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Module 6 · Retrenchment and Severance Benefits Act, Chap. 88:13

Termination & Severance

Notice, fair process, retrenchment notice to the Minister and the severance formula.

Where an employer intends to terminate five or more workers for redundancy, it must give 45 days' written notice to each affected worker and to the Minister of Labour (not the Chief Personnel Officer). The notice must state the reasons.

A worker with one full year of continuous service who is retrenched is entitled to severance on their basic rate of pay: two weeks' pay (or half a month's pay for monthly-paid workers) for each of the first four years, and three weeks' pay (or three-quarters of a month's pay) for each year from the fifth year onwards. Part years are pro-rated.

Severance formula (1+ year of continuous service, basic pay only)

Years of serviceWeekly, daily or hourly paidMonthly paid
Years 1 to 42 weeks' basic pay per yearHalf a month's basic pay per year
Year 5 onwards3 weeks' basic pay per yearThree-quarters of a month's basic pay per year
Part yearsPro-rated by completed monthsPro-rated by completed months

Use basic pay only. Allowances, overtime and commissions are not included.

Key rules from the Act

  • Severance is payable to any eligible retrenched worker, whatever the size of the workforce.
  • It is an offence to put a retrenchment into effect during the 45-day notice period.
  • Severance may be withheld if the worker unreasonably refuses comparable alternative employment.
  • Unpaid severance 30 days after the notice expires can be taken to the Industrial Court.
  • An employer who breaches the Act can be fined TT$10,000.

Record this risk in the Employer Self-Assessment

Related legislation

  • Industrial Relations Act, Chap. 88:01

Last reviewed: October 2026

General guidance only, not legal advice.