What Severance Pay Rules Must Employers Follow in Chad?

Which Employees Qualify for Severance Pay?

• Employees on indefinite-term contracts who are dismissed for reasons other than serious misconduct generally qualify for severance after a minimum period of continuous service.
• Workers on fixed-term contracts may be owed compensation if the contract is terminated early without a legally valid reason or agreed clause.
• Employees who resign for employer fault that amounts to constructive dismissal can in practice claim similar severance rights as if they were dismissed.
• Probationary employees and those with very short service may not qualify for statutory severance but must still receive earned wages and benefits.
• Employees dismissed for gross or serious misconduct, properly documented and proven, are typically excluded from severance entitlements.
• Collective redundancies or economic layoffs usually trigger severance obligations, alongside consultation and notice requirements set by the Labour Code.

What Are the Legal Timelines for Paying Severance?

In Chad, the Labour Code expects you to settle all termination-related payments, including severance, at the end of the employment relationship or within a short, reasonable period set by practice or any applicable collective agreement. In most compliant companies, this means paying severance together with the final paycheck issued on or shortly after the last working day. Where an employee works through a notice period, you should calculate and prepare the severance in advance so it can be paid immediately when the contract ends. If local authorities or a collective agreement specify a stricter deadline, your company should follow the shorter timeline. Always document the payment date and method in a signed receipt or final settlement statement.

What Penalties Apply if Severance Is Not Paid Correctly?

If your company fails to pay severance correctly in Chad, you risk both financial and regulatory consequences. Labour inspectors can investigate complaints, review your payroll records, and order you to regularize outstanding amounts. Courts may then award the employee unpaid severance, interest, and sometimes additional damages for unfair dismissal or late payment. Non-compliance can also damage your reputation with authorities and make future inspections more intensive.

• Administrative fines can be imposed for breaches of the Labour Code and inspection orders.
• Courts may order back payment of severance plus legal interest and potential damages.
• Repeated violations can trigger closer monitoring or more frequent labour inspections.
• Poor records or non-payment can weaken your position in any wrongful dismissal dispute.
• Non-compliance can harm your employer brand and make hiring and retention harder.

Does Outsourcing Employment via an EOR Change Severance Liability?

Using an Employer of Record (https://www.playroll.com/employer-of-record) in Chad does not remove the underlying obligation to respect local severance rules. In most structures, the EOR is the legal employer on paper and is responsible for calculating and paying severance in line with the Labour Code. However, your company, as the client, typically bears the economic cost and can still face indirect exposure if instructions you give lead to unlawful terminations. You should ensure your EOR contract clearly allocates severance funding, decision-making authority on dismissals, and responsibility for handling disputes. Regular audits and transparent communication with the EOR help confirm that every termination is documented and compliant.

Be 100 Percent Compliant in Offering Severance with Playroll

Playroll helps your company navigate Chad’s severance rules by combining local legal expertise with structured payroll processes. Our team tracks statutory changes to the Labour Code, typical collective agreement practices, and market norms for severance so your offers remain both compliant and competitive. We standardize how you document reasons for termination, calculate service length, and apply the correct severance formula for each employee category.

With Playroll, you can centralize approvals for dismissals, automate final-pay calculations, and maintain clear records for inspections or disputes. Whether you employ directly or through an EOR partner, we help you align notice, severance, and benefits so employees are paid correctly and on time. That reduces legal risk, protects your employer brand in Chad, and lets your team focus on running the business instead of decoding labour law.