Changes in Sint Maarten labor laws as per October 1st, 2022

September 27, 2022

Sint Maarten has recently enacted amendments to Book 7A of the Civil Code of Sint Maarten, pertaining to labor laws. These amendments will become effective as per October 1^st, 2022.

The amendments are set out in the National Ordinance Employment Agreement (“Landsverordening arbeidsovereenkomst”) (AB 2021, 64). Pursuant to this National Ordinance book 7A of the Civil Code will be replaced by book 7, Title 10 of the Civil Code. Besides this more (legal-)technical amendment, this National Ordinance also contains several substantive amendments, including:

1. Restricted possibility to unilaterally change employment conditions (Article 7:613 of the Civil Code)

The possibility for an employer to unilaterally change an employment condition will be – further – restricted. The use of a unilateral changes clause is subject to two conditions as reflected in Article 7:613 of the Civil Code: (i) the unilateral changes clause must be agreed upon in writing, and (ii) the employer must have such a substantial interest in the change that this interest outweighs the interests of the employee in accordance with the standards of reasonableness and fairness. Also, the option of introducing employment conditions via an employee handbook (in Dutch: ‘arbeidsreglement’) has been removed. An employee handbook can still be used by the employer but shall no longer be binding without the consent of the employee.

2. Unfit as a result of illness or accident (Article 629 of the Civil Code)

If the employee is unfit for work as a result of illness or accident, the employee shall retain his/her right to salary for only a ‘relatively short time’. In accordance with case law, the new National Ordinance explicitly mentions that this ‘relatively short time’ shall be at least six weeks. Deviating agreements to the detriment of the employee are no longer permitted, except that parties could agree that the employer does not owe the employee any wages for the first two days of unfitness due to sickness or incident. The employee shall however lose any right to salary if the employee, through his/her fault, has hampered or delayed his/her recovery, has refused to comply with reasonable instructions, and/or has refused to perform suitable other work, etc. Please note in this respect that if the employee is SZV-insured, the employee shall remain entitled to receive ‘sickness money’ (in Dutch: ‘ziekengeld’)’ also in excess of the ‘relatively short time’ as far as covered under the SZV insurance.

3.  Pregnancy and maternity leave (Article 7:629a and 7:629b of the Civil code)

The total duration of pregnancy- and maternity leave will increase (from at least twelve weeks) to at least sixteen weeks. During pregnancy- and maternity leave, the employee is entitled to continued payment of the full wage. Pregnancy leave starts between two to eight weeks prior to the estimated delivery date and maternity leave should at a minimum be seven weeks after the employee gave birth.

According to Article 7:629b of the Civil Code the partner of an employee who is pregnant and/or gave birth has a right to seven days of parental leave for partners. This leave can be taken any time between two weeks prior to the estimated delivery date until seven weeks after the actual date of birth of the child. During the leave, the employee is entitled to continued payment of the full wage.

4. Gender equality rights (Article 7:646 – 7:649a of the Civil Code)

The National Ordinance introduces a separate paragraph (Book 7, Title 10, paragraph 4 of the Civil Code) pertaining to gender equality rights for employees. This includes a prohibition for the employer to make a distinction between men and women, part-time or full-time workers as well as employees with a fixed-term or indefinite employment agreement regarding – in short – entering into an employment, the employment terms and conditions, and the termination of employment agreements. Note that there are several exceptions.

5. Reintegration rights and obligations (Article 7:658a and 660a of the Civil Code)

Up to October 1^st, 2022 the rights and obligations of an employer and employee in case of incapacity for work are based on the principle to act as a good employer and good employee. Amongst other things, the employer and the employee are obliged to make an effort to reintegrate the employee into his/her own or other suitable position. These rights and obligations in relation to the reintegration process of an employee who is incapacitated for work will be laid down in Article 7:658a and 7:660a of the Civil Code.

6. Employees’ rights in case of transfer of undertaking (Article 7:662 – 7:666 of the Civil Code)

The employees’ rights will be protected extensively in case of a so-called ‘transfer of undertaking’ (in Dutch: ‘overgang van onderneming’). A transfer of an undertaking is defined as “a transfer of an economic entity which retains its identity, meaning an organized grouping of resources which has the objective of pursuing an economic activity, regardless of whether that activity is central or ancillary”. Whether a transfer falls within the scope of this definition, highly depends on the facts at hand. As a result of a transfer of an undertaking, new employment agreements are automatically (by law) created between the acquiring company and the employees who formerly worked with the acquired undertaking. The new employer must respect and apply all the existing terms and conditions between the employee and the former employer. This includes any applicable collective labor agreement and pension commitments. Regarding the latter, however, exceptions may apply depending on the circumstances. Note that it is not possible to contract out the applicability of a transfer of an undertaking and all the legal consequences.

7. Consecutive short-term contracts (Article 668a of the Civil Code)

The National Ordinance reduces the number of consecutive short-term contracts to a maximum of two (2) within a timeframe of twenty-four (24) months. In the event of a third contract for a definite period of time or a series of such fixed-term contracts that surpasses the said period of 24 months, the employment contract automatically converts into an employment contract for an indefinite period of time. Proposals to further limit short-term contracts as are mentioned in the Explanatory Notes of the National Ordinance, have not (yet) been adopted.

8. Definition of temporary (agency) agreement (Article 7:690 – 7:691 of the Civil Code)

The National Ordinance qualifies the temporary agency agreement (in Dutch: ‘uitzendovereenkomst’) as an employment agreement in the meaning of Book 7, Title 10 of the Civil Code. Consequently, the labor laws (of Book 7) apply to such agreement. The introduction of these specific provisions pertaining to temporary agency workers does not affect the applicability of the National Ordinance with regard to making workers available (“Landsverordening op het ter beschikking stellen van arbeidskrachten”) (P.B. 1989, no. 73), such as the permit requirements for agencies.

If you have any questions or should you wish to receive more information on the validity of existing fixed-term contracts, the binding status of existing employee handbooks and/or the legal possibilities for in- and outsourcing, please feel free to contact the attorneys from our Employment Law team.