Dismissal by Agreement: How does it work?


Have you ever heard of dismissal by agreement?

This type of dismissal happens when the employee and the company decide together to end the employment contract. Before the Labor Reform signed in 2017, this type of dismissal happened illegally in organizations, as there were no regulations. With the new rules brought about by the reform, dismissal by common agreement underwent a series of changes and became part of the Consolidation of Labor Laws, but in a different way than what used to happen.

Now, this type of dismissal must be carried out in accordance with the rules established in the Labor Reform and can only happen if it is within the new norms. However, it can be said that the created measure made the practices of dismissal by agreement a lot more flexible, which, despite the lack of legal guarantees, were already common in the labor market.

With the changes brought about by the Labor Reform, the practice of dismissal by agreement also underwent changes and generated many doubts both for business owners and managers and for the employees of organizations. As this type of dismissal is an important subject of labor law, those responsible for the Human Resources department need to be aware of the new legislation, to avoid legal problems.

With a view to clarifying questions regarding changes in the law and avoiding doubts about the dismissal process by agreement, the mywork gathered in this article the main information about this type of dismissal. Read more or check out the video!

What is resignation by agreement?

Dismissal by mutual agreement, which is also known as consensual dismissal, is the agreement between the employer and the employee to terminate the employee, so that the process is done in a more autonomous and flexible way. In other words, it is the dismissal that happens when the company and the employee jointly decide to terminate the employment contract. It was always common practice in Brazilian companies until 2017 for employees to have access to their FGTS. With the approval of the Labor Reform, there are a series of rules that must be followed for this type of dismissal to be validated.

What changed with the Labor Reform?

Before the regulations brought about by the Labor Reform, the most common terminations of employment contracts took place either from the employee’s resignation, or from the dismissal made on the company’s initiative, with or without just cause. Basically, then, the CLT provided for 3 types of dismissal:

  • Dismissal by request: one that occurs on the initiative of the employee, who no longer wishes to maintain employment ties with that company and requests the dismissal. In this case, the employee receives the severance pay in full (such as 13th salary, early warning and vacation), but you no longer have the right to withdraw the FGTS benefit, the 40% fine and the unemployment insurance.
  • Dismissal without just cause: takes place on the initiative of the company, and gives the employee the full right to severance pay and also to 40% fine on the total FGTS amount and withdrawal of the full amount of the benefit. If the professional has worked at the company for 12 months, he may also receive unemployment insurance.
  • Dismissal for just cause: It also happens at the initiative of the company, but the employee loses the right to a series of severance pay, being entitled only to benefits acquired during the period worked, such as the balance of the last month of salary and overdue vacation (if applicable). In this case, the professional loses the right to FGTS, fine and unemployment insurance.

In addition to the layoffs provided for by the CLT, dismissal by agreement was also common in companies, despite not being provided for by law at the time. In this case, the negotiation used to work as follows: the employee asked to be fired and could count on all the severance benefits, such as full withdrawal of the FGTS and unemployment insurance and, in exchange, returned the 40% FGTS fine for the company.

All forms of dismissal previously presented still exist and continue to be used in companies. What has changed is the legal text that regulates dismissal by agreement. Now, dismissal by agreement must take place based on some norms that were added to the Consolidation of Labor Laws so that the negotiation between the employee and the company is not considered illegal and generates problems in the Labor Court.

In practice, therefore, when the employee and the company wish to sign a resignation agreement, they must follow the new rules and the termination values ​​are:

  • Half of the FGTS fine (from 40% to 20%)
  • Withdrawal of up to 80% of the FGTS value;
  • Half the value of early warning;
  • Accrued and proportional vacations + ⅓.
  • 13th salary proportional to the period worked;
  • salary balance

However, the employee who signs the resignation agreement is not entitled to unemployment insurance.

In addition to the amounts signed, the Labor Reform determined, in paragraph 6 of article 477 of the CLT, that the severance pay must be paid by the company within 10 calendar days after the contractual termination (excluding the first day and including the due date). .

Advantages of dismissal by agreement

Because it is a type of dismissal that allows greater flexibility throughout the process, dismissal by agreement brings advantages for both the employer and the employee.

Advantages for the employer:

  • Cost reduction: when carrying out a common dismissal without just cause, the company would have to bear a series of costs, since in addition to the 40% fine on the total FGTS amount, other benefits are owed to the dismissed employee. This does not happen in dismissal by agreement, as the FGTS fine is reduced to 20%.
  • Flexibility: Another great advantage that consensual dismissal brings to the employer is the possibility of negotiating the dismissal directly with the employee within the law, which eliminates the risk of fraud and other problems in court, as the company now has legal support in the agreement. Prior to the regulation, the agreement for the return of the 40% fine on the FGTS was made verbally, which gave room for the dismissed employee not to comply with his part of the agreement and to keep the amount for himself, which would represent a harm to the employer. Now, with clear regulation, this process is safer.
  • Strategic decision making: There are cases in which an employee wants to leave the company, but does not because he wants to redeem the FGTS amount, which ends up generating, consequently, a drop in employee satisfaction and productivity. To avoid such situations, entering into an agreement as a dissatisfied employee is more strategic and advantageous for both parties, as the company can replace the dissatisfied employee without major termination losses and the employee, on the other hand, receives part of the FGTS and other related amounts. to shutdown.

Benefits for the employee:

  • Negotiation: An employee who wants to leave the company does not always want to do so without having the right to withdraw from the FGTS account. The reasons why an employee wants to leave a company are many, such as, for example, the desire to open their own business, job offers at other companies, taking a sabbatical year, dedicating themselves to personal projects, etc., and waiting for a dismissal without just cause in order to be able to count on severance pay is not always the best option. With the possibility of negotiating the dismissal, it is possible to leave the company with financial security, since the new law allows the withdrawal of part of the FGTS, and all signed agreements have legal support and legal protection to avoid problems.

How does trading work?

Dismissal by agreement only works if both parties are in agreement with the terms of the dismissal, that is, if both the company and the employee agree with the proposals for terminating the employment contract. As part of the measures instituted by the law financially favor the employer, there are those who claim that the employee may feel coerced into accepting this dismissal instead of dismissal without just cause, which would guarantee more severance pay for the employee.

However, the employer cannot coerce, oblige or intimidate the employee to agree to this type of dismissal if it is not appropriate, mainly because the employer holds most of the power in a labor relationship and cannot abuse it. If this happens, the worker can resort to the Labor Court to claim his rights and denounce the employer, who will be subject to punishment for the attempt at coercion, as employees have legal protection.

Despite this, it is also important that the company takes measures to ensure the integrity of the dismissal agreement process and protect itself from bad faith actions committed by workers, such as, for example, an irregular report of coercion. For this, it is important that the entire negotiation process be carried out in the presence of impartial witnesses in the dismissal process, avoiding, however, that such witnesses are direct superiors of the terminated employee or who have positions of trust.

It is also important that there is a written document that demonstrates the professional’s desire to leave the company, such as a resignation letter by mutual agreement, for example. This letter must contain the reasons why the employee will leave the company, the negotiation bases and the severance amounts involved. The letter can be prepared with the help of the Human Resources department.

Furthermore, it is important for the company to be aware of special cases when opting for dismissal by mutual agreement. In the cases of professionals with stability, such as women who have just left maternity leaveit is mandatory that the compensation received upon dismissal be paid in full, even if the option is for dismissal by agreement.

How to make the correct payment of severance pay?

It is important for companies to closely monitor all amounts paid to employees over time. In the case of severance pay, it is important that the company has a history of the remuneration of its employees and of all amounts that may affect payments, such as overtime, allowances, discounts for delays, commissions, etc. To this end, it is important for the company to use adequate management systems to avoid fraud and miscalculations, for example.

To avoid problems related to the payment of overtime and discounts for delays and unjustified absences, for example, you can rely on mywork’s online time and attendance system. to test the check Point mywork online for free for 15 days, you can click on here.

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