Contract Termination Severance in Mozambique and Dismissal

Contract termination severance in Mozambique and dismissal are two different things that many people lump together in the same sentence. The difference is not a small detail: in some scenarios there is not a single day of severance pay, while in others there are 45 days of salary for each year of service.

Here, article by article under Law 13/2023, are the scenarios that entitle you to severance pay, the required notice periods, and what to do when you believe the company dismissed you unlawfully. If you are looking for answers regarding contract termination severance in Mozambique, the short answer section provides the full breakdown.

The short answer

• Natural end of term of a fixed-term contract: there is no severance pay. Article 136 of Law 13/2023 states exactly that.
• Termination by the employer for economic reasons: 30, 15, or 5 days of salary per year of service, depending on the salary band (Article 141).
• Termination with just cause at your initiative: 45 days of salary per year of service, prorated for fractions of less than 12 months (Article 139).
• Dismissal declared unlawful: reinstatement with back pay up to six months, or severance pay of 45 days per year (Article 76).
• In all cases: the employer must provide a work certificate (Article 147).

The ways a contract ends in Mozambique

Article 135 of Law 13/2023 lists the forms of employment contract termination: expiration, mutual agreement (revocation agreement), notice of termination by either party, and termination with just cause by either contracting party. Dismissal operates through its own path: as a disciplinary sanction and as a collective measure.

The practical difference matters. Expiration is something agreed upon by both parties: both knew the end date. Dismissal is a decision by the employer, whether as a sanction, due to reorganization, or in violation of the law.

To understand which regime applies, start by confirming the type of contract you signed: fixed-term, unspecified-term, or indefinite-term. The guide on types of employment contracts in Mozambique explains the details of each one.

End of term contract: what you receive and what you do not receive

In a fixed-term contract, once the term expires, the contract lapses and expiration does not confer severance pay (Article 136, paragraph 3). It was agreed upon, it was fulfilled, and it is complete.

In an unspecified-term contract, however, the logic changes. Article 46, paragraph 3, requires communicating the expiration with 15 days' notice if the period of work exceeds six months and does not exceed three years, and 30 days' notice if the period exceeds three years and does not exceed six.

Anyone who completes more than six consecutive years of service, or interrupted by a period not exceeding six months, converts to an indefinite-term contract (Article 46, paragraph 4).

If the termination or dismissal of a worker under an unspecified-term contract is without just cause, the worker is entitled to severance pay of 45 days per year of service, or proportional to the time served if seniority does not reach one year (Article 46, paragraph 7).

Regarding the renewal of fixed-term contracts, the non-renewal notice period rule applies: 15 days if the contract is equal to or greater than three months and does not exceed one year, and 30 days if the duration exceeds one year (Article 43, paragraph 5).

And pay attention: if the worker continues to perform their duties after the term ends, the contract converts into an indefinite-term contract (Article 43, paragraph 7).

This is also the starting point of a dedicated guide on renewals, limits, and conversion of fixed-term contracts.

Revocation agreement: the middle ground on signed paper

The parties may agree to terminate the contract at any time. The agreement must be set out in a document signed by both, stating the date of execution and the date it takes effect (Article 137, paragraph 1).

Two details protect the worker. First: you can revoke the effects of the agreement via written notice within a period not exceeding seven days, but you must immediately return in full any compensation received (Article 137, paragraph 3). Second: refusing a proposal for a revocation agreement does not constitute just cause for terminating the contract of the person who refused (Article 137, paragraph 4).

In practice: if the company proposes an agreement with low compensation and you reject it, they cannot later cite your rejection as just cause.

Termination by the employer: the 30, 15, and 5 days

The employer may terminate contracts with prior notice when the measure is based on structural, technological, or market grounds and proves essential to the company's competitiveness, economic recovery, or reorganization (Article 141, paragraph 1). Structural grounds refer to production reorganization or lack of resources; technological grounds, to the introduction of new processes; market grounds, to difficulties in placing goods and services.

Here is the financial core. The severance pay depends on the ratio between your base salary, including seniority bonuses, and the minimum wage for the sector of activity (Article 141, paragraph 3):

• 30 days of salary per year of service, if the salary corresponds to one to seven minimum wages in the sector;
• 15 days of salary per year of service, if it corresponds to more than seven to eighteen minimum wages;
• 5 days of salary per year of service, if it corresponds to more than 18 minimum wages.

Individual contracts and collective bargaining instruments may provide for more favorable criteria for the worker (Article 141, paragraph 4). It is worth reading your union or company agreement before signing any document.

Formalities carry weight: written notification to the worker, the trade union body, and the Ministry overseeing labor must arrive at least 30 days in advance (Article 142, paragraph 2). In a fixed-term contract, on the date of termination, the employer makes available compensation corresponding to the remuneration that would accrue until the agreed term (Article 142, paragraph 4).

Dismissal: disciplinary sanction, collective, and unlawful

Dismissal operates, first, as a disciplinary sanction. Article 64, point f), provides for dismissal at the end of the disciplinary scale, after written reprimand, suspension, fine, and demotion.

If the sanction is applied and the judge declares it null and void, the worker is reinstated or receives severance pay under paragraphs 2 and 3 of Article 139 (Article 74, paragraph 2), that is, 45 days of salary per year of service. The guide on the steps required by law in a disciplinary process covers this scenario in detail.

Second, it operates as a collective measure. Collective dismissal occurs when the employer, over a period of three months, citing structural, economic, technological, and market reasons, terminates more than eight contracts in micro and small enterprises and more than 10 in medium and large ones (Article 143). The consultation process with the trade union body cannot last more than 30 days (Article 144, paragraph 3).

Third, it can simply be unlawful. Article 75 defines it: dismissal is unlawful when carried out for political, trade union affiliation, ideological, or religious reasons, when legal formalities are not observed, or when it results from refusal of favors or advantages, pressure, harassment, or gender-based violence.

In such cases, the course of action is challenge: filing a claim in the labor court or labor arbitration body within six months from the date of dismissal (Article 76, paragraph 2).

If declared unlawful, the worker must be reinstated and receive back pay up to a maximum of six months, without prejudice to seniority (Article 76, paragraph 3). By express choice or when objective circumstances make reinstatement impossible, the employer pays severance pay of 45 days of salary per year (Article 76, paragraph 5).

You may also request an injunction to suspend the dismissal within 30 days of termination (Article 76, paragraph 4). The full reading is in the guide on dismissal, severance pay, and just cause.

Termination by worker notice: the notice period that can be costly

You can terminate the contract with prior notice and without needing to cite just cause, provided you communicate the decision in writing to the employer (Article 140, paragraph 1). But the deadline has teeth.

In a fixed-term contract, termination on your initiative requires a minimum notice of 30 days; failing to do so gives the employer the right to compensation for damages, corresponding to up to a maximum of one month's salary (Article 140, paragraph 2).

In an indefinite-term contract, the prior notice period is 15 days if the length of service exceeds six months and does not exceed three years, and 30 days if it exceeds three years (Article 140, paragraph 3). Anyone breaching the notice period must compensate the employer in the amount of salary they would have earned during that period (Article 140, paragraph 5).

If the cause of your departure is employer conduct that culpably violates your rights, that constitutes just cause on your part (Article 138, paragraph 5) and paves the way for the severance pay described in the next section, rather than simple notice of resignation.

Just cause on your part: 45 days of salary per year of service

Article 139 regulates contract termination with just cause initiated by the worker. Prior written notice must be given at least seven days in advance, explicitly stating the facts on which it is based (paragraph 1).

In an indefinite-term contract, severance pay corresponds to 45 days of salary for each year of service and, on a prorated basis, for fractions of time under 12 months (paragraph 2). In a fixed-term contract, it corresponds to the remuneration that would accrue between the date of termination and the agreed end date of the contract term (paragraph 3).

A detail that many people miss: if the worker breaches the notice period, they must pay the employer a penalty equal to seven days of salary, to be deducted from the severance pay to which they are entitled (paragraph 4). A seven-day delay in notice reduces the final payout accordingly.

After the end: certificate, INSS, and outstanding accounts

When the employment relationship ends, regardless of the reason, the employer must issue a work certificate detailing the length of service, professional skills acquired, and position or positions held (Article 147, paragraph 1). The certificate cannot contain other references, except at the written request of the worker (paragraph 2). Do you disagree with the contents? You have 30 days to appeal to the competent authorities (paragraph 3).

Dismissal as a disciplinary sanction does not erase social security rights: the application of the sanction does not result in the loss of rights stemming from registration in the system, provided you meet the benefit eligibility requirements at the date of termination (Article 64, paragraph 4). The guide on INSS: contributions and protection in Mozambique helps you understand what remains active.

Unpaid earnings also do not disappear: back pay, unused leave, and due severance pay are company debts. The guide on net vs. gross salary in Mozambique serves as a reference to verify how much should appear on your pay slip.

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Read also

• Sue Your Employer in Mozambique Labour Court: Step-by-Step

Where these numbers come from

• Law No. 13/2023 of August 25 (New Labor Law), published in the Official Gazette (Boletim da República) No. 165, Series I, in force since February 21, 2024 — Articles 43, 46, 64, 74, 75, 76, and 135 to 147.
• Sector minimum wage — the sector table currently in force is on the INSS portal; the band into which your base salary (with seniority bonus) fits determines the 30, 15, or 5 days under Article 141.
• Cited guides — the guide on what changed in Law 13/2023 and the practical list of worker rights, both in the Inademy Guide.

All values cited here come from the legal text or official tables. If your contract or collective agreement provides for more, read the instrument: the law permits criteria more favorable to the worker.

Frequently asked questions

My fixed-term contract has come to an end. Am I entitled to any severance pay?

If the end was the normal expiration of the agreed term, no: expiration does not confer entitlement to severance pay (Article 136, paragraph 3). Severance pay only applies if the company terminates before the term expires, if an unspecified-term contract ends without just cause, or if there is just cause on your part, in the amounts provided for under Article 139 and Article 46, paragraph 7.

How are the 30, 15, or 5 days of employer-initiated termination calculated?

Classify your situation based on the ratio between your base salary, including seniority bonus, and the minimum wage of your sector: one to seven minimum wages give 30 days per year of service; more than seven to eighteen give 15; more than 18 give 5 (Article 141, paragraph 3). That is why the right salary band changes the final payout.

What if I am dismissed without following the law?

The course of action is challenging the decision in the labor court or arbitration within six months (Article 76, paragraph 2). If you win, you are either reinstated with back pay for up to six months, or you receive severance pay of 45 days per year of service; and an injunction to suspend the dismissal must be filed within 30 days.

I want to resign. How many days of notice do I have to give?

In a fixed-term contract, a minimum of 30 days' notice; in an indefinite-term contract, 15 days if you have more than six months of service up to three years, and 30 days if you have more than three years (Article 140). Notice must be in writing; without it, you compensate the employer for the salary of the notice period.

What separates "dismissal" from "termination" in Law 13/2023?

Under the new law, termination (rescisão) refers to non-disciplinary end of contract (with just cause, for economic reasons, or by agreement), whereas dismissal (despedimento) operates as a disciplinary sanction, a collective measure (more than eight or 10 contracts in three months), or an unlawful act subject to challenge. Confusion with the previous law costs rights for those who do not read the correct text.

What documents must the company hand over to me at the end?

The work certificate stating period of service, skill level, and position held, without other references, along with the settlement of owed amounts: back pay, unused leave, and any applicable severance pay (Article 147). If the certificate is issued incorrectly, you have 30 days to request correction.

In summary, what to do today

1. Confirm the type of contract you have: fixed-term, unspecified-term, or indefinite-term, and the agreed end date.
2. Read the notice of termination or dismissal: the reasons cited, the offered severance amount, and the termination date.
3. Check your salary band against the sector minimum wage table and calculate the severance pay due under Article 141 or Article 139.
4. Keep the challenge deadline in mind: six months in court or arbitration; 30 days for an injunction.
5. Demand the work certificate and verify your INSS statement before signing any agreement, if applicable.

Official source: Law No. 13/2023 (Labour Law) is available as a PDF on the website of Mozambique's Supreme Court (Tribunal Supremo): official text (PDF).