Analysis | Politics

Legal Term ‘Act of God’ Does NOT Mean That God Is Being Blamed

Please note that this legal term has been with us since 1863 under English Common Law which considered contractual obligations as sacred. An ‘Act of God’ is also used interchangeably with the term ‘force majeure’. Force majeure is a clause used in most contracts.
02 Jun 2020 16:39
Legal Term ‘Act of God’ Does NOT Mean That God Is Being Blamed
  • Joseph Veramu is an economic policy consultant can be contacted on joseph.veramu@outlook.com.

Analysis:

If you spent sleepless nights worrying about mainstream and social media posts that noted God is being blamed for the COVID-19 pandemic in Fiji, you can now relax and breath easily knowing that God is sovereign.

‘Act of God’ is a legal term used in the laws of contracts and has absolutely nothing to do with blaming God for earthly happenings!

For people who think that this term ‘Act of God’ was suddenly invented by the Attorney-General during the Parliament sitting of 28/5, please note that this legal term has been with us since 1863 under English Common Law which considered contractual obligations as sacred.

Origins

In 1863, this very challenging law was eased by the case of Taylor v Caldwell which came up with the doctrine of frustration of contract.

This doctrine noted that “where a contract becomes impossible to perform and neither party is at fault, both parties may be excused their obligations”.

The Taylor v Caldwell case dealt with a music hall that was burned down by ‘act of God’ before a contract of hire could be fulfilled, and the court deemed the contract frustrated.

The leader of a political party has claimed that the ‘Act of God’ legal usage is an act of sacrilege.

No acts of sacrilege

Reporters in Parliament can confirm that no acts of sacrilege by way of animal sacrifices or rituals were carried out!

A trade unionist has linked the ‘Act of God’ with China not being located in Heaven. We have checked satellite images and can confirm that China is indeed located on Planet Earth!

When lawyers use this term, it means a hazard such as a cyclone, an earthquake, a tsunami or epidemic/pandemic, for which an individual cannot be held responsible.

An ‘Act of God’ is also used interchangeably with the term ‘force majeure’.

Force majeure is a clause used in most contracts.

It frees both parties (for example employer and employee) from liability or obligation when a drastic event or circumstance beyond the control of the parties, such as a war, strike, riot, crime or an event or pandemic described by the legal term Act of God, prevents one or both parties from fulfilling their obligations under the contract. The force majeure is suspended for the period of, for example, the COVID-19 pandemic.

Context

It is important to understand the context of our situation which has given rise to the term ‘Act of God’ and the recently passed Employment Relations Bill 2020.

Because of the negative effects of the pandemic, normal revenue like VAT, corporate tax, personal income tax, Environmental Climate Adaptation Levy, immigration fees and departure taxes have dried up.

Tourism is currently a very depressed sector of the economy and remittances from Fijians living overseas is very low.

We are a resilient nation and we have been in catastrophic situations, like for example, Tropical Cyclone Winston which caused economic damages estimated at 28 per cent of our GDP. We can overcome our current obstacles by working constructively together.

How is the’ Act of God’ legal term being used in Fiji?

On May 28, Parliament passed the Employment Relations Bill.

It allows employers to release their workers if they cannot provide jobs due to an inability to fulfil their obligations because of the COVID 19 pandemic.

The public will note that the Business Survey of 3,500 local businesses conducted by the Ministry of Trade and Commerce in partnership with International Finance Corporation revealed that more than 500 companies have said that they may face bankruptcy if the pandemic persists for another 6 months. Over 1,000 companies had reported big losses in income. The COVID 19 pandemic has drastically changed the landscape of Fijian businesses

In the context of the Employment Relations Bill, the legal term ‘Act of God’ is used to include COVID-19 which the World Health Organization has declared a global pandemic. As mentioned earlier, under laws of contracts, there is the ‘doctrine of frustration’ of contract, which says that “where a contract becomes impossible to perform and neither party is at fault, both parties may be excused their obligations.” This means that in the case, for example, of an employment contract between a worker and employer that cannot be fulfilled due to a force majeure’ Act of God, the contract is deemed frustrated.

The public should know that employers cannot let go of their workers willy-nilly or at whim. There are robust safeguards for workers. The Bill stipulates that the employers have to clearly prove that they have to let go of their employees due to the pandemic. The Minister of Economy in discussing the Amendment to Section 24 of the Bill said that it would provide clarity to employers and employees. “So by having this definition, we are actually telling both the parties this is what will happen in respect of not being able to provide work under the contract that has been put in place and an act of God, which the employer actually has to prove.” The employer cannot abuse this provision.

The Way Forward

Please note that I am not sugar-coating the serious situation we are in.

If the situation does not approve, Government income is likely to drop by 50 per cent in the next financial year if tourists are not able to come to Fiji, remittances are low and trade is depressed.

Government income is likely to drop by almost $1.5 billion in the 2020/2021 financial year if the economy becomes more sluggish.

This would be 50 per cent of the total annual revenue before COVID-19.

We all need to work together to help pull us out of the drastic situation we are in.

As Government works to open the travel bubble between Fiji, Australia and New Zealand and provide stimulus packages for SMEs and the informal sector, we can each play a significant part in contributing to a sustainable Fiji.

Now is the time to put aside our differences and work for the sustainable development of our nation.
Feedbackrosi.doviverata@fijisun.com.fj

Fiji Sun Instagram
Fiji Plus
Subscribe-to-Newspaper