Statement on the timeframe for claiming a severance payment

Statement on the timeframe for claiming a severance payment re: Severance Payments (Amendment) Act 2020 and Severance Payments Act – Cap. 355A

The Labour Department, Ministry of Labour and Social Partnership Relations, considers it imperative to issue this statement to bring clarity on certain statements made in the print and electronic media concerning the timelines for claiming a severance payment.

This statement is intended to provide accurate information to employees in Barbados.

It is not correct to say that the amendment to the legislation changes the period that a worker has in order to make a claim for severance.

The Sections of the Severance Payments Act that speak about 4 weeks and 1 year were not affected by the Amendment. They remain in place and in force. The worker has 4 weeks to trigger the process and the claim remains alive for 1 year – the worker has 1 year to claim severance. These provisions have not changed and remain the law.

The Severance Payments (Amendment) Act 2020, 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 a period of 24 weeks.

An employee who wishes to make a claim for severance in the circumstances, has to inform the employer of his intention within 4 weeks of becoming entitled.  The time frame of four weeks is exactly the same as that specified in section 6 of the Severance Payments Act – Cap. 355A

Attention is drawn to Section 37 (a) and Section 37 (b) of the Severance Payments Act – Cap. 355A which indicates that in spite of the provisions of the Part 2 of the Severance Payments Act (where the amendments are inserted), an employee would not be entitled to a severance payment unless the following occur before the expiry of 12 months following the date on which he/she became entitled to claim

1. the sum of severance is agreed and paid, or
2. written notice of a claim was submitted to the employer.

It is understood 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.