Fall 2005-02 Severance pay increased

newsletter header


Number 61
Fall 2005

Severance pay increased

Law No. 128 was enacted on October 7, 2005, to amend "Law 80"-the Wrongful Termination Act. Law No. 128 substantially increases the amount of compensation for employees that are discharged from his or her employment without just cause.
Increased compensation

The new incremental changes are the following:

Salary Increments
Years of EmploymentFixed Compensation
up to 5 yearstwo months' salary
5 to 15 yearsthree months' salary
15 years or moresix months' salary
Progressive Compensation
Years of EmploymentFixed Compensation
up to 5 years1 week for each year
5 to 15 years2 weeks for each year
15 years or more3 weeks for each year

The employee's highest salary during the three years prior to his or her discharge will be taken into account to calculate the above compensations.

Pre-trial

Law No. 128 also states that the judge must hold a pre-trial conference in wrongful termination claims, not later than 20 days after the complaint is answered. The judge must determine at the end of this conference if there are sufficient reasons, beyond the circumstances of conflicting allegations, to believe that the discharge was without just cause. If this is the case, the judge must order the employer to deposit with the clerk of the court-or post a bond-within ten days, an amount equivalent to the total compensation to which the employee may be entitled. The employer must also deposit or bond a sum to cover the employee's attorney's fees, which may not be less than 15% of the total compensation, or $100.00, whichever sum is higher.


© 2005 Goldman Antonetti