Monday 19 October, 2020

Ministry of Labour clarifies timeframe for claiming severance payments

Employees have four weeks to trigger severance and should claim it within a year. 

This was stated by the Labour Department, Ministry of Labour and Social Partnership Relations in a recent press release as they attempted to clarify any misinformation for employees. 

In June of this year, the Severance Payments Amendment Act was updated to accommodate the effects of COVID-19 on the island. 

According to the press release the act “makes provision for an employee to “trigger” a claim for severance if placed on lay-off or short-time for 22 consecutive weeks or 18 or more weeks within 24 weeks.” If an employee wants to trigger severance in this circumstance, they are required to inform their employer within 4 weeks of being entitled. 

Furthermore, Section 37 (a) and Section 37 (b) of the Severance Payments Act - Cap. 355A indicates that despite the provisions in section 2 of the act, an employee would not be entitled to a severance payment unless the sum of the severance is agreed and paid or a written notice of a claim was submitted to the employer within 12 months of filing the claim. 

The press release also stated that “...this provision opens the way for a claim for severance as a result of short-time and lay-off to be “alive” for 1 year however, the initial trigger at 4 weeks remains. The Amendment did not change nor remove the applicability of Section 37 (a) nor (b) but Section 37 (c) which addressed referral to the tribunal, does not apply. It must be noted also that, the Amendment Act affected sections 6 and 7 and the Fifth Schedule – sec. 7 of the Severance Payments Act. 

All other areas of the Severance Payments Act – Cap. 355A were unaffected and would therefore apply in the usual way.” 




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