Dismissal by mutual agreement: what it is and how this termination of the company works

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Dismissal by mutual agreement: what it is and how this termination of the company works

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THE labor reform 2017 changed several rules in the relationship between employers and workers. One of the most significant is the regulation of dismissal by mutual agreement. That practice that was already common in the market, but now has specific rules to give more security to those involved.

You may have heard that someone “made a deal to get fired”. But do you know how this agreement worked before the reform? And what were the rules defined for this type of disconnection?

To get you on the subject, in this post we explain everything you need to know about dismissal by mutual agreement. Want to know more? Check it out below!

What is joint dismissal?

dismissal-in-common-agreement-how-it works

The dismissal by mutual agreement happens when the company and the employee decide consensual form terminate the employment contract.

Despite being a practice that has always been common, until 2017 it was carried out without any legal guarantee, since it was not provided for by law. With the labor reform, that changed.

Now, the agreement must follow some specific rules that have been included in the CLT. Otherwise, the negotiation can be considered illegal, generating negative consequences for both the employer and the employee.

Dismissal by mutual agreement before labor reform

Until 2017, CLT foresaw three types of terminations:

  • Resignation: occurs when the employee requests the termination. In this case, he receives full severance payments (vacation, 13th salary and prior notice), but without the right to a fine, a withdrawal from the FGTS and unemployment insurance.
  • Dismissal without cause: occurs at will of the company. In addition to the total severance pay, the employee receives a 40% fine on the total FGTS and the full withdrawal of the benefit. There is no right to unemployment insurance.
  • Dismissal with just cause: it also occurs at the initiative of the company, but without the right to a fine or unemployment insurance. The worker receives only the balance of the last salary and the vacation leave, if any.

However, as stated earlier, it was common for employers and workers to make a termination agreement for a variety of reasons.

The mechanics were simple: the employee asked to be fired and returned the 40% FGTS fine for the company. However, he still had the full withdrawal of the benefit and guaranteed the right to unemployment insurance.

Dismissal by mutual agreement: how it works now

With the labor reform, dismissal by mutual agreement is now recognized by law, together with the resignation request and dismissals with and without just cause.

However, the operation is different. Instead of paying the fine and waiting for the return, the company must follow the new rules established by the government:

  • FGTS fine reduced from 40% to 20%;
  • withdrawal of FGTS reduced from 100% to 80%;
  • employee receives only half of the severance payments;
  • there is no right to unemployment insurance.

>> To get deeper into the subject, check out this other blog post: Types of layoffs: what are they and the differences between them? <

How does the negotiation between the parties take place

As the name implies, dismissal by mutual agreement is only possible when there is consensus between the parts.

The employer cannot in any way coerce the employee to accept that kind of shutdown. If this happens, the worker must seek justice and claim his rights. The company, in turn, is subject to serious penalties for irregular conduct.

Negotiation must be conducted in the presence of neutral witnesses to ensure legal certainty both parties. There must also be a written document – the letter of resignation by mutual agreement – to express the employee’s will, pointing out the reasons for leaving, the values ​​involved and the bases of the negotiation.

You also have to be careful with special cases. Professionals with stability as members of CIPA or women just out of maternity leave, they must receive full monies, even if they are dismissed by mutual agreement.

In cases of suspended employee contracts with the EHIC, termination is not possible. See below for other rights that cannot be reduced during the negotiation.

rights-resignation-common-agreement
Rights that cannot be reduced in negotiation. | Source: Agência Câmara de Notícias.

Benefits of dismissal by mutual agreement

The dismissal by mutual agreement can bring great benefits to the company and to the employee, if it is done within the law and under ideal conditions. Here are the main benefits:

Cost reduction

On the company side, one of the main benefits of dismissal by mutual agreement is the cost reduction in shutdown. With the regulation, it is possible to end the cycle of a dissatisfied professional without paying the full amounts, since the payment of the FGTS fine and severance fees are reduced by half.

Negotiation within the law

With the new rules, both sides are legally protected in dismissal by mutual agreement, without risk of possible fraud.

Before, there was the possibility that the employee did not comply with the agreement and did not return the 40% fine. If that were the case, the company would have no one to turn to, as the practice was not guaranteed by law. Now, the chance of that happening is zero.

Strategic gain

It is very common for employees to want to leave the company, but not to resign so as not to lose the financial benefits of dismissal without cause.

But is it worth keeping a dissatisfied employee on the team? In this situation, the best thing to do is to propose a dismissal by mutual agreement. In this way, the company can replace this employee with another one much more willing to engage in the business purpose.

Freedom for the employee

An employee may wish to leave the company for several reasons: dissatisfaction, to open his own business, to take a sabbatical, among many others.

Whatever the reason, dismissal by mutual agreement can be a way out of this situation. Even with the smallest amounts, the model allows end the cycle with some financial security, guaranteeing the freedom to seek new paths.

Decrease joint dismissal cases

As we saw throughout the post, the regulation of dismissal by mutual agreement was very important to ensure protection for those involved in the practice that had occurred since before the labor reform.

Now that you know how it works, just deepen your knowledge of the law and put it into practice! But you can also circumvent resignations because of dissatisfaction with the company.

Get to know the tool HR Consultant UKy and learn how the system that implements payment on demand works, that is, your employees can advance part of their salaries whenever they want.

This tool is changing the way employees deal with their wages and generating more satisfaction and motivation from the team with the company.

HR Consultant UKy can be one of the most valued benefits for those who work at your company. Talk to an expert and learn more!

Did you like the article? Leave a comment in the post and tell us how your company deals with dismissal by mutual agreement. We are available to answer your questions on the subject.

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