Termination of employment: global rules employers must follow

Ending an employment relationship in another country carries more legal risk than most employers expect. What counts as fair dismissal in your home market may be unlawful in another, and the consequences of getting it wrong range from reinstatement orders to uncapped compensation claims. If you employ people internationally, understanding local termination rules is not optional.

This guide covers the key areas where termination law differs across jurisdictions, what employers need to get right, and where an Employer of Record can help reduce exposure.

Employment termination in the United States operates on an at-will basis, meaning either party can end the relationship at any time, for any reason that is not explicitly prohibited by law. Most employers are familiar with this model. The problem is that almost no other country works this way.

In the majority of jurisdictions, employment protection is the default. Employers need a valid reason to dismiss someone, and that reason must be documented, proportionate, and in many cases approved in advance. Failure to follow the correct process can result in the dismissal being declared void entirely, regardless of whether the underlying reason was legitimate.

For companies hiring internationally, this creates a practical challenge. You cannot apply your domestic termination framework to employees in other countries and assume it will hold up.

Notice periods are one of the most common areas where employers misstep. In some countries, the statutory minimum is one week. In others, it can exceed six months depending on the employee’s tenure, role, or age.

In Germany, statutory notice periods start at four weeks and increase with length of service, reaching up to seven months for employees with 20 or more years of tenure. In Belgium, notice periods for long-serving employees can extend well beyond a year. In Brazil, every year of service adds three days to the base 30-day notice period.

These are minimums. Employment contracts and collective bargaining agreements can extend them further, and employers are typically bound by whichever is more favourable to the employee.

Getting the notice period wrong does not just delay the process. In many jurisdictions, an incorrect notice period renders the entire dismissal procedurally unfair, giving the employee grounds to challenge it.

Severance pay is another area where assumptions break down. In the US and UK, statutory severance is relatively limited. In other markets, mandatory severance can represent a material cost.

In Mexico, a dismissed employee is entitled to three months’ salary plus 20 days’ salary per year of service. In India, employees with five or more years of continuous service are entitled to 15 days’ wages for each completed year. In Italy, every employee accrues a severance fund (TFR) throughout their employment, paid out on termination regardless of the reason.

Some jurisdictions also require additional payments depending on the circumstances. In Spain, unfair dismissal compensation is currently set at 33 days’ salary per year of service, capped at 24 months. In the UAE, end-of-service gratuity payments are calculated based on the employee’s basic salary and length of service.

The key point is that severance is rarely discretionary in international employment. Employers need to understand their obligations before the termination conversation, not after it.

Most employers understand that they cannot dismiss someone on the basis of race, gender, or disability. But many countries extend protections well beyond these categories.

In France, employees on sick leave are protected from dismissal except in very specific circumstances. In the Netherlands, dismissal requires prior approval from either the UWV (the Dutch employee insurance agency) or a court, depending on the grounds. In South Korea, dismissals for operational reasons must meet a strict four-part test, and the employer must consult with employee representatives at least 50 days before taking action.

Pregnancy and maternity protections are near-universal but vary in scope. In some jurisdictions, protection extends well beyond the formal maternity leave period. In Germany, dismissal of pregnant employees is prohibited from the start of pregnancy through to four months after childbirth, and exceptions are extremely rare.

The practical implication is that employers must understand the specific protections that apply in each jurisdiction before initiating any termination process. Getting advice after the fact is too late if a protected category has been triggered.

Even where the reason for dismissal is valid, the process used to carry it out must meet local standards. Many employers underestimate how prescriptive these requirements can be.

In the UK, a fair dismissal requires that the employer follow a reasonable process, including investigation, a formal meeting, and the right to appeal. In France, the procedure involves a formal preliminary interview, a mandatory waiting period, and a written letter setting out the precise grounds for dismissal. In Australia, employers must provide a valid reason, give the employee an opportunity to respond, allow a support person at any meeting, and genuinely consider the employee’s response before making a decision.

In countries with works councils or employee representative bodies, there are additional consultation requirements. In Germany, the works council (Betriebsrat) must be informed and consulted before any dismissal, and failure to do so makes the termination invalid.

The consequence of procedural errors is often the same as having no valid reason at all. Courts in many jurisdictions will order reinstatement or award compensation for unfair dismissal if the employer did not follow the correct steps, even when the underlying reason was sound.

Employers sometimes assume that fixed-term contracts sidestep termination complexity because they end on a defined date. This is only partially true.

Many jurisdictions restrict the use of fixed-term contracts, the number of renewals allowed, or the total duration. In Germany, a fixed-term contract without objective justification can only last two years with a maximum of three renewals. Exceeding these limits converts the contract to permanent employment automatically.

Early termination of a fixed-term contract before the end date is often more difficult than terminating a permanent employee. In many jurisdictions, the employer must pay out the remaining term unless there is gross misconduct.

If you rely on fixed-term contracts internationally, you need to understand both the rules around their use and the rules around ending them early.

Redundancies affecting multiple employees trigger collective dismissal obligations in most jurisdictions. The thresholds, consultation periods, and notification requirements vary.

In the EU, the Collective Redundancies Directive requires employers to consult employee representatives and notify the relevant authority when dismissing a certain number of employees within a defined period. Individual member states implement this differently, with some imposing stricter requirements.

In France, collective redundancies involving 10 or more employees within 30 days require a plan de sauvegarde de l’emploi (PSE), which includes redeployment measures, retraining, and support for affected employees. The process can take several months.

Employers planning headcount reductions across multiple countries should assess each jurisdiction separately and build timelines that account for the longest consultation period, not the shortest.