Severance in Guyana is governed by the Termination of Employment and Severance Pay Act, Act No. 19 of 1997, now Chapter 96:01.
Who qualifies
An employee who has completed one or more years of continuous employment with an employer is entitled to a severance or redundancy allowance.
- One week's wages for each completed year of service for the first five years, including the entitlement year
- Two weeks' wages for each completed year after the fifth year and up to the tenth
- Three weeks' wages for each completed year in excess of ten years
The total is capped at 52 weeks.
What that means in practice
Someone with 12 years of service accumulates 5 weeks for the first five years, 10 weeks for years six to ten, and 6 weeks for years eleven and twelve — 21 weeks in total.
The rate tripling for long service makes staying considerably more valuable than in a flat-rate system.
The penalty for non-payment
This is unusually direct. An employer who fails to comply is liable on summary conviction to a fine of thirty-one thousand two hundred and fifty dollars and to imprisonment for one year.
And where an employer is convicted for failing to pay, the court must additionally order payment of the sum representing the severance or redundancy allowance.
So a conviction does not substitute for the payment — it comes on top of it.
Instead of gratuity
The Act provides that in certain circumstances the section 21 severance allowance is paid instead of a gratuity. Worth checking which applies to your contract.
When severance arises
It applies in cases of redundancy, mutual consent, or termination for good and sufficient cause.
Enforcement
The Chief Labour Officer can institute prosecutions under the Act. That is a meaningful route, and it is separate from any civil claim.
Lay-off has a limit
The Act provides that no lay-off shall exceed six weeks. Beyond that, the position changes.