What Severance Pay Rules Must Employers Follow in Zimbabwe?

Which Employees Qualify for Severance Pay?

• Employees terminated due to retrenchment, restructuring, or redundancy approved under the Labour Act generally qualify for severance.
• Employees with written contracts or collective bargaining agreements that promise severance or retrenchment packages are entitled to those terms.
• Long-term and permanent employees are more likely to receive statutory or negotiated severance than short-term casual workers.
• Employees dismissed for operational reasons and not for proven misconduct usually qualify for severance or a retrenchment package.
• Fixed-term employees may qualify if their contracts are ended early without lawful cause or agreed notice and pay in lieu.
• Employees affected by business transfers, closures, or mergers may qualify where jobs are lost or conditions are significantly worsened.

What Are the Legal Timelines for Paying Severance?

In Zimbabwe, severance and retrenchment packages are usually payable once the retrenchment plan is approved by the Retrenchment Board or relevant labour authority and the termination takes effect. Your company should aim to pay all severance amounts on or before the employee’s final working day, together with outstanding salary, leave pay, and benefits. Where payments are structured in instalments under an approved retrenchment agreement, you must follow the agreed schedule strictly. Any delay or partial payment can be treated as an unfair labour practice and may trigger interest, penalties, or enforcement action. To stay safe, document payment dates clearly in the retrenchment agreement and keep proof of all transfers.

What Penalties Apply if Severance Is Not Paid Correctly?

If your company fails to pay severance correctly in Zimbabwe, you risk both financial and regulatory consequences. Non-compliance can lead to labour officer investigations, orders to pay arrears with interest, and potential criminal liability for persistent breaches. Disputes can escalate to the Labour Court, increasing legal costs and reputational damage. You should treat severance as a priority liability whenever you plan terminations.

• Labour officers can order payment of outstanding severance plus interest and costs.
• The Labour Court may issue enforcement orders or writs of execution against company assets.
• Failure to follow approved retrenchment procedures can render terminations unfair and lead to reinstatement or higher damages.
• Persistent non-compliance can expose directors or managers to personal liability under labour laws.
• Disputes over severance can delay restructuring plans and damage your employer brand in the local market.

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 Zimbabwean 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 according to the Labour Act and any collective agreements. However, your company, as the client, typically bears the commercial cost of severance and may still be cited in disputes if it directed the termination. You should ensure your EOR contract clearly allocates severance funding, approval workflows, and dispute-handling responsibilities. Always confirm that the EOR is registered and experienced in handling retrenchments with Zimbabwean labour authorities.

Be 100 Percent Compliant in Offering Severance with Playroll

Playroll helps your company stay compliant with Zimbabwean severance rules by acting as the local employment expert behind the scenes. Our team tracks updates to the Labour Act, retrenchment procedures, and sectoral agreements so your severance decisions are grounded in current law. We help you structure terminations, estimate severance budgets, and align documentation with what labour officers and the Retrenchment Board expect to see. That means fewer surprises, fewer disputes, and a smoother exit experience for employees.

When you hire through Playroll’s global infrastructure, we handle local payroll, benefits, and statutory payments, including severance where required. Your team focuses on business decisions while we manage calculations, timelines, and compliant payment methods. We also help you compare statutory minimums with market practice so you can offer fair, competitive exit packages. With Playroll, you can scale in and out of Zimbabwe confidently, knowing your severance processes are consistent and audit-ready.