Termination, Layoffs, and Severance Pay
Handle terminations, layoffs, and severance pay in compliance with international regulations, ensuring smooth transitions and legal protection with expert guidance.
Why are Termination, Layoffs, and Severance Pay Relevant for SMEs?
Properly managing terminations and layoffs is essential for SMEs to avoid legal disputes and uphold fair treatment of employees. Ensuring compliance with local laws on notice periods and severance pay helps mitigate risks, protect the company’s reputation, and support smooth transitions during workforce changes.
Challenges Faced by SMEs in Termination, Layoffs, and Severance Pay
- Understanding varying notice period requirements and severance calculations.
- Ensuring compliance with local labor laws to avoid wrongful termination claims.
- Managing the financial and operational impacts of layoffs
What Should an SME Do Facing This Issue in a Foreign Country?
- Conduct Thorough Research: Understand local labor laws regarding terminations and severance.
- Seek Expert Legal Advice: Consult with local legal experts to navigate termination and severance processes.
- Implement Clear Policies: Develop and communicate clear policies on terminations, layoffs, and severance pay.
Common Scenarios
Employment and Workforce Management
Recruitment, management, and termination of employees and contractors in foreign markets, including remote/virtual workers.
Foreign Direct Investment
Investment in, setting up, managing, and closing business entities in foreign markets, including subsidiaries, partnerships, or joint ventures.
Outsourcing and Manufacturing
Outsourcing the manufacturing of products to a foreign company based on your own design and IP.
Cross-border Services
Provision of professional or business services to foreign clients without establishing a physical presence.
Explore Legal Solutions by Country
Taiwan
Philippines
Canada
- Termination Requirements: Employers must provide a valid reason for termination and adhere to the notice period specified by provincial laws.
- Severance Pay: Severance is based on years of service, typically one week’s pay for each year worked, subject to provincial regulations.
- Approval and Documentation: Proper documentation and adherence to provincial guidelines on notice periods and severance are required
Hong Kong
Brazil
India
- Termination Requirements: Notice period and reasons must comply with the Industrial Disputes Act.
- Severance Pay: 15 days’ wages for each completed year of service.
- Approval and Documentation: Proper notice and government approval may be required for large layoffs.
Vietnam
- Termination Requirements: Specific grounds required; improper termination can lead to reinstatement orders.
- Severance Pay: One month’s salary for each year of service if employed for more than one year.
- Approval and Documentation: Written notice and proper documentation needed.
China
- Termination Requirements: Requires a valid reason and may need consultation with labor unions.
- Severance Pay: Calculated based on years of service, typically one month’s salary for each year worked.
- Approval and Documentation: Documentation and proper notice periods required
U.S
Indonesia
- Termination Requirements: Must follow specific procedures; illegal terminations can result in reinstatement orders.
- Severance Pay: Varies by type of termination; typically one month’s salary for each year worked.
- Approval and Documentation: Documentation and approval from the Ministry of Manpower may be required.
Malaysia
Thailand
- Termination Requirements: Must provide valid reasons and proper notice.
- Severance Pay: Based on length of service; ranges from 30 days to 300 days of wages.
- Approval and Documentation: Proper notice and documentation required.
Manage Terminations and Layoffs with Legal Compliance
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Haiping Deng
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