Dismissal is a problem faced by many employers. When done incorrectly, it usually leads to an unforeseen financial burden. If you are conducting operations in Equatorial Guinea, you need to be aware that the laws are designed to favour the employee. Even in the event of theft, where the employer fails to follow the proper dismissal procedure, the employer will be obliged to pay the employee a penalty. In this piece, we will provide guidance on how to avoid the main common mistakes companies make when dismissing employees.
Risks involved in dismissing an employee
Dismissal issues are more complex than they appear. In Equatorial Guinea, it is imperative for the company to understand all the legal obligations a decision to dismiss entails before deciding to do so. The law requires much more responsibility on the part of the employer. Additionally, there are procedures in place that aim to provide more guarantees to the employee to remain employed.
To avoid surprises, the employer needs to take precautions and design specific mechanisms that prevent errors in dismissal procedures. To do this, it is important to have knowledge of the types of dismissals that the law establishes, as well as the obligations and risks involved with each of them.
Justified dismissal: This is the best dismissal you can opt for. The law authorises the employer to dismiss the employee when they have breached their main contractual obligations. Article 87 of the Labour Law provides a list of what these obligations entails.
There are two scenarios that the employer can apply – a dismissal with notice or a dismissal without notice. Whether notice is issued or not may depend on the grounds for dismissal. Consult with a lawyer in this regard where there is uncertainty. Dismissal with notice requires notifying the employee that he will be dismissed within one month, if the employee has worked for more than six months, or one week if he has worked for at least one month.
The employee will continue working during the notice period. Once the notice period has lapsed, a final dismissal letter will be issued to the employee indicating the reasons for which he is dismissed. Both the notice letter and the termination letter must be signed by the employee.
If there is no just cause for dismissal, but the employer still insists thereon, he or she can unilaterally decide to terminate the employment contract. The employer may also skip the prior notice letter (dismissal without notice). However, if dismissal is done in this way, the law is very clear that the employer must pay the employee the equivalent of 30 days’ salary and compensation of 45 days’ salary.
Dismissal for economic reasons: The general rule is that the employee cannot be dismissed without just cause. The law does, however, allow the employer to dismiss a considerable number of employees when the company is suffering losses and needs to reduce costs. When dismissal is made for economic reasons, the employee’s compensation is considerably reduced.
This type of dismissal is subject to the authorisation and verification of the Ministry of Labour. Consult with a lawyer before commencing this process to save a large sum of money by following the proper process. If dismissal for economic reasons is not done correctly, including the authorisation application process, it may be denied.
To give an indication, compensation can range from 45 days’ salary per year worked to 30 days’ salary per year worked, depending on whether the employer obtained the authorisation of the Ministry of Labour. In certain instances, it may be better to suspend employment contracts rather than lay off large number of employees.
Null dismissal: Dismissal is considered void when the legal process for dismissal has not been followed. Cases hereof would be when the employee has not received proper notice in the form of a dismissal letter or has been dismissed in specific circumstances that the law prohibits. For example, when a woman is on maternity leave; when employment contracts are suspended; or when the employee claims some of his labour rights before authorities and is then dismissed for doing so.
The risk faced by the employer for a null dismissal is that he may be ordered to reinstate the employee into the same position that he held prior to dismissal, under the same contractual conditions. Further, the employer may be required to pay the employee the wages not received during that time, as the dismissal had no legal effect.
Best way to deal with layoffs
Close dismissal deals with extra-judicial agreements: This option is recommended due to its flexibility. An extra-judicial agreement can include clauses that prevent the employee from suing the employer in the future. Additionally, the amount of compensation can be negotiated and agreed upon. This autonomy will, however, be restricted if the employee institutes legal proceedings in court based on irregular dismissal procedures being followed.
Legalisation of the agreements signed with employees: Although the agreement is valid from the moment it is signed by the parties, it is required to be legalised before the labour court. This provides greater security and allows the employer to use it in the future where the employee files a suit in another court. It is very important that the content of the agreements is adequate and contains the correct clauses that safeguard the employer.
It is easy to make mistakes during dismissal procedures. Regardless of what the employee has done, the dismissal process must be legal. If due process is not followed, the company may be obliged to pay the employee. Therefore, it is necessary to obtain the appropriate advice when considering this kind of decision.
*Django works with The Centurion Law Group
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