Notice and Severance

Notice Requirement

A fixed term contract terminates at the end of its term or by cancellation by either of the parties. The cancellation is either by agreement or in case of gross negligence. The party terminating the contract on gross negligence must notify the other party within forty eight (48) hours. In case of resignation before expiry of contract or dismissal on the basis not provided under the law, the party initiating the termination has to pay an indemnity equivalent to the remuneration for the remaining contract period along with the other compensation which must be paid.

An indefinite term (open ended) contract may be terminated by either of the parties by serving a notice or paying in lieu of notice. The employment may be terminated for legitimate reasons.

Labour Code does require an employer to serve a contract termination notice to the workers except when they are dismissed due to serious misconduct. The termination notice must be in writing and contain the reasons for termination.

For terminating an indefinite term contract, the required notice period depends on the worker's length of service as follows:- 

  1. 15 days for a worker who has worked for less than a year; and
  2. 1 month for a worker who has worked for more than a year.   

Notice is not required in case of mutual agreement between parties or in case of gross negligence or if the employment contract is terminated during probationary period.

Payment in lieu of notice, by either party, is equivalent to the salary and other benefits from which the worker would have benefited during the notice period that has not been effectively respected. The notice allowance doubles in case of termination of the employment contract during paid leave or suspension period by the employer.

Source: Articles 27-32 of the Law regulating Labour in Rwanda, 2009 (aka Labour Code)

Severance Pay

"In accordance with the Labour Code, a worker is entitled to severance pay (dismissal compensation) upon dismissal, provided that they have completed at least one year of continues service with the employer. Severance pay is payable at the following rates:

  • one-month salary for less than 5 years of service;
  • two-month salary for 5 to 10 years of service;
  • 3-month salary for 10 to 15 years of service;
  • 4-month salary for 15-20 years of service;
  • 5-month salary for 20-25 years of service; and
  • 6-month salary for more than 25 years of service.

The average monthly salary is calculated by dividing by twelve the total salary the worker has received for the last twelve (12) months exclusive of allowances allocated to the worker to enable him/her to discharge his/her duties.

An employer may terminate workers on individual or collective basis due to economic reasons, internal organization or consecutive restructuring for economic difficulties or technological transfers with the aim of protecting the competitiveness of the enterprise. (Art. 34-35 of Labour Code)"

Source: Articles 34-35 of the Law regulating Labour in Rwanda, 2009 (aka Labour Code)

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