Severance Pay in Morocco: Legal Formula and Worked Example

The statutory formula in article 53

• 96 hours of salary per year of service for the first 5 years.
• 144 hours of salary per year from the 6th to the 10th year.
• 192 hours of salary per year from the 11th to the 15th year.
• 240 hours of salary per year beyond the 15th year.
• Condition: at least 6 months of continuous service with the same employer, and no serious misconduct.
• Basis: the average salary received over the 52 weeks preceding termination. For a monthly paid employee, the hourly rate is the monthly salary divided by 191 hours.

Worked example: MAD 8,000 a month and 7 years of service

• Hourly rate: 8,000 / 191 = approximately MAD 41.88.
• Hours due: 5 years x 96 hours = 480 hours, then 2 years x 144 hours = 288 hours, giving 768 hours in total.
• Severance pay: 768 x 8,000 / 191 = approximately MAD 32,167.
• If the dismissal is held to be unfair, article 41 damages may be added: 7 years x 1.5 months = 10.5 months, i.e. MAD 84,000.
• To run your own estimate, the firm provides an online calculator at /en/calculateur-indemnite-licenciement.

Unfair dismissal, notice and other sums due

Where a dismissal is not justified by a valid reason, or the procedure was not followed, it may be held unfair. Article 41 of the Labour Code then provides for damages of one and a half months' salary per year or part year of service, capped at 36 months. They are payable in addition to severance pay and pay in lieu of notice.

The employee may also opt for preliminary conciliation before the labour inspector. An agreement signed at that stage is final and cannot be challenged in court, so check the figures before signing.

The notice period, whose length depends on the employee's category and seniority, must be observed; otherwise the employer owes pay in lieu equal to the salary for that period. Outstanding wages, untaken paid leave and a certificate of employment are also due. Where serious misconduct is genuinely established and the prior hearing procedure was followed, the employee loses notice and severance pay.

Step-by-step procedure

• Step 1: keep the dismissal letter or, if you were dismissed verbally, record the date and any witnesses, then ask in writing for the reason.
• Step 2: do not sign a final settlement receipt without checking the amounts. If signed, it can be withdrawn within 60 days.
• Step 3: if you wish, refer the matter to the labour inspector for preliminary conciliation.
• Step 4: if no agreement is reached, bring a claim before the court of first instance (social chamber) within 90 days of receiving the dismissal decision.
• Step 5: hearing, conciliation attempt by the judge, then judgment, which may be appealed.

Documents to prepare

• Employment contract and any amendments.
• Payslips for at least the last 12 months.
• Statement of contributions declared to the CNSS.
• Notice to attend, hearing record and dismissal letter.
• Written exchanges with the employer (emails, messages, warnings).
• Labour inspectorate conciliation or non-conciliation record, if any.

Common mistakes

• Signing a final settlement or conciliation agreement without recalculating your entitlements.
• Missing the 90-day deadline to go to court.
• Calculating on basic salary alone rather than the average of the last 52 weeks.
• Confusing severance pay with unfair dismissal damages, which are cumulative.
• Resigning under pressure instead of establishing that the employer ended the contract.