In Vanuatu, the Employment Act governs the notice period requirements for terminating an employment contract. The specific timeframe depends on the length of the employee's service and the terms of the contract.

Notice Periods Based on Employment Duration

The Employment Act outlines the following minimum notice periods:

• Less than 3 Years of Service: Employees with less than three years of service must be provided with three months' notice before termination.

• 3 Years or More of Service: For employees who have served for three years or more, the minimum notice period is reduced to 14 days.

It's important to note that these are minimum requirements. Employment contracts can stipulate longer notice periods, but they cannot be shorter than what's mandated by law.

Notice Period for Probationary Period

Vanuatu allows employers to include a probationary period in employment contracts, typically lasting three months. During this probationary period, either the employer or the employee can terminate the contract without providing any notice.

Notice Requirements

The Employment Act allows for notice to be given verbally or in writing. However, it's advisable to provide written notice to maintain a clear record of the termination date.

The employer can choose to pay the employee their full salary for the required notice period instead of providing actual notice. This option eliminates the need for the employee to continue working during the notice period.

In Vanuatu, employees who have been in continuous employment for at least 12 months and are terminated by their employer are legally entitled to severance pay. This entitlement is outlined in the Employment Act, Cap 160.

Scenarios for Severance Pay

Severance pay is mandatory in the following situations:

• Redundancy: The employee's position has become unnecessary due to changes in the business's operations, technology, or reduced workload.
• Employer's Ill-Health: The employer is unable to continue operating the business permanently due to health reasons.
• Liquidation of the Business: The business is closing down permanently.

Severance Pay Calculation

The calculation of severance pay is based on the employee's length of continuous service and their regular wage or salary:

• One month's wage per year of service. This means that for every year of service, the employee is entitled to one month's regular wages as severance pay.
• Pro-rata Calculation for Partial Years: If the employee has not completed a full year of service, they are still entitled to severance pay calculated on a pro-rata basis (e.g., six months of service would result in half a month's wages as severance pay).

Additional Considerations

• No Severance for Expatriates: Expatriate workers (non-residents of Vanuatu) are not entitled to severance pay.
• No Severance for Misconduct: Employees dismissed for serious misconduct are not eligible for severance pay.
• Collective Agreements: Severance provisions may be included in collective agreements, potentially offering more favorable terms than the minimum outlined in the Employment Act.

The Employment Act of Vanuatu (Cap 160) governs the termination of employment contracts. The process can be initiated by either the employer or the employee.

Termination at the Employer's Initiative

Employers can terminate an employee's contract for several valid reasons:

• Redundancy: The employee's job becomes unnecessary due to business restructuring or economic reasons.
• Ill-Health: The employer is permanently unable to run the business due to health issues.
• Misconduct: Serious misconduct on the part of the employee, such as gross negligence or criminal activity.

Termination at the Employee's Initiative

Employees also have the right to terminate their contracts:

• Resignation: Employees can resign from their positions. While not legally mandatory, providing at least two weeks' notice is considered standard practice.
• Constructive Dismissal: If the employer creates a work environment or breaches the contract to the point it becomes intolerable, the employee may resign and consider it a 'constructive dismissal', which may give grounds for legal action.

Additional Considerations

There are several additional factors to consider during the termination process:

• Written Documentation: It's strongly recommended to document all termination-related communications in writing, including termination notices, reasons for termination, and any relevant agreements.
• Final Payments: The employer must issue all outstanding payments due to the employee, including salary, compensation for unused vacation.
• Fairness and Objectivity: Employers should ensure terminations are conducted fairly, transparently, and are based on objectively justifiable reasons.