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 Understanding the New Guidelines for Employee Termination Under Article 27 of the Labor Law


Date: 10 March 2024


In a significant development, the Ministry of Cooperatives, Labour, and Social Welfare has issued Circular No. 242539 dated February 5, 2024, providing comprehensive guidelines on the termination of employment in accordance with Article 27 of the Labor Law. This circular, alongside Advisory Opinion No. 20 from the General Directorate of Employment Relations, Compensation Services, and Unemployment Insurance, marks a pivotal moment in clarifying the legal framework surrounding the dismissal of workers due to misconduct or failure to fulfill job duties.

Detailed Guidelines and Provisions:

  1. Criteria for Termination:

    • Misconduct and Non-compliance: Employers are entitled to unilaterally terminate employment contracts based on the worker’s failure to perform assigned duties or violation of disciplinary rules, post issuance of written warnings. The legislation explicitly identifies these two scenarios as legitimate grounds for dismissal, ensuring employers act within legal bounds.
    • Union Consultation: Before any dismissal action, employers with unionized workforces must seek and obtain approval from the relevant workers' union. If the union opposes the termination, the employer is legally barred from proceeding with the dismissal, thereby embedding a layer of protection for employees against arbitrary termination.
  2. Procedural Norms for Termination:

    • Issuance of Written Warnings: The law mandates that prior to termination, employers must provide written warnings to employees, offering them a chance to rectify their conduct or performance. This procedural step is crucial for maintaining transparency and fairness in the disciplinary process.
    • Appeal Rights: Employees have the right to contest their dismissal before the Dispute Resolution Board. This body will review the circumstances surrounding the termination, ensuring that all procedural and substantive requirements have been met. If the board finds the termination unjustified, it may order the reinstatement of the employee, along with compensation for the period of wrongful suspension.
  3. Appeals and Further Recourse:

    • The circular details the appeals process, enabling both employers and employees to challenge the decisions of the Dispute Resolution Board. Such appeals are to be adjudicated by the Labor Dispute Appeals Board, with subsequent rights of challenge in the Administrative Justice Court, thereby ensuring a comprehensive legal remedy for aggrieved parties.
  4. Advisory Nature of Guidelines:

    • It is imperative to understand that Advisory Opinion No. 20, while providing critical insights into the application of Article 27, does not impose mandatory legal obligations on individuals or entities. Instead, it serves as a guiding framework intended to promote just and lawful termination practices across workplaces.

The issuance of Circular No. 242539 and Advisory Opinion No. 20 marks a crucial step towards clarifying and enforcing the provisions of Article 27 of the Labor Law. By outlining clear guidelines for the dismissal of employees and emphasizing the importance of due process and the role of workers' unions, the Ministry of Cooperatives, Labour, and Social Welfare aims to foster a fair, transparent, and balanced employment environment. This initiative not only protects the rights of workers but also guides employers through the legal complexities of employment termination, promoting harmony and understanding in the workplace.