The decision
The Constitutional Court of St. Maarten (hereinafter: the Court) brought out its highly anticipated decision earlier this week in the case of “the Ombudsman v. the Government of Sint Maarten” in connection with three temporary austerity ordinances (the temporary ordinance on COVID-19 austerity measures on fringe benefits of civil servants, the temporary ordinance on the mitigation of top salaries and adjustment of labor conditions at (semi) public entities, the temporary ordinance on the adjustment of salaries of political mandataries). The austerity measures were proposed as conditions for St. Maarten to receive monetary relief from the Netherlands, and include a 12.5% reduction in the total package of (fringe) benefits of employees of (semi) government entities.
The Ombudsman requested the Court to declare the austerity ordinances unconstitutional on the grounds of – among others – violation of the constitutional right of ownership and discrimination.
The Court rejected the request(s) of the Ombudsman based on the opinion that the austerity measures are merely temporary and not disproportional or excessive in light of the seriousness of the crisis and, the fact that these measures are required in order to receive much needed monetary relief. The minimum wage is furthermore not affected nor do employees fall below the poverty line as a consequence of the salary adjustments. Moreover, there is no discrimination in the opinion of the Court.
The percentage of 12.5 is fixed
The biggest takeaway from the decision of the Court is however the fact that it further solidifies the standpoint that the 12.5% reduction should be considered a fixed percentage: i.e., the total package of (fringe) benefits of the employees of (semi) government entities is cut by 12.5% (not more or less!), whilst a base limit equal to the minimum wage is maintained.
The Court repeatedly and consistently mentions the specific percentage of 12.5 throughout its decision and elaborates extensively on the background thereof. The specific percentage of 12.5 was originally proposed by the Aruba Government and accepted by the Netherlands as a condition for all three Islands of Aruba, Curacao and St. Maarten to receive monetary relief, despite the fact that St. Maarten is worse off than Aruba and Curacao due to Irma.
The Court furthermore concludes that 12.5% (specifically!) is in line with the austerity measures prompted by major economic crises in decisions by the European Court of Appeal.
Pilots v. Winair
The above is relevant in light of a recent decision made by the Court in First Instance of St. Maarten in a case filed by the pilots of Winair against the airliner. Winair imposed (and still maintains) a salary cut of 25% and argued that such would be allowed under the austerity ordinance, among others. The pilots argued, among others, that the austerity ordinance only allows for a salary cut of 12.5%. The Court in First Instance of St. Maarten agreed with Winair and dismissed the case. The considerations made by the Constitutional Court in its decision seem to contradict the opinion of the Court in First Instance.