Bahamas Privy Council Ruling: No “Unjust Dismissal” Outside the Employment Act

If you’re an employer operating in The Bahamas, or anywhere with Bahamian employees, this recent decision from the Judicial Committee of the Privy Council is essential reading.

It closes the door on a long-simmering legal theory that threatened to open a third category of dismissal claim: the so-called “unjust dismissal” argument.

Here’s what happened and why it matters to your business.

Background: What Happened?

Ervin Dean worked for Bahamas Power & Light (BPL) for more than 30 years. In 2017, BPL terminated him without cause and paid him only the statutory minimum notice required under the Employment Act, 2001.

Dean filed a lawsuit claiming not only wrongful dismissal (a contractual breach) but also argued he was dismissed “unjustly.” He pointed to language in his union’s industrial agreement which stated that the employer “shall not terminate an employee unjustly.”

He claimed this created a separate contractual right beyond the existing statutory and common law protections.

The Supreme Court of The Bahamas agreed and awarded him 74 months of pay, which represented over six years of compensation.

The Court of Appeal and the Privy Council

The Court of Appeal intervened and reduced the damages to 18 months’ pay. It found the original award was excessive and unsupported by evidence. More importantly, the court found that there was no separate claim for “unjust dismissal” outside the Employment Act.

Dean appealed to the Privy Council, the final appellate court for The Bahamas.

The outcome was a win for BPL and a decisive ruling for employers.

The Key Takeaways for Employers

The law is now clear:

There is no third cause of action for “unjust dismissal” outside the Employment Act and common law.

If an employee believes they have been unfairly dismissed, they must bring a claim under the statutory procedure outlined in Sections 34 to 48 of the Employment Act, 2001.

This means:

• Wrongful dismissal is a breach of contract, such as failure to give proper notice
• Unfair dismissal is a statutory claim, typically involving procedural or substantive unfairness
• “Unjust dismissal” language in a contract is not a standalone cause of action. It is merely a reminder that statutory protections remain intact.

Employers can still terminate without cause, but…

You must provide reasonable notice or payment in lieu. What counts as “reasonable” will depend on factors like:

• Length of service
• Age
• Health
• Chances of reemployment
• Loyalty and position

Failure to consider these can lead to a breach of contract claim.

Pay attention to how notice is calculated

The Privy Council upheld the 18-month award because there was no evidence supporting the claim that Dean was entitled to pay through retirement.

The takeaway is simple. Notice periods must be grounded in the evidence and applicable contractual criteria, not assumptions.

Why This Ruling Matters

This judgment protects employers from unintended legal exposure caused by ambiguous phrases like “unjust dismissal” in industrial agreements.

It also reinforces that employees cannot bypass the statutory framework by dressing up unfair dismissal claims as breaches of contract.

For businesses, it provides clarity. Employers can continue to include reassurance clauses without fear they will create a new basis for litigation.

That said, employers must still get the basics right. Failing to provide adequate notice or payment in lieu can still result in a successful wrongful dismissal claim.

What Employers Should Do Now

• Review your employment contracts and industrial agreements to ensure they are legally sound and up to date.
• Make sure any payment in lieu of notice meets or exceeds the statutory minimum and reflects any agreed contractual terms.
• Understand that “unjust dismissal” language does not create a new right to sue. It confirms that employees still retain their statutory protections.
• Seek legal advice before dismissing long-serving or senior employees.

Final Word

At ParrisWhittaker, we help employers navigate Bahamian employment law with precision and confidence.

Whether you are restructuring, managing terminations, or facing a dispute, understanding the law is the first step to protecting your business.

Need assistance? Contact us today.