Gunthrope v British American Insurance Company Ltd

• Jurisdiction: Antigua and Barbuda
• Court: Industrial Court (Antigua)
• Judge: Lewis, J.
• Judgment Date: 25 August 1978
• Docket Number: No. 5 of 1978
• Date: 25 August 1978

Industrial Court

Lewis, P.; Clarke, J. (Vice President); Caines, J. (Member)

No. 5 of 1978

Gunthrope

and

British American Insurance Co. Ltd.

Appearances:

T.H. Kendall, Solicitor for employee/claimant

W. Archibald, Solicitor for employer/respondent

Labour Law - Termination of Employment — Dismissal.

Labour Law - Termination of Employment — Compensation.

Labour Law - Termination of Employment — Payment in lieu of vacation leave.

Introductory:

Lewis, J.

1 The British American Insurance Company Limited (“the company”) carries on the business of insurers in this State and the claimant is one of its agents. He was employed by the company on 5 ^th August, 1968 and signed an agent's agreement on that date. He had a copy of this agreement which he handed to one Mr. Halstead for him to hold discussions with the company on his behalf but he never got it back and so was unable to produce it. The contract between the company and the claimant (hereinafter referred to as “the agreement”) was said by the claimant to be similar to that signed by Mr. Merchant another agent of the company and to be the standard form of agreement used by the company. The company's Solicitor agrees that the claimant's agreement was in the standard form used by the company and similar to the form of agreement attached to the company's memorandum as Appendix 1.

2 The Mr. Merchant referred to was the claimant in Douglas Merchant v British American Insurance Company Limited, Reference No.2 of 1978, in which the judgment was delivered by this court on the 27 ^th day of July 1978.

3 The claims for relief in the Merchantcase were similar to those in the instant case and the agreement produced in the Merchantcase was in all respects, save the date of execution, similar to the form of agreement attached to the company's memorandum in this case, so, this court, will have no difficulty in ascertaining the contents of the agreement between the claimant and the company.

4 In determining the claims in the Merchantcase this court conducted an extensive examination of the Antigua Labour Code (“the code”) including the Long Title and sections A2(i), C2(6), C5, C6, C7(i) and C58 in an effort to ascertain to what extent, if any, the agreement in the Merchantcase was affected by the provisions of the code. In the course of its judgment on this issue this court said:

“The code is also a piece of social legislation passed for the benefit of employees, and in Division C, which deals with basic employment the various rights and privileges to which employees are entitled are laid down. It is accordingly the duty of this court to see that the provisions of the code establishing these rights are carried into effect.”

5 Later on in its judgment the court in coming to the conclusion that the agreement in Merchant's case was affected by the provisions of the code said this:–

“In the light of the above provisions of the code to which we have referred we have come to the conclusion that when the code came into effect it modified all contracts of employment in existence at that time irrespective of when they were made, and consequently, all questions relating to leave and vacation privileges, notice, severance pay or compensation for unfair dismissal which may be raised in proceedings dealing to the provisions of the code; therefore, the agreement in this case must be interpreted in such a manner as to bring it into conformity with the provisions of the code.”

6 The court proposes to follow the latter statement of principle enunciated above, and therefore, its conclusion that the provisions of the code apply to and modify the agreement in the Merchantcase will also be applicable to the claimant's agreement in this case.

7 Before dealing with the two claims made by the claimant we which to refer to certain legal submissions made by the Solicitor for the company. They are as follows: (a) “In spite of the wide definition of “employment contract” in the code, the instant contract is not an employment contract to which all (an he stressed the word all) of the provisions of the code apply. All the provisions of the code refer to contracts which have fixed hours of work. (b) Where the calculation of remuneration is made, of necessity, without reference of time, the contract is not one to which sections C17, C18, C43 and C44 of the code can apply. (c) The code does not require any basic wage to be paid where there are no fixed or normal hours of work.”

8 In Merchantcase this court examined the meaning of the terms “employee”, “employer” and “employment contract”, each of which is defined in section A5 of the code as follows:–

“Employee” means any person who enters into or works under or stands ready to enter into or work under, a contract with an employer, personally to perform any services or labour, whether the contract be oral or written, expressed or implied; and the term includes a person whose services or labour have been interrupted by a suspension of work during a period of leave, temporary lay off, strike, or lockout, as well as an apprentice whose services or labour may be designed primarily to train such apprentice; but the term does not include established employees of the Government.”

“Employer” means any person, including any of his representatives, whose contracts for or stands ready to contract for the services or labour of an employee and the term includes any body of persons corporate or incorporate;”

“Employment contract” means any contract whether expressed or implied and whether written or oral, where under it is agreed that one person (the employee) will perform certain services or labour for another (the employer); and the term shall include any indenture or contract of apprenticeship.”

9 The court also examined the provisions of the employment contract in Merchant'scase and stated in relation thereto that:–

“The term of the agreement, which we have quoted, conclusively establishes in our opinion that the claimant was an “employee” within the meaning of this word as defined in the code, for the agreement is undoubtedly one in which the claimant contracted personally to perform >services or labour' as an insurance agent for and on behalf of the company.”

10 This conclusion also properly defines the claimant's position in this case. It may be helpful to consider, insofar as they may be relevant, the definitions of “basic wage”, “hours of work”, and “normal hours of work” referred to by the company's Solicitor. These expressions are defined in section C3 of the code. “Basic wage” means that part of an employee's remuneration for services which is payable in money for his normal hours of work.”

11 It will at once be apparent that by invoking the definition of “basic wage” the company derives no assistance therefrom for its submissions, because no reference is made in the definition of “employment contract”, to fixed hours or work, or to wages (either basic or gross) which are either fixed, or, if not fixed, ascertainable, by reference to fixed hours of work. In other words there is nothing in the definition of “employment contract” which says that a contract must contain either of these two elements - fixed hours, or wages - so that, according to the argument for the company, if these elements are missing it must be said that the agreement in this case is not in conformity with the provisions of the code and so not amenable thereto. The essential factor in the definition of “employment contract” is the agreement between the parties whereby one of them (the employee) undertakes to perform services for the other (the employer). Admittedly, the definition is silent, as to the question of remuneration and as to the period of service, but it must be remembered that if the parties reach agreement it would be on mutually acceptable terms and one of those terms in a contract of employment would in ordinary and normal circumstances include the question of remuneration, in the absence of which, the parties would not usually reach agreement and so no contract will come into effect. Payment of remuneration for services rendered or to be rendered is so obviously a condition of an Aemployment contract” that the legislature did not perhaps think it necessary to include such a condition in express terms in this definition but it left it to be implied. This is after all a matter of common sense, for as soon as parties begin talking about a possible contract or employment sooner or later the would be employee will raise the question of remuneration, and no contract will be effective unless this question is settled.

12 In considering the definition of “employee”, “employer” and “employment contract” in Merchant'scase, this court came to the conclusion that the claimant in that case was an employee of the company although there was no reference to wages in the definition of “employee”. The court said as follows:–

“Now it will be observed that in the definition of “employee” no reference is made to wages. This is not surprising, for although it is possible that an employee may perform work for an employer gratuitously, it is highly improbable that he would. So unlikely indeed is such a situation that it was not thought necessary to include in the definition of “employee” a statement that his services or labour should be for reward. It was taken for granted that this would be so in the majority of cases.

What the definition of employee does require is that a person should work under a contract with an employer in order to create a relationship of employer and employee, but this relationship would not ordinarily be created unless there is between the parties some provision for remuneration to be paid to the person performing the services of labour, i.e. to the employee. This is entirely different from saying that the code lays down that a person does not become an employee unless he is paid a basic...