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Clause 3 adds a new Part IIIA, consisting of sections 20B to 20R, to the principal Ordinance.
Section 20C provides that, subject to other provisions in the new Part IIIA, an employee who, having been employed for a minimum of 24 months, is either dismissed by reason of re- dundancy or is laid off is entitled to a severance payment. Domestic servants are given the same rights as other employees by treating the maintenance of a household as if it were the carrying on of a business.
Section 20D contains exclusions from the right to a severance payment. The excluded cases are where-
(a) the employee's contract is terminated for cause under
section 8;
(b) the employer offers to renew the employee's contract or to re-engage him under a new contract on terms identical or similar to his existing contract and the employee unreasonably refuses that offer; or
(c) the employee ceases work before the expiration of notice given to him under section 5 without the employer's consent or a payment in lieu of notice.
Section 20E determines what is meant by "dismissal" by an employer for the purposes of liability to make a severance pay- ment and section 20F prescribes what is meant by "lay-off".
Section 20G provides that certain specified classes of employees are not entitled to severance payments.
Calculation of the amount of a severance payment is provided for by section 20H. It is a proportion of the employee's wages multiplied by the length of his service. A maximum payment is prescribed and employment more than 5 years prior to the day appointed by the Governor under section 20C(1) is not to be included for the purposes of such calculation.
An employee who, being under notice of dismissal, has his contract terminated forthwith for taking part in a strike is not solely on that account deprived of his right to a severance payment.
Employees who are entitled to both a severance payment under Part IIIA and a gratuity based upon length of service must elect to take either the severance payment or the gratuity (section 20J).