Ruling by the Courts could leave security guards jobless

Financial analyst Dennis Chung is suggesting that the recent ruling by the Revenue Court, which effectively means security guards are now entitled to the benefits afforded to persons categorized as employees, could work against them as companies seek to straddle the increased cost of providing the service.

The increased costs could see security firms cutting staff as their clients adopt technological solutions to satisfy their security needs instead of manpower, according to Chung said.

“I think effectively, it is going to work more against the security guards themselves than the actual companies because they will find something else that has a greater return on capital,” Chung reasoned.

The Jamaica Society for Industrial Security (JSIS) has signalled that the cost of private security services could jump by at least 50 per cent following the recent landmark ruling by the high court that security guards are to be treated as employees and not contract workers.

“People are going to be faced with a decision for their companies. If their clients are not willing to take on the added cost, then there will be no reason to employ someone,” the financial analyst suggested.

The court ruled that security guards engaged by Marksman Limited are employees and not contract workers and that the company should begin paying its portion of National Housing Trust (NHT) statutory contributions immediately.

The NHT challenged the private security firms in court following their refusal to accept the Trust’s declaration that the security guards they engaged are employees and not contract workers.

“I am not surprised about the ruling because the labour laws do say that if someone is continuously on a contract, then effectively you treat them like an employee. So all the statutory payments are to be made,” Chung said.”

The employee benefits such as paid vacation and sick leave, which the companies are now expected to adhere to, will likely see some companies cutting jobs, he said.

“Depending on how much the costs go up, you may find that they may be cutting back on the number of people they employ,” he said.

“It’s the same argument with the minimum wage when people say it should be increased. But how many people will lose their jobs? That is the balancing act that the government has to make … because it is based on affordability,” Chung added.

“Remember that money always follows capital, and people will always find ways to organize themselves and make money. It could be as simple as saying: ‘this is not a profitable industry anymore, let me sell out and go somewhere else,” he reasoned.