Severance pay in Zambia is calculated differently depending on the reason for termination of employment. The key rule is that [Employment Code Act, S.54] requires employers to pay severance according to the specific circumstances.
If an employee's fixed-duration contract ends, severance pay must be a gratuity of at least 25 percent of the employee's basic pay earned during the contract period [Employment Code Act, S.54(b)]. If employment is terminated by redundancy, the employee is entitled to a minimum of two months' pay for every year served [Employment Code Act, S.54(3)(a)]. Where an employee is medically discharged from employment, they receive at least three months' basic pay for each completed year of service [Employment Code Act, S.36(6)]. If an employee dies in service, their estate receives two months' basic pay for each year served [Employment Code Act, S.54].
Important exceptions apply: severance pay is not paid to casual employees, temporary employees, employees on long-term contracts, or those still serving a probation period [Employment Code Act, S.54(3)]. The Minister has authority to prescribe a formula for the minimum computation of severance pay [Employment Code Act, S.54(4)], so you should check current regulations for any prescribed minimums that may apply to your situation.