What Severance Pay Rules Must Employers Follow in Botswana?

Which Employees Qualify for Severance Pay?

• Employees engaged under a contract of employment who have completed at least 60 months of continuous service with your company.
• Employees whose employment ends due to dismissal (other than for serious misconduct), redundancy, non-renewal of a fixed-term contract, or employer-initiated termination.
• Employees who are not covered by an approved pension, gratuity, or similar scheme that provides benefits equal to or better than statutory severance.
• Employees working full-time or part-time, including those paid hourly or monthly, as long as they meet the continuous service requirement.
• Citizens and non-citizens alike, provided they are employed in Botswana under a valid contract governed by the Employment Act.
• Employees who resign for justified cause attributable to the employer may, in some cases, be treated similarly to those terminated by the employer.

What Are the Legal Timelines for Paying Severance?

In Botswana, the Employment Act requires that all terminal benefits, including any severance pay due, be settled as soon as reasonably practicable after termination. In practice, your company should aim to calculate and pay severance within the final payroll cycle or within a few days of the employee’s last working day. Where notice is paid in lieu, severance should be processed together with notice pay and any accrued leave. Delays can trigger disputes before labour officers or the Industrial Court, so you should document the calculation and payment date clearly. If there is a genuine dispute about entitlement, pay the undisputed portion promptly while you resolve the balance.

What Penalties Apply if Severance Is Not Paid Correctly?

If your company fails to pay severance correctly in Botswana, you risk statutory penalties, government enforcement, and employee claims. Labour officers can investigate complaints, and the Industrial Court can order payment of arrears plus additional remedies. Non-compliance can also affect your reputation with regulators and employees, especially in redundancy exercises.

• Labour officers may issue compliance directives requiring you to pay outstanding severance without further delay.
• The Industrial Court can order payment of unpaid severance, interest, and in some cases additional compensation.
• Failure to comply with lawful orders can expose your company to fines and enforcement proceedings.
• Disputes over severance can lead to reinstatement or compensation orders if the termination itself is found unfair.
• Persistent non-compliance can damage your employer brand and complicate future work permit or regulatory interactions.

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 Botswana’s severance rules, but it can shift day-to-day compliance tasks. In an EOR model, the EOR is the legal employer on paper and is responsible for calculating and paying severance under the Employment Act. However, your company, as the client, typically bears the economic cost and must fund any severance amounts invoiced by the EOR. If you instruct or pressure the EOR to terminate outside the law, you can still face commercial or reputational exposure. A well-drafted EOR agreement should clearly allocate severance risk, approval processes, and documentation standards.

Be 100 Percent Compliant in Offering Severance with Playroll

Playroll helps your company stay aligned with Botswana’s severance rules by standardising employment terms, tracking continuous service, and flagging when employees approach key service thresholds. Your team gets clear visibility into who qualifies for severance, how much is likely to be owed, and how pension or gratuity schemes affect statutory entitlements. This reduces the risk of underpayments during restructurings, site closures, or performance-related terminations.

With Playroll as your global employment partner, you can centralise contracts, policies, and termination workflows while ensuring local Botswana rules are built into each step. Our Employer of Record infrastructure handles compliant calculations, payslips, and documentation, so your managers can focus on fair decision-making rather than legal arithmetic. That combination of local legal accuracy and global oversight makes it easier to budget, communicate clearly with departing employees, and avoid costly disputes.