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Termination and Severance Policies

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

Notice period

In Azerbaijan, the Labor Code stipulates the legal requirements for notice periods during employment termination. These requirements vary based on the party initiating the termination and the employee's length of service.

Notice Periods by Employer

The employer is required to provide written notice to the employee before termination. The notice period depends on the employee's length of service:

  • Less than 1 year: At least two calendar weeks
  • 1 to 5 years: At least four calendar weeks
  • 5 to 10 years: At least six calendar weeks
  • More than 10 years: At least nine calendar weeks

For employees being laid off due to redundancy, the employer must provide two months' notice and grant the employee one day off per week with pay during the notice period to aid their job search.

Notice Periods by Employee

An employee intending to resign must notify their employer in writing at least one calendar month in advance.

Exceptions to Notice Periods

There are exceptions where the notice period may not be required:

  • Serious misconduct: If an employee commits a serious offense as outlined in the Labor Code, they can be dismissed immediately without notice.
  • Employee's initiative: The employee can terminate the employment contract without notice for specific reasons, including reaching retirement age, disability, starting educational programs, relocation, or accepting another job offer.

Important Considerations

  • Collective Agreements: Collective bargaining agreements may supersede the statutory notice periods. It's recommended to consult any applicable agreements for specific requirements.
  • Contractual Agreements: While the Labor Code outlines minimums, the employment contract can stipulate a longer notice period for the employer, with a maximum of six months.

Severance pay

In Azerbaijan, the entitlement to severance pay is largely dependent on the reason for employment termination, as outlined in the Labor Code.

Redundancy or Liquidation Termination by Employer

Employees who are dismissed due to redundancy or the liquidation of the enterprise are entitled to severance pay. The amount of this pay is determined by their length of service:

  • Less than one year of service: One month's salary
  • 1 to 5 years of service: At least 1.4 times the monthly salary
  • 5 to 10 years of service: At least 1.7 times the monthly salary
  • More than 10 years of service: At least twice the monthly salary

In addition to this, regardless of tenure, employees must receive at least two month's salary if the employer modifies employment terms, they are enlisted for military service, or their health prevents them from continuing in their role.

Termination Initiated by Employee

Generally, if an employee initiates the termination of their employment contract, they are not entitled to severance pay. However, there may be exceptions to this rule if specific provisions in the employment contract or a collective bargaining agreement address severance pay upon resignation.

Calculation of Severance Pay

Severance pay is generally calculated based on the employee's average monthly salary.

Termination process

The termination of an employment contract in Azerbaijan is governed by the Labor Code of the Republic of Azerbaijan. The procedures for terminations initiated by both the employer and the employee are outlined below.

Termination by the Employer

The employer may terminate an employment contract for a variety of reasons, including:

  • Redundancy or Liquidation: Due to a reduction in workforce or the complete shutdown of the company.
  • Change of Ownership: If a business changes ownership.
  • Employee's Inability to Perform: If the employee cannot perform their duties due to lack of qualifications, unsatisfactory work results, or a change in their health conditions.
  • Disciplinary Grounds: For serious misconduct on the part of the employee, such as repeated violations of work discipline or a single gross violation.

The employer must provide the employee with written notice in advance, outlining the reason for termination.

Termination by the Employee

An employee may terminate their employment contract by providing their employer with written notice. Some valid reasons for an employee-initiated termination include:

  • Employer's Breach of Contract: If the employer fails to fulfill their obligations under the employment contract.
  • Change in Working Conditions: If the employer makes significant changes to the employee's working conditions without prior agreement.
  • Personal Reasons: Such as relocation, health issues, or pursuing education.

Termination of Fixed-Term Contracts

Fixed-term contracts usually end automatically upon the agreed-upon end date. However, either party can terminate a fixed-term contract early for a valid reason outlined in the Labor Code.

Important Considerations

There may be additional restrictions or requirements when terminating employees belonging to protected categories, such as pregnant women, employees on parental leave, or those with disabilities. If there is disagreement over the validity of termination, the matter could be resolved through a labor dispute resolution procedure, including possible court proceedings.

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