In Palau, labor law stipulates specific notice periods for employment termination, with the required timeframe varying based on the type of employee and the reason for termination.

Government Employees

Government employees in Palau are required to give and receive a minimum of 60 days' written notice for the termination of the employment contract. This provision applies unless there are exceptional circumstances, in which case an appeal can be made to the President for a waiver of the notice period.

Non-Resident Workers

Non-resident workers who are terminated by their employer "for cause" (meaning with justification), are required by Palauan law to receive a minimum of 10 days' written notice before the termination becomes effective. This notice must be provided to the employee and the Division of Labor.

Important Points

• There appears to be no legal minimum notice period mandated for private sector employees (other than government employees) in Palau.
• Employment contracts can supersede these minimums and dictate a longer notice period if both parties agree to it in the contract.

For a more comprehensive understanding of employment termination procedures and legalities in Palau, consulting with a local labor law expert is recommended.

Severance pay in Palau is not a mandatory entitlement across all industries under the standard labor laws. However, there are specific situations where severance pay may be required.

Government Employees

Government employees in Palau may be entitled to severance pay in specific termination scenarios.

Contractual Agreements

Severance pay provisions may be explicitly outlined within an individual employment contract. These terms are legally binding if agreed upon by both the employer and employee. If a union represents a group of employees, a collective bargaining agreement may include provisions for severance pay.

Circumstances Warranting Severance Pay

While not mandated by broad labor laws, some situations where severance pay might typically be considered in Palau include:

• Downsizing or Redundancies: If an employee is terminated due to the company downsizing or their position being made redundant, they may be eligible for severance pay.
• Company Closure: Severance pay may be granted if an employee loses their job due to the company permanently ceasing operations.

Calculating Severance Pay

Severance pay amounts in Palau are not standardized. When applicable, these factors often influence the calculation:

• Length of Service: Employees with a longer tenure at the company may receive a higher severance package.
• Salary: Severance pay calculations may be a percentage of the employee's salary or a multiple of their monthly wages.

The termination process in Palau is governed by legal guidelines designed to protect both employees and employers.

Types of Termination

There are several types of termination:

• Resignation: This is when an employee voluntarily ends their employment. The employee must provide the appropriate notice as outlined in their employment contract or collective bargaining agreement.
• Termination for Cause: This occurs when an employer ends an employee's employment due to reasons such as misconduct, poor performance, or violation of company policies. The employer must have a valid reason and follow due process.
• Termination Due to Redundancy: This happens when an employer ends an employee's position due to reasons such as restructuring, economic downturn, or similar circumstances.

Documentation and Procedures

Certain procedures and documentation are required during the termination process:

• Termination Letter: A termination letter should clearly state the reason for termination, the effective date, and any other relevant information.
• Due Process: Employers must follow due process when terminating an employee for cause. This typically involves providing the employee with written notice of the allegations, an opportunity to respond, and a fair investigation.

Final Compensation

Upon termination, employees are entitled to receive all outstanding wages, accrued vacation pay, and any other benefits owed to them according to their employment contract.

Disputes and Resolution

If an employee believes their termination was unjust, they may file a grievance with the Palau Division of Labor. The Division of Labor can assist in mediating disputes between employers and employees.