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Labor laws: what are the differences between dismissal and layoff?

Leis trabalhistas: quais as diferenças entre demissão e dispensa?

Many people believe that dismissal and layoff are the same thing. However, while they may seem to have the same meaning, according to labor law, they are quite different situations.

The goal of this post, therefore, is to help you better understand the differences and consequences of these two cases. Stay tuned!

Dismissal vs. Layoff

Simply put, dismissal occurs at the employee's request. In other words, the employee requests the employer to terminate their employment contract.

In the case of dismissal, the opposite occurs. Here, it is the employer who terminates the employment contract, whether for just cause or without cause.

The legal differences between dismissal and layoff

Now that we have seen what each expression represents, it is important to also analyze what the main differences in relation to workers' rights.

Severance pay

If a resignation is requested, the employee will be entitled to receive only the remaining salary, accrued and proportional vacation pay with a 1/3 increase and the proportional thirteenth salary.

In the case of dismissal without just cause, the worker will be entitled to receive the remaining salary, accrued and proportional vacation plus 1/3, thirteenth salary, a fine of 40% and withdrawal of the FGTS — as well as unemployment insurance.

If the dismissal is for just cause, according to the Article 482 of the CLT, the employee will only receive the balance of salary, vacations acquired and not taken and the thirteenth salary.

FGTS

According to labor laws, the employee may withdraw the FGTS if you are dismissed without just cause.

When a resignation is requested, that is, when the employee requests the termination of the contract, he/she will not be able to benefit from the FGTS.

Unemployment insurance

The Federal Constitution expressly provides in its article 7 that “These are rights of urban and rural workers, in addition to others that aim to improve their social condition (…) II – Unemployment insurance, in the case of involuntary unemployment”.

That is, this benefit, in the same way as the FGTS, it will also only be possible in cases where the employer dismisses without just cause.

Prior notice

Prior notice, as the name suggests, is a communication that must be made by the employee to the employer, or vice versa, informing the termination of the contract.

In this case, a few situations may arise. Let's take a look:

Dismissal for just cause

In the case of dismissal for just cause, no prior notice to the employee is required. In this case, the notice period is not compensated or worked.

Dismissal without just cause

In this case, the employer must notify the employee of the termination of the contract at least 30 days in advance.

The notice period can be worked, in which case the employee can choose to leave two hours early or not work for 7 days at the end of the period.

If the worker doesn't work, he or she will be compensated. This occurs when the company doesn't allow the worker to work during those 30 days—but the employee's salary for that period must still be paid.

Resignation

When an employee resigns, the notice period may be worked or compensated.

If the employee works, they will normally receive the amounts due. However, if they receive compensation, it means the employee failed to serve their notice period, and in this case, the employer may demand a fine equivalent to one month's salary.

The importance of labor laws

As seen, termination of employment is a matter that involves a series of rules that aim, primarily, to protect the employee.

Therefore, it is very important that the employer, even with the support of an accountant, is very familiar with labor laws, always acting correctly, avoiding harm to the employee and penalties to the company.

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