The Redundancy Board

The Redundancy Board has been set up under section 73 of the Workers’ Rights Act 2019. It deals with all cases of reduction of workforce and closure of enterprises for economic, financial, structural, technological or any other similar reasons.

The Board consists of

(a) a President;

(b) a Vice-President;

(d) a representative of the Ministry responsible for the subject of finance and economic development;

(e) a representative of employers;

(f) a representative of workers;

(g) an economist and

(h) an accountant.

The law provides that no one is to be appointed President or Vice-President of the Board unless he is qualified for appointment as a Judge of the Supreme Court or has held judicial office.

The Board makes orders in relation to the reduction of workforce or closing down of enterprise. It also makes orders for requiring the attendance of any person for the production of any document as it may determine. It takes evidence on oath.

The Board may sit in one or more Divisions at any time and any place in Mauritius. Its proceedings are to be completed within 30 days from the date of notification by the employer and such period may be extended by agreement of both parties.

History of the Redundancy Board

Reduction of Workforce and Closing down of Enterprise

The term “reduction of workforce” is used mainly to refer to situations where several contracts of employment within an enterprise are being terminated simultaneously. It covers mainly situations where an enterprise is facing financial difficulties and consequently has to cut operating costs by dismissing some of its employees according to the relative importance of their respective posts in ensuring the survival or at least, an equitable dissolution, of the enterprise.

Before the enactment of the Employment Rights Act of 2008 which set up the Employment Promotion and Protection Division of the Employment Relations Tribunal, there was the Termination of Contract Service Board (TCSB) which looked into proposals for reduction of workforce. Section 8 of the Termination of Contract Service Ordinance of 1963 provided: “an employer of more than 10 persons who apprehends a likelihood of his having to curtail his activities as to render it necessary to propose to his employees the working of short-time, with consequent loss of earning of the reduction of his workforce whether temporary or permanent, shall forthwith notify the appropriate office of the Ministry of Labour and Social Security.”

There was then an obligation to inform the Ministry. In the provision of the Termination of Contract Service (amended) Ordinance of 1966, the Board was “to consider whether there is a valid reason for such reduction of employer’s workforce having regard to the operational requirements of the undertaking, establishment of service.”

Consequently, the functions of the TCSB were retained under the Labour Act 1975 and the same principles governing reduction of workforce were retained under Section 39 of the legislation.

After the closing down of the TCSB, a period of what is commonly known as the ‘hire and fire’ period led to many injustices being caused to employees who were subject to being redundant without any judicial scrutiny.

The Employment Promotion and Protection Division came to rescue the situation but it was still by referral from the Permanent Secretary, Ministry of Labour and Industrial Relations that the Tribunal could be seized of the matter.

Currently, the employer who intends to reduce his workforce or close down his enterprise has a duty to notify the Board accordingly.