Even as Bermuda acclimatises to the 'new normal', it is
clear that the economic effects of the pandemic are likely to be
substantial and enduring, meaning that many employers will be
feeling the pressure to reduce costs. As an immediate reaction,
some chose to cut operating costs by laying off staff without pay.
Many of those employees were able to take advantage of the
government's new Unemployment Benefit, however the scheme has
now been wound up.
Under the Employment Act 2000 (the Act),
employees laid off for 4 continuous months are deemed to be
terminated for redundancy and are entitled to statutory severance
allowance. Even though the Act has recently been amended so that
the 3 months from 1 April to 30 June 2020 are discounted for these
purposes, employers who laid off staff may soon need to decide
whether to bring them back to work or be forced to pay
severance.
