News & Events

Bermuda Employment Law in a Nutshell

Submitted By Firm: Canterbury Law Ltd.

Contact(s): Juliana Snelling

Author(s):

Date Published: 11/6/2012

Article Type:

Share This:

Employment law in Bermuda comprises local legislation (statutes enacted by Parliament) and English and Bermuda common law (case law decided by courts over the years).

The relevant legislation is:

The Employment Act 2000 (as amended) which: 

1.1   applies to all employees working wholly or mainly in Bermuda, including foreign employees;

1.2  sets out minimum statutory entitlements, including notice of termination rights and various leave benefits (vacation, sick leave, maternity, bereavement, public duty leave, etc.);

1.3  mandates that there be a written contract (“Statement of Employment”) in place setting out fundamental terms of the employment relationship . If the contract contains more favourable terms than the Act, then the contract prevails. Parties cannot contract out of the Act’s minimum requirements;

1.4  provides that an employee can only be dismissed for a valid reason, such as ability, performance, conduct or business operational requirements (redundancy);

1.5  provides that statutory redundancy pay (“severance allowance”) must be paid if conditions of redundancy are made out (capped at 6 months’ wages);

1.6   protects employees from disciplinary action or termination (“unfair dismissal”) on human rights related grounds or for being a whistle-blower;

1.7  defines constructive dismissal (also “unfair dismissal”) and provides compensation for same based on the employer’s unreasonable conduct;

1.8  provides for a mandatory warning process for employees engaging in misconduct (short of serious misconduct) or unsatisfactory performance and time to improve (employees engaged in serious misconduct related to the employment relationship can be summarily dismissed);

1.9  provides a complaint process for breach of the statute – to an Inspector and then to the Employment Tribunal, with a 3 month limitation period. Compensation is limited to 6 months’ wages or reinstatement; and

1.10 provides that either side can terminate the contract for any reason and without notice during a contractual probation period (if there is one, the contract must state whether there is one or not).

1.11 gives priority to an employee’s claims for unpaid wages and accrued vacation pay in a winding up action.

The Bermuda Immigration and Protection Act 1956 (as amended) provides that employees who are not Bermudian or a spouse of a Bermudian or a Permanent Resident’s Certificate (PRC) holder must have a work permit issued by the Department of Immigration to work in Bermuda. These can range from 3 months to 10 years in time (the latter subject to several stringent criteria) and are renewable. The time for processing is approximately 8 to 10 days (for “fast track” or “temporary permits”) or 6 to 10 weeks (for standard permits of 1 year or more); 

2.1  a work permit will not be issued where a qualified Bermudian, spouse of a Bermudian, non-Bermudian dependant of a Bermudian, Permanent Resident Certificate holder or other person with a qualifying connection to Bermuda applies for the position;

2.2  employees are generally subject under Bermuda immigration policy to a maximum of 6 years of working under a permit in Bermuda (“terms limits”);

2.3  certain positions can be deemed “key” to a business and the holder of that position can be exempted from term limits or receive an extension of to their term limit of up to 3 additional years;

2.4  other grounds for exemption can be made out (e.g. worldwide shortage in that industry, company hardship, etc.). 

The Human Rights Act 1981 prohibits discrimination and harassment in the employment sector on the basis of race, place of origin, colour, ancestry, sex (gender), marital status, disability, legitimacy, religious belief or political belief. Sexual harassment is also prohibited and made a criminal offence.

The Labour Relations Act 1975 & the Trade Dispute Act 1992 provides for the hearing of a labour dispute by the Minister or an Arbitration Panel/Trade Disputes Tribunal. Governs strike actions. This applies to unionised employees (note that virtually all employees of international companies in Bermuda are non-unionised).

The Worker’s Compensation Act 1965 provides for compensation by employers to workers who are injured on the job, regardless of fault. If negligence on the part of the employer is involved, the employee can sue in the Court for damages.

Common Law Courts an employee elect to pursue a breach of employment contract claim (including wrongful dismissal) in the Courts for damages. The limitation period is 6 years.  The damages obtainable are dependent on common law principles derived from Court decided cases over the years.

Miscellaneous:

7.1  there is no statutory minimum wage in Bermuda. Wages are determined by agreement between the parties as set out in the individual contract of employment or collective agreement (if unionised);

7.2  employers must provide a health insurance plan for their employees and each employee’s uninsured dependant (spouse or child) at the minimum “hospital insurance benefit” standard. Many employers provide a higher level “major medical” coverage, paying 50% of the premium;

7.3  employers must provide a private pension plan for Bermudian employees and employed spouses of Bermudians at the rate of 10% of “pensionable earnings” as defined in the relevant Act – 5% can be deducted from the employee’s earnings;

7.4  social insurance (government contributory pension) is also payable at a minimum fixed amount per month;

7.5  payroll tax is payable on salary and benefits; the percentage rate depends on the total remuneration payable to employees in the company. Generally tax on remuneration is around 14 to 16% of the remuneration package and the employer can claw back 5.25% from the employee.

7.6  the typical work week is Monday to Friday from 9 a.m. to 5 p.m. with an hour for lunch. At least 24 hours of consecutive rest must be provided each week.

7.7  Overtime pay is mandatory for hours worked in excess of 40 hours at 1.5 times basic pay unless the parties have contracted out of the requirement or unless the employee is professional / managerial whose contract states that the salary has been calculated to reflect that over 40 hours a week will be required on occasion;

7.8  non-competition clauses are only enforceable to the extent that they are reasonable to protect the employer’s legitimate business interests (e.g. trade secrets or key personnel). Non-solicitation clauses (of the former employer’s clients and employees) are more readily enforceable;

7.9  employers cannot conduct involuntary drugs test on applicants or employees. It is up to the employee/applicant as to whether they agree to submit to it in order to become/stay employed; and

7.10 there are no laws that specifically protect an employee’s right to privacy. The employer’s policies should be clear in setting out the employer’s right to monitor and act on employee communications.

Find an Employment Lawyer

In all 50 U.S. states, every Canadian province, and over 135 countries. View or print a complete ELA member list by clicking here.

Find an Immigration Lawyer

Facilitate employee transfers around the globe. View or print a complete ELA member list by clicking here.

International Background Checks Summaries

Your free resource summarizing the requirements for pre-employment checks around the world.

Client Successes

Altra Industrial Motion Inc.

Altra Industrial Motion Inc. has multiple locations in the U.S., as well as Central America, Europe, and Asia. The Employment Law Alliance has proved to be a great asset in assisting us in dealing with employment issues and matters in such diverse venues as Mexico, Australia, and Spain. We have obtained excellent results using the ELA network for matters ranging from a multi-state review of employment policies to assisting with individual employment issues in a variety of foreign jurisdictions.

In one instance, we were faced with an employment dispute with a former associate in Mexico that had the potential for substantial economic exposure. The matter had been pending for over a year, and we were not confident in the employment advice we had been receiving. I obtained a referral to the ELA counsel in Mexico, who was able to obtain a favorable resolution of the dispute in only a few days. Based on our experiences with the ELA, we would not hesitate to use its many resources for future employment law needs.

American University in Bulgaria

In my career I have been a practicing attorney, counsel to the Governor of Maine, and CEO of a major public utility. I have worked with many lawyers in many settings. When the American University in Bulgaria needed help with employment litigation in federal court in Syracuse, New York, we turned to Pierce Atwood, the ELA member we knew and trusted in Maine, for a referral. We were extremely pleased with the responsiveness and high quality of service we received from Bond Schoeneck & King, the ELA's firm in upstate New York. I would not hesitate to recommend the ELA to any employer.

David T. Flanagan
Member of Board of Trustees 

Arcata Associates

I really enjoyed the Conducting an Effective Internal Investigation in the United States webinar.  We are in the midst of a rather delicate employee relations issue in California right now and the discussion helped me tremendously.  It also reinforced things that you tend to forget if you don't do these investigations frequently.  So, many, many thanks to the Employment Law Alliance for putting that webinar together.  It was extremely beneficial.

Lynn Clayton
Vice President, Human Resources

Barrett Business Services, Inc.

I recently participated in the ELA-sponsored webinar on the Employee Free Choice Act.  I was most impressed with that presentation.  It was extremely helpful and very worthwhile.  I have also been utilizing the ELA's online Global Employer Handbook.  This compliance tool is absolutely terrific. 

I am familiar with several other products that purport to provide up-to- date employment law information and I believe that this resource is superior to other similar compliance manuals.  I am delighted that the ELA provides this free to its members' clients.

Boyd Coffee Company

Employment Law Alliance (ELA) has provided Boyd Coffee Company with a highly valued connection to resources, important information and learning. With complex operations and employees working in approximately 20 states, we are continually striving to keep abreast of specific state laws, many of which vary from state to state. We have participated in the ELA web seminars and have found the content very useful. We appreciate the ease, cost effectiveness and quality of the content and presenters offered by these web seminars.  The Global Employer Handbook has provided our company with a very helpful overview of legal issues in the various states in which we operate, and the network of attorneys has helped us manage issues that have arisen in states other than where our Roastery and corporate headquarters are located in Portland, Oregon.

Capgemini Outsourcing Services GmbH

As an international operating outsourcing and consulting supplier Capgemini has used firms of the Employment Law Alliance in Central Europe. We were always highly satisfied with the quality of employment law advice and the responsiveness. I can really recommend the ELA lawyers.

Hirschfeld Kraemer

As an employment lawyer based in San Francisco, I work closely with high tech clients with operations around the globe. Last year, one of my clients needed to implement a workforce reduction in a dozen countries simultaneously. And they gave me 48 hours to accomplish this. I don't know how I could have pulled this off without the resources of the ELA. I don't know of any single law firm that could have made this happen. My client received all of the help they needed in a timely fashion and on a cost effective basis.

Stephen J. Hirschfeld
Partner 

Hollywood Entertainment Corporation

As the Vice President for Litigation & Associate General Counsel for my company, I need to ensure that we have a team of top-notch employment lawyers in place in every jurisdiction where we do business. And I want to be confident that those lawyers know our business so they don't have to reinvent the wheel when a new legal matter arises. With more than 3400 stores and 35,000 employees operating in all 50 U.S. states and across Canada, we rely on the ELA to partner with us to help accomplish our objectives. I have been delighted with the consistent high quality of the work performed by ELA lawyers. I encourage other in-house counsel to use their services, as well.

Ingram Micro

Ingram Micro is the world's largest technology distributor, providing sales, marketing, and logistics services for the IT industry around the globe. With over 13,000 employees working throughout the U.S. and in 35 international countries, we need employment lawyers who we can count on to ensure global legal compliance. Our experience with many multi-state and multi-national law firms is that their employment law services are not always a high priority for them, and many do not have experts in many of their offices. The ELA has assembled an excellent team of highly skilled employment lawyers, wherever and whenever I need them, and they have proven to be an invaluable resource to our company.

Konami Gaming

Our company, Konami Gaming, Inc., is growing rapidly in a very diverse and highly regulated industry. We are aggressively entering new markets outside the domestic U.S., including Canada and South America. I have had the recent opportunity to utilize the services provided by the ELA. The legal advice was both responsive and professional. Most of all, the entire process was seamless since our Nevada attorney coordinated the services and legal advice requested. I look forward to working with the ELA in the future, as it serves as a great resource to the legal community.

Jennifer Martinez
Vice President, Human Resources

Nikkiso Cryo, Inc.

Until recently, I was unaware of the ELA's existence. We have subsidiaries and affiliates throughout the United States, as well as in Asia, the Middle East and Europe. When a recent legal issue arose in Texas, our long-time Nevada counsel, who is a member of the ELA, suggested that this matter be handled by his ELA colleague in Dallas. We are very pleased with the quality and timeliness of services provided by that firm, and we are excited to now have the ELA as an important asset to help us address employment law issues worldwide.

Palm, Inc.

The ELA network has been immensely important to our company in helping us address an array of human resources challenges around the world. I strongly encourage H.R. executives who have employees located in many different jurisdictions to utilize the ELA's unparalleled expertise and geographic coverage.

Stacy Murphy
Former Senior Director of Human Resources

Rich Products

As the General Counsel for a company with 6,500 employees operating across the U.S. and in eight countries, it is critical that I have top quality lawyers on the ground where we do business. The ELA is an indispensable resource. It has taken the guesswork out of finding the best employment counsel wherever we have a problem.

Jill K. Bond
Senior Vice President/General Counsel, Shared Services and Benefits

Ricoh Americas Corporation

We have direct sales and service offices all over the U.S., but have not necessarily had the need in the past for assistance with legal work in every state where we have a business presence. From time to time, we suddenly find ourselves facing a legal issue in a state where we have no outside counsel relationship. It has been a real benefit to know that the ELA has assembled such an impressive team of experts throughout the U.S. and overseas.

A few years ago, we faced a very tough discrimination lawsuit in Mississippi. We had never had to retain a lawyer there before. I was absolutely delighted with the Mississippi ELA firm. We received an excellent result. They will no doubt handle all of our employment law matters in Mississippi in the future. I have also obtained the assistance of several other ELA firms around the U.S. and have received the same outstanding service. The ELA is a tremendous resource for our company.

Roberts-Gordon LLC

Our affiliated companies have used the Employment Law Alliance in connection with numerous acquisitions, and have always been extremely pleased with our ability to obtain the highest quality legal advice on due diligence issues from jurisdiction to jurisdiction. We have found the Employment Law Alliance firms to be not only first rate with respect to their legal advice but also responsive and timely in assisting us with federal and state law issues critical to our due diligence efforts. We consider the Employment Law Alliance to be an important part of our team.

Rockwell Collins, Inc.

We have partnered with many ELA firms on the development and execution of case management strategies with very positive results. We have been very pleased with the legal advice and counsel provided by the law firms we have utilized who are affiliated with the Employment Law Alliance. The ELA firms we have worked with are customer focused, responsive, and thorough in their approach to handling labor and employment law matters.

Elizabeth Daly
Assistant General Counsel

Sanmina-SCI

Sanmina-SCI has facilities strategically located in key regions throughout the world. Our customers expect that we will provide them with the highest quality and most sophisticated services in the marketplace. We have that same expectation for the lawyers with whom we do business. With operations in 17 countries, we need to be certain that we have a team of lawyers working together to address our employment law needs worldwide. The ELA has delivered exactly what it promised-- seamless and consistent high quality services delivered in each locale around the globe. It has quickly become a key asset for our human resources department.

Starwood

We own, manage, and franchise hotels throughout the U.S. and in more than 90 countries. With more than 145,000 employees worldwide, ensuring that we comply with the complex web of local labor and employment laws in every one of these jurisdictions is a daunting task. The Employment Law Alliance has served as an important resource for us and we have benefited greatly from its expertise and long reach. When a legal dispute or issue has arisen in some far-flung place, Employment Law Alliance lawyers have always provided responsive, practical, and cost-effective assistance.

Wilmington Trust Corporation

Wilmington Trust has used the ELA to locate firms in California, Washington State, Georgia, and Europe. Our experience with the ELA lawyers with whom we have worked has always been one of complete satisfaction and prompt, practical advice.

Michael A. DiGregorio
General Counsel  

Loading...