GIBRALTAR Law and Practice Contributed by: Nick Cruz, Marc X Ellul, Arcelia María Hernández-Cordero and Kayleigh-Anne Revagliatte, Ellul & Cruz
Compensation Subject to certain specified exceptions, if an employ - ee who has been continuously employed for two years is dismissed by reason of redundancy, they are enti - tled to a redundancy payment. Where a person’s employment is terminated by reason of redundancy, and provided that the total amount of the redundancy payment does not exceed the amount of one year of pay and that no payment will be made to an employee who has not completed one year of service, they shall be paid by their employer by way of compensation: • for each of the first five completed years of service, two weeks of pay; • for each of the next five completed years of ser - vice, three weeks of pay; • for each additional completed year thereafter, four weeks of pay; and • in respect of an employee age 41 years and over, for each completed year of service after the age of 40, two weeks of pay. However, the foregoing shall not prevent redundancy settlements that are more favourable. Compromise Agreements A common way of terminating an employment rela - tionship is to enter into a compromise contract. Effec - tively an employer will pay an employee an agreed sum of money in return for the employee not bringing or continuing any common law or statutory claims against the employer for any act of discrimination or harassment. For details of the conditions that must be met in order for the compromise agreement to be binding, please refer to 7.4 Termination Agreements. 7.2 Notice Periods Minimum statutory notice periods the employer must give vary depending on the employee’s length of ser - vice. If the employee is paid monthly, notice periods are as follows: • up to eight years’ service – one month; • between eight and ten years’ service – two months; and • more than ten years’ service – three months.
In determining how many employees an employer is proposing to dismiss as redundant, no account shall be taken of employees in respect of whose proposed dismissals consultation has already begun. For the purposes of the consultation, the employer must disclose in writing to the appropriate representa - tives and to the Director of Employment: • the reasons for their proposals; • the number and description of employees whom it is proposed to dismiss as redundant; • the total number of employees of any such description employed by the employer at the establishment in question; • the proposed method of selecting the employees who may be dismissed; • the proposed method of carrying out the dismiss - als, with due regard to any agreed procedure, including the period over which the dismissals are to take effect; and • the proposed method of calculating the amount of any redundancy payments to be made (otherwise than in compliance with an obligation imposed by, or by virtue of, any enactment) to employees who may be dismissed. The dismissal shall be regarded as unfair if the reason or principal reason for the dismissal of an employee was that they were redundant, but it is shown that the circumstances constituting the redundancy apply equally to one or more other employees in the same undertaking who hold positions similar to that held by the dismissed employee and who have not been dismissed by the employer and that either: • the reason (or, if more than one, the principal reason) for which the employee was selected for dismissal was that the employee had exercised – or had indicated an intention to exercise – certain rights (specifically indicated in Section 60 (2) and Section 62 of the Employment Act); or • the employee was selected for dismissal in con - travention of a customary arrangement or agreed procedure relating to redundancy and there were no special reasons justifying a departure from that arrangement or procedure in this case.
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