In September 2017 Hurricane Irma hit most parts of the northeastern Caribbean and the Florida Keys with extreme power (see also our 2017/03 Newsletter). This has caused widespread and catastrophic damage, for instance in St. Maarten which is part of the Kingdom of the Netherlands. Our office also deals with legal matters and proceedings in St. Maarten.
In a recent case the Court of First Instance in St. Maarten ruled that a radical event, such as hurricane Irma, can be a reason for a proposal to change employment conditions. However, employers should be aware that a detailed justification of the need to change the terms and conditions of employment is crucial, given the far-reaching consequences for an employee, before the employee can actually be expected to accept the proposal.
In the case at hand the employer operates a resort and was forced to close the doors as a result of the severe damage caused by hurricane Irma. At the time of the ruling the resort was still closed. As of October 1, 2017, the employees did not receive wages. The employer had made a proposal for partial payment of wages, until the reopening of the resort. Some of the employees accepted the proposal. Others did not and filed, in the form of interlocutory proceedings, a claim for (outstanding) wages.
The employer reasoned in court that the employees are not entitled to wages because they did not perform work and that the cause, hurricane Irma, should not be for the account and risk of the employer. The latter argument is based on a stipulation found in the Dutch Civil Code, Article 7:628(1), that states that the employee remains the right to wages that are fixed in money terms if he has not performed the contracted work due to a cause which, reasonably, should be for account of the employer. A similar provision, though, is not included in the Civil Code of St. Maarten, and the Court was not inclined to get ‘inspired’ by the Dutch regulation.
However, the Court subsequently examined whether in this case there was reason for the employer to make a reasonable proposal to change the terms of employment which the employee, as a reasonable employee, should accept. In this respect the Court agrees with the employer that the damage hurricane Irma has caused may constitute a reason to make a reasonable proposal. According to the Court, however, the proposal of the employer lacks financial underpinning and proper substantiation in the form of a damage report, a liquidity forecast, and a reconstruction plan. It was therefore rejected by the Court.