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Nov 12

LABOUR COMMISSIONER BREAKS DOWN SEVERANCE PAYMENT FOR EMPLOYEES UNDER THE LAW

Basseterre, St. Kitts, November 12, 2018 (SKNIS): The legislative safeguards for workers in St. Kitts and Nevis as outlined in the Protection of Employment Act have ensured that workers at Lutron Liamuiga will be fairly compensated for their years of service to the factory.

The Protection of Employment Act was originally passed in 1986. It was revised in 2002 and is now known as the Protection of Employment Act Chapter 18.27. The Act “makes certain provisions in respect of termination of employment; the establishment of a Severance Payments Fund; payment of severance payments to employees; and for other related or incidental matters.”

On Wednesday (November 07, 2018), Senior Minister and Minister of Labour, the Honourable Vance Amory, announced that the government was officially informed of the intentions of the principals to close Lutron Liamuiga after 31 years of operations in St. Kitts. The impending closure is as a result of the United States Government’s regulatory changes dating back to 2007, which led to a decrease in the demand for Lutron Liamuiga’s products.

With the intended closure of the factory set for March 01, 2019, Labour Commissioner Shernel James, explained that the details of the severance payment to workers are governed by Part III of the Act.

Section 30 of Part III states: “the rate of severance payment shall be two weeks for each year of continuous service for a period of up to five years service, three weeks for a period of five years to 10 years service, and four weeks for any period of service in excess of ten years calculated backwards from the date of the termination of employment …”

Ms. James gave a practical example to simplify the application of the law in determining severance payments. She used an employee with the company for 10 years.

“Ten years is equivalent to 25 weeks. How do you get 25 weeks?” she asked. “The first 5 years [of work] is two weeks [of severance] for every year. This means 5 years x 2 weeks is 10 weeks,” Ms. James noted. “The second 5 years [of work] is three weeks pay [severance] for every year so that 5 years x 3 weeks is 15 weeks; 15 weeks + 10 weeks is 25 weeks [of due severance pay].”

The labour commissioner also explained that the calculation of monies owed will be an average of the employee’s normal wages for the past 52 weeks (year 1) – that is March 01, 2018 to March 01, 2019. The sum will not be subject to any mandatory government deductions such as social security or social service levy.

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