CHAPTER 386
SEVERANCE ALLOWANCE ACT

[PRINCIPAL LEGISLATION]

ARRANGEMENT OF SECTIONS

   Section

Title

   1.   Short title.

   2.   Interpretation.

   3.   Employers to pay severance allowance in certain cases.

   4.   Circumstances in which severance allowance not payable.

   5.   Calculation of severance allowance.

   6.   Employees eligible for pensions and provident fund benefits.

   7.   Payments made on termination of employment under contracts made before enactment of this Act.

   8.   Payments under Workers' Compensation Act for death or permanent total incapacity.

   9.   Continuous employment by more than one employer.

   10.   Severance allowance to be in addition to other liabilities.

   11.   Time and manner of payment.

   12.   Recovery of severance allowance by suit.

   13.   Failure to pay severance allowance.

   14.   Application of Part XII of the Employment Act.

   15.   [Omitted.]

CHAPTER 386
THE SEVERANCE ALLOWANCE ACT

An Act to provide for the payment of allowances to employees on the termination of their employment in certain circumstances.

[5th October, 1962]

R.L. Cap. 487
Acts Nos.
57 of 1962
81 of 1962
36 of 1964
62 of 1964
35 of 1965
24 of 1966
1 of 1975
2 of 1988
13 of 1991

1.   Short title

   This Act may be cited as the Severance Allowance Act.

2.   Interpretation

   (1) In this Act, unless the context otherwise requires–

   "casual employee", "contract of service", "employee" and "employer" have the meanings respectively assigned to those expressions in the Employment Act; and

   "dependant" means a member of the family of an employee who was wholly or in part dependent upon his earnings at the time of his death, and, where the employee, being the parent or grandparent of an illegitimate child, leaves such child so dependent upon his earnings, or, being an illegitimate child, leaves a parent or grandparent so dependent upon his earnings, shall include such an illegitimate child or parent or grandparent respectively:

   Provided that a person shall not be deemed to be a partial dependant of another person unless he was dependent partially on contributions from that other person for the provisions of the ordinary necessaries of life suitable for persons in his class and position.

   (2) For the purposes of this Act, a contract of service shall be deemed not to expire if the parties thereto are presumed, under the provisions of section 30 of the Employment Act *, to have entered into a new contract of service.

   (3) Subject to the provisions of paragraphs (i) and (ii) of the proviso to paragraph (a) of subsection (3) of section 5, and of section 9, for the purposes of this Act, continuous employment means the employment of an employee by an employer under one contract of service, or under more than one contract of service where the intervals between any one such contract and the next succeeding contract do not exceed twenty-eight days; and an employee shall be deemed to be in employment at any time when he is on leave of absence with or without pay and during any period in respect of which he is in receipt of any retainer from a former employer, other than any sum in the nature of a pension in consideration of his returning to the employment of such former employer, and such former employer shall be deemed to be an employer during any period in respect of which any such retainer is paid.

3.   Employers to pay severance allowance in certain cases

   Subject to the provisions of this Act, where an employee has been in the continuous employment of an employer for a period of three months or more and, on or after the twenty-fifth day of June, 1962 (or, in a case to which paragraph (c) refers, the commencement of Part III of the Security of Employment Act * 1)–

   (a)   (i)   the employment is terminated by the employer; or

       (ii)   such employee's contract of service expires,

      and either the employer fails to offer to re-employ the employee or to renew the contract, as the case may be, forthwith at the same place of work, and at a wage not less than the wage at which he was employed immediately before such termination or expiry, and, if such employee accepts the offer to re-employ him or renew his contract accordingly or, in the case of those contracts to which sections 49 and 56, or section 58, as the case may be, of the Employment Act * refer, the maximum periods of service and re-engagement as prescribed in the relevant section have expired; or

   (b)   the employment is lawfully terminated by the employee, or the employee's contract of service expires and he refuses to renew the contract of service, on account of his incapacity due to old age or to illness or injury not occasioned by his own serious and wilful misconduct; or

   (c)   the employment is lawfully terminated by the employee, or the employee's contract of service expires and he refuses to renew the contract of service, and the appropriate Conciliation Board established under the Security of Employment Act *, is satisfied, after reference to it and inquiry into the circumstances, that the employer has unlawfully assaulted the employee and that the employee has terminated the employment or refused to renew the contract by reason thereof, and gives its certificate to that effect; or

   (d)   such employee dies in the service of his employer, otherwise than as a result of an accident occasioned by his own serious and wilful misconduct, leaving a dependant or dependants; or

   (e)   the contract of service of such employee is terminated in the circumstances set out in sections 20, 21 or 22 of the Employment Act * or otherwise by operation of law,

where an employee leaves the employment under circumstances which would otherwise qualify him for payment of terminal benefits under any other law or regulation irrespective of his salary had he been governed by such law or regulation, the employer shall pay to the employee, or, in the case referred to in paragraph (c), to his dependants, a severance allowance:

   Provided that when an employee who has completed a contract to which sections 49 and 56 of the Employment Act refer and who is re-engaged by his employer on the statutory terms as defined in section 36 of the Security of Employment Act *, severance allowance shall not be payable to or in respect of such employee by reason of the expiry of the maximum periods of service or re-engagement, as defined in the relevant sections of the Employment Act *; or

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