In this piece, Marion Django of The Centurion Law Group, provides guidance on how to avoid the main common mistakes companies make when dismissing employees
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.
- The risks involved in the dismissal of an employee in Equatorial Guinea
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. In order 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 authorizes the employer to dismiss the employee when he/she has breached his/her main contractual obligations. Article 87 of the Labor 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 authorization and verification of the Ministry of Labour. Consult with a lawyer before commencing this process in order to save a large sum of money by following the proper process. If dismissal for economic reasons are not done correctly, including the authorization 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 authorization of the Ministry of labour. In certain instances, it may be better to suspend employment contracts rather than lay off large numbers 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. Furthermore, the employer may be required to pay the employee the wages not receive during that time, as the dismissal had no legal effect.
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- Close dismissal deals with extrajudicial agreements
This option is recommended due to its flexibility. An extrajudicial 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 lawsuit 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.