In Paraguay, the Labour Code stipulates the legal requirements for notice periods during employment termination. The length of the notice period depends on the employee's length of service. For employees who have worked for less than a year, a 30-day notice period is required. For those who have worked between 1 to 5 years, a 45-day notice period is required. Employees who have worked between 5 to 10 years require a 60-day notice period, and those who have worked for more than 10 years require a 90-day notice period.

Notice Period Length

• Less than 1 year: 30 days
• 1 to 5 years: 45 days
• 5 to 10 years: 60 days
• More than 10 years: 90 days

These are the minimum requirements. An employment contract can stipulate a longer notice period, but it cannot be shorter than what's mandated by law.

Notice in Writing

Termination notices must be delivered to the employee in writing. This written notification is crucial for ensuring a smooth termination process and protecting both the employer and the employee's rights.

Exceptions to Notice Periods

There are a few exceptions where the notice period may not apply:

• Termination for Just Cause: If an employee is terminated for misconduct or poor performance, the employer may not be required to provide a notice period. However, if the employer cannot prove just cause in court, they may be liable for back pay.
• Company Closure: In cases of company closure or significant reduction of activities, specific legal procedures dictate the timeframe for informing employees.

Paraguay's labor laws have specific regulations concerning severance pay, ensuring employees are compensated if they are terminated under certain circumstances.

When Severance Pay is Required

Severance pay is payable to employees in Paraguay when an employer terminates an employee without justifiable reason as outlined in articles 81 and 82 of the Labour Code.

Severance Pay Calculation

The formula for calculating severance pay in Paraguay, according to article 84 of the Labour Code, is 15 days of regular salary for every year of service, or fraction exceeding six months. However, there's a cap based on the employee's length of service, usually limited to 30 times their monthly salary.

Important Considerations

Workers with 10 or more years of service who are unjustly dismissed have the right to double the severance pay or possible reinstatement, as per article 93 of the Labour Code. On the other hand, if the employer can prove valid reasons for dismissal such as misconduct or poor performance, they are not obligated to pay severance.

Terminating an employee in Paraguay requires adherence to specific legal guidelines to protect both the employer and the employee. The process can be broken down into key steps:

Identifying Grounds for Termination

Employers need to carefully consider the grounds for termination, which fall into two main categories:

• Termination with Just Cause: The Labour Code (articles 81 and 82) outlines reasons such as misconduct, poor performance, or negligence.
• Termination without Just Cause: When an employer terminates an employee without valid reasons, the employee is entitled to certain rights as outlined in the Labour Code.

Providing Written Notice

According to articles 87 and 88 of the Labour Code, termination notices must be in writing and delivered to the employee. It's best practice to include:

• Date of termination
• Reason for termination

Payment of Final Wages and Benefits

The employer must ensure the employee receives all outstanding wages, accrued vacation time, and other benefits due to them upon termination.

Important Considerations

• Labor Courts: If disputes arise, employees may submit claims to labor courts.
• Collective Bargaining Agreements: Some sectors may have specific termination procedures outlined in collective bargaining agreements.