When resigning voluntarily in Guatemala, severance pay (indemnización/liquidación) is calculated based on the number of years worked. Here's a general breakdown: * **For the first year of employment:** You are entitled to one month's salary. * **For subsequent years worked:** You are entitled to 15 days' salary for each year of service. **Important Considerations:** * **Definition of Salary:** "Salary" typically refers to your gross monthly income, including any regular bonuses or commissions that are part of your compensation. * **Pro-rated for partial years:** If you have worked for a partial year after completing the first full year, you will receive a pro-rated amount for that partial year. * **Legal Rights:** This is a general guideline. It's always advisable to consult with a labor lawyer in Guatemala or review your employment contract and the Guatemalan Labor Code (Código de Trabajo) for precise details applicable to your specific situation, as there can be nuances and specific legal interpretations. * **Advance Notice:** While not directly part of severance pay calculation, Guatemalan labor law often requires advance notice of resignation. Failure to provide proper notice could potentially affect other aspects of your final settlement.

What is labor termination?

In Guatemala, the term “liquidation” is commonly used to refer to the payment a worker receives upon termination of their employment relationship. However, from a legal standpoint, this concept is often confused with workman's compensation, which only applies when the worker is dismissed without just cause.

The indemnification it is financial compensation that the employer must pay only when the dismissal is unjustified. If the worker voluntarily resigns, you are not entitled to compensation, as the termination of the contract occurs by your own decision and not due to the employer's responsibility.

Legal basis

The right to compensation and the conditions for termination of the employment contract are regulated in the Labor Code of Guatemala (Decree 1441), mainly in the following articles:

• Article 82: recognizes compensation when the dismissal is unjustified.
• Article 79: establishes that the employee can resign voluntarily with prior notice.
• Article 85: provides that when the worker resigns, He is not entitled to compensation., because the termination is by your own will.

Therefore, the so-called “settlement” with severance pay is only applicable when the worker is dismissed without just legal cause.

What must be paid upon resignation?

Even if there is no right to compensation, the worker must still receive proportional payments for all benefits earned during their time of employment. These include:

• Outstanding wages.
• Untaken vacation.
• Proportional Christmas bonus.
• 14% proportional bonus.
• Overtime or other pending benefits.

These amounts make up the Final settlement of ordinary benefits, but do not constitute compensation.

Why is there no compensation for resignation?

The purpose of compensation is to compensate the worker when they lose their job by the employer's decision without a valid cause. On the other hand, when the worker voluntarily resigns, the relationship ends by their own will, so there is no harm to be compensated.

The Labor Code it is clear in stating that compensation is only applicable when the termination of the contract is due to a unjustified dismissal, and not when the completion comes from the worker.

Exceptions and special cases

There are a few exceptional cases where an employee may receive additional payment even when the resignation is voluntary:

1. Internal policies or collective bargaining agreements some companies or institutions recognize a “universal indemnity” that they grant to all their workers upon retirement, even if there is no legal obligation.
2. Voluntary agreement between the parties: The employer may voluntarily grant financial compensation as recognition or incentive.
3. Termination for good cause: If the employee is forced to resign due to serious breaches by the employer (non-payment, harassment, changes in conditions, etc.), they can claim recognition as constructive dismissal and demand compensation in accordance with Article 79, letter f) of the Labor Code.

How is severance pay calculated in case of unfair dismissal?

In case of wrongful termination, the compensation is equivalent to one month's ordinary salary for each year worked or fraction thereof exceeding six months, according to Article 82 of the Labor Code.

This calculation This does not apply when the employee resigns voluntarily, unless there is an agreement or internal policy to the contrary.

Conclusion

When a worker voluntarily resigns in Guatemala, He is not entitled to compensation., because the law reserves it solely for cases of unjustified dismissal.

However, the employer must pay all outstanding benefits such as proportional vacation pay, Christmas bonus, and bonus 14. In some cases, companies may grant additional compensation at their own discretion, but this does not constitute a legal obligation.

En Conservis Lawyers We provide specialized consulting in Labor law and employer compliance, helping both workers and employers correctly calculate benefits, prepare retirement documents, and ensure compliance with Guatemalan labor law.