Retrenchment and Severance Benefits (Amendment) Bill, 2026

The Employers’ Consultative Association of Trinidad and Tobago (ECA) has taken note of the Retrenchment and Severance Benefits (Amendment) Bill, 2026 to be debated in Parliament on April 24th, 2026, having been introduced in Parliament on April 14.

We acknowledge the importance of maintaining and modernising labour legislation so that it remains relevant, effective and responsive to changing workplace and economic realities. Indeed, the ECA is on record as supporting the need to review and appropriately amend our labour laws. In that regard, the review of the Retrenchment and Severance Benefits Act (RSBA) is neither unexpected nor, in principle, objectionable.

While the Bill commendably seeks to introduce a number of amendments to improve the redundancy framework, the ECA is deeply concerned that, as currently drafted, it contains several provisions which stand to ultimately affect business stability, job creation, and the overall ease of doing business in Trinidad and Tobago. The drafting appears to be generally unclear or overly rigid in many areas and insufficiently calibrated to the realities of lawful business restructuring, temporary business disruption, and employment sustainability.

At its core, the RSBA is not only a worker-protection law. It is also one of the key laws governing how businesses are able to adjust in times of contraction, reorganisation, temporary interruption, and now, closure or insolvency. It therefore sits at a unique intersection of worker protection, enterprise sustainability, formal employment, and economic resilience. Getting that balance right is critical.

Notably, the ECA is not opposed to enhancing worker protection. Workers should be treated fairly and with dignity when redundancy occurs. The issue is whether the Bill achieves that objective in a way that is clear, workable, proportionate, and economically sustainable.

There is also a particular irony in the manner in which this Bill has been advanced. The RSBA forms part of a wider industrial relations framework that places real importance on consultation, dialogue, procedural fairness, and balanced engagement between the parties. Unlike many other statutes, labour legislation is unique in that it regulates continuing workplace relationships, and in this regard, its effectiveness depends on legal enforceability, as well as legitimacy, clarity, and practical acceptance by those who must operate under it. It is therefore deeply concerning that a Bill of this nature, which will directly affect employers, workers, unions, and the wider economy, has proceeded to Parliament on an accelerated timetable without the kind of open and meaningful stakeholder consultation ordinarily expected for labour-law reform.

Notwithstanding the extremely limited time to review and assess the contents of the Bill, the ECA has noted the following:

• The Bill substantially increases the statutory severance formula, in some cases more than doubling potential liability. This is not a minor update. It is a major increase in the cost of lawful redundancy, with likely implications for business viability, restructuring decisions, and hiring behaviour, with particularly acute impacts on labour-intensive sectors, MSMEs and businesses already facing financial constraints. The RSBA establishes a minimum statutory floor in respect of severance obligations, among other statutory obligations. Employers remain free, and have always remained free, to provide enhanced severance benefits through contracts of employment, collective agreements, company policy, or otherwise negotiated separation arrangements. Importantly, there has been no clear identification of the problem this increase is intended to solve. The sole, implicit logic appears to be that because the formula dates back to 1985, it is therefore outdated and should now be increased. In our view, that is too simplistic a basis for such a significant and consequential legislative reform. The age of a statutory formula does not, by itself, establish that it is inadequate, unjust, or unfit for purpose.

• The Bill also redesigns the redundancy procedure in a manner that may make lawful restructuring slower, more uncertain, and more administratively burdensome. In particular, the proposed framework makes the commencement of the statutory 45-day notice period dependent on Ministerial acknowledgement information processes, rather than the clear current rule that notice runs from service. This effectively places the executive as a gatekeeper in implementing lawful business decisions, and with no clear timelines or guidelines for how and when this acknowledgement will happen.

• The proposed treatment of temporary layoff is also problematic. While the ECA supports the principle of codifying existing jurisprudence in respect of temporary layoff, the Bill adopts an unduly rigid approach that may blur the line between a genuine temporary interruption of work and a permanent redundancy situation.

• A number of the Bill’s new provisions and definitions are framed in vague or highly contestable terms, including the proposed rehiring obligation and expanded continuity of service rules in respect of fixed-term contracts. These may generate unnecessary disputes and uncertainty rather than improving clarity and fairness.

There is a real risk of unintended labour-market consequences, including discouraging formal hiring at a time when employment creation has become an important economic driver, and rising informality continues to be a growing concern and economic strain.

The ECA therefore urges that this Bill be approached with the significance it deserves. Reform of this nature should not only be expedient, but also evidence-based, properly consulted, and carefully drafted. We urge the Government to pause, widen the consultation process on the proposed Bill, and allow the stakeholders most affected to properly review and meaningfully contribute to a genuinely holistic modernisation exercise.