In Palau, the notice period requirements during employment termination vary depending on the type of employment and whether the termination is initiated by the employer or the employee.

Government Employment

The National Public Service System Act establishes a framework for employment in the Palauan government. However, it delegates the formulation of specific policies and regulations to the Bureau of Public Service System (BPSS). These regulations likely address notice periods, but publicly available information on the BPSS website is limited.

Private Sector Employment

For private sector employment, the Republic of Palau Employment Contract, a sample contract provided by the government, outlines a 60-day notice period for both employer and employee terminations or resignations. The relevant clause from the sample contract states:

Employment may be canceled by either Government or Employee on the giving of written notice of termination and/or resignation (by employee) at least sixty (60) calendar days prior to the effective date of cancellation of this Contract.

It's important to note that the sample contract mentions the possibility of waiving the notice period in special circumstances with the approval of the relevant authority. This suggests that the 60-day notice requirement might not be universally mandated by law, but rather a common practice reflected in standard employment contracts.

Non-Resident Workers

There are additional regulations for non-resident workers (foreign employees). The Division of Labor Rules specify a 10-day notice period required by employers if they are terminating a non-resident worker for cause (with reason) before the end of their contract. The relevant clause from the Division of Labor Rules states:

Termination by Employer for Cause: An employer may terminate the employment of a non-resident worker for cause... provided that the employer gives the worker a written notice of termination at least ten (10) working days before the effective date of termination.

Severance pay in Palau is not a legal requirement according to the country's national labor laws. These laws primarily focus on areas such as minimum wage, working hours, and workplace safety, but do not contain a general provision requiring employers to provide severance pay upon termination of employment.

Contractual Arrangements

However, severance pay may still be granted in Palau under certain circumstances. These include:

• Employment Contracts: Individual employment contracts can include severance pay provisions. In these cases, the terms of the contract will determine the eligibility and amount of any severance package.

• Collective Bargaining Agreements: In unionized workplaces, collective bargaining agreements negotiated between the union and the employer may include provisions for severance pay.

• Company Policy: Some companies may have internal policies that address severance pay, even if it's not mandated by law or contract.

While not explicitly mentioned in labor regulations, severance pay can sometimes be offered as compensation for a shortened notice period. For example, if an employer terminates an employee without providing the stipulated notice period, they may offer severance pay instead.

In Palau, the termination process can differ based on whether the employment is in the public or private sector, and the reasons for the termination.

Types of Termination

• Resignation: An employee can voluntarily terminate their employment by providing written notice.

• Termination for Cause: An employer can terminate an employee for specific reasons such as misconduct, poor performance, or violation of company policies. In the case of termination of non-resident workers, employers are required to provide a written notice of termination at least 10 days prior to the effective date. This notice should clearly state the reasons for termination.

• Termination without Cause (Redundancy): An employer can terminate an employee due to economic factors, restructuring needs, or other reasons not directly related to the employee's conduct.

General Procedural Steps

1. Written Notice: Both resignations and terminations usually require written notice.

2. Clear Communication of Reasons: Especially in cases of termination for cause, the employer should clearly outline the reasons for termination in the written notice.

3. Final Payment: Upon termination, employers are obligated to pay all outstanding wages, benefits, and any accrued vacation time.

4. Employment Clearance: Non-resident workers are required to obtain an Employment Clearance Form before leaving Palau. This form verifies that there are no outstanding contractual disputes with the employer.

Important Considerations

• Government Employment: Government employees may have additional procedural safeguards during the termination process. Always consult the National Public Service System Act and relevant regulations for the specific procedures.

• Non-Resident Workers: The termination of non-resident workers is governed by the Division of Labor Rules, which stipulate specific procedures and notice requirements.