What Severance Pay Rules Must Employers Follow in Gambia?

Which Employees Qualify for Severance Pay?

• Employees with a valid employment contract who are terminated without the contractual or statutory notice required by the Labour Act 2007.
• Employees whose roles are made redundant due to restructuring, closure, or economic reasons where no suitable alternative role is offered.
• Employees dismissed for reasons that may be found unfair or unjustified by the Industrial Tribunal, such as lack of due process.
• Employees with continuous service (typically at least several months) where company policy or a collective agreement promises severance benefits.
• Fixed-term employees who are terminated before the agreed end date without a lawful reason or agreed compensation.
• Employees affected by mass layoffs where a collective agreement or company policy provides for ex gratia severance packages.

What Are the Legal Timelines for Paying Severance?

In Gambia, the Labour Act 2007 requires you to respect statutory or contractual notice periods and to pay all terminal benefits promptly at the end of employment. In practice, you should settle severance, notice pay in lieu, accrued salary, and unused leave on or before the employee’s final working day. Where an Industrial Tribunal orders compensation or severance, payment must follow the timeline set in the judgment or any enforcement order. To reduce dispute risk, your company should document the calculation and obtain written acknowledgment of receipt. Paying late or in installments without written agreement can expose you to claims for breach of contract or non-compliance with the award.

What Penalties Apply if Severance Is Not Paid Correctly?

If your company fails to pay severance or other terminal benefits correctly in Gambia, you risk legal claims, financial awards, and reputational damage. The Industrial Tribunal can review dismissals, order compensation, and enforce payment where the Labour Act 2007 or a contract has been breached. Non-compliance can also trigger inspections or interventions from the Labour Department. You should keep clear records of contracts, notices, and payment calculations to defend your position if challenged.

• The Industrial Tribunal may order you to pay outstanding severance, notice pay, and other terminal benefits.
• Additional compensation can be awarded for unfair dismissal or wrongful termination.
• You may incur legal costs and interest on late payments where ordered by the Tribunal.
• Repeated non-compliance can attract closer scrutiny from labour authorities.
• Disputes over severance can damage your employer brand and make future hiring harder.

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 Gambian labour standards, including severance-related rules. In a compliant EOR setup, the EOR is the legal employer on paper and is responsible for administering terminations and paying statutory benefits. However, your company usually directs the decision to dismiss, so you can still be exposed to contractual or commercial liability under your service agreement. If the EOR mishandles severance or notice, the worker may claim against the EOR while the EOR seeks indemnity from you. Clear instructions, documented performance issues, and alignment with the EOR on local law are essential to manage this risk.

Be 100 Percent Compliant in Offering Severance with Playroll

Playroll helps your company navigate Gambian severance rules by standardizing contracts, notice clauses, and termination workflows. Our team tracks the Labour Act 2007 and common Industrial Tribunal practices so your managers understand when severance, notice pay, or compensation may be triggered. We also help you benchmark market practice for ex gratia packages, especially in redundancy or restructuring scenarios.

With Playroll as your global employment partner, you can plan exits in advance, model the cost of severance, and ensure payments are made on time and in the correct currency. We coordinate with local experts and, where relevant, your Employer of Record structure so that documentation, approvals, and employee communications are consistent. That way, your team can reduce dispute risk, protect your reputation, and stay fully compliant when ending employment in Gambia.