Are you looking for flexible employment laws?
Let me not keep you in suspense if the title catches your attention. You won’t find that in Aruba. In 2013 and 2021, we introduced changes to employment laws. Still, despite ongoing and consistent recommendations from clubs such as the IMFs of the world and the Dutch government, flexibility was absent from our employment laws. The changes were to promote the rights of the employees and create more benefits. The changes were not to give employers any flexibility, as is common in the more civilized world. Politicians from both sides of the aisle tend to find common ground quickly when they have a choice to burden the employers and favor employees. It is what it is. Don’t get me wrong; I am not against these changes because these laws generate employment for many, including lawyers and human resources consultants. In this week’s column, I will elaborate on some specific aspects that illustrate the non-flexible nature of employment laws. In doing so, I also hope to bust or address a few myths or misconceptions that are out there about “hacks” that folks believe work.
Myth 1 extending the trial period
The law allows parties to agree on a trial period. This trial period can be up to 2 months, provided it is agreed upon in writing. This agreement should be in place at the moment or before the employment starts. This means that the employer or the employee can terminate the employment without cause and without incurring any liability during that term. Parties can agree to make the trial period, but it can be, at most, the maximum stipulated by law or two months. If you do not have a trial period agreed upon in writing, there is a risk for both parties. Suppose the employee terminates without a or outside a trial period. In that case, they can be held liable for damages caused to the employer. The damages can be, at the discretion of the employer, an amount equal to the salary paid in a paid period or the actual damages. If an employer wants to terminate outside a trial period, this is likely to cost a few bucks for settlement pay or legal fees, and many times both. Any trick you can think of to extend the trial period will likely fail. Such a trick or hack has been tried and did not hold up in court. My recommendation is to save yourself the trouble and the suffering and stick to what the law says, which is a maximum of 2 months. Maybe you thought of first giving a new employee a contract for a “project” of 4 months. Once you are satisfied with his work, give him an employment contract with a trial period of 2 months so that you can end up with a trial period of 6 months. Don’t hold your breath; that gimmick will not fly with the courts. Stick to the law.
Myth # 2 Zero-hour contract
Another concept I often hear about is a “zero-hour contract.” The idea behind this arrangement is that as an employer, you do not commit to any fixed hours with one or more employees and only pay them for hours worked. The Zero-hour contract saves money and keeps your payroll light because those employees will not become permanently employed. While this may have some merit in the past, you should realize that this idea won’t hold water. Especially as of September 1st, 2021, with the changes in the employment laws. Why? The commies made sure that once a worker exceeds specific parameters in terms of weeks or hours worked, the zero contract hours contract is deemed to be a contract for an indefinite period of time-based on the (average) hours worked. The exact math is tedious, and at the risk of sounding too academic or going beyond the scope of this column, I will skip the nitty-gritty explanation. After all, this column is for education and entertainment and is not intended as legal advice. Suffice it to state the warning, so you know the risk involved if you choose this path. I wouldn’t.
Myth 3 On-call contract
Another well-liked arrangement is the “on-call” contract. The intention here is to have the ability to have a person who knows the job and can do the job at hand, but the employer can only “call” when there is extra demand for staffing on the work floor. I get it. At the Wharton School of Business, we/they would call this something like optimizing your human capital resource based on the needs/demands of the business. It could also be called a means to allow those with a permanent job to supplement their income by working “on-call” or “on-demand.” Our legislators are not fans of such arrangements and deem it unnecessary since our laws allow for “fixed-term contracts.” The legislator doesn’t say or state that the “fixed-term contracts” under our laws are as useless as a remote without batteries.
Myth 4 Fixed-term contracts
I am speaking of fixed-term contracts. Yes, the law allows for these, but the exceptions are so imitative and impractical that 9 out of 10 fixed-term agreements will be qualified as employment agreements for an indefinite period. In case you are wondering? Don’t get fooled for one moment that the legislature passed pro-employer laws. Doing so would be unpopular, and that is the last thing any politician in power wants to do.
I have published the LEGAL column in the news portal www.Trempan.com for two years. The LEGAL column appears every Monday. The column also appears on my LinkedIn, my FB, the FB of Gomez Coffie Law, and www.AboutTheLaws.com. It started in our native Papiamento. Beginning in 2023 and at the request of many, I will wing it in English and see how it goes. As a columnist, I aim to observe, analyze, and share insight based on (the little) I know about the subject. This column is not legal advice, nor am I writing for the academics or the lawyers of the world. The column is aimed at the regular Joe or Juancho. If you enjoy the column, super; if not, scroll on and be happy.
See you next week.