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Labour Law

What is the real formula for calculating severance pay in the individual termination of an employment contract by the employer?

By Dra. Célia Orlando Cumbe Trainee Lawyer

Published on 6 October 2026

Summary

An analysis of how to calculate the severance pay owed to a worker when an open-ended contract is terminated by the employer. Article 141(3) of the Labour Law sets three bands (30, 15 and 5 days' pay per year of service, depending on the salary as a multiple of the sector minimum), while Article 142(5) points to 45 days per year of service. The author argues for applying the 45-day rule, as the most favourable to the worker, and for an urgent review of the regime.

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