Dear Valued Clients
The unprecedented crisis we are currently facing has impacted all sectors of the Mauritian economy and more specifically tourism, hospitality and leisure industries. As we have now entered the first phase of the reopening of the economy along with an easing of the lockdown measures, a number of issues regarding legal, tax, financial and social measures related to the Covid- 19 crisis remain unclear.
Etude Guy Rivalland law firm remains committed to assist you in order to tackle and address any issues you may encounter in light of the legal implications and the regulatory framework which have been constantly evolving as a result of the current circumstances.
Our team of legal experts are available to answer promptly any query you may have with a view to support you as much as possible during this historic turmoil and help you resume your activities smoothly.
In this particular context, we would like to invite you to read the short memo below which could be helpful to you.
With best regards
All the team at Etude Guy Rivalland
As a leading litigation firm in Mauritius, it is of utmost importance to Etude Guy Rivalland to keep its valued clients updated on some critical legal issues that may be of interest to them and to other readers as well. Indeed, the Covid 19 has hit us all hard in many ways and the unprecedented economic crisis resulting therefrom led to a number of questions which often remain unclear or even unanswered.
Some of the major challenges being faced by the stakeholders including leading business owners, financial market players and employers more generally are to help maintaining the employment of their personnel during the crisis.
On 01st May 2020, the Prime Minister of Mauritius announced a further extension of the lockdown measures which have then been imposed in Mauritius since 20th March 2020 up to 01st June 2020 in order to avoid a potential resurgence of the pandemic. Although the government announced measures to gradually ease the lockdown in view of re-opening the economy as from 15th May, the situation will not come back to “normal” before a while and very few categories of activities only have been able to resume work including but not limited to some employees of the private sector, self-employed and civil servants.
As we are following closely the most recent developments on this situation, the controversial but widely expected Covid-19 (Miscellaneous Provisions) bill (“Covid-19 bill”) has been discussed in Parliament since 13th May along with the Quarantine bill.
The Covid-19 bill concerns the proposed amendments to some 56 laws with the objective to adjust certain legal provisions to the "Covid-19 effects" in our daily activities subject to it being passed and enacted into law.
While some of the proposed amendments have been hailed by many such as those made to the Companies Act where we can see namely an extended time frame granted to companies for the holding of their annual meeting (9 months after the balance sheet date instead of 6 months) and the preparation/filing of their annual accounts (9 months after the balance sheet date or more as may be specified by the Registrar of Companies for the preparation of the accounts instead of 6 months and 3 months instead of 28 days for the registration of the accounts with the authorities) as well as a flexibility to the directors’ liability in the event of insolvency, the proposed changes to some other acts and more specifically the Workers’ Rights Act 2019 have sparked debates and negative comments amongst a number of people including the opposition party and trade union groups.
Below are some frequently asked questions which you may find useful in order to have a better understanding of the potential legal implications of the proposed amendments to the Workers’ Rights Act 2019.
The answers provided below are for informational purposes only for the benefit of the readers.
1) Would an employer be entitled to make an employee redundant on the basis of economic reasons as a result of the crisis?
As the provisions of the Workers' Rights Act currently stand, the employer would be able to reduce its workforce through the Redundancy Board and in accordance with the provisions of section 72 et seq of the Workers' Rights Act 2019.
However in order to avoid redundancies, the government has encouraged employers to retain their staff on payroll during the lockdown. This partly explains the setting up of the Government Wage Assistance scheme which is aimed at supporting the employers where the employee receives a monthly pay not exceeding MUR 50,000. The assistance scheme has been extended to the month of May as declared by the Ministry of Finance.
2) What are the main conditions for an Employer to make an employee redundant or to reduce its workforce on the basis of economic reasons?
Prior to making a decision to reduce its workforce for economic reasons, whether temporarily or permanently, the employer shall explore any possible alternatives with the trade union (if applicable) or the representative of the workers (duly appointed by the workers for such purposes). These alternatives may include reduction in overtime, the retirement of workers who are beyond the retirement age, restrictions on recruitment.
Under the Covid-19 bill, certain categories of employers working in the sectors listed below may proceed with a reduction of their workforce or a closing down of their enterprise within a shorter time frame as described further below. These sectors include civil aviation and airport, customs, electricity, health, hotel services, hospital, port, including cargo handling services and other related activities in the ports, radio and television, refuse disposal, telephone, transport of passengers and goods and water supply. In such instance, the employer has 15 days to notify the Redundancy Board of his decision (30 days in the current provisions), the latter will also have 15 days to complete its proceedings.
3) What are the decisions available to the Redundancy Board in case an employer wishes to make an employee redundant or has the intention to close down its enterprise?
The Redundancy Board may either accept or reject the employer's decision.
i. Should the Redundancy Board accept the redundancy, the employee shall be entitled to 30 days’ wages as indemnity in lieu of notice. The Redundancy Board may also order and in this instance in lieu of termination and subject to the employer’s consent that the employee be reinstated to the company in accordance with new terms and conditions imposed by the employer on leave without pay on such period designated by the employer.
ii. Where the Redundancy Board finds that the reasons for the reduction of the workforce or the closing down are unjustified, the employer may either be ordered:
- to reinstate the employee in his former employment (subject to the employee's consent) and be paid the amount he was due to receive between the date of redundancy and the date of reinstatement ; or
- to pay the employee severance allowance at the rate of 3 months’ remuneration per year of service.
4) Other significant change proposed under the Covid-19 Bill in terms of employment
An employer may during a period of 18 months following the expiry of the COVID-19 period, withhold up to 15 days’ annual leave, or such other number of annual leave as may be prescribed, from the aggregate of the annual leave which accrues to an employee as from the beginning of the year of the COVID-19 period or such further period as may be prescribed.
5) What about the handling of court matters during this period?
The judicial system has not been spared by this crisis either and the Courts in Mauritius are currently closed until further notice except for urgent matters (including but not limited to the granting of protection orders or the request for release on bail).
It would be worth noting that the Covid-19 bill is also proposing to give a broader power to the Chief Justice to make any such rules or decisions which he deems fit during the Covid-19 period or at any time after the said period. These may include hearings and procedures being conducted remotely or the handling of a case to be heard before any specific court.
