Maldives

The Employment Act of Maldives stipulates the legal requirements for notice periods during employment termination. These requirements are applicable to indefinite term employment agreements, essentially contracts without a pre-determined end date.

Notice Periods Based on Tenure

• Two weeks' notice: For employees who have been employed for more than six months but less than one year.
• One month's notice: For employees who have been employed for more than one year but less than five years.
• Two months' notice: For employees who have been employed for more than five years.

Exceptions to these mandated notice periods typically involve situations where serious misconduct has occurred.

Key Points to Consider

• Employer's Obligation: The employer is generally obligated to provide the employee with written notice of termination, adhering to the mandated notice period based on the employee's tenure.
• Payment in Lieu of Notice: The employer can opt to terminate employment immediately by paying the employee wages and other benefits for the required notice period.
• Employee's Right to Resign: If the employer provides less notice than required by law, the employee has the right to resign with immediate effect and be considered dismissed without reasonable cause.

Severance pay in the Maldives is regulated by the Employment Act (Law No 2/2008) and its subsequent amendments. This law outlines when severance pay is applicable.

Entitlement to Severance Pay

Severance pay is applicable to employees working on indefinite contracts who are involuntarily terminated by the employer, with some exceptions. It also applies to employees who have their employment contract breached and have a valid reason for resigning, a situation known as constructive dismissal.

Severance Pay Calculation

The calculation of severance pay depends on the employee's length of service with the employer. For those with less than one year of service, the severance pay is one month's salary. For those with between one and four years of service, the severance pay is three months' salary. The same applies to those with more than four years of service.

Exceptions to Severance Pay

There are circumstances where employees may not be entitled to severance pay. These include summary dismissal due to serious misconduct on the part of the employee, resignation by the employee unless there has been a constructive dismissal, and the expiry of fixed-term contracts.

Additional Information

The employer is responsible for paying the severance package upon termination. Additionally, any unused annual leave entitlement should also be compensated by the employer before termination.

Termination of employment in the Maldives is governed by a strict legal framework outlined in the Employment Act (Law No 2/2008). It's important for both employers and employees to understand this process.

Types of Termination

There are several types of termination:

• Termination by Employer (with notice): The employer must provide written notice of termination. The notice periods depend on the duration of employment [Employment Act of Maldives, Section 22(a)].
• Termination by Employer (without notice): Also known as summary dismissal, this is permitted in cases of serious misconduct by the employee. The reasons for such dismissal must be clearly documented [Employment Act of Maldives, Section 23].
• Employee Resignation: An employee can resign by giving written notice to the employer. The notice period must align with the requirements of the Employment Act, based on the employee's length of service [Employment Act of Maldives, Section 22(b)].
• Constructive Dismissal: If an employer makes fundamental changes to the terms of employment significantly impacting working conditions, an employee may be entitled to resign and claim constructive dismissal.

Steps in the Termination Process

The termination process involves several steps:

1. Notice of Termination: In cases where an employer initiates termination, a written notice must be provided to the employee, along with reasons for termination [Employment Act of Maldives, Section 22(a)].
2. Work During Notice Period: Unless exempted, the employee is usually required to work during the notice period.
3. Final Paycheck: The final paycheck should cover any outstanding wages, unused annual leave, and other relevant entitlements.

Important Considerations

There are several important considerations during the termination process:

• Documenting the Process: It's highly recommended that employers maintain detailed documentation of the termination process, including notice letters, reasons for termination.
• Disputes: In case of disputes related to termination, the Labour Relations Authority (LRA) in the Maldives is the official body for handling and resolving such matters.