What Severance Pay Rules Must Employers Follow in Benin?

Which Employees Qualify for Severance Pay?

• Employees dismissed for reasons other than serious or gross misconduct generally qualify for statutory severance.
• Workers with at least one year of continuous service with your company are typically entitled to severance benefits.
• Employees terminated for economic or technological reasons (redundancy) usually qualify, following required consultation and procedure.
• Fixed-term employees may qualify if the contract is ended early by the employer without a valid legal reason.
• Employees covered by a collective agreement that grants more generous severance terms qualify under those enhanced rules.
• Workers who resign for employer fault recognized as constructive dismissal may, in some cases, be treated similarly to dismissed employees.

What Are the Legal Timelines for Paying Severance?

In Benin, the Labour Code requires you to settle all termination-related payments, including severance, within a short and reasonable period after the end of the contract. In practice, employers aim to pay severance at the same time as the final paycheck or within a few days of the employee's last working day. Collective agreements or company policies may specify a precise deadline, which you must respect if it is more protective. To stay safe, your company should target payment no later than the end of the month in which the contract terminates. Always document the calculation, obtain a signed receipt, and keep proof of payment for inspection.

What Penalties Apply if Severance Is Not Paid Correctly?

If your company fails to pay severance correctly in Benin, you risk financial, administrative, and reputational consequences. Labour inspectors can investigate complaints, and courts may order you to pay outstanding amounts plus damages and interest. Non-compliance can also complicate future workforce changes, as unions and staff representatives may challenge your decisions more aggressively.

• Administrative fines may be imposed following labour inspection findings.
• Courts can award back pay, severance differentials, and legal interest to affected employees.
• You may be ordered to pay damages for abusive or irregular dismissal procedures.
• Persistent non-compliance can trigger closer monitoring by labour authorities and unions.
• Disputes can damage your employer brand and make hiring skilled workers more difficult.

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 comply with Benin's severance rules. In a compliant EOR setup, the EOR is the legal employer on paper and is responsible for calculating and paying severance under the Labour Code and any applicable collective agreement. However, your company, as the client, usually bears the economic cost and may be exposed if it instructs the EOR to act unlawfully. You should ensure your EOR contract clearly allocates severance costs, decision-making authority on terminations, and responsibility for handling disputes. Coordinating early with the EOR before any dismissal helps avoid procedural mistakes that could increase liability.

Be 100 Percent Compliant in Offering Severance with Playroll

Playroll helps your company navigate Benin's severance rules by combining local legal expertise with clear, practical workflows. We map your employment relationships, identify which employees qualify for severance, and apply the correct statutory and collective agreement formulas. Your team gets transparent breakdowns of notice, severance, accrued leave, and any other terminal benefits, so you can explain outcomes confidently to employees and auditors.

Beyond calculations, Playroll supports you in planning compliant termination strategies, including redundancy processes and documentation. We coordinate timelines so that final pay and severance are released on time, and we maintain records that stand up to labour inspections or disputes. With Playroll as your global employment partner, you can restructure or right-size in Benin while staying aligned with local law and protecting your employer brand.