Rivermate | Honduras flag


Termination and Severance Policies

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

Notice period

In Honduras, the Labor Code stipulates a minimum notice period for employers intending to terminate indefinite employment contracts. The duration of this notice period is contingent on the length of service of the employee.

Length of Service and Corresponding Notice Period

  • For employees who have served less than 3 months, a notice period of 24 hours is required.
  • For those who have served between 3 to 6 months, a notice period of one week is mandated.
  • Employees who have served between 6 to 12 months require a notice period of two weeks.
  • A notice period of one month is required for employees who have served between 1 to 2 years.
  • For employees who have served over 2 years, a notice period of two months is required.

It's important to note that these requirements apply to terminations initiated by the employer. Employees who are voluntarily resigning typically need to provide less notice, although the specifics may be outlined in their employment contract.

Other Factors to Consider

  • Employment Contract: The notice period specified in the individual employment contract may override the minimum legal requirements, as long as it provides equal or greater benefits to the employee.
  • Failure to Provide Notice: If the employer does not provide the legally mandated notice period, they are required to pay the employee their full wages for the notice period they did not receive.

Severance pay

Severance pay, or Auxilio de Cesantía, in Honduras is a financial compensation that employers are legally obligated to provide to employees upon termination of employment under certain circumstances. The Honduras Labor Code (Código del Trabajo de Honduras) is the primary legal source governing these rights.

Circumstances Justifying Severance Pay

Severance pay is justified in the following situations:

  • Dismissal without just cause: If an employer terminates the employment contract without a valid reason outlined in the Labor Code.
  • Indirect dismissal: This occurs when the employer creates intolerable work conditions, forcing the employee to resign.
  • Mutual agreement: When the employer and employee agree to terminate the contract.
  • Completion of a fixed-term contract: If the contract isn't renewed.
  • Closure of the business: If the closure is for economic or other authorized reasons.
  • Employee's death.

Circumstances Excluding Severance Pay

Severance pay is not justified in the following situations:

  • Employee resignation (unless they have a justified reason)
  • Termination with just cause: If the employee's actions are a valid reason for dismissal, such as those outlined in Article 112 of the Honduras Labor Code.
  • During the trial period of employment.

Calculation of Severance Pay

Severance pay is calculated based on the employee's length of service and their average salary in the last six months:

  • 3 months to 6 months of service: 10 days wages
  • 6 months to 1 year of service: 20 days wages
  • More than 1 year of service: One month's wages for each year worked.

Severance pay is capped at a maximum of 8 months' wages.

Payment of Severance Pay

Employers must pay severance immediately upon termination of employment.

Termination process

In Honduras, employers are required to follow specific legal procedures when terminating an employee's employment. The Honduras Labor Code (Código del Trabajo de Honduras) provides the valid reasons for termination.

Types of Termination

  • Termination with Just Cause: The employer has the right to dismiss the employee for serious misconduct or reasons outlined in Article 112 of the Labor Code. These reasons include repeated absences or lateness without justification, dishonesty, violence, threats, or insults against the employer or colleagues, intentional damage to workplace property, negligence endangering safety, and engaging in actions expressly prohibited in the employment contract.

  • Termination without Just Cause: The employer can end the contract without a specific cause.

  • Mutual Termination: Both the employer and employee agree to end the employment relationship.

  • Indirect Dismissal: The employee resigns due to intolerable working conditions created by the employer. This is treated similarly to termination without just cause.

Termination Procedure

  1. Written Notice: The employer is required to provide a written termination notice stating the reason(s) for dismissal and the effective date.

  2. Proof of Just Cause (if applicable): If the termination is with just cause, the employer bears the burden of proving the employee's misconduct.

Additional Considerations

  • Right to Challenge: Employees have the right to challenge unfair dismissals via labor courts.

  • Special Protections: Certain employees, such as pregnant women and union leaders, have additional protections against termination.

Rivermate | A 3d rendering of earth

Hire your employees globally with confidence

We're here to help you on your global hiring journey.