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Termination and Severance Policies

Learn about the legal processes for employee termination and severance in Algeria

Notice period

In Algeria, labor law stipulates that employers must provide notice periods when terminating employment, unless the employee has committed serious misconduct. The duration of this notice period is determined by collective bargaining agreements and the employee's tenure.

Collective Bargaining Agreements and Minimum Notice Period

Collective agreements or industry conventions establish the minimum notice period. These agreements can set a standard notice period applicable to all companies within a specific industry or region. If no relevant collective agreement exists, the legal minimum notice period is unclear, with some sources suggesting a base period of six months, potentially extending to twelve months for highly skilled workers.

Tenure-Based Notice Period

In addition to the minimum set by collective agreements, Algerian law mandates an extra notice period based on the employee's length of service. Employers must provide an additional five days' notice for each year of service, capped at a maximum of 30 extra days. For example, an employee who has worked for a company for three years would be entitled to the minimum notice period established by collective agreements, plus fifteen additional days.

Employer Obligations During Notice Period

During the notice period, Algerian law grants dismissed employees specific rights. Employees have the right to two hours of paid leave per day to search for new employment. Employers can fulfill this obligation by providing a lump sum payment equivalent to the employee's regular wages during the notice period. Employers who fail to provide the legally mandated notice period or violate an employee's rights during this time may face legal repercussions.

Severance pay

In Algeria, labor law stipulates that employees are entitled to severance pay under certain conditions.

Severance Pay for Redundancies

If an employee is dismissed due to downsizing for economic or structural reasons, the employer is legally required to provide severance pay. However, two conditions must be fulfilled:

  • The employee must be covered by the Algerian unemployment insurance scheme.
  • The employee must have at least two years of service with the same employer.

Calculation of Redundancy Severance Pay

The severance pay for redundancy is equivalent to three months' salary. This is calculated based on the average gross monthly wage the employee received in the twelve months prior to the termination of the employment relationship.

Severance Pay for Other Reasons

Employees dismissed for reasons other than redundancy are also entitled to severance pay, provided two conditions are met:

  • The employee must have completed at least two years of service for the same employer.
  • The dismissal cannot be due to serious misconduct by the employee.

Calculation of Other Severance Pay

In these cases, the severance pay is calculated at a rate of fifteen days' wages for each year of service. The calculation is based on the employee's last received salary.

Termination process

Algerian labor law provides a structured process for terminating employment, which is designed to protect both employers and employees. The procedure varies depending on the reasons for termination.

Serious Misconduct Termination

Employers can terminate an employee's contract immediately, without any notice period or severance pay, if the employee commits a serious fault as defined by Algerian law (Article 73 of Law No. 90-11). Serious misconduct typically includes:

  • Criminal offenses related to work duties
  • Habitual drunkenness during work
  • Disclosure of trade secrets
  • Violence, threats, or insults at the workplace
  • Serious disobedience towards superiors

Termination for Other Reasons

When terminating an employee for reasons other than serious misconduct, employers must adhere to the following steps:

  1. Advance Notice: Provide the employee with a written notice of termination.
  2. Statement of Reasons: Clearly state the valid reasons for termination within the written notice.
  3. Opportunity for Defense: Allow the employee the opportunity to respond to the allegations and present their defense. The employer may be required to convene a disciplinary hearing.

Probationary Period Termination

Employers can terminate employees during the probationary period with shorter notice. The typical probation period length is six months (twelve months for highly skilled positions), but a collective agreement can set a different limit.

Redundancy Termination

Redundancies follow a more complex procedure aimed at minimizing job losses and ensuring fair treatment of employees:

  1. Economic Justification: Employers must demonstrate valid economic, technological, or structural reasons for the workforce reduction (Article 41 of Decree No. 94-09).
  2. Consultation: Employers must consult with employee representatives or the labor inspectorate regarding the redundancy plan and potential alternatives (Article 31 of Decree No. 94-09).
  3. Selection Criteria: Redundancy dismissals should adhere to objective and transparent criteria for selecting employees (Articles 34 and 35 of Decree No. 94-09). Such criteria may include length of service, skills, and family responsibilities.

Employers who fail to comply with any of these procedural steps for various types of termination risk legal challenges and potentially having the dismissal ruled 'abusive'.

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