Termination of Employment

Dismissal of an employee should be handled fairly and should be the last course of action.  Listed below is a four step approach in handling poor conduct on the job;

1. Poor behaviour – employees should be cautioned about their behaviour at this stage
2. Misconduct – employees are issued their first written warning (examples include refusal to follow instructions, or repeated time keeping offenses)
3. Serious Misconduct – employees are issued a second written warning
4. Gross misconduct - dismissal (examples include fighting, the use of drugs and alcohol on the job)

When an employee’s employment is terminated, the employer must give him/her on the date of termination of employment, a completed Termination of Services/Lay-off Certificate. The employer must also send to the Director of National Insurance a copy of the certificate within a week of the date of the employee’s termination of employment. Copies of the termination certificate are obtainable at the National Insurance Office.  An employer who fails to comply with this requirement is guilty of an offence and is liable on summary conviction to be fined.

Unemployment Benefits

Unemployment benefits are provided by the National Insurance Scheme.  To receive unemployment benefits, the individual must qualify by meeting certain criteria.  To qualify the individual must:

• have been insured for at least 52 weeks
• have at least seven (7)  contributions paid or credited in the quarter but one before the quarter in which the individual became unemployed
• have at least 20 contributions paid or credited in three (3) consecutive quarters ending with the quarter before that in which individual became unemployed.

Severance Payment Act

Provisions are made in the Severance Payment Act for circumstances where the employment relations have ended as a result of redundancies or related matters.  Main features of the Severance Payment Act are detailed below.

1. In order for a person to qualify for severance payment, he/she must:
   • Be an employee;
   • Be between the ages of 16 and 65;
   • Have worked with the same employer for at least 104 consecutive weeks;
   • Have been dismissed for redundancy or a natural disaster;
   • Have been laid off for 13 consecutive weeks or 16 out of 26 weeks when the contract of employment is terminated.
2. If an employee is severed he/she is entitled to severance payment and at least 2 or 4 weeks’ notice or 2 or 4 weeks’ pay in lieu of notice.
3. An employee’s severance pay is calculated as follows: “For each completed year of employment,
   1. 2.5 weeks’ basic pay, i.e. the insurable earnings of that employee in accordance with the regulations, for each such year up to 10 years,
   2. 3 weeks’ basic pay for each such year by which the employment exceeds 10 years but does not exceed 20 years, and
   3. 3.5 week’s basic pay for each such year by which the employment exceeds 20 years but does not exceed 33 years.

      Below is an example of a severance payment calculation:

      Average Weekly Earnings = $332.54; Completed Years of Service = 2 years

      Severance is calculated at 2.5 weeks’ basic pay for each completed year

      = 2.5 x $332.54 x 2 years = $1,662.70.

4. Basic pay includes all remuneration before any deductions are made.
5. An employer can revoke his decision to sever an employee’s contract of employment if the employer offers to re-engage the employee on terms similar to those  he/she presently works under.
6. If an employee is dismissed wrongfully, the compensation he/she receives is not less than the severance pay to which they would have been entitled if they had been severed.
7. Severance payment must be paid within 2 months of it becoming due or such longer period not exceeding 4 months as the National Insurance Board allows.
8. Interest is payable on all severance payments not made within the 2 months of it becoming due.
9. Either party can appeal against the decision of a tribunal on a question of law, to the High Court.