Severance allowance payment is to increase from 26 weeks to 32 after MPs today passed new employment legislation.

The increase will affect only long-serving staff who have been in continuous work with an employer for 13 years or more.

Introducing the Employment Amendment Act 2024, Jason Hayward, the Minister of Economy and Labour, said the legislation would strengthen the island’s labour policies.

“Job loss can be a significant source of stress and disquiet, especially for persons who have been employed by one employer for a significant period of time,” Mr Hayward said.

“Increasing the severance allowance payable can help alleviate the fears associated with sudden job loss, provide a sense of financial security and stop the need for persons to rely on financial assistance.

“Increasing the severance allowance payable to employees also gives employees the time and resources needed to seek new employment.

“This Bill will strengthen labour policies that protect the rights of workers in Bermuda and encourage employers to engage in fair and responsible employment practices and assist persons to be able to meet their basic needs, which is the foundation of building a healthy and thriving society.”

Scott Pearman, the OBA’s spokesman for finance in the House of Assembly, asked whether the Government had given consideration to carving out small to medium-sized firms from the extension.

He asked whether the severance pay would be subjected to tax and suggested that the increase could be a burden for businesses with a small workforce, asking if there could be any relief.

Mr Pearman added: “It’s very difficult to attract job creators, and if we add more burdens, it may not be the best way to attract them to our shores.”

The Premier responded by reminding the House of a pledge in the recent Throne Speech that outlined plans to remove the requirement to pay payroll tax on redundancy pay.

David Burt said the Government would “make sure that for persons who may find themselves in a situation where they are being made redundant, they do not face the impact with their final redundancy check and pay payroll tax on that particular matter.

“This legislation is a reminder to the people who are listening to the people of this country that there is one party that has always stood on the side of workers in this country.”

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The Employment Amendment Act

• To read the Employment Amendment Act 2024, see Related Media