Navigating Employment Termination in Bolivia: A Guide for International Employers

As an international HR professional, understanding Bolivia's employment termination regulations is crucial for compliance and risk management. The country's labor laws establish clear requirements for notice periods, severance payments, and valid dismissal grounds that employers must follow meticulously.

Notice Period Requirements in Bolivian Labor Law

Bolivian legislation mandates specific notice periods based on employment duration. For workers with continuous service exceeding one month, a one-week notice is required. This extends to 15 days after six months of service and 30 days after one year. For employees, the requirement is 30 days' notice when resigning, while employers must provide 90 days' notice after three months of continuous employment.

Failure to comply with these notice periods requires payment equivalent to the wages for the notice duration. This system balances protection for both parties, giving employees transition time while allowing employers adequate recruitment periods. Collective labor disputes may exempt parties from notice requirements when specific legal conditions are met.

Types of Employment Termination in Bolivia

Bolivian law recognizes several termination categories:

Voluntary Resignation: Employee-initiated termination without employer causation
Mutual Agreement: Both parties consent to contract termination
Employer-Initiated Dismissal: Includes justified termination (misconduct, theft, confidentiality breaches) and unjustified termination requiring compensation
Company Liquidation or Employer Death: Triggers compensation obligations transferred to successors
Fixed-Term Contract Expiration: Natural termination without severance, unless early termination occurs
No-Compensation Dismissals: Applies to cases including voluntary resignation, contractual breaches, or probationary periods

Severance Payment Calculations and Obligations

Employers must calculate severance based on the employee's average salary over the preceding three months. The standard compensation rate is one month's salary per year of service, with proportional payments for partial years. Notably, probation periods typically don't count toward service length calculations.

Bolivian law prioritizes employee wage and benefit payments during bankruptcy proceedings, aligning with civil and commercial codes. SailGlobal's case studies show that proper severance calculation prevents approximately 78% of potential labor disputes in Bolivian operations.

Compensation exemptions apply to specific scenarios including workplace safety violations, confidentiality breaches, unauthorized absences exceeding six days, and theft incidents. Service length calculations include probation periods when determining notice requirements and severance eligibility.

Unlawful Dismissal Considerations

Article 16 of Bolivia's Labor Law specifies valid dismissal grounds, including property damage, confidentiality violations, safety negligence, contractual breaches, criminal behavior, and unjustified absences. Employers lacking these grounds face unlawful dismissal claims requiring payment of accumulated wages, vacation pay, and applicable bonuses.

International companies like SailGlobal document termination reasoning thoroughly, as Bolivian courts increasingly scrutinize foreign employers' compliance with local standards.

Termination Process Framework

The standard termination procedure involves:

Establishing valid termination grounds
Providing statutory notice periods
Preparing termination documentation
Settling final payments
Calculating severance obligations
Maintaining compliance records

Unemployment Support Landscape

Unlike many developed economies, Bolivia lacks a national unemployment benefits system. Instead, support mechanisms include:

Severance payments based on service length
Continued healthcare access through social security
Government and NGO training programs for reemployment

Companies expanding into Bolivia should partner with local experts like SailGlobal to navigate these unique labor market conditions effectively while ensuring full regulatory compliance.

Bolivia Employment Termination Guide: Notice Periods, Severance & Labor Laws