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Brunei Darussalam

Termination and Severance Policies

Learn about the legal processes for employee termination and severance in Brunei Darussalam

Notice period

In Brunei Darussalam, the Labour Act (Chapter 93) outlines the legal requirements for notice periods during employment termination.

Contractual Notice Period

The notice period stipulated in the employment contract takes precedence. This period must be the same for both the employer and the employee to ensure fairness.

Statutory Minimum Notice Period

If the employment contract does not specify the notice period, a statutory minimum applies based on the employee's length of service. The minimum notice period is as follows:

  • Less than 26 weeks of employment: 1 day
  • Between 26 weeks and 2 years of employment: 1 week
  • Between 2 and 5 years of employment: 2 weeks
  • 5 years or more of employment: 4 weeks

Maximum Notice Period

The maximum notice period cannot exceed one month, regardless of the employment contract or length of service.


The Act provides an exception for domestic servants, where the minimum notice period is 14 days instead of following the length of service guidelines.

Severance pay

In Brunei Darussalam, severance pay is not a universal statutory right. However, the Labour Act (Chapter 93) outlines certain circumstances that dictate eligibility for severance or similar payments.


An employee dismissed due to redundancy is entitled to redundancy payment if they have completed at least one year of continuous service. The calculation for this payment is based on the employee's length of service:

  • 1-5 years of service: 15 days of wages for each completed year
  • 5-10 years of service: 20 days of wages for each completed year
  • Above 10 years of service: 30 days of wages for each completed year

Retirement Benefits

Employees may be entitled to retirement benefits depending on the terms of their employment contract or collective bargaining agreement. The Labour Act mentions that employers can establish pension or provident funds for their employees. If applicable, these funds would provide the retirement benefits.

Gratuity Payments

Gratuity payments are sometimes included in employment contracts as a lump sum payment upon termination, often after a certain period of service. Entitlement depends on the specific contract.

Additional Information

There is no general requirement for severance pay for terminations due to reasons other than redundancy. Severance entitlements in Brunei are mainly dependent on the provisions within the employee's individual contract or any applicable collective agreements.

Termination process

The termination process for employees in Brunei Darussalam is governed by the Employment Order 2009 and the Labour Act (Chapter 93). The general procedure includes various types of termination and specific termination procedures.

Types of Termination

  • Termination with Notice: Both employers and employees can terminate the employment contract by providing written notice, as outlined in the contract or the statutory minimums [Employment Order 2009, Part VI).
  • Termination without Notice (Summary Dismissal): Employers may summarily dismiss an employee for gross misconduct without notice [Employment Order 2009, Section 82(1)]. Employees can also terminate employment without notice in cases of serious misconduct by the employer.
  • Termination Due to Redundancy: If a position becomes redundant, the employer can terminate the employment, following specific procedures.
  • Mutual Termination: Employer and employee can mutually agree to terminate the employment contract.

Termination Procedures

  • Written Notice: Termination must be communicated in writing, clearly stating the reasons for termination and the effective termination date.
  • Payment in Lieu of Notice: An employer can sometimes opt to pay the employee's salary in lieu of the applicable notice period [Employment Order 2009, Section 81(3)].
  • Final Payments: Upon termination, the employer must pay all outstanding wages, benefits, and any accrued entitlements to the employee [Employment Order 2009, Section 86].

Unfair Dismissal

Employees might have grounds to claim unfair dismissal if the termination was unreasonable, unjust, or without valid grounds. In such cases, the employee can file a complaint with the Labour Department.

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