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Termination and Severance Policies

Learn about the legal processes for employee termination and severance in Guernsey

Notice period

In Guernsey, the Employment Protection Law of 1998 outlines the legal requirements for notice periods during employment termination. The law mandates minimum notice periods that both employers and employees must adhere to when terminating a contract of employment. The required notice period is not fixed and increases with the employee's length of service.

Minimum Notice Periods

Employees are generally entitled to receive a minimum notice period as follows:

  • No statutory minimum notice period is required for the first month of employment.

Exceptions to Minimum Notice Periods

The minimum notice period requirements don't apply in certain situations, including:

  • Short-term contracts: Fixed-term contracts for three months or less, or contracts for a specific task not exceeding three months, are exempt from minimum notice period requirements.

Notice Periods in Employment Contracts

An employment contract can specify a longer notice period than the statutory minimum. However, the notice period cannot be shorter than the legal minimum.

For example, an employment contract may stipulate one week's notice during the first year of employment, increasing to two weeks after two years, and four weeks after five years. This would be compliant as long as it meets or exceeds the minimum legal requirements.

Consequences of Failing to Provide Proper Notice

If an employer fails to provide the required notice period, they may be liable to pay the employee wages in lieu of notice. Similarly, if an employee fails to provide the required notice, they may be responsible for reimbursing the employer for any financial losses incurred due to the lack of notice.

Severance pay

In Guernsey, there is no statutory requirement for employers to provide severance payments to employees upon termination of employment. An employee's right to severance pay typically depends on whether there's a contractual agreement in place outlining such terms.

Contractual Severance Pay

Employers may include a provision for severance pay within an employment contract. These provisions are legally binding and must be honored by both the employer and the employee.

Negotiated Severance Packages

In some cases, an employer and employee may negotiate a severance package outside of any pre-existing contractual agreement, especially in situations related to redundancy.

Redundancy Situations

While not a severance payment in the traditional sense, employees made redundant in Guernsey may be legally entitled to a redundancy payment if certain conditions are met. The eligibility and the amount of any redundancy payment would usually depend on the length of continuous employment with the employer, the employee's age, and the employee's weekly pay.

Termination process

The termination of an employee's contract in Guernsey must follow established legal procedures to ensure fairness and compliance with the law.

Types of Termination

There are several types of termination:

  • Termination by the Employer (Dismissal): An employer must have a valid reason for dismissing an employee. The Employment Protection (Guernsey) Law, 1998 lists the following fair reasons for dismissal:

    • Capability or qualifications
    • Conduct
    • Redundancy
    • Statutory restrictions preventing continued employment
    • Some other substantial reason (SOSR) to justify dismissal
  • Termination by the Employee (Resignation): An employee can resign at any time by providing the notice period stipulated in their employment contract or the statutory minimum if none is specified.

  • Termination Due to Contract Expiration: A fixed-term contract ends automatically on the agreed expiry date unless renewed.

Fair Dismissal Process

If an employer intends to dismiss an employee, they must follow a fair process. This typically involves:

  1. Investigation: Thoroughly investigate the alleged reason for dismissal (e.g. misconduct, poor performance).

  2. Notice of Potential Dismissal: Inform the employee of the possible dismissal and the reasons for it in writing.

  3. Disciplinary Hearing: Provide the employee with an opportunity to respond to the concerns raised, present their case, and potentially be accompanied by a representative.

  4. Decision: After careful consideration of all information, a decision must be made on whether to proceed with dismissal. The employee must be informed of this decision in writing.

  5. Appeal: The employee should have the right to appeal the dismissal decision.

Unfair Dismissal

An employee with at least one year of continuous service can claim unfair dismissal if they believe they were terminated without a fair reason or without a fair procedure being followed. The Employment and Discrimination Tribunal (Guernsey) Ordinance, 2005, deals with these claims.

Written Statement of Reasons for Dismissal

All employees with one year of continuous service are entitled to receive a written statement of the reasons for dismissal upon request, provided within seven days of the request. This right applies to all types of dismissal, including resignation where there is a dispute about the reasons for the employee leaving.

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