Newsletter
CALCULATION OF TERMINATED WORKERS UNDER MASS RE-DUNDANCY ACT
In a recent interpretation, the CLA addressed doubts over the calculation of the number of workers whose employment is to be terminated, for the purposes of the Protective Act for Mass Redundancy of Employees (PAMRE). The CLA stated that if a business entity participates in a merger or acquisition that is governed by the Corporate Mergers and Acquisitions Act (CMAA), and in accordance with the CMAA the new employer issues retainment notices to em-ployees of the old employer, then the old em-ployer must duly give notice of termination, and pay out severance pay, to any worker who re-fuses such a retainment offer employment; but it is not required to include such worker in its calculation of the number of terminated em-ployees under the PAMRE. Only those workers who are terminated without being offered re-tainment by the new employer should be in-cluded in the PAMRE calculation.
However, the CLA takes the view that if an en-tity transfers its business, assets and workforce in a transaction that is not governed by the CMAA, and the new employer issues retainment offers in the same way as prescribed under the CMAA, this does not have the same legal effect as reten-tion of workers under Article 16 of the CMAA, but is merely an inquiry by the new employer as to whether the existing workers are willing to switch employers. Therefore, if a worker de-clines a retainment offer to work for the new employer, whether the worker should be counted as a terminated employee for the purposes of the PAMRE should depend on whether the old em-ployer has any statutory cause to terminate the worker.