Navigating employment termination in Jordan requires a thorough understanding of the country's Labour Law. Both employers and employees must adhere to specific regulations governing notice periods, severance pay, and valid grounds for dismissal. Compliance is crucial to avoid legal disputes and ensure fair treatment throughout the termination process.
Understanding these procedures is essential for companies operating in Jordan, whether they are local entities or international businesses employing staff in the country. Proper management of terminations ensures legal compliance and protects the company's reputation.
Notice Period Requirements
In Jordan, the required notice period for terminating an employment contract depends primarily on the type of contract and the duration of employment. For indefinite-term contracts, the law specifies a minimum notice period that must be provided by either party wishing to terminate the agreement. Fixed-term contracts generally expire automatically at the end of the specified term, but early termination may require notice or compensation as stipulated in the contract or by law.
For indefinite-term contracts, the minimum notice period is typically one month. This notice must be given in writing. The contract or a collective bargaining agreement may stipulate a longer notice period, which would then apply. During the notice period, the employment relationship continues, and the employee is entitled to their regular salary and benefits.
| Contract Type | Minimum Notice Period | Notes |
|---|---|---|
| Indefinite-Term | One Month | Must be in writing; longer periods possible |
| Fixed-Term | N/A (Expires) | Early termination may require notice/compensation |
Severance Pay Calculations and Entitlements
Severance pay, often referred to as end-of-service indemnity, is a statutory entitlement for employees in Jordan upon termination of their employment, provided certain conditions are met. This payment is generally calculated based on the employee's last wage and their length of service.
Employees on indefinite-term contracts are typically entitled to severance pay upon termination, unless the termination is for specific grounds related to serious misconduct by the employee. Employees on fixed-term contracts are also generally entitled to severance pay upon the expiry of the contract or early termination by the employer without just cause.
The standard calculation for severance pay is one month's wage for each year of service. For periods less than a year, the severance is calculated proportionally. The "wage" used for calculation includes the basic salary plus any allowances that are considered part of the regular wage.
- Calculation: (Last Monthly Wage / 12) * Number of Months of Service
- Entitlement: Generally applies to employees on indefinite or fixed-term contracts upon termination by the employer (unless for specific misconduct) or expiry of a fixed-term contract.
Grounds for Termination
Employment contracts in Jordan can be terminated based on various grounds, which can be broadly categorized as termination with cause and termination without cause. The distinction is critical as it affects the employee's entitlement to notice pay and severance pay.
Termination With Cause (Just Cause): The Labour Law specifies certain actions or omissions by an employee that constitute just cause for immediate termination without notice or severance pay. These grounds typically involve serious misconduct.
- Assuming a false identity or submitting forged certificates.
- Committing a mistake that results in substantial material loss to the employer.
- Disobeying instructions related to work safety, provided the instructions are in writing and clearly displayed.
- Absence from work without legitimate reason for more than twenty intermittent days or ten consecutive days in a year.
- Divulging work secrets.
- Being convicted by a final court judgment for a crime or misdemeanor involving moral turpitude or public indecency.
- Assaulting the employer, manager, or a colleague during work or because of work.
- Being under the influence of alcohol or drugs during work.
Termination Without Cause: Termination without cause occurs when the employer ends the employment relationship for reasons that do not constitute just cause as defined by law (e.g., restructuring, redundancy, or simply ending the relationship without employee fault). In such cases, the employer must provide the required notice period and pay severance pay.
Procedural Requirements for Lawful Termination
To ensure a termination is lawful, employers must follow specific procedural steps, particularly when terminating an indefinite-term contract without cause or for alleged misconduct. Failing to adhere to these procedures can render the termination unlawful, leading to potential claims for wrongful dismissal.
Key procedural steps often include:
- Written Notice: Providing the employee with written notice of termination, clearly stating the effective date, especially for indefinite-term contracts terminated without cause.
- Reason for Termination: Clearly communicating the reason for termination to the employee. While not always legally required for termination without cause (beyond providing notice), it is good practice. For termination with cause, the specific grounds must be clearly stated and often supported by evidence.
- Investigation (for Cause): If terminating for cause based on misconduct, conducting a fair investigation into the alleged behavior before making a decision.
- Final Settlement: Calculating and paying all final dues, including outstanding wages, accrued leave pay, and severance pay (if applicable), upon the effective date of termination.
- Documentation: Maintaining proper documentation of the termination process, including the notice letter, records of any warnings or disciplinary actions (if applicable), and the final settlement details.
Employee Protections Against Wrongful Dismissal
Jordanian Labour Law provides employees with protections against arbitrary or wrongful dismissal. A termination is considered wrongful if it occurs without a valid legal ground or without following the correct procedures.
If an employee believes they have been wrongfully dismissed, they have the right to file a complaint with the Ministry of Labour or file a case in court. If the court finds that the termination was unlawful, the employer may be ordered to compensate the employee.
Compensation for wrongful dismissal typically includes:
- Payment in lieu of the notice period (if not given).
- Severance pay (if applicable and not paid).
- Additional compensation for arbitrary dismissal, which can be significant and is often calculated based on the employee's wage and length of service, potentially ranging from a few months' wages up to a year's wages or more depending on the circumstances and court's discretion.
Common pitfalls for employers leading to wrongful dismissal claims include failing to provide adequate notice, terminating without a valid legal ground, not paying full severance entitlement, or failing to follow fair procedures, especially when terminating for alleged misconduct.
