Redundancy: the one route that reliably triggers severance

Redundancy is the circumstance most likely to give rise to severance allowance in Malawi, which makes it worth understanding properly.

What counts

The Act refers to termination resulting from redundancy or retrenchment, economic difficulties, or the employer's technical, structural or operational requirements.

The common thread is that the role is going for reasons connected to the business, not to your conduct or performance.

What follows

If you have completed one year of service and are not on a pension scheme:

• 1 to 5 years: two weeks' wages per year
• 6 to 10 years: three weeks' wages per year
• 11 years and above: four weeks' wages per year

Plus notice or pay in lieu, untaken leave and outstanding wages.

If you are on pension

No severance allowance is due, because pension replaced severance compensation. Your pension benefits become payable instead, within six weeks of termination.

Questions worth asking

1. Is this being treated as redundancy, or as something else?
2. Am I on a pension scheme, and what does that mean for my settlement?
3. What start date is being used for my service?
4. Which severance band applies to my years of service?
5. Is untaken leave included in the calculation?

If the redundancy does not look genuine

If your role is filled by someone else shortly afterwards, or if the reason given does not match what happens, that is worth raising.

A dismissal dressed up as redundancy — or a redundancy mislabelled as something that avoids severance — can be challenged.

Alternative offers

Where suitable alternative employment on similar terms is offered and refused, the severance position may be affected. Consider any offer carefully before declining it.

Where to raise it

The District Labour Officer handles complaints under the Employment Act.