SECTION A

Instruction: Complete ALL questions from this section.

Case Study

The Parnassus Equipment Limited (PEL), a medium-sized operation, has been in business for the past 53 years. The company was launched over 50 years ago with the aim of creating products for use in the farming industry. It managed to open outlets all over the island. Employment by the company was increasing steadily over the years and the wages were good. Many persons sought employment in the company in all areas: production, marketing, administration and sale, to name a few.

However, with the rise of globalisation, import deregulation and digitization, the company started to lose many of its former business clients. The farming equipment industry was hard hit by cheap imports and many of them started closing down. The last damaging blow came when the international financial recession hit in 2008. Financing grew difficult and interest on debt became prohibitive.

PEL tried to diversify but it was too little and too late. In the year 2016, Computer & AI Limited approached PEL with an offer to purchase the assets of the company. The offer was a good offer which PEL believed would be a dereliction of duty if management should let such an offer go by. They were, however concerned about the welfare of their workers some of whom were at the company for over twenty-five years. Take for example Merdella Boganvilla, she has been with the company for 30 years.

PEL tried to incorporate the future of their workers, all of whom work under a contract of service, in their negotiations with Computer & AI Limited. However, given the nature of Computer & AI business, most of PEL workers would be ill-equipped for their workforce. Computer & AI stated that they would be willing to consider about 10 % of Clarendons workforce but only on a contract for service basis.

PEL is now considering a termination package for its workforce and seeks your advice as an industrial relations specialist on the following matters.

Questions

1. Which Act is needed to guide the process of dealing with the termination of workers in these circumstances? (1 mark)

2. Identify TWO (2) actions that the company should take into consideration

when going about the terminations. (4 marks)

3. Explain THREE (3) provisions of the law identified in (A.) above. (3 marks)

4. Explain FOUR (4) distinctions between a contract of service and a contract

for service. (8 marks)

5. How many weeks severance payments would a worker like Merdella

Boganvilla be entitled to in accordance with the law? (4 marks)