In the wake of the Covid-19 pandemic, many companies are currently forced to make short-term cost savings. This may also affect business abroad, for which often only one or two employees are working locally. Meanwhile similar legal standards apply in most industrialized countries if an employment relationship shall be terminated; however, in every jurisdiction some specifics still need to be considered. In order to avoid unnecessary costs, an initial overview for a step by step planning is often essential. The following ten aspects may be a first general guideline for the termination of an employment contract, in particular regarding its timing. Our legal experts provide you with a first landing platform for the particularities of their country, being at your service for additional specific advice for your individual case hereafter.
Is “employment at will” the general principle in the respective country or do you usually need grounds for a termination of an employment contract?
Companies do not need grounds for termination, but there is a 40% penalty applicable to the “FGTS” account balance. FGTS is a severence indemnity fund and consists in a 8% deposit of a worker’s salary made by the employer and collected by federal government.
Termination with cause is also foreseen in the legislation. There is a list of conducts by employee that gives rise to the termination with grounds. In this case, no indemnification is payable to the employee upon termination of his/her employment contract, but the employer has the burden of proof as to any of the legal situations above.
If there is a general concept of “dismissal protection”, is it limited to certain requirements (e.g. size of company/workplace, length of service)?
There is not a general concept of “dismissal protection”, but there are a few situations when employees are protected from dismissal for a certain period of time, as in case of pregnancy, illness, discrimination, etc.
If a termination is deemed to be invalid, is “reinstatement (including backpay)” or “payment of damages” the general remedy?
Termination can only be considered invalid in case the employee is dismissed during the period of protection, as explained in the above question. Both reinstatement (including backpay) and payment of damages can be applied, depending on the case.
If “payment of damages” is the general concept, what is the basis of its calculation/the maximum amount the employee may receive?
The length of time that employee should remain in the job due to the protection is the basis for calculating the indemnification. It depends on the special hypothesis of job protection.
May the right to terminate in some cases forfeit, (e.g. right to terminate forthwith) if not executed timely? If so, what is the respective timeframe?
Not applicable.
Has notice to be given in writing or may the delivery of an oral/email/facsimile termination without an original signature be sufficient as well?
Notice of termination can be delivered in any way, but it is recommended to confirm it in writing with proof of receipt (email, text message or others: original signature is not required in accordance to practice).
May a notice be successfully rejected due to the lack of a formal proxy of the managing director or may internal authorization generally be sufficient?
Notice of termination cannot be rejected by the formality used.
Is the are any general formal procedure with regard to the employee (e.g. obligatory meeting with the employee) before a valid termination may be issued?
There is no formal procedure regarding the employee. Personal conversation is recommended to avoid claims of moral damage.
Is there any statutory body that needs to be dealt with before a valid termination may be issued? If so, what is the usual timeframe?
No statutory body needs to be notified.
Is there -usually- an employee representative body that needs to be dealt with before a termination may be issued? If so, what is the usual timeframe?
No employee representative body needs to be notified.
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