Three situations that trigger severance, not just one

Severance in Barbados is not limited to straightforward redundancy. The Act covers several situations.

The qualifying reasons

Severance pay is legally required for employees with two years of tenure dismissed for reasons including:

• Redundancy
• Lay-off or short-time
• Natural disaster

That last one is a practical inclusion for a hurricane-exposed island economy, and it is worth knowing about.

Lay-off and short-time

The Act provides a specific right to severance payment for lay-off or short-time. Being put on reduced hours or laid off without formal dismissal can still trigger the entitlement, subject to the conditions the Act sets.

If you have been on short-time for an extended period, that is worth examining rather than simply waiting.

Anticipating the employer's notice

The Act deals with the situation where an employee anticipates the expiry of the employer's notice — leaving before the notice period ends. There are rules on how that affects entitlement, so it is worth checking before walking out early.

Change of ownership

Where a business is sold or transferred, the Act addresses what happens to severance rights. Continuity may be preserved with the new owner rather than triggering an immediate payment.

Strike and lock-out

The Act contains specific provisions on what happens where a strike occurs during the currency of the employer's notice to terminate, and on lock-outs during a notice period.

The Fund

Employers contribute to a Severance Fund. That Fund allows rebates to employers in respect of severance payments made, and payments out to employees where the employer does not pay.

It is the mechanism that makes the entitlement real rather than theoretical.

Written particulars

The Act requires employers to provide written particulars of the severance payment. Always ask for that statement, and check the 104-week average used.