What Severance Pay Rules Must Employers Follow in Mauritius?

Which Employees Qualify for Severance Pay?

• Employees on indefinite (permanent) contracts who are dismissed without valid justification or in breach of statutory procedures.
• Employees with at least 12 months of continuous service who are made redundant for economic, technological, or structural reasons.
• Employees whose employment ends following a closure or downsizing where the employer has not followed Redundancy Board procedures.
• Employees dismissed for alleged misconduct where a court or tribunal later finds the dismissal unjustified or excessively harsh.
• Fixed-term employees who are terminated before the agreed end date without a valid reason recognized by the Workers’ Rights Act 2019.
• Employees who resign following a proven constructive dismissal, where working conditions were unlawfully made intolerable by the employer.

What Are the Legal Timelines for Paying Severance?

In Mauritius, you are expected to pay severance as soon as reasonably practicable after termination, and in many cases on or before the employee’s final pay date. Where a case goes before the Redundancy Board or the Industrial Court, payment is usually due promptly after an award or settlement is issued. For economic redundancies, you should not wait for litigation: calculate the statutory or agreed package and pay it at the end of employment. Always document the calculation, payment date, and method, and obtain a signed acknowledgment from the employee. Late or staggered payments can be treated as non-compliance and may attract interest or additional damages.

What Penalties Apply if Severance Is Not Paid Correctly?

If your company fails to pay severance correctly in Mauritius, you risk both financial and regulatory consequences. The Industrial Court or Redundancy Board can order payment of statutory severance, additional damages, and sometimes interest for late payment. Non-compliance can also expose your company to reinstatement orders, reputational damage, and closer scrutiny from authorities in future workforce changes.

• Courts may order payment of the full statutory severance (often three months’ remuneration per year of service) plus any shortfall.
• You may be liable for interest on overdue amounts and legal costs incurred by the employee.
• The court can order reinstatement or re-engagement where dismissal is found unjustified.
• Breaches of consultation or notification duties in redundancies can trigger additional compensation awards.
• Persistent non-compliance can damage your standing with regulators and increase the risk of collective disputes.

Does Outsourcing Employment via an EOR Change Severance Liability?

Using an Employer of Record (https://www.playroll.com/employer-of-record) in Mauritius does not remove the underlying legal rights employees have to severance under the Workers’ Rights Act 2019. In most structures, the EOR is the legal employer on paper and is responsible for calculating and paying any severance due. However, your company, as the client, usually bears the commercial and contractual cost of that severance through your service agreement. If you direct terminations or restructuring decisions, you can still face reputational and potential joint-liability risks, so you should align closely with the EOR on process, documentation, and budget before ending any engagement.

Be 100 Percent Compliant in Offering Severance with Playroll

Severance compliance in Mauritius starts with planning every termination around the Workers’ Rights Act 2019 and the Redundancy Board framework. Your team should confirm whether the reason is economic, performance-related, or misconduct, and then check if consultation, notice, or approval steps are required. From there, you can model different scenarios, estimate severance exposure, and decide whether alternatives like redeployment or negotiated exits make better business sense.

Playroll helps your company operationalize this by standardizing severance calculations, timelines, and documentation across your Mauritian workforce. With local legal insight built into workflows, your managers get clear guidance on when severance is triggered, how much to budget, and how to communicate decisions to employees. That way, you reduce the risk of disputes, avoid unexpected awards from the Redundancy Board or courts, and keep your offboarding process compliant, predictable, and respectful.