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  • Legal system, currency, language

    Constitutional and civil law with certain application of case law. Pesos (ARS). Spanish.

     

  • Corporate presence requirements & payroll set-up

    A foreign entity cannot hire employees in Argentina without a local corporate presence.

    Employers must pay social security contributions (23% or 27% on top of salaries, depending on the company's activity and revenues). Employees must contribute 17% of their salaries to the social security system (to be withheld by the employer and subject to certain taxable limits). Income tax is also withheld by the employer when paying employees' salaries (maximum rate 35%, subject to a progressive scale).

    Collective bargaining agreements for certain activities provide payments to be made by the employer and/or the unionized employees to the relevant unions.

  • Pre-hire checks

    Required

    • Pre-hire medical checks are required pursuant to resolutions issued by the Occupational Hazard Superintendence. If an employee does not complete a pre-hire medical check, the employee will be deemed to have begun work in optimal health; therefore, any injuries or diseases which subsequently arise will be deemed to have happened during the employment relationship.
    • Criminal record checks are required for foreign employees to obtain a work visa.

    Permissible

    Where criminal checks are not required for work visa purposes, they are only permissible (and often done in practice) for specific roles (eg, high-level managerial positions). Reference and educational checks are common and permissible, provided applicant consent is previously obtained.

  • Immigration

    Foreigners from non-Mercosur countries must obtain a temporary residence permit that permits them to enter and work in Argentina. Temporary residency is granted for a maximum period of up to 1 year, extendable for periods of equal or shorter terms. After 3 consecutive years as a temporary resident, foreign employees are entitled to apply for permanent residence.

    Citizens of Mercosur countries can apply for temporary Mercosur residence in Argentina without the need to present a work contract to the authorities. Temporary Mercosur residence is granted for 2 years and enables the individual to work and to apply for permanent residence on expiry of the temporary residence.

  • Hiring options

    Employee

    Full-time, part-time, fixed-term, indefinite-term employees or trainees.

    The following factors tend to indicate a labor relationship: availability to work for his/her employer; an employer who directs and subordinates the individual; an employer who instructs the services and duties required and creates the individual's schedule. Courts will also look at the extent to which the worker depends economically on the employer.

    Independent contractor

    Contractors should only be engaged where there is no labor relationship, that is, no direction/subordination or economic dependence.

    Misclassification, that is failure to register an individual as an employee, or submission of an incomplete or defective registration, carries the risk of severe sanctions and fines from the authorities (including amounts owed to social security for unpaid contributions). In addition, steep fines are levied upon statutory severance, including the doubling of the amount of severance owed to a (misclassified) employee.

    Agency worker

    Employers can engage workers through agencies. Agencies must be authorized by the authorities to function as an agency.

    The employer will be jointly and severally liable with the agency for all labor obligations arising from the worker's employment.

  • Employment contracts & policies

    Employment contracts

    There is no general, legal requirement to execute employment contracts in a specific form – meaning that they can be in writing, made orally, etc. unless a specific law or collective convention applies and indicates otherwise. Notwithstanding, employers are advised to enter into a written employment contract.

    Probationary periods

    The maximum permitted duration of a probationary period is 3 months. After the end of the 3 month period, the employee will turn into an indefinite term employee.

    Policies

    The law does not require employers to have specific policies in place. Notwithstanding, there are some policies that are strongly recommended to prevent potential conflict, such as bonus policies.

    Third-party approval

    Third-party approval is not required for employment contracts or any policies.

  • Language requirements

    No statutory language requirements; however, in practice, employment contracts are drafted in Spanish.

  • Minimum employment rights

    Employees entitled to minimum employment rights

    The Employment Contract Law No. 20,744 (LCL) governs the minimum employment rights in Argentina.

    Pursuant to Article 3º of the LCL, the law governs everything related to the validity, rights and obligations of the parties, provided the employment contract is performed in Argentina, even if the contract was entered into abroad.

    The LCL applies to "workers" which covers not only employees working under an employment contract, but also other individuals who personally perform "work" or provide services for the employer.

    For this purpose, "work" should be understood as any legitimate activity that is provided in favor of someone who has the power to direct that work, through the payment of remuneration for those activities and/or services rendered.

    The main factors that will tend to indicate that an individual is an employee rather than a worker or self-employed worker, are:

    • The employee must be available to work for his/her employer
    • The employer will direct and subordinate the employee, appoint the services and duties required and order the employee to comply with a schedule

    Courts will also weigh the extent to which the worker depends economically on the income obtained from the alleged employer.

    Working hours

    The general maximum number of hours is 8 hours per day or 48 hours per week for all employed workers in public or private enterprises. Each extra hour worked above these limits is deemed to be overtime.

    Notwithstanding the foregoing, Article No. 3 of Law No. 11,544, in its subsections a), b) and c) regulates exceptions to the abovementioned maximum limitation on working hours. The limitations do not apply to employees performing duties under the form of a "job team," that is, working in a special coordinating rotation system, nor to employees performing duties in high-level positions (main managers, directors etc.).

    Overtime

    Employees in Argentina are allowed to perform overtime. Overtime will be only compulsory in cases of danger or accidents or imminent force majeure, or by exceptional demands of the national economy or the company (Article No. 203 of the LCL).

    Overtime must be paid with a surcharge of 50%, calculated using the employee's usual salary if the overtime hours were worked during business days, and 100% on Saturday after 1pm, Sunday or holidays. In no event may employees work overtime of more than, 3 hours per day, 30 hours per month or 200 hours per calendar year.

    Wages

    The national minimum wage (NMW) is updated regularly by the National Council of Employment dependent of the Ministry of Production and Labor. The NMW rate as of December 2018 is AR$11,300.

    Most CBAs also provide for a specific minimum wage applicable to employees subject to the CBA.

    Vacation

    Employees with less than 5 years seniority are entitled to 14 calendar days after 6 months of work. This increases to 21 calendar days for employees with between 5 to 10 years of seniority; 28 days for employees with between 10 to 20 years of seniority, and 35 days for employees with more than 20 years of seniority. For employees with less than 6 months of service, employers must grant 1 day of vacation per worked month. Companies should grant vacation to their employees between October 1 to April 30 of the following year.

    Sick leave & pay

    Sick/accident leave of up to 3 months per year must be provided to employees with less than 5 years of seniority, while 6 months must be granted to employees with seniority of 5 years or longer. For employees with "family dependents" (generally understood to be the immediate family that economically depends on the employee’s wage and labor benefits), these periods are doubled, to 6 and 12 months, respectively.

    Maternity/parental leave & pay

    Pregnant employees may take leave of 45 days prior to giving birth and up to 45 days after giving birth. However, the employee may choose to reduce the leave prior to giving birth, but it may not be less than 30 days, and add those days to the maternity leave period after the birth of the child. In the event of premature birth, the period of the leave that has not been enjoyed before the birth will be added to the leave period after the childbirth. Further, the employee is entitled to earn her gross remuneration (without any withholding contributions made to the social security system), during maternity leave. The ANSES (as defined below) pays the remuneration of employees during maternity leave.

    Fathers are entitled to paid leave of 2 consecutive days for the birth of his child. There is no general regulation providing other parental leave after the birth of a child. 

  • Discrimination

    The law prohibits discriminatory acts or omissions based on race, religion, nationality, ideology, political or trade union opinion, sex, economic position, social condition or physical characteristics.

    In addition, Argentina has ratified international antidiscrimination conventions, such as the Convention of Belem do Pará and the Convention on the Elimination of All Forms of Discrimination against Women.

  • Benefits & pensions

    The Social Security National Administration (Administración Nacional de la Seguridad Social, hereinafter ANSES) is the authority in charge of the administration of the social security system in Argentina, called Sistema Integrado de Jubilaciones y Pensiones (SIJP). Employers and employees are required to make contributions to the SIJP which provides for old age pension and disability benefits.

    To qualify for a statefunded pension distribution, male employees must be 65 years old, while female employees must be 60 years old. In both cases, in order to qualify for pension the employee must have contributed to the SIJP for a minimum of 30 years.

    Employers do not have a legal obligation to provide a private pension scheme for employees, as the employees are entitled to state pensions.

  • Data privacy

    The Data Privacy Law No. 24,766 sets limits to the type of personal data that may be collected by prohibiting the collection of sensitive personal data, such as data that is related to political or religious opinions, and regulates the collection, use, processing and transfer of personal data.

    Employers are allowed to monitor employee's work devices, provided the employee is duly notified in advance, and personal information is safeguarded and not disclosed.

  • Rules in transactions/business transfers

    Where there is an asset transfer that qualifies as a business transfer, all obligations arising from the employment contracts that the transferor has executed with its employees will be taken on by the transferee after the transfer. Employment contracts will continue with the transferee and the employees will retain their seniority with the transferor and the rights arising from it. Therefore, on the execution of the transfer, all employees are automatically transferred to the transferee, after their written consent has been obtained.

    Although in practice both internal consultations and collective consultation with trade unions are held before a business transfer takes place, the transferor and the transferee are not required by law to inform or consult employees on a business transfer. However, in order to perform the transfer of staff, the employee’s written consent must be given prior to the transfer. In the absence of this consent, the employee may terminate the employment, with the right to compensation.

    The transferor and the transferee will be jointly and severally liable for any dismissals that arise due to the transfer.

  • Employee representation

    Argentina is a highly unionized country with approximately 3,100 active trade unions with considerable political power. There are unions in nearly all sectors or industries.

    A trade union must be recognized by the Ministry of Production and Labor. Only recognized and authorized unions can enter into a CBA. Employers cannot recognize an unauthorized union voluntarily, not even for collective bargaining purposes.

    The National Constitution sets out collective labor rights in its Article No. 14 (bis), guaranteeing unions the right to collectively bargain and the right to strike.

    CBAs are very common in Argentina. There are different types of CBAs depending on the territory in which they are going to be enforceable. Some CBAs only govern employees within one specific company, whereas other CBAs govern employees performing certain activities in a geographical region or industry.

  • Termination

    Grounds

    Cause is not required for termination of employment; however, it is required to avoid payment of statutory severance. There is no exhaustive and/or exemplary list of behaviors that constitute cause for dismissal; therefore, whether a dismissal is with or without cause will depend on judicial judgment on a case by case basis. 

    Who is subject to termination laws?

    All employees.

    Prohibited or restricted terminations

    Public employees and union delegates cannot be dismissed without cause and without complying with the statutory procedure for these terminations. All other employees can be dismissed with payment of statutory severance, which will differ based on the case (maternity, illness, etc.)

    Pregnant employees are protected from dismissal. If a pregnant employee is dismissed within the period of 7-1/2 months before or after the date of childbirth, the pregnancy will be considered to be the cause of the dismissal, entitling the employee compensation for the discrimination equivalent to their annual salary, in addition to the applicable severance payment.

    Further, if a dismissal occurs 3 months before the marriage of an employee, or 6 months after it, the dismissed employee will be entitled to a special compensation.

    In order to dismiss employees on sick leave, employers must pay a special severance (full severance payment applicable for dismissal without cause, plus the salary which would be payable for the entire period the illness would be expected to last, according to medical opinion).

    Third-party approval for termination/termination documents

    Under Decree No. 1043/18 (effective as of November 14, 2018), employers wishing to dismiss indefinite term employees without cause must notify the Ministry of Production and Labor at least 10 business days before the decision goes into effect. This Decree is effective through March 31, 2019.

    As this decree was issued recently, there is no administrative or judicial case law interpreting the Decree.

    Mass layoff rules

    Prior to a mass dismissal, an employer must provide notice to the respective trade union that regulates the employer's industry. Collective consultation may be required depending on employee headcount.

    Prior to executing or communicating dismissals or suspensions due to force majeure, economic or technological causes that affects more than:

    • 15% of the employees where total headcount is less than 400
    • 10% of the employees where total headcount is between 400 and 1,000 and
    • 5% of the employees where total headcount is greater than 1,000

    Employers must comply with the Preventive Procedure of Companies Crisis (PPC) before the Ministry of Production and Labor. During this procedure, the company will engage in negotiation with the respective union acting on behalf of their members. The aim of this procedure is to avoid business shutdowns or bankruptcy. After the company files the request at the Ministry of Production and Labor, the Ministry will forward the claim within 2 business days of the filing to the other party for its response. After a response is made, a settlement hearing will be scheduled within the next 5 business days. If a settlement is not reached, the Ministry will open a "negotiating period" that must not extend beyond 10 business days. If the parties still do not reach to an agreement within that period, the PPC process will conclude. Notwithstanding this, in practice, this procedure normally takes longer than the law sets out.

    Notice

    In order to proceed with termination, employers must give notice to employees before the dismissal. 

    The term of this notice will depend on the seniority of employees:

    • During their probationary period, notice must be given to employees 15 days before termination
    • In order to dismiss employees who have completed the probationary period but who have less than 5 years of seniority, notice must be given 1 month prior to the dismissal and
    • Employees with more than 5 years' seniority must receive 2 months' notice before their dismissal

    Statutory right to pay in lieu of notice or garden leave

    Employers are permitted to pay in lieu of notice. Current legislation does not regulate nor prohibit garden leave.

    Severance

    An employee who is dismissed without reasonable cause is entitled to statutory severance of 1 month's salary for each year of service, or period longer than 3 months. This amount is calculated using the employee's highest monthly, regular compensation received in the last 12 months of work. This baseline cannot be more than 3 times the "monthly payment," which is the average of all compensation set out in the applicable CBA at the time of the dismissal (this average is periodically published). The Ministry of Production and Labor governs the updating of this average for every authorized trade union.  

    If the employee is not subject to a CBA (typically, senior employees), the limits applicable to the activity in which he/she performs duties will apply. In no case will the amount of the compensation payable be less than 1 month of real salary.

    Currently, in the Vizotti case, the Supreme Court of Justice has raised the basis for calculating compensation subject to a limit, establishing that it will be 67% of the employee's monthly and usual compensation, the amount to be multiplied by the years of service of the employee, based on constitutional reasons and in cases where the application of the legal limit imposes a reduction to the severance payment of more than 33%.

    This severance payment may be reduced or increased in other types of termination (eg, force majeure and lack or reduction of work; death of the employee; employer's bankruptcy; employee's retirement; employee's illness; employee's pregnancy; etc.)

  • Post-termination restraints

    Non-compete, customer non-solicitation and employee non-solicitation clauses are often used, especially when the employer and employee negotiate the terms and conditions of the termination of the employment.

    Restrictive covenants are capable of being enforced post-employment, provided the employee receives compensation for the restrictions. Therefore, consideration is required for valid restrictive covenants. The amount must be fair and in accordance with the salary of the employee, his/her position in the company, the agreements that the company intends to impose and the extent (period and territory) of the restrictive covenant.

    The law does not specifically regulate restrictive covenants. However, most restrictive periods range between 2 years to 5 years. However, under certain circumstances the court has enforced a 10 year post-termination restraint period, based on the business and the amount of consideration paid to the employee.

    Where an employee is in breach of an agreement, the employer can file a claim against the employee in court requesting compensation for damages. The complaint may include injunctive relief to stop the violation immediately. Alternatively, courts may declare the covenant null and void if it has been drafted too widely.

  • Waivers

    Pursuant to the LCL, any executed agreement that suppresses or reduces rights granted by the LCL, labor laws related to specific industries, collective agreements or individual employment contracts, either at the time of their agreement or execution, or the exercise of the rights arising from its termination, shall be null and void.

  • Remedies

    Discrimination

    Compensation is available as a remedy for discrimination or harassment. In case the event of a complaint based on harassment, the employee can file a claim requesting the payment of the statutory severance payment applicable to dismissals without cause and an additional amount for the pain and/or emotional distress caused by the harassment.

    Employers are liable for the acts of their employees. Therefore, the employer and the harasser will be declared jointly and severally liable for the payment of any compensation granted to the victim.

    Unfair dismissal

    Employees may challenge a dismissal without cause within 2 years of the dismissal and seek payment of statutory severance, plus interest and court fees. The complaint must be filed before the labor courts.

    Failure to inform & consult

    Not applicable for terminations as there are no consultation obligations.

  • Criminal sanctions

    Breaches of labor law do not entail a criminal breach or sanction unless such a breach or offense is specifically regulated by the National Criminal Code as a crime. In that case, criminal sanctions will be applied for the breach of criminal law and not for the breach of labor law.

  • Key contacts
    Osvaldo Jofre
    Osvaldo Jofre
    Cordova Francos [email protected]

Termination

Argentina

Grounds

Cause is not required for termination of employment; however, it is required to avoid payment of statutory severance. There is no exhaustive and/or exemplary list of behaviors that constitute cause for dismissal; therefore, whether a dismissal is with or without cause will depend on judicial judgment on a case by case basis. 

Who is subject to termination laws?

All employees.

Prohibited or restricted terminations

Public employees and union delegates cannot be dismissed without cause and without complying with the statutory procedure for these terminations. All other employees can be dismissed with payment of statutory severance, which will differ based on the case (maternity, illness, etc.)

Pregnant employees are protected from dismissal. If a pregnant employee is dismissed within the period of 7-1/2 months before or after the date of childbirth, the pregnancy will be considered to be the cause of the dismissal, entitling the employee compensation for the discrimination equivalent to their annual salary, in addition to the applicable severance payment.

Further, if a dismissal occurs 3 months before the marriage of an employee, or 6 months after it, the dismissed employee will be entitled to a special compensation.

In order to dismiss employees on sick leave, employers must pay a special severance (full severance payment applicable for dismissal without cause, plus the salary which would be payable for the entire period the illness would be expected to last, according to medical opinion).

Third-party approval for termination/termination documents

Under Decree No. 1043/18 (effective as of November 14, 2018), employers wishing to dismiss indefinite term employees without cause must notify the Ministry of Production and Labor at least 10 business days before the decision goes into effect. This Decree is effective through March 31, 2019.

As this decree was issued recently, there is no administrative or judicial case law interpreting the Decree.

Mass layoff rules

Prior to a mass dismissal, an employer must provide notice to the respective trade union that regulates the employer's industry. Collective consultation may be required depending on employee headcount.

Prior to executing or communicating dismissals or suspensions due to force majeure, economic or technological causes that affects more than:

  • 15% of the employees where total headcount is less than 400
  • 10% of the employees where total headcount is between 400 and 1,000 and
  • 5% of the employees where total headcount is greater than 1,000

Employers must comply with the Preventive Procedure of Companies Crisis (PPC) before the Ministry of Production and Labor. During this procedure, the company will engage in negotiation with the respective union acting on behalf of their members. The aim of this procedure is to avoid business shutdowns or bankruptcy. After the company files the request at the Ministry of Production and Labor, the Ministry will forward the claim within 2 business days of the filing to the other party for its response. After a response is made, a settlement hearing will be scheduled within the next 5 business days. If a settlement is not reached, the Ministry will open a "negotiating period" that must not extend beyond 10 business days. If the parties still do not reach to an agreement within that period, the PPC process will conclude. Notwithstanding this, in practice, this procedure normally takes longer than the law sets out.

Notice

In order to proceed with termination, employers must give notice to employees before the dismissal. 

The term of this notice will depend on the seniority of employees:

  • During their probationary period, notice must be given to employees 15 days before termination
  • In order to dismiss employees who have completed the probationary period but who have less than 5 years of seniority, notice must be given 1 month prior to the dismissal and
  • Employees with more than 5 years' seniority must receive 2 months' notice before their dismissal

Statutory right to pay in lieu of notice or garden leave

Employers are permitted to pay in lieu of notice. Current legislation does not regulate nor prohibit garden leave.

Severance

An employee who is dismissed without reasonable cause is entitled to statutory severance of 1 month's salary for each year of service, or period longer than 3 months. This amount is calculated using the employee's highest monthly, regular compensation received in the last 12 months of work. This baseline cannot be more than 3 times the "monthly payment," which is the average of all compensation set out in the applicable CBA at the time of the dismissal (this average is periodically published). The Ministry of Production and Labor governs the updating of this average for every authorized trade union.  

If the employee is not subject to a CBA (typically, senior employees), the limits applicable to the activity in which he/she performs duties will apply. In no case will the amount of the compensation payable be less than 1 month of real salary.

Currently, in the Vizotti case, the Supreme Court of Justice has raised the basis for calculating compensation subject to a limit, establishing that it will be 67% of the employee's monthly and usual compensation, the amount to be multiplied by the years of service of the employee, based on constitutional reasons and in cases where the application of the legal limit imposes a reduction to the severance payment of more than 33%.

This severance payment may be reduced or increased in other types of termination (eg, force majeure and lack or reduction of work; death of the employee; employer's bankruptcy; employee's retirement; employee's illness; employee's pregnancy; etc.)

Australia

Grounds

Termination can be brought about: by mutual agreement; upon expiry of a fixed-term contract; by the employer, with or without notice; or termination (resignation) by the employee.

Who is subject to termination laws

Employees who have completed 6 months of service with their employer (or 12 months in the case of a small business employer with fewer than 15 employees) and earn less than the high income threshold (currently AU$145,400); or who are covered by a modern award or enterprise agreement, are eligible to make a claim for unfair dismissal.

Prohibited or restricted terminations

Employers are prohibited from taking "adverse action" (including termination) against other persons because the other person has or exercises a "workplace right," or engages lawful in "industrial activity," or because of a protected attribute (such as race, sex, age or disability). Further protections include a prohibition on an employer dismissing an employee because the employee is temporarily absent from work because of illness or injury for fewer than 3 months in a 12 month period.

Third-party approval for termination/termination documents

Not applicable.

Mass layoff rules

Reporting requirements apply where a decision is made to make 15 or more employees redundant, including notifying the relevant government agency and relevant unions.

Notice

Between 1 week and 4 weeks depending on length of continuous employment (although employment contract may specify longer notice period). Where an employee is over 45 years of age and has completed at least 2 years' continuous service, he or she will be entitled to another week's notice.

Statutory right to pay in lieu of notice or garden leave

Employer can pay in lieu of notice. No right to garden leave unless specified in the contract.

Severance

The entitlement to severance as a result of a termination by reason of redundancy is based on a sliding scale and calculated by reference to the length of the employee's period of continuous service on termination.

Period of continuous service Pay
Less than 12 months of service 0
12 months to less than 2 years of service 4 weeks' pay
2 years of service to less than 3 years of service 6 weeks' pay
3 years of service to less than 4 years of service 7 weeks' pay
4 years of service to less than 5 years of service 8 weeks' pay
5 years of service to less than 6 years of service 10 weeks' pay
6 years of service to less than 7 years of service 11 weeks' pay
7 years of service to less than 8 years of service 13 weeks' pay
8 years of service to less than 9 years of service 14 weeks' pay
9 years of service to less than 10 years of service 16 weeks' pay
10 years and over 12 weeks' pay
Note: The scale does drop from 16 weeks to 12 weeks. This is an odd historical anomaly that continues to be the case and is usually justified by the employee's entitlement to long service leave after reaching 10 years' service.

A "week's pay" is generally calculated on the basis of the employee's base rate of pay.

Service prior to January 1, 2010 is only counted if the employee had an entitlement to redundancy pay under some other instrument prior to that date.

Austria

Grounds

No grounds required. In special cases (eg, if termination is exceptionally hard for the employee and therefore socially inadequate), the employee may claim unfair termination and reinstatement. Where the termination is deemed socially inadequate, the employer would need business reasons or reasons relating to the employee to justify the termination.

Employees subject to termination laws

Employees with fewer than 6 months' seniority have no unfair dismissal protection.

Prohibited or restricted terminations

Certain employees, eg, pregnant employees, disabled employees, members of works councils, etc., enjoy special protection and their termination requires prior approval by the competent court or institution.

Third-party approval for termination/termination documents

With the exceptions outlined above, generally, approval is not required to implement a termination. If a works council exists, the works council has a right of information and may give a statement. Special documents, eg termination in writing, are in general not mandatory (collective bargaining agreements or special legal provisions, eg with respect to trainees, may provide different regulations).

Mass layoff rules

Information of the competent Austrian authorities is mandatory for a mass layoff –that is, if the employer employs between 20 and 100 employees, termination of at least 5 employees; if the employer employs between 100 and 600 employees, termination of at least 5% of the employees; if the employer employs more than 600 employees, termination of at least 30 employees – triggers an obligation to inform the competent authorities. Termination of at least 5 employees each older than 50 years triggers an obligation to inform the competent authorities regardless of the threshold outlined above. Furthermore, redundancy programs must be implemented together with the respective works council.

Notice

For the employer, minimum of 6 weeks' statutory notice to the end of every calendar quarter (possible agreement to 6 weeks to the end of every month and/or 15th of every month, which is common); additional notice due to seniority. Not required for terminations for cause.

For the employee, 1 month to the end of every month (if not agreed otherwise). Not required for terminations for cause.

Statutory right to pay in lieu of notice or garden leave

No payment in lieu of notice. Right to place an employee on garden leave depends on contract terms.

Severance

Every month during employment, the employer is obliged to pay 1.53% of the gross salary to a public insurer (Mitarbeitervorsorgekasse). Employee then has a severance right against that insurer, but there is no additional severance payable by the employer.

Bahrain

Grounds

Termination is possible on these grounds: during the probationary period, on the expiry of a fixed term contract, dismissal with notice provided it is for a valid reason, following a failure to improve performance after reasonable opportunity (60 days), resignation, incapacity or death, redundancy, retirement (age 60) and summary dismissal (by reason of any of the grounds listed in Article 107 of the Labor Law).

Employees subject to termination laws

All employees are subject to the Labor Law.

Prohibited or restricted terminations

Employees who have not exhausted their statutory sick leave entitlement are protected from dismissal on grounds of health, unless their full sick leave entitlement has been taken (ie, 55 days per year of service). The worker may accumulate the balance of sick leave on full or partial pay to which the worker is entitled for a period not exceeding 240 days. Female employees are protected from dismissal during maternity leave and by reason of their marriage.

Third-party approval for termination/termination documents

Any office closures must be reported to the Ministry of Labor and Social Development. Bahrain nationals are generally entitled to higher protection from dismissal in such circumstances and may accordingly be awarded higher compensation payments by the authorities.

Mass layoff rules

Governed under Article 110 and 111 of the Labor Law.

Notice

30 days' statutory notice.

Statutory right to pay in lieu of notice or garden leave

Depends on Labor Law and contract of employment.

Severance

Unless terminated under Article 107 of the Labor Law, employees are entitled to salary and benefits up to the termination date, notice (or payment in lieu), payment in lieu of accrued but untaken annual leave, the cost of a flight/air ticket to repatriate the employee to their home country unless the employee has obtained alternative sponsorship to remain in Bahrain, an end of service gratuity payment (EOSG) and reimbursement of unpaid business expenses.

In case of employer termination, employees are eligible for payment of an EOSG which accrues at the rate of half a month's wage for each of the first 3 years of service and 1 month's wage for each of the following years of service. The calculation is pro-rated for any fractions of a year of service that have not been completed.

Belgium

Grounds

In principle no obligation to justify the dismissal, except in case of a dismissal for serious cause. However, on the request of the employee, the employer will have to explain the dismissal on grounds which relate to the employee's work ability, his/her behavior at work or the employer's business necessities, or the employee may be entitled to a complementary indemnity.

Employees subject to termination laws

All.

Prohibited or restricted terminations

Specific protection against dismissal applies in the following circumstances: application for time credit leave; application for maternity or paternity leave, parental leave or adoption leave; formulation of observations in the register in the framework of the procedure for introducing or amending the work regulations; being a holder of or a candidate for a political mandate; redundancy or threatened redundancy due to the introduction of new technologies; application for paid educational leave; application for leave in order to assist a person with palliative care, in order to assist a person who is suffering a serious disease or in order to take up the education of a child; request by a night worker to return into a daytime schedule; prevention consultant; lodging of a claim in relation to violence, harassment or sexual harassment or testifying in the framework of such a claim; lodging of a claim in relation to discrimination; appointment as union delegate; and being a candidate in the election process for the appointment of employee representatives within the works council or the committee for prevention and protection at work. Other protections against dismissal can exist on an industry level.

In case of a protection against dismissal, the employer will either have to prove that the grounds of dismissal are not related to the reason why the employee is protected (eg, in case of maternity leave) or will have to comply with a strict dismissal procedure before terminating the employment contract (eg, in case of the contemplated dismissal of a candidate or employee representative).

Third-party approval for termination

Required in the event of a dismissal of a candidate or employee representative in the works council or the Committee for Prevention and Protection at Work:

  • In case of a dismissal for economic or technical reasons, an approval by the competent joint committee, or in absence of such approval, an approval by the president of the employment tribunal, is required
  • In case of a dismissal for serious cause, an approval by the president of the employment tribunal is required

A prevention advisor can only be dismissed in case of approval by the Committee for Prevention and Protection of Work, unless the employment contract is terminated for serious cause.

Mass layoff rules

Strict information and consultation rules apply where 10 or more employees (depending on the total number of employees) are to be made redundant over 60 days or less, and in case of a closure of an undertaking or a department thereof. Failure to comply is a criminal offence.

Notice

The following notice periods apply in case of dismissal of an employee:

Period of continuous service Notice period
Less than 3 months 1 week
3 months – 4 months 3 weeks
4 months – 5 months 4 weeks
5 months – 6 months 5 weeks
6 months – less than 9 months 6 weeks
9 months – less than 12 months 7 weeks
12 months – less than 15 months 8 weeks
15 months – less than 18 months 9 weeks
18 months – less than 21 months 10 weeks
21 months – less than 24 months 11 weeks
2 years – less than 3 years 12 weeks
3 years – less than 4 years 13 weeks
4 years – less than 5 years 15 weeks
As of 5 years plus 3 weeks per commenced year of continuous service
As of 20 years plus 2 weeks per commenced year of continuous service
As of 21 years plus 1 week per commenced year of continuous service

Deviations exist within certain industry sectors (eg, construction sector).

No notice period to be observed in case of a dismissal for serious cause.

Statutory right to pay in lieu of notice or garden leave

The employer can terminate the employment contract with immediate effect, by payment of an indemnity in lieu of notice equal to the remuneration due for the notice period. Garden leave is only allowed with the employee's prior and explicit consent.

Severance

No general statutory severance, but clientele indemnity in case of the dismissal of a sales representative; closure indemnity in case of the closure of an undertaking or a department of an undertaking; mobilization indemnity within the framework of a mass layoff (collective dismissal); protection indemnity; etc.

Brazil

Grounds

As a rule, termination does not require a cause, but severance payments for terminations without cause are higher than those owed in cases of termination for cause. Certain circumstances protect employees against unmotivated dismissal. Termination by mutual agreement is allowed in certain circumstances, when it is convenient for the company and also for the employee.

Employees subject to termination laws

All employees.

Restricted or prohibited terminations

Certain circumstances prevent the termination of the employment relationship without cause or cause an increase in the severance payments, such as:

  • Pregnancy
  • Application by the employee for, or election of the employee to, a position at the Internal Commission for Accident Prevention (Comissão Interna de Prevenção de Acidentes or CIPA)
  • Application by the employee or election of the employee for a management position at the employees' union
  • Work accident (an employee who suffers a work-related accident cannot be dismissed until one year after the illness allowance has ceased)
  • Acceptance by the employee of a position in the conciliation commission in charge of settling labor disputes

Other events provided under collective conventions or collective agreements may lead to temporary job tenure protection.

Third-party approval for termination

The union may be required to be involved in the termination process of employees in circumstances preventing termination per collective bargaining rules.

Since November 13, 2017, the union (or the labor authority) is no longer required to ratify terminations of employees.

Mass layoff rules

Mass layoffs do not require prior negotiation with the union.

Notice

Termination without cause by employer's initiative: 30 days during the first year plus 3 days per additional year of service for the same company, limited to 90 days. Additional collective bargaining agreement provisions may apply.

Termination for cause: Not applicable, effective immediately.

Statutory right to pay in lieu of notice or garden leave

The company has the statutory right to pay in lieu of notice. Garden leave is not allowed.

Severance

In case of termination without cause, the employee is entitled to severance, amounting to the equivalent of 40% of the balance in the employee's Unemployment Guarantee Fund (Fundo de Garantia do Tempo de Serviço) (FGTS), accrued during the employment relationship. Additional payments will be due, such as: one month's salary if the termination takes place in the 30 days before the expected date of the collective bargaining agreement for the following period; payout of accrued vacation plus 1/3 vacation bonus; pro-rated 13 months' pay, and other payments required by the applicable collective bargaining agreement or contract.

In case of termination with cause, accrued unused vacation plus vacation bonus, and other payments required by the applicable collective bargaining agreement or contract, are still required, but there will be no FGTS payout or additional one month's salary.

In case of termination by mutual agreement, the company must pay half of the notice and 20% of the FGTS balance (as opposed to 40% when the termination is on the company's initiative). The employee will be allowed to withdraw 80% of the balance of the FGTS fund (as opposed to 100% when the termination is on the company's initiative) but he/she is not entitled to unemployment benefits in this type of termination.

Canada

Grounds

Termination for cause without notice or pay in lieu is permissible, but the standard is high, requiring gross and willful misconduct, willful neglect of duty, fraud, serious breach of applicable policies or material or repeated insubordination. Termination without cause is permissible in most jurisdictions, provided that proper notice of termination or pay in lieu is provided. If an employer reprises against an employee for exercising a statutory right under employment standards, human rights or occupational health and safety legislation, no amount of notice will make the termination lawful.

In Quebec and Nova Scotia, additional protections exist for certain employees who have acquired tenure, and in those circumstances, termination may not be possible except for bona fide reasons, such as position elimination or lack of work. 

Federally-regulated employers may not terminate a non-managerial employee with at least one year of service without sufficient reason (generally just cause or a discontinuance of the job function). Employers are federally-regulated if they operate in industries that fall within the federal government's constitutional jurisdiction and concern matters of national interest, notably:

  • Banking
  • Telecommunications
  • Air transport
  • International and interprovincial rail and road transport
  • Marine shipping, ferry and port services
  • Radio and television broadcasting
  • Fisheries
  • Interprovincial canals, pipelines, tunnels and bridges
  • Grain, feed and seed mills
  • Uranium mining and processing

The vast majority of employees in Canada (approx. 90%) are provincially regulated.

Employees entitled to termination protection

Generally, employees in Canada cannot be terminated without just cause or without proper notice or pay in lieu and severance pay, if applicable, under statute and at common/civil law. The right to reinstatement, however, is generally limited to unionized employees, employees terminated contrary to human rights legislation, employees terminated for exercising a statutory right with respect to working conditions or legislated employment standards (such as the right to a pregnancy leave) or for certain employees who both have the requisite length of service and are working in federally regulated industries or are employed in the provinces of Quebec or Nova Scotia.

Prohibited terminations

Employees may not be terminated based on a prohibited ground, for filing a harassment complaint, or as an act of reprisal for asserting a statutory right with respect to working conditions or legislated employment standards.

Third-party approval for termination/termination documents

Approval is not required. However, for group terminations, notice in a prescribed form must generally be provided to the applicable Ministry of Labour, and may need to be posted in the workplace (in some cases before the termination will be effective).

Mass layoff rules

There are rules to be followed in the event of a mass layoff. Most jurisdictions provide for increased statutory notice or pay in lieu and/or severance pay in the event of a group termination, and may require the provision of notice to a government ministry. In most jurisdictions, the threshold is 50 or more employees within a specified period. However, in some cases the threshold is much lower (eg, in Quebec, the threshold is more than 9 employees). There is generally not a consultation obligation; however, notice may need to be given to a governmental authority.

Notice

The statutorily required minimum length of notice of termination varies by jurisdiction and, for individual terminations, is based on an employee's length of service. For individual terminations, most jurisdictions limit notice of termination to 8 weeks. However, some provide for up to 10 weeks. Significantly longer notice periods (up to 2 years or more) can be awarded at common law unless there is a valid termination clause in an employment agreement which limits the common law entitlement. In Quebec, similar entitlements exist and generally cannot be limited by contract at the outset of the employment relationship.

Statutory right to pay in lieu of notice or garden leave

Pay in lieu of notice is permitted. "Garden leave" is becoming more common and, with appropriate care and planning, an employer can often achieve this objective for a reasonable period. 

Severance

Eligible employees in Ontario and the federal jurisdiction are eligible for severance pay. In Ontario, eligible employees (those with 5 or more years of service) receive 1 week for each year of service, with partial years prorated to a maximum of 26 weeks. In the federal jurisdiction, eligible employees receive the greater of 2 days' wages per year of service or 5 days' wages.

Chile

Grounds

Except for managers and others specified by statute, employees cannot be terminated unilaterally without cause. However, the law makes a distinction between standard for-cause removal reasons (eg, failure of performance, non-attendance at work, insults to the employer, etc.), which do not entitle the employee to severance pay, and removal based on redundancy (or the unilateral removal of managers), which do entitle the employee to severance pay if the employee has been in the position for more than 1 year.

Employees subject to termination laws

All employees.

Restricted or prohibited terminations

Among others, pregnant women and women for up to 1 year and 12 weeks after birth of the child, and union leaders cannot be terminated without prior court approval.

Third-party approval for termination

No third-party approval is required, except for the cases referred to above (see Restricted or Prohibited Terminations).

Mass layoff rules

There are no specific rules regarding mass layoffs.

Notice

30 days' notice for unilateral termination of managers and other specified employees.

30 days' notice for termination of any employee based on redundancy.

Notice is required for standard for-cause removal reasons. The notice must be handed over to the employee at the time of termination of the employment agreement or within following 3 business days.

Statutory right to pay in lieu of notice or garden leave

The company has the statutory right to pay in lieu of notice.

There are no garden leave rules in Chile and in principle, any contractual clause on that matter would be considered void.

Severance

If the employee has worked in the position, uninterrupted, for more than 1 year, severance pay is equal to 30 days' remuneration for every year worked and fraction of a year over 6 months spent in the service of the same employer, capped at 330 days and at a maximum monthly remuneration of UF 90 (approximately US$4,000). Employment contracts can specify more generous severance terms.

China

Grounds

There is no "at-will" employment in China and termination of employees must be for cause.

Employees subject to termination laws

All employees.

Restricted or prohibited terminations

Employees:

  • Who are pregnant, on maternity leave or in the nursing period
  • Who are suffering from work-related injuries or occupational diseases
  • Who have been employed by the employer for more than 15 years and have less than 5 years from the statutory retirement age (60 for male employees, 55 for female employees holding office positions, and 50 for female factory workers)
  • Who are on sick leave (for certain cumulative periods depending on the employee's seniority), may not be unilaterally terminated

Third-party approval for termination

The trade unions should be notified of any unilateral termination.

Mass layoff rules

Yes, strict information and consultation rules apply where 20 individuals or equal to or more than 10% of the total number of employees are to be made redundant.

The employer must also notify the trade union/all employees of the redundancies and report to the local labor bureau.

Notice

30 days prior notice. Not required for misconduct cases or termination due to failure to meet the conditions of employment during the probation period.

Statutory right to pay in lieu of notice or garden leave

There is a statutory right to make a payment in lieu of notice. Garden leave with full pay is also permissible.

Severance

Severance pay is based on the number of years an employee has worked with the employer at the rate of 1 month's wage for each year worked (rounded up to the nearest 0.5 or 1 year). The wages used for calculation during the service years after 2008 are subject to a statutory cap.

Colombia

Grounds

An employer may terminate their employment relationship with an employee without incurring liability if any of the justified causes established by law exist, which are mostly based on misconduct or poor performance. A disciplinary process must be conducted before any termination with cause. Terminations without cause are also valid but will trigger severance obligations. In a dismissal not for cause no notice is required, but the employee will be entitled to compensation (indemnification) for unilateral termination as set out below.

Employees subject to termination laws

All employees.

Restricted or prohibited terminations

There are special cases where it is not possible to terminate an employment agreement without the authorization of the Ministry of Labor or a Labor Judge, even with just cause:

  • Employees who are pregnant or on maternity leave (this protection extends to a father/domestic partner who is an employee when the mother is unemployed and included as her beneficiary with the social security authorities)
  • Employees who are on health leave or have restrictions that substantially limit them to comply with their labor duties
  • Employees who are less than 3 years away from complying with the requirements to obtain a retirement pension

Also, union leaders cannot not be terminated unless a labor judge authorizes it and only for the just causes established in Colombian Labor Code and the company's policies and/or procedures.

Third-party approval for termination/termination documents

Third-party approval is required for restricted or prohibited terminations.
No third-party approval is required in other cases, but it is common to have employees sign a labor settlement in front of the labor authorities (Ministry of Labor or Labor Judge).

Mass layoff rules

Depending on the number of employment agreements to be terminated, prior authorization from the Ministry of Labor may be required. This should take 2 months. However, usually the Ministry takes longer.

If the requirement for a collective dismissal (mass redundancy) is met (see threshold triggers below), the above authorization is mandatory. If the company does not have such authorization, the terminations shall be void by operation of law and the company will be obliged to re-engage the employees.

Simultaneously, the employer has to notify its employees in writing regarding the authorization requested before the Ministry of Labor.

A collective dismissal occurs when it affects:

  • In a company employing between 10 and 50 employees, 30% of employees in a period of 6 months
  • In a company employing between 50 and 100 employees, 20% of employees in a period of 6 months
  • In a company employing between 100 and 200 employees, 15% of employees in a period of 6 months
  • In a company employing between 200 and 500 employees, 9% of employees in a period of 6 months
  • In a company employing between 500 and 1000 employees, 7% of employees in a period of 6 months
  • In a Company of more than 1000 employees, 5% of employees in a period of 6 months

Notice

At least 15 days' written notice is required in cases of poor performance. In cases of misconduct or termination without cause, no notice is required, and such terminations can be effective immediately.

Statutory right to pay in lieu of notice or garden leave

Not applicable under Colombian Law.

Severance

Unilateral termination without cause is lawful but will trigger severance obligations.

If the termination is unilateral and without cause, the employee will be entitled to receive an indemnification, in addition to the final wages. For employees with an indefinite term agreement, such indemnification would be calculated as follows:

  • For employees earning less than 10 minimum legal monthly wages (in 2019 COP$8,281,160), the compensation is 30 days of salary for the first year of service and 20 days of salary for each additional year of service (proportional to the fraction of a year)
  • For employees earning 10 minimum legal wages or more, the compensation is 20 days of salary for the first year of service and 15 days of salary for each additional year of service (proportional to the fraction of a year)

For employees with a fixed-term agreement, the severance would be equal to the salary owed to the employee until the term of the agreement expires.

For employees who entered into agreements for the duration of a project, the severance would be the estimated salary owed to the employee until the project concludes, however in no case can severance be less than 15 days of salary.

Czech Republic

Grounds

Termination with notice permissible on the following grounds only: organizational change (dissolution, relocation, other organizational change), incapability (ill-health, failure to meet conditions, unsatisfactory performance), misconduct, breach of obligation to remain at home during sick leave.

Immediate dismissal permissible on the following grounds: criminal conduct, gross misconduct.

Employees subject to termination laws

All (except employees working based on an agreement on work performance and an agreement on work activity).

Prohibited or restricted terminations

Protection against termination for certain employees/in certain circumstances (eg, sick leave, military exercise, discharge of public office, pregnancy, maternity or parental leave). Certain statutory exceptions apply.

Third-party approval for termination/termination documents

If the employee is a trade union representative of a recognized union, the trade union's consent to the termination (on notice or immediate) is required.

Mass layoff rules

Mandatory consultation rules apply where the threshold number of employees will be made redundant over a 30-day period for organizational reasons. The thresholds are 10 employees if the employer has 20-100 employees; 10% of employees if the employer has 101–300 employees; 30 employees if the employer has more than 300 employees). Obligatory notification must be given to the relevant labor authority and to the employee representative bodies.

Notice

No notice required in case of termination during probationary period and immediate dismissal. Statutory minimum notice period of 2 months for both employee and employer. Notice period may be extended via agreement of the parties (must be the same for employer and employee).

Statutory right to pay in lieu of notice or garden leave

Not applicable.

Severance

Payable to all employees depending on the length of employment (1 times average monthly earnings if employment lasted less than 1 year; 2 times average monthly earnings if employment lasted at least 1 year; 3 times average monthly earnings if employment exceeded 2 years), provided that termination occurred on organizational grounds. If termination occurs due to accident at work or occupational disease of the employee, 12 times average monthly earnings are owed. More generous terms are possible.

Denmark

Grounds

In general, terminations are permissible on fair grounds. No legislation regulates discipline procedures. In many cases, dismissal with or without notice will be deemed unfair if the dismissal is due to circumstances connected to the employee (eg, due to performance issues), and the employer has not presented the employee with a prior written warning.

Employees subject to termination laws

Employees not covered by the Danish Salaried Employees Act (who have been employed for less than 12 months) or a collective agreement have no legal protection against unfair dismissal. However, the majority of collective bargaining agreements include provisions protecting employees against unfair dismissal.

Prohibited or restricted terminations

The legal regime governing employment relationships in Denmark is generally more liberal and favorable towards the employer than in many other EU countries. However, certain employees, such as safety and employee representatives, shop stewards, pregnant employees or employees on maternity, paternity or parental leave, are subject to special protection in relation to termination of employment. An employer must comply with specific regulations which aim to protect such employees in the event that the employer intends to terminate the employment of such an employee.

Third-party approval for termination/termination documents

Generally not required.

Mass layoff rules

Statutory rules apply to reductions in staff contemplated by employers employing more than 20 persons for reasons which are not related to the individual employees concerned, and where the number of terminated employees within 30 days exceed the following limits:

  • a minimum of 10 workers in companies which normally employ 21 - 99 persons
  • a minimum of 10% of the workforce in companies which normally employ 100 - 299 persons
  • a minimum of 30 workers in companies which normally employ a minimum of 300 persons

Notice

The length of the notice will depend on an individual agreement or collective bargaining agreement.

However, salaried employees are entitled to receive one month's notice in the first six months of employment, and then between three and six months' notice, based on the length of service.

An employer may dismiss an employee without notice (summary dismissal) where the employee is guilty of behavior which amounts to serious misconduct.

Statutory right to pay in lieu of notice or garden leave

There is no statutory right for an employer to pay in lieu of notice, but an employer has the right to put the employee on garden leave for the duration of the notice period.

If the employee is on garden leave, the employer may, with certain limitations, reduce the salary paid during the notice period if the employee finds new employment.

Severance

A salaried employee who has been continuously employed for 12 or 17 years is entitled to severance pay corresponding to 1 or 3 months' salary in the event of the employer's termination of the employment.

Finland

Grounds

Employers are not allowed to terminate an indefinite employment contract without a proper and weighty reason as referred to in the Employment Contracts Act, such as serious breach or neglect of obligations or economic, production related or reorganizational reasons.

Employees subject to termination laws

All employees under the Employment Contracts Act are protected.

Restricted or prohibited terminations

The employment of a shop steward,an elected representative or an industrial safety delegate may be terminated due to redundancy only if the work of the representative in question ceases completely and the employer is unable either to arrange work that corresponds to the person’s professional skill or is otherwise suitable, or to train the person for some other work.

The employer can terminate the employment contract of an employee on maternity, special maternity, paternity, parental or child care leave due to redundancy only if its operations cease completely.

Third-party approval for termination/termination documents

No third-party approval required. However, if a shop steward’s employment is terminated on personal grounds, the majority of the employees who are eligible to vote for the person as a shop steward have to approve the termination.

Mass layoff rules

A formal and heavily sanctioned consultation process needs to be followed in case of mass redundancies as set out in the Act on Co-operation within Undertakings, if the employer regularly employs at least 20 employees. Furthermore, the Employment Contracts Act imposes some obligations to the employer (eg, obligations to offer work, training and rehire) regardless of the number of employees.

Notice

In general, the length of the notice period depends on the length of the employment. Unless otherwise agreed in the applicable CBA or employment contract, notice periods according to the Employment Contracts Act are as follows:

  • 14 days if the employment has continued for up to 1 year
  • 1 month if the employment has continued for more than 1 year but no more than 4 years
  • 2 months if the employment relationship has continued for more than 4 years but no more than 8 years
  • 4 months if the employment relationship has continued for more than 8 years but no more than 12 years
  • 6 months if the employment relationship has continued for more than 12 years

Statutory right to pay in lieu of notice or garden leave

No statutory right to pay in lieu of notice. Payment in lieu of notice requires an agreement with the employee. However, employees can be unilaterally placed on garden leave.

Severance

No statutory right to severance payment although severance may be agreed on in the employment contract. Termination agreements are also allowed for.

France

Grounds

Termination of an indefinite-term employment contract is permissible on personal grounds (eg, misconduct, poor performance) and economic grounds (eg economic difficulties, technological changes, activity closure, reorganization to safeguard competitiveness). Economic grounds are assessed at the group level worldwide in the relevant business sector where the process commenced before September 24, 2017, and at the group level in France if it commenced after that date

The El Khomri Law of August 2016 has specified the definition of "economic difficulties."

Early termination of a fixed-term employment contract is permissible only in limited circumstances as stated by the French Labor Code.

Employees subject to termination laws

All employees under an indefinite-term employment contract.

Restricted or prohibited terminations

Restrictions on terminations and specific procedures required for termination of protected employees:

  • Termination of workers' representatives (workers' delegates, members of the works council or the CSE, union delegates and union section representatives)
  • Termination while the employment contract is suspended as a result of an occupational disease or accident, save on the grounds of serious misconduct or the inability to maintain the contract for a reason unrelated to the occupational disease or accident
  • Termination during pregnancy, maternity/adoption leave and for 4 weeks following maternity leave, save on the grounds of serious misconduct or the inability to maintain the contract for a reason unrelated to the pregnancy, childbirth or adoption

Termination on discriminatory grounds is prohibited.

Third-party approval for termination

The Labor Inspector's authorization is needed in case of termination of a protected employee.

Mass layoff rules

Applicable rules differ depending on the number of employees made redundant over 30 days (+/- 10) and the number of employees within the company (+/- 50).

If fewer than 10 employees are made redundant over 30 days in a company employing at least 50 employees: information/consultation of the works council and usually also the Health and Safety Committee, or the CSE when in place, is required.

If at least 10 employees are made redundant over 30 days in a company employing at least 50 employees: the employer needs to implement an employment safeguard plan (PSE); inform/consult the works council and Health and Safety Committee, or the CSE when in place; with the procedure under the control of the Labor Administration.

In companies employing fewer than 50 employees: information/consultation of Workers' delegates (if any), or the CSE when in place, is required.

Notice

Under 6 months' seniority: as determined by law, the CBA or geographical and professional common practice.

Between 6 months' and less than 2 years' seniority: 1 month.

At least 2 years' seniority: 2 months.

Subject to differentiating provisions in the CBA, employment contract or common practice, whichever is more agreeable to the employee.

No notice period in case of dismissal for gross or willful misconduct.

Statutory right to pay in lieu of notice or garden leave

Employees can be paid in lieu of notice. Alternatively, an employee can be paid his/her usual salary for the duration of the notice period even if not performed.

Severance

An employee with at least 1 year of seniority is entitled to a severance of 1/4th of his or her average monthly salary per year of seniority for the first 10 years (instead of 1/5 which applied before the Macron orders) and 1/3 of his or her average monthly salary per year of seniority for each following year, subject to more agreeable provisions in the applicable CBA (which are very frequent).

Germany

Grounds

In a business with up to 10 employees, there is no dismissal protection, and termination can generally be for any reason. With over 10 employees, there is dismissal protection unless dismissal is justified by compelling operational reasons, conduct related reasons (in particular misconduct) or personal reasons (unable to work due to health or new job requirements).

Employees subject to termination laws

Employees with fewer than 6 months' seniority have no unfair dismissal protection (save in certain circumstances where no seniority is required, including dismissals connected to family/pregnancy rights, works council membership or discrimination).

Restricted or prohibited terminations

Pregnant employees, mothers during maternity leave, employees on parental leave, works council members, candidates during elections, data protection officers, severely disabled employees.

Third-party approval for termination/termination documents

The works council, if established, has to be consulted about each termination. Dismissal of disabled employees, pregnant employees or employees on maternity or parental leave can be permitted by specific authorities. Collective redundancies require consultation with the works council about a restructuring agreement and a social plan, whereby consent is only mandatory for the social plan; in case of a tie, the employer's decision on the restructuring plan prevails.

Mass layoff rules

Yes, strict information and consultation rules apply where 6 or more employees in a business between 20 – 60 employees are to be made redundant within 30 days; in larger businesses, the threshold is 10% or more than 25 individuals; in businesses with 500 or more employees, the threshold is at least 30 employees. The employer must file an application with the Federal Employment Agency; failure to comply will render all notices and agreed terminations invalid.

Notice

4 weeks' statutory notice effective to the 15th or the end of a calendar month; after 2 years of employment, 1 month effective to the end of a calendar month; with a sliding scale of up to 7 months' notice after 20 years of service. Not required for terminations for very serious misconduct.

Statutory right to pay in lieu of notice or garden leave

No statutory right to pay in lieu of notice. As to garden leave, the right depends on contract terms and merits of the case, applying a weighting of interests between both parties.

Severance

No statutory severance. A valid dismissal will end the employment without compensation, unless it is part of a collective restructuring covered by a social plan agreed with the works council. Invalid dismissal leads to enforced reinstatement by the labor courts, unless the parties settle the dispute. Settlements are standard; the general formula is between 0.5 and 1.5 monthly salaries per year of service. There is no maximum threshold on settlements.

Hong Kong

Grounds

Termination with notice or payment in lieu of notice is permissible.

Employees with continuous employment of 2 years or more are also protected against "unreasonable dismissal" ie, there must be a valid reason for termination and in this regard any of the following may constitute a valid reason: the conduct of the employee; the capability or qualifications of the employee for performing work of a kind which he or she was employed to do; redundancy; illegality or some other substantial reason. Unreasonable dismissal is not a criminal offence but employees will be entitled to certain statutory remedies. Presumption of unreasonable dismissal can be rebutted by showing that there is a valid reason for termination. There is then no requirement to show that the termination was "reasonable" or "fair" in these circumstances.

Employers should also ensure they comply with the contractual terms and other implied terms relating to the reason for, and manner of, dismissal.

Employees subject to termination laws

Employees with continuous employment of 2 years or more are protected against unreasonable dismissal. There are prohibited or restricted terminations for all employees (see below).

Restricted or prohibited terminations

Female employees who are pregnant or on statutory maternity leave; any employee who is absent from work on sick leave and is in receipt of statutory sickness allowance; any employee who has suffered a work related injury entitling him or her to compensation under the Employees' Compensation Ordinance; by reason of an employee's trade union membership and activities; by reason of an employee giving evidence or information in any proceedings or inquiry in connection with the enforcement of the Employment Ordinance, work accidents or breach of work safety legislation; any employee who has given evidence under the Factories and Industrial Undertaking Ordinance (breach of any of the above may constitute "unlawful dismissal"); any employee who is undertaking jury service; any employee who is taking statutory vacation; and by reason of an employee's spent conviction.

Unlawful dismissal is an offence with a fine up to HK$100,000 upon conviction.

Third-party approval for termination/termination documents

Not applicable for this jurisdiction.

Mass layoff rules

Not applicable for this jurisdiction.

Notice

Minimum 7 days' notice after the first month of the probationary period and during subsequent employment. If the notice is specified in the employment agreement, the notice will be the agreed period. If no notice period is specified, it is presumed to be 1 month. Notice is not required for termination for serious misconduct (ie, gross misconduct or cause) but it requires a high threshold.

Statutory right to pay in lieu of notice or garden leave

There is a statutory right to make a payment in lieu of notice. Right to place on garden leave depends on the terms of the contract.

Severance

Statutory severance payment payable to redundant employees with continuous service for 2 years or more. Calculated using a base amount per year of service or 2/3 of the employee's last full month's wages (being the monthly average of the wages earned by the employee during the previous 12 months (or some shorter period where the employee has been employed for less than 12 months), or 2/3 of HK$22,500, whichever is less). Total severance payment is capped at HK$390,000. Employers are entitled to offset from the liability to pay a severance payment, any gratuity or retirement scheme payment that has been made to the employee in respect of any years of service for which the severance payment is payable. For the purposes of a severance payment, there is a statutory presumption that the termination arose by reason of redundancy. This presumption can only be rebutted by an employer proving that the employment was terminated for reasons wholly unrelated to redundancy.

Hungary

Grounds

Termination by notice is possible in cases of indefinite term employment. In case of fixed-term employment, termination by notice is less common.

For indefinite term employment, dismissal is only permitted for a  reason connected with:

  • The employee's performance
  • The employee's behavior relating to the employment
  • The operations of the employer

For fixed-term employment, the employer may only terminate the employment by notice:

  • During a liquidation or bankruptcy procedure
  • For reasons relating to an employee's performance
  • If maintaining the employment is no longer possible due to an unavoidable external reason

In the event of a dispute, the employer is obliged to prove that the reason for dismissal is fair, true and reasonable.

Who is subject to termination laws?

All employees are protected against unfair and unlawful termination of employment.

Restricted or prohibited terminations

For some special groups of employees, further termination restrictions apply; thus, the employer may not terminate employment by notice during pregnancy, maternity leave, a leave of absence taken without pay to care for a child, during military service, and, in the case of women, while participating in human fertilization procedures. Termination of employment by mutual agreement is permitted during these periods.

Third-party approval for termination/termination documents

Not required.

Mass layoff rules

The dismissal of a certain large number of employees due to a change in the employer's operation constitutes a mass layoff and is subject to special information and consultation rules.
Notice

In case of dismissal with notice, the employment relationship is terminated at the end of a notice period, which will be a minimum of 30 days and a maximum of 6 months, depending on length of service or in line with the parties' agreement.

Statutory right to pay in lieu of notice or garden leave

Not applicable.

Severance

Employees are entitled to a severance payment if their employment is terminated on notice by the employer for operational reasons. The amount of severance pay is a minimum of 1 month's pay and a maximum of 6 months' "absence fee," depending on length of service. The employment contract may stipulate a higher amount of severance.

India

Grounds

Dismissals should be for ''reasonable cause'' – eg, redundancy, poor performance, continued ill health, etc. – especially in certain states, where the local S&E Act stipulates such a requirement. Otherwise, employees may be dismissed for misconduct (or ''for cause''). For workmen, the IDA defines ''retrenchment'' as the termination by the employer of the service of a workman for any reason whatsoever, other than as a punishment inflicted by way of disciplinary action. However, "retrenchment" does not include voluntary retirement, reaching the stipulated superannuation age, non-renewal of a contract on expiry of its term, termination arising under such fixed-term contracts, or termination of service on the grounds of an employee's continued ill health.

An employer may for economic reasons reduce the number of its workmen, provided the process as stipulated in the IDA is followed. The process to be followed will depend on whether the workmen to be retrenched have at least 1 year's (ie, 240 days) continuous employment and are:

  • Employed in:
    • Factories/mines/plantations with less than 100 employees
    • Other establishments
  • Employed in factories/mines/plantations where the number of workmen employed in the last year is 100 or more (please note that IDA has been amended in certain states to increase this threshold to 300 employees or more)

For the ''non-workmen'' category of employees, their services may be terminated in the manner provided in their employment contracts and subject to complying with the provisions of the relevant S&E Act of the state.

Employees subject to termination laws

Where an employer plans to retrench a workman who has been in continuous service for at least 1 year (ie, 240 days) and who is employed in:

  • Factories/mines/plantations with less than 100 employees
  • Other establishments, prescribed steps must be taken:
    • Where the workman belongs to a particular category of workmen, in the absence of any agreement otherwise, the employer shall ordinarily retrench the workman who was the last person to be employed in that category. If the employer retrenches any other workman it must record the reason for doing so (''Last In First Out Rule'')
    • The workman must be given the requisite period of notice or payment in lieu of notice  
    • Retrenchment compensation must be paid to the workman
    • Notice in the prescribed manner must be served upon the appropriate government authority

Where an employer plans to retrench a workman who has been in continuous service for at least 1 year (ie, 240 days) in factories/mines/plantations where the number of workmen employed in the last year is 100 or more (300 in some states), the following steps should be taken:

  • The Last In First Out Rule has to be followed before retrenching the service of a workman
  • The workman must be given the requisite period of notice or payment in lieu of notice
  • Prior permission of the appropriate government authority must been obtained (see below)
  • Retrenchment compensation must be paid to the workman

For "non-workmen", the steps which the employer must take will be as stated in the employment contract and the provisions of the relevant S&E Act of the state.

Restricted or prohibited terminations

The level of protection granted to workmen in relation to the termination of their employment is higher where they are employed in factories/mines/plantations where the number of workmen employed in the last year is 100 or more (300 in some states). The IDA prohibits termination of certain categories of workmen while a dispute is pending between them and their employer except with the approval of a designated authority. Under MBA it is unlawful for an employer to discharge or dismiss a female employee whilst they are on statutory maternity leave. Similar protection is provided under ESI Act to employees who earn a monthly salary not exceeding INR 21,000 and who may be in receipt of certain statutory medical benefits provided under ESI Act.

Third-party approval for termination/termination documents

Where an employer plans to retrench a workman who has been in continuous service where the number of workmen employed in the last year is 100 or more (300 or more in some states), prior permission of the appropriate government authority must be obtained by the employer. The appropriate government authority, after making inquiries with the parties and considering the genuineness and adequacy of the relevant factors, will make an order either granting or refusing to grant permission. The order of the appropriate government authority is final and binding on all parties and remains in force for one year.

Mass layoff rules

The retrenchment procedure described above will equally apply to mass terminations.

Notice

Notice is required to be given prior to termination. The notice period may vary from state to state, but it is normally 1 month for ordinary dismissal, unless the employment contract provides for a longer notice period.

Where:

  • An employer plans to retrench a workman who is employed in factories/mines/plantations with less than 100 employees
  • Other establishments, the employee is entitled to receive one month's notice or payment in lieu of such notice period

Where an employer plans to retrench a workman who is employed in factories/mines/plantations where the number of workmen employed in the last year is 100 or more (300 in some states), the employee is entitled to receive 3 months' notice or payment in lieu of such notice period. In both cases, the notice of termination must be in writing and must indicate the reason for retrenchment.

Statutory right to pay in lieu of notice or garden leave

Employers may make a payment in lieu of notice. The right of workmen to receive retrenchment compensation is based on their length of service as of their last working day (irrespective of whether the termination is with immediate effect or after the employee has been asked to serve the notice period).

Garden leave is possible, though there is little case law to suggest how it will be enforced by the courts. It is preferable to include a specific garden leave in the contract of employment and company policy.

Severance

In case of a termination due to redundancy, employers are required to pay retrenchment compensation. Severance or retrenchment compensation equal to 15 days' average pay for every completed year of continuous service or part thereof in excess of six months must be paid to a workman on termination of employment.

In addition, the employer must pay certain termination benefits to employees who are dismissed, including: leave encashment; gratuity payment (for employees, whether workmen or not, with 5 years or more of seniority); payment in lieu of notice (if no notice is given); statutory bonus payment and any other amounts due under the employment contract. Employees who are being terminated on account of misconduct will not be entitled to notice pay or retrenchment compensation.

Indonesia

Grounds

Termination is possible on the following grounds but in each of these cases, IRC approval is required:

  • Termination without cause (ie, where dismissal cannot be avoided, such as in the case of a merger, a reorganization of the company, or bankruptcy of the employer; note that the employer still has to show grounds for termination)
  • Termination with cause (eg, where the employee breaches the employment contract or company regulation, or commits gross misconduct) although this is now subject to some uncertainty due to a recent constitutional court decision
  • Where the employee has been unable to work for over 6 months due to legal proceedings brought against him or her (however, if the court finds the employee not at fault, the employer must re-employ the employee)
  • Where the employee has been absent from work for 5 or more consecutive working days without providing reasons or evidence and 2 notices have been given.

Employees subject to termination laws

All employees are subject to termination provisions under the Manpower Law.

Restricted or prohibited terminations

Termination cannot be on the basis of the following circumstances:

  • A worker being absent due to illness according to a physician's statement for a period of not more than 12 months
  • A worker having a permanent disability or being ill due to a work accident or due to the employment relationship where, according to a physician's statement, the recovery period cannot be determined
  • A worker being unable to carry out work due to the fulfillment of state duties
  • A worker performing his or her religious rituals
  • A worker getting married
  • A female worker being pregnant, in delivery, experiencing a miscarriage or breastfeeding her baby
  • A worker having a blood relationship and/or a marital relationship with another worker within one company
  • A worker having reported the employer to the authorities alleging criminal activity by the employer
  • A worker forming, becoming a member and/or the manager of a union, or carrying out activities of the union outside working hours, or during working hours with consent from the employer or based on the provisions of an employment agreement, company regulations or a collective agreement
  • Based on the provisions under the employment agreement, the company regulations or the collective labor agreement
  • A worker has reported the employer to the authorities concerning the question of whether the employer has committed criminal actions
  • A worker has a permanent disability condition or is ill due to a work accident or due to the employment relationship, and, according to a physician's statement, the recovery period cannot be determined

If the employer purports to terminate an employee's employment under any of the circumstances above, such termination is void by law and the employer must continue to employ such employee.

Third-party approval for termination/termination documents

In order to unilaterally terminate employment, generally, employers must first undertake bipartite or tripartite negotiations as well as mediation or conciliation procedures and (if no mutual agreement is reached) by obtaining a favorable decision on the termination of employment from the IRC. Exceptions apply if the termination of employment occurs during the probation period of the worker (as long as the probation period is specifically provided in writing), due to the worker's voluntary resignation without pressure/intimidation from the employer, due to a mutually agreed termination or due to the worker reaching retirement age. There is no applicable pension age for private sector employers in Indonesia. Currently, 57 years is the pension age for obtaining the pension security from BPJS Ketenagakerjaan. However, a company can set a different retirement age to apply within the company, eg 55 years. 

Mass layoff rules

No specific definition of redundancy or layoff. Employers seeking to make employees redundant should ensure that they provide valid evidence as grounds for the redundancy. Employers must attempt to negotiate a proposed termination with an employee or relevant labor union, as all dismissals on redundancy grounds require approval from the IRC (if not mutually agreed). A consultation process must be completed before notice of termination is given to employees. Where a redundancy occurs, the employer must pay the employee severance pay, service pay (if applicable) and compensation pay.

Notice

Employment cannot be terminated unilaterally through notice. Some employment agreements stipulate a notice period for termination even though termination by written notice alone is not permitted and the written notice does not negate the legal requirement to perform the termination procedures as explained above under "Third-party approval for termination/termination documents."

Statutory right to pay in lieu of notice or garden leave

Payment in lieu of notice is not a recognized concept under the Manpower Law but is simply a part of the calculation of severance and may be given in addition to the statutory termination package. 

Employers can require employees to serve a period of garden leave in a form of suspension pending the outcome of mediation and IRC proceedings. During such period the employees are still entitled to their salary.

Severance

Amount and type of severance depends on the basis of the termination of employment. For example, if the termination is due to the employee's minor misconduct, the employee is entitled to the following after a process involving the issuance of 3 written warning letters and, absent mutual agreement, the IRC termination approval process:

  • Standard severance pay: 1 month's salary for every year of service, up to 9 months' salary
  • Service appreciation pay: 2 months' salary for the first 3 years of service, followed by an additional  month's salary for every 3 years of service thereafter, up to a maximum of 10 months' salary for 24 years of service
  • Compensation: to cover annual leave that has not expired or been taken, relocation expenses (to return the employee and his or her family to the place from which they were recruited), medical and housing allowance, other benefits under the employment relationship; and other compensation amounts as determined by the IRC (if applicable)

If the termination is without cause or there is termination on retirement, the employee is entitled to 2 times the severance pay amount plus the standard service appreciation pay (if applicable) and compensation. If contested, a termination without cause may result in reinstatement.

Ireland

Grounds

Termination permissible if a fair process has been followed, on the following grounds: Misconduct, capability (including performance and ill-health), redundancy, illegality and "some other substantial ground of a kind to justify dismissal."

Employees subject to termination laws

Employees with less than one years' service have no protection against unfair dismissal (except in certain circumstances where no service is required, including dismissals for whistleblowing, dismissals based on discriminatory grounds or trade union membership and activities etc.).

Restricted or prohibited terminations

Transfer related dismissals are void unless justified on economic, technical or organisational grounds.

Third-party approval for termination/termination documents

Not required.

Mass layoff rules

Strict information and consultation rules apply in certain collective redundancy situations. The employer must also notify the Minister for Business, Enterprise and Innovation.

Notice

Statutory minimum notice requirements:

  • Pp to 13 weeks – none
  • 13 weeks to 2 years – 1 week
  • 2 years to 5 years – 2 weeks
  • 5 years to 10 years – 4 weeks
  • 10 years to 15 years – 6 weeks
  • 15 years or more – 8 weeks

Notice is not required for terminations for gross (extremely serious) misconduct. Longer notice can be agreed and set out in the contract of employment.

Statutory right to pay in lieu of notice or garden leave

There is no statutory right and entitlement to either pay in lieu or garden leave, depends on contract terms.

Severance

Severance is payable only to redundant employees with 2 years' service at the rate of 2 weeks' pay per year of service plus an additional week's pay. "Pay" is capped at €600 per week. More generous terms are possible and quite common.

Israel

Grounds

Any reasonable reason provided that a fair process has been followed in accordance with the procedural requirements for termination. Employees may claim unlawful dismissal on the grounds of discrimination, breach of the employers' good faith obligation and/or failure to comply with the procedural requirements for termination.

Employees subject to termination laws

All employees.

Restricted or prohibited terminations

Pregnant women (after 6 months of employment), women on maternity leave and during the first 60 days following their return to work, and employees undergoing fertility treatments may not be dismissed without the prior approval of the Minister of Economy. Employees may not be dismissed during their military reserve duty or for 30 days following their return to work.

Third-party approval for termination/termination documents

Not required, apart from the notification below in case of a mass dismissal.

Mass layoff rules

No special rules apply, however, if all employees without exception are dismissed, the prior hearing process for termination can be skipped. In the event of dismissal of more than 10 employees, the employer is required to notify the local Employment Services Bureau of the dismissal.

Notice

Absent a contractual arrangement setting a longer notice period than the minimum requirements, the notice period for full-time employees is as follows:

  • During the 1st year of employment, 1 day for each month during the first 6 months of employment and an additional 2.5 days for every additional month thereafter
  • Following completion of at least 1 entire year of employment on a full-time basis, 30 days

The length of the notice period will be less for employees paid on an hourly basis. Most employment agreements include a 30 days' contractual notice period.

Statutory right to pay in lieu of notice or garden leave

Yes. Payment in lieu of notice in an amount equal to the employee's salary is permissible. The employer/employee relationship is terminated immediately, and benefits need no longer be paid, unless a contractual provision or binding practice requires otherwise.

Garden leave is permissible on full salary and benefits.

Severance

Payable to dismissed employees with at least 1 year seniority. Usually, this is the last monthly salary multiplied by the number of years the employee worked. Generally, a substantive portion of the severance pay entitlement will have been accrued as part of the employees' managers' insurance and/or pension fund. If the parties provided so in the employment agreement or as a result of a collective bargaining agreement applicable to the employee, the employee will not be entitled to severance pay other than the amount accumulated in the employee's pension fund.

Italy

Grounds

Termination permissible on these grounds:

  • Just cause, ie an irremediable and serious "breach of trust" (serious violation of contractual duties) between the parties of the employment relationship. In this case, the contract terminates immediately, without notice.
  • Justified reason, which may be subjective (breach of employee's contractual obligation is less serious than just cause) or objective (such as redundancy). In this case, the contract terminates with notice.

Dismissals must be notified in writing. Reasons for dismissal must be detailed. If the dismissal is due to just cause/subjective reasons, a special disciplinary procedure must be complied with.

Resignation and mutual consent terminations

Under Jobs Act reforms, which were effective on March 12, 2016, resignations and mutual consent terminations can only be implemented in electronic form (such forms are provided by the Labor Ministry). Within 7 days of the submission of the form, employees have the right to revoke their resignation or mutual termination, provided they do so via electronic means. The Ministerial Decree of December 15, 2015 details the procedure for communicating resignation and mutual consent terminations.

Employees subject to termination laws

All employees except for those under probationary period.

Restricted or prohibited terminations

Discrimination, retaliation, pregnant women, mothers until the child is 1 year old, women within 12 months of marriage, and disabled employees, under certain conditions.

Third-party approval for termination/termination documents

Dismissal based on objective and economic reasons, for employees hired before March 7, 2015, must be preceded by a mandatory administrative conciliation procedure when more than 15 employees are employed in the office where dismissal takes place (or more than 60 in the national territory). Employees hired from March 7, 2015 are not subject to this procedure and can be dismissed without prior involvement of the labor office. Notice to labor authorities has to be given within 5 days of the termination of employment.

Mass layoff rules

Yes, strict information and consultation rules apply where 5 or more employees are to be made redundant over 120 days or less.

Notice

Notice is set out in the collective bargaining agreements and varies depending on enrollment level, category and tenure.

Statutory right to pay in lieu of notice or garden leave

The employer or employee may pay an indemnity in lieu of working the notice period. Garden leave is not possible under Italian law.

Severance

In all cases of termination (including for just cause) the employer has to pay a severance pay (known as TFR), which is equal to the sum of each annual salary divided by 13.5, accrued for any single year. TFR is usually set aside on the books of the company. Employees are also entitled to receive the indemnity in lieu of any holidays or permits accrued and not used, as well as the pro-rata portion of the supplementary salary installments.

 

Japan

Grounds

Employees in Japan enjoy substantial security when it comes to their employment. Termination of employees generally must be for cause. While employers do have the right to dismiss employees, a dismissal will be regarded as an "abuse of rights" under Japanese law and therefore invalid, if a court determines that the dismissal lacks "reasonable" grounds and is not "socially acceptable" − a very high standard to meet. The following grounds may possibly be considered reasonable and socially acceptable: very serious misconduct (eg, theft or violence in the workplace); serious insubordination and failure to correct the action after clear warnings are given; serious and ongoing poor performance, after formal warnings have been given, significant training has been provided through performance improvement plans and other positions have been explored, and it is determined that the training is ineffectual and no other suitable positions exist; provision of material false information about one's background that impacts performance; and a loss of or significant and continuous lack in ability/capability to perform work duties.

See below under "Mass Layoff Rules" regarding economic dismissals.

Employees subject to termination laws

Generally, all employees.

Restricted or prohibited terminations

Under the Labor Union Act, disadvantageous treatment, including dismissal, based on the fact that an employee is or intends to be a member of a labor union, intends to organize a labor union, or engages in a proper act of a labor union, is prohibited as an unfair labor practice.

Terminating employees on leave of absence for work-related injury or illness or maternity leave is generally not permissible.

Third-party approval for termination/termination documents

Not required.

Mass layoff rules

There are no redundancy statutes in Japan. An employer may justify terminations based on the economic conditions of the company. However, 4 conditions must be met in order to justify such a termination: there must be a very strong economic necessity to reduce the workplace; the employer must have taken all reasonable steps to avoid terminations; the employees to be dismissed should be selected using a reasonable and fair standard; and termination procedures must be reasonable and proper.

An employer must notify the Public Employment Security Office in advance if:

  • 30 or more employees will leave during a 1-month period
  • 5 or more employees who are between the age of 45 and 65 and reach the retirement age set by the employer, are dismissed or otherwise leave due to the employer's actions within a 1 month period
  • An employee who is a foreign national leaves
  • An employee with a disability is dismissed (under certain conditions) or
  • The employer withdraws a job offer or extends the time of joining the company for new graduates or cancels or downsizes the size of hiring plans of new graduates

There are some exceptions to these notification requirements.

There may be additional notification requirements set out in any collective bargaining agreement. In any event, if the employee is represented by a union, the employer is expected to consult with the union to fulfill the good faith consultation requirement.

Notice

Employers must give at least 30 days' notice of dismissal. It is customary for the work rules to specify that an employee must give 30 days' notice of resignation. However, under the Japanese Civil Code, employees may terminate an employment agreement with 2 weeks' notice. The Civil Code will prevail over any longer requirement. Therefore, if an employee insists on 2 weeks' notice, such notice will be valid.

Statutory right to pay in lieu of notice or garden leave

Payment in lieu of notice is permitted even if there is no contractual right to make such a payment. It is not common for an employee to be placed on garden leave.

Severance

There are no statutory requirements for severance payments in Japan. Given the severe limitations on the employer's right to terminate an employee, most employees are offered a severance payment in exchange for a waiver and voluntary resignation.

Kenya

Grounds

Termination is permissible, if the statutory procedure has been followed on the following grounds: misconduct, capability (including performance and sickness), redundancy and any other substantial reason that may justify dismissal. The Employment Act strictly requires a disciplinary hearing only in the cases of summary dismissal and termination based on poor performance. The Employment and Labor Relations Court has, however, taken the view that the employer must also accord the employee an opportunity to be heard by a disciplinary panel in all cases of termination. The procedure contemplates an oral hearing.

A disciplinary process is not mandatory for dismissals during a probationary period.

There is a specific process for redundancy dismissals (see mass layoff rules).

Employees subject to termination laws

All except employees serving on probationary contracts.

Restricted or prohibited terminations

No statutory prohibitions. However, due process has to be followed in terminating the contract.

Third-party approval for termination/termination documents

No third-party approval is required.

Mass layoff rules

The Employment Act 2007 sets out the requirements and procedure for effecting a lawful redundancy:

  • Where the employee is a member of a trade union, the employer notifies the union of which the employee is a member and the labor officer in charge of the area where the employee is employed of the reasons for, and the extent of, the intended redundancy, not less than 1 month prior to the date of the intended date of termination on account of redundancy
  • Where an employee is not a member of a trade union, the employer notifies the employee personally in writing, and then notifies the labor officer
  • The employer has, in the selection of employees to be declared redundant, due regard to seniority in time and to the skill, ability and reliability of each employee of the particular class of employees affected by the redundancy. The Last in First Out (LIFO) principle is preferred but it is not the only one.
  • Where there is in existence a collective agreement between an employer and a trade union setting out termination benefits payable on redundancy; the employer must not place the employee at a disadvantage for being or not being a member of the trade union
  • Where leave is due to an employee who is declared redundant, the employer pays off the leave in cash
  • The employer pays an employee declared redundant not less than 1 month's notice or 1 month's wages in lieu of notice
  • The employer pays to an employee declared redundant severance pay at the rate of not less than 15 days' pay for each completed year of service
  • The employee is issued with a Certificate of Service at the end of the redundancy process

This procedure is mandatory and must be followed, otherwise the termination would be deemed unfair.

Notice

Notice is not required where wages are paid daily. Where the wages are paid periodically, notice is given at a period equivalent to that at which the next payment would be due. Where wages are paid monthly, then a month's notice is required. The notice period may also be agreed upon contractually, but if none is provided for, notice must be at least 1 month.

Statutory right to pay in lieu of notice or garden leave

Either party is required to give the requisite contractual notice or pay in lieu. In some cases, the employer may decide to allow the employee to be on garden leave instead of working during the notice period on such terms as may be mutually agreed.

Severance

Severance pay is payable at the rate of 15 days for every year worked and is only payable in cases where termination is on account of redundancy. In cases of termination for other reasons other than redundancy, service pay is payable at a rate equal to that of severance pay.

 

 

Kuwait

Grounds

Termination is possible on these grounds: by agreement, on the expiry of a fixed term contract, resignation, incapacity or death, dismissal with notice provided it is for a valid reason, or summary dismissal (by reason of any of the grounds listed at Article 41A of the Labor Law).

Employees subject to termination laws

All employees.

Restricted or prohibited terminations

Employees on any type of leave cannot be terminated while on leave, eg employees on maternity leave or who are delayed in returning to work due to sickness resulting from pregnancy or labor cannot be terminated.

Third-party approval for termination/termination documents

Special consideration should be given in the case of Kuwaiti nationals.

Mass layoff rules

None.

Notice

3 months' notice for monthly paid employees; 1 month's notice for all other employees.

Statutory right to pay in lieu of notice or garden leave

None. Entitlement depends on contract terms.

Severance

Unless terminated under Article 41A of the Labor Law, employees are entitled to salary and benefits to the termination date, notice (or payment in lieu), payment in lieu of accrued but untaken annual leave, the cost of a flight/air ticket to repatriate the employee to their home country (unless (i) dismissal is attributable to the employee and the employee has the funds to pay his/her own costs; or (ii) the employee has obtained alternative sponsorship to remain in Kuwait), an end of service gratuity payment and reimbursement of unpaid business expenses. In case of employer termination, the end of service gratuity for monthly paid employees is calculated at 15 days' pay per year for each of the first 5 years of service; and 1 month's pay for each additional year of service thereafter. Where the employment is terminated by the employee, the employee is entitled to the following:

  • After 3 and up to 5 years' continuous service, 50% of the severance pay as calculated above
  • After 5 years' continuous service, two thirds of the severance pay as calculated above
  • After 10 years' continuous service, the full entitlement to severance pay as calculated above

The Labor Law only sets out the employee's entitlement to an end of service gratuity in the case of a resignation in respect of indefinite contracts; however, we have been advised by MOSAL that the same entitlements will apply to employees who resign from limited term contracts.

The total end of service gratuity entitlement an employee can receive is capped at one and a half years' salary.

Luxembourg

Grounds

Termination permissible with immediate effect for gross misconduct or with notice for real and serious cause connected with the employees' attitude, aptitude or for operating needs of the business (economic ground).

Employees subject to termination laws

All.

Restricted or prohibited terminations

Employee representatives, employees who have duly notified their incapacity to work, pregnant women, employees during parental leave, etc.

Third-party approval for termination/termination documents

No third-party approval is required for termination.

Mass layoff rules

  • Any employer contemplating dismissing at least 7 employees within a period of 30 days, or 15 employees within a period of 90 days for one or more reasons not related to the employees is required to follow the procedure applicable to mass layoffs.
  • The employer must enter into prior negotiations with the employee representatives in order to come to an agreement in respect of the establishment of a social plan. Before negotiations start, the employer must inform the employee representatives in writing of the proposed collective dismissal and provide them with information thereon. Any dismissal notified before a social plan is signed is deemed null and void.

Notice

The notice period (which is not applicable in case of terminations due to gross misconduct) depends on the length of service:

  • Less than 5 years: 2 months
  • Between 5 and 10 years: 4 months
  • More than 10 years: 6 months

Statutory right to pay in lieu of notice or garden leave

No statutory right to pay in lieu of notice. The employee can be released from the obligation to work during the notice period. During the release, the employee is entitled to the same remuneration and benefits as if he or she was working.

Severance

The amount of the severance depends on the length of service and varies from 1 to 12 months. Not applicable for terminations for gross misconduct.

Malaysia

Grounds

Termination must be with just cause. Termination by the employer is usually on the grounds of misconduct, poor performance, redundancy, or closure of business.

Employees subject to termination laws

All employees (EA Employees and non-EA Employees, including probationers) are protected from unfair dismissal or unfair termination of employment.

Restricted or prohibited terminations

There are specific prohibitions restricting termination of an employee by reason of his joining a trade union, or a female employee while she is on maternity leave.

Third-party approval for termination/termination

No approval required, unless provided for in a collective agreement.

Mass layoff rules

When implementing a retrenchment exercise, employers are encouraged (but not required) to abide by the guidelines in the Code of Conduct for Industrial Harmony ("Code"). Note that there is no headcount threshold and these guidelines apply even if the retrenchment exercise involves only one employee. The employer must also inform the nearest Department of Labor at least 1 month before the retrenchment takes place. Employers must apply fair and objective selection criteria, and are required to abide by the "Last In, First Out" (LIFO) principle and any objective selection criteria set out in any collective agreement.

Notice

EA Employees are entitled to the following minimum notice periods under the EA:

  • 4 weeks' notice if the employee has been so employed for less than 2 years on the date on which the notice is given
  • 6 weeks' notice if the employee has been so employed for 2 years or more, but less than 5 years on such date
  • 8 weeks' notice if the employee has been so employed for 5 years or more on such date

For non-EA Employees, the notice period is as stated in the employment contract, and if the contract is silent, a "reasonable" notice period will be implied. What constitutes a "reasonable" notice period will depend on the circumstances (eg employee's role or seniority in the organization, notice periods for other employees, past practice), but should ordinarily be expected to be between 1-6 months.

In very limited circumstances, an employer may be entitled to summarily dismiss an employee, where it can be shown that the employee is guilty of a serious misconduct which is so serious that it renders the continuation of the employment relationship impossible. The burden of proving that the misconduct was serious enough to warrant summary dismissal lies with the employer.

Statutory right to pay in lieu of notice or garden leave

For EA Employees, the EA provides for termination without notice with the making of a payment in lieu of notice. For non-EA Employees, it is subject to the employment contract. No statutory provision for garden leave.

Severance

An EA Employee who has been employed for 12 months or more is entitled to the following minimum severance payments pursuant to the Employment (Termination and Lay-Off Benefits) Regulations 1980:

  • 10 days' wages for every year of employment under a continuous contract of service with the employer if he has been employed by that employer for a period of less than 2 years
  • 15 days' wages for every year of employment under a continuous contract of service with the employer if he has been employed by that employer for 2 years or more but less than 5 years
  • 20 days' wages for every year of employment under a continuous contract of service with the employer if he has been employed by that employer for 5 years or more, and pro-rata in respect of an incomplete year, calculated to the nearest month

For non-EA Employees, the entitlement to severance payments depends on the employment contract.

Mexico

Grounds

An employer may rescind an employment relationship without incurring any liability if any of the justified "causes" established by law is given, which are mostly based on misconduct. Technically, the employer cannot terminate employment without cause, except in specific cases established in the labor law. In practice, however, exposure in an unlawful termination lawsuit is mostly limited to the statutory termination payments, so most terminations can be implemented either through employee resignations (with all statutory payouts, including severance), or through a mutual termination agreement signed-off in front of the labor court (again with all statutory payouts, including severance).

Employees subject to termination laws

All employees.

Restricted or prohibited terminations

If the employment relationship is suspended (eg, an employee on maternity leave).

Third-party approval for termination/termination documents

No third-party approval is required, but it is common to have employees sign a resignation letter or a waiver and release letter in front of the labor authorities.

Mass layoff rules

No mass layoff rules.

Notice

No notice period.

Statutory right to pay in lieu of notice or garden leave

Not applicable under Mexican law.

Severance

90 days' Integrated Salary (ie, the last annual average of the employee's income), plus 20 days' Integrated Salary for each year of services rendered, seniority premium equal to 12 days' wages for each year of services rendered (subject to a limitation up to twice the minimum wage) and accrued benefits.

Morocco

Grounds

Termination permitted for serious misconduct or for 4 non-serious misconducts during 1 year or for economic reasons. Termination due to poor performance is very rare in Morocco and subject to very strict conditions:

  • Performance objectives must be agreed upon between the employer and the employee in writing;
  • Objectives must not be excessive;
  • The employer needs to prove that the employee was given all the means to achieve the objectives.

Employers must summon employees for a preliminary hearing before taking a dismissal decision. The purpose of the hearing is to allow the employees to defend themselves.

Economic termination involves a different, very long and cumbersome process.

At least one month before starting an economic dismissal process, the employer must inform the employees' representatives (or the work council) and the union's representatives, if any. The employer must also conduct discussions and negotiations with them, in order to minimize the impacts of the contemplated dismissals. Minutes of the meetings must be drafted and signed by the employer and the employees participating in the negotiations, and a copy of these minutes must be sent to the labor inspector.

A request for authorization must be sent by the employer to the Governor. The Governor must inform the company of his decision to grant or not grant the authorization no later than two months after the receipt of the request.

The request for authorization must explain the financial difficulties faced by the employer or the technological or structural reasons and be documented by evidence of said difficulties or technological or structural reasons.

Employees subject to termination laws

All employees are protected against unfair dismissal except during the probation period.

Restricted or prohibited terminations

Termination of employment is prohibited during maternity leave.

Termination for discriminatory reasons is forbidden.

Third-party approval for termination/termination documents

Not required.

Mass layoff rules

Consultation with employees representatives is required in a mass layoff if such representatives exist in the company. The law is not specific about what constitutes a mass layoff; in theory, more than one employee, but in practice, more than 10.

Subject to an authorization from the governor of the region, which is rarely granted in practice.

Notice

Variable between 8 days and 3 months, depending on the seniority and the position of the employee; notice is not required in cases of serious misconduct.

Statutory right to pay in lieu of notice or garden leave

Statutory right to pay in lieu of notice. It is permissible to put employees on garden leave during the notice period as long as their salary is paid.

Severance

In case of termination of a fixed-term employment agreement without misconduct of the employee, the severance pay equals the wages the employees would have received if the employee had stayed in the company until the end of the employment contract.

In case of termination of an indefinite term employment agreement without serious misconduct of the employee, the severance pay depends on the seniority of the employee; the amount may vary between 2 and 36 months of salary. In some case, the severance pay may be even higher.

Mozambique

Grounds

The formalities for termination of an employment contract are provided by the Labor Law and are mandatory. There is no summary dismissal without notice. Employment contracts may terminate by expiry, agreement, denunciation (cancellation) by either party, or rescission by either of the contracting parties based on just cause (eg, retrenchment, disciplinary process). Cancellation of the contract can be based on just cause or for convenience. Resignation would be one of the forms that this termination can take provided that the employee meets the notice requirements as applicable.

Performance issues, depending on the particular situation, may be dealt with as misconduct (lack of compliance with work instructions) or as manifest ineptitude discovered after the probationary period, one of the forms of unilateral termination of the contract by the employer with just cause.

Employees subject to termination laws

All employees.

Restricted or prohibited terminations

There are no statutory prohibitions.

Third-party approval for termination/termination documents

No, apart from the consultation/notification below in case of a mass dismissal.

Mass layoff rules

In respect of collective dismissal (more than 10 employees) there is a consultation process with the trade union where the union may be required to be involved in the termination process. This process shall not last longer than 30 days. Notification to the Ministry of Labor is required as well. The employer shall inform the trade union, the affected employees and Ministry of Labor of the collective dismissal before the negotiation process begins (no specific period is indicated in the law). The negotiation process shall not take longer than 30 days. In practice, the 30-day period would start when employees and other relevant stakeholders in the process are notified of the collective dismissal and negotiation process, and the collective dismissal would occur before or upon the end of this period.

Notice

In the event of termination during the probationary period, a minimum of 7 days' advance notice, in writing, is required. In the event of termination with just cause (after the probationary period) the employer must give 30 days' prior notice. In case of termination by the employee, the employee is required to give prior notice of 15 days where the period of work is more than 6 months but does not exceed 3 years, and 30 days' prior notice where the period of work is of more than 3 years. Employees with fixed-term employment contracts must give prior notice of 30 days.

Statutory right to pay in lieu of notice or garden leave

Employees are entitled to receive salary during the notice period. Garden leave is common as notice cannot be paid in lieu.

Severance

In respect of termination of the contract on the initiative of the employer with just cause and with prior notice, the employee is entitled to receive severance. In respect of termination by agreement, compensation is normally agreed between the parties. In respect of termination by dismissal due to a disciplinary process, expiry or during the probationary period, the employee will not be entitled to severance.

In the event of contracts for indefinite duration (permanent contracts), the employee will be entitled to severance which will be calculated according to the salary received by the employee, as per the following table:

Base Wage Severance Payable
From 1-7 Minimum Wages (MWs) 30 days for each year of service
From 8-10 MWs 15 days for each year of service
From 11-16 MWs 10 days for each year of service
More than 16 MWs 3 days for each year of service


On the date of termination of an employment contract which is a fixed-term contract, the employer shall pay the affected employee severance equivalent to the wages that the employee would have earned between the date of termination and the contractual expiry date. Where more favorable severance criteria have been agreed upon between employer and employee, such more favorable criteria shall apply as it benefits the employee; ie the requirements of the Labor Law in this case are regarded as minimum severance requirements.

For employees hired while the former labor law was in force, ie, before November 1, 2007 and whose basic salary including the length of service bonus, corresponds to an amount between 1 and 7 minimum national wages may also be entitled for a severance of 90 days for each 2 years of service.

If the termination of the employment contract on the initiative of the employer is deemed to be unlawful by a Labor Court, the employee would be entitled to be reinstated and receive an amount equal to the remuneration payable between the date of termination and the date of effective reinstatement, up to a maximum of 6 months, or, if reinstatement is not possible, the employer will be liable for severance of 45 days per year of service minus any severance already paid, if any. The period between the unlawful termination and the verdict of the Labor Court shall count as length of service of up to 6 months for severance calculation purposes.

 

Myanmar

Grounds

Based on the standard employment contract (see above under Employment Contract and Policies), termination is possible in the following circumstances:

  • Liquidation of the factory/company
  • Winding up the employer's business due to force majeure or
  • Death of employee

All employers must ensure their employment contract/an annex to it provides a list of misconduct offences. Although not an exclusive list, typical grounds for termination for cause are listed in the "work rules" annex to the standard issue government employment contract. These are:

  • Stealing, accepting stolen goods, misusing, or helping to misuse, work-related property
  • Intentionally destroying, or helping to destroy, the property of the factory/company
  • Quarrelling among employees, injuring another employee or causing conflicts
  • Committing morality-related crimes in the workplace
  • Corruption
  • Bringing alcohol to, or selling or drinking alcohol at, the workplace
  • Gambling at the workplace
  • Keeping, distributing, selling or using narcotic drugs
  • Smoking or using fire at the work place
  • Bringing prohibited materials or explosives
  • Entering restricted areas of the factory/company
  • Breaking secrets, revealing confidential information, formulae, statistics or technologies of the company to others, or taking photos thereof
  • Being arrested and sentenced in criminal cases
  • Failing to come to work for 3 days continuously or for 5 days during a month without permission from the employer or manager

If an employee is not in compliance with work obligations, then the employee must have received 3 written prior warnings, with an undertaking given by the employee on the third warning, of poor performance and have been provided with the opportunity to rectify his or her conduct prior to termination of employment. 

Employees subject to termination laws

All.

Restricted or prohibited terminations

An employer is not permitted to terminate an employee who did not breach the existing laws, rules or the employment contract.

Third-party approval for termination/termination documents

None.

Mass layoff rules

An employer may terminate the employment of an employee as a result of closure, or a necessary change or restructuring of the business. In any cases of making changes to employment conditions such as changes of employer or changes of work place or changes of work nature, the employer must report these to the TLO within 10 days with the prescribed Form. Workforce reductions or termination of employment, must be effected in coordination with a workplace union and the WCC, if no union exists in the workplace, coordination should be directly with the WCC.

Notice

Either party may terminate the relationship by giving 1 months' notice, but the employer must have a basis for termination.

Statutory right to pay in lieu of notice or garden leave

Myanmar laws do not provide payment in lieu of notice or garden leave, but it is often written into employment contracts or internal policies, or agreed upon at the time of termination.

Severance

The employer shall, in respect of the termination of an employment contract of an employee having worked continuously, make severance payments on the basis of his/her last salary (without over‐time premium) as follows:

Periods of service  Severance (Monthly Salary)  
6 months to less than 1 year  ½ 
1 year to less than 2 years 
2 years to less than 3 years  1½ 
3 years to less than 4 years  3
4 years to less than 6 years 
6 years to less than 8 years  
8 years to less than 10 years 
10 years to less than 20 years 
20 years to less than 25 years  10
From the completion of and more than 25 years 13

Netherlands

Grounds

Termination is permissible on misconduct, performance, redundancy or other substantial grounds. Dismissal is only possible on the basis of one of the reasons specified in the new Dutch legislation.

Employees subject to termination laws

All.

Restricted or prohibited terminations

Members of the (European) works council, employees on their first 2 years of sick leave, pregnant employees, employees on military service.

These prohibitions on termination do not apply in the event that:

  • An employee consents to the termination in writing
  • The termination takes place during the probationary period
  • The termination is by operation of law due to the expiry of a fixed term contract
  • The termination is a dismissal with immediate effect
  • There is a company closure (the termination of employees who are pregnant/on maternity leave in that event still prohibited/restricted) or
  • The termination takes place because the pensionable age has been reached

Third-party approval for termination/termination documents

Employers do not need any third-party approval for:

  • Immediate termination due to an urgent reason
  • Termination during a probationary period
  • Termination by operation of law due to expiry of a fixed term contract
  • Mutual consent termination

In all other situations, employers must either seek approval of the Dutch Employee Insurance Agency (UWV) or request a court to dissolve the employment agreement. Mutual consent terminations are common.

Mass layoff rules

Strict information and consultation rules apply in situations where 20 or more employees are to be made redundant within a period of 3 months or less.

Notice

The notice period that has to be  given by the employee is 1 month. For the employer notice requirements depend on the duration of the employment:

  • Less than 5 years requires 1 months' notice
  • Between 5 and 10 years requires 2 months' notice
  • Between 10 and 15 years requires 3 months' notice
  • 15 years or more requires 4 months' notice

It is permissible to agree a longer notice period to be given by the employee an employment contract, provided that the notice period to be given by the employer  is at least double that period (ie, 2 months for the employee, 4 months for the employer). The notice period to be given by the employee cannot be longer than 6 months.  

With the consent of the employee, employers can, but are not required to, make a payment in lieu of notice.

Statutory right to pay in lieu of notice or garden leave

No.

Severance

Severance pay regulations are arranged by law, under a so-called transition payment. A transition payment will be due where the employment has lasted at least 2 years, and the amount will be based on years of service:

  • 1/6 of one month's salary (including holiday allowance and (if any) fixed end of year bonus and/or average bonus/commission of the last 3 years) for every full 6 months for the first 10 years of service and
  • 1/4 of one month's salary (including aforementioned elements) for every full 6 months over 10 years of service.

The maximum transition payment for 2019 amounts to €81,000 gross or, where an employee earns over €81,000 per annum, a maximum of one year's salary. For employees of 50 years or older and who have been employed for 10 years or more, a temporary more favorable calculation method applies (until January 1, 2020)

Waivers

Enforceable, but employees must be given time to consider and to seek legal help.

New Zealand

Grounds

Termination can be brought about by mutual agreement, expiry of a fixed-term contract, termination by the employer for cause (with or without notice) or termination (resignation) by the employee.

Who is subject to termination laws?

All employees.

Restricted or prohibited terminations

Employers are prohibited from making "unjustified" dismissals and from taking adverse action against an employee for union membership or because of a protected characteristic under the Human Rights Act 1993.

Third-party approval for termination/termination documents

Not applicable for this jurisdiction.

Mass layoff rules

Employers must use a fair and reasonable process when implementing a redundancy. An employer needs to show that there is a genuine commercial reason for any redundancy decision and offer to redeploy employees if possible.

Notice

The notice period will be set out in the employment agreement. Generally, this is 1 month.

Statutory right to pay in lieu of notice or garden leave

Employers can pay in lieu of notice if stipulated in the employment agreement. No right to garden leave unless specified in the employment agreement.

Severance

No right to severance payments unless specified in the employment agreement.

Nigeria

Grounds

Usually, the employment contract provides for termination of employment, and where the contract of employment makes explicit provision for termination, said termination of the employment must be done in accordance with the prescribed procedure. The statutory obligation which applies only to manual and clerical workers is that required notice is given for termination of employment. Recent decisions of the National Industrial Court (NIC) state that employers are required to state the reasons for the termination in the notice of termination. Failure to do so will amount to wrongful termination and give rise to a cause of action for breach of contract. This will need to be affirmed by the Supreme Court, the highest court, to be widely judicially recognized.

Employees subject to termination laws

 
All employees.

Restricted or prohibited terminations

Termination of employment is prohibited during maternity leave. Also, employees in the oil and gas industry cannot be terminated without the consent of the Department of Petroleum Resources (DPR).

Third-party approval for termination/termination documents

No third-party approval for termination or termination documents, except in the oil and gas industry where the consent of the DPR is required.

Mass layoff rules

In the event of redundancy, the employer is required to inform the trade union, if any, of the reason and the extent of the anticipated redundancy. The principle of "last in, first out" shall be adopted in the discharge of the particular category of workers affected, subject to factors such as skill, ability and reliability. Employers are also expected to use their best efforts to negotiate redundancy payments.

Please note that this process applies to only manual and clerical workers. For other categories of employees, the steps outlined above are used as a guide but are not mandatory.

With regard to the oil and gas industry in Nigeria, the guidelines for release of staff which was issued by the Director of the Department of Petroleum under the Petroleum (Drilling and Production) (Amendment) Regulations, 1988, provide that the holder of an oil mining lease, license or permit issued under the Petroleum Act 1969 or regulations made thereunder or any person registered to provide any services in relation thereto, shall not remove any worker from his / her employment except in accordance with guidelines that may be specified from time to time by the Minister. Furthermore, the prior consent of the DPR is required for the release of any worker employed by the holder of an oil mining lease, license or permit under the Petroleum Act. 

Notice

No statutory requirement, but the employment contract provides for the notice period. In practice, the notice period is typically one month, and more for senior employees. 

Statutory right to pay in lieu of notice or garden leave

Where the employment contract provides for pay in lieu of notice, either party terminating the contract can decide to pay in lieu of notice. Garden leave is not provided for under the Nigerian Law and also not a common practice in Nigeria, but some employment contracts provide for same.

Severance

Severance pay is usually subject to the provisions of the employment contract or collective agreement. However, for manual and clerical workers, redundancy pay is mandatory. The law does not stipulate the amount to be paid as redundancy pay; the law only provides that the employer should use its best endeavors to negotiate redundancy payments.

 

Norway

Grounds

Mutual agreement, expiry of a fixed-term contract, dismissal by the employer with notice, dismissal by the employer without notice and notice given by the employee.

Termination by dismissal with notice is permissible if dismissal is objectively justified on the basis of circumstances relating to the undertaking, the employer or the employee. Termination by dismissal without notice is permissible if the employee is guilty of a gross breach of duty or other serious breach of the contract of employment.

Employees subject to termination laws

All. The chief executive may relinquish the right to employment protection in exchange for severance pay by prior agreement. 

Prohibited or restricted terminations

Termination for the following reasons is prohibited or restricted:

  • Supporting or not supporting statutory union recognition and de-recognition
  • Trade union membership or activities or non-membership of a trade union
  • Pregnancy or any reason connected with maternity
  • Taking, or seeking to take, parental leave
  • Sex or race
  • Ethnicity, politics or religion
  • Sexual orientation
  • Age or disability
  • Sickness, during the first 12 months after being unable to work

Third-party approval for termination

Not required.

Mass layoff rules

Strict information and consultation rules apply when notice of dismissal is given to 10 employees or more within a period of 30 days, for business reasons (as opposed to reasons relating to the employees).

Notification  to the Labor and Welfare Service is required.

Notice

During the probationary period, 14 days' notice is required. After the probationary period, the minimum statutory notice period for terminating an employment contract is 1 month. The notice period will be increased by one month for each 5 years of service, up to 10 years of service. If an employee is dismissed after at least 10 years of employment, the period of notice must be at least 4 months when given after the employee is 50 years of age, at least 5 months after the age of 55, and at least 6 months after the age of 60.

Statutory right to pay in lieu of notice or garden leave

No. All employees are entitled to work and receive full payment during the notice period. The right to notice may be waived at the time of the termination.

Severance

No statutory right to severance pay. However, employees often offer severance pay so the employee accepts notice.

Oman

Grounds

Termination possible on these grounds: by agreement; on the expiry of a fixed term contract or completion of the specific project; resignation; incapacity or death; dismissal with notice provided it is for a valid reason; or summary dismissal (by reason of any of the grounds listed at Article 40 of the Labor Law).

Employees subject to termination laws

All employees.

Prohibited or restricted terminations

Employees who have not exhausted statutory sick leave or who are on public holiday. In such instances, any notice of termination will not be effective until the leave or absence has ended. 

It is also not permissible to dismiss a female employee by reason of illness which is proved by a medical certificate to result from pregnancy or delivery and where she cannot resume work because of such illness, provided that the total period of absence is not more than 6 months.

Third-party approval for termination/termination documents

None required.

Mass layoff rules

None.

Notice

30 days' statutory notice.

Statutory right to pay in lieu of notice or garden leave

No. Depends on contract terms.

Severance

Unless terminated under Article 40 of the Labor Law, employees are entitled to: salary and benefits to the termination date; notice (or payment in lieu); payment in lieu of accrued but untaken annual leave; the cost of a flight/air ticket to repatriate the employee to their home country (unless the dismissal is attributable to the employee and the employee has the funds to pay his/her own costs or the employee has obtained alternative sponsorship to remain in Oman); an end-of-service gratuity payment; and reimbursement of unpaid business expenses.

In case of termination by the employer, the end-of-service gratuity is calculated based on the employee's final salary. An employee is entitled to 15 days' pay for the first 3 years of service and 1 month's pay for each subsequent year. 

Philippines

Grounds

Employees may only be terminated either for just or authorized causes as enumerated in the Labor Code. The burden of proof is with the employer or the employer will be liable for reinstatement with back pay.

The following are the just causes for the termination of employment by the employer:

  • Serious misconduct or willful disobedience by an employee of the lawful order of his or her employer or representative in connection with his or her work
  • Gross and habitual neglect of duties by an employee
  • Fraud or willful breach by an employee of trust reposed in him or her by the employer or its duly authorized representative
  • Commission of a crime or offense by an employee against the person of his or her employer or any immediate member of his or her family or his or her duly authorized representative
  • Other causes analogous to the foregoing

The following are the authorized causes of termination:

  • Installation of labor-saving device or automation
  • Redundancy
  • Retrenchment (downsizing)
  • Closure or cessation of operation of the establishment or undertaking

Employees subject to termination laws

All employees, with no distinction as to rank or status.

Prohibited or restricted terminations

Substantive due process mandates that an employee can only be dismissed based on just or authorized causes. On the other hand, procedural due process requires further that the employee can only be dismissed after the employee has been given an opportunity to be heard.

Further, pregnancy or number of children shall not be a ground for termination from employment. (Republic Act No.10354)

Third-party approval for termination/termination documents

Not required.

Mass layoff rules

There are no specific mass layoff rules. Layoff, used interchangeably with retrenchment or redundancy, would be a valid ground for termination if the following are present:

  • Retrenchment must be reasonably necessary and likely to prevent business losses
  • Losses, if already incurred, are not merely de minimis, but substantial, serious, actual and real, or if only expected, are reasonably imminent
  • Expected or actual losses must be proven by sufficient and convincing evidence
  • Retrenchment must be in good faith for the advancement of its interest and not to defeat or circumvent employees' right to security of tenure
  • For redundancy, business must show that employees are in excess given current business situation of a company
  • For both redundancy and retrenchment, there must be fair and reasonable criteria in ascertaining who would be dismissed and who would be retained among the employees, such as status, efficiency, seniority, physical fitness, age and financial hardship for certain workers 

Notice

For termination based on just cause, there is no statutory advance notice period; for termination based on authorized causes, there is a statutory notice period to both the employee and the Department of Labor and Employment of at least 30 days prior to termination.

In addition, for termination of employment based on just cause, the procedure to be followed is as follows:

  • A first written notice must be served on an employee specifying the ground for termination, a detailed narration of facts and circumstances that will serve as basis for the charge against the employee, and a directive that the employee is given opportunity to submit a written explanation within a reasonable period
  • A hearing or conference during which an employee is given ample opportunity to be heard and to defend himself or herself with the assistance of the employee's representative if desired
  • A second written notice served to the employee indicating that
    • all circumstances involving the charge against an employee have been considered and
    • the grounds have been established to justify the severance of their employment
  • For termination of employment based on authorized causes, requirements of due process will be deemed complied with upon the service of a written notice to the employee and the appropriate Regional Office of the Department of Labor and Employment at least 30 days before the effective date of the termination, specifying the ground or grounds for termination

Statutory right to pay in lieu of notice or garden leave

Not provided for under Philippines law.

Severance

Separation pay is equivalent to at least 1 month's pay or at least 1 month's pay for every year of service, whichever is higher, a fraction of 6 months considered as 1 year. However, if the ground for termination is retrenchment to prevent serious losses, closure of business or disease, the separation pay shall be equivalent to 1 month's pay or 1/2 month's pay for every year of service, whichever is higher, a fraction of 6 months considered as 1 year.

Poland

An employment contract can be terminated by mutual agreement of the parties, with notice, with immediate effect (for cause or without any employee's fault) or at the end of the period it has been concluded for (fixed-term employment contracts and probationary period employment contracts).

Polish law sets forth detailed rules regarding the unilateral termination (with notice and with immediate effect) served by both an employer and an employee. These rules vary depending on the type of employment contract.

Grounds

An employer that terminates the open-ended employment contract or terminates the employment with immediate effect must specify the reasons for termination, which must be concrete, justified and real. A termination letter must include all the reasons for termination as it is not possible to raise further grounds before the court. In case of termination with immediate effect, Polish law enumerates the reasons for termination (eg, the gross breach of basic employee obligations).

Employees subject to termination laws

Polish law provides for general protection against dismissal (granted to all employees engaged under open-ended contracts) and special protection against termination (due to employee's life situation or role he/she holds).

Prohibited or restricted terminations

Statutory limitations of an employer's right to unilaterally terminate the employment relationship with some groups of employees due to their age (employees who will reach retirement age in not more than 4 years), life situation (eg, due to pregnancy, when using maternity leave, paternity leave, parental leave and childcare leave, during sick leave, holiday leave) or function they hold (eg, trade union leaders, works council members).

Third-party approval for termination/termination documents

In case of the protected employees, the restriction on termination may require the employer to seek consent of certain bodies for the termination of employment (eg, trade union's consent for summary dismissal of a pregnant employee or terminating the employment relationship with a member of the trade union's board; consent of the works council for the termination of employment of its member).

In case of termination of an open-ended employment contract with notice or termination with immediate effect with an employee represented by the trade union (as its member or upon his/her request), it is necessary to notify the trade union in writing on the intended termination and its grounds. The trade union's opinion is not binding for the employer.

Mass layoff rules

Special procedure of termination in case of collective redundancies, applicable to employers engaging at least

20 employees terminating employment on grounds not related to individual employees. Collective redundancies cover the dismissal of at least:

  • 10 employees in entities normally employing less than 100 employees
  • 10% of the employees in entities normally employing at least 100, but fewer than 300 employees and
  • 30 employees in entities normally employing at least 300 employees

Notice

The length of the notice period depends on the type of employment contract. In the case of an employment contract for a probationary period, it can be 3 days, 1 week, or 2 weeks, depending on the length of the probationary period.

The length of notice period applicable to open-ended and fixed-term employment contracts is between 2 weeks and 3 months, depending on the length of service with a given employer.

Parties can agree on a notice period longer than the statutory one. No notice period must be observed by termination by mutual agreement or termination with immediate effect.

Statutory right to pay in lieu of notice or garden leave

Pay in lieu of notice: inadmissible. Only if the termination of an open-ended employment contract is due to employer's bankruptcy or liquidation or other reasons not related to the employee, the 3 months' notice can be shortened up to 1 month and the employee is entitled to compensation equal to salary for the outstanding notice period.

Garden leave: permissible for the period of notice, provided that an employee retains the right to his/her standard remuneration and benefits.

Severance

In general, an employee is not entitled to severance pay, unless the parties agree otherwise. Only in case of the collective redundancies or an individual termination of employment made exclusively due to reasons not related to the employee (only by employers engaging at least 20 employees), an affected employee is entitled to severance pay which is fixed on the basis of the period of employment by the employer. The amount of the statutory severance pay is equal to the employee's 1-3-months' salary and cannot exceed 15 times the minimum wage.

Portugal

Grounds

Termination unilaterally by the employer: dismissal based on objective grounds (redundancy reasons); disciplinary dismissal with just cause (based on serious breach of the employee's duties); dismissal due to unsuitability for the job.

Termination without cause (with notice): only for employees hired under an employment contract of service commission regime (a particular type of contract for high level employees which provides flexibility for termination - not common).

Other termination causes: mutual agreement, termination by the employee (termination with notice or constructive dismissal with just cause), expiration (fixed-term and open-term contracts, retirement).

Employees subject to termination laws

All employees.

Restricted or prohibited terminations

Restrictions on terminations and specific procedures required for termination of protected employees:

  • Pregnant women and women who have recently given birth (for 120 days after birth) or are breastfeeding, as well as parents who are taking parental leave, are protected against dismissal.
  • Unilateral dismissal of protected employees will be allowed if the employer submits an application to CITE (Commission for Equality in Labor and Employment) and CITE does not oppose the dismissal; otherwise, the employer has to file a lawsuit to obtain a court decision confirming the existence of grounds for dismissal. CITE may decide not to oppose the dismissal (if for example there are obvious grounds for termination). If CITE opposes, then the employers prefer to negotiate more generous severance rather than waiting for a court decision.

Termination on discriminatory grounds is prohibited.

Where a victim of harassment is dismissed within 1 year after the complaint, there is a rebuttable presumption that the dismissal is abusive.

Third-party approval for termination/termination documents

Except in respect of protected employees, third-party approval is not required to terminate an employment contract.

Mass layoff rules

Redundancy dismissal is allowed for one or more of the following reasons:

  • A definitive closure of the organization
  • Closure of one or more departments of the organization
  • Personnel reduction based on structural, technological or market reasons

Collective dismissal rules will be triggered if the dismissal involves at least 2 employees (in a company with up to 49 employees) or 5 employees (in a company with 50 or more employees) within a 3-month period.

Information and consultation with the employees' representatives and with the ministry of employment representative (DGERT) is required. However, there is no need to obtain approval for termination.

If the collective dismissal rules are not triggered, the dismissal procedure due to extinction of the job is applicable. Previous consultation with the employees' representatives and with the employee is required.

Notice

For redundancy dismissal and dismissal due to unsuitability for the job, the following notice is required:

  • 15 days if the employee's seniority is less than 1 year
  • 30 days if the employee's seniority is at least 1 year but less than 5 years
  • 60 days if the employee's seniority is at least 5 years but less than 10 years
  • 75 days if the employee's seniority is 10 years or longer

Termination by the employee: notice of 30 or 60 days is required, depending on whether the employment contract was in force for up to 2 years, or for a longer period.

Notice periods in case of term contracts:

  • Fixed term contracts: 15 days for the employer and 8 days for the employee.
  • Open-term contracts (eg, a contract to cover absence) (employer): 7, 30 or 60 days, where the employment contract was in force for up to 6 months, between 6 months and 2 years or more than 2 years respectively.

Statutory right to pay in lieu of notice or garden leave

If the notice period is not honored, payment in lieu of notice is required.

Garden leave is allowed during the notice period.

Severance

Fair dismissal based on objective grounds (redundancy) or dismissal due to unsuitability for the job: 12 days' salary per year of service, up to 12 months' base salary. The severance is partially (50%) paid by a fund (FCT) administered by Social Security, to which the employer has to make contributions.

For employees hired before October 1, 2013, the calculation of the legal severance follows specific and transitory rules.

Fair disciplinary dismissal: no severance.

Higher severance payments may be agreed and are usual as a way to avoid litigation.

Qatar

Grounds

Termination possible on these grounds: during the probationary period (provided the employee is proved to be incapable of carrying out the work), on the expiry of a fixed term contract, resignation, upon the mutual consent of the employer and employee, incapacity or death, dismissal with notice and summary dismissal (by reason of any of the grounds listed in Article 61 of the Labor Law). Article 61 of the Labor Law sets out a limited list of circumstances (including when the employee attends work under the influence of alcohol, or is absent from work for period of seven consecutive or 15 non-consecutive days) where an employee's employment agreement may be terminated without notice while forfeiting the employee's right to an EOSG. There is no general misconduct category.

Employees subject to termination laws

All employees.

Restricted or prohibited terminations

Employees who have not exhausted the statutory sick leave entitlement are protected from dismissal on grounds of health, unless the full sick leave entitlement has been taken (ie, 12 weeks per year of service). Women employees are protected from dismissal during maternity leave. A female employee may not be dismissed on grounds of her marriage.

Third-party approval for termination/termination documents

No.

Mass layoff rules

No.

Notice

A minimum of 1 month's written notice where the employee is paid annually or monthly and has less than 5 years of service increasing to a minimum of 2 months' written notice where the employee has more than 5 years' service. Different notice periods apply for employees paid more frequently.

Statutory right to pay in lieu of notice or garden leave

There is a statutory right to pay in lieu of notice. Garden leave is not expressly and specifically dealt with in the Labor Law. As such, the employer and employee may contractually agree to provisions relating to garden leave.

Severance

Unless terminated under Article 61 of the Labor Law, employees are entitled to salary and benefits up to the termination date, notice (or payment in lieu), payment in lieu of accrued but untaken annual leave, the cost of a flight/air ticket to repatriate the employee to their home country or any other place agreed to by the employer and employee (unless the employee has obtained alternative sponsorship to remain in Qatar), an EOSG and reimbursement of unpaid business expenses.

In case of employer termination, employees are eligible for an EOSG where they have more than 1 year of continuous service. EOSG accrues at the rate of 3 weeks' final basic salary for each year of completed service unless the parties agree on a greater amount. The calculation is prorated for any fractions of a year service that have not been completed. A different EOSG regime may apply for employees employed prior to 2004.

Romania

Grounds

Termination implemented by the employer is permissible:

  • On the following grounds only:
    • For reasons not related to the individual employee (redundancy)
    • For reasons related to the individual employee, namely:
      • Poor performance
      • Serious or repeated misconduct (disciplinary)
      • Medical unfitness
      • Arrest of the employee for a period exceeding 30 days
  • Subject to strictly complying with the procedure provided by law

A simplified form of termination is also possible, at the initiative of either party, during or at the end of the probationary period, exclusively on the basis of a written notice, with no notice period nor termination grounds being required.

Employees subject to termination laws

Termination rules equally apply to all employees (with no seniority threshold required by law).

Restricted or prohibited terminations

A dismissal may never be implemented on discriminatory grounds or for exercising the right to strike or trade union rights.

A dismissal may not be implemented, for example, during temporary work incapacity (medical leave), during pregnancy (provided that the employer acknowledged the pregnancy before issuing the dismissal decision), during maternity leave, child-raising leave or during vacation/annual leave, etc.

Third-party approval for termination/termination documents

There are no third-party approvals expressly required by law; however, there is a requirement to involve certain labor authorities (during a mass layoff process or, in specific cases, during a poor-performance or medical unfitness dismissal), including an obligation to provide them with relevant termination-related documents.

Mass layoff rules

Strict information and consultation rules apply where, over a 30-calendar-day period, a certain number of employees are to be made redundant. The thresholds depend on the employer's total headcount, so, for example, the rules will apply where at least 10 employees are to be dismissed if the company employs between 21 and 99 employees. The employer must also notify the territorial labor inspectorate and the workforce occupancy agency at set times during the redundancy process.

Notice

The minimum notice period provided by the law in case of dismissal is 20 working days. Longer notice periods may be agreed upon and set out in the individual employment agreement. By law, notice is not required for disciplinary terminations, nor in case of termination due to the employee being under arrest for a period exceeding 30 days.

Statutory right to pay in lieu of notice or garden leave

No express regulation under Romanian employment law. However, the Romanian High Court of Cassation and Justice has ruled that payment in lieu of notice is not permitted, as it essentially breaches an employee's fundamental legal right to receive notice.

Severance

There is no minimum level of severance payment expressly provided by the law. However, in practice, employers may decide to make a severance payment.

Russia

Grounds

The Labor Code sets out specific circumstances for which an employer may terminate the employment of one of its employees, which include, but are not limited to, the following:

  • The employee's repeated failure to perform his or her employment duties without a justifiable reason (if the employee was lawfully disciplined during the preceding 12 months)
  • Dismissal due to redundancy
  • The employee's unjustified absence from the workplace for more than 4 consecutive hours during 1 working day

Employees subject to termination laws

All employees.

Restricted or prohibited terminations

Certain categories of employees stipulated by the Labor Code enjoy additional protection. These include, amongst others: minors, employees on sick or holiday leave, pregnant employees, employees with children and trade union members.

Third-party approval for termination/termination documents

Local trade union (if any).

Mass layoff rules

Yes, strict information and notification rules apply when 50 or more employees are to be made redundant within 30 calendar days; 200 or more employees within 60 calendar days; or 500 or more employees within 90 calendar days; as well as in case of dismissal of employees amounting to 1% of the total number of employees in connection with the liquidation of the organization or staff reduction within 30 calendar days in areas with less than 5,000 working persons in total. This rule may differ in different regions and industries, depending on the provisions of collective industrial agreements.

The employer must also notify the Russian Employment Service of the redundancies.

Notice

The mandatory notice could vary depending on the grounds for termination (eg, 2 months' notice for redundancy). Not required for dismissals due to gross misconduct as defined by law.

Statutory right to pay in lieu of notice or garden leave

No.

Severance

Payments to redundant employees of at least 1 month's average earnings (Average Pay). Additionally, an employee is also entitled to one more payment of Average Pay, if they remain unemployed within 2 months after the termination date. They are also eligible for one more payment of Average Pay in the event they are not employed after the expiry of 3 months from the termination date, provided that they registered with the Russian Employment Service within 2 weeks of the termination date.

A payment in the amount of at least 3 times Average Pay in the event of removal and termination of the general director.

Saudi Arabia

Grounds

If a fair process has been followed, termination is permissible on the grounds stated in the Labor Law, for example: misconduct, force majeure, winding up the business or parts of the entities activities, retirement, and some other substantial reasons, as well as the consent of both parties.

Any termination that occurs outside of what is permissible by law and/or without following a fair process (ie, termination for redundancy without proper economic reasons) will be considered unjustified termination, where the employer shall be required to compensate the employee accordingly.

Employees subject to termination laws

All.

Restricted or prohibited terminations

Termination may not be based on an employee's illness if the employee has not exhausted his/her sickness days, nor can the employee be provided with a termination notice during the statutory sick leave.

Further, no termination notice can be provided to a female employee during her maternity leave.

Third-party approval for termination/termination documents

Not required.

Mass layoff rules

According to the Labor Law, the concept of redundancy is recognized provided that business is either closing down entirely, or is terminating a particular activity. Prior to this, Saudi law was silent on the issue. There are still risks, however, that termination would be deemed to be for an invalid reason in certain circumstances. 

Collective redundancy of Saudi-national employees is generally prohibited under the Saudi Labor Law in circumstances other that closing down of business or terminating a particular activity. A ministerial resolution that has been issued regulates the collective redundancy of Saudi nationals. Process of collective redundancies has been defined. Also, in certain cases the company shall notify the authority before proceeding with the termination including providing full lists of the jobs being removed and nationalities of those involved.

Notice

If the contract is for an indefinite term, either party may terminate it for a valid reason, to be specified in a written notice to be served to the other party at least 60 days prior to the termination date, if the employee is paid monthly, and not less than 30 days for others.

For fixed-term contracts, the employment will terminate once the fixed term has expired. Both parties can agree on a notice period under a fixed term contract.

If termination is sought prior to the expiry of a fixed-term contract for an invalid reason, and if the parties did not agree on the compensation amount, compensation may be payable to the employee in the form of all wages for the duration of the remaining period of the contract. The last wage received by the employee shall serve as the basis for estimating the compensation.

For indefinite-term contracts, the party who has suffered an unjustified termination is entitled to compensation equal to 15 days' wages per year of service.

In both cases (indefinite- and fixed-term contracts), the compensation amount shall not be less than 2 months' wages.

Statutory right to pay in lieu of notice or garden leave

Payment in lieu of notice and garden leave are both permissible.

Severance

End-of-Service Gratuity (EOSG) is not payable before the end of the employment relationship. If the employer ends the employment, the benefit is calculated by adding 1/2 month's wage for each of the first 5 years and 1 month's wage for each of the subsequent years. For fractions of a year, the employee is entitled to proportionate EOSG. EOSG is calculated on the basis of the employee's last salary.

If the employee resigns, he/she will entitled to 1/3 of the award after service of not less than 2 consecutive years and not more than 5 years; to 2/3 if his/her service is in excess of 5 successive years, but less than 10 years; and to the full award if his/her service amounts to 10 or more years.

If an employee is called to military service or cannot work because of force majeure, he/she is entitled to EOSG. Female employees are entitled to EOSG if they resign within 6 months of marriage or within 3 months of childbirth.

Singapore

Grounds

There is no legal requirement to state the reason for termination, so long as termination is effected in accordance with the express termination provisions of the employment contract (though there may need to be grounds where the employment contract has no express termination provisions). In addition, an employer has a right to summarily dismiss an employee in exceptional circumstances (including gross misconduct) save that "due inquiry" must first be conducted for EA Employees prior to such dismissal. It is usually prudent to set out in the contract the circumstances and grounds on which the employee may be summarily terminated. Suspension is also only possible for EA Employees for a maximum period of one week (unless otherwise agreed by the Commissioner) and provided the employee is given half pay.

Employees subject to termination laws

The EA is the main piece of legislation governing termination of employment. As such, for those employees not covered by the EA, termination is governed by the employment contract between employer and employee.

Restricted or prohibited terminations

None, save for restrictions as to termination of female employees on maternity leave, and termination of employees who attain the retirement age but remain eligible for re-employment under the conditions stated in the Retirement and Re-Employment Act (or on the grounds purely of old age). There is also legislation governing the termination of employees in respect of their trade union activities under the Industrial Relations Act, employees in respect of their national service duties under the Enlistment Act and employees in respect of health and safety reporting or investigations under the Workplace Safety and Health Act. There is also a general protection against dismissal without 'just cause or excuse' under the EA and under the Industrial Relations Act.

Third-party approval for termination/termination documents

None required.

Mass layoff rules

There are no laws prohibiting mass layoffs, but these would be subject to any restrictions under the individual contracts of employment and collective agreements (if any). The 2016 Tripartite Guidelines on Managing Excess Manpower and Responsible Retrenchment (Guidelines) issued by the MOM provide guidance on redundancy situations and are commonly followed by employers, but are not legally binding.

Any redundancy exercize should be implemented in consultation with a trade union (if the company is unionized, including if a union has been statutorily recognized).

Employers who employ at least ten employees will have to make mandatory notifications in the prescribed form to the Ministry of Manpower in Singapore if 5 or more employees will be retrenched within a 6 month period beginning January 1, 2017. While there is no legal definition of redundancy in Singapore, in this context, retrenchments will be taken to mean dismissal on grounds of redundancy or by reason of any reorganization of the employer's profession, business, trade or work. This applies to permanent employees, as well as contract workers with full contract terms of at least 6 months.

From April 1, 2019, employers will be obliged to provide information to the Commissioner of Labour in relation to the retrenchment of an employee, if so requested. There will be penalties for non‑compliance.

Notice

Employment contracts typically specify a required notice period for termination. For an EA Employee, the length of such notice must be the same for both employer and employee, and is determined by the notice provision specified in the terms of the contract of service. In the absence of a specified term, where the employee is an EA Employee, the required notice of termination is dependent upon the employee's length of employment (from 1 day for those employed for less than 26 weeks to 4 weeks for those employed for 5 years or more). A Non-EA Employee is not subject to the statutory minimum notice period, and instead is entitled to reasonable notice (usually not less than the statutory minimum notice period) if his or her employment contract does not set out an express notice period.

Statutory right to pay in lieu of notice or garden leave

Even if not made express in the contract, it is possible for the employer to make payment in lieu of notice for EA employees — a sum equal to the amount of salary which would have been earned by the employee during the required period of notice, and for the EA employee to likewise make a payment in lieu of notice if resigning. The same is true for an employer's termination of Non-EA employees (provided all relevant contractual benefits are paid in addition to salary) if the same is provided for in the employment contract. Non-EA employees are, however, not entitled to terminate their employment contracts by paying salary in lieu of notice unless there is an express contractual right to do so.

Employees serving their notice period before termination may be placed on garden leave. During this time, they should continue to be treated as an employee and receive their full contractual benefits up to their last day with the employer.

Severance

Unless the employment terms expressly provide that severance, retrenchment or redundancy benefits are payable, there is no obligation on the part of the employer to pay such benefits, and any retrenchment benefits are to be agreed between the employer and the employee. This is a matter of contract, company policy, subsequent negotiations and financial position, or what has been agreed collectively. When dealing with unionized employees, employers are obliged to negotiate in good faith with the union, and may not have absolute discretion to determine the terms of the retrenchment benefits.

Part IV EA Employees will not be entitled to retrenchment benefits (even where their contracts provide for such benefits) if they have worked for less than two years with their employer. Under the EA read with the Tripartite Guidelines on Managing Excess Manpower and Responsible Retrenchment issued by the Ministry of Manpower, Part IV EA Employees who have served the company for at least two years are eligible to request retrenchment benefits on dismissal if such dismissal is on the ground of redundancy or by reason of any reorganisation of the employer's profession, business, trade or work although the amount is subject to agreement between the employer and the employee in the absence of contractual provisions.

Slovak Republic

Grounds

Grounds for termination of employment by the employer are strictly determined by the Slovak Labor Code. In other cases it is possible to terminate the employment only on the basis of a mutual agreement.

Employees subject to termination laws

All.

Restricted or prohibited terminations

An employer may not give notice to an employee during a protected period, ie when:

  • An employee has been recognized as incapable of work due to illness or injury
  • An employee has been summoned to carry out an extraordinary duty during a crisis situation
  • An employee is released to undergo voluntary military training
  • An employee is pregnant, or on maternity leave or parental leave
  • An employee who is a single (or 'lone') parent has been taking care of a child below three years of age
  • An employee has been released to pursue public office
  • An employee carrying out night work has been medically certified as incapable of night work

Third-party approval for termination/termination documents

Termination of employment by notice or termination with immediate effect by the employer must be pre-negotiated by the employer with the employee representatives, otherwise it is invalid. In case of termination of a member of the employer's employee representative body, the prior consent of the employee representatives is required.

An employer may give notice to a disabled employee only with the prior consent of the competent Office of Labor, Social Affairs and Family, failing which the notice is invalid. Such consent is not required if notice is given to an employee who has reached the determined age for eligibility to old-age pension, or the employer is being wound-up or relocated, or there are reasons based on which the employer could terminate the employment with immediate effect or due to a less serious breach of work discipline.

Mass layoff rules

Information and consultation rules apply where at least 10 employees in a business with between 20–100 employees are to be made redundant within 30 days. In businesses with 100-300 employees, the threshold is 10% of the number of the employees, and in a business with more than 300 employees, at least 30 employees.

The employer must negotiate the mass layoff with the employee representatives and must inform the Office of Labor, Social Affairs and Family and provide a list of the employees to be dismissed. After negotiation, the employer must deliver written information about the negotiation outcome to both the Office of Labor, Social Affairs and Family and the employee representatives.

Failure to comply with the above information and consultation obligations will not render any notice of termination or any agreed-upon termination invalid.

Notice

An employer may give notice to an employee only on the basis of a reason expressly stipulated by the Slovak Labor Code. The reasons for termination include winding-up or relocation of the employer, redundancy of the employee, lack of medical fitness, failure to satisfy the requirements of the agreed work, dissatisfactory performance of work tasks, etc.

The length of the notice period depends on the length of an employment and the termination reason, and varies between 1 and 3 months.

Statutory right to pay in lieu of notice or garden leave

No statutory right to pay in lieu of notice or garden leave.

Severance

An employee whose employment is terminated by the employer with notice, by reason of redundancy, due to winding up or relocation of the employer, or due to the employee´s inability to carry out his or her current work, will be entitled to severance pay amounting to 1 to 4 times his or her average monthly earnings, depending on the length of his or her employment.

Where the employment is terminated by agreement for one of the above stated reasons, the employee is entitled to severance pay amounting to 1 to 5 times his/her average monthly earnings, depending on the length of his or her employment.

An employee whose employment is terminated by notice of termination or by agreement because the employee cannot perform their work due to a workplace injury, occupational disease or due to the threat of such disease, or if he or she has reached the maximum permissible exposure (eg, to hazardous substances) in the workplace, is entitled to severance payment in the amount of at least 10 times his or her average monthly earnings.

South Africa

Grounds

Termination is permissible if substantively and procedurally fair. Dismissal is only justifiable by reason of misconduct, capacity (ill-health or performance) or operational requirements. Termination by effluxion of time (ie, fixed term or retirement age) is not considered dismissal; hence there is no requirement of fair reason or fair process.

Employees subject to termination laws

All employees from the beginning of the employment relationship, although termination is easier during a probation period. Independent contractors not protected.

Prohibited or restricted terminations

Automatically unfair dismissals are prohibited, and increased penalties will attach if a dismissal is motivated by one of these prohibited reasons. Automatically unfair dismissals include for instance dismissals due to employee participation in lawful strike action and dismissals due to an employee's pregnancy or a reason related to pregnancy.

Third-party approval for termination/termination documents

Not required.

Mass layoff rules

Strict information and consultation rules apply to all mass layoffs (operational requirement dismissals or retrenchments). Additional requirements apply to large-scale retrenchments (size of retrenchment determined on a sliding scale, by reference to number of affected employees compared to total employees).

No notice to government officials required.

Notice

Minimum BCEA notice periods of between 1 week and 4 weeks apply, unless contracts of employment provide for longer notice, or a collective agreement provides a shorter period. Notice to be given in writing. Notice cannot be given while the employee is on any type of leave.

Statutory right to pay in lieu of notice or garden leave

Employer may freely elect to pay remuneration in lieu of notice, irrespective of who gives notice. The decision to waive the obligation to work during a notice period rests with the employer, but the employee must agree to a waiver of the obligation to pay remuneration. The employee cannot be compelled to take accrued leave during the notice period. Garden leave is neither regulated by statute, nor commonly provided for in employment contracts.

Severance

Only payable in the event of operational requirement dismissals. Minimum of 1 week's remuneration per completed year of service, subject to additional payments agreed upon in the consultation period. Severance is one of the mandatory topics of consultation.

South Korea

Grounds

The LSA provides that an employer may only terminate for "just cause," though "just cause" is not defined. The courts have generally held that "just cause" only exists in limited circumstances, including:

  • Fault attributable to the employee making continued employment untenable: for example, where the employee is guilty of sufficiently grave misconduct, making it impossible to continue the relationship; continuous and persistent unsatisfactory performance; criminal or deliberate tortious acts against the employer; serious criminal acts not in the line of duty; improper relationships with other employees; or material misrepresentation in the hiring process
  • Urgent business necessity to try and save a failing business from imminent bankruptcy

Employees subject to termination laws

All employees are covered if their employer employs 5 or more employees.

Restricted or prohibited terminations

Employees on sick leave due to a job-related illness or injury (and for 30 days after their return); employees on maternity leave (and for 30 days after their return); and employees on childcare leave.

Third-party approval for termination/termination documents

None required.

Mass layoff rules

Lawful, provided an employer can show there is an "urgent business necessity," that the employer has made best efforts to avoid the termination and that an objective selection process is conducted.

A duty to report dismissals may be triggered depending on the number of employees routinely hired:

  • Where 99 or less employees are routinely hired, 10 or more dismissals will trigger a duty to report
  • Where 100-999 employees are routinely hired, dismissal of 10% of the workforce will trigger a duty to report
  • Where 1000 or more employees are routinely hired, 100 or more dismissals will trigger a duty to report 

Notice

If an employee is dismissed, the LSA requires that the company provide the employee with at least 30 days' prior notice or at least 30 days' ordinary wages in lieu of notice. The company can be exempted from this requirement if either:

  • The employee has been continuously employed for less than 3 months
  • It can establish that it is impossible to maintain its business due to a natural disaster or other unavoidable reason
  • The employee intentionally causes substantial problems for the company or intentionally damages company property

Statutory right to pay in lieu of notice or garden leave

A statutory right to at least 30 days' payment in lieu of notice. Garden leave is possible, if provided for in contract of employment or under company policy.

Severance

Employers must adopt a retirement benefit system. The default is the statutory severance pay system, whereby, upon termination of employment for any reason (including employee resignation), where the employee has been employed for at least 1 year, the employee is entitled to severance pay of 30 days' "average wages" (all wages generally including any bonus paid within the previous 3 months) for each year of continuous service.

Spain

Grounds

Decided unilaterally by the employer: redundancy of the job position based on economic, organizational, productivity or technological reasons, on individual or on collective basis; disciplinary dismissal (including performance).

Other termination grounds: employee resignation; constructive dismissal; mutual agreement; grounds legally agreed upon in the contract; expiration of a fixed-term contract; employee's retirement; force majeure; death or permanent disability.

Employees subject to termination laws

All.

Restricted or prohibited terminations

Some employees are protected against unfair dismissal (eg, pregnant employees, employees enjoying reduced working time to take care of a child, employee representatives, employees who have filed a claim against the company). Protected employees can be terminated, but only for fair cause, or they will be entitled to reinstatement and back wages.

Third-party approval for termination/termination documents

Third-party approval is not required for terminations. Termination documents in accordance with employment legislation are required.

Mass layoff rules

Collective dismissal rules will be triggered in the event that the number of affected employees exceeds the legal thresholds (eg, 10 terminations in a 90-day period in companies with fewer than 100 employees).

Strict information and consultation rules apply, which require involving both the employees' representatives and the labor authority. However, there is no need to obtain approval for termination.

Terminations can be challenged by the employees, the employees’ legal representatives, and in exceptional cases, by the administration.

Notice

15 days' notice in case of redundancy of common employees. Senior managers are entitled to a minimum 3 months' notice.

Not required in case of disciplinary dismissal.

Statutory right to pay in lieu of notice or garden leave

If the 15 days' notice is not honored, payment in lieu of notice is required.

Garden leave is not expressly regulated, although employers sometimes use garden leave (which may result in issues given the employee's right to work).

Severance

Fair individual redundancy: 20 days of salary pay per year of service, up to 12 months. For collective layoffs, this is usually increased through collective consultations.

Fair disciplinary dismissal: no severance.

Sweden

Grounds

The EPA requires that the employer has a "just cause" in order to terminate employment. The EPA distinguishes between termination due to personal reasons (eg, poor performance, misconduct or disloyalty) or economic reasons (eg, restructuring or reorganization, closing down of business, etc.). Redundancy is generally deemed to constitute just cause for termination under the EPA (the employer must, however, follow the substantive and the formal rules laid down by the EPA). Conversely, termination due to personal reasons is deemed to be a last resort by the courts, and the burden of proof is on the employer. An employee may also be summarily dismissed in a situation where he or she grossly neglects obligations towards the employer.

Employees subject to termination laws

The EPA applies regardless of employment period and form of employment, and to all employees, with only a few minor exceptions, eg employees in managerial or similar positions (in respect of salary, position and job assignment), members of an employer's family, employees engaged in the employer's household, and employees assigned public temporary work.

Restricted or prohibited terminations

If employment is terminated due to redundancy, the notice period for an employee on full parental leave does not commence until the employee returns to work or the date the employee would have returned to work. If an employee is given notice of termination during the employee's vacation, the notice of termination shall be deemed effective no earlier than the day after the vacation ends.

Moreover, termination of employment may not be in violation of applicable anti-discrimination laws (eg, the Discrimination Act and the Parental Leave Act). Employees who also are trade union representatives (fackliga fortroendeman) may be protected under the Trade Union Representative in the Workplace Act (lag om facklig fortroendemons stallning pa arbetsplatsen).

Third-party approval for termination/termination documents

Not required.

Mass layoff rules

If more than 5 employees may be affected by a potential redundancy, the employer is obligated to notify the Swedish Public Employment Service in writing. Additionally, normal redundancy rules under the EPA must be adhered to.

Notice

The minimum statutory period of notice for the employer is 1 month, and the period of notice increases by 1 month for each 2 years of service, up to a maximum of 6 months when the employee has a length of service of 10 years or more. However, it is permissible to have longer notice periods, and this is common both in individual employment contracts and in collective bargaining agreements.

The EPA includes extensive formal and substantive rules to observe in relation to termination. An employer who intends to terminate an employee's employment for personal reasons shall notify the employee and his or her trade union at least 2 weeks in advance, prior to handing over the termination notice. Thereafter, the employee and his/her trade union have a right to request consultations. The termination cannot be effected until the consultations are concluded. In case of termination without notice (summary dismissal), the notification shall be given at the latest 1 week before the termination becomes effective.

Statutory right to pay in lieu of notice or garden leave

Employees are both entitled to and have a duty to work during the notice period. Garden leave and payment in lieu of notice is subject to the employee's consent.

Severance

Severance is not mandatory. However, at least in midsize to large companies, it is standard practice to include a severance payment on top of the notice period for a managing director (typically not covered by employment protection) in the employment agreement. The severance pay is normally corresponding to 6 to 12 months' fixed salary. Also, in a specific termination situation, it is common that the employer pays a severance payment in addition to notice in a settlement agreement, especially if it is unclear whether just cause for termination exists or if there are other issues − eg, non-compliance with the last-in-first-out rule (LIFO).

Switzerland

Grounds

Termination of indefinite-duration contracts is possible for any reason, except for "abusive reasons." Certain reasons cannot serve as a fair basis for a termination (individual characteristics, complaints made by the employee regarding his or her working conditions or his or her agreement not being respected, trade-union membership, etc.) and a fair process must be followed in any case.

Employees subject to termination laws

All employees.

Restricted or prohibited terminations

Termination is restricted/prohibited when an employee is unfit for work (accident, sickness) for limited periods increasing with seniority (30 to 180 days), or is pregnant or in military service, or within the 16 weeks following giving birth. These are the non-exhaustive main examples.

Third-party approval for termination/termination documents

Not required.

Mass layoff rules

Information and consultation rules apply when at least 10 employees are to be made redundant within 30 days, depending on various thresholds. The employer must also notify the Cantonal Labor Authority of the result of the consultation.

Depending on the canton, specific rules may also apply when at least 6 employees are dismissed within the same calendar month.

In bigger companies (250 employees and over), the employer must hold negotiations with the aim of preparing a social plan if it intends to make at least 30 employees redundant within 30 days (redundancies over a longer period of time that are based on the same operational decision are counted together). In other cases, a social plan is not mandatory unless a collective bargaining agreement provides for it.

Notice

Unless otherwise stated in the contract: 7 calendar days within the probation period; 1 month's notice to the end of a month during the first year of service, then 2 months' notice to the end of a month from the second to ninth years of service and 3 months' notice to the end of a month thereafter.

The contract can provide for different notice periods, but no less than 1 month's notice after the probation period.

No notice required for terminations for very serious misconduct (such terminations in principle have to be notified within 2 – 3 days after having discovered the breach).

Statutory right to pay in lieu of notice or garden leave

No.

Severance

Due only to employees of at least 50 years of age and 20 years or more of service, provided there is a shortfall in pension benefits. Due to this last condition, this statutory entitlement almost never applies. The severance amount would be between 2 to 8 months' pay.

Written agreements and collective labor agreements may adopt specific provisions.

Taiwan

Grounds

Termination without notice or severance is allowed in cases where an employee is involved in acts of violence, serious contract/rule breaches, equipment abuse, misrepresentation of qualifications, unjustified absence from work for 3 days, or a jail sentence that cannot be commuted to a fine.

Termination is allowed in other cases, but advance notice and severance are required. Employers may terminate the employment of employees for redundancy only where:

  • The employer is ceasing business or the ownership of the employer is being transferred
  • The employer suffers a loss or is curtailing business operations
  • The operations of the employer are suspended for more than 1 month due to force majeure (ie, when performance of contractual obligations is prevented by an event or circumstance outside the parties' control)
  • The business nature of the employer has been altered, a reduction in the number of employees is necessary, and there are no other suitable job openings for the redundant employees

Employees can also be terminated on performance grounds, where the employee is proven to be incapable of carrying out the work assigned to him/her.

Employees subject to termination laws

Most employees (95.3%), including foreigners, are covered under the LSA.

Restricted or prohibited terminations

No prohibitions, although termination is not allowed if there are available job openings for redundant employees.

Third-party approval for termination/termination documents

Not required, absent a mass layoff.

Mass layoff rules

The Mass Layoff Protection Act (MLPA) applies depending on number of employees and time frame. Where the MLPA applies, 60 days' advance notice and public announcements must be given to

  • The labor union of which the affected employees are members (if applicable)
  • The employees' representatives at the Labor-Management Conference
  • The employees affected by the redundancies

Further, the employer must notify the local labor authorities of the redundancy plans. Within 10 days of the date of notification of the redundancy plans, the employer and the affected employees must engage in discussion to reach an agreement regarding the mass redundancies.

Notice

The law requires 10 days' notice after 3 months to 1 year of employment; 20 days for 1 to 3 years' employment; and 30 days for 3 years or more. Notice is not required in cases of very serious misconduct.

Statutory right to pay in lieu of notice or garden leave

Both are permitted.

Severance

Generally, severance is 50% of average monthly pay per year of service, up to a maximum of 6 months' pay. For foreigners and local employees still under the LSA pension system, severance is 1 month's average pay for each year of service.

Thailand

Grounds

Whether an employer has reasonable grounds for termination will be determined on a case by case basis. The following are grounds for termination of employment "with cause" under the LPA (ie, where the employer is not obliged to give advance notice or pay severance pay):

  • being guilty of dishonesty or intentionally committing a criminal offence against the employer
  • wilfully causing damage to the employer
  • being guilty of recklessness which causes serious damage to the employer
  • violating work rules or regulations or disobeying a fair and lawful order of the employer and in relation to which the employer has already given a written warning (except in serious cases where the employer does not need to give a warning). A written warning shall be effective for not more than 1 year from the date the employee committed an offence
  • abandoning duties without justifiable grounds for 3 consecutive working days regardless of whether or not there is a holiday in between and
  • being sentenced to imprisonment by a final court judgement; provided that in the case of an offence committed due to recklessness or misdemeanours, the employer must have suffered damage as a result.

Employees subject to termination laws

All employees hired under a hire of services.

Restricted or prohibited terminations

An employer cannot dismiss, reduce the wages of, punish and/or withhold the performance of duty of any employee who is a member of the Employees' Committee unless permission to do so has been given to the employer by the Labour Court. Further, an employer is not allowed to terminate or take any action which may result in an employee being unable to continue work due to the fact that such employee is a member of labor union.

Third-party approval for termination/termination documents

No third party approval is required except for the termination of employee who is a member of the Employees' Committee (in which case approval from the Labour Court is required).

Mass layoff rules

Only apply in the case of termination of employment due to the introduction of machinery or replacement of machinery or application of technology. There is no numerical threshold to be reached before the rules apply.

Mass layoff rules

Only apply in the case of termination of employment due to the introduction of machinery or replacement of machinery or application of technology. There is no numerical threshold to be reached before the rules apply.

Notice

For an employee who is party to an open-ended contract, either the employer or the employee may serve to the other notice of termination on or before any salary payment date to take effect on the following salary payment date. However, it is not necessary to provide notice more than 3 months in advance.

An employer may terminate the contract of an employee immediately by making full payment of wages otherwise due for the notice period. From May 5, 2019, such wages must be paid to an employee on the date of dismissal.

Advance notice is not required if an employer terminates the employment "with cause" attributable to the employee as provided in the LPA.

For an employee employed under a definite period contract, an employer does not need to provide prior notice in order to terminate such employment at the agreed time. However, if the employment is renewed or extended regularly, this may be deemed to be an open-ended contract and notice of termination will be required. Employees under a definite-period contract are also entitled to severance pay if their work does not fall within the exemptions given under the LPA.

Where a retirement age is not specified or the specified retirement age exceeds 60 years old, an employee who reaches 60 years of age can declare his/her intention to retire to an employer. Such intention will become effective after 30 days from the date of the declaration. The retirement will be deemed a termination of the employment, requiring the employer to pay severance pay to the retired employee, subject to years of services.

In the case of termination of the employee's employment by the employer as a result of reorganization, improvement of the production process, distribution or service due to the introduction of machinery or replacement of machinery or application of technology which results in reduction of the number of employees, the employer must give 60 days' notice of termination to the employee. A failure to give such notice will result in payment of special severance equal to the last 60 days' wages in addition to the severance pay for employment termination.

Statutory right to pay in lieu of notice or garden leave

Only the employer has the right to make a payment in lieu of notice.

There is no concept of garden leave under Thai laws. Employer and employees may agree thereto on a case by case basis. Nevertheless, such agreement must not  take advantage of an employee. Otherwise, it will be enforceable to the extent as it is fair and reasonable by the order of the Thai court.

Severance

LPA provides that an employer who terminates the employment of an employee without any cause attributable to the terminated employee as specified in the LPA, is obliged to pay a severance payment to the employee at the rate prescribed by the LPA together with other due payments, eg, payment in lieu of advance notice and other accrued obligations such as payment for unused annual leave, overtime payment, etc.

An employee employed under a definite period contract or a project contract whose employment is terminated according to such specified period is not entitled to any severance payment, provided that such employment is either:

  • A specific project which is not in the normal business or trade of the employer and requires a definite date to commence and end the work
  • For work which is occasional with a definite ending or completion
  • For work which is seasonal

And provided that the work is completed within a period not exceeding two years, and that the employer enters a written contract with the employee at the beginning of the employment.

Rates of severance payment are as follows:

Period of employment Severance pay (wage equivalent)
120 days, but less than 1 year 30 days' wages
1 year, but less than 3 years 90 days' wages
3 years, but less than 6 years 180 days' wages
6 years, but less than 10 years 240 days' wages
10 years but less than 20 years 300 days' wages
20 years or more 400 days' wages

Special severance pay

If an employer terminates an employee due to the introduction of machinery or replacement of machinery or application of technology, and such employee has been working for 6 consecutive years or more, the employer shall pay additional special severance pay (in addition to the severance pay above) of not less than the last 15 days' wage rate per year of employment capped at an amount equal to the last 360 days' wage rate. For any period of less than a 1 year, if the fraction of employment period is more than 180 days, it will be rounded up to 1 full year of employment.

Turkey

Grounds

Requirements for termination of an employment contract vary, depending on whether such contract has an indefinite or definite term.

Employment contracts for a definite period terminate automatically with the expiration of the period or with a just cause stipulated under the Labor Law or based on mutual consent. Employers may terminate an indefinite employment contract for valid or just cause or based on mutual consent.

Terminations based on just cause

Under the Labor Law, just causes that may lead to immediate termination (without waiting for the notice periods) of the employment agreement by the employer are classified under four categories:

  • Long-term absence due to health reasons
  • Immoral, malicious and dishonorable employee conduct
  • Force majeure
  • Absence due to detention or arrest

When an employment contract is terminated with just cause, the benefits and rights of the employee arising from the employment contract (eg, an amount equivalent to the accrued but unused annual paid leave days, and any payment arising from workplace practice) and the Labor Law are payable. No notice is due, but severance may need to be paid (unless employment was terminated on the grounds of immoral, dishonorable or malicious conduct or similar behavior).

Terminations based on valid cause

Under the Labor Law, if an employee who has an indefinite term employment agreement is employed in a company with 30 or more employees, and has a minimum seniority of six months, then the labor security provisions of the Labor Law will apply, and therefore the termination must be based on a valid cause.

A termination based on valid cause triggers notice and severance payments. Such valid cause could relate to efficiency or behavior of an employee or requirements of the enterprise, workplace or work.

For companies with fewer than 30 employees, the valid cause requirement does not kick in, and employment can be terminated for any reason (but notice and severance pay are still required).

Termination based on mutual consent

Moreover, whether the employment contract has a definite duration or not, it may be terminated with the mutual consent of the parties by executing a settlement agreement.

Employees subject to termination laws

Employees in companies with fewer than 30 employees and/or employees who have less than 6 months' employment in a company are not entitled to job security. The employer's representatives who act on behalf of the employer and participate in the management of the work, workplace and business are also not entitled to job security.

Restricted or prohibited terminations

The employment contract cannot be terminated for the following reasons: participation in union activities; filing of a complaint against the employer involving alleged violations of laws; race, color, sex, marital status, family responsibilities, pregnancy confinement, religion, political opinion and similar reasons; absence from work during maternity leave when female employees must not engage in work; temporary absence from work during the waiting period due to illness or accident foreseen in the relevant article of the Labor Law.

Third-party approval for termination/termination documents

Not required.

Mass layoff rules

Collective redundancy occurs when in establishments employing between 20 and 100 employees, a minimum of 10 employees are dismissed on the same date or in a 1-month period; in establishments employing between 101 and 300 employees, a minimum of 10% of employees are dismissed on the same date or in a 1-month period, and in establishments employing 301 and more employees, a minimum of 30 employees are dismissed on the same date or in a 1-month period.

Notice

Less than 6 months of employment − 2 weeks; 6 months to 1.5 years of employment − 4 weeks; 1.5 years to 3 years of employment − 6 weeks; more than 3 years of employment − 8 weeks. These periods are the minimum periods and may be increased by the mutual agreement of the parties; however such change must be applicable for both parties and should be reasonable.

No need to comply with the notice in case of termination based on just cause determined under the Labor Law.

Statutory right to pay in lieu of notice or garden leave

Payment in lieu of notice is permissible. A company is entitled to pay wages corresponding to the term of notice (notice pay).

There is no set garden leave concept under Turkish law. However, it can be agreed upon in the employment agreement.

Severance

An employee is only entitled to severance if he/she has completed 1 year of service for the employer.

Severance payments must be paid if the employer terminates the employment contract with notice based on an objective, valid cause relating to the efficiency or behavior of an employee, or business requirements (redundancy). In principle, an employee is entitled to severance payment upon termination of employment without notice based on a just cause specified under the Labor Law, unless the termination is based on immoral, dishonorable or malicious conduct or similar behavior. An employee is not entitled to a severance payment upon voluntary resignation.

For each complete year of work (and pro rata for any incomplete year), the employee must be paid an amount equal to his/her monthly salary. The Labour Law provides an upper limit for severance pay. Regardless of the amount of an employee's last month's salary, the upper limit of severance pay for each year of work is capped at TRY 6,017.60 for the first half of 2019 (the amount is indexed twice a year). Accordingly, even if the employee's salary for his/her last month is higher than the mandatory upper limit, the employer is only required to pay the severance pay to be calculated as per the upper limit.

Uganda

Grounds

Dismissal and termination are distinguishable under the Employment Act. Termination is permissible for justifiable reasons such as reaching the retirement age, expiry of contract, death, medical incapacity, redundancy etc. Dismissal is permissible for verifiable acts of misconduct or poor performance. A fair process has to be followed. Fair process includes substantive and procedural fairness. In other words, the employer must have reasons for dismissal, and due process has to be followed before the dismissal is effective.

Employees subject to termination laws

All employees, except that employees on probation have no unfair dismissal protection.

Restricted or prohibited terminations

No statutory prohibitions.

Third-party approval for termination/termination documents

Not required.

Mass layoff rules

Strict information and consultation rules apply where 10 or more employees are to be made redundant over 90 days or less. The employer must also notify the Commissioner for Labor of such redundancies (failure to do so is a criminal offense).

Notice

14 days' notice for employees on probation. No less than 2 weeks where the employee has been employed for over 6 months but less than a year. 1 month where employee has been employed for more than 1 year but less than 5 years, 2 months where employee has been employed for more than 5 years but less than 10 years and 3 months where employee has been employed for over 10 years. Not required for summary dismissals for gross (extremely serious) misconduct. Longer notice can be agreed and set out in the contract of employment.

Statutory right to pay in lieu of notice or garden leave

Statutory right to pay in lieu of notice. Garden leave depends on contract terms.

Severance

Payable in the following circumstances to employees who have completed 6 months continuous service:

  • Unfair dismissal from employment
  • Death in service otherwise than from the employee's own serious and willful misconduct
  • Employee's termination of contract on account of physical incapacity not occasioned by his/her own serious and willful misconduct
  • Termination by reason of death or insolvency of the employer
  • Termination by a labor officer following the inability/refusal of the employer to pay wages
  • Such other circumstances as the Minister may, by regulations, provide

The rate of severance pay is negotiable. Where no prior negotiations have been made, the courts have set severance pay at 1 month's salary for every year worked.

Ukraine

Grounds

The following are the main grounds for termination under Ukrainian legislation:

  • Termination by the employee with 2 weeks' prior notice
  • Termination by the employer's initiative based on grounds directly defined by law (redundancy, non-compliance of the employee with the positions due to lack of qualification or issues with health, systematic violation of employment obligations, etc.)
  • Termination on the basis of the agreement of the parties
  • Expiration of the term as per the employment agreement
  • Retirement (general statutory age for retirement is 60 years, for some categories of employees it can be different)

For the first two, other notice periods or specific procedures may be agreed with certain categories of employees on special types of employment contract, such as CEOs.

Employees subject to termination laws

All employees.

Restricted or prohibited terminations

The following categories of employees may not be dismissed except in the case of the company's liquidation:

  • pregnant women
  • individual with children under 3 years old
  • single parents with disabled children or children under 14 years old

Special dismissal procedures are applicable to employees under 18 years old and trade union members.

Third-party approval for termination/termination documents

Employers must seek the applicable trade union's consent when terminating the following categories of employees:

  • a trade-union member, based on the grounds of redundancy, discovered inconsistency of the employee with the occupied position
  • an employee who is accused of guilty actions in relation to managing employer's funds or other material valuable items, if such actions resulted in the loss of trust in such employee
  • an employee performing pedagogical functions who is accused of immoral misconduct that prevents such employee from maintaining his or her position

In case of liquidation, reorganisation, change of ownership or partial termination of production, which leads to the redundancy or worsening of the work condition, the employer shall notify the trade unions in advance.

Mass layoff rules

Mass layoff is defined as the termination of:

  • 10 or more employees in companies with 20 to 100 employees during a one-month period
  • at least 10% of the employee population in companies with 101 to 300 employees during a one-month period
  • at least 20% of the employee population (regardless of the total number of employees) during a three-month period

The employer must notify the local office of the State Employment Center regarding the mass layoff at least 2 months prior to the layoffs.

Notice

The period of mandatory notice to the employee varies and depends on the grounds for termination (eg, 2-month notice for redundancy, no notice period for termination based on the mutual consent of the parties, 2-week notice for termination if initiatiated by the employee, etc.). The notice period for termination based on the employer's initiative may be increased under the employment agreement/collective agreement.

Statutory right to pay in lieu of notice or garden leave

No. Ukrainian law does not recognize garden leave or payment in lieu of notice. For specific categories of the employees (eg, CEOs), the provisions similar to garden leave concept may be included in the employment contracts.

Severance

The amount of severance payment depends on the ground of termination and varies from 1 up to 6 average monthly salaries. Namely, the employee is entitled to severance payment in the amount:

  • not less than 1 average monthly salary in cases of: redundancy, refusal of the employee to continue his or her employment under changed work conditions, non-compliance of the employee with the position or reinstatement of the employee who held the position earlier
  • 2 statutory minimum salaries in case of mobilization or commencement of military duty
  • not less than 3 average monthly salaries if the employment terminates due to employer's violation of labor legislation, collective bargaining agreement or employment agreement
  • not less than 6 average monthly salaries if the employee is terminated due to termination of his or her authority as the company's officer (eg, CEO)

The applicable collective agreement or employment contracts can establish higher amounts of severance payments.

There are no special rules that regulate the severance payment in case of mass layoffs, and, under the general requirement, one month's average salary must be paid as severance.

United Arab Emirates

Grounds

Termination is possible on these grounds: by agreement, on the expiry of a fixed term contract, resignation, incapacity or death, dismissal with notice provided it is for a valid reason, or summary dismissal (by reason of any of the grounds listed at Article 120 of the Labor Law).

Employees subject to termination laws

All employees.

Restricted or prohibited terminations

Employees who have not exhausted the statutory sick leave entitlement are protected from dismissal on grounds of health, until the full sick leave entitlement has been taken (ie, 90 calendar days per year of service).

Third-party approval for termination/termination documents

UAE nationals are entitled to higher protection from dismissal. As part of such additional protection, approval from MOHRE is required before the employment of a UAE national can be terminated.

Mass layoff rules

No mass layoff rules exist.

Notice

30 days' statutory minimum notice. 3 months maximum permitted notice.

Statutory right to pay in lieu of notice or garden leave

Depends on contract terms.

Severance

Unless terminated under Article 120 of the Labor Law, employees are entitled to salary and benefits to the termination date, notice (or payment in lieu), payment in lieu of accrued but untaken annual leave, the cost of a flight/air ticket to repatriate the employee to his or her home country (unless (i) dismissal is attributable to employee and the employee has the funds to pay his/her own costs; or (ii) the employee has obtained alternative sponsorship to remain in the UAE), an end-of-service gratuity payment, and reimbursement of unpaid business expenses. In case of employer termination, the end of service gratuity is computed at 21 days' pay per year of service for the first 5 years of employment, provided the employee has reached a year's service (pay to include basic pay and potentially bonus and/or commission, but not allowances) and 30 days' pay for each subsequent year. Such payment cannot exceed 2 years' pay.

United Kingdom

Grounds

Termination is permissible, if a fair process has been followed, on the following grounds only: Misconduct, capability (including performance and ill-health), redundancy, illegality and "some other substantial reason of a kind to justify dismissal."

Employees subject to termination laws

Employees with fewer than two years' seniority have no unfair dismissal protection (save in certain circumstances where no seniority is required, including dismissals for whistleblowing, connected to family/pregnancy rights, trade union membership and activities, etc.).

Restricted or prohibited terminations

No statutory prohibitions.

Third-party approval for termination/termination documents

Not required.

Mass layoff rules

Yes, strict information and consultation rules apply where 20 or more employees are to be made redundant within 90 days or less. The employer must also notify the Secretary of State of the redundancies. Failure to do so is a criminal offense.

Notice

No notice required in the first month of employment. After this, 1 week notice per complete year of service, up to 12 weeks. May be required to give longer notice, if reasonable. Not required for terminations for gross (extremely serious) misconduct. Longer notice can be agreed upon and set out in the contract of employment.

Statutory right to pay in lieu of notice or garden leave

No. Entitlement depends on contract terms.

Severance

Payable to redundant employees with 2 years' seniority only: 1/2 week's pay per year of service, for service under age 22; 1 week's pay per year of service, for service aged 22 to 40; 1.5 week's pay per year of service, for service age 41 and above. "Pay" capped at £508 per week from April 2018. The rate will increase in April 2019. More generous terms are possible.

United States

Grounds

In almost all states, absent a contract or union agreement to the contrary, an employer may terminate an employee for any non-discriminatory, non-retaliatory reason, at any time, with or without notice, and with or without cause.

Employees subject to termination laws

Generally, all employees are protected by some laws prohibiting termination for certain reasons (eg, discrimination, retaliation). Employees who are parties to a collective bargaining agreement or have a written employment agreement may have greater protections, as dictated by their contracts.

Restricted or prohibited terminations

Employers cannot terminate employees based on any protected category, in retaliation for a complaint of discrimination or harassment based on any protected category, or for engaging in protected whistleblowing activity. Greater protection may be afforded by collective bargaining agreements or individual contracts.

Third-party approval for termination/termination documents

Not applicable for this jurisdiction.

Mass layoff rules

Under the Worker Adjustment and Retraining Notification (WARN) Act, employers with more than 100 employees generally must provide 60 days' notice to affected employees and certain government agencies of a plant closing or mass layoff that surpasses certain thresholds of employees affected. Some states have "mini-WARN" acts with more far-reaching requirements (ie, applicable to employers with fewer employees, are triggered at lower thresholds, and/or provide for longer notice periods).

Notice

Generally, no advance notice is required for a termination of employment, unless otherwise required by contract or the termination involves a triggering event under the WARN Act or a state equivalent "mini-WARN" act (see above). Certain states (eg, Georgia) may require that the terminated employee be provided with a written notice related to the separation.

Statutory right to pay in lieu of notice or garden leave

Payment in lieu of notice is permitted even if there is no contractual right to make such a payment. It is not common for an employee to be placed on garden leave.

Severance

Other than as provided by contract or in an employer's severance plan or policy, there is generally no statutory right to severance pay under federal or state law (except in Puerto Rico).

Venezuela

Grounds

Employees may either be subject to so-called job stability (estabilidad), or protected by the bar against dismissal (inamovilidad), both of which significantly limit the scope for termination.

Job stability

Although Venezuelan labor laws set forth a stability procedure, it is not currently applicable, due to the Presidential Decree on Bar Against Dismissal having been extended to all employees.

Employees covered by the stability procedure might be dismissed with justified cause, but after the dismissal, the employer must file a "participation of dismissal" before a labor judge, explaining the facts and legal causes for the dismissal. Legal cause might include, among others reasons: misconduct; defamation of the employer; lack of due care or negligence, affecting health and safety at work; unjustified absence during 3 working days in a month; material damage to working machines or tools, caused intentionally or by lack of due care; disclosure of professional or trade secrets; serious failure of employment obligations; or sexual or workplace harassment.

In general, all employees are protected by job stability, except upper-management employees.

Bar against dismissal

Protected employees shall not be dismissed without justified cause and previous authorization of the Labor Inspector. An employee is entitled to claim reinstatement and back pay when dismissed without authorization.

Employees protected by inamovilidad are those, among others, whose employment relationship is suspended due to work accidents, maternity leave, etc., or employees enjoying certain union privileges. Note, however, that since 2003, this protection has been extended to all employees (excluding upper-management employees) by Presidential Decree. The current decree is in force until December 28, 2020.

In practice, most terminations are implemented through mutual consent.

Third-party approval for termination

See above, under "Grounds."

Mass layoff rules

A mass layoff takes place when a number of workers equal to or larger than the following are terminated within 3 months (or longer in critical circumstances):

  • 10% of the employees in a company with more than 100 employees
  • 20% of the employees in a company with 50 or more employees
  • 10 employees in a company with fewer than 50 employees

In the case of a mass layoff, the Labor Ministry may order the employer to stop the dismissals based on social interests, and to reinstate the employees immediately to their positions. Contempt of the Labor Ministry's order may result in economic and/or criminal sanctions.

There are special administrative proceedings for mass layoffs based upon financial difficulties. This procedure starts with an employer's petition filed before the Labor Inspector, along with all evidence that supports the decision regarding mass layoff.

Notice

There is no legal obligation for employers to give advance notice, since employees are protected by the stability procedure and bar against dismissal. Employees can give notice, but if they do not, they are still entitled to receive labor benefits up to the date of termination of employment relationship.

Statutory right to pay in lieu of notice or garden leave

NA.

Severance

Employees must deposit a guarantee of severance quarterly, which must be equivalent to 15 days of salary, based on the salary of the last month of the quarter. Additionally, employers must deposit 2 additional days of salary after the first year, and for each subsequent year, up to the amount of 30 accumulated days.

In case of termination of the employment relationship, the employer must calculate the severance payment based on 30 days of salary per year or per portion greater than 6 months of service. This calculation must be based on the salary received by the employee at the termination of the employment relationship. The worker has the right to receive the highest amount between those two sort of compensations.

Vietnam

Grounds

The grounds for termination of an employment contract include:

  • Expiry of the term
  • Agreement between the parties
  • The employee reaches the retirement age
  • The employee is dismissed in accordance with the laws
  • One of the parties unilaterally terminates (eg, due to performance issues) in accordance with the law
  • The employer makes the employee redundant as a result of a restructuring, a change of technology, for economic reasons, or due to a merger, consolidation or separation of the enterprise

An employer may unilaterally terminate an employment contract where:

  • The employee repeatedly fails to perform their work in accordance with the terms of the employment contract
  • The employee is sick or has an accident and remains unable to work after treatment for 12 consecutive months in the case of an indefinite-term contract, or 6 consecutive months in the case of a definite-term contract, or more than half the duration of the contract in the case of a specific term contract or for seasonal employment of less than 12 months
  • The employer is forced to reduce production and employment, after attempting all measures to recover from a natural disaster, fire, or another event of force majeure, as stipulated by the government
  • The employee fails to attend the workplace on expiry of a period of suspension of the employment contract
  • As a result of an organizational restructuring or technological changes, or for economic reasons

An employee on an indefinite-term employment contract may unilaterally terminate the contract if he or she provides the employer with at least 45 days' written notice.

An employee on a definite-term employment contract, or a specific term employment contract with a duration of less than 12 months, may unilaterally terminate by giving 3–30 days' notice depending on the cause of termination, which can include where the employee:

  • Is not assigned to the correct job or workplace, or is not given the work conditions agreed upon in the contract
  • Is not paid in full, or on time, the wages due under the contract
  • Is mistreated or is subject to sexual harassment or forced labor
  • Cannot continue to perform the duties specified in the employment contract due to genuine personal or family difficulties
  • The employee is elected to full-time duties in a public office or is appointed to a position in a state body
  • The employee is pregnant and must cease working on the advice of a doctor
  • Where an employee suffers illness or injury and remains unable to work after receiving treatment for a period of 90 consecutive days in the case of a definite-term labor contract; or for a quarter of the duration of a contract for a specific or seasonal job of less than 12 months

Employees subject to termination laws

All.

Restricted or prohibited terminations

An employer is not permitted to unilaterally terminate an employment contract if:

  • The employee is suffering from an illness or injury caused by a work-related accident or occupational disease, and is undergoing treatment by a doctor, other than in the circumstances specified in "Grounds" section above
  • The employee is on annual leave or any other type of leave permitted by the employer
  • The employee is female and is pregnant, on maternity leave, or raising a child under the age of 12 months, except for specific cases prescribed by the law

Third-party approval for termination/termination documents

Not applicable.

Mass layoff rules

Mass layoff rules apply in cases of termination of employment due to restructuring, change of technology or changes for economic reasons. If the employer is unable to create new jobs and must make employees redundant, the employer must pay severance allowances to those employees. In order to conduct a mass layoff of its employees, the employer must have discussions with the organization representing the labor collective at the grassroots level and provide 30 days' advance notice to the provincial state administrative body for labor.

Notice

The employer must give prior notice to the employee when unilaterally terminating an employment contract. The notice period must be:

  • At least 45 days in the case of an indefinite-term employment contract
  • At least 30 days in the case of a definite-term contract
  • At least 3 working days in the case of a contract for specific or seasonal employment of less than 12 months, or in the case of termination of the contract due to illness or injury of the employee, as prescribed by law

Statutory right to pay in lieu of notice or garden leave

Both the employer and the employee are entitled to make payment in lieu of notice.

Severance

Generally, employees working for 12 months or more will be entitled to a severance allowance equal to the aggregate amount of half of 1 month's salary for each year of employment.

In the event of restructuring, change of technology, or change for economic reasons, or upon the merger, consolidation, division or separation of an enterprise, the allowance is 1 month's salary for each year of employment, with a minimum of 2 months' salary.

An employee who unilaterally and illegally terminates a contract is not entitled to a severance allowance, and must pay compensation to the employer of half of 1 month's salary.

"Salary," for the purposes of calculating severance payment, is the average salary set out in the employment contract that was earned in the 6 months immediately preceding termination. The average salary for severance calculation purposes is base salary and does not include variable components. In cases where an employee has worked more than 6 months in any year, the number of years of service must be rounded up. Annual leave, public holidays and training courses (excluding study periods or trade practice periods as a trainee or apprentice in order to work for the employer) are included in determining the period of employment.