What Severance Pay Rules Must Employers Follow in Sierra Leone?

Which Employees Qualify for Severance Pay?

• Employees terminated due to redundancy, restructuring, or economic reasons not related to misconduct.
• Employees with continuous service who are dismissed without a valid reason or without following fair procedure.
• Employees whose contracts or collective agreements expressly provide for severance or end-of-service benefits.
• Employees who are laid off following business closure, relocation, or technological changes initiated by your company.
• Employees on fixed-term contracts where early termination occurs without lawful cause or agreed notice.
• Employees who do not fall under excluded categories such as true independent contractors or casual workers with no continuity of service.

What Are the Legal Timelines for Paying Severance?

In Sierra Leone, you should aim to pay severance at the same time the employment relationship ends, or within a very short, reasonable period after the final working day. In practice, many employers align severance with the final payroll cycle, ensuring all dues are settled within 7 to 14 days of termination. Where a collective agreement or contract sets a specific deadline, that timeline will govern and should be followed strictly. If there is a dispute about the amount, you should still pay the undisputed portion promptly while the balance is resolved. Always document the calculation, payment date, and employee acknowledgment to show compliance if the Labour Department or a court reviews the termination.

What Penalties Apply if Severance Is Not Paid Correctly?

If your company fails to pay severance correctly in Sierra Leone, you risk financial, regulatory, and reputational consequences. Labour authorities and courts can order you to pay outstanding severance, plus additional sums where rights were breached. Non-compliance can also complicate future workforce changes and damage trust with employees and unions.

• Courts can order payment of all unpaid severance and other terminal benefits.
• You may face interest or additional compensation for unlawful or unfair termination.
• The company can incur fines or sanctions under labour regulations for serious breaches.
• Disputes can lead to costly litigation and management time spent on hearings.
• Reputational damage can affect hiring, retention, and union or community relations.

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 comply with Sierra Leonean severance rules, but it can shift day-to-day compliance work. In an EOR model, the EOR is the legal employer on paper and is responsible for administering terminations and paying severance locally. However, your company usually remains the de facto decision-maker, so you can still be exposed commercially or contractually if you instruct an unlawful termination. A well-drafted EOR agreement should clearly allocate who funds severance, who approves dismissals, and how disputes are handled. You should always confirm that the EOR is applying Sierra Leone law and any enhanced severance you promise in your global policies.

Be 100 Percent Compliant in Offering Severance with Playroll

Playroll helps your team translate Sierra Leone’s severance rules into clear, predictable processes so you are not scrambling at the point of termination. We work with local legal and payroll experts to benchmark statutory minimums against market practice, then configure your policies and contracts accordingly. That means your managers know in advance what a termination will cost and which steps they must follow to stay compliant.

When you use Playroll as your global employment partner, we can support you directly or via an EOR structure to calculate, document, and pay severance correctly in Sierra Leone. Our workflows capture notice, reason for termination, and length of service so severance is calculated consistently and paid on time. We also keep you updated when local laws change, helping your company avoid penalties and maintain a fair, transparent offboarding experience for your Sierra Leonean employees.