Legal Insights – Page 2 – Fitzwilliam, Stone, Furness-Smith & Morgan

WORK PERMIT ISSUES IN TRINIDAD AND TOBAGO

Under the Immigration Act, Chapter 18:01 of the Laws of Trinidad and Tobago, no person who is not a citizen or permanent resident of Trinidad and Tobago, may legally work in Trinidad and Tobago except for a single period not exceeding thirty (30) days in a consecutive twelve (12) month period. If a foreign national intends to work in Trinidad and Tobago for periods greater than thirty days in a twelve-month period or intends to enter Trinidad and Tobago multiple times for work during the course of a year, he/she must be granted a work permit by the Minister of National Security. Further, no natural or legal person may hire a foreign national for work (he/she being neither a citizen nor a resident of Trinidad and Tobago) unless the employer first obtains a work permit for that foreign national. Even if the foreign national intends to perform such activities as training or inspections, a work permit will need to be secured prior to any work being commenced.

A foreign national will not need to obtain a work permit for short-term business activities, such as board meetings. In such cases, the foreign national will usually be granted entry to Trinidad and Tobago to carry out these types of activities for a limited period of time, usually seven to ten working days.

A work permit will be granted to a foreign national only if there is no citizen or resident of Trinidad and Tobago who is qualified to perform the functions of the job. In order to demonstrate that the employer of the foreign national has taken all reasonable steps to locate a citizen or resident of Trinidad and Tobago to fill the position, the employer will be required to provide evidence of the placement of advertisements of the employment position in local newspapers and to report on the applications received in response to that advertisement. Further, the employer must show that, as the intended employee, the foreign national possesses the relevant experience or skill or expertise pertinent to the employment position.

All foreign employees are required to impart their knowledge and skills to other nationals/residents of Trinidad and Tobago with whom the foreign employees will closely work. If the employer does not propose to have a Trinidad and Tobago citizen or permanent resident trained to replace the foreign employee at the expiration of his/her work permit, a satisfactory explanation must be provided to the Ministry of National Security as to why such training will not to be undertaken.

A work permit application should be submitted well in advance (at least three months) of the date of the foreign employee’s intended arrival into Trinidad and Tobago, together with supporting documentation which includes the following:

a police certificate of good character with respect to the previous five (5) years;
two (2) written character references, one of which must be from the foreign applicant’s previous employer;
an updated resume;
copies of all certificates, degrees and other documents evidencing the foreign applicant’s relevant qualifications;
passport biographic page; and
a recent photograph taken within the last six (6) months.
As the holder of a work permit, a foreign employee and any of his/her accompanying dependents, must have their passports endorsed by the Immigration Division with a Multiple Entry visa, which will allow the foreign employee and his/her dependents to enter Trinidad and Tobago without obtaining entry visas each time they seek to enter Trinidad and Tobago or paying visa waiver fees at the port of entry. Further, a holder of a work permit which exceeds one year in duration and his/her accompanying dependents must submit to the Immigration Division completed medical reports in the required form, when having their passports endorsed for Multiple Entry visas. A security bond may also be required to meet any deportation costs which may arise.

Any foreign national who is found to be working in Trinidad and Tobago without a work permit is liable to be deported immediately. The employer of the foreign national who is not in possession of a valid work permit may be liable, on summary conviction, to pay a fine and/or subject to imprisonment and to meet the deportation costs of the foreign national.

DISCLAIMER

The information and content on this website is provided for general information purposes only and is not intended to constitute legal or other professional advice. Legal information or content on this website relates only to the laws of Trinidad and Tobago which may be different from your laws. You should not take any actions based on information found on this website without first seeking appropriate legal advice with respect to your specific matter.

No representations or warranties are made about the suitability, currentness, comprehensiveness and/or accuracy of the information and other content contained on this website. It should be noted that legal information and content can rapidly become out of date and we give no undertaking to keep this website up to date. All liability for any loss or damage of any kind which may be suffered as a result of accessing and using the information and/or content of this website is hereby excluded to the full extent permitted by law.

Trinidad And Tobago Foreign Investment Act

The Foreign Investment Act, Chap. 70:07 (“the FIA”) came into force on August 17, 1990 and repealed the Aliens (Landholding) Act, Chap. 58:02 (“the Aliens Act”), which until its repeal regulated among other things, the holding of land, shares, debentures and directorships by persons who were “aliens” for the purposes of the Aliens Act. The Aliens Act placed considerable fetters on the ability of non-nationals to invest in Trinidad and Tobago, but in 1990 Parliament repealed and replaced it with the FIA which considerably mitigated the restrictions previously imposed on foreign investors by the Aliens Act.

Although considerably less restrictive than the Aliens Act, the FIA nevertheless does provide some regulation with respect to the acquisition by foreign investors of interests in land, shares in Trinidad and Tobago companies and the incorporation of Trinidad and Tobago companies by foreign investors. The term “foreign investor” is defined as meaning:

(a) an individual who is neither a national of Trinidad and Tobago nor of another member state under the Revised Treaty of Chaguaramas (“Member State”) establishing the Caribbean Common Market (“CARICOM”), including the CARICOM Single Market and Economy;

(b) a firm, partnership or an unincorporated body of persons of which at least one-half of its membership is held by persons who are not nationals of Trinidad and Tobago or another Member State;

(c) any company or corporation that is not incorporated in Trinidad and Tobago or another Member State or, if so incorporated, is controlled by persons referred to in paragraphs (a) or (b) above or is deemed to be under the control of foreign investors (a company is deemed to be so controlled if:

(i) at least one-half of the votes exercisable at a meeting of the company are vested in foreign investors; or
(ii) in the case of a company having a share capital, at least one-half of the nominal amount of its issued shares that carry voting rights are vested in foreign investors; or
(iii) if it does not have a share capital, at least one-half of the number of its members are foreign investors; or
(iv) it is in fact controlled by foreign investors).

A foreign investor wishing to purchase shares in a private company incorporated in Trinidad Tobago (i.e., a company that does not distribute its shares to the public) is required to provide prescribed particulars in respect of the investment to the Minister of Finance (“the Minister”). The consideration for the shares must be paid in an internationally traded currency through a person authorised by law to deal in such currency (for instance, a commercial bank in Trinidad and Tobago). The currency and authorised dealer requirements also apply in relation to the acquisition of land.

A foreign investor may also purchase shares in a Trinidad and Tobago public company (i.e. a company which distributes its shares to the public) and must fulfill the same reporting requirements as for the purchase of shares in a private company. However, in certain cases a foreign investor may be required to obtain a licence from the Minister before he can legally acquire such shares.

A foreign investor may own land for residential and business purposes up to certain set acreage limits but thereafter, must acquire a licence from the Minister for any further acreage in excess of the limit prior to acquiring such acreage. Certain land in Trinidad and Tobago which has been designated by an Order of the Minister, regardless of its size, may not be owned by a foreign investor without such foreign investor obtaining a licence. The FIA does however, provide for certain specific exceptions where a foreign investor may obtain a limited interest in land, regardless of the acreage limit, without first obtaining a licence.

Further, where any land vests in a foreign investor who is authorised to acquire land without a licence under the FIA, the foreign investor and his attorney-at-law acting for him in the matter, must forthwith, ensure that a notice of such vesting, in duplicate, together with prescribed particulars and supporting documents, are given to the Minister.

The holding of land in Trinidad and Tobago or shares in any local company in trust (the term “trust” is very widely defined under the FIA) for a foreign investor who requires a licence but has obtained such land or shares without first obtaining a licence is prohibited. The FIA contains various penalties for breaches of its restrictions and any land or shares acquired by a foreign investor without a duly required licence are subject to forfeiture by the State.

There are no restrictions on repatriation of capital, profits, dividends, interest, distributions or gains on investment.

DISCLAIMER

Trinidad And Tobago Arbitration Legislation

The Arbitration Act

Generally speaking, arbitration in Trinidad and Tobago is governed by the Arbitration Act, Chap. 5:01 (“the Arbitration Act”) which is based on early English arbitration legislation.

The Arbitration Act provides that an arbitration agreement (unless a contrary intention is expressed therein) is irrevocable except by leave of the High Court and shall have the same effect in all respects as if it was an order of the Court. Unless a contrary intention appears in the arbitration agreement itself, provisions set out in the Arbitration Act will be implied into the arbitration agreement.

The High Court has extensive powers under the Arbitration Act to facilitate and promote the arbitration process, especially in circumstances where same has broken down. These powers include inter alia:

The power of the Court to stay any alternative legal proceedings that a party may attempt to bring in breach of the arbitration agreement;
The power in certain cases to appoint an arbitrator, umpire or third arbitrator or remove them as the case may be;
The power, in appropriate circumstances, to remit certain matters for reconsideration by an arbitrator or umpire; and
The power to extend limitation periods fixed under the arbitration agreement, where a time bar for the commencement of arbitration proceedings would cause undue hardship.

In addition to the above, the Arbitration Act also gives the High Court the power to set aside arbitral awards in circumstances where an arbitrator has misconducted himself or the proceedings, or an arbitration or award has been improperly procured. The scope of this power clearly implies that there must be some sort of irregularity in procuring the award or in the actual arbitration proceedings. The term “misconduct” is used in the section in its widest sense and without attempting to make an exhaustive list, has been held to include situations involving bias, irregularities in evidence and serious errors of law on the part of the arbitrator. The power of the High Court to set aside a flawed arbitral decision exists despite the parties agreeing that such award would be final and binding between them.

Apart from misconduct, the High Court has a further inherent power to set aside an award which is bad on its face as either involving an apparent error in fact or law, or as not complying with the requirements of finality and certainty. An error of law on the face of the award means that one can find in the award or documents actually incorporated thereto (for instance, a note appended by the Arbitrator stating the reasons for his judgment) some proposition which is the basis of the award and which can be challenged as being erroneous. It should however be noted that if the error of fact or law does not appear on the face of the award the arbitral award is good and the Court is very unlikely to interfere or set aside the award based on such alleged error.

Provisions in a contract seeking to exclude the High Court’s jurisdiction (apart from a “Scott v Avery Clause”, that is, a clause framed as an agreement merely to submit a matter to arbitration before taking Court action) will be void as against public policy. Further, provisions in arbitration agreements mandating that a party must in any event pay its own costs will be void. This notwithstanding, parties are free to come to such agreements on costs in relation to disputes that have already arisen at the time of their agreeing to arbitrate. It should also be noted that in the case of agreements where each party is to appoint an arbitrator and the arbitrators are to appoint a third, such third appointee shall be treated as an umpire so that, if the two arbitrators cannot agree the umpire shall make the arbitral award in their stead.

The Arbitration Act provides that an arbitral award can be enforced in the same manner as a judgment or order of the Court to the same effect and in such case a formal judgment may be entered in terms of the award. Any such award will also carry the same interest (unless otherwise directed) as a judgment debt.

The Arbitration (Foreign Arbitral Awards) Act

Trinidad and Tobago is a signatory to the New York Convention on Recognition and Enforcement of Foreign Arbitral Awards (“the NY Convention”). The Arbitration (Foreign Arbitral Awards) Act, Chap. 5:30 (“the FAA Act”) gives effect in Trinidad and Tobago to the NY Convention and permits the enforcement of awards made pursuant to an arbitration agreement in a State other than Trinidad and Tobago that is a party to the NY Convention in Trinidad and Tobago either by an action or in the same manner as a judgment of the Courts in Trinidad and Tobago. This considerably accelerates the enforcement process when compared to the procedure to enforce an arbitral award under the common law.

Prior to the enforcement of a foreign arbitral award in Trinidad and Tobago, a certificate must be obtained from the Minister of Foreign Affairs showing that the State specified therein is or was at the time specified, a party to the NY Convention and same shall be conclusive proof in any proceedings that the State is or was at the time specified a party to the NY Convention. Further, a party seeking to enforce a foreign arbitral award must produce the following documents to the High Court:

The duly authenticated original award or a duly certified copy of it;
The original arbitration agreement or a duly certified copy of it; and
A translation of the award or agreement certified by an official or sworn translator or by a diplomatic or consular agent, if the award or agreement is in a language other than English.

Enforcement of an award may not be refused except in limited circumstances as prescribed under the FAA Act.

Under the common law, foreign arbitral awards from States that are not signatories to the NY Convention can be enforced by action in Trinidad and Tobago provided they are (i) in accordance with an agreement to arbitrate which is valid by its governing law; and (ii) are valid and final according to the law governing the arbitration proceedings.

A Trinidad and Tobago Court whether under the FAA Act or under common law has the discretion to refuse to recognise and enforce any arbitration award that gives effect to a matter that is contrary to Trinidad and Tobago public policy. Examples include where such an award seeks to enforce clauses that qualify as a penalty or unreasonable restraint of trade under Trinidad and Tobago law. However, a Trinidad and Tobago Court will use this discretion very sparingly and only in the clearest of cases.

DISCLAIMER

Labour Issues In Trinidad And Tobago

THE EMPLOYMENT CONTRACT

There is no statutory requirement under the laws of Trinidad and Tobago for the employment contract to be in writing. The usual practice is for the employer to engage an employee under a letter of offer which sets out the main terms and conditions of the employment. Policies and procedures of the employer may be incorporated into the terms of employment by reference, or by practice. Where there is a unionised environment with a registered collective agreement between the employer and a recognised majority trade union, the terms and conditions of employment are set out in the collective agreement. Terms and conditions of employment, for both unionised and non-unionised employees, are generally negotiated freely.

CASH COMPENSATION

There is a statutory regime for fixing minimum wages to ensure that contractual wages and terms and conditions of service are at least as favourable to the employee as the prescribed statutory minimum. There is a statutory regime for the payment of overtime which applies only to employees receiving an hourly rate of one and one half times the national minimum wage or less. While industry practice varies, actual overtime rates are not dissimilar to the statutory rates.

PERQUISITES AND ALLOWANCES

There are no statutory provisions which oblige employers to pay bonuses or commissions or to grant perquisites or allowances to employees. Such are however often provided for in the contract of employment or collective agreement.

DEDUCTIONS

Pay As You Earn (“PAYE”): – An employer is obliged to withhold tax from the emoluments of each employee and remit to the Board of Inland Revenue the employee’s personal income tax. An employer who fails to deduct tax from his employees’ emoluments, or having deducted fails to remit the tax deducted by the due date, is liable to fine and imprisonment on summary conviction and incurs a penalty and interest on the sum not deducted or remitted plus the penalty.

National Insurance: – There is a statutory system of compulsory insurance for employed persons. The main benefits are: sickness benefit, maternity benefit, invalidity benefit, funeral grant, retirement pension, retirement grant, survivor’s benefit, employment injury benefit and industrial disease benefit. Contributions are paid by both the employer and the employee. The employer is responsible for deducting the employee’s contributions from the employee’s earnings and remitting both the employer’s and employee’s contributions to the National Insurance Board.

Health Surcharge: – A statutory health surcharge is payable by every employed person. The employer is required to deduct the surcharge from the emoluments of the employed person and to remit the sum to the Board of Inland Revenue.

WORKING HOURS

There is a statutory regime which prescribes the maximum number of working hours for workers receiving an hourly rate of one and one half of the national minimum wage or less. Actual working hours vary from industry to industry for workers earning above one and one half times the national minimum wage.

PUBLIC HOLIDAYS

At present there are fourteen (14) days which have been designated public holidays. In addition Carnival Monday and Tuesday are customary non-working days.

VACATION LEAVE AND ILLNESS LEAVE

There are no statutory requirements which fix an employee’s entitlement to vacation leave and to paid illness leave. These benefits are usually provided for in the contract of employment or collective agreement.

HEALTH CARE

There is no statutory requirement for an employer to provide health care for employees. Most well established employers do have health plans typically through life insurance companies.

MATERNITY LEAVE

Female employees have the right to a leave of absence for maternity, pay while on maternity leave and to resume work after such leave on terms no less favourable than those enjoyed immediately prior to maternity leave. Pay during maternity leave is provided between the employer and the national insurance system.

PENSIONS

There is no statutory obligation on an employer to establish a pension plan. However, pension plans are common in well-established businesses. Such plans are regulated. The plans must be established by irrevocable trust with various rules as to contributions and safeguards for the benefits payable to the members of the plan and there are restrictions on the classes of assets in which the funds of the plan may be invested. There are tax advantages to the employer, the employee and the trust income if the plan is approved by the Board of Inland Revenue. As an alternative to a formal pension plan, employers enter into Board of Inland Revenue approved annuity contracts with life insurance companies.

EMPLOYEE PROFIT SHARING PLAN

An employer company may establish an employee’s profit sharing plan, with the approval of the Board of Inland Revenue, to which contributions may be made by the employer. There are rules governing the annual distribution of profits and the purchase of shares in the employer company. A plan must be constituted by irrevocable trust.An employer company may establish an employee’s profit sharing plan, with the approval of the Board of Inland Revenue, to which contributions may be made by the employer. There are rules governing the annual distribution of profits and the purchase of shares in the employer company. A plan must be constituted by irrevocable trust.

EMPLOYEE SAVINGS PLAN

An employer may establish an employee savings plan to which contributions may be made by both the employer and the employee. There are tax benefits to the employer and employee in the event such a plan is established.

WORKMEN’S COMPENSATION

There is statutory scheme of compensation for injury or death to a workman caused by accident arising out of and in the course of employment. The compensation is based on certain formulae applied to the workmen’s earnings and is payable in certain specified circumstances. The employer is under an obligation to procure an insurance policy to fund its obligation to compensate workmen.

TERMINATION ISSUES

Redundancy of Workers:- There is a statutory procedure to be followed where an employer proposes to terminate the services of workers for the reason of redundancy (that is, the existence of surplus labour). This termination is referred to as a retrenchment and the onus is on the employer to demonstrate the reasonableness of the decision to retrench. The employer must give a formal notice of termination to the workers and to any recognised trade union. There is a formula for minimum severance payments on retrenchment based on earnings and years of service.

Redundancy of Managers:– Employees who are not workers for the purposes of industrial relations and retrenchment are not protected by statute, but must be given reasonable notice of termination depending on a number of variables, including; the responsibilities and duties of the employee, re-employment prospects, the age of the employee and the length of the employee’s service.

Termination for cause:- The law related to termination for cause depends on whether the employee is a worker for industrial relations purposes. In the case of workers, certain principles and practices of good industrial relations are applied and these significantly alter the common law. The employer must be able to prove a good case for dismissal for poor performance, misconduct or other good cause and must, very importantly, give the worker the opportunity in a disciplinary hearing to answer to the employer’s case before the employer takes the decision to terminate (or to impose some lesser disciplinary sanction). The common law principles continue to apply to employees who are not workers for industrial relations purposes. In such cases the requirement for a disciplinary hearing is less stringent but the employer must have good cause to terminate (or to impose some lesser disciplinary sanction).

OCCUPATION SAFETY AND HEALTH

There is a comprehensive statutory code for the safety, health and welfare of employees in an industrial establishment, that is, “a factory, shop, office, place of work or other premises but does not include premises occupied for residential purposes only”. It is the duty of every employer to ensure the safety, health and welfare at work of all employees, so far as is reasonably practicable. An employee has the right to refuse to work or to do particular work if there is sufficient reason to believe that there is danger to health or life. A more instructive overview can be found at the Legal Insight entitled “Trinidad and Tobago Occupational Safety and Health Act Chap. 88:08.”

DISCLAIMER

Trinidad and Tobago Government, Legal System and Economy

Government

and Tobago is a former British colony. It became independent in 1962 and adopted a republican Constitution in 1976 replacing the British Monarch with a President elected by Parliament as the country’s Head of State. The general direction and control of the Government rests with the Cabinet, led by a Prime Minister who is answerable to Parliament.

Parliament serves as the legislative arm of government and consists of two chambers known as the Senate and the House of Representatives. For any piece of legislation to come into effect as law it must receive a majority vote of approval in both the Senate and the House of Representatives and be assented to by the President. Certain pieces of legislation, for instance those which deprive persons of rights guaranteed by the Constitution, must expressly declare its inconsistency and achieve votes of a special majority in both chambers before they can come into force.

Democratic elections for the 41 members of the House of Representatives must be held at least every five years. Elections may be called earlier by the President at the request of the Prime Minister or after a vote of no confidence in the House of Representatives. The Senate’s 31 members are appointed by the President: 16 on the advice of the Prime Minister, 6 on the advice of the leader of the opposition, and 9 independents appointed by the President (in his sole discretion) from among outstanding members of the community. There is a system of local government: elected councils administer the nine regional, two city, and three borough corporations in Trinidad. Since 1980 the Tobago House of Assembly has governed Tobago with limited responsibility for local matters.

Legal System

The law of Trinidad and Tobago is based upon the common law of England and statutes of general application in force in England in 1848 as modified by subsequent local legislation. Local legislation is often derived from or based on English (and in recent times other Commonwealth States mainly Canada) statutes. The final Court of Appeal in respect of any civil and criminal litigation is the Judicial Committee of the Privy Council in the United Kingdom. The principles derived from the decisions of the courts of the United Kingdom and other Commonwealth countries particularly other Commonwealth Caribbean Islands, Canada, Australia, India and New Zealand, though not strictly binding, are regarded as persuasive by the local courts where relevant to local cases.

The country’s judiciary is made up of a three tier system of courts, the first being the High Court, the second being the Court of Appeal and the highest court being the Judicial Committee of the Privy Council in London. Member states of the Caribbean Community (“CARICOM”) selected Trinidad and Tobago as the headquarters site for the new Caribbean Court of Justice (“CCJ”), which is intended eventually to replace the Judicial Committee of the Privy Council as the final appellate Court of Trinidad and Tobago and for all CARICOM states. The CCJ heard its first case in August 2005. Despite having its seat in Port of Spain, Trinidad and Tobago has not passed the domestic legislation that is required to establish the Caribbean Court of Justice as its final appellate court.

Economic Overview

Trinidad and Tobago is one of the wealthiest countries in the Caribbean, thanks to its large reserves of oil and gas. Although Trinidad and Tobago’s economy consists of many different industries the exploitation of hydrocarbons is by far the most dominant.

Trinidad and Tobago has a well-educated society and a stable political climate. The government has attracted foreign investment (with varying degrees of success), particularly into the energy sector, since the late 1980s. The Government now places substantial importance on projects that increase local content and participation. The benefits of macroeconomic stability and proximity to the United States market have been complemented by modernization of laws governing corporate activity, substantial liberalization of the trade regime and fiscal incentives, including import duty exemptions.

Trinidad and Tobago is one of the world’s largest exporters of ammonia and methanol and has multiple plants. The country has one LNG plant employing 4 trains run by 3 separate Atlantic LNG entities. Each train is supported by a consortium of international upstream investors with the State owned National Gas Company of Trinidad and Tobago Limited (“NGC”) also having an equity stake in at least two (2) of the trains. In addition, Trinidad and Tobago has ammonia and methanol plants, a urea plant and iron and steel plants. Trinidad and Tobago also supplies manufactured goods to the Caribbean region and beyond and is the regional financial centre. Trinidad’s tourism season primarily revolves around its world renowned carnival which takes place on the Monday and Tuesday before Ash Wednesday; but in the last decade it has also become a very popular eco-tourism destination. Tobago’s economy is primarily tourism driven and offers the classic Caribbean attraction namely crystal blue waters and pristine white sand beaches.

Trinidad and Tobago is the Caribbean’s largest producer of oil and gas and most of the country’s investments have been in the energy sector, which makes up the bulk of its exports. Its hydrocarbon resources have enabled Trinidad and Tobago to become the Caribbean’s most industrialized nation. The country has one oil refinery located at Pointe-a-Pierre which is operated by Petroleum Company of Trinidad and Tobago Limited (“Petrotrin”) which is state owned. Over the years considerable sums of money have been spent and continue to be spent in upgrading this facility. Petrotrin is also active in upstream exploration and production.

NGC was established in 1975 and acts as the sole buyer, transporter and distributor of natural gas in Trinidad and Tobago. A sizeable gas-based industry has developed in Trinidad and Tobago, much of which is centered on the Point Lisas Industrial Estate on the west coast of Trinidad.