Severance, Termination and Suspension
1) Is my employer allowed to take out tax and NIS from my severance pay?
Generally No [see section 25 (1) (v) of the Income tax Act Cap 435];
Income tax deductions are payable only in situations where the employee has not reached retirement age or has not been made redundant.
NIS contribution is not payable on severance pay.
2) If I am severed should my employer pay my severance payment immediately?
Yes [see section 27 (2) of the Protection of Employment Act (PEA), 2003]; the employer shall pay the employee forthwith the severance due to him;
3) What can the employee do if his employer refuses to pay severance forthwith or within a reasonable time?
The employee can lodge a written complaint to the Commissioner in the first instance [S 35 (1) of PEA or,
Apply to the tribunal for an order [S 47 (2) PEA]
4) What happens when an employer disobeys an order for payment of severance made by the hearing officer?
the matter would then be forwarded by the Labour Commissioner to the Attorney General for enforcement of the order
5) Can I take my employer to court to enforce a severance payment order?
Where an order for severance payment made by the Hearing Officer is refused by the employer, the matter would be forwarded to the Attorney General for enforcement.
6) Does the employer have the right to pay severance in installment?
No; he does not have such right.
Where the employer is unable to make one lump sum payment, the employee may agree to accept such form of payments over a reasonable period of time.
7) Does an employer have the right to suspend an employee without pay?
The law is silent on this issue;
The Department of Labour recommends however, that the employee not be suspended for more than one month and in any event on “reduced pay”.
8) Should notice of termination of service be given during probationary period?
This is not mandatory but can be given by either party
9) Can an employee be given notice of termination while on sick or vacation leave?
10) Can an employee be terminated during a suspension period?
11) How long must I work to become eligible for severance payment?
You must work for a period of two years of continuous service.
12) Would I be eligible for severance pay if I do not work full time?
if you work intermittently, one hundred days of work in each of the last two years would qualify you for severance.
13) How is severance pay computed?
- Two weeks pay for each of the first ten years of continuous service;
- Three weeks pay for each further years of continuous service from eleven to twenty-five years;
- Four weeks pay for each further year of continuous service in excess of twenty-five years.