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Termination

Notice

Are employers required to give notice of termination?

In general, termination by serving a notice period is not allowed. However, for fixed-term employment contracts, employers must serve employees with two weeks’ prior written notice before their contract expires.

Further, a 30-day notice period applies to individual termination for objective reasons and a 60-day notice period applies to collective dismissal.

The lack of prior notice, in whole or in part, entitles employees to receive salaries corresponding to the period not observed. In the cases set out above, it is possible for employers to pay the notice period in lieu.

Redundancies

What are the rules that govern redundancy procedures?

Under the General Labour Law, redundancy occurs when an employer faces economic, technological or structural circumstances that give rise to an internal reorganisation or conversion or the reduction or closure of activities which makes it necessary to eliminate or significantly alter certain positions. The law provides for two main types of redundancy procedure: collective dismissal and individual redundancy.

Are there particular rules for collective redundancies/mass layoffs?

Yes. Under the General Labour Law, a collective dismissal can take place if the redundancy procedure covers more than 20 employees. Otherwise, the more flexible individual redundancy rules apply.

A collective dismissal requires the employer to:

  • serve an initial redundancy notice on the union committee and the Ministry of Labour;
  • carry out a mandatory information and consultation process with all parties concerned; and
  • serve a final collective termination notice on the employees.

The Ministry of Labour has supervisory powers over the process and the prerogative to reject the collective dismissal process.

Redundancy gives employees the right to a 30-day notice period for individual terminations for objective reasons and 60 days for collective dismissals (or payment of salary in lieu), plus compensation of one month’s base salary per full year of service up to five years of seniority and 50% of monthly base salary per each additional year. Micro, small and medium-sized companies may pay reduced compensation to redundant employees.

Protections

What protections do employees have on dismissal?

Employees may bring reinstatement claims that must be filed by employees within 180 days of termination; compensation may be claimed within 12 months of the same date.

If an employment termination is declared to be unlawful by a res judicata ruling handed down by the competent court, the employer will immediately reinstate the employee in their position with the same conditions or alternatively indemnify the employee as established by law. In addition, employees will be entitled to the base salary that they would have received if they had continued to work, until the earlier date on which they found a new job or on which the ruling becomes res judicata, but subject to a maximum of six months for large companies, four months for medium-sized companies and two months for small and micro companies. Employees may also judicially plea for damages suffered due to termination.

The General Labour Law establishes that the following categories of employee have special protection regarding dismissal:

  • pregnant employees;
  • mothers for one year after childbirth;
  • union or former union representatives;
  • miners;
  • former combatants; and
  • employees with reduced capacity equal or higher than 20%.