With job cuts being announced weekly in Bermuda, it is appropriate to spend some time discussing the consequences of redundancy.In order for a position to be declared redundant, a condition of redundancy has to be present. The redundancy must be part of a reduction in the employer's workforce that is a direct result of, for example, the reduction in business as a result of economic conditions and/or the re-organisation of the business. There are other conditions of redundancy, but in the current economic climate, these two conditions appear to be most common.Once the condition has been identified, there is an obligation on the part of employers to consult with the employee's trade union or other representative. The purpose of the consultation is to identify the existence of the redundancy, the reason for it, and also to explore whether any other possible measures can be undertaken to minimise the adverse effects of the redundancy.The employee is entitled to notice of the termination in accordance with the term of his contract. If the employer does not wish the employee to work out his notice, then the employer must make a payment in lieu of notice equal to the salary and benefits he would have earned during the notice period.In addition, the employee is entitled to a severance payment (often referred to as a redundancy payment) that, unless the contract provides for a greater payment, will amount to two weeks' wages for each completed year of continuous employment up to the first ten years and three weeks' wages for each completed year of continuous employment thereafter. There is a cap of 26 weeks in respect of severance payments.Anecdotal evidence will often be the subject of gossip that employees in certain organisations received a “massive” or “generous” severance payment. Regretfully, today, those anecdotal stories are but history. Very few employers are in a position to pay anything more than the statutory or contractual payment to its employees.On termination by reason of redundancy therefore, an employee should come away from his employer with his unpaid salary accrued and paid to date, payment for accrued but untaken vacation to date, payment in lieu of notice (if appropriate) and details as to the continuation or otherwise of the employee's health insurance. Usual deductions for social insurance, payroll tax, pension and health insurance will be made from these sums.An employer may extend additional help to a former employee in the form of outplacement services, resume writing, leads to other potential employers or, at the very least, continuing EAP services.The employee should take advantage of outplacement services if this is offered. If it is not offered, a visit to an outplacement organisation may be very worthwhile. At the very least, prepare a comprehensive resume that can be sent out to prospective employers or that is ready to be sent out in answer to an advertisement for which the employee is qualified.While it will probably take some time to obtain new employment, the watchword is to “apply, apply, apply”. The employee may also consider taking part time work of whatever nature.A severance payment and a payment in lieu of notice will not last very long in Bermuda. A former employee should avoid being tempted to spend that money on anything other than the essentials of life and should avoid luxuries.When a work permit holder ceases to be employed, the permit becomes invalid immediately. The employer must return the employer and employee portions of the work permit to the Department of Immigration. If the work permit holder intends to leave Bermuda, he or she is generally given two months during which to settle his or her affairs. The Department of Immigration will consider applications for extensions.If the work permit holder intends to seek alternative employment, then permission must be obtained directly from the Department of Immigration.This is an application by letter supported by the Government fee. Immigration policy is normally to provide permission to reside and seek alternative employment for two months in the first instance.The key to obtaining permission to reside and seek alternative employment is the release letter from the former employer. This letter confirms the employee is released from its employment and raises no objection to the individual seeking alternative employment.Given a redundancy, this should not be problematic.Most employers will have considered alternatives to redundancy.The discontinuation of overtime, salary freezes, and salary reductions are but some of the ways in which employers can continue in business and employees can continue to have a job in an attempt to avoid a reduction in headcount.Attorney E. Kelvin Hastings-Smith, FCIArb, is Counsel and Manager of the Litigation Practice Group at Appleby. A copy of Mr Hastings-Smith's column can be obtained on the Appleby website at www.applebyglobal.com. This column should not be used as a substitute for professional legal advice. Before proceeding with any matters discussed here, persons are advised to consult with a lawyer.