What Severance Pay Rules Must Employers Follow in Fiji?

Which Employees Qualify for Severance Pay?

• Employees classified as redundant due to restructuring, downsizing, or closure, not for misconduct or poor performance.
• Employees with at least 12 months of continuous service with your company, unless a more generous contractual term applies.
• Full-time and part-time employees working under a contract of service, including those on open-ended or fixed-term contracts that end early for redundancy.
• Employees who are Fijian nationals and, in practice, also non-citizens working lawfully under local employment contracts.
• Employees who are not dismissed for serious misconduct, abandonment of employment, or other lawful summary dismissal grounds.
• Employees whose contracts or collective agreements promise severance or redundancy benefits beyond the statutory minimum.

What Are the Legal Timelines for Paying Severance?

Under the Employment Relations Act 2007, severance for redundancy should be paid as soon as reasonably practicable after termination, and in practice you should aim to pay it on or before the employee’s final working day. Many employers in Fiji align severance payment with the final payroll cycle, together with accrued wages, annual leave, and any notice pay. Where consultation or calculation delays occur, you should document the reasons and agree a clear payment date in writing with the employee. Any delay should be minimal, and you must keep proof of payment and signed acknowledgments to show compliance in case of inspection or dispute. If the matter goes to mediation or the Employment Relations Tribunal, late or disputed payments will be closely scrutinized.

What Penalties Apply if Severance Is Not Paid Correctly?

If your company fails to pay severance correctly in Fiji, you risk financial penalties, orders to back-pay employees, and potential reputational damage. The Employment Relations Authority and Tribunal can investigate complaints, review your redundancy process, and require you to prove that calculations and timelines complied with the Employment Relations Act 2007 and any applicable collective agreements.

• You may be ordered to pay outstanding severance, interest, and sometimes additional compensation.
• Non-compliance can lead to fines and enforcement action against your company and, in some cases, responsible officers.
• Poorly handled redundancies can be reclassified as unfair or unjustified dismissals, increasing your liability.
• Disputes can consume management time and legal costs and may affect your ability to hire or win tenders.
• Reputational damage can harm employee relations and make future restructuring more difficult.

Does Outsourcing Employment via an EOR Change Severance Liability?

Using an Employer of Record (EOR) such as a provider found via https://www.playroll.com/employer-of-record does not remove the need to follow Fiji’s severance rules. In most EOR models, the EOR is the legal employer on paper and is responsible for administering termination payments, but your company directs when and why a termination happens. If you instruct a redundancy that breaches the Employment Relations Act 2007, both your company and the EOR can be exposed to claims for unpaid severance or unfair dismissal. You should ensure your EOR contract clearly allocates who funds severance, how it is calculated, and how disputes will be handled. Always confirm that the EOR’s local processes match statutory redundancy and consultation requirements in Fiji.

Be 100 Percent Compliant in Offering Severance with Playroll

Managing severance in Fiji means balancing the Employment Relations Act 2007 requirements with your own policies and budgets, and it is easy to miss details like service thresholds or how to treat partial years. Playroll helps your team standardize severance calculations, document redundancy decisions, and align contracts with local minimums so you are not improvising at the point of termination. With clear workflows and records, you can show authorities that you consulted properly, calculated correctly, and paid on time.

When you hire through Playroll’s global infrastructure, you keep control of business decisions while Playroll handles day-to-day compliance, including severance and final-pay administration. Your company gets localized guidance on redundancy procedures, notice, and benefits, and Playroll coordinates with in-country experts to keep you aligned with any changes to Fijian law. That means fewer surprises, smoother exits for employees, and a lower risk of costly disputes or penalties for your business.