Critical discussion of the severance pay legal framework in Lesotho
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Date
2025-05
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National University of Lesotho
Abstract
This Dissertation critically examines the legal framework governing severance pay in Lesotho,
with a comparative focus on Austria’s reformed severance pay model. The study explores the
historical development of severance compensation in Lesotho, the statutory provisions under
the Labour Act 2024, and the system’s compliance with international labour standards,
particularly ILO Convention No. 158and Recommendation No. 166. Through legal and
comparative analysis, the paper identifies significant weaknesses in Lesotho’s current system,
including its financial burden on employers, lack of portability, and limited protection for
employees in cases of liquidation or insolvency. In contrast, Austria’s pre-funded severance
scheme offers a sustainable, equitable, and mobile model. The study recommends that Lesotho
adopt similar structural reforms to enhance the fairness, efficiency, and sustainability of its
severance pay system, ensuring better protection for both employers and employees within an
evolving labour market.
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Keywords
Severance pay, industrialization, Labour Law, Lesotho