Dismissals and Termination of Employment in Morocco

Legal information about notice periods, severance pay, summary dismissals, grounds for termination and more.

1. Dismissal of employees

Preliminary remarks: 

Requirements for fair dismissals:

  • There must always be a fair reason for the dismissal;
  • The dismissal must have been affected in accordance with a fair procedure.

Moroccan courts are very formulaic toward the enforcement of the Labour Code and its implementing texts. Indeed, Courts consider that a dismissal is automatically unfair if it is not carried out for a fair reason (i) and in accordance with legal procedure provided by Article 62 et seq of the Labour Code (cf. point 1.2.). If any of these two requirements is not fulfilled, the dismissal would be regarded as unfair, thus, entitling the dismissed employee to receive all the legal severance payments (i.e. dismissal indemnity, damages and compensation in lieu of notice).

1.1 Reasons for dismissal

The two (2) grounds on which a termination of the employment contact might be legitimate without notice period or any allowances are as follows:

  • Fair dismissal for serious misconduct: according to the provisions of Article 39 of the Moroccan Labour Code. Article 39 of the Labour Code provides a list (i.e. on an indicative basis) of serious misconducts. Some examples are: 
    • the offence of undermining the honour, trust or morality that has given rise to a final judgement pertaining to the restriction of liberty;
    • disclosure of a professional secret causing prejudice to the company;
    • committing the following acts inside the establishment or at work: 
      • an act of theft;
      • an breach of trust;
      • being in a state of drunkenness;
      • using drugs;
      • an act of corporal mugging;
      • making serious insults;
    • The deliberate and unjustified refusal of an employee to execute a task falling within its competences;
    • The unjustified absence, for a period of four (4) days, or eight (8) half days, during a period of twelve (12) months;  
    • Etc.. 
  • Fair dismissal for 4 cumulative non-serious misconducts in one year: In accordance with Articles 37 et seq of the Labour Code, a non-serious fault is deemed to be any professional fault, other than serious misconduct as referred to in Article 39 of the Labour Code. When 4 disciplinary sanctions for non-serious misconduct are exhausted during a year, the employee can be lawfully dismissed.

1.2 Form

The applicable procedure for dismissal for a disciplinary motive is governed by Articles 62 et seq of the Labour Code.

When the employer intends to dismiss an employee for a disciplinary motive (i.e. serious misconduct or 4 non-serious acts of misconduct), the more important thing is to perform the following steps within a period not exceeding eight (8) days from the date of discovery – by the employer – of the serious misconduct:

  • Step 1: obligation to invite the employee to a prior interview with the employer or his representative, either by registered letter with an acknowledgement of receipt, letter delivered by hand against receipt, or through a bailiff. The attendance of an employee representative (i.e. “Délégué des salariés” in French) or a union representative (i.e. “representant syndical”) from within the company chosen by the employer is mandatory. 
  • Step 2: prior interview of the employee in order to hear his/her explanations regarding his wrongful conduct. At the end of the prior interview, minutes must be recorded and signed by all parties. 
  • Step 3: notification through the dismissal letter: Then, the employer has to notify the employee of the decision of dismissal for a disciplinary motive within a period of forty-eight (48) hours following the date of its decision. 

A copy of the dismissal letter and the minutes of the hearing must be sent to the labour inspector (Article 64 of the Labour Code).

1.3 Notice period

The notice period is set by the decree 2-04-469 29 December 2004 related to the notice period for unilateral termination of an unlimited employment contract, and generally lasts between 8 days and three months. If the dismissal is for serious misconduct, a notice period is not required

1.4 Involvement of employee representatives

No

1.5 Involvement of a union

Yes. Please refer to point 1.2. above.

1.6 Approval of state authorities necessary

The approval of the labour authority is only required for “protected employees” (i.e., employees who are employee representatives or union representatives). 

An administrative authorization (i.e. the governor) is also required in the event of collective redundancies (Cf point 1.7 below).

1.7 Collective redundancies

Article 66 stipulates that the employer must inform the employee representative (in a company employing 10 or more employees) or the work council (in a company employing more than 50 employees) and the union representative if applicable, of its decision to dismiss all or part of its workforce for technological, structural, or similar reasons, or for economic reasons. It has indeed the obligation to inform but also to negotiate with them the modalities of the company closure or the termination of the employees and thus one (1) month before starting the termination procedure.

The conclusion of the consultation must be drafted by minutes on behalf of the employer and signed by both parties (the employer and the staff’s representatives). One copy is addressed to the provincial work delegate and one is given to the staff representative.

Therefore, it is necessary to provide the staff representative with all the necessary information related to the termination including the reasons for it, the number and categories of employees involved in the termination and the period after which it wishes to start the termination.

The dismissal of all or part of the workforce in the companies referred to in Article 66 above for technological, structural, or similar, or economic reasons, is subject to an authorization issued by the governor of the prefecture or province, within a maximum period of two months from the date the employer submitted its request to the provincial delegate in charge of labour.

1.8 Summary dismissals

There is no reference in the Labour Code to the term “summary dismissals”. 

Dismissal without notice is only possible for serious misconduct, but even then, the form described above for the dismissal procedure (point 1.2.) must still be applied, in order to prevent the dismissal from being seen as unfair.

1.9 Consequences if requirements are not met

If either of these two requirements referred to in point 1.1 and 1.2. is not fulfilled, the dismissal would be regarded as unfair. In this case, the employee can claim for all indemnities provided by the Labour Code.

1.10 Severance pay

  • Dismissal indemnity (Article 53 of the Labour Code) which depends on the employee’s seniority and salary. 
Seniority (years of effective service)Indemnity granted
Up to five (5) yearsNinety-six (96) hours of work
From six (6) to ten (10) yearsOne hundred and forty-four (144) hours of work
From eleven (11) to fifteen (15) yearsOne hundred and ninety-two (192) hours of work
Exceeding fifteen (15) yearsTwo hundred and forty (240) hours of work
  • Damages (Article 41 of the Labour Code) are equal to one and a half (1.5) times the last (monthly) salary per year of seniority, capped at thirty-six (36) months.
  • Compensation in lieu of notice (Decree n° 2-04-469 dated 29 December 2004, completing the general provisions of Article 43 (2°) of the Labour Code) 
CategorySeniorityLegal period notice
ExecutivesLess than one (1) yearOne (1) month
From one (1) to five (5) yearsTwo (2) months
More than five (5) yearsThree (3) months
Non-executivesLess than one (1) yearEight (8) days
From one (1) to five (5) yearsOne (1) month
More than five (5) yearsTwo (2) months
  • Indemnity for annual paid leave (Article 252 of the Labour Code) based on the number of untaken days at the termination date. 

1.11 Non-competition clauses

Non-competition clauses are governed both by Article 109 of the Dahir on Obligations and Contracts (DOC) and case-law. 
Pursuant to several decisions handed down by Moroccan Courts, a non-competition clause must comply with four cumulative conditions:

  1. it must be essential to protect the employer’s legitimate interests; 
  2. it is limited to a specific time period;
  3. it is limited to a specific geographical area; and 
  4. it must take the characteristics of the employee’s job into account.

Consequently, insertion of a non-competition clause is possible whenever it is justified by the interest of the company, provided that it gives the employee the possibility to exercise his/her professional activity consistent with his/her training, knowledge and experience. These conditions aim to protect the freedom to work.

In the current state of the jurisprudence, there is no requirement to pay financial compensation during the time of the obligation in order for the non-competition clause to be valid.  

Furthermore, an employee who breaches his non-competition obligation can be sentenced to pay damages to his former employer. For the most part, non-competition clauses contain a penalty clause (in French “clause pénale”) that defines a certain amount to which the employee may be condemned to pay as compensation for his/her violation of the non-competition clause. The judge may reduce the amount of the penalty clause if it seems excessive. 

The non-competition clause can be waived by the employer in the letter of dismissal or any other letter set up for this purpose.

1.12 Miscellaneous

In the absence of a valid motive to dismiss an employee and to avoid the risk of litigation with an employee to be terminated, concluding a settlement agreement through a preliminary conciliation is the safest way to terminate the employment relationship.

The preliminary conciliation procedure is governed by Article 41 of the Labour Code. Under this procedure, the employment termination results when minutes of the agreement between the parties is signed before the labour inspector. 

The agreement (in the form of the minutes signed) resulting from the preliminary conciliation procedure is deemed final and cannot be subject to any possible appeal in court by any party. 

2. Dismissal of managing directors

NB: We assume that the managing directors within the meaning of this section are subject to company law and as such have a corporate office. They are therefore not bound to the company by an employment contract (except in the case of a combination of both capacities/status).

2.1 Reasons for dismissal

In order to revoke a managing directorship, the company is required to invoke a legally valid and fair reason (e.g. one or several violations of the legal provisions applicable to LLCs or public limited companies; breach of the Articles of Association, mismanagement, etc.). 

In case the revocation is deemed unfair (i.e. decided without due and valid reason), it may give rise to damages, the amount of which is assessed by the Court, taking into account the absence or not of a due and valid reason for the dismissal.

2.2 Form

By a resolution of the shareholders or the board of directors, depending on the form of the company and the internal organization of the management. The dismissal/revocation must be notified in writing to the managing director, and the change of managing director must be published in a relevant trade register of companies.

2.3 Notice period

No notice period is required, unless provided for in the company's Articles of Association or in the resolution appointing the managing director.

2.4 Involvement of employee representatives

Not applicable.

2.5 Involvement of a union

Not applicable.

2.6 Approval of state authorities necessary

Not applicable.

2.7 Collective redundancies

Not applicable.

2.8 Summary dismissals

Not applicable.

2.9 Consequences if requirements are not met

Damages may be claimed for the absence of a fair reason in companies where such a reason is legally required to revoke a managing directorship, or in case the revocation is notified under inopportune circumstances (e.g., without granting the managing director the chance to defend him-/herself). 

2.10 Severance pay

Unless stipulated in the Articles of Association of the company or in the resolution appointing the Managing Director, no mandatory severance payment is due for the position of Managing Director

2.11 Non-competition clauses

The effectiveness of the non-compete clause under Moroccan law is subject to the determination of the geographical scope and duration of its application. Hence, if the scope of the clause is too wide (according to its geographic area, its length, or the activities it concerns), its validity may be challenged.

2.12 Miscellaneous

In the event that the managing director combines his corporate mandate with an employment contract, a proper dismissal process (i.e. employment law aspects) will have to be implemented in addition to the revocation process (corporate law aspects) and relevant severance indemnities must be paid.