Navigating employment termination in Jordan requires a clear understanding of the legal framework governing employer-employee relationships. The Jordanian Labor Law outlines specific procedures, notice periods, and entitlements designed to protect both parties during the cessation of employment. Adhering strictly to these regulations is crucial for employers to ensure compliance and avoid potential legal disputes or claims of wrongful dismissal.
Whether terminating an indefinite or definite contract, employers must follow prescribed steps, including providing appropriate notice and calculating end-of-service benefits correctly. The specific requirements often depend on the type of contract, the reason for termination, and the employee's tenure. Understanding these nuances is essential for managing workforce changes effectively and lawfully within the Kingdom.
Notice Period Requirements
The required notice period for terminating an employment contract in Jordan depends primarily on the type of contract in place. For indefinite-term contracts, the law mandates a minimum notice period. Definite-term contracts, conversely, typically expire automatically at the end of their term, and termination before expiry is subject to different rules, often involving compensation rather than a notice period in the traditional sense, unless the contract specifies otherwise or termination is for cause.
For indefinite contracts, the minimum notice period that an employer must provide to an employee is one month. This notice must be given in writing. The contract or a collective bargaining agreement may stipulate a longer notice period, but it cannot be less than the statutory minimum. During the notice period, the employment relationship continues, and the employee is entitled to their regular wages and benefits.
| Contract Type | Minimum Notice Period | Notes |
|---|---|---|
| Indefinite Term | One month | Must be in writing. Contract/CBA may require longer. |
| Definite Term | N/A | Contract expires automatically. Early termination has different rules. |
Severance Pay Calculations and Entitlements
Severance pay, also known as end-of-service indemnity, is a statutory entitlement for employees in Jordan under specific circumstances. The primary trigger for severance pay is the termination of an indefinite contract by the employer without cause, or by the employee for certain valid reasons stipulated by law, or upon the expiry of a definite-term contract.
The calculation of severance pay is based on the employee's final wage and their length of service. The general formula is one month's wage for each year of service. For periods less than a full year, the severance is calculated proportionally. The "wage" used for this calculation typically includes the basic salary plus any allowances that are considered part of the regular remuneration.
Severance pay is generally due in the following situations:
- Termination of an indefinite contract by the employer without cause.
- Termination of an indefinite contract by the employee due to specific reasons (e.g., employer breach of contract, assault by employer).
- Expiry of a definite-term contract.
- Employee resignation after a certain period of service (though conditions may apply).
- Employee death or inability to work due to illness.
Severance pay is typically not required if the employee is terminated for serious misconduct (termination with cause) or if the employee resigns from an indefinite contract without a valid legal reason before completing a certain period of service (often linked to social security contributions).
Grounds for Termination
Employment contracts in Jordan can be terminated based on various grounds, broadly categorized as termination with cause and termination without cause.
Termination With Cause (Summary Dismissal)
Termination with cause allows an employer to dismiss an employee immediately without notice or severance pay. This is reserved for instances of serious misconduct or gross negligence by the employee. The Jordanian Labor Law lists specific actions that constitute valid grounds for termination with cause, such as:
- Assuming a false identity or submitting forged certificates or documents.
- Committing a mistake that results in substantial material loss to the employer, provided the employer notifies the employee within two days of becoming aware of the incident.
- Disobeying written instructions regarding the safety of workers or the workplace, provided the instructions are posted in a conspicuous place and the employee is informed of them.
- Absence from work without legitimate cause for more than twenty intermittent days or ten consecutive days in a year.
- Divulging workplace secrets.
- Being convicted by a final court judgment for a crime or misdemeanor involving moral turpitude or public indecency.
- Assaulting the employer, the manager in charge, or any fellow worker during work or because of it.
- Being found in a state of intoxication or under the influence of a narcotic drug during working hours.
- Committing an act that violates public morals or decency at the workplace.
For termination with cause to be lawful, the employer must typically conduct an investigation and provide the employee with an opportunity to respond to the allegations before the decision is made.
Termination Without Cause
Termination without cause occurs when an employer decides to end an indefinite contract for reasons that do not constitute serious misconduct by the employee. In such cases, the employer must provide the statutory or contractual notice period (minimum one month) and pay the employee their full end-of-service indemnity. Terminating a definite contract before its expiry date without cause generally requires the employer to compensate the employee for the remaining term of the contract, in addition to severance pay for the period worked.
Procedural Requirements for Lawful Termination
Ensuring a termination is legally compliant in Jordan involves following specific procedural steps. Failure to adhere to these procedures, even if grounds for termination exist, can render the dismissal unlawful.
Key procedural requirements include:
- Written Notice: For termination of indefinite contracts without cause, written notice must be provided to the employee at least one month in advance (or longer if specified in the contract). The notice period begins from the date the employee receives the written notice.
- Clear Grounds: The reason for termination should be clearly stated, especially in cases of termination with cause.
- Investigation (for Cause): If terminating for cause, the employer should conduct a fair and impartial investigation into the alleged misconduct and allow the employee to present their defense. Documentation of this process is crucial.
- Payment of Dues: Upon termination, the employer must pay the employee all outstanding wages, accrued leave pay, and end-of-service indemnity (if applicable) promptly.
- Documentation: Proper documentation of the entire process, including the termination letter, proof of delivery of notice, investigation records (if applicable), and final payment calculations, is essential.
Common pitfalls include insufficient notice, failure to pay all entitlements, lack of proper investigation for 'for cause' dismissals, and inadequate documentation.
Employee Protections Against Wrongful Dismissal
Jordanian labor law provides employees with protection against arbitrary or wrongful dismissal. A dismissal is considered wrongful if it occurs without a valid legal reason or without following the correct legal procedures.
If an employee believes they have been wrongfully dismissed, they can file a complaint with the Ministry of Labor or file a case in the labor court. If the court finds the dismissal to be unlawful, it may order the employer to pay compensation to the employee.
The compensation for wrongful dismissal typically includes:
- Compensation equivalent to the notice period that should have been given (if not provided).
- Full end-of-service indemnity (if it was denied).
- Additional compensation for arbitrary dismissal, which the court determines based on the circumstances of the case, often related to the employee's wage and length of service, but generally capped at a certain amount (e.g., wages for a specific number of months).
The court may also, in some cases, order the reinstatement of the employee, although monetary compensation is a more common outcome. Employers must be diligent in ensuring terminations are both substantively justified and procedurally correct to mitigate the risk of wrongful dismissal claims.
