What Severance Pay Rules Must Employers Follow in Swaziland?

Which Employees Qualify for Severance Pay?

• Employees with at least 12 months of continuous service whose employment is terminated by the employer, other than for lawful misconduct.
• Employees dismissed for redundancy, retrenchment, or closure of part or all of your business operations.
• Employees whose fixed-term contracts are ended early by your company without a valid legal reason or agreed notice.
• Employees who successfully challenge an unfair dismissal and are awarded severance instead of reinstatement.
• Employees who are not covered by more favorable severance terms in a collective agreement but still meet the statutory criteria.
• Employees on indefinite contracts whose roles are abolished and who are not offered suitable alternative employment on comparable terms.

What Are the Legal Timelines for Paying Severance?

In Eswatini, the Employment Act, 1980 expects severance and all final terminal benefits to be paid within a reasonable time after the effective date of termination. In practice, you should aim to settle severance together with final salary, accrued leave, and other dues on or shortly after the last working day. Where a retrenchment exercise is involved, payment is usually made on the agreed termination date set out in the retrenchment plan. Delays can be treated by the Labour Commissioner or Industrial Court as non-compliance, especially if the employee has no income during the gap. To stay safe, your internal policy should target payment within 7 to 14 days of termination at the latest, unless a written settlement agreement clearly sets a different schedule.

What Penalties Apply if Severance Is Not Paid Correctly?

If your company fails to pay severance correctly in Eswatini, you risk statutory claims, interest, and reputational damage. The Labour Commissioner and Industrial Court can order you to pay outstanding severance, plus additional remedies where the dismissal itself was unlawful. Non-compliance can also complicate future retrenchments, union relations, and licensing or tender processes where labour compliance is reviewed.

• You may be ordered to pay the full unpaid severance plus interest from the date it fell due.
• The Industrial Court can award compensation for unfair dismissal on top of severance.
• You can face fines or enforcement action for breaching the Employment Act, 1980.
• Court orders can be executed against company assets if you ignore judgments.
• Persistent non-compliance can damage your standing with regulators, unions, and workers.

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 Eswatini’s severance rules, but it can shift day-to-day compliance tasks. In an EOR model, the EOR is the legal employer on paper and is responsible for calculating and paying severance in line with the Employment Act, 1980. However, your company usually bears the economic cost through your service fees and remains exposed if you instruct terminations that breach local law. You should ensure your EOR contract clearly allocates liability for severance errors, disputes, and any penalties imposed by the Labour Commissioner or courts.

Be 100 Percent Compliant in Offering Severance with Playroll

With Playroll, your team gets local employment expertise in Eswatini so you can structure contracts, probation, and benefits with severance in mind from day one. We help you distinguish between misconduct, poor performance, and redundancy, so you only trigger severance when the law requires it and you document each step properly. Our workflows ensure that notice, consultation, and calculation of years of service are all aligned with the Employment Act, 1980.

Playroll’s platform centralizes employment data, so severance calculations are based on accurate salary, allowances, and service records for each employee. When you need to restructure or exit the market, we coordinate with local counsel and authorities to design compliant retrenchment plans and payment schedules. That way, your company can move quickly while minimizing the risk of disputes, penalties, or unexpected severance liabilities.