Advance notice: what it is, how it works and who is entitled to the benefit

Advance notice is a right guaranteed by Brazilian labor law, regulated by the Consolidation of Labor Laws (CLT) and enhanced by Law No. 12,506/2011. This tool ensures that both employer and employee have time to organize themselves in the face of the termination of an employment contract. Besides its importance in the employment relationship, advance notice has details that are not always widely understood.

Among the available modalities, worked advance notice and compensated advance notice are the most widely used, with specific characteristics for each situation. Furthermore, the introduction of advance notice proportional to length of service brought new rights to workers with longer service.

What is advance notice and what are its purposes?

Advance notice is a mandatory period of notice before the termination of an employment contract. Its main purpose is to allow for an orderly transition, giving the employer the opportunity to seek a replacement and the employee the opportunity to plan their financial situation or find a new job. For both parties, this phase is crucial to avoid unforeseen circumstances.

This practice is regulated by the Consolidation of Labor Laws (CLT), which establishes an initial 30-day period. However, with legislative changes, this period may be extended in specific cases. Failure to comply may result in penalties for the employer or deductions from the employee's severance pay.

Notice Period Types

Worked Notice Period

In the case of worked notice period, the employee continues to perform their duties at the company for a minimum period of 30 days. During this period, they retain all rights, including full salary, benefits, and FGTS (Severance Indemnity Fund) contributions. To facilitate the transition, the employee has the option of reducing their daily workload by two hours or not working for the last seven days of the period.

Notice Period Compensation

When notice period compensation is paid, the employee is exempt from working the period. In this case, they receive financial compensation equivalent to the time they should have worked. This method is generally adopted in cases of immediate termination, ensuring that the employee receives the compensation without having to remain with the company.

Proportional Notice Period

With the enactment of Law No. 12,506/2011, proportional notice periods were established. This benefit is calculated based on the employee's length of service with the company, extending the period beyond the initial 30 days. Three days are added for each full year worked, up to a limit of 60 additional days. This means that notice periods can reach up to 90 days, depending on the employee's seniority with the organization.

For example, an employee with 10 years of service would be entitled to the initial 30 days plus an additional 30 days, totaling 60 days of notice. This calculation aims to benefit those with longer service years, promoting a more equitable transition.

Rights and Duties During the Notice Period

During the period of notice, the employee maintains their rights. Salary, benefits such as health insurance and vouchers, as well as FGTS contributions, remain unchanged. This period also counts as time of service for purposes of calculating vacation and 13th-month salary.

In the case of compensated notice period, in addition to financial compensation for the period, the employer is responsible for paying severance pay within the legal deadline. Failure to comply with these obligations may result in fines and labor lawsuits.

Specific Situations Involving Notice Period

• Dismissal for cause: In this type of termination, the employee is not owed notice. The contract terminates immediately, without the need for notice.

• Resignation by the employee: If the employee decides to leave the company and does not serve the notice period, the employer may deduct the corresponding amount from the severance pay.

• Termination for new employment: If an employee finds new employment during their worked notice period, they can request to be terminated for the remainder of the period without losing their right to severance pay.

• Reduced working hours during the worked notice period: The employee can choose to reduce their workday by two hours or not work during the last seven days of their notice period.

• Employees with tenure: Employees with tenure-track employment, such as pregnant women or members of the Internal Accident Prevention Commission (CIPA), have specific rules that may include a guarantee of compliance with the notice period.

Fundamental Rules on Notice Periods

• The minimum initial period is 30 days, which can be extended depending on the employee's length of service.

• Proportionality is mandatory for companies, but does not apply in cases of dismissal for cause.

• Both employers and employees must comply with these rules to avoid lawsuits or legal sanctions.

Impact of Advance Notice on the Labor Market

Advance notice represents one of the pillars of labor relations in Brazil, balancing the rights of employers and employees. Its implementation ensures a more orderly transition and reduces conflicts, allowing both parties to plan for the future. However, its practical application can raise questions, especially regarding proportional calculation and compliance conditions.

It is essential that the parties involved understand their obligations to avoid legal problems. As a period of preparation, advance notice also promotes stability in the labor market, ensuring that companies can maintain their operations while restructuring their workforce.

Source: Mixvale