In Venezuela, there is no statutory notice period required for employment termination, whether it is initiated by the employer or the employee. This rule applies to both situations: when a company decides to lay off an employee and when an employee chooses to leave the company.

Exception to the Rule

The only exception to this rule is when an employee resigns without a justifiable reason. In this case, the Organic Law of Labor and Workers (LOTTT) stipulates that the employee must provide written notice to the employer beforehand. The specific timeframe for this notification isn't defined by law, and it's typically determined by the terms of the employment contract.

Worker Protections

Despite the absence of a mandatory notice period, Venezuelan labor law prioritizes worker protections. This is evident in the concept of job stability, where employees enjoy significant dismissal safeguards. Employers must obtain authorization from a labor tribunal before terminating such employees, even with cause.

Dismissal Formalities

In addition to job stability, employers are obligated to notify the Labor Court within five working days following termination, outlining the justification for dismissal. Failure to do so can be interpreted as an unjust dismissal, potentially leading to the employee's reinstatement and back pay.

In Venezuela, labor legislation establishes a comprehensive system for severance pay, often referred to as "prestaciones sociales." The purpose of this system is to provide financial security for workers who experience involuntary job termination.

Entitlement

All employees in Venezuela are entitled to receive severance pay upon termination of their employment, regardless of the reason for termination. This entitlement applies to both fixed-term and indefinite-term employment contracts.

Calculation Methods

Employers must calculate severance pay using one of two methods, with the employee receiving the higher of the two amounts:

Method 1: Quarterly Deposits

Employers are required to deposit the equivalent of 15 days of salary, calculated based on the employee's latest salary, into a bank trust or their accounting books every quarter. This equates to 60 days of salary deposited per year. These deposits accrue interest at a special rate set by the Venezuelan Central Bank.

Method 2: Seniority Benefit (Antigüedad)

After the first year of service, employers must deposit or set aside an additional two days of salary per year worked, up to a maximum of 30 days.

Payment Upon Termination

At the termination of employment, the employee is entitled to receive the entirety of the accrued severance pay, including any accrued interest. The employee gets the higher amount resulting from either calculation method.

Additional Considerations

Severance pay is considered part of an employee's salary and is subject to all relevant deductions and social security contributions. It cannot be waived or renounced by the employee. Employers who fail to fulfill their severance pay obligations may face legal consequences.

The termination of employees in Venezuela is a highly regulated process with a focus on protecting worker rights. The main procedures and legal guidelines involved are as follows:

Types of Termination

• Termination with Cause (Justificado): The employer may terminate an employee for serious misconduct or other justifiable reasons explicitly outlined in the Organic Law of Labor and Workers (LOTTT), Article 79. Examples include repeated absences or tardiness without proper justification, dishonesty or acts of violence in the workplace, and serious negligence or breach of contractual obligations.
• Termination without Cause (Injustificado): Employers can terminate employment without cause, but they might need government approval due to the "labor freeze" in place.
• Resignation: Employees may resign voluntarily. Although no statutory notice period exists, providing notice is customary and might be outlined in the employment contract.
• Mutual Agreement: Employers and employees can mutually agree to terminate the employment relationship.

Termination Procedure for Employers

1. Establish Just Cause: If terminating with cause, clearly document and substantiate the reason for dismissal based on the grounds outlined in the LOTTT.
2. Obtain Labor Inspector Approval (If Necessary): Due to the "labor freeze", employers might require pre-approval from a Labor Inspector before terminating employees without cause. Exceptions include top-level managers and temporary workers.
3. Written Notice: Provide the employee with a written termination notice outlining the reason (if with cause) and the effective date of termination.
4. Notification to Labor Court: Within five working days of termination, notify the competent Labor Court and specify the basis for dismissal.

Important Considerations

• Job Stability: Employees with job stability ("estabilidad") cannot be dismissed without just cause and prior authorization from the Labor Inspector and court. This significantly enhances employee protection.
• Non-compliance: Failure to adhere to the proper termination procedures can lead to legal disputes and potential sanctions against employers.