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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.
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:
Therefore, the so-called “settlement” with severance pay is only applicable when the worker is dismissed without just legal cause.
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:
These amounts make up the Final settlement of ordinary benefits, but do not constitute compensation.
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.
There are a few exceptional cases where an employee may receive additional payment even when the resignation is voluntary:
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.
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.