Learn about the legal processes for employee termination and severance in Timor-Leste
In Timor-Leste, the Labour Code (Law No. 4/2012) sets out the legal requirements for notice periods during employment termination. The notice period required varies depending on the length of the employee's service and the reason for termination.
There are two main scenarios for notice periods:
Employee Initiated Termination: Employees intending to resign must provide their employer with a written notice of at least 30 days.
Employer Initiated Termination: The notice period required from the employer depends on the employee's length of service:
It's important to note that no notice period is required during the probationary period for either the employer or the employee.
There are certain situations where the notice period may not apply:
If the employer does not provide the legally mandated notice period, they are required to compensate the employee for the number of days of missing notice.
In Timor-Leste, the Labour Code (Law No. 4/2012) stipulates specific severance pay entitlements for employees under certain conditions.
Employees are entitled to severance pay when their employment is terminated involuntarily by the employer, except in cases of dismissal due to serious misconduct. Specific situations that warrant severance pay include:
Severance pay is calculated based on the employee's length of service and their final wage rate. The rates are as follows:
The employer must pay the calculated severance amount to the employee or their inheritors upon the termination of employment.
Important Note: Severance pay entitlement and calculation may vary depending on collective bargaining agreements or individual employment contracts. It's advisable to consult those documents for specific terms.
In Timor-Leste, the termination of an employee's contract is governed by the Labour Code (Law No. 4/2012). There are specific procedures that employers must adhere to.
Under certain circumstances, employers can terminate an employee for cause as outlined in Article 53 of the Labour Code. These circumstances include serious breach of contract, repeated misconduct despite warnings, unjustified absences from work, condemnation for a crime related to work duties, and fraud, theft, or abuse of trust. It's important to note that employers must have clear evidence and conduct a fair investigation before terminating an employee for cause.
If an employer wishes to terminate an employee's contract without cause, they must follow these steps:
The written notice of termination must clearly specify the reason for termination, whether with or without cause. Employees have the right to appeal their dismissal before the Labor Inspector or the Labor Court within a set timeframe.
During the probationary period, which cannot exceed 3 months, either the employer or the employee may terminate the contract without notice or severance.
If an employer fails to follow the correct termination procedures or terminates an employment contract without a valid reason, the employee may file a wrongful dismissal claim. The Labor Court has discretion in determining the outcome and remedies for such claims.
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