What Severance Pay Rules Must Employers Follow in Tunisia?

Which Employees Qualify for Severance Pay?

• Employees dismissed for reasons other than serious or gross misconduct generally qualify for severance under Tunisian law.
• Workers with at least one year of continuous service in your company are more likely to benefit from statutory or collectively agreed severance.
• Employees on open-ended (CDI) contracts usually qualify, while fixed-term (CDD) staff may only receive severance if the contract ends early without valid cause.
• Unionized employees or those covered by a sectoral collective agreement qualify according to the more favorable terms in that agreement.
• Employees who resign without employer fault typically do not qualify, unless a collective agreement or contract grants a benefit.
• Employees terminated for economic or organizational reasons may be entitled to severance plus additional protections, such as notice and priority for rehire.

What Are the Legal Timelines for Paying Severance?

In Tunisia, severance is normally due at the end of the employment relationship, alongside the final paycheck and accrued benefits. The safest practice is to calculate and pay severance on the employee’s last working day or within a few days after contract termination. Collective agreements or company policies may set shorter internal deadlines, which your company should follow if they are more favorable. If the amount is disputed, you should still pay the undisputed portion promptly and document your calculations. Delays can increase the risk of labor court claims, interest, and reputational damage.

What Penalties Apply if Severance Is Not Paid Correctly?

If your company fails to pay severance correctly in Tunisia, you risk labor inspections, financial exposure, and court-ordered compensation. Non-compliance is usually enforced through the labor courts, which can review dismissals, recalculate entitlements, and award additional damages where the termination is found to be unfair or abusive.

• Courts may order payment of all outstanding severance plus legal interest.
• You may be required to pay damages for unfair or abusive dismissal, which can exceed the severance amount.
• Reinstatement of the employee can be ordered in some cases, especially where dismissal rules were clearly breached.
• Legal and administrative costs can rise, including lawyer fees and time spent in litigation.
• Repeated non-compliance can attract closer scrutiny from labor authorities and damage your employer brand.

Does Outsourcing Employment via an EOR Change Severance Liability?

Using an Employer of Record (https://www.playroll.com/employer-of-record) in Tunisia can shift day-to-day employment administration, but it does not remove your need to understand severance rules. In most EOR models, the EOR is the legal employer on paper and is responsible for calculating and paying severance in line with the Labour Code and collective agreements. However, your company typically funds these costs through service fees or pass-through charges, and you remain the de facto decision-maker on terminations. If you instruct an unlawful or discriminatory dismissal, you can still face reputational and commercial consequences, even if the EOR is the formal respondent. A clear contract with the EOR should define who bears financial, legal, and operational risks around severance.

Be 100 Percent Compliant in Offering Severance with Playroll

Playroll helps your company navigate Tunisia’s severance rules by combining local legal insight with practical payroll execution. Your team gets structured guidance on eligibility, notice, and severance calculations, aligned with the Labour Code and relevant collective agreements. We help you document the reason for termination, confirm service length and salary references, and ensure that final pay, unused leave, and severance are processed on time.

With Playroll as your global employment partner, you can standardize termination workflows while still respecting Tunisian specifics. Our platform and experts support you whether you hire directly or via an EOR, so you understand the cost of each termination decision before you act. That means fewer surprises, cleaner audits, and a better offboarding experience for your Tunisian employees.