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Dominican Republic

Termination and Severance Policies

Learn about the legal processes for employee termination and severance in Dominican Republic

Notice period

In the Dominican Republic, the Labor Code outlines the necessary notice periods for employment termination. These periods are contingent on the duration of the employee's service and whether the termination is with or without cause.

Notice Periods for Termination Without Cause (Desahucio)

The Dominican Labor Code sets a tiered system for notice periods in cases of termination without cause (Desahucio). This applies when either the employer or employee decides to end the employment contract without a specific reason for termination.

  • Three to Six Months of Employment: The party initiating the termination must provide a minimum of seven (7) days' advance notice.

  • Six to Twelve Months of Employment: If the employee has been working for more than six months but less than a year, the notice period increases to fourteen (14) days.

  • Over Twelve Months of Employment: For employees with more than one year of continuous service, the required notice period is the highest at twenty-eight (28) days.

  • Important Note: The Labor Code permits the termination of the employment contract within the first three months without any specific notice period obligations for the employer.

Additional Considerations

These are the minimum legal requirements. An employment contract can stipulate a longer notice period, which would supersede the minimums outlined in the Labor Code. Additionally, employers must notify the Ministry of Labor within 48 hours of termination, regardless of the cause.

Severance pay

In the Dominican Republic, the Labor Code grants employees severance pay under certain circumstances, providing financial support during the job search period.

Entitlement to Severance Pay

Employees are entitled to severance pay if their employment is terminated without cause. This means the employer must initiate the termination and not have a legally justified reason like poor performance or misconduct. There is no entitlement to severance pay in cases of termination with cause, where the employer can demonstrate a valid reason for dismissal as outlined in the Labor Code. Additionally, domestic workers are exempt from receiving severance pay.

Calculation of Severance Pay

The amount of severance pay an employee receives is determined by their length of service and ordinary salary. The Labor Code establishes a tiered system for calculating severance:

  • For employees with three to six months of employment, no severance pay is mandated.
  • Employees who have worked for more than six months but less than a year are entitled to severance pay equivalent to thirteen (13) days' salary.
  • For employees with one to five years of service, the severance pay increases to twenty-one (21) days' salary for each year of service.
  • Employees with more than five years of continuous service receive the highest severance amount, which is twenty-three (23) days' salary for each year of service.

The ordinary salary used for calculating severance pay includes the employee's base salary and any regular bonuses or commissions received.

Severance Pay Disbursement and Penalties

The employer is legally obligated to pay the calculated severance amount within ten (10) days of the termination date. Any delay in payment incurs a penalty of one day's salary for each day of delay.

Termination process

In the Dominican Republic, there are specific legal guidelines that regulate the termination of employment. These guidelines ensure a fair process for both employers and employees. The Dominican Labor Code recognizes four primary categories of employment termination:

Desahucio (Termination without Cause)

This applies when either the employer or employee decides to end the employment contract without citing a specific reason for termination.

Despido (Termination with Cause by Employer)

Employers can dismiss employees with just cause based on legitimate reasons outlined in the Labor Code, such as serious misconduct or poor performance. No severance pay is required in justified dismissals, but the employer must provide evidence to support the cause for termination.

Dimisión (Resignation with Cause by Employee)

Employees have the right to resign for cause if the employer breaches the employment contract or creates a hostile work environment. Similar to termination with cause by the employer, evidence is required to substantiate the reason for resignation.

Termination by Mutual Agreement

This occurs when both parties agree to end the employment contract. This route offers flexibility and avoids potential disputes.

Procedural Steps

  1. Written Notification: The initiating party (employer or employee) must provide written notification to the other party regarding the termination. The notice should specify the termination date.

  2. Ministry of Labor Notification: Regardless of the cause for termination, the employer is obligated to notify the Ministry of Labor within 48 hours of the termination.

Additional Considerations

  • Employers must have demonstrable cause to terminate with cause (Despido) and may face legal repercussions if they cannot justify the dismissal.
  • Employees have the right to challenge a termination they believe is unfair through the Dominican Labor Courts.
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