Fall 2005-02 Severance pay increased
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 Employment | Fixed Compensation |
| up to 5 years | two months’ salary |
| 5 to 15 years | three months’ salary |
| 15 years or more | six months’ salary |
| Progressive Compensation | |
| Years of Employment | Fixed Compensation |
| up to 5 years | 1 week for each year |
| 5 to 15 years | 2 weeks for each year |
| 15 years or more | 3 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