Mauritius has an institution that few countries have: a Redundancy Board that examines whether a workforce reduction was justified.
What the Board does
Where an employer reduces its workforce, the Board considers whether the reasons were justified.
Where the Board finds the reasons were unjustified, the employer must pay severance allowance at the rate of three months' remuneration per year of service.
Alternatively, the Board may — with the worker's consent — order the employer to reinstate the employee to their former employment.
Three months per year is substantial
That rate is high by international standards. It means an unjustified redundancy after ten years of service could produce thirty months of remuneration.
It is a strong deterrent against poorly grounded redundancies.
How a month's remuneration is computed
The Act is specific. For computing severance allowance, a month's remuneration is the higher of:
- The remuneration drawn for the last complete month of full-time employment, or
- An amount calculated to give the rate per month at which the worker was remunerated over the 12 months before termination — including payment for extra work, productivity bonus, attendance bonus, commission for services and any other regular payment
That inclusion of bonuses and commission is important. A severance calculation based only on basic salary, where you regularly received other payments, may be understated.
What can be deducted
The severance allowance can be reduced where the employer has granted a gratuity, made contributions to a fund or scheme, or contributed to the PRGF.
Injury protection
Employers are prohibited from dismissing a worker because their performance was affected by an injury sustained in the course of work, where a government medical practitioner certifies incomplete recovery.
An employer dismissing in contravention may be ordered by the Court to pay severance of up to three months per year of service.
What to check
That the twelve-month computation was used where it gives a higher figure, and that regular bonuses and commission were included.