Does an employer have to follow a prescribed procedure to achieve an effective termination of the employment relationship? If yes, describe the requirements of that procedure or procedures.
Employment & Labour Law (3rd edition)
The employer shall give a written notice in advance or pay one month’s salary in lieu of notice, in situations where termination without fault of employees (see question 1) is permitted. Furthermore, some requirements of procedure shall be followed under different circumstances, such as in cases of dismissing an incompetent employee. In this case the employer must provide a training for the employee to improve his/her performance or assign him/her to a new position. If the employee continues to display incompetency after this process, the employee may be legally dismissed. In cases of mass redundancy, employers must also follow certain conditions and procedures (see question 2).
If it is a dismissal without a cause, there is no procedure prescribed in the law. The only requirement is to pay the legal indemnification to the former employee.
If it is a dismissal with fair cause there is procedure (called Visto Bueno) before the administrative authority for the approval or rejection of the dismissal. The procedure lasts 30 days and it has the following steps:
- The employer presents its claim for the dismissal before the Labor Inspector.
- The authority reviews the claim and asks the employee to defend himself
- The employee answers the claim.
- The Labor Inspector investigates and may receive evidence from the parties.
- The Labor Inspector accepts or denies the request for dismissal with a cause.
This administrative decision may be subject of review before the judicial courts.
In any event, the grounds of dismissal must be precisely set out in the notification letter. As mentioned in question 1, the grounds of dismissal must be contained in the dismissal letter, but additional details can be provided within 15 days following the notification.
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.
Depending on the grounds for dismissal, further requirements may have to be complied with, e.g.:
- dismissals on grounds of physical unfitness require prior consultation of staff delegates, medical examination and redeployment searches in order to find an alternative to dismissal.
- 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;
- Economic redundancies must be preceded by various steps (please refer to question 2).
First, the notice needs to be in writing, signed by the employer, i.e. (a) person(s) being legally entitled to represent the employer in this respect. 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).
Furthermore, if a works council is in place, it must be heard before every dismissal. It is important that the dismissal is declared clearly and unambiguously in writing. The grounds for the dismissal generally do not need to be stated in the notice. Dismissals must be delivered in order to become effective and it is advisable to have sufficient proof of the delivery and its date.
- The employer must communicate to the employee the dismissal by a letter indicating the ground of termination and the reasons of the dismissal. The dismissal letter must be delivered to the worker personally or by certified mail to the worker´s domicile indicated in the employment agreement.
- A copy to the Labour Authority must also be sent within 3 or 6 business days (depending on the ground of termination).
- Within 10 business days following the termination of the employment, the employer must make available to the worker a labour release. This labour release shall be signed and ratified before a Notary Public. The worker’s signature in the labour release shall be granted before a notary public.
Yes, an employer must follow the prescribed procedure to terminate an employment relationship. Depending on the reason for termination of employment (e.g., violations of the employment agreement, company regulation or collective labour agreement; non-performance) the employer is required to serve three consecutive warning letters in order to be able to terminate. Each warning letter is valid for six months – however, an agreed timeline for improvement can be agreed between the employer (i.e., a timeline for improvement that is shorter than six months). After three consecutive warning letters, an employer has the right to terminate the employment agreement of the employee. If the employee contests the termination, the employer would have to attend a dispute settlement process.
We set out below the dispute settlement process in Indonesia.
A. Bipartite Negotiation
Law No. 2 of 2004 on Settlement of Industrial Relations requires all industrial relation disputes, including disputes over termination of employment, to be first resolved through bipartite negotiations in a consultative manner.
If the bipartite negotiation manages to resolve the dispute, then the parties will draw up and sign a settlement agreement. The settlement agreement must be registered at the Labour Court. If a bipartite negotiation fails, then one or both parties can report their dispute to the relevant local office of the Ministry of Manpower (“MOM”).
If the bipartite negotiation does not reach an agreement, one or both disputing parties can report their dispute to the relevant local office of the MOM. The local office of the MOM is required to offer both parties the option of conciliation or mediation.
The mediator/conciliator must try to persuade the parties to settle the dispute. If there is no settlement, the mediator/conciliator must issue a recommendation at the latest 10 days after the first mediation/conciliation session.
If the parties agree with the recommendation, the mediator must assist the parties in preparing a settlement agreement. The settlement agreement needs to be registered at the Labour Court.
If the dispute is not resolved through mediation/conciliation, then the mediator/conciliator will issue a written recommendation. If the mediator's/conciliator's written recommendation is rejected by one or both parties, then one or both parties may continue by way of filing a lawsuit to the relevant Labour Court.
C. Labour Court
If a party does not agree with the recommendation of the mediator/conciliator, it may bring the case to the Labour Court whose jurisdiction covers the workplace of the employee.
The proceedings at the Labour Court theoretically should not exceed 50 working days from the first hearing.
D. Supreme Court
For disputes over termination of employment, if a party does not agree with the decision of the Labour Court, it may bring the case to the Supreme Court (through the Sub-registrar office of the Labour Court) at the latest 7 working days after the date of the decision (for parties who are present at the court decision hearing) or 7 working days after the date of decision notification (for parties who are absent).
Under Italian law, dismissals have to be notified in writing and the relevant notice must include specific indication of those reasons upon which the termination is grounded.
Disciplinary dismissals - namely, those relying on a cause ("giusta causa") or on subjective justified grounds ("giustificato motivo soggettivo") - have to be served, regardless the relevant employee's qualification and date of hiring as well as the size of the employer's business - by complying with a specific procedure, as follows:
- the employer must promptly provide the relevant employee with a written notice specifying those misconducts which are objected to him/her;
- within the following 5 days (or the longer term which may be set forth by the applicable national collective bargaining agreement), the relevant employee is entitled to submit his/her justifications hereof, either in writing or orally;
- at the expiry of the above 5-day term (or the longer term which may be set forth by the applicable national collective bargaining agreement), if no justifications have been provided by the relevant employee, or - alternatively - upon receipt of the affected employee's justifications, if these have been submitted, the employer is entitled to serve the dismissal.
In case of dismissals relying on objective justified grounds ("giustificato motivo oggettivo"; namely, dismissals due to individual redundancy), a specific procedure has to be triggered by the employer, except for those dismissals which are:
- to be notified to employees hired as from 7 March 2015;
- to be served to executive status employees ("dirigenti");
- grounded upon the relevant employee’s absences from work due to illness or accidents exceeding the maximum threshold set forth by the applicable national collective bargaining agreement;
- to be notified by "small companies" (namely, those staffed with up to 60 employees within the Italian territory and employing up to 15 employees at each production unit/within each municipality).
Under this procedure, the employer must notify in advance its intention to dismiss the relevant employee, thus explaining reasons grounding the dismissal, to both the latter and the Labour Office. Then, within the following 7 days, a meeting aimed at a settlement agreement being reached by the employer and the relevant employee is scheduled before the Labour Office. After the meeting, if no agreement is reached, or - alternatively - upon expiry of the above 7-day term, if no meeting is scheduled, the employer is allowed to actually serve the dismissal.
A specific procedure (the "collective dismissal procedure") apply whenever employers staffed with more than 15 employees, due to reduction, transformation or shutdown of activities, intend to dismiss - within a 120-day term - at least 5 employees employed at the same production unit or at different production units within the same province.
The main steps of such procedure are the following:
- the employer must notify in advance both the works councils established within its premises and the external territorial trade unions;
- the relevant notice, copy of which is to be sent to the labour office as well, must include indication of - among others - reasons which the redundancy relies on, the number of both redundant employees and other employees in force at the employer as well as positions covered by them, those technical, organizational and production-related grounds due to which no alternative measures in respect to the lay-offs can be implemented, etc.;
- upon request by the works councils/trade unions, a meeting between the latter and the employer has to be scheduled;
- if no agreement is reached over such meeting, an additional meeting before the Labour Office is to be scheduled;
- after such additional meeting, even if no agreement is reached, the employer is allowed to serve the dismissals (these are to be served in the following 120 days from the conclusion of the procedure or from the agreement if reached before the maximum duration of the procedure, unless the agreement reached with the works councils/trade unions within the collective dismissal procedure, if any, provides for a longer term);
- employees to be actually dismissed among those redundant must be identified by applying statutory selection criteria provided for by Italian law (namely, number of dependant relatives, company seniority as well as technical, production-related and organizational needs) or, alternatively, those under the agreement executed with the works councils/trade unions within the framework of the collective dismissal procedure, if any.
The maximum duration of the collective dismissal procedure is 75 days (to be decreased by half whenever the collective dismissal procedure concerns up to 10 employees). This procedure also applies to executive status employees ("dirigenti").
Taking the necessary measures prior to the termination of employment would place the employer in a better position to defend possible claims of wrongful termination.
In a case of poor performance, the employer must ensure there is a record that the employee had been made aware of his shortcomings and been provided with opportunity to improve together with sufficient support and guidance from the employer. Failure to improve despite these measures will, subject to proof, justify the termination of employment.
In instances involving misconduct, the employer is obliged to comply with the rules of natural justice and to provide the accused employee with an avenue to be heard and defend himself against the allegations made against him. An appropriate punishment (including termination of employment) may only be meted out after due inquiry.
Disciplinary procedures which are set out in the company’s handbooks, policies and regulations are to be complied with unless there are reasons to justify the employer’s decision to depart from its own prescribed procedures.
The procedure differs depending on whether the termination is based on circumstances relating to the employer (redundancies) or the employee.
Through case law and major collective agreements, a requirement has developed for there to be an information and consultation process involving elected employee representatives prior to the decision to reorganize a company being made by the board of directors. There is no mandatory requirement to inform and consult with employee representatives unless 10 employees or more are to have their employment terminated. However, the court will always intensify the test of the “objectively justifiable reasons” if a redundancy process was not subject to consultations before the decision was made.
The selection of each employee to be dismissed must be based on a selection process where objectively justifiable criteria are applied. The selection criteria must – amongst others - be the subject of consultations with the employees' elected representatives. There is no mandatory rule stating that seniority is to be the sole selection criterion. In most cases, there will be an overall assessment based on seniority, education, experience and social circumstances.
Prior to any termination of employment due to circumstances relating to the employee or redundancies, the employer is obliged to discuss any impending dismissal with the employee before the decision to terminate his/her employment is finally made. The employee is entitled to receive assistance in such discussions from an elected employee representative or another advisor.
The notice of dismissal must be in writing. It must be handed over to the employee personally or sent by registered mail. The notice must include information about the right to dispute the validity of the termination of employment, and additional information regarding:
- the right to demand a negotiation meeting with the employer,
- the right to remain in one's post after the end of the notice period until a final ruling is made by the court,
- the right to claim compensation for damages,
- any preferential right if made redundant, and
- within what time period the various claims must be made against the employer or lodged in court by the employee.
For termination based on just causes, after serving the first notice (please refer to our reply under Question 4), the employer is required to conduct an administrative hearing to afford the employee an ample opportunity to be heard and to defend himself with the assistance of counsel (if the employee desires). If found that the termination of employment is justified, the employer shall serve the employee the second notice discussed above.
For termination based on authorized causes, the employer is required to serve the notices discussed under Question 4 and, if applicable, to pay the employee separation pay.
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.
Mattos: Yes. The employment law requires the employer to give a notice of termination to the employee and pay the severances in 10 days after the termination; in addition, the employee must be submitted to medical examination, to confirm that he/she is able to work. The employer also has to record the termination in the employee's booklet and in the company’s book of employees (a proper book to register all employments' data).
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 on valid grounds and on justified grounds have different procedures to be followed by the employer in order to achieve an effective termination. However, irrespective of the type of ground for termination, a written termination notice shall be served to the employee, in which the reasons for termination was explained clearly.
Termination on valid ground
If the employer intends to terminate the employment contract on a valid ground (See Question due to the principle of termination to be last resort, before terminating the contract the employer shall,
a. Give the employee a warning letter, explaining the valid grounds, in which (s)he will be requested to compile a defence. These valid grounds should be proven with concrete evidences and witnesses in case of a dispute.
b. After getting the defence, the employer may terminate the employment contract by:
- giving a written termination notice in which, the valid grounds, requiring the termination, is stated,
- recognising abovementioned notice periods (See Question 4) depending on employee’s length of service at the workplace, or paying a notice pay in lieu,
- paying the severance pay, which is equal to the last monthly gross salary of the employee, for each year of passed service, (gross salary is defined as broad as “any benefit that the employee receives in return of labour and that may be measured by money”.)
- paying the vested, but uncovered allowances (if any) e.g. unused annual leave entitlement, unpaid salary or bonus.
Termination due to performance
If the valid ground for termination is the employee’s performance, then a specific procedure shall be followed. Firstly, the employer shall prove the performance decrease. Therefore, the employer shall need to create a performance evaluation system based on objective criteria and provide documents regarding the performance decrease. Performance criteria shall be proper and realistic. The employer shall prepare performance evaluation forms regarding these standards for each employee. The performance evaluation criteria shall be predetermined and notified to the employee. In case the performance of the employee is lower than the stipulated criteria, the employer shall explain in detail his/her future expectations, the professional and personal improvements expected from the employee. After that, if there is no improvement on the performance, then the employer may terminate the employment relationship.
Termination on justified ground
In case of a termination on a justified ground (See Question 1), the employer shall terminate the contract within six days after learning the reason for termination and in anyway within one year following the action. However, if the employee gained some financial benefit due to such action, this one-year period will not be applied.
Mutual termination protocol
Although termination through mutual termination protocol is not designated under TLC, it is recognised by case law and hence is preferred by the employers to mitigate the reinstatement risk. Pursuant to case law, for a mutual settlement protocol to be construed as valid, a reasonable benefit shall be provided to the employee in addition to the termination payables that (s)he is entitled by law. Whilst a certain calculation criterion or a method is not defined by case law for the determination of the amount of the reasonable benefit, according to the well settled precedents of the High Court;
- When mutual termination is offered by the employee, the employee shall be entitled to an exit package consisting of notice pay, severance pay and an additional payment of up to 4 months’ salary (Please note that as per several recent High Court precedents, the employer is not required to make any additional payment if the mutual termination is offered by the employee),
- When mutual termination is offered by the employer, the employee shall be entitled to an exit package consisting of notice pay, severance pay and an additional payment of minimum 4 months’ salary (See Question 15).
Swiss law does not impose a specific mandatory procedure to be followed in order to terminate an employment relationship.
Nevertheless, in order for the termination to be effective, a notice of termination must be issued. The notice of termination is not subject to mandatory written form, unless otherwise specified in the employment agreement or in a collective labour agreement. In practice, it is of course more common and recommended to give notice of termination in writing.
In addition, notice of termination must be given in compliance with the statutory or contractual notice periods (see question 4), unless it is a termination without notice for 'just cause' (see question 5), and cannot be given for reasons deemed abusive (see question 11) or during a 'protected period' (see question 13).
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 redundancy.
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 obligated 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 should be 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 the validity of the termination, 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.
In addition to substantive cause, the Employment Relations Act 2000 requires that an employer follow a fair process prior to termination. A fair process requires that prior to terminating employment the employer must, at a minimum:
- Investigate allegations against the employee sufficiently (as appropriate);
- Raise any concerns with the employee;
- Give the employee a reasonable opportunity to respond to the employer’s concerns; and
- Consider the employee’s explanation in relation to the allegations.
The process is underpinned by a statutory duty of good faith which requires an employer who is proposing to make a decision that will, or is likely to have an adverse effect on the continuation of employment to provide any affected employee with information relevant to the continuation of employment, and provide the affected employee with the opportunity to comment on the information before making a final decision.
An employment agreement or employer's policy may contain additional procedural requirements or consultation obligations which must be complied with prior to terminating employment.
An employee is entitled to be represented throughout a termination process by a union or other representative.
An employment contract may be terminated by the employer with the employee’s consent or unilaterally with or without notice.
Briefly the unilateral termination must be preceded by a preliminary meeting for large companies and followed by a registered termination letter including either a notice period or the reasons for not granting such a notice period.
The termination by mutual consent must be drawn up in two original documents signed by the parties.
Specific categories of employees are protected from the termination of their employment contract (see below).
In Romania, a specific procedure applies for each type of dismissal.
For example, for a redundancy dismissal, the employer should primarily focus on:
- properly documenting the business case - this is key to the entire process, as it serves to showcase the business rationale/ real and serious cause of the planned restructuring, which will need to be fully relied upon in all follow-up steps,
- having the business case formerly approved by its competent corporate body when effectively suppressing the affected job positions, and
- issuing and communicating the redundancy dismissal decision.
On the other hand, when embarking on a disciplinary dismissal, the main points to consider are:
- the employer may impose a disciplinary sanction within 30 calendar days of acknowledging the disciplinary misconduct (namely after the formal investigation is finalized), but also not later than 6 months after the date when the deed took place,
- in terms of procedure, this primarily involves (a) setting-up a disciplinary commission to investigate the suspected breaches, (b) summoning the employee to a disciplinary investigation meeting via a written notice, communicated with reasonable time in advance (often 3-5 working days), (c) holding the disciplinary hearing and assessing relevant evidence, based on which the appointed disciplinary commission to report to the employer its conclusion and propose the course of action to be taken with respect to the employee or not (and, if relevant, the proposed sanction), and (d) issuing and communicating the disciplinary sanctioning (disciplinary dismissal, if the case) decision.
Irrespective of the dismissal ground, statutory minimum content rules apply for any dismissal decision. Equally, they are all effective upon communication - typically, this is attempted through personal handover to the employee, but, if refused, alternative communication means must be implemented (including via official bailiff).
Yes, under a regular dismissal procedure, employers must comply with the following steps:
Once the employer acknowledges the commission of the severe misconduct, the employer shall verify all the facts involved and evaluate whether such conduct reasonably justifies the termination of employment.
If the commission of the misconduct is determined by the employer, the employer must deliver the worker a letter informing him or her of the imputation of the misconduct, the facts that caused the commission of said misconduct and its severity. This requirement will not be considered fulfilled if the letter contains the imputation under generic terms.
Moreover, the employer must grant the worker a minimum of six (6) calendar day period in order for him or her to present a written defence of the accusations. Said term will not apply in the cases where the misconduct is flagrant.
Once said period expires, the employer –with or without the worker’s written defence- shall decide whether it is reasonable to terminate the labour relationship executing the dismissal. The dismissal must be noticed to the worker through a letter informing the worker –in a detailed manner- the cause of the dismissal (which must not include other than the one(s) contained in the first letter) and the effective date of termination of employment.
It is important to note that during the legal procedure for dismissal, all employers must consider that:
- the accusation is noticed to the worker within a reasonable time from the date in which the employer acknowledged the misconduct;
- the misconduct is foreseen in the legal causes described in Question N° 1; and,
- the dismissal is a proportional measure considering the severity of the misconduct, the worker’s category, seniority and background.
On the other hand, to withdraw trust from a worker in a management or trust position, it is only necessary for the employer to inform such decision to the worker by written notice.
Now, it is important to mention that Peruvian legislation has established a trial period of three (3) months, term in which the employer can evaluate if the worker’s performance is in accordance with the needs of the company and during which the employer can terminate the employment relationship without cause or prior notice.
Therefore, if the employee is dismissed during this period, he or she will not be entitled to claim an indemnification for unfair dismissal nor a reinstatement in the workplace.
Said trial period could be extended for a maximum of twelve (12) months, in the case of management positions, and for a maximum period of six (6) months in the case of trust positions or when the work to be performed requires a longer period of training or adaptation.
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).
Firstly, the employer must set out the grounds of termination precisely in the notification letter. The ground on which the termination of the employment is based determines the procedure the employer must follow. Termination based on (business) economic reasons or long-term disability, which is the case if an employee has been incapacitated for in excess of 2 years (grounds a and b of question 1) must be assessed by the UWV beforehand. Termination based on the other exhaustive grounds (c through h of question 1) shall be assessed by the district court.
The UWV-procedure requires:
- The employer to send an application for a dismissal. The reasons for the application must be substantiated sufficiently to carry the dismissal and the employer must prove that he did enough to prevent the dismissal;
- There are several specifics in case of (business) economic reasons. Employer must fill in 3 different forms, A, B and C. Employer must make the structural redundancy of jobs due to the close down of business or actions to continue the business plausible. Several other factors must be substantiated to make a successful application;
- The assessment of the application takes approximately 4 weeks;
- The employee can put up a defence if he does not agree with the application. This instigates the hearing of both parties. Parties can request an expert opinion in this stage if the application is based on ground b (frequent illness absence);
- After this round the UWV will give a decision. Parties can enter an objection to this decision at the district court judge. After this objection the procedure follows the normal Dutch civil procedural law.
- Employers have to submit an application to the district court judge requesting the termination of the employment contract;
- The employee is allowed to file a defence.
- The judge will terminate the employment contract, provided that reasonable grounds do occur, meaning one of the grounds of points c through h of question 1.
- When terminating an employment agreement of an employee who has been in the employer’s service for 24 months, the transition payment is due by operation of law. The judge may grant fair compensation in excess when the employer is seriously culpable.
The district court procedure requires:
It is always possible to terminate the employment by mutual consent. This requires a settlement agreement, in writing.
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.
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:
b.1. ADVANTAGES: No intervention by the officers of the Board required; the termination process is more agile.
b.2 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.
Termination of the employment relationship will be valid whether or not the employer follows any prescribed procedures. But if the dismissal is found to be unfair, a possible although uncommon remedy is for the Employment Tribunal to order that the employee be reinstated.
As well as terminating the relationship for a fair reason, the termination must also be fair in all the circumstances and this means that procedural fairness must be observed. What is required differs from case to case but the principles including ensuring that the employee has the obligation to respond to allegations against him, treating employees consistently and allowing a right of appeal.
A Code of Practice applies to grievances and dismissals for misconduct or poor performance. Employers have no legal obligation to follow the Code, and an employee cannot bring a claim against the employer on the grounds that they have not followed it. But a failure to comply with the Code can be taken into account by an Employment Tribunal Judge in relation to another complaint and as a result the employer can be required to pay an increased sum of compensation (up to 25%).
Employers may also be obliged to follow contractual dismissal procedures included in the contract of employment.
Yes an employer have to follow a prescribed procedure to achieve an effective termination of the employment relationship.
An employer have to notice an employee in the notice period mentioned in point 4 this questionnaire.
In case of terminating the employment contract on the bases: liquidation of the organisation-employee, in case of reduction of the number and (or) staff of the employees, due to changes in production volumes and (or) the conditions of economic and (or) technological and (or) work organization and (or) production necessity or in case of restoration of the employee in his previous job, an employer must to pay a severance pay to the employee in the amount of his average monthly wage. In other cases (inefficiency of the employee in his/her position or in performance of his/her work, conscription for military service, long-term disability, retirement, and material changes of the terms of the contract), the dismissal pay shall be defined, depending on the length of service of the employee to that employer, as 10 to 40 times their average daily salary.
If the employment relationship is terminated as a disciplinary sanction, the employee before employing a disciplinary sanction, must request from the employee a written explanation of the violation. If a reasonable time limit set by the employer fails to provide a written explanation without good reason, the disciplinary sanction (termination of contract) can be applied without written explanation.
In principle, an employer must: (1) adhere to the disciplinary procedures (if any) outlined in its policies or regulations; and (2) provide a written notice of termination (either served in advance or with immediate effect pursuant to an appropriate payment in lieu thereof). Please refer to Question 4 for more details on written termination notices.
The notice of termination must be in writing and explained, as well as served to the worker. If there is an established works council, it must be informed about the intent of termination. The works council is obliged to issue a standpoint regarding the employer’s decision of termination within 8 days, or 5 days in case of extraordinary termination.
If the works council does not revert to the employer, it is considered that they do not have any objections or suggestions.
All other procedures for achieveing effective termination of the employment relationship depend on the reason of termination.