Notice, termination and severance pay in Tanzania: what the law says

Minimum notice periods

Section 41 of the Employment and Labour Relations Act sets the shortest notice allowed when a contract can be ended on notice:

• 7 days, if notice is given during the first month of employment;
• after the first month, 4 days if you are employed on a daily or weekly basis;
• after the first month, 28 days if you are employed on a monthly basis.

A contract may set a longer notice period, but only if it is the same length for both you and the employer. The same minimums apply when you resign: you also owe your employer notice.

How notice must be given

Notice of termination must be in writing. It must state the reasons for termination and the date on which notice is given. It cannot be given during leave taken under the Act, and it cannot run at the same time as that leave.

Instead of letting you work the notice period, the employer may pay you what you would have earned during it. This is called pay in lieu of notice. If an employee refuses to work during the notice period, the employer may deduct the pay for that period from money due on termination. None of this takes away your right to challenge whether the termination was lawful or fair.

A fair reason and a fair procedure

Section 37 makes it unlawful for an employer to terminate employment unfairly. A termination is unfair if the employer fails to prove three things: that the reason is valid, that it is a fair reason related to your conduct, capacity or compatibility, or to the employer's operational requirements, and that a fair procedure was followed. In a dispute, the employer must prove that the termination was fair.

The Act lists reasons that can never be fair, including:

• pregnancy or disability;
• discrimination under the Act;
• belonging to a trade union or taking part in its lawful activities, including a lawful strike;
• exercising a right under the Act, an agreement or another law;
• refusing to do something the employer may not lawfully require;
• disclosing information you are entitled or required to disclose by law.

These unfair termination rules apply once you have six months of employment with the same employer. Before that, the notice and payment rules below still apply.

Retrenchment for operational reasons

When an employer plans to cut jobs for economic, technological, structural or similar reasons, section 38 sets out the process. The employer must give notice as soon as retrenchment is contemplated, disclose the relevant information and consult before acting. The consultation covers the reasons, ways to avoid or reduce job losses, how employees will be selected, the timing and severance pay. Consultation is with a recognised trade union, a registered union with members at the workplace, or the employees themselves if no union represents them. If no agreement is reached, the matter goes to mediation.

Severance pay: who qualifies and how much

Under section 42, severance pay is at least 7 days' basic wage for each completed year of continuous service with that employer, up to a maximum of ten years. It is due when you have completed 12 months of continuous service and the employer ends your employment.

Severance is not due:

• after a fair termination for misconduct;
• if you were terminated for capacity, compatibility or operational reasons but unreasonably refused alternative work with that employer or another employer;
• when you reach retirement age, or when your contract expires or ends because its time has run out.

The basic wage excludes allowances, overtime, extra pay for Sundays, rest days or public holidays, and night work pay. Use your basic wage for the calculation.

What you should be paid when the job ends

Section 44 lists what the employer must pay on termination:

• pay for work done before the termination;
• pay for annual leave you have not taken;
• annual leave pay that has built up in an incomplete leave cycle;
• notice pay, if the employer paid instead of giving notice;
• severance pay, where it is due;
• a transport allowance, where it is due.

The employer must also give you a certificate of service. The 2017 regulations set its form: it states your position and the dates you worked. Ask for it before you hand back your work items, and keep a copy.

A worked severance example

The daily rate in this example is invented for the calculation. Your own daily basic wage depends on your contract. The Act includes a table for converting a monthly wage into daily and hourly rates, so ask your employer to show how your figure was worked out.

Transport back to where you were recruited

If your job ends at a place other than where you were recruited, section 43 requires the employer to transport you and your belongings back to the place of recruitment, pay for that transport, or pay you a transport allowance. The allowance must be at least a bus fare to the bus station nearest the place of recruitment, plus daily subsistence for any days between the end of the contract and the journey. The 2017 regulations set that subsistence at the daily basic wage, or a figure set by the relevant wage board.

If you think the termination was unfair

Act quickly. The Commission for Mediation and Arbitration (CMA) says a dispute over unfair termination should be referred within 30 days of the termination, using form CMA F.1. If you are late, you must apply for condonation using form CMA F.2.

If an arbitrator or the Labour Court finds the termination unfair, it can order reinstatement, re-engagement or compensation. Since the 2025 amendments, compensation ranges from 6 to 12 months' pay for an unfair procedure, 12 to 18 months for an unfair reason, 12 to 20 months when both are unfair, and 12 to 24 months when the termination was unfair because of discrimination or harassment. Read the CMA step by step guide.