In El Salvador, there is no statutory notice period for individual terminations, meaning employers are not legally required to provide a set amount of notice before dismissing an employee.

Notice Periods in Employment Contracts

The notice period for termination is typically established within the employee's employment contract or collective bargaining agreement. This agreement dictates the timeframe for both the employer and employee to provide notice before termination. While there's no legal minimum, a common practice involves employees giving at least 7 days' written notice after their probationary period ends.

Exceptions: Collective Dismissals

For certain collective dismissals, the Salvadoran Labor Code requires prior judicial authorization. In such situations, the authorities might mandate a notice period before termination. Article 50 of the Salvadoran Labor Code outlines the grounds for dismissal with just cause.

Employees in El Salvador are legally entitled to severance pay under certain circumstances.

Unjustified Dismissal

As per Article 58 of the Salvadoran Labor Code, in the event of an unjustified dismissal, an employee is entitled to severance pay. This is calculated as one month of salary for each year of service, with a minimum of 15 days’ salary. For example, an employee who has been unjustly terminated with 5 years of service would receive 5 months of salary as severance.

Resignation

Employees who voluntarily resign from their job are not entitled to receive severance pay.

Employer's Breach of Contract (Indirect Dismissal)

In cases where an employee terminates their employment due to a significant breach of contract by the employer, they are entitled to the same severance pay as in the case of an unjustified dismissal. This is as per Article 53 of the Labor Code.

Calculating Severance Pay

The calculation of severance pay in El Salvador is based on the employee's basic salary. The Labor Code of El Salvador (Articles 53 and 58) provides the legal references for these regulations.

The termination process in El Salvador can be initiated by either the employer or the employee.

Termination by the Employer

• Termination with Just Cause: The Labor Code lists the specific grounds under which an employer can terminate employment with just cause. These include reasons like employee dishonesty, repeated negligence or misconduct, disclosing confidential company information, and serious insubordination.
• Termination without Just Cause: When the employer terminates an employee without justification, the employer is required to pay severance.

Termination by the Employee

• Resignation: An employee can resign from their position at any time. Resignation should be communicated in writing to the employer.
• Indirect Dismissal: The Labor Code allows employees to terminate their employment if the employer significantly breaches the employment contract. In this case, the employee is entitled to the same severance pay as an unjustified dismissal.

Notice and Documentation

• Written Notice: Whether initiated by the employer or the employee, it's best practice for the termination to be communicated in writing. This notice should outline the reasons for termination and any relevant dates.
• Final Payments: Upon termination, the employer must provide the employee with their final salary and any outstanding benefits, such as accrued vacation pay.