Dismissals and Termination of Employment in Mauritius

While the current labour legislation differentiates between workers (earning an annual basic wage or salary up to 600,000 Mauritian Rupees (approximately 12,400 Euros)) and non-workers (earning an annual basic wage or salary exceeding 600,000 Mauritian Rupees (approximately 12,400 Euros)), the statutory protection offered by the Workers’ Rights Act 2019 against the termination of agreement makes no discrimination between workers and non-workers. 

Dismissal is generally based on the following grounds:

1. Poor performance;
2. Misconduct; or
3. Redundancy.

An employer has a statutory obligation to state the reason for the termination of any work agreement at the time of notifying an employee of the termination of his/her employment.    

Either party can give notice of termination of the agreement verbally or in writing.

On the other hand, an employer needs to follow a certain statutory procedure before it can dismiss an employee, or else the termination will be considered as unlawful. 

To terminate an employee’s employment on the grounds of misconduct or poor performance, the following steps need to be taken:

1. the employer has, within 10 days of the day on which he/she becomes aware of the alleged misconduct, notified the employee of the charge made against such employee;
2. the employee has been invited to an oral hearing for such employee to have the opportunity to answer any charge made against such employee with regards to the alleged misconduct or poor performance;
3. the employee is given at least 7 days’ notice to answer any charge made against such employee in the oral hearing;
4. the employer cannot, in good faith, take any other course of action;
5. the termination is effected no later than 7 days after the employee has answered the charge made against such employee in an oral hearing. 

In order to reduce its workforce or close down, any employer employing not less than 15 workers or having an annual turnover of at least 25 million Mauritian Rupees (approximately 516,000 Euros) shall:

1. notify and negotiate with the trade union or workers’ representatives to explore the possibility of avoiding the reduction of the workforce or closing down or agree on the payment of compensation by way of settlement; and
2. where no agreement is reached, give written notice, a statement showing cause for the reduction or closure and supporting documentation to the Redundancy Board at least 30 days before the intended reduction or closing down. 

The Workers’ Rights Act 2019 specifically provides for a minimum notice period to be given. 

The length of notice to be given by either an employer or an employee should not be less than 30 days.  Either party may, in lieu of giving notice, pay the other party the amount of remuneration the employee would have earned had he remained in employment during the notice period. 

Fixed term agreements (typically used with regard to non-citizens and migrant employees) are generally terminated on the last day of the agreed contract term between the employer and the employee. However, any contractual term regarding the notice period shall also need to respect the statutory provision outlined above. Non-citizens and migrant employees are also subject to the protection against dismissal, including those regarding the notice period. 

Certain statutory sections specifically provide for the assistance of employee representatives on certain occasions of employment disputes. 

Where an employee is given the opportunity to answer any charge (of misconduct or poor performance) made against him/her during a disciplinary hearing, the employee can be assisted by a representative from a trade union and/or a legal representative or an officer from the Ministry of Labour. 

Any negotiation conducted regarding the possibility of avoiding a reduction of workforce is to be done with any recognised trade union, any trade union having a representational status or workers’ representatives elected by the workers (where there is no trade union). 

Any employee (workers and non-workers) is afforded the right by the Constitution of the Republic of Mauritius and the Employment Relations Act 2008 to belong to a trade union and be represented and assisted at the employee’s workplace by an officer or negotiator of the said trade union in any disagreement arising with respect to an employee’s legal rights. The said officer and negotiator shall not be prevented from entering the workplace to represent and assist the member. 

The approval of state authorities shall be necessary only in matters of redundancy, i.e. reduction of workforce or closure of enterprises, where not less than 15 workers are employed or whereby the annual turnover was at least 25 million Mauritian Rupees (approximately 516,000 Euros). Please refer to the process before the Redundancy Board set out in paragraph 1.2 above. 

The process of respect with regard to matters of collective redundancies is provided in paragraph 1.2 above. 

Any employer shall be required to submit the following information and documents:

1. information regarding the company’s asset and liabilities at the time of the application;
2. information on the financial situation of the employer and the causes and extent of its difficulties;
3. supporting documentary evidence regarding the restructuring decision and plan having been approved by the company’s board of directors or by the person in charge of the enterprise;
4. a statement as to why the restructuring plan has a reasonable prospect of preventing insolvency and saving jobs;
5. the number of jobs to be saved. 

If the Redundancy Board finds the employer’s reasons are unjustified, the Board will make an order for the employer not to reduce its workforce or close down its enterprise. If the employer fails to comply or where the employment was terminated in breach of the statutory procedure, the Redundancy Board may, upon an employee’s application, order that: 

1. the employee is reinstated in employment with a backdated payment of remuneration from the date of termination of the employee’s employment until the employee’s reinstatement or
2. the employee’s employer pays the employee severance allowance of 3 months’ remuneration per period of 12 months of continuous employment and any additional period of less than 12 months pro rata. 

Alternatively, if the reasons are held to be justified, the Redundancy Board will order that the employee be paid 30 days’ wages as indemnity in lieu of notice.

Summary dismissal represents the termination of employment without payment of severance allowance or notice period. Not every misconduct justifies summary dismissal – gross misconduct or “faute grave”, at the highest end of the spectrum of degrees of misconduct, would alone justify summary dismissal.

It is nonetheless recommended that employers follow the statutory procedure before dismissing any employee summarily. 

The burden rests upon the employer to establish that the employee’s actions amounted to misconduct and that the misconduct was serious enough that the employer could not, in good faith, take any other course of action that terminated the employee’s employment. 

Failure to comply with the statutory requirements (regarding the obligations placed on the employer) will result in the dismissal being unlawful and the employee being paid a severance allowance. 

Severance allowance corresponds to a sum equivalent to three (3) months’ remuneration per period of 12 months of continuous employment and any period of less than 12 months pro rata.   

The month’s remuneration corresponds to the higher amount between the last complete month of employment’s remuneration or an aggregate of remuneration over a 12-month period before the termination, including any payment for extra work, productivity bonus, attendance bonus, commission in return for services and any other regular payment. 

Any gratuity granted by the employer, contribution to any fund or scheme and PRGF contributions may be deducted from the severance allowance payable. 

Restrictive covenants may be included in employment contracts. 

Previous caselaw (based on French jurisprudence) show that restrictive covenants such as non-competition clauses will be held as valid as long as:

1. They are restricted in time and space (specific geographical limits);
2. They are not too wide in scope to prevent the employees from earning a living, and
3. Their maintenance is fundamental to protect the legitimate interest of the business of the employers. 

There is no additional precondition to the validity of a restrictive covenant regarding the payment of an indemnity by way of a “contrepartie financière” (financial compensation) due to the absence of any legislation (akin to French statutory provisions) to that effect.   

The Workers’ Rights Act 2019 provides the use of compromise agreements as a mechanism to resolve disputes between employers and workers (see definition under paragraph 1) regarding the amount of compensation payable following a termination of employment. The validity of such a compromise agreement shall rest on:

1. the said agreement having been vetted by an independent adviser or
2. the worker having received advice from a relevant independent adviser regarding the agreement’s terms and effect on the worker’s claim; or
3. the independent adviser not being a party to the matter for the employer. 

As explained in paragraph 1 above, non-workers whose annual basic wage or salary exceeds 600,000 Mauritian Rupees (approximately 12,400 Euros) are covered by the same protective statutory provisions under the Workers’ Rights Act 2019 as workers. 

Managing directors are generally appointed by the board members of a private company and subject to certain terms of appointment aside from their contract of employment. 

Please refer to paragraph 1.1. 

Please refer to paragraph 1.2. 

Directors, including managing directors, can be removed from their office by way of an ordinary resolution passed at a meeting (in the case of a public company) or a special resolution passed (for private companies) in accordance with the company’s constitution. In any case, a director’s office is vacated if the said director resigns, is removed from office, becomes disqualified from being a director, dies or otherwise vacates office in accordance with the company’s constitution.

Please refer to paragraph 1.3.

Please refer to paragraph 1.4. 

Please refer to paragraph 1.5.    

Please refer to paragraph 1.6. 

Please refer to paragraph 1.7. 

Please refer to paragraph 1.8. 

Please refer to paragraph 1.9. 

Please refer to paragraph 1.10. 

Please refer to paragraph 1.11. 

Whilst the compromise agreement remains an option to resolve any dispute regarding claims regarding termination of employment for managing directors not considered as workers (in the event that their annual basic salary or wages exceeds 600,000 Mauritian Rupees (approximately 12,400 Euros)), the statutory validity conditions are not mandatory, even if the advice of an independent adviser provided to the director is encouraged.