Severance Allowance in Mauritius: How It Is Calculated and When It Is Owed

04 August 2026 · Jenny Legal AI

Severance allowance in Mauritius is three months' remuneration for every twelve months of continuous employment. Here is when it is payable under sections 69 to 71 of the Workers' Rights Act 2019, and the exceptions that remove it.

Severance allowance is the most expensive consequence of getting a dismissal wrong in Mauritius. The rate in section 70(1) of the Workers' Rights Act 2019 is three months' remuneration for every twelve months of continuous employment — so a worker with ten years' service represents thirty months of pay.

This guide sets out when it is owed, how it is calculated, and the exceptions that remove the entitlement.

The rate: three months per year of service

Where the Court makes one of the findings in section 70(1), it may order severance allowance:

(i) for every period of 12 months of continuous employment, a sum equivalent to 3 months' remuneration; and

(ii) for any additional period of less than 12 months, a sum equal to one twelfth of the sum calculated under subparagraph (i) multiplied by the number of months during which the worker has been in continuous employment of the employer.

So the calculation is 3 months' pay per completed year, plus a pro-rata amount for the remaining months.

A worked example. A worker with 4 years and 6 months of continuous service, earning Rs 40,000 per month:

• 4 completed years × 3 months = 12 months → 12 × Rs 40,000 = Rs 480,000
• Remaining 6 months: (3 months ÷ 12) × 6 = 1.5 months → 1.5 × Rs 40,000 = Rs 60,000
• Total: Rs 540,000

What counts as "a month's remuneration"

Section 70(3) defines it as either:

• the remuneration drawn by the worker for the last complete month of his employment; or
• an amount computed in the manner best calculated to give the rate per month at which the worker was remunerated over a period.

The second limb matters where pay is variable — commission, piece rates, or fluctuating hours. A single unrepresentative final month does not have to be the basis.

Interest

Section 70(2) allows the Court, whether or not a claim to that effect has been made, to order interest at a rate not exceeding 12 per cent per year on the severance amount, running from the date of termination to the date of payment.

The Court can award this on its own motion. A long-running dispute therefore carries a cost beyond the principal.

The threshold: 12 continuous months

Section 69(1) requires the worker to have been in continuous employment for not less than 12 continuous months with the employer. This applies whether the worker is on a contract of indeterminate duration or on one or more fixed-term contracts with the same employer.

Successive fixed-term contracts with the same employer can therefore accumulate towards the threshold — subject to the exception in section 69(3A) below.

When severance is ordered

Severance under section 70(1) is not automatic on any termination. It follows a finding by the Court on one of five grounds:

• (a) the termination was due to the reasons in section 61(2) — ill-treatment, failure to pay remuneration, failure to provide work, or a resignation obtained by fraud or duress;
• (b) the termination contravened section 64(1), (1A), (2), (5), (6) or (9) — the prohibited grounds and the mandatory misconduct and performance procedures;
• (c) the reasons relating to alleged misconduct or poor performance did not constitute valid grounds for termination;
• (d) the employer could in good faith have taken any other course of action instead of terminating; or
• (e) notwithstanding all of the above, the termination was unjustified.

Ground (d) is the one employers underestimate. Misconduct can be proven and the procedure followed, and severance can still be ordered if a lesser sanction was available in good faith. Dismissal must be the only reasonable response, not simply a defensible one.

Ground (e) is a catch-all. Even where none of the specific grounds is made out, the Court can find the termination unjustified.

When severance is not payable

Three exceptions in section 69 remove the entitlement.

Migrant workers and non-citizens on fixed-term contracts. Section 69(2): no severance allowance is payable to a migrant worker or a non-citizen employed under one or more contracts of fixed duration, at the expiry of his contracts. Note the limit — this covers expiry, not a termination before term.

Agreements under section 13(1) coming to an end. Section 69(3): unless the parties agree otherwise, no severance is payable where a worker and employer enter into an agreement under section 13(1) and that agreement comes to an end.

High earners receiving a gratuity. Section 69(3A) is the exception most often relevant to senior staff. Where a worker whose basic wage or salary exceeds Rs 600,000 in a year is paid a gratuity, compensation or other payment in lieu of pension or in respect of length of service — at the end of every 12-month period or at the end of each determinate-duration contract — that worker is not entitled to severance allowance on expiry of each contract or the last contract.

Section 69(3A)(b) adds a significant rider: such a worker "shall not be considered to be in continuous employment where he is employed successively under one or more contracts of a determinate duration." For this group, successive fixed-term contracts do not accumulate.

Two conditions must both hold for 69(3A) to apply: the salary threshold and the actual payment of a gratuity or equivalent. A high earner who receives no such payment is not caught by it.

Before the Court: the settlement stage

Severance claims do not go straight to litigation. Section 69(4) provides that where a worker claims severance allowance, the supervising officer "shall enquire into the matter with a view to promoting a settlement."

Only where that does not produce a satisfactory settlement may the supervising officer enter proceedings before the Court, and then only if he considers the worker has a bona fide case (section 69(5)).

For employers, this conciliation stage is the cheapest point at which to resolve a dispute. For workers, it is a route to the Court that does not require funding a case privately.

Deductions

Section 71 governs deductions from severance allowance. Where the calculation is contested, read it alongside section 70 rather than assuming the gross figure is the payable figure.

Remuneration due on termination

Separate from severance, section 31 governs payment of remuneration due on termination of an agreement. Severance is an additional liability, not a substitute for outstanding wages and accrued entitlements.

The practical picture

The structure of the Act means the severance exposure is driven less by the merits of the dismissal than by the procedure and by length of service.

An employer facing a possible dispute should work out the exposure before deciding how to proceed: three months per year of service, plus pro rata, plus up to 12 per cent interest. Against that figure, the cost of running a proper section 64 procedure — or of settling at the section 69(4) stage — is usually small.

A worker assessing a claim should check the three exceptions in section 69 first, since each removes the entitlement entirely rather than reducing it.

The sections to read in full are 69, 70 and 71, together with sections 61(2) and 64 which supply the grounds. See also our guide to notice periods and lawful termination, which covers the procedure that determines whether severance becomes payable at all.

This article is general information about Mauritian law, not legal advice. Legislation is amended and courts reinterpret it. Verify the current text of any provision and consult a qualified Mauritian legal practitioner before acting.