In Guatemala, the Labor Code outlines the legal requirements for notice periods during employment termination. These requirements differ for employers and employees, and the specific timeframe depends on the employee's length of service.

Notice Periods for Employers (Indefinite Term Contracts)

According to Guatemala's Labor Code, employers are required to provide a written notice to employees before terminating an indefinite term contract. The required notice period varies based on the employee's seniority.

• For employees with less than six months of service, employers must provide one week's notice.
• For those with between six months and one year of service, employers are required to give at least ten days' written notice.
• For employees with between one and five years of service, a minimum of two weeks' notice is necessary.
• For those with more than five years of service, employers must provide one month's notice before termination.

It's important to note that these are the statutory minimums. An employment contract can stipulate a longer notice period, which would supersede the legal requirements.

Notice Periods for Employees (Indefinite Term Contracts)

Unlike employers, Guatemalan Labor Law doesn't impose mandatory notice periods for employees seeking to terminate an indefinite term contract. However, the employment contract itself might specify a notice period that the employee must adhere to. In the absence of such a provision within the contract, there's no legal obligation for employees to provide notice before resigning. Even if there's no legal requirement, providing reasonable notice demonstrates professionalism and allows for a smoother handover of responsibilities.

Additional Considerations

The aforementioned notice periods apply to indefinite term contracts. Fixed-term contracts typically terminate upon the pre-determined end date without requiring notice. There are specific legal procedures employers must follow in cases of termination with cause. These procedures may involve obtaining prior judicial approval for dismissal depending on the reason for termination.

In Guatemala, the Labor Code mandates severance pay entitlements for employees whose employment is terminated, except under specific circumstances.

When Severance Pay is Required

Employees are legally entitled to severance pay in Guatemala when:

• The employer terminates the employment contract without just cause: If the employer cannot demonstrate a lawful reason for termination, they must compensate the employee.
• The employee resigns due to the employer's breach of contract: If the employer substantially violates the terms of the employment contract, forcing the employee to resign, severance pay is owed.

When Severance Pay is Not Required

Severance pay is not mandated in the following cases:

• The employee voluntarily resigns without cause: The employer isn't liable to provide severance pay when the employee chooses to leave without a justifiable reason.
• Termination with cause attributed to the employee: If the employee engages in gross misconduct outlined in the Labor Code (Article 77), the employer can legally terminate employment without severance.
• Mutual agreement to terminate the employment contract: Both parties can agree to end the employment relationship without severance.
• Completion of fixed-term contracts: If the employment contract has a pre-determined end date, severance pay is generally not required upon its completion.

Calculating Severance Pay

Severance pay calculations in Guatemala are as follows:

• Basis of Calculation: Severance pay is based on the employee's last average monthly salary (ordinary and extraordinary) over the previous six months of work.
• One Month's Salary Per Year: Employees are entitled to one month's salary for each year of continuous service or a proportional amount for less than a complete year.

Noteworthy Considerations

• Economic Advantages (Ventajas Económicas): Guatemala's labor law includes additional benefits in the severance calculation called "economic advantages" which are typically valued at 30% of the total severance due. These can include non-cash benefits like company cars, health insurance, food services, etc.

The termination of employees in Guatemala is governed by specific legal procedures to ensure compliance with the Guatemalan Labor Code.

Termination with Cause

Termination with cause, also known as dismissal for just cause, happens when an employee engages in misconduct or breach of contract as defined by Guatemalan law. The Labor Code (Article 77) outlines the grounds for justified termination, which include repeated absences or tardiness without reasonable justification, dishonesty, violence, threats, or insults against the employer or coworkers, intentional damage to workplace property, gross negligence or insubordination, disclosure of confidential company information, and being under the influence of alcohol or drugs at work.

Procedure for Termination with Cause

The procedure for termination with cause involves three steps:

1. Documentation: The employer must thoroughly document the reasons for termination, collecting evidence, witness statements, and other relevant information.
2. Prior Authorization (In Specific Cases): Guatemalan law requires employers to seek judicial approval before terminating certain protected categories of employees, including pregnant women, those involved in union formation, etc.
3. Written Notice: The employer must provide a written termination notice to the employee, clearly stating the reasons for the dismissal and the applicable provision of the Labor Code.

Termination without Cause

An employer can terminate an employee without cause, provided they adhere to the following:

1. Severance Pay: The employer is legally obligated to pay severance as outlined in the Labor Code (Article 82).
2. Notice Periods: The employer must provide advance notice in writing, with the length of notice based on the employee's duration of service as specified in the Labor Code.

Other Forms of Termination

Other forms of termination include mutual agreement and resignation. Both the employer and employee can mutually agree to terminate the employment relationship. Severance pay may or may not apply depending on the terms of the agreement. An employee may resign at any time. While not legally required, providing advance notice is considered professional and allows for a smoother transition.

Important Considerations

Adherence to the legal procedures is crucial, especially in instances of termination with cause. Failure to follow the proper steps could result in a wrongful termination claim and potential financial liabilities for the employer. Employers must maintain thorough documentation of any performance issues, disciplinary actions, or incidents that could potentially justify termination.