From Francis Le Gresley, manager, Citizens Advice Bureau.
DEPUTY Geoff Southern’s proposition for redundancy payments to be provided by the States of Jersey to former employees of Woolworths plc, totalling £139,472, is obviously well intentioned but totally overlooks two critical facts:

• Jersey does not have a redundancy law and therefore no employer running a business in Jersey is currently legally required to make a redundancy payment to any employee whose job is no longer required, unless this is agreed contractually.

• The payment of redundancy monies, in the event of insolvency of the employer, is only possible where the government has created an insolvency fund, funded by a combination of contributions from employers and employees. In the UK this is known as the National Insurance Fund.

• The States of Jersey would have to agree to raise the current Social Security contributions of 6.5 per cent for employers and six per cent for employees in order to create such a fund.

Deputy Southern comments in his proposition that ‘the States of Jersey has a moral obligation to protect its workers to a standard which matches the UK’ but the States also has an obligation to treat all members of the community fairly and equally.

It follows therefore that former employees of Woolworths ought not to be given preferential treatment simply because they were employed on UK contracts while other former employees of failed businesses, on Jersey contracts, are not being offered similar recompense. If the members of the States are minded to approve this proposition then it has to apply retrospectively to all people who have recently lost their job through insolvency of the employer.

In the specific case of Woolworths, former employees in Jersey and the UK are entitled to make a claim to the Liquidator or Receiver, when appointed, for pay in lieu of notice, holiday pay, maternity pay, etc. An employee will be a preferential creditor up to a maximum of £800. For any money owed over this amount the employee will be treated as an ordinary creditor.

The administrators, Deloittes, are only responsible for the payment of wages to Woolworths’ staff for days worked since their appointment on 26 November 2008.
The Bureau has been providing this information to Woolworths’ employees since 11 December 2008 and therefore we are not surprised that the administrators refused to consider the payment of redundancy monies to staff in Jersey.
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