Little Switzerland loses case against 22 workers

PHILIPSBURG--World Gifts Import BV, the owner of jewellery chain Little Switzerland, has lost its appeal in an injunction against 22 of its employees who had filed a court case against the company that had sent them home without pay in December 2017.
 
On May 18, 2018, the Court had ordered Little Switzerland to pay its employees due salaries, with interest, including a legal increase of 10 per cent at the most. Little Switzerland’s holding company World Gifts Import had filed for appeal on June 7, 2018, pleading with the Court to reject the claims.
 
Little Switzerland sells jewellery and luxury watches in more than 30 locations in the Caribbean, including St. Maarten. The Little Switzerland stores in St. Maarten suffered extensive damage due to Hurricanes Irma and Maria, which struck St. Maarten in September 2017.
 
The hurricanes severely damaged Little Switzerland’s Front Street and Harbour stores, which led to no or hardly any turnover for quite some time. Whereas the Harbour store partially reopened in December 2017, the Front Street store remained closed until September 2018.
 
After Irma, Little Switzerland paid wages to all its workers for three months, as this was covered by the company’s business-interruption insurance. As it had not been able to reopen its business and the three-month period expired on December 7, 2017, Little Switzerland said it was forced to suspend further payment of wages to all employees who were not working as of that date.
 
The company called a general staff meeting on November 28, 2017, during which employees were presented with the option to terminate their labour agreements and receive “termination compensation,” including vacation days accrued but not taken, back pay and incentives. However, none of the workers involved in the injunction signed the agreement.
 
In the meantime, all of the workers have returned to their jobs and their salaries are paid as usual. Nevertheless, they still seek payment of their salaries from December 6, 2017, for the nine-month period until the reopening of the Front Street store in September 2018.
 
According to Little Switzerland, the principle of “no work, no pay” is explicitly set in the Civil Code of St. Maarten, and as it would have been impossible for the employees to resume sales work and as the impediment to performing work in this case was not Little Switzerland’s fault, it was the employer’s position that this principle, which is also included in the workers’ employment agreements, applies.
 
In most employment agreements the company has included a so-called calamity provision which states: “In the event the Employer is unable to make use of the services of the Employee – due to a calamity (fire, hurricane, rain, or any Act of God) or any occurrence beyond control of the Employer, whether or not for the risk of the Employer – for a period exceeding three months, the Employer will only be obligated to pay the applicable minimum wage to the Employee for said period.
 
“If such calamity or occurrence should last longer than three months, the Employer’s obligation to pay wages shall cease.”
 
The Court stated in the verdict that companies such as Little Switzerland are insured against prevention of business activities due to a natural disaster. As disasters should be an employer’s risk and not of employees who were willing to work, they should be paid their salaries.
 
The judge said that it was insufficiently proven that there was no employment in Little Switzerland’s stores in St. Maarten and that it was also not proven that it was technically impossible to open the Front Street before September 2018.
 
With regard to the jewellers’ financial situation, which had revealed a considerable drop in turnover, the judge said it had become “insufficiently plausible” that the employees’ early return to work could not reasonably be expected from Little Switzerland.
 
 “A hurricane with Irma’s impact is a social disaster, which not only hurts the employer but also the employees, who are all living in St. Maarten. They have a big interest in income, especially in times like these, as other work will not be easily obtainable. Also, these employees, who work on commission, already bear part of the adverse effects of the hurricane, in particular because tourism in St. Maarten has not been at the former level for a long time,” the judge stated.
 
The Daily Herald
 
The employees were represented in this case by attorney Jelmer Snow of BZSE Attorneys at Law I Tax Lawyers. Little Switzerland was legally represented by attorneys Daniella Engelhardt and Michiel Gorsira of Van Eps Kunneman Van Doorne. 
 

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