Employment law
Severance pay in Mali
In the Faso Imprim workshop, the offset presses have been running slowly since the school textbook contract was lost. Management has to let several employees go, and the accountant is preparing the final settlements, calculator in hand. He has taken the last basic salary, applied 30% to the whole career and forgotten the last six months of service. Three mistakes that can turn into as many back-pay claims.
Faso Imprim is a Bamako printing company with 35 employees. We will follow three of them: Moussa, an offset press operator with 12 years and 6 months' service; Aminata, a production secretary with 7 years' service; and Karim, an assistant operator hired 10 months ago. This company and the people mentioned are fictitious: their names are used for illustration only.
1. What exactly are we talking about?
Severance pay is the sum the employer owes a dismissed employee according to length of service. It protects an employee who loses a job after years of service: the longer they stayed, the heavier the loss, and the higher the amount.
It is not the same as any other end-of-contract payment. Each follows its own logic and may be added to the others:
| Payment | What it compensates | Text |
|---|---|---|
| Severance pay | The dismissed employee's years of service | L.53 |
| Notice, or payment in lieu of notice | The period between announcing the termination and leaving | L.41 and L.42 |
| Payment in lieu of paid leave | Leave days earned but not taken | L.162 |
| Damages for unfair dismissal | The harm caused by a termination without legitimate grounds | L.51 |
The most common mistake
Believing that paid notice "covers" severance pay. The Code says the opposite: severance pay is distinct from notice (Labour Code, article L.53). The two are cumulative.
Notice pays for the departure. Severance pays for the years.
2. Who is entitled: two conditions, only one fault removes it
Article L.53 sets two cumulative conditions. The termination must be a dismissal or a termination for force majeure. The employee must have at least one year of continuous service in the company.
Karim, hired 10 months ago, is not entitled to severance pay. He does, however, keep his notice and his payment in lieu of leave. Aminata and Moussa meet both conditions.
The only fault that removes severance pay
Severance pay is not due if the dismissal is based on gross misconduct. Gross misconduct is a breach so serious that it allows the contract to be terminated without notice. In a dispute, the court decides whether the fault reaches that level (Labour Code, articles L.41 and L.53).
The "serious misconduct" trap
Many dismissal letters cite "serious misconduct" (faute grave). This concept comes from French law. The Malian Labour Code only recognises gross misconduct (faute lourde) as a ground for removing notice and severance pay. If the fault alleged is not gross misconduct, severance pay remains due.
| Situation | Severance pay? | Text |
|---|---|---|
| Dismissal after at least 1 year of continuous service | Yes | L.53 |
| Termination for force majeure after at least 1 year | Yes | L.53 |
| Dismissal for proven gross misconduct | No | L.53 |
| Dismissal before 1 year of service | No, but notice and leave remain due, except notice in case of gross misconduct | L.41 and L.162 |
| Termination during the probation period | No | L.33 |
| Resignation | No; long-service payment after 10 years | L.54 |
| Retirement | No; retirement payment, calculated the same way | L.55 |
| Mutually agreed termination of an open-ended contract | Departure payment at least equal to statutory severance pay | L.50 bis |
How to count length of service
- The probation period counts once the hiring becomes permanent (L.32).
- Periods of temporary lay-off for technical or economic reasons count (L.35).
- Training leave and workers' education or union training leave count (L.10 and L.11).
- Leave of absence for personal reasons, which suspends service at the employee's request, does not count (L.59).
What you need to do
- Calculate each employee's exact length of service on the termination date, in years and months.
- Refuse severance pay only in cases of gross misconduct, bearing in mind that the court may review whether it is real.
- Check whether the termination falls under another regime: resignation, retirement or mutually agreed termination.
3. The calculation base: the average of the last twelve months
Faso Imprim's accountant used Moussa's basic salary: XOF 320,000. But Moussa also receives a performance bonus and overtime pay.
The calculation base is the amount to which the percentages are applied. For severance pay, it is the monthly average of the remuneration received during the twelve months before the dismissal. It includes all sums paid in return for work, excluding those that reimburse expenses (L.53).
| Included in the base | Not included in the base |
|---|---|
| Basic salary | Reimbursement of business expenses |
| Work-related bonuses and commissions | Allowances covering actual expenses, such as travel expenses |
| Overtime paid | |
| Benefits in kind, at their value |
Example. Over the last twelve months, Moussa received XOF 3,840,000 in basic salary, XOF 540,000 in performance bonuses and XOF 420,000 in overtime. He also received XOF 180,000 in reimbursed travel expenses.
Remuneration to include: 3,840,000 + 540,000 + 420,000 = XOF 4,800,000
Monthly average: 4,800,000 ÷ 12 = XOF 400,000
Travel expenses: XOF 180,000, excluded from the calculation
What a wrong base costs
Using basic salary alone, the accountant calculates on XOF 320,000 instead of XOF 400,000. Moussa's severance pay drops from XOF 1,200,000 to XOF 960,000 (the full calculation is set out below). Moussa can claim the missing XOF 240,000.
What you need to do
- Add up all sums paid in return for work over the last twelve months.
- Exclude only expense reimbursements.
- Divide by twelve and attach the calculation details to the final settlement.
4. The scale: three bands that add up
| Length-of-service band | Percentage of average remuneration, per year |
|---|---|
| 1st to 5th year | 20% |
| 6th to 10th year inclusive | 25% |
| Beyond the 10th year | 30% |
The scale is progressive by band: each year is paid at the rate of its band. An employee with twelve years' service does not receive 30% for twelve years. They receive 20% for the first five years, 25% for the next five and 30% for the last two.
Fractions of a year also count (L.53). Six months count as half a year, three months as a quarter.
Each year is paid at the rate of its band, not at the rate of the last one.
What a band mistake costs
Faso Imprim's accountant first applied 30% to Moussa's 12.5 years: 400,000 × 12.5 × 30% = XOF 1,500,000, i.e. XOF 300,000 overpaid. The opposite mistake, 20% on the whole career, gives XOF 1,000,000: XOF 200,000 is then missing, which Moussa can claim.
5. Two calculations, line by line
Example. Aminata has 7 complete years, with an average monthly remuneration of XOF 300,000.
First 5 years: 300,000 × 5 × 20% = XOF 300,000
6th and 7th years: 300,000 × 2 × 25% = XOF 150,000
Severance pay: XOF 450,000
Example. Moussa has 12 years and 6 months, with an average monthly remuneration of XOF 400,000.
First 5 years: 400,000 × 5 × 20% = XOF 400,000
6th to 10th year: 400,000 × 5 × 25% = XOF 500,000
11th and 12th years: 400,000 × 2 × 30% = XOF 240,000
6 months of the 13th year: 400,000 × 0.5 × 30% = XOF 60,000
Severance pay: XOF 1,200,000
Moussa therefore receives the equivalent of three months' average remuneration.
What you need to do
- Split length of service into bands: the first 5 years, the 6th to 10th, then beyond.
- Apply each band's own percentage, including fractions of a year.
- Have a second person check the calculation before signing the final settlement.
6. The rest of the final settlement
Faso Imprim is dismissing for economic reasons, after following the procedure of consulting staff delegates and informing the labour inspector. See Economic dismissal. Severance pay is then just one line of the final settlement.
- Notice. Unless a collective agreement provides otherwise, it is 8 days for staff paid by the day or week, one month for employees paid monthly, two months for supervisors and three months for managers (Labour Code, article L.41). If the employer releases the employee from working it, it still pays for it (L.44).
- The special economic dismissal payment. It equals one month's gross salary and is not taxable (Labour Code, article L.48).
- Payment in lieu of paid leave. It pays for leave earned but not taken, on termination (Labour Code, article L.162).
- The certificate of employment. It is handed over when the employee leaves (L.61).
Example. Faso Imprim releases Moussa from working his one-month notice. One month's remuneration is taken as XOF 400,000.
Severance pay: XOF 1,200,000
Payment in lieu of notice: XOF 400,000
Special economic dismissal payment: XOF 400,000
Total, excluding paid leave: XOF 2,000,000
All these sums are paid as soon as work ends (Labour Code, article L.103). In a case of gross misconduct, notice and severance pay disappear, but the payment in lieu of leave remains due. For the details of notice periods, see Notice period.
What you need to do
- List, for each departure, all sums due: severance, notice, leave and, for economic dismissals, the special payment.
- Pay everything as soon as work ends.
- Hand over the certificate of employment on the day of departure.
7. What can still change the amount after departure
The collective agreement first
The Code's scale is a minimum. Collective agreements and establishment agreements may provide more favourable rates, which then replace the statutory rates (L.53). An establishment agreement is an agreement concluded within the company with staff representatives. If Faso Imprim is bound by a collective agreement, its clauses apply to employment contracts (Labour Code, article L.77).
Signing the final settlement does not close the file
Moussa signs his receipt "in full and final settlement". This wording does not prevent him from claiming what he is owed (Labour Code, article L.111). He has three years to sue for his wages, bonuses and allowances (Labour Code, article L.118), and proceedings before the labour court are free of charge (article L.202).
What a disputed dismissal costs
If the court finds that the dismissal had no legitimate grounds, it also awards damages. They are separate from both notice and severance pay (Labour Code, article L.51).
A signature at the bottom of the final settlement closes nothing. A correct calculation does.
What you need to do
- Check the collective agreement or establishment agreement before applying the statutory scale.
- Keep the calculation details with the payment register, which is kept for five years (L.108).
- Correct any mistake you discover of your own accord, without waiting for a claim.
A closer look: one calculation, four situations
The severance pay calculation serves as the reference for other departures. Knowing it means being able to put a figure on almost every termination involving a long-serving employee.
| Situation | Condition | Amount |
|---|---|---|
| Dismissal or force majeure (L.53) | At least 1 year of continuous service | Scale of 20%, 25% and 30% |
| Resignation (L.54) | At least 10 years of continuous service | Same calculation: long-service payment |
| Retirement (L.55) | Stopping work to draw a retirement pension | Same calculation: retirement payment, which replaces the other two |
| Mutually agreed termination (L.50 bis) | Agreement signed by both parties | At least the amount of statutory severance pay |
For the resignation of a long-serving employee, see Long-service payment. One last effect to know: if Faso Imprim rehires Moussa one day, the years already compensated will no longer count towards his seniority bonus (Labour Code, article L.97).
Key takeaways in 6 points
- Pay severance to every dismissed employee with at least one year of continuous service, on top of notice.
- Refuse it only for gross misconduct: "serious misconduct" does not exist in the Malian Labour Code.
- Calculate the base on the average of the last twelve months, bonuses and benefits included, expenses excluded.
- Apply each rate to its band: 20% up to 5 years, 25% from the 6th to the 10th year, 30% beyond.
- Count fractions of a year: six months count as half a year.
- Check the collective agreement before paying, because a claim remains possible for three years.