Dismissing a Senior Executive in Morocco: Procedure, Risks and Negotiated Exit

A senior executive's departure in Morocco cannot safely be treated as a single, generic "dismissal". Before acting, a company should work out the person's legal status, whether the issue is misconduct, performance, restructuring or corporate governance, the applicable procedure, the financial rights that have accrued, whether a corporate mandate must be revoked separately, the confidentiality and non-compete risks, and whether a negotiated exit is commercially preferable.

This guide is written for the employer side — a Moroccan company, its founders or shareholders, its management or HR, or a foreign parent operating a Moroccan subsidiary. It is informational, not a substitute for advice on a specific file, because the outcome always depends on the facts, the contracts and the evidence.

The single most important step is to characterise the person's status, because it decides which legal regime applies. A job title — directeur, directeur général, gérant, administrateur — does not by itself answer this.

An employee holds an employment contract governed by the Labour Code (loi 65-99); disputes go to the social chamber. A corporate officer (mandataire social — a gérant of a SARL, or a board member of an SA) holds a corporate mandate governed by company law (loi 5-96 / loi 17-95); their appointment and removal follow corporate rules, and removal is a revocation, not a dismissal. A single person can be both — and that combination changes everything that follows.

So the first task is factual, not formal: does the person actually work under an employment contract, hold a corporate mandate, or both — and is the action you are contemplating a dismissal, a revocation of the mandate, or both at once?

Moroccan jurisprudence recognises that a person can hold a corporate mandate and an employment contract at the same time — but only where the employment relationship is genuine: distinct employment functions, real subordination, and separate remuneration, rather than an arrangement designed to limit the free revocability of the mandate.

Two consequences matter for an employer. First, revoking the corporate mandate does not automatically terminate a genuine separate employment contract — the company may remove the gérant and still face an employee with full dismissal protections. Second, and conversely, a title, a payslip or a document does not, on its own, establish protected employee status: a payslip is evidence of an employment relationship but is not conclusive, and the courts examine the reality of the subordinate relationship.

Once the same person is at once employee, corporate officer and perhaps shareholder, the dispute stops being purely employment law and crosses into company and commercial law. This is the point at which a commercial lawyer in Morocco and the analysis in our guide on shareholder and partner disputes become directly relevant.

The lawful route depends on the real reason for the departure. Disciplinary misconduct, poor performance, a restructuring, and a corporate-governance fallout are four different problems with four different analyses, and mislabelling one as another is a frequent and expensive error.

Note one boundary at the outset: dismissal for economic, technological or structural reasons follows a separate regime under articles 66-71, with its own authorisation process. That is not the subject of this guide and should be handled on its own footing; here the focus is the individual senior-executive departure.

Where the ground is serious misconduct, article 39 of the Labour Code lists the faults that can justify dismissal — for example theft, breach of trust, disclosure of professional secrets, serious insults or violence, intentional serious damage, or repeated unjustified absence. For a senior executive, breach of trust and disclosure of confidential information are the most common in practice.

Two points must be kept firmly in mind. Serious misconduct is not established by an allegation; it must be proven, and courts assess its seriousness, proportionality and context. And — critically — a serious fault does not remove the disciplinary procedure: the hearing and notification steps still apply, and skipping them can turn even a well-founded dismissal into an abusive one.

Underperformance and disciplinary misconduct are not the same legal category, and treating a performance problem as a faute grave is a classic mistake. Performance issues are managed and evidenced (objectives, reviews, warnings); they do not, by themselves, amount to serious fault.

For non-serious fault, the Labour Code requires graduated sanctions before dismissal (articles 37-38): a warning, then a reprimand, then a second reprimand or a suspension of up to eight days, then a further sanction or transfer. These are applied progressively; when the scale has been exhausted within the year, a dismissal can be considered justified. This is a sequence, not a licence to dismiss after a single warning.

Before dismissing an employee, the employer must hold a prior hearing. Under article 62, the employee must be heard within eight days of the discovery of the imputed act, by the employer or its representative, in the presence of a staff delegate or union representative the employee chooses. A procès-verbal is drawn up, signed by both parties, with a copy given to the employee.

If the employee refuses to attend or to sign, that refusal should itself be documented — in practice before the labour inspector — so the company can show it offered the hearing. The hearing is not a formality to be waived because the misconduct looks obvious; its absence is one of the most common reasons a dismissal is later requalified as abusive.

The dismissal decision must be in writing and reasoned. Under article 63 it is delivered to the employee against receipt or by registered letter with acknowledgment, within forty-eight hours of the decision being taken, and it must state the grounds, the date the employee was heard, and be accompanied by the article 62 procès-verbal.

Vague or shifting grounds are a real weakness: the reasons stated in the letter frame the later litigation, so they must be precise, accurate and supported by the evidence gathered before the decision.

By law, it is the employer who must prove an acceptable ground for the dismissal (article 63); the employer must also prove abandonment of post where it alleges it. The practical lesson is that a dismissal is only as strong as the evidence assembled before it is decided.

That evidence should be built lawfully: the employment contract and amendments, internal rules, written objectives and reviews, warnings and disciplinary history, attendance records, professional correspondence, and the findings of any internal investigation. Company email, logs and devices can be used within privacy limits, but the company must not access an employee's personal accounts, private phone or private data, or deploy disproportionate surveillance — unlawfully obtained evidence undermines the very case it was meant to support.

A validly established serious fault can deprive the employee of notice and of statutory severance, and can defeat damages for abusive dismissal. It does not, however, erase rights already earned: salary actually due and accrued paid-leave rights remain payable. "Faute grave means the employee gets nothing" is wrong and dangerous.

Where there is no serious fault, statutory severance is due for an employee with at least six months' service, calculated in tiers by seniority, and unrespected notice gives rise to a compensatory indemnity. The detailed tiers are set out in our employee-side guide on unfair dismissal; for an employer the key point is to map the total financial exposure — severance, notice, accrued leave, and any damages risk — before deciding.

When the contract ends, the employer typically obtains a final-settlement receipt (reçu pour solde de tout compte). Under articles 73-74 it must set out the sums paid in detail, state a forfeiture period of sixty days in legible characters, be drawn up in two copies (one given to the employee), and carry the employee's signature preceded by the words "lu et approuvé".

Its effect is limited and precise: if it is not contested within the sixty-day period it becomes final for the sums it covers, but if it is denounced in time (articles 75-76) it has only the value of a simple receipt. It is not a magic waiver of every possible claim, and it cannot give liberating effect to sums that were never paid.

Two limitation rules matter most. An abusive-dismissal claim must be brought within ninety days (article 65) — but that forfeiture is enforceable against the employee only where they actually received a formal dismissal decision expressly mentioning that period; a defective notification can leave the door open far longer. Other actions arising from the employment contract are generally subject to a two-year limitation (article 395).

For an employer, the takeaway is twofold: notify correctly if you want the ninety-day clock to run, and do not assume that time has extinguished a claim simply because months have passed.

For a senior executive, the risks often crystallise after departure. Confidentiality can survive the end of the contract depending on its source — the disclosure of professional secrets is itself a serious fault under article 39, and further obligations may arise from the contract and from the protection of confidential business information; but confidentiality does not automatically last forever, and its scope depends on the circumstances.

A non-compete clause is subject to judicial control. To be enforceable it should protect a legitimate business interest and remain limited in time, geographical scope and the activity covered; a clause that simply bars the person from working is vulnerable. Whether a financial counterpart is required is a matter of legal analysis rather than a settled, automatic rule in Morocco, and it should not be assumed either way.

Client diversion sits on a fine line. Lawful competition after departure is permitted; what can be actionable — depending on the facts — is the use of confidential client information or company files, solicitation in breach of a valid obligation, or unfair competition. These questions move the dispute into commercial territory, where the commercial-law framework applies alongside employment law.

Executive disputes frequently turn on money beyond salary: contractual bonus, discretionary bonus, commissions and targets. Whether variable pay is owed on departure depends on the contract wording, the conditions attached, what had actually been earned, and the company's own practice — there is no universal rule that a bonus is or is not due.

Because these entitlements are contract-driven, the bonus plan, the targets, and the record of how variable pay was calculated in the past are central evidence, and they should be reviewed before any figure is offered or refused.

A senior departure usually involves company property and information: laptop, phone, access badge, files, credentials, and client data. The company is entitled to recover its property and to organise a proper handover, and to preserve its own information lawfully and proportionately.

The boundary matters as much as the right. The company must not secretly enter the person's personal accounts, bypass passwords on private devices, read private messages, copy personal data without a legal basis, or use spyware. Recovering company assets is legitimate; overreaching into private data creates new liabilities and can taint otherwise good evidence.

For a senior executive, a negotiated exit is often commercially preferable to litigation: it can resolve the departure, the financial terms, confidentiality and non-compete questions, and the corporate-mandate side, in one controlled step. A settlement can take the form of a transaction under the general law of obligations.

But a settlement is not a blank cheque of protection. It cannot waive public-order employment rights, and a poorly mapped agreement may leave claims alive or prove unenforceable. The right approach is to identify the actual dispute and the accrued rights first, then structure the agreement — including the solde de tout compte — around them, rather than assuming a signature ends everything.

Jurisdiction follows the nature of the claim, not the person's title. An employment-contract dispute is heard by the competent first-instance court (social chamber); a dispute about the corporate mandate — its revocation, or the officer's liability — belongs to the company/commercial framework. Where the person had dual status, a single conflict can split across the two, with the employment questions and the corporate questions travelling on different tracks.

This is why the status analysis at the start is not academic: it determines not only what procedure applies, but where and how any dispute will actually be litigated.

Foreign ownership does not switch off Moroccan employment law: where Moroccan employment law applies, a foreign parent, a foreign shareholder or a remote board must still respect the procedure, the deadlines and the evidence rules, and some steps and formalities require local coordination rather than being handled entirely from abroad.

The corporate context can also change the employment picture. In a share sale the employing company remains the same legal person, so employment continues within it; in a transfer of the business or establishment, the continuity rules of article 19 may apply and contracts can pass to the new employer. This overlaps with the diligence covered in our guide on buying a hotel or company in Morocco.

Legal advice earns its place on a senior departure because the value is in the analysis and sequencing. Counsel can characterise the person's status, run the dual-status analysis, review the disciplinary process and the evidence, prepare the dismissal documentation, and estimate the financial exposure before a decision is taken.

It can also coordinate the corporate-mandate side, assess confidentiality and non-compete positions, structure a negotiated exit, plan litigation strategy, and coordinate with foreign shareholders. The role is to reduce risk and choose the right route at the right moment — not to promise a particular outcome, which depends on the facts, the evidence and the court.