In the current economic climate, it is not uncommon to find companies experiencing financial difficulties unwilling to make valued employees redundant. For companies seeking an alternative to redundancy, layoffs can prove a viable option, provided that they can meet the statutory requirements under Bermuda law.

The Employment Act 2000 mandates that one of the following conditions of redundancy must exist in order for an employer to lawfully layoff one of its employees:

The modernization, mechanization or automation of all or part of the employer’s business;

The discontinuance of all or part of the business;

The sale or other disposal of the business;

The reorganization of the business;

The reduction in business which has been necessitated by economic conditions, contraction in the volume of work or sales, reduced demand or surplus inventory; or

The impossibility or impracticality of carrying on the business at the usual rate or at all due to shortage of materials, mechanical breakdowns, an act of God or other circumstances beyond the control of the employer.

Where one or more of the above conditions exist, an employer can lay off employees for a continuous period of up to four months. Depending on the needs of the business, this period of time could be just what the doctor ordered – allowing a company to salvage employment relationships with its employees while:

Reducing overhead costs associated with payroll, benefits and insurance;

Gaining better control over finances;

Improving the viability of the company over the long term; and The role of the company management and HR in the selection process.

Reconsidering business strategies and distinguishing the key performers within the company.

Type

Insight

Locations

Bermuda

Share
Twitter LinkedIn Email Save as PDF
More Publications
29 Jun 2022

Bermuda’s legal system

Through an elected Bar Council, the Bar Association — in conjunction with the Supreme Court Judici...

29 Jun 2022

Avoid These 3 Common NDA Drafting Mistakes

It is difficult to think of a transaction that doesn’t begin with a confidentiality or non-disclos...

28 Jun 2022

Bermuda: a restructuring destination

Bermuda has an outsized, first-class insurance and financial sector, attracting complex, multination...

Contributors: James Batten
27 Jun 2022

Insurtech ILS and the New Normal

As Bermuda and the global markets with which the Island transacts move towards the so-called  ‘ne...

Contributors: Josephine Noddings
23 Jun 2022

Digital Assets in a Crypto Winter

In 2013, IT engineer James Howells was cleaning out his house. He had two identical hard drives: one...

Contributors: James Batten
22 Jun 2022

Bloomberg Tax Country Guide: Bermuda

Bloomberg Tax Country Guides provide overviews of the tax regimes of more than 200 jurisdictions. Th...

Contributors: Ashley Bento
9 Jun 2022

Bermuda’s long-term re/insurance landscape

Bermuda’s long-term re/insurance market has grown considerably in recent years. The island now has...

2 Jun 2022

Provisional Liquidation In Bermuda

Provisional liquidation in Bermuda is a distinctive, flexible regime that operates to support compan...

Contributors: James Batten
23 May 2022

The good life: Bermuda’s new economic pillar

The life sector has moved swiftly from being a new ‘nice-to-have’ in the Bermuda marketplace, to...

5 May 2022

Restructuring of (Re) Insurers during Covid-19

Restructuring involves changing the financial, operational, legal or other structures of a business ...