Employment & Labour
Redundancy in Jamaica: A Guide for Employers
Redundancy is a legitimate ground for terminating employment in Jamaica, but only if the prescribed statutory procedure is followed. Employers who fail to comply expose themselves to claims before the Industrial Disputes Tribunal. This guide sets out the key requirements.
Published
19 May 2026
Author
Marcus O. Reid
Associate
The statutory framework
Redundancy in Jamaica is governed principally by the Employment (Termination and Redundancy Payments) Act. The Act provides that an employee who is dismissed by reason of redundancy is entitled to a redundancy payment calculated by reference to the employee's years of continuous service and final basic wage. Separately, the Minister of Labour has issued guidelines on consultation and notice procedures that courts and the Tribunal treat as authoritative.
What constitutes redundancy
Redundancy arises where the employer has ceased or intends to cease carrying on the business in which the employee was employed, or has ceased or intends to cease carrying on that business at the place where the employee was employed, or where the requirements of the business for employees to carry out work of a particular kind have ceased or diminished. The test is objective: an employer cannot engineer a redundancy by changing an employee’s role to make it appear redundant.
Consultation obligations
Before implementing any redundancy, the employer must consult with the affected employees or their union representative. The consultation must be genuine — it cannot be a formality where the decision has already been made. The employer should provide the reason for the proposed redundancy, the number of employees affected, the proposed selection criteria, and the proposed timing. Employees must be given a reasonable opportunity to make representations.
Notice and payment
The Act requires a minimum notice period before the redundancy takes effect. Where the employer pays in lieu of notice, the payment in lieu must be made at the time of dismissal. The redundancy payment itself is calculated at two weeks' wages per year of service for the first ten years, and three weeks per year thereafter. Employers should obtain a copy of the employee's service record and calculate the payment precisely before issuing the notice of termination.
Selection criteria
Where only some employees in a category are to be made redundant, the employer must apply consistent and objectively justifiable selection criteria. Last-in-first-out remains a common and defensible approach, but employers may use skills-based criteria provided they can demonstrate that the criteria were applied fairly. Selection on grounds of trade union membership, pregnancy, or any protected characteristic will be treated as unfair dismissal.
Industrial Disputes Tribunal
An employee who believes a redundancy was not genuine, or who disputes the amount of the redundancy payment, may refer the matter to the Industrial Disputes Tribunal. The Tribunal has broad remedial powers, including ordering reinstatement or compensation. Employers with properly documented consultation records and accurate payment calculations are considerably better placed in Tribunal proceedings than those who have not maintained records.
This article is provided for general information only and does not constitute legal advice. The law may have changed since publication. You should not act or refrain from acting on the basis of anything published here without first obtaining specific legal advice from a qualified practitioner. For advice on your specific circumstances, please contact Clarke, Whittaker & Reid.
About the Author
Marcus O. Reid
Associate · Employment & Intellectual Property
Marcus Reid joined the firm in 2017 following his call to the bar. His practice focuses on employment and labour matters, including tribunal representation, and intellectual property work across all stages from registration to enforcement. He advises both regional and international clients seeking to protect their brands in the Jamaican and Caribbean markets.
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