What Severance Pay Rules Must Employers Follow in Guinea Bissau?

Which Employees Qualify for Severance Pay?

• Employees with an open-ended employment contract who are dismissed without just cause generally qualify for statutory severance.
• Employees terminated for economic, technological, or structural reasons usually qualify where redundancy rules are met.
• Workers with at least the minimum continuous service required by the Labour Code or applicable collective agreement are more likely to qualify.
• Employees whose contracts are ended early by the employer before the agreed term may be entitled to compensation, unless there is serious misconduct.
• Employees covered by a collective bargaining agreement or individual contract that promises severance will qualify under those more favorable terms.
• Employees who resign for a legally recognized justified reason attributable to the employer may, in some cases, be treated similarly to unfair dismissal for severance purposes.

What Are the Legal Timelines for Paying Severance?

In Guinea Bissau, severance is generally expected to be paid at the time the employment relationship ends or within a short, reasonable period after the final working day. In practice, your company should aim to settle all termination-related amounts - salary, unused leave, and severance - no later than the normal payroll cycle following the dismissal. Where a written termination notice is given, you should calculate the severance during the notice period so payment can be made on the last day of work. If there is a dispute, courts may award interest or additional compensation for late payment. To stay safe, document the payment date on a signed receipt or payslip and keep proof of bank transfers.

What Penalties Apply if Severance Is Not Paid Correctly?

If your company fails to pay severance correctly in Guinea Bissau, you risk financial, administrative, and reputational consequences. Labour authorities and courts can order you to pay the outstanding amounts, plus possible interest and damages, especially where the dismissal is found to be unfair. Non-compliance can also complicate future workforce reductions and expose your team to repeat claims if your processes are not fixed.

• Court orders can require back payment of all unpaid severance.
• Interest and additional compensation may be awarded for late or underpaid amounts.
• Dismissals may be reclassified as unfair, increasing the compensation owed.
• Labour inspectors can escalate serious or repeated breaches to the courts.
• Your company’s reputation and employee relations can suffer long-term damage.

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 Guinea Bissau’s severance rules, but it can shift day-to-day compliance work to the EOR. In a typical structure, the EOR is the legal employer in Guinea Bissau and is responsible for calculating and paying statutory severance. However, your company usually bears the commercial and contractual cost, since the EOR will recharge termination expenses under your service agreement. If the EOR misapplies local law, employees may still bring claims against the legal employer, and your company can then face indirect liability through indemnity or reputational damage. Clear contracts, accurate instructions, and transparent approval workflows are essential to ensure severance is handled correctly.

Be 100 Percent Compliant in Offering Severance with Playroll

Managing severance in Guinea Bissau can be challenging when you are juggling local labour rules, collective agreements, and internal policies across multiple countries. Playroll helps your team standardize termination workflows, so you know exactly when severance is due, how to calculate it, and what documentation to keep for audits or disputes. With local expertise and structured checklists, you can reduce the risk of wrongful dismissal findings and unexpected payouts.

By partnering with Playroll, you keep strategic control over hiring and exits while we handle the complex compliance details on the ground. Our platform supports clear approval flows, cost estimates before you confirm a termination, and accurate, on-time payments to employees. That means fewer surprises, smoother offboarding, and a stronger compliance story if you are ever challenged by labour authorities or courts.