In this article we will explore three other forms of employment contract termination: resignation, consensual termination, and termination request with cause by the employee.
Resignation Request by the Employee
The first of these is the resignation request by the employee. In this type of contract termination, the procedures to be adopted are basically the same as those applied in dismissal without cause. When an employee resigns, they must submit a resignation letter and comply with a 30-day notice period as provided by Brazilian labor law. The notice period can be worked or compensated.
- Fulfillment of Notice Period: The employee continues working for 30 days after delivering the resignation letter. In this case, they receive their salary normally until the last worked day.
- Waiver of Notice Period: If the employee requests to waive the notice period and the company agrees, they can leave the job immediately. However, if the company does not agree, the employee may have to compensate the company for not fulfilling the notice, equivalent to 30 days’ salary.
- Compensation for Notice Period: If the employee does not wish or cannot fulfill the notice period and the company does not waive this obligation, the company may deduct the amount equivalent to 30 days’ salary from the employee.
- In resignation, the rights are all maintained, such as: Proportional salary, Unpaid vacation, Proportional vacation, Proportional 13th salary.
- However, the employee will not be entitled to: 40% FGTS indemnity, Withdrawal of FGTS, Unemployment insurance.
Termination by Mutual Agreement (Consensual Termination)
Another type of termination is called consensual termination, which is a mix between dismissal without cause and resignation. In consensual termination, both the company and the employee agree to terminate the employment contract.
- In this type of termination, in addition to the severance payments to which the employee is entitled as in resignation (such as proportional salary, unpaid vacation, proportional vacation, and proportional 13th salary), the employee will also be entitled to: Half the amount of the notice period and 20% of the FGTS balance indemnity.
- There is also the possibility of withdrawing up to 80% of the FGTS balance.
- On the other hand, in consensual termination, the employee loses the right to receive unemployment insurance.
Termination Request with Cause by the Employee
Lastly, the most serious type of termination by the employer is the request for termination with cause. In this case, it is the employee who is dismissing the employer with cause.
- This can occur when the company does not comply with the rights and obligations provided for in the employment contract. Some examples would be moral harassment, sexual harassment, excessive workload, and life-threatening conditions.
- In this type of termination, all employee rights are maintained, meaning they will have the right to receive proportional salary, unpaid vacation, proportional vacation, proportional 13th salary, notice period, 40% FGTS indemnity, withdrawal of FGTS, and the possibility of receiving unemployment insurance.
Regardless of the form of termination, it is very important to pay attention on the procedures and details to avoid potential future problems. Count on the ORGATEC team for accounting, tax, and payroll services. See you next time, bye!