Does an employer have to follow a prescribed procedure to achieve an effective termination of the employment relationship? If yes, what are the requirements of that procedure or procedures?
Employment & Labour Law
Generally, there is no statutorily-prescribed procedure if the employment is terminated by notice or salary in lieu of notice. It is common for employment agreements to prescribe a termination notice period, and how notice may be given to the employee. In this regard, the employer should ensure that the employee is terminated and given notice (or salary in lieu of notice) in accordance with the employment agreement. Please see our response to question 4 for more details on notice periods.
We also set out some additional considerations:
First, this is subject to any collective agreement, which might require the trade union to be notified/consulted.
Where the termination is a retrenchment, additional requirements may apply. See our response to question 2.
If an employee covered under the EA has committed an act of misconduct, the employer must conduct an inquiry before deciding whether to dismiss an employee.
If the employee is a foreigner holding a work pass, then the employer should cancel his/her work pass and seek tax clearance from the Inland Revenue Authority of Singapore.
Unless otherwise provided in an employment contract or collective bargaining agreement, no federal law requires employers to follow a formal procedure when discharging individual employees. Several states do require employers to provide notice to a terminated employee as to the date of termination and loss of employee welfare benefits, if provided, as well as issue the last paycheck within a set time period. Additionally, employees covered under an employer’s health insurance program must be provided notice as to the option to continue coverage for a specific period of time following the termination, typically 18 months, at the employee’s own expense.
Yes, it does.
A written dismissal letter must be given to the employee detailing the facts supporting the disciplinary dismissal and the termination date.
Likewise, a specific different legal procedure must be complied with in case employees to be dismissed are workers’ legal representative or trade union affiliates.
a) Collective layoff
- A consultation period with the workers’ legal representatives shall be followed before the collective layoff takes place. Such consultation period shall not exceed 30 calendar days, or 15 in case of companies employing less than 50 employees.
- The consultation period shall minimum deal with the possibilities of preventing or reducing the redundancy dismissals as well as mitigating their consequences through the application of social support measures such as outplacement measures or training or professional and recycling activities that could be used to improve employability.
- Notice of the opening of the consultation period shall be notified in writing by the employer to the workers’ legal representatives, a copy of which shall be sent to the Administrative Labour Authority. Spanish law also stipulates the information that such letter shall include.
- During the consultation period, parties must negotiate in good faith with a view of achieving agreement. However, there is no obligation to reach an agreement.
- Once the consultation period finishes, its result must be communicated by the employer to the Administrative Labour Authority. If an agreement is reached, the employer shall deliver a copy of it to the Administrative Labour Authority. However, if parties have not reached an agreement during the consultation period, the employer shall communicate to the workers’ legal representatives and the Administrative Labour Authority its adopted final decision related to the redundancy dismissal as well as its conditions and terms.
- Where the extinction affects more than 50% of the employees, notice shall be given to the workers’ legal representatives and as well to the corresponding authorities of the sale of the company property by the employer, except for those goods making up its normal traffic.
- Once the final decision is notified to the workers’ legal representatives, the employer should notify the individual dismissals to the affected employees according to the following procedure:
- Written notice to the employee, stating the reasons for the dismissal.
- Simultaneously with the delivery of the letter, the statutory redundancy severance payment (20 days of salary per worked year of service with a maximum of 12 monthly payments) shall be made available in such moment to the employee. However, a severance payment higher than the statutory one could be stated by the Company unilaterally or according to the conditions negotiated by the Company and the workers’ legal representatives during the consultation period.
-15 days prior notice following the delivery of the letter must be granted before the dismissal takes effect, although the employer may choose to replace this period with the payment in lieu of notice. In any case, at least 30 days should exist between the notification date to the Administrative Labour Authority about the opening of the consultation period and the dismissal date.
- Workers’ legal representatives shall have the priority of permanence in the company. By collective bargaining agreement or agreement reached during the consultation period parties can state permanence priorities for other employees groups such as employees with family care, disabled employees or workers above a certain age.
- If collective layoffs affect employees aged 50 years or older, companies shall have to pay an economic contribution to the Spanish Public Treasury under the terms and conditions stated in law. Please note that certain legal requirements must be met by employers to pay the economic contribution mentioned above.
- Employers shall be obliged to offer outplacement plans when collective layoffs affect more than 50 employees.
b) Individual redundancy
- Simultaneously with the delivery of the written dismissal letter detailing the corresponding legal reason, the statutory redundancy severance payment (20 days of salary per worked year with a cap of 12 monthly payments) shall be made available in such moment to the employee.
- Furthermore and as mentioned before, 15 day prior notice following the delivery of the letter must be granted before the dismissal takes effect, although the Company may choose to replace this period with payment of salary in lieu of notice. If the Company chooses the first option, notice that during such period of time the employee shall have to continue providing his/her services, although he will be entitled to spend 6 hours per week looking for new employment.
- A copy of the redundancy dismissal letter must be given to the workers’ legal representatives.
In any case, it is highly advisable to check the applicable collective bargaining agreement in order to determine if additional provisions shall be complied with.
The employer is obliged follow the procedures governed by the Labour Law in the event that the employee in question is subject to the job security provisions of the Labour Law (please see Question 1 for the details of job security term).
Under the provisions of job security, the employer has to provide either valid reason or just cause for the duly termination of employment contract (please see Question 1 for the examples of valid reasons and just causes) along with a termination notice that must be sent to the employee in compliance with notice periods set forth under Article 17 (please see Question 4 for the notice periods).
In the event of termination with just cause, the employer is not required to either notify the employee with a written notice or obtain the employee's defence.
However, if the employment contract is terminated based on valid reason relating to the efficiency or behaviour of such employee, the employer must according to Article 19 of the Labour Law give a chance to employee to defend him/herself, reassess the termination grounds and then only notify the employee if the employer is still convinced of the existence of a valid reason for termination.
A special procedure for termination (to guarantee the right of defence) applies only in case the termination is based on a just cause. The requirements of the procedure are the following:
- The employer must collect the evidence before initiating the procedure.
- The employer must send to the employee a formal communication of the initiation of the process and it will summon the employee to a meeting, which could take place within the following days after the summoning, to hear the explanations of the employee.
- During the meeting, the employer will have to present the charges to the employee, indicating the conducts or presumed violations and its qualifications. Additionally, during the meeting the employer will present to the employee the evidence supporting the conducts/violations in which the employee has incurred and will give to the employee the opportunity to defend and to present evidence in his/her favor.
- The employer shall evaluate the information and proceed to communicate to the employee, its decision to terminate the employment agreement alleging the specific just cause, in which case the employee will not be entitled to receive the indemnification (severance) provided in the law.
- Depending on the provisions included in the internal work code of the employer, the employee may appeal the decision before an officer of the employer and/or challenge the decision before the Labor Courts.
In addition, according to the law and the jurisprudence, some of the just causes have a previous procedure that have to be followed (i.e. low performance requires at least two notices requesting the employee to improve performance.
In principle, an employer does not have to follow a prescribed procedure to effectively terminate an employment. The employer must only observe the proscribed periods according to art. 336c of the Swiss Code of Obligations (eg applicable in case of the employee’s absence from work due to illness; the maximum duration of such proscribed period depends on the employee’s years of service).
In case of a termination of an older employee with many years of service, the employer has to inform and consult the employee and evaluate the possibilities to continue the employment prior to making him/her redundant according to Swiss case law. Non-compliance with these requirements only leads to the wrongfulness of the termination according to art. 336 of the Swiss Code of Obligations and not to the invalidity of the termination, however.
There are no statutory procedures for lawful dismissal except for the required notice period of 30 days or payment in lieu of notice (please see reply to Questions 4 and 5).
Except in cases that fall under Section 119 of the LPA, generally, under the law, an employer is required to give prior notice to an employee in order to terminate the employee’s employment or make payment of lieu of advance notice for the termination of employment to be effective immediately (please see paragraph 6 above). The employer would also be required to pay wages, overtime pay, holiday pay, holiday overtime pay and unused annual leave which the employee is entitled to receive, to the employee, within three days from the date of termination of employment. In all cases which do not fall within Section 119 of the LPA, the employer would also be required to make payment of statutory severance pay, and any other contractual benefits to which the employee would be entitled under the employee’s contract of employment.
However, in the case where the employees have set up a labour union, the termination of employment of an employee who is a member of the Employee’s Committee of the labour union must be approved by the Labour Court only. Save for the Labour Court’s approval, the termination of employment of a member of the Employee’s Committee can be made without having to give notice to any other third party.
Termination of a workman for any reason other than on grounds of discipline is referred to as ‘retrenchment’ under the ID Act.
The process for retrenchment of a workman under the ID Act depends on the nature of establishment and the number of workers employed.
In case of a commercial establishment the process of retrenchment requires following conditions to be fulfilled by the employer with respect to any workman who has rendered continuous service of not less than 1 year: (i) provide 1 months’ notice in writing indicating the reasons for retrenchment or pay wages in lieu of such notice to the workmen; (ii) pay retrenchment compensation equivalent to 15 days’ average pay for every completed year of continuous service or any part thereof in excess of 6 months; (iii) notify the concerned labour authority by filing the prescribed form within the prescribed time; (iv) comply with the ‘last in first out’ principle unless there exists an agreement with the workman in this behalf or the employer has justifiable reasons which have been recorded in writing to deviate from such principle; and (iv) the employer is required to give preference to the retrenched workmen in the matters of re-employment over other persons, in the event a vacancy in the same position arises with the employer. However, such re-employment does not give the workman the right to secure employment on the previous terms and conditions of service.
In case of manufacturing facilities employing 100 or more workmen, prior permission is required to be obtained by making a 3 months’ advance application in the prescribed format. Subject to such permission the workmen can be terminated by 3 months’ notice or pay in lieu thereof along with payment of retrenchment compensation as prescribed under the ID Act. While considering the application for retrenchment, the authority makes such enquiry as it thinks fit, and gives the opportunity of being heard to the employer, the concerned workmen and other persons interested in the retrenchment, before granting or refusing the permission. The order granting or refusing the permission is typically issued within 60 days from the date on which the application is made. In case no such communication is made, the permission is deemed to have been granted on the expiry of 60 days. Any retrenchment without obtaining such permission is deemed illegal from the date on which retrenchment notice was issued.
It may be noted that the retrenchment following the approval route also requires compliance with the ‘last in first out’ principle along with the opportunity of re-employment to the retrenched workman.
In case of non-workmen employees, retrenchment would need to be undertaken as per the terms of their contract of employment, company policies and the relevant Shops and Establishments legislation, which typically requires a notice or pay in lieu thereof to be given to the employee for termination.
There is no legal requirement, so unless is mentioned in the labour agreements there are no formalities on how to proceed with the termination. In case of temporary contracts, termination of the employment relationship between the parties occurs by the sole fulfillment of the stipulated term or condition.
The local law does not require the employer to provide notice of termination in writing. It is recommended a verbal communication followed by a formal notification in writing, hence this is a recommendation and not mandatory or law stipulated.
The Labour Law does not prescribe a procedure for an employer to follow to terminate the employment relationship, other than that termination of an unspecified term contract must be for a legitimate reason, must be in writing and must be given 30 days in advance of such termination. It is permissible to terminate a specified term contract only if one of the grounds for termination without notice (discussed above in section 1) can be proved to apply.
The employer shall give a written notice in advance or pay one month’s salary in lieu of notice, upon the situations that termination without fault of employees (see question 1) is allowed. Furthermore, some requirements of procedure shall be followed under different circumstances, such as in cases of dismissing the incompetent employee. In this case, the employer must first arrange training or another new position for the employee who is proved incompetent, and the employee must be incompetent for work after this process. In cases of mass redundancy, employers must also follow certain conditions and procedures (see question 2).
The EPA and the CDA set forth rules regarding the process of termination and summary dismissal. The procedure differentiates depending on whether the termination is based on personal reasons or redundacy.
When there is a redundancy at the workplace, the basic principle is that the employee with the longest length of service will be entitled to stay the longest. The employer must select the employees to be terminated on a ‘last in, first out’ basis meaning that an employee, whose role is redundant has a right to be relocated to a position held by an employee with less seniority of employment. Employers with 10 or less employees is entitled to exempt two key employees from this order of priority. Prior to termination due to redundancy, the employer is obliged to conduct consultations under the CDA. This is mandatory if the employer is bound by a collective bargaining agreement or if any of the affected employees are members of a union. Thus, if there is no collective bargaining agreement, the employer must ask the affected employees whether they are members of a union.
For terminations due to personal reasons, the employer must notify the employee and the employee’s union about the potential termination two weeks in advance. For a summary dismissal, such notice must be sent to the affected parties one week prior to the dismissal. The employee and the union may, within one week from receiving the notice, request consultations with the employer concerning the dismissal.
The notice of termination or the summary dismissal must be in writing and handed over to the employee in person. If this is not possible, the notification may be sent as a registered letter by mail. The notice of termination must include information regarding the employee’s right to contend that the termination is invalid, his possibilities to claim damages and the limitation periods for such claims. It must also include information on potential priority to right of re-employment.
The employer is required to notify the employee in writing of the reason of dismissal and its effective date under the LSA. In addition, if specific procedures for dismissal (e.g., hearing at disciplinary committee) are provided for in the rules of employment or collective bargaining agreement, the employer must follow such procedures.
In any event, the grounds of dismissal must be precisely set out in the notification letter. In addition, except in the event of a large layoff procedure, dismissal must be preceded by the invitation of the employee to a preliminary meeting, where he may be assisted by staff representatives for example. A minimum of five business days must elapse between the invitation and the meeting, and at least two business days must elapse between invitation and notification of dismissal. In addition, dismissals on grounds of physical unfitness require prior consultation of staff delegates. Finally, disciplinary dismissals must comply with specific requirements, among which the necessity to start the procedure no later than two months after the facts were committed or discovered, and the dismissal must be notified no later than one month after the preliminary meeting.
If the employer does not follow any prescribed procedure as described in response to question 6, what are the consequences for the employer?
Failure to precisely set out the dismissal grounds has the same effect as an absence of “real and serious cause” and entitles the employee to damages for unfair dismissal. The same applies to non-compliance with the timeframes applicable to disciplinary procedures. Other violations of the procedure (e.g. non-compliance with the required five business days between invitation and preliminary meetings) could result in a maximum of a one-month penalty.
If established, the works council must be informed at least a week before providing an employee with a notice of termination. After the employer has notified the works council, the council has seven days to deliberate on the termination and provide a response. This period starts the day following its information and ends upon expiry of the seventh day hereafter. This period of deliberating serves for the works council to decide whether it will explicitly approve the termination, object to the termination, or refrain from any comment. The decision taken by the works council is only relevant to post-termination matters, like a legal contest of termination.
Although an employer must provide an employee with his or her statutory and contractual entitlements upon termination of employment, the employer generally does not, except in the case of mass terminations (see Question 2), have to follow a prescribed procedure to effectively dismiss an employee.
While there is no prescribed procedure, the manner in which an employer terminates an employee—including the employer’s conduct both before and after the termination meeting—can result in an adverse award of aggravated damages or punitive damages. As such, there are a number of ‘best practices’ that can mitigate an employer’s risks in terminating employment.
While such practices may vary depending on the employer’s relationship with the employee and the context of his or her termination, employers should, at minimum, carefully plan the day of termination and aim to hold the termination meeting in a manner that minimises the employee’s embarrassment and distress, optimises privacy, and avoids any behaviour that could be characterised as harsh, vindictive, malicious, dishonest, or in bad faith. The employer should take notes at or immediately after the meeting. The termination letter should be provided to the employee at the time of the termination meeting. If the employer is offering a separation package in exchange for the execution of a release, the employer should not require the employee to sign the release on the same date as he or she receives it, since a court may find that the employer put undue pressure on the employee to sign and thereby conclude that the release is unenforceable. In Québec, employees can require that the termination letter, and other relevant documents, be drafted in French.
While not a ‘prescribed procedure’ per se, an employer must provide various government documents to an employee upon termination of termination, pursuant to unemployment legislation and other applicable statutes.
If the employment relationship is terminated upon notice, such notice must:
- be given in writing and specify the start date as well as the duration of the notice period; and
- be served by a bailiff or be sent by registered mail (taking effect on the third working day (i.e. all days except Sundays and Bank Holidays) following the day of posting);
failing which the notice will be null and void (see question 8).
The notice period starts on the first Monday following the week during which it is served on the worker.
If the employment relationship is terminated upon payment of a severance allowance, the above formalities do not apply.
The employer and the worker can also opt, by mutual consent, for a mixed solution whereby the worker only serves part of the notice period, following which a severance allowance is paid, which corresponds to the remuneration the worker would have earned during the unperformed part of the notice period.
If the employment relationship is terminated by the employer for serious misconduct of the worker, the latter will be dismissed with immediate effect, without notice and without being entitled to a severance allowance. In such a situation, a specific dismissal procedure applies.
Irrespective of the way in which the employment relationship is terminated, the employer must bear in mind that written communications to the worker will only be legally binding and, therefore, enforceable, if the Belgian language requirements are complied with. The applicable rules and sanctions (in case of non-compliance) depend on the location of the relevant employment seat(s) of the company in Belgium.
According to Italian law the dismissal must always be in writing and there are various procedures to be followed depending on the type of termination, the size of the company and the date of hiring of the employee/his or her level. In particular, the procedures are the following: (i) disciplinary procedure; (ii) procedure for dismissal for objective reason; (iii) collective redundancy procedures.
(i) disciplinary procedure
The employer must promptly provide the employee with a written description of the objectionable behaviour or conduct.
The employee has the right to respond within 5 days (or the timeframe set out under the applicable NCBA) via a “justification letter”. The employee can also request a meeting with the employer if he/she wishes to provide his/her response orally and can be accompanied by an employee representative.
The employer can dismiss the employee following (i) the employee’s failure to respond to the charges laid against him/her within the above 5 days (or the timeframe set out under the applicable NCBA) or (ii) immediately following the receipt by the employer of the justification letter. In particular, the employer should explain why the employee’s justifications are not acceptable.
(ii) procedure for dismissal for objective reasons
According to Law no. 604 of 15 July 1966 as modified by Law no. 92 of 28 June 2012, the employer must communicate in advance its intention to proceed with individual dismissal to the Labour Office of the employee’s workplace copying the same employee and explaining the reasons for the termination. This procedure applies only to the dismissal of employees hired before 7 March 2015 and employed by companies having sixty-one or more employees in the whole Italian territory or sixteen or more employees in a single business unit or in more business units within the same municipality (“Comune”). This procedure does not apply to “Dirigenti”.
Within seven days from the receipt of the above communication, the Labour Office summons the parties before the Conciliation Office for a meeting in which the parties will attempt to reach an agreement. The procedure will terminate by and not later than twenty days starting from the day in which the Labour Office sent the communication of summoning.
In case the parties reach an agreement, the employee may have access to a social security cushion which provides unemployed with a monthly indemnity that is now called ‘NASPI’ (Nuova Assicurazione Sociale Per l’Impiego) that has replaced the ASPI (Assicurazione Sociale Per l’Impiego) from 1 May 2015.
Should not the parties reach an agreement or, in any case, after seven days have elapsed without any summoning communication by the Labour Office, the employer can serve the dismissal.
The served dismissal is effective from the day the communication of the intention to serve the dismissal was sent, without prejudice for the employee’s right to notice period.
iii) collective redundancy procedures
The procedure provided by the law lasts maximum 75 days.
It is possible that the NCBA may provide a previous and additional consultation to be implemented before the one provided by the law.
The employer should notify the staff representatives and the relevant (external) Trade Unions of the decision to proceed to the collective dismissal. If there are not staff representatives, the notification has to be sent to the Trade Unions of the sector most representatives on a national level. If there is no existing works council, there is no obligation on the Company to organise elections for one.
Same notification has to be sent also to the competent Labour Office.
The Company is not required to inform employees generally or to ask them to elect employee representatives.
The dismissals may be served within a period of 120 days from the conclusion of the procedure unless the parties have agreed a longer term.
Under a labor profile, no approvals are required to close a unit/business. The trade unions have no veto powers on the redundancy project.
The collective dismissal procedure applies also to “Dirigenti” (previously excluded from the application of the procedure) but it does not apply to fixed-term workers and temporary workers.
Any employer with one hundred fifty (150) employees or more who contemplates dismissing any employee must, before reaching any decision, interview the employee concerned.
Notice of such interview must be given in writing by registered mail or by hand delivery with acknowledged receipt. The letter must give an indication of the purpose of the interview and its date, time and place.
Whether dismissal requires a period of notice or is for gross misconduct, notification of such dismissal must be:
- no earlier than the day following the interview;
- no more than one week later.
If the employee does not attend the interview after being summoned to do so, notification of dismissal must be:
- no earlier than the day following the day set for the interview;
- no more than one week later.
The dismissal must be notified under penalty of invalidity:
- Either by registered letter,
- Or by hand delivery. In this case, the employee must acknowledge receipt of the dismissal letter on a copy which will be kept by the employer as proof of receipt.
The employee may request communication of the reasons, although such request must be made to the employer by registered letter within one month of the date of the notification of the dismissal. The employer must state the reasons in detail within one month further by registered letter.
In Germany, a lot of formal requirements need to be fulfilled.
If a works council exists, it must be heard before every dismissal. It is important that the dismissal is declared clearly and unambiguously in writing. If the employer is a legal entity (e.g a limited liability company) the dismissal needs to be signed by a representative. The representative must present his or her power of attorney (unless he or she is authorized pursuant to the commercial register or is the head of personnel). The grounds for the dismissal generally do not need to be stated in the notice. Dismissals must be delivered in order to become effective.
Yes, as mentioned above, under Mexican legislation the termination of employment relationships must follow specific procedures.
When the employer has a justified cause for the termination, pursuant to the aforementioned article 47 of the FLL, the employer must inform the employee in writing of the date and cause or causes of the termination, this must be done within 30 days of the justified cause. This document must be brought to the attention of the employee, or directly to the Labour Board within five days of the termination, providing the Labour Board with the address the employer has on file, and requesting the Authority to notify the employee.
The lack of a written notification to the employee or the Labour Board will alone be enough to consider the separation unjustified, and consequently, the nullity of the dismissal.
If the employer does not have a cause for termination, but still would like to terminate the employment relationship by mutual consent with the employee, then we commonly suggest following one of these two procedures:
a. By executing a Termination Agreement before the Conciliation and Arbitration Labour Board, sanctioned and ratified by such Board with respect to its content, signing, delivery and receipt of the amount by the employee, as well as the signing of a settlement (finiquito) that breaks down the elements of the amount referred to in the Agreement and being paid. The advantage of this scenario is that the Termination Agreement is a public document, unassailable with respect to its authenticity in the case of a labour claim, and much more defensible evidence than a resignation letter.
b. By a signed and fingerprinted resignation letter having the following characteristics:
- ADVANTAGES: No intervention by the officers of the Board required; the termination process is more agile.
- DISADVANTAGES: It is a private document that, although valid, may be objected to by an employee deciding to file a labour claim and disavowing his signature and fingerprint, or alleging that he was forced or misled to sign said document.
Although a resignation letter is a unilateral and voluntary way to terminate the employment relationship, it is a common practice in Mexico to ask an employee to sign one when dismissed. The reasons behind this is that (i) there is no employment at will; and (ii) the burden of proof in litigation lies on the employer at all times, including the cause of termination or dismissal. That lack of flexibility make employers opt for a more agile way to terminate employees.
The termination on individual grounds typically requires a prior warning issued to the employee. An employee is generally liable to understand that his/her breaches are severe enough to result in termination only if he/she has been warned and he/she continues the breaches despite the warning. A prior warning is not deemed necessary only in case an employee must have understood the severity of the matter also without one. Therefore, issuing a warning to a negligent employee or an employee breaching against his/her duties first is generally advisable instead of immediately terminating his/her employment contract.
The notice of termination must be given in writing. The notice must contain a short description of the reasons for the termination, the length of the notice period, and the date of the last day of work. The notice period is calculated from the date of the delivery of the notice to the employee.
The employer must prove that the employee has received the notice. It is therefore advisable to deliver the notice personally to the employee. If this is not possible, the notice can be sent by mail or in electric form. The employee is then considered to have received it on the seventh day following its sending. If a notice of termination is delivered during annual vacation, the period of notice starts when the employee returns to work.