Terminating an employee in Cabo Verde requires careful adherence to local labor laws to avoid potential disputes and liabilities. Cabo Verde's legal framework outlines specific procedures for termination, including notice periods, severance pay, and justifiable grounds for dismissal. Understanding these regulations is crucial for employers, especially those operating through an Employer of Record (EOR), to ensure compliance and fair treatment of employees. Navigating these requirements can be complex, but following the proper steps is essential for a smooth and legally sound termination process.
This guide provides an overview of the key aspects of employment termination in Cabo Verde, focusing on the regulations in effect for 2025. It covers notice period requirements, severance pay calculations, grounds for termination, procedural requirements, and employee protections against wrongful dismissal. By understanding these elements, employers can effectively manage terminations while remaining compliant with Cabo Verdean labor law.
Notice Period Requirements
The required notice period in Cabo Verde depends on the type of employment contract and the employee's length of service. Generally, fixed-term contracts do not require notice unless otherwise stipulated in the agreement. For indefinite-term contracts, the following minimum notice periods apply:
| Length of Service | Notice Period |
|---|---|
| Less than 1 year | 15 days |
| 1 year to less than 5 years | 30 days |
| 5 years or more | 60 days |
It's important to note that collective bargaining agreements or individual employment contracts may stipulate longer notice periods. Employers must always adhere to the most favorable terms for the employee.
Severance Pay Calculations and Entitlements
Severance pay, known as "compensação," is generally payable to employees terminated without just cause under indefinite-term contracts. The calculation is based on the employee's length of service and their average monthly base salary. The formula is typically:
Severance Pay = (Monthly Base Salary) x (Years of Service) x (Factor)
The "Factor" is determined by law and can vary, but it is often around 30 days of salary per year of service. Some collective agreements may provide for more generous severance packages.
- Eligibility: Employees terminated without just cause are generally entitled to severance pay.
- Exclusions: Employees terminated for just cause or those who resign voluntarily are usually not entitled to severance pay.
Grounds for Termination
Termination in Cabo Verde can be either with or without just cause.
Termination with Just Cause:
Just cause typically involves serious misconduct by the employee that makes the continuation of the employment relationship untenable. Examples include:
- Theft or fraud
- Insubordination
- Repeated unjustified absences
- Violation of company rules
Termination without Just Cause:
Termination without just cause occurs when the employer ends the employment relationship for reasons unrelated to the employee's conduct or performance. This can include:
- Redundancy due to economic reasons
- Company restructuring
- Technological changes
In cases of termination without just cause, the employer is generally required to provide notice and severance pay.
Procedural Requirements for Lawful Termination
To ensure a lawful termination, employers must follow specific procedural requirements:
- Written Notice: Provide the employee with a written notice of termination, clearly stating the reasons for the dismissal and the effective date.
- Just Cause Documentation: If terminating for just cause, gather and document all evidence supporting the allegations of misconduct.
- Consultation (if applicable): In cases of collective dismissal (e.g., due to redundancy), consult with employee representatives or unions as required by law.
- Payment of Entitlements: Ensure timely payment of all outstanding wages, accrued vacation time, and severance pay (if applicable).
- Delivery of Documents: Provide the employee with all necessary employment-related documents, such as a certificate of employment.
Employee Protections Against Wrongful Dismissal
Cabo Verdean law provides several protections for employees against wrongful dismissal:
- Judicial Review: Employees have the right to challenge their termination in court if they believe it was unfair or unlawful.
- Reinstatement: If a court finds that the termination was wrongful, the employee may be entitled to reinstatement to their former position or compensation in lieu of reinstatement.
- Discrimination: Termination based on discriminatory grounds (e.g., gender, religion, ethnicity) is strictly prohibited.
- Burden of Proof: In cases of termination for just cause, the employer bears the burden of proving that the employee's misconduct warranted dismissal.
Employers should maintain thorough documentation of employee performance and conduct, follow proper termination procedures, and seek legal advice when necessary to minimize the risk of wrongful dismissal claims.
