How is redundancy pay calculated in Jamaica?

What the law says

Who qualifies. Under section 5(1) of the Employment (Termination and Redundancy Payments) Act, an employer must pay a redundancy payment to an employee who has been continuously employed for 104 weeks and is

“dismissed by his employer by reason of redundancy”

What redundancy means. Under section 5(2) of the Employment (Termination and Redundancy Payments) Act, a dismissal is for redundancy if it is wholly or partly because the employer has closed, or plans to close, the business or the workplace. It also covers a fall in the need for your kind of work, or an injury or prescribed disease caused by the job.

The rate for the first 10 years. Under regulation 8(1) of the Employment (Termination and Redundancy Payments) Regulations, for each year of employment up to 10 years the payment is

“the sum arrived at by multiplying two weeks’ pay by the number of years;”

The rate after 10 years. Under regulation 8(1)(b) of the Employment (Termination and Redundancy Payments) Regulations, the first 10 years are paid at 2 weeks’ pay each, and every year after that at 3 weeks’ pay each.

How the arithmetic works. Under regulation 8 of the Employment (Termination and Redundancy Payments) Regulations, someone with 12 years would get 10 years at 2 weeks’ pay plus 2 years at 3 weeks’ pay. That is 26 weeks’ pay in all. What one week’s pay is worth depends on your wages, as explained below.

What changes the answer

A part year. Under regulation 8(2) of the Employment (Termination and Redundancy Payments) Regulations, years are counted back from the relevant date. A leftover part year of 13 weeks or less is ignored, more than 13 and up to 39 weeks counts as half a year, and more than 39 weeks counts as a full year.

What a week’s pay means. Under regulation 8(2)(c) of the Employment (Termination and Redundancy Payments) Regulations, 2 weeks’ pay is the greater of twice your normal wages for your last normal working week, or 2/13 of your normal wages over your last 13 normal working weeks.

A year of employment. Under regulation 2 of the Employment (Termination and Redundancy Payments) Regulations, a year of employment means 52 weeks, continuous or not, that count under the Regulations.

If you resign. Under section 6(1) of the Employment (Termination and Redundancy Payments) Act, you lose the right if you end the contract yourself, unless the employer’s conduct forced you to leave without notice. You also lose it if you retire with a pension under a scheme.

Misconduct. Under section 6(2) of the Employment (Termination and Redundancy Payments) Act, there is no redundancy payment when the employer was entitled to dismiss you without notice for your conduct, and did.

An offer of other work. Under section 6(3) and (4) of the Employment (Termination and Redundancy Payments) Act, you lose the payment if you unreasonably refuse a written offer of the same job, or of suitable work no more than 10 miles away, starting within 2 weeks.

The 6-month deadline. Under section 10(1) of the Employment (Termination and Redundancy Payments) Act, you are entitled to the payment only if, within 6 months of the relevant date, it is agreed, you claim it by written notice to the employer, or proceedings are started.

A new owner. Under section 5(1) of the Employment (Termination and Redundancy Payments) Act, anyone who takes over the business within 12 months of the dismissal is also liable to pay.