Severance: one day’s basic pay for each month of service

Severance in Antigua and Barbuda is governed by the Labour Code, Cap. 27, and its formula works differently from most of the region.

The statutory formula

The Labour Code requires severance of at least one day's basic pay for each month of service.

Note the unit: month, not year. Twelve months of service produces twelve days of basic pay.

A worked example

An employee earning XCD 2,500 monthly who has worked four years — 48 months — receives around XCD 5,000 in severance, based on their basic wage at the time of termination.

Who qualifies

Severance is required primarily for redundancy or termination without cause, after one year of continuous service.

Published figures vary considerably

Be aware that guidance on Antiguan severance differs substantially between sources. Alongside the per-month formula, you will find published references to two weeks per year capped at 12 weeks, one week per year, and two weeks per year after five years.

Given that spread, confirm the applicable formula with the Labour Department before accepting a figure. The per-month calculation is the one that appears in sources citing the Labour Code directly.

Collective agreements often do better

Collective agreements frequently provide more favourable terms than the statutory minimum. If your workplace is unionised, the agreement is likely to be the more relevant document.

The 2019 amendment and business sales

The Labour Code (Amendment) Act, 2019 addresses limitations on severance pay and the offer of equivalent employment.

An employee entitled to severance under section C40 by reason of a sale of the undertaking to a successor employer may exercise the option to accept severance from the original employer — or, where equivalent employment is offered, different rules apply.

If your employer has been bought and you are being offered a role with the new owner, that choice is worth understanding before deciding.

Recovery of severance

The Labour Code contains provisions on recovery of severance pay, giving a route where payment is not made.

What to check

Your basic pay at termination, your service counted in months, whether a collective agreement applies, and whether a business sale is involved.