How to take disciplinary actions against erring employees
It is not mandatory to notify the Ministry of Labour when imposing disciplinary penalties
Question
A questioner asks:
I am a company owner and would like to know what penalties I am entitled to impose on employees under the labor law. Is it necessary to notify the Ministry of Labor when applying a penalty? Is it possible to terminate an employee’s service without prior warning? Please advise.
Answer
It is not mandatory to notify the Ministry of Labour when imposing disciplinary penalties. These matters fall under the internal policies of each company. However, employers are required to maintain a schedule of penalties that clearly outlines the disciplinary measures as stated in Article 39 of the Decree-Law.
Permissible Penalties Under Article 39 of the Labor Law:
a. Written caution
b. Written warning
c. Deduction from wages, not exceeding five (5) days per month
d. Suspension from work for up to fourteen (14) days without pay
e. Deprivation of periodic raise for up to one (1) year (if applicable under the company’s system)
f. Denial of promotion for up to two (2) years (if applicable under the company’s system)
g. Dismissal from service, with the employee retaining the right to end-of-service gratuity
Termination without notice
Under Article 44 of the Labor Law, an employer may terminate an employee without prior notice only in specific circumstances, and only after conducting a written investigation. The dismissal decision must be documented in writing, include the reasons for termination, and be delivered to the employee in person or through an authorized representative.
Examples of valid reasons include:
Being under the influence of alcohol during working hours
Disclosure of confidential company information
Working for another establishment without permission
For any reasons outside those specified in Article 44, dismissal without notice is not permissible. If either party fails to comply with the notice period requirements, the other party is entitled to compensation equivalent to the wage for the entire notice period or the remaining portion thereof.
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