How to Handle Global Employee Terminations: Legal Requirements by Country

Terminating an international employee is not like terminating a US employee. At-will employment is a US exception — most of the world has employment protection laws that require just cause, mandatory process, and statutory severance. Getting it wrong creates immediate legal liability.

This guide covers the termination process in the four most common US offshore markets: India, the Philippines, Poland, and Colombia.

The Golden Rule: Process First

In virtually every country outside the US, the termination process is as important as the reason for termination. Even a legitimate performance-based termination can be unlawful if the process was not followed. The process typically requires: documented performance issues or cause, opportunity for the employee to respond, written notice, and waiting periods.

Termination in India

Grounds for termination

• Misconduct: theft, fraud, insubordination, sexual harassment, willful damage — requires domestic inquiry
• Performance: documented failure to meet reasonable performance standards after a formal Performance Improvement Plan (PIP)
• Role elimination / retrenchment: genuine business reason (not pretextual); requires 1 month notice or pay in lieu
• Mutual separation: both parties agree to end the employment — simplest and most risk-free approach

Required process for performance termination

• Document performance issues with specific examples and dates
• Issue formal written warning letter
• Implement 30–60 day Performance Improvement Plan (PIP) with measurable targets
• If targets not met: issue termination letter with reason and effective date
• Serve or buy out notice period
• Process full and final settlement (F&F): salary, leave encashment, gratuity, form 16

Statutory payments on termination

• Salary for all days worked including notice period
• Leave encashment: earned leave balance paid out at current daily rate
• Gratuity: if 5+ years continuous service
• EPF settlement: Form 10C/10D for PF withdrawal or transfer
• Form 16 for the current financial year

Termination in the Philippines

Security of tenure principle

Philippine law strongly protects employees from arbitrary dismissal. Termination requires either Just Cause or Authorized Cause — the two legally recognized grounds.

Just Cause (employee fault)

• Serious misconduct or willful disobedience
• Gross and habitual neglect of duty
• Fraud or willful breach of trust
• Commission of a crime against the employer

Authorized Cause (business reason)

• Installation of labor-saving devices
• Redundancy (role elimination)
• Retrenchment to prevent business losses
• Closure of establishment

Separation pay

For authorized cause terminations: at least 1 month salary per year of service. For redundancy specifically: at least 1 month salary per year of service. Non-compliance with termination process triggers reinstatement or full backwages as remedy.

Termination in Poland

Notice periods by tenure

• Less than 6 months employment: 2 weeks notice
• 6 months to 3 years: 1 month notice
• 3+ years: 3 months notice

Notice must be in writing

Polish labor law requires termination notice to be in writing, signed, and delivered to the employee. The notice must state the reason for termination (for indefinite-term contracts). Failure to state the reason is grounds for wrongful dismissal claim.

Severance for economic redundancy

If termination is due to employer's reasons (redundancy), severance is mandatory: 1 month salary (under 2 years service), 2 months (2–8 years), 3 months (8+ years). Maximum severance capped at 15x minimum wage.

Termination in Colombia

Just cause vs without cause

Colombia allows termination without just cause but requires payment of indemnification. Just cause termination (disciplinary grounds following proper process) does not require indemnification beyond wages owed.

Indemnification for termination without just cause

• Fixed-term contract: remainder of contract salary
• Indefinite contract (under 1 year): 30 days salary
• Indefinite contract (1–5 years): 20 additional days per year after year 1
• Indefinite contract (5–10 years): 15 additional days per year after year 5
• Indefinite contract (10+ years): 20 additional days per year after year 10

EOR-Managed Terminations

When your employee is on EOR payroll, the EOR manages the termination process. Your role: notify the EOR of the termination decision and reason, provide documentation (PIP, warning letters, business case for redundancy). The EOR handles: local process compliance, notice period management, F&F calculation and payment, and government reporting.

The EOR's management of termination is one of the most valuable features of the model — it converts a complex local legal process into a managed workflow.