Section 46: Payment of severance allowance

46. Payment of severance allowance (1) Subject to subsection (1A), an employer shall pay severance allowance to a worker as specified in subsection (5) where the worker has been in continuous employment with the employer— (a) for a period of not less than 12 months on a contract of indeterminate duration and that employer terminates his agreement; or (b) for a period of more than 24 months under one or more determinate agreements in respect of a position of a permanent nature and that employer terminates the agreement of the worker other than a migrant worker. (1A) Unless otherwise agreed by the parties, no severance allowance shall be payable where— (a) a worker and an employer enter into an agreement under section 5 (3A) and the agreement comes to an end; (b) a worker and an employer enter into one or more determinate agreements for a total period of less than 24 continuous months in respect of a position of a permanent nature and the agreement comes to an end; or (c) a worker, whose basic wage or salary is at a rate in excess of 360,000 rupees per annum, and an employer enter into a determinate agreement and that agreement comes to an end. [Issue 6] E9B – 34 Revised Laws of Mauritius (2) (a) Subject to section 42 (3) or 43 (1), where a worker claims severance allowance under subsection (1), he shall register himself with the Permanent Secretary within 14 days of the termination of his employment or the expiry of his contract, as the case may be, and the Permanent Secretary shall enquire into the matter with a view to promoting a settlement. (b) The Permanent Secretary may, on reasonable cause shown, extend the time limit referred to in paragraph (a). (3) Where the matter under subsection (2) does not result in being satisfactorily settled, the Permanent Secretary— (a) may enter proceedings before the Court if he is of the opinion that the worker as defined in section 40 has a bona fide case and thereupon— (i) if that worker is still unemployed, he shall be entitled to be admitted to the Workfare Programme; or (ii) if that worker becomes gainfully employed, he shall be entitled to be paid an allowance equivalent to the Transition Unemployment Benefit, as specified in section 44, from the date of the termination of his employment up to the date he has taken up employment. (b) may not enter proceedings before Court if he is of the opinion that the worker does not have a bona fide case and advise the worker as defined in section 40 that he may apply for registration in the Workfare Programme, unless the worker institutes proceedings on his own to claim severance allowance. (3A) Where a worker is entitled to be admitted to the Workfare Programme under subsection (3) (a) (i) or to be paid an allowance under subsection (3) (a) (ii), he shall register himself with the Permanent Secretary within 14 days of the date on which he is notified by the Permanent Secretary that Court proceedings have been entered on his behalf. (3B) Where a worker, who claims severance allowance under subsection (1), registers himself with the Permanent Secretary after 14 days of the termination of his employment, the Permanent Secretary may enter proceedings before the Court if he is of the opinion that the worker has a bona fide case, but the worker shall not be entitled to be admitted to the Workfare Programme. (4) Where there has been a settlement under subsection (2), other than a settlement by reinstatement or by payment of any compensation, the worker as defin severance allowance under subsection (1), registers himself with the Permanent Secretary after 14 days of the termination of his employment, the Permanent Secretary may enter proceedings before the Court if he is of the opinion that the worker has a bona fide case, but the worker shall not be entitled to be admitted to the Workfare Programme. (4) Where there has been a settlement under subsection (2), other than a settlement by reinstatement or by payment of any compensation, the worker as defined in section 40 shall be entitled to be admitted to the Workfare Programme. (5) Where a worker has been in continuous employment for a period of not less than 12 months with an employer, the Court may, where it finds that— (a) the termination of agreement of the worker was due to the reasons specified under section 36 (3) and (4); (b) the termination of agreement of the worker was in contravention of section 38 (2), (3), and (4); E9B – 35 [Issue 5] Employment Rights Act (c) the reasons related to the worker’s alleged misconduct or poor performance under section 38 (2) and (3) do not constitute valid reasons for the termination of employment of the worker; (d) the grounds for the termination of agreement of a worker for economic, technological, structural or similar nature affecting the enterprise, do not constitute valid reasons; (e) notwithstanding paragraphs (a), (b), (c) and (d), the termination of agreement of the worker was unjustified, order that the worker be paid severance allowance as follows— (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. (5A) Where a matter has been referred to the Tribunal under section 39B, the Court shall have no jurisdiction to hear the matter. (5B) Notwithstanding subsection (5), where the Court finds that the termination of employment of a worker, who has been in continuous employment for a period of not less than 12 months with an employer, is effected on grounds specified in sections 38 (1) (a) and (d), the Court may, with the consent of the worker, order that that worker— (a) be reinstated in his former employment with payment of remuneration from the date of the termination of his employment to the date of his reinstatement; or (b) be paid severance allowance in accordance with subsection (5). (6) Where the Permanent Secretary has not entered proceedings on behalf of a worker under subsection (3) (b) and the worker has instituted proceedings before the Court on his own, and the Court has given judgment in favour of the worker in terms of subsection (5), the worker as defined in section 40 shall be eligible to be admitted to the Workfare Programme within 14 days as from the date of judgment. (7) — (8) — (9) Where the employment of a part-time worker, a migrant worker or a non-citizen, who has been in continuous employment with an employer for a period of 12 months or more, has been terminated by the employer for reasons of economic, technological, structural or similar nature affecting the enterprise, the employer shall pay severance allowance to the part-time or migrant worker or the non-citizen— (a) for every period of 12 months, one quarter of a month’s remuneration; (b) for any additional period of less than 12 m t of a part-time worker, a migrant worker or a non-citizen, who has been in continuous employment with an employer for a period of 12 months or more, has been terminated by the employer for reasons of economic, technological, structural or similar nature affecting the enterprise, the employer shall pay severance allowance to the part-time or migrant worker or the non-citizen— (a) for every period of 12 months, one quarter of a month’s remuneration; (b) for any additional period of less than 12 months, a sum equal to one twelfth of the sum calculated under paragraph (a) multiplied by the number of months during which the worker has been in the continuous employment of the employer. [Issue 5] E9B – 36 Revised Laws of Mauritius (10) — (11) The Court may, where it thinks fit and whether or not a claim to that effect has been made, order an employer to pay interest at a rate not exceeding 12 per cent per annum on the amount of severance allowance payable from the date of the termination of the agreement to the date of payment. (12) For the purposes of this section, a month’s remuneration shall be— (a) the remuneration drawn by the worker for the last complete month of his employment; or (b) an amount computed in the manner as is best calculated to give the rate per month at which the worker was remunerated over a period of 12 months before the termination of his agreement inclusive of payment for extra work, productivity bonus, attendance bonus, commission in return for services and any other regular payment, whichever is the higher. [S. 46 amended by s. 12 (j) of Act 14 of 2009 w.e.f. 1 July 2009; s. 25 of Act 6 of 2013 w.e.f. 11 June 2013.]