What is the standard Employee Offboarding Process with Horizons?

Termination cases

Mutual Termination

In many situations, a Mutual Termination Agreement (MTA) is the preferred method for ending employment due to its flexibility and robust protection against potential legal disputes. In countries where termination is only allowed for specific, strict reasons (as opposed to “at-will” employment or termination “for any reason”), and the case does not meet any of these criteria, negotiating a mutual termination becomes the only viable option.

In certain countries with strict labor laws, particularly in Europe, the concept of “mutual agreement” is heavily regulated and must be approved by local authorities. This means that the employer cannot simply reach an agreement with the employee; instead, a process established by local law must be followed for the termination agreement to be valid.

When entering into an MTA, both the client and the employee agree on a compensation settlement for the loss of employment. An MTA is typically utilized in the following scenarios:

• Both the employer and the employee mutually agree that it is in their best interest to part ways. There is no legally valid reason to proceed with unilateral termination.
• Unilateral termination is possible, but an MTA is preferred to ensure protection against potential claims.

Below are the tasks involved in signing an MTA. Please note that the entire process is usually completed within 4/6 weeks: 

Dismissal

In some cases, MTA might not be the best way to terminate an employee, or the local labour law allows to unilaterally dismiss the employee without incurring in potential legal disputes.

Note: In most countries, the EOR setup makes it difficult to go with a dismissal. Instead, when a client intends to terminate an employee, it is advised to opt for the mutual agreement option even if the decision is originally unilateral.

Below are the tasks involved in the dismissal process:

Resignation

When an employee voluntarily decides to resign, they must submit an official resignation notice addressed to Horizons. Any resignation notice sent to the client holds no legal value. A resignation process is initiated in the following scenarios: 

• The employee decides to leave their position.
• The client needs to transfer the employee to their own entity.
• The client decides to move the employee to a different provider or setup. Below are the tasks involved in the resignation process:

Litigation

Despite efforts to ensure a smooth termination process while maintaining compliance, employees retain the right to file claims for unfair dismissal or related grievances. In some jurisdictions, it is also a common practice to file such claims. 

When an employee initiates a claim, Horizons is responsible for defending the case. There are two proceeding: 

1. The client may choose a lawyer of their preference to handle the case, and Horizons, as the legal Employer of Record (EOR), will coordinate with the selected law firm. 
2. Horizons can recommend a local law firm from our network and provide an estimate fee for their services. The client then needs to approve the cost and we will then be able to coordinate the case. 

Important: All costs associated with any legal dispute (including legal fees, additional payments to the employee, administrative expenses, etc.) will be passed on to the client, who will be responsible for covering these expenses.