In San Marino, the law stipulates specific notice periods for terminating employment contracts. These periods vary based on the type of contract and the length of the employee's service.

Legal Basis

The main reference for notice periods is usually found in collective bargaining agreements or individual employment contracts.

Priority of Notice Periods

• Contractual Stipulations: If an employment contract specifies a notice period, this takes precedence. This period can be longer but not shorter than the legal minimums.
• Collective Bargaining Agreements: Industry-wide agreements may establish notice periods that apply to member companies. These generally take precedence over individual contracts unless the contract offers a more favorable term to the employee.
• Absence of Defined Notice Period: In the absence of a specific timeframe in the contract or collective agreement, statutory minimums come into effect as outlined in Article 141(2) of the Labour Code.

Statutory Minimum Notice Periods (Labour Code, Article 141(2))

The minimum notice period required by law is based on the employee's length of service:

• Less than 6 Months: 15 days' notice
• 6 Months to 1 Year: 1 month's notice
• More than 1 Year: An additional day's notice for each additional year of service, up to a maximum of 6 months' notice

Important Notes

• Notice periods apply to both employers and employees initiating termination.
• The notice period serves as a working period, allowing the employee to search for new employment while still fulfilling their duties. Employers must grant the employee reasonable time off during this period for job hunting purposes.
• Failure to comply with the required notice period can result in the employee being entitled to their wages during the unserved notice period.

In San Marino, severance pay entitlements, known as the "TFR" (Trattamento di Fine Rapporto), are a significant part of employment termination.

Legal Basis

Severance pay regulations primarily come from Law No. 57 of March 19, 1973, and subsequent amendments, specifically Article 5. Certain industry-specific collective agreements may contain more favorable severance pay provisions for employees.

Eligibility

As a general rule, all employees, regardless of their contract type (fixed-term or indefinite), are entitled to severance pay upon termination of their employment contract. However, there might be specific exceptions for particular categories of workers outlined in collective agreements or individual contracts.

Calculation of Severance Pay

Each year of employment, the employer sets aside a portion of the employee's gross salary (approximately 7.5%) into a severance fund. This accrues annually. Upon termination, regardless of the reason (resignation, dismissal, retirement, etc.), the accumulated severance fund (TFR) is paid out to the employee.

Special Cases

In cases of justified dismissal due to serious misconduct, the employee may forfeit a portion or all of their TFR, depending on the severity of the misconduct. Specific provisions under San Marino law address the protection of severance entitlements in the event of company bankruptcy.

Tax Considerations

The severance pay (TFR) is subject to specific taxation rules.

Terminating an employment relationship in San Marino involves specific procedures to ensure compliance with labor laws. The process can be broken down into different types of termination and the procedures that must be followed for each.

Types of Termination

• Termination with Notice: This is the most common form of termination, where either the employer or employee ends the contract. Reasons can include restructuring, poor performance (not amounting to misconduct), and more.
• Summary Dismissal for Just Cause: This is immediate termination reserved for serious misconduct such as theft, violence, or gross negligence. Strict legal guidelines dictate what constitutes just cause.
• Mutual Agreement: In this case, the employer and employee mutually agree to end the employment relationship, and the terms are outlined in a settlement agreement.
• Expiry of Fixed-Term Contracts: Employment ends automatically upon the contract's end date without the need for formal termination procedures.

Termination with Notice Procedure

1. Written Notice: The terminating party (employer or employee) must provide written notice of termination, stating the date of termination and a clear reason for termination (if employer initiated).
2. Opportunity to Respond: The employee has a right to respond to the termination notice and make representations, especially if the termination is due to alleged misconduct or performance issues.
3. Investigation (If applicable): If misconduct is alleged, the employer must conduct a fair and thorough investigation.

Important Considerations

• Unfair Dismissal: Employees can contest a termination they deem unfair or unjustified through dispute resolution mechanisms offered by the Labour Department.