In Timor-Leste, the Labour Code (Law No. 4/2012) sets out the legal requirements for notice periods during employment termination. The notice period required varies depending on the length of the employee's service and the reason for termination.

Notice Period Variations

There are two main scenarios for notice periods:

• Employee Initiated Termination: Employees intending to resign must provide their employer with a written notice of at least 30 days.

• Employer Initiated Termination: The notice period required from the employer depends on the employee's length of service:

  • Less than 6 months: 10 days written notice
  • 6 months to 1 year: 15 days written notice
  • Over 1 year: 30 days written notice

It's important to note that no notice period is required during the probationary period for either the employer or the employee.

Exceptions to Notice Period

There are certain situations where the notice period may not apply:

• Dismissal for Misconduct: If an employee is dismissed due to serious misconduct, the employer may not be required to provide a notice period, but must have proper documentation and evidence of the misconduct.
• Mutual Agreement: The employer and employee can agree to terminate the contract with immediate effect through a written agreement outlining the terms.

Failure to Provide Notice Period

If the employer does not provide the legally mandated notice period, they are required to compensate the employee for the number of days of missing notice.

In Timor-Leste, the Labour Code (Law No. 4/2012) stipulates specific severance pay entitlements for employees under certain conditions.

Eligibility for Severance Pay

Employees are entitled to severance pay when their employment is terminated involuntarily by the employer, except in cases of dismissal due to serious misconduct. Specific situations that warrant severance pay include:

• Redundancy or Business Closure: If the company undergoes restructuring, faces economic hardship, or entirely closes operations resulting in job losses.
• Unilateral Termination by Employer (without cause): If the employer terminates the contract without a justified reason based on the employee's conduct or job performance.
• Employee's Death: Upon the death of the employee, severance pay is due to their inheritors.

Calculating Severance Pay

Severance pay is calculated based on the employee's length of service and their final wage rate. The rates are as follows:

Length of Service

• 3 months to 1 year: 30 days of the last wage rate
• 1 to 2 years: 60 days of the last wage rate
• 2 to 3 years: 90 days of the last wage rate
• 3 or more years: 120 days of the last wage rate

Payment of Severance Pay

The employer must pay the calculated severance amount to the employee or their inheritors upon the termination of employment.

Important Note: Severance pay entitlement and calculation may vary depending on collective bargaining agreements or individual employment contracts. It's advisable to consult those documents for specific terms.

In Timor-Leste, the termination of an employee's contract is governed by the Labour Code (Law No. 4/2012). There are specific procedures that employers must adhere to.

Termination with Cause

Under certain circumstances, employers can terminate an employee for cause as outlined in Article 53 of the Labour Code. These circumstances include serious breach of contract, repeated misconduct despite warnings, unjustified absences from work, condemnation for a crime related to work duties, and fraud, theft, or abuse of trust. It's important to note that employers must have clear evidence and conduct a fair investigation before terminating an employee for cause.

Termination without Cause

If an employer wishes to terminate an employee's contract without cause, they must follow these steps:

1. Provide the employee with a written notice of termination.
2. Calculate and pay the appropriate severance to the employee upon termination.
3. Issue a job certificate to the employee upon dismissal.

Additional Procedural Requirements

The written notice of termination must clearly specify the reason for termination, whether with or without cause. Employees have the right to appeal their dismissal before the Labor Inspector or the Labor Court within a set timeframe.

Termination During Probationary Period

During the probationary period, which cannot exceed 3 months, either the employer or the employee may terminate the contract without notice or severance.

Wrongful Dismissal

If an employer fails to follow the correct termination procedures or terminates an employment contract without a valid reason, the employee may file a wrongful dismissal claim. The Labor Court has discretion in determining the outcome and remedies for such claims.