LABOUR LAW UPDATE · EQUATORIAL GUINEA
The cost of termination under Ley 6/2026
What an exposed contractor must re-provision from 15 June. The first consequence does not show up in the next dismissal — it shows up in the accuracy of the provisions already on the books
Law 6/2026 changes far more than the wording of a few articles of the labour law. For companies operating in Equatorial Guinea, it changes the basis on which the cost of ending an employment relationship is calculated. At a services contractor to the operators, a project in Bata comes to an end and part of the crew has to be let go. The administrator opens the usual sheet and starts to settle the seniority pay: 45 days of salary for each year worked, as it has always been done. It is July 2026, and halfway through the calculation the figure stops adding up.
What seniority pay used to be
Under Ley 4/2021 (the Equatorial Guinean labour law), seniority pay was a right recorded each year in the worker’s account and paid when the contract ended, whatever the cause. It did not count as salary and was not taxed. The amount was adjusted to the final salary — an annual obligation every administrator planned around.
What changes on 15 June
Law 6/2026 lowers the base from 45 to 30 days of salary per year and, above all, changes what seniority pay is: it stops being an obligation paid out every year and becomes a benefit the worker receives when the contract ends through retirement or resignation. If it ends through death, the heirs receive it.
Dismissal no longer triggers the payment
The law lists the cases in which seniority pay is due, and dismissal is not among them. WOOMAX reads this plainly: dismissal no longer triggers the seniority payment. Severance for the separation is a separate matter, and the cost of an unfair dismissal has risen. But seniority pay, as such, is no longer settled by the act of dismissing.
The 2026 split, and 2027 onwards
The reform is not retroactive: time worked up to 15 June 2026 keeps its base of 45 days. That is why this year’s calculation splits at that date, 45 days before and 30 after. That split belongs to 2026. From 2027, the annual provision is set at 30 days only, and what accrued on the old base stays as an acquired right, without being recalculated.
Payment and tax
Payment can now be agreed: the employer and worker may arrange how it is settled, including by fraction of a month, by notifying the Autoridad Laboral. On tax, three laws read in sequence: Ley 4/2021 held that seniority pay was not taxed; Ley 1/2024, on the tax system, then allowed the ISS to be charged on it in certain cases; Ley 6/2026 reverses course and leaves it free of tax again. A company applying the ISS under the 2024 law can no longer do so from 15 June.
What to review now
What decides the cost is whether the books already reflect the change. Recalculating on the 45/30 split at the close of 2026, setting the provision at 30 days from 2027, fixing a single payment policy for the whole workforce, and reviewing the ISS treatment is the work the reform puts on the table. Non-compliance rarely appears because a law changes. It appears because internal processes keep running on the old one.
With Ley 6/2026 in force, the cost of ending a contract is decided before the dismissal, in whether the provisions, the form of payment and the ISS treatment already reflect the new framework.