What Severance Pay Rules Must Employers Follow in Jersey?

Which Employees Qualify for Severance Pay?

• Employees dismissed for redundancy who have at least two years of continuous service with your company.
• Employees working under a contract of employment in Jersey, whether full time or part time, who meet the redundancy criteria.
• Employees whose role genuinely disappears or whose need for work of that kind has diminished for business reasons.
• Employees who are not excluded by a valid probationary clause or a fixed-term contract that ends on its agreed expiry date.
• Employees who do not unreasonably refuse suitable alternative employment that you genuinely offer, subject to specific circumstances.
• Employees who have not already received a contractual or enhanced severance package that clearly offsets statutory redundancy pay.

What Are the Legal Timelines for Paying Severance?

In Jersey, statutory redundancy pay must be paid when the redundancy dismissal takes effect, or as soon as reasonably practicable after the termination date. In practice, your company should aim to pay redundancy and any agreed severance on the final working day or within the normal payroll cycle that covers the termination date. You should confirm the payment date in the written termination notice or redundancy agreement so the employee knows what to expect. If you are running a consultation process, build the payment timing into your redundancy timetable and payroll cut-off dates. Where there is any dispute, paying promptly and documenting the calculation will help you demonstrate good faith and reduce legal risk.

What Penalties Apply if Severance Is Not Paid Correctly?

If your company fails to pay statutory redundancy or agreed severance correctly in Jersey, employees can bring claims in the Jersey Employment and Discrimination Tribunal. The tribunal can order you to pay the unpaid statutory redundancy, any underpaid contractual sums, and in some cases additional compensation for unfair dismissal. Non-compliance can also damage your reputation with staff and regulators, and make future restructures more contentious.

• The tribunal can award the full amount of unpaid statutory redundancy pay.
• You may be ordered to pay notice pay, holiday pay, and other contractual sums that were withheld.
• In unfair dismissal cases, additional compensation can be awarded on top of redundancy pay.
• Legal costs, management time, and disruption to your business can be significant.
• Repeat issues can undermine employee trust and make collective consultations harder.

Does Outsourcing Employment via an EOR Change Severance Liability?

Using an Employer of Record (EOR) such as https://www.playroll.com/employer-of-record does not remove the need to follow Jersey redundancy and severance rules for employees based there. Typically, the EOR is the legal employer on paper and will handle payroll, notices, and statutory redundancy calculations, but your company directs day-to-day work and usually decides when roles are made redundant. Jersey tribunals will look at the real substance of the relationship, so if you control the role and the decision to dismiss, you may still be drawn into disputes. A clear contract with the EOR should set out who funds statutory redundancy, who approves settlements, and how you will share information to ensure accurate and timely payments.

Be 100 Percent Compliant in Offering Severance with Playroll

Playroll helps your team stay aligned with Jersey rules by standardising how you assess redundancy situations, track service length, and apply the statutory redundancy formula. Our local experts flag when employees cross key service thresholds, so you know exactly when redundancy pay becomes due and how much you should budget. We also help you document the business reasons for redundancy and keep a clear audit trail in case a claim is brought later.

When you use Playroll as your global employment partner, we coordinate with legal counsel and HR to ensure termination letters, payment schedules, and settlement agreements are consistent with Jersey law. Your finance team gets clear breakdowns of statutory redundancy, notice pay, and any ex gratia amounts, reducing the risk of underpayments or missed deadlines. That way, you can restructure confidently while treating employees fairly and keeping tribunal exposure to a minimum.