What Severance Pay Rules Must Employers Follow in Equatorial Guinea?

Which Employees Qualify for Severance Pay?

• Employees dismissed for reasons not related to serious misconduct, such as redundancy, restructuring, or economic reasons.
• Employees on open-ended contracts who have completed the statutory minimum probation or qualifying service period.
• Fixed-term employees whose contracts are ended early by the employer without a legally valid reason or agreed compensation.
• Employees who resign for employer breach that would amount to constructive dismissal under local labor standards.
• Employees who are terminated without proper notice or without following the procedural safeguards set out in the Labour Code.
• Unionized or non-unionized employees alike, provided they meet the statutory conditions or more generous terms in a collective agreement.

What Are the Legal Timelines for Paying Severance?

In Equatorial Guinea, the safest practice is to pay all severance and final entitlements at the same time you deliver the termination decision or on the employee’s last working day. Where immediate payment is not operationally possible, you should aim to settle within a few working days, and no later than the end of the pay period in which the contract ends. Local practice and inspections focus on whether the employee is left waiting for wages or severance after employment has ceased. You should document the calculation, obtain a signed receipt, and keep proof of bank transfer or cash payment. If a dispute is likely, consider paying the undisputed portion immediately while you resolve any contested amounts.

What Penalties Apply if Severance Is Not Paid Correctly?

If your company fails to pay severance correctly in Equatorial Guinea, you risk financial, administrative, and reputational consequences. Labor authorities and courts can require back payment of all outstanding amounts, often with interest or surcharges. Non-compliance can also trigger inspections that expose other payroll or contract issues, increasing your overall risk profile in the country.

• You may be ordered to pay outstanding severance, notice, and wage balances in full.
• Courts can add interest, penalties, or damages for unlawful or abusive termination.
• Labor authorities may impose administrative fines or corrective measures.
• Disputes can lead to reinstatement orders or negotiated settlements at higher cost.
• Repeated breaches can damage your standing with regulators and local talent.

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 Equatorial Guinea’s severance rules, but it can shift day-to-day liability and administration. In an EOR model, the EOR is the legal employer on paper and is responsible for calculating and paying statutory severance. However, your company’s decisions about termination grounds, timing, and documentation still drive the legal risk of unfair dismissal claims. If you instruct an EOR to terminate without a valid reason or proper process, you may face contractual or indemnity exposure to the EOR and, indirectly, to the worker. Clear service agreements and coordinated termination planning are essential to keep severance decisions compliant and defensible.

Be 100 Percent Compliant in Offering Severance with Playroll

With Playroll, your company gets a partner that tracks Equatorial Guinea’s Labour Code requirements and market practice so you do not have to decode them alone. We help you confirm when severance is due, how to calculate it based on service and salary, and how to align notice, documentation, and final pay. That means fewer surprises at the point of termination and a smoother experience for both your HR team and the departing employee.

Playroll’s Employer of Record and global payroll solutions centralize contracts, salary data, and termination workflows, reducing the risk of missed payments or misapplied rules. Our local experts flag red-flag terminations, advise on safer alternatives, and coordinate timely, documented payouts. You stay in control of business decisions, while we handle the compliance mechanics that keep your operations secure in Equatorial Guinea.