A labour relations expert has claimed that companies who reduce benefits to the minimum required under the new Employment Act 2000 are breaking the law.

Last week both Labour Minister Terry Lister and Bermuda Public Services Association General Secretary Ed Ball claimed some companies were using the new Act, which comes fully into force on March 1, as an excuse to reduce holiday entitlement and fire workers.

Malcolm Dixon, a labour relations consultant to Total Office Management, pointed out a section in the Act which says this is against the law.

The passage reads: "Subject to any additional requirements of this Act, the terms and conditions of employment evidenced in the written statement shall be at least as beneficial to the employee as the terms and conditions on which he was employed immediately before the commencement date."

Mr. Dixon, a former executive director of the Bermuda Employers' Council (BEC), said he spends a lot of time writing employment handbooks for companies as well as statements of employment required by the Act.

He said: "When the Employment Act was drafted, the Minister of Labour of the day, Paula Cox, was very aware that some employers may take the opportunity to reduce their current terms and conditions down to the minimum requirements of the Act and that a protection clause would be needed."

Bermuda Industrial Union president Derrick Burgess backed up Mr. Dixon's stance.

He told The Royal Gazette recently: "The law doesn't permit employers to take away benefits. They can't do that. What type of employer is out there?"

Mr. Dixon said there was no way that an employee should lose out on their existing benefits.

He said: "The main purpose of introducing the Act was to ensure that employers provide a set of minimum standards for their employees where in many instances employees were not receiving even basic benefits.

"The Act should not be perceived as being threatening or Draconian but as a tool to develop good employment practices and employee relations."

Bermuda Employers' Council executive director Andrea Mowbray agreed the Act clearly stated that employers could not reduce existing policies.

She said: "That's how we have been advising our members. We have been very vocal, saying don't think about dropping to the minimum.

"I don't think our members are doing this. I have vetted handbook after handbook.

"It could be someone is misreading the Act, they are not used to reading legislation. I don't think it's anything malicious."

Under the Employment Act employees can protest violations to an inspector for mediation. If there is no resolution the complaint gets referred to the employment tribunal which will be set up under the Act.