#BTColumn – If my company changes hands do I get severance?

Disclaimer: The views and opinions expressed by the author(s) do not represent the official position of Barbados TODAY.

by Carol-Ann Jordan and Jacqueline Belgrave

My company has been taken over by a new owner. I have been offered to continue in the same job I had with the same terms and conditions.

However, I am wondering if I refuse the offer would I be due severance from the previous owner?

If you refuse the offer made by the new employer, you will not be entitled to severance as long as certain conditions have been met by the new owner.

Under the Severance Payment Act, severance payments are made in instances where:

• your employer ceases to operate the business (or intends to cease operation of the business) for the purpose for which you are employed or the place in which you are employed; or

• your employer changes the types of roles or number of roles needed to do the type of work you were employed to perform; or

• there is a natural disaster ( fire, flood, hurricane, earthquake or any other act of God) which destroys or damages the business of your employer

Another example of a situation which would trigger the payment of severance occurred recently when the country went into protective mode during the initial COVID-19 outbreak.

In this situation, employees would have become entitled to severance if they were laid off or kept on short-time for 13 or more consecutive weeks; or for a series of 16 or more weeks (of which not more than 12 were consecutive) within a period of 26 weeks.

In your particular case, you will not be deemed to have been dismissed where the business changes ownership and, with your agreement, the new owner renews your contract or re-engages you under a new contract of employment.

This, however, is provided that the terms and conditions of the new contract do not differ from the contract in place immediately before the termination and the renewal or re-engagement takes effect on or before the date on which the termination takes effect.

Where the offer of renewal or re-engagement made differs (entirely or partially) from the corresponding provisions of the contract which was in place immediately before the dismissal, the new offer must be in writing and must constitute an offer of suitable employment in relation to the employee.

In addition, the renewal or re-engagement must take effect on or before the effective termination date of the existing contract or not more than four weeks after that date.

Where an offer is made then all the conditions above must be met, that is, the contract is the same as in force prior to the termination or, if it differs, the new one  offers “suitable employment” and the applicable timeframe in which the offer takes effect is met.

If after all this is done, and you refuse the offer, then it will be determined that you unreasonably refused the offer. In such an instance, since you would have refused a reasonable offer, you would not be entitled to a severance payment.

In summary then, while you can choose to refuse to accept the job offered by the new owner, you do not have the right to a severance payment because your employment would have effectively continued under the new owner, either under unchanged terms and conditions of work or other suitable employment terms.

In our view this situation is not one which would provide grounds for a claim against your previous employer.

About Lifeline Labour Solutions: Lifeline Labour Solutions is a boutique partnership providing people management solutions to workplace challenges Partners Carol-Ann Jordan and Jacqueline Belgrave are established practitioners with a wealth of knowledge and experience in Employment Relations, Labour Relations and Human Resource Management between them. Email: info@ lifelinelabour.com; Tel: 1(246)247-5213