On 13 April 2026, the Judicial Committee of the Privy Council (Privy Council) delivered judgment in Chandradev Appadoo v SBM Bank (Mauritius) Ltd [2026] UKPC 12, addressing two key issues under the Employment Rights Act 2008 (ERA). These included the evidential requirements for establishing a break in continuous employment; and the correct approach to awarding interest on a severance allowance.
The ERA which has since been replaced by the Workers’ Rights Act 2019, which:
- defined ‘continuous employment’ as ‘the employment of a worker under an agreement or under more than one agreement where the interval between an agreement and the next agreement does not exceed 28 days’.
- gave the Industrial Court the discretion to order an employer to pay interest on severance allowance at a rate not exceeding 12% per annum, from the date of termination to the date of payment.
The facts
Mr Appadoo worked for SBM Bank (Mauritius) Ltd (SBM) from 1980 to 2017. Following disciplinary proceedings in 2017, he was dismissed for alleged gross misconduct. He claimed a severance allowance of MUR 88 194 796.90 based on 37 years’ continuous service.
SBM contended that a gap of more than 28 days between two contracts in late 2012 broke the continuity of his employment, limiting his entitlement to a severance allowance for the period from 24 December 2012 to September 2017.
The central issue was whether Mr Appadoo’s employment had been continuous since 1980, or whether it had been interrupted by a gap of 28 days in late 2012 as contended by SBM.
Judicial history
The Industrial Court, in its judgment of 15 May 2023:
- Held that Mr Appadoo’s dismissal was unlawful because SBM had failed to: (a) comply with the notification requirements under the ERA; and (b) notify Mr Appadoo of the charges against him within the time prescribed by the Act.
- Accepted SBM’s contention that there was a break of more than 28 consecutive days in Mr Appadoo’s employment between 24 November and 24 December 2012 with the result that the severance allowance was limited to approximately four years of continuous service; and
- Awarded interest at 3% per annum on the severance allowance from the date of judgment, without providing reasons for selecting that rate.
The Supreme Court of Mauritius, in its judgment of 11 October 2024, reversed the Industrial Court’s finding on continuous employment, holding that the finding was perverse and against the weight of the evidence.
The Supreme Court held that Mr Appadoo had been in continuous employment for 37 years, entitling him to severance allowance of MUR 88194 796. On interest, the Supreme Court overturned the Industrial Court’s award of 3% and declined to award any interest at all, itself providing no reasons for that decision.
The Privy Council’s decision
On continuous employment, the Privy Council held that SBM failed to establish any break in Mr Appadoo’s service. SBM relied on internal documents including an exit checklist, HR emails, and a letter to the Bank of Mauritius, none of which evidenced Mr Appadoo’s knowledge of, or agreement to, an early termination of his contract in 2012.
SBM had not pleaded mutual agreement, adduced no direct evidence of it, and had not put it to Mr Appadoo in cross-examination. The Privy Council upheld the Supreme Court’s reversal of the Industrial Court and confirmed 37 years’ continuous employment.
On interest, the Privy Council held that both the Industrial Court (which awarded 3% without explanation) and the Supreme Court (which awarded no interest at all) erred. The Privy Council reasoned that interest under section 46(11) of the ERA serves as compensation for the employer’s delay in meeting its obligation to pay a severance allowance. Since SBM had not paid any part of the allowance and had used the money to which Mr Appadoo was entitled, there was no justification for setting the rate below the legal rate prescribed under article 1153 of the Mauritian Civil Code.
The Privy Council further noted that section 46(11) of the ERA is intended to afford a more beneficial interest regime for unfairly dismissed workers than that available under article 1153 of the Civil Code, and that the discretion to award interest should not be used to penalise a successful employee for the manner in which he conducted the litigation.
Accordingly, the Privy Council awarded interest at the legal rate of 4.5% per annum, running from the date of the Industrial Court’s judgment to the date of final payment.
Key takeaways
This decision confirms that internal administrative records alone are insufficient to establish a break in continuous employment. An employer asserting premature termination of a contract must adduce evidence that the employee was informed of, and agreed to, the early termination.
On interest, the Privy Council has clarified that, where the Industrial Court exercises its discretion under section 46(11) of the ERA, it should not award interest below the legal rate without providing clear reasons for doing so.
Summary
A recent Privy Council judgment addressed two key issues under the Employment Rights Act (ERA). These included the evidential requirements for establishing a break in continuous employment; and the correct approach to awarding interest on a severance allowance.
The decision confirmed that internal administrative records alone are insufficient to establish a break in continuous employment. An employer asserting premature termination of a contract must adduce evidence that the employee was informed of, and agreed to, the early termination.
The Privy Council also clarified that, where the Industrial Court exercises its discretion under the ERA, it should not award interest below the legal rate without providing clear reasons for doing so.
