What Severance Pay Rules Must Employers Follow in Seychelles?

Which Employees Qualify for Severance Pay?

• Employees engaged under a contract of employment governed by the Seychelles Employment Act, 1995.
• Workers with at least six months of continuous service where termination is not due to serious misconduct.
• Employees whose roles are made redundant for economic, structural, or technological reasons.
• Fixed-term employees whose contracts are ended early by the employer without valid cause or required notice.
• Employees found by the Competent Officer or Employment Tribunal to have been unfairly dismissed.
• Non-citizen employees where severance or end-of-service benefits are promised in the contract or company policy.

What Are the Legal Timelines for Paying Severance?

In Seychelles, you should aim to pay any severance or statutory compensation on or before the employee’s final working day, together with outstanding salary, accrued leave, and other terminal benefits. Where the amount is subject to a decision by a Competent Officer or the Employment Tribunal, payment is due within the period ordered in that decision, which is usually a short, specified number of days. If you are conducting redundancies, plan the calculation and approvals in advance so you can pay promptly once notice expires. Always document how you calculated the amount and obtain written acknowledgment of receipt from the employee. When in doubt, pay within the same timeframe as final wages to reduce the risk of disputes or penalties.

What Penalties Apply if Severance Is Not Paid Correctly?

If your company fails to pay severance or statutory compensation correctly in Seychelles, you risk financial penalties, orders to pay arrears with interest, and potential criminal liability for non-compliance with the Employment Act. Disputes are typically handled by the Ministry of Employment, the Competent Officer, or the Employment Tribunal, which can investigate and enforce payment.

• Failure to comply with an order to pay compensation can lead to fines under the Employment Act.
• Persistent non-payment may expose directors or managers to criminal charges.
• The Employment Tribunal can order back pay, interest, and additional compensation for unfair dismissal.
• Non-compliance can trigger inspections and closer scrutiny of your wider employment practices.
• Reputational damage and strained employee relations can make future terminations more contentious.

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 Seychelles severance rules, but it can shift day-to-day compliance work to the EOR. In most EOR models, the EOR is the legal employer on paper and is responsible for calculating and paying severance in line with the Employment Act. However, your company usually remains the de facto decision-maker on dismissals and redundancies, so you can still be drawn into disputes if terminations are poorly handled. A well-structured EOR agreement should clearly allocate responsibility for severance calculations, funding, and dispute management. You should still review how the EOR applies local law and ensure your internal approvals align with statutory requirements.

Be 100 Percent Compliant in Offering Severance with Playroll

Playroll helps your company navigate Seychelles severance rules by standardizing how you collect data on start dates, salary history, contract type, and reason for termination. With this information, our team and tools can map your situation against the Employment Act and common tribunal practice, so you know when severance or compensation is likely to be due. We also help you align notice periods, redundancy procedures, and documentation so that any termination decision is easier to defend.

Beyond calculations, Playroll can coordinate timing of final pay, including severance, accrued leave, and other benefits, so everything is processed in one clean workflow. If you use Playroll as an Employer of Record, we take on the local employer-of-record obligations, including payroll, statutory filings, and severance payments, while you retain control over business decisions. That combination lets your team focus on performance and workforce planning, knowing that the technical compliance steps are being handled correctly.