XN000022-1977-04-07 — Page 4

THURSDAY, APRIL 7, 1977

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PROPOSAL TO INCREASE RATE OF SEVERANCE PAYMENT

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A BILL WHICH SEEKS TO INCREASE THE RATE OF SEVERANCE PAYMENT TO WORKERS WHOSE SERVICES ARE TERMINATED THROUGH NO FAULT OF THE IR OWN WAS PUBLISHED IN THE GOVERNMENT GAZETTE TODAY (THURSDAY).

THE EMPLOYMENT (AMENDMENT) (NO. 2) BILL 1977, IF APPROVED WILL INCREASE THE AMOUNT OF SEVERANCE PAY PER YEAR OF SERVICE FROM ONE-THIRD OF A MONTH'S PAY TO HALF A MONTH'S PAY FOR MONTHLY RATED EMPLOYEES, AND FROM 10 DAYS' WAGES TO 13 DAYS' WAGES FOR TIME OR PIECE-RATED EMPLOYEES.

THE BILL ALSO SEEKS TO EXTEND THE PERIOD OF SERVICE WHICH WOULD BE TAKEN INTO ACCOUNT IN CALCULATING SEVERANCE PAY FROM FIVE TO EIGHT YEARS, PRIOR TO AUGUST 23, 1974.

THE MAIN EFFECT OF THESE CHANGES IS TO GIVE MORE SEVERANCE PAY PARTICULARLY TO LONGER SERVING EMPLOYEES WITH EIGHT TO 11 YEARS OF CONTINUOUS SERVICE WITH THE SAME EMPLOYER.

A LABOUR DEPARTMENT SPOKESMAN POINTED OUT THAT OF 168 TRADE DISPUTES INVOLVING SEVERANCE PAY HANDLED BY THE LABOUR RELATIONS SERVICE, ABOUT 25 PER CENT WERE SETTLED AFTER THE EMPLOYERS HAD AGREED TO PAY 12 TO 30 DAYS WAGES FOR EVERY YEAR OF SERVICE.

+ IN OTHER CASES, HE SAID, +EMPLOYERS MADE EX-GRATIA PAYMENTS TO ACHIEVE SPEEDY SETTLEMENT.+

+A NUMBER OF WELL ESTABLISHED COMPANIES OPERATE SCHEMES WHICH PROVIDE FOR REDUNDANCY PAYMENTS RANGING FROM 15 TO 30 DAYS' WAGES PER YEAR OF SERVICE,+ HE ADDED.

THE LAW AT PRESENT PROVIDES FOR EMPLOYEES TO BE GIVEN SEVERANCE PAYMENTS AT A FLAT RATE OF ONE-THIRD OF A MONTH'S PAY FOR MONTHLY-RATED WORKERS, OR 10 DAYS' WAGES FOR TIME AND PIECE-RATED WORKERS FOR EVERY YEAR OF CONTINUOUS SERVICE, SUBJECT TO A QUALIFYING PERIOD OF TWO YEARS' SERVICE AND TO A MAXIMUM PAYMENT NOT EXCEEDING 12 MONTHS' PAY. ANY SERVICE IN EXCESS OF FIVE YEARS PRIOR TO THE ENACTMENT OF THE LEGISLATION, 1.E. AUGUST 23, 1974, DOES NOT COUNT FOR THE CALCULATION OF PAYMENTS.

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