment under the new dispensation, then severance be paid to them.
SVG has clearly become a place where the quality of mercy is strained. It is clearly a culture of kisses go by favours. For over 100 employees to have their services with all accrued benefits terminated in this way is something really out of the ordinary. Where is the Labour Commissioner? Where is the Minister of Labour? Where is justice?
Matthew Thomas
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