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Ending employment in Brazil: dismissal, just cause, mutual agreement, severance pay and job protection

Last verified: 2026-10-27 · Status: Stable

An employer may dismiss without cause at any time, but owes notice of 30 days plus 3 days per year of service (up to 90), the 40 percent FGTS fine, proportional 13th salary and vacation, all paid within 10 days or with a penalty of one month's salary. Just cause is limited to the misconduct listed in CLT art. 482, a mutual agreement halves the notice and the FGTS fine, and mass dismissals need prior union participation though not union approval. Pregnant employees, accident returners, union and CIPA representatives and some others are protected from dismissal, and from 2027 fathers on paternity leave too.

USD figures use the Banco Central do Brasil PTAX selling rate of R$5.5007 per US dollar for 26 October 2026, the last business day before verification. The real moved sharply that day (R$5.0377 on 23 October), so conversions are for orientation only.

Key facts

Minimum notice period	30 daysLei nº 12.506/2011 art. 1, as of 2026-10-27 · in force
Maximum notice period	90 daysLei nº 12.506/2011 sole paragraph, as of 2026-10-27 · in force
Extra notice days per year of service	3 daysLei nº 12.506/2011 sole paragraph, as of 2026-10-27 · in force
FGTS fine on dismissal without cause	40 %Lei nº 8.036 art. 18 § 1, as of 2026-10-27 · in force
FGTS fine on termination by mutual agreement	20 %CLT art. 484-A, I, as of 2026-10-27 · in force
FGTS share the employee may withdraw after a mutual agreement	80 %CLT art. 484-A § 1, as of 2026-10-27 · in force
Deadline to pay termination amounts	10 daysCLT art. 477 § 6, as of 2026-10-27 · in force
Penalty to the employee for late termination payment	1 monthly salary CLT art. 477 § 8, as of 2026-10-27 · in force
Dismissal without cause allowed	Yes, with notice and FGTS fine CLT art. 477; Lei nº 8.036 art. 18, as of 2026-10-27 · in force
Union role in mass dismissals	Prior intervention required, no authorization needed STF Tema 638; CLT art. 477-A, as of 2026-10-27 · in force

The rule

1. For an indefinite contract, the party ending it without just cause must give notice of at least 30 days to employees with up to 1 year in the company, plus 3 days per full year of service, up to 60 extra days, for a total of up to 90 days. If the employer gives no notice it pays salary for the notice period, which still counts as service time; if the employee gives no notice the employer may deduct the corresponding salary. During notice given by the employer the workday is reduced by 2 hours without pay loss, or the employee may stop work for 7 consecutive days instead.
Cost to do it: Salary for 30 to 90 days if notice is paid in lieu.
Example: Salary R$8,000.00, 4 full years of service: 30 + 12 = 42 days, paid in lieu R$11,200.00. / About US$2,036.10.Lei nº 12.506 of 11 October 2011; CLT arts. 487 and 488, Lei nº 12.506 art. 1 and sole paragraph; CLT art. 487 §§ 1, 2 and 5; art. 488 and sole paragraph, 2011-10-11 official text · verified 2026-10-27

2. Just cause for dismissal by the employer is limited to the listed grounds: dishonesty; misconduct; habitual competing business without permission; final criminal conviction without suspension; negligence; habitual or on duty drunkenness; disclosure of company secrets; indiscipline or insubordination; job abandonment; offenses or assault at work; habitual gambling; and loss, through intentional conduct, of a license required for the job.
Cost to do it: On just cause the employer owes only salary balance and vacation already earned with one third; no notice, no FGTS fine, no proportional 13th salary.CLT art. 482; item m inserted by Lei nº 13.467 of 13 July 2017, CLT art. 482, a to m, 2017-07-13 official text · verified 2026-10-27

3. The employee may treat the contract as ended by the employer's fault (indirect termination) and claim the full dismissal indemnities if the employer demands excessive or illegal work, treats the employee harshly, exposes the employee to serious danger, fails its contractual obligations, offends the employee's honor, assaults the employee, or cuts piece work so as to reduce pay substantially. If both parties are at fault, the court halves the indemnity.
Cost to do it: Same as dismissal without cause (notice, 40 percent FGTS fine, proportional amounts); halved for mutual fault.CLT arts. 483 and 484, CLT art. 483, a to g and §§ 1 to 3; art. 484, 1943-05-01 official text · verified 2026-10-27

4. On termination the employer must record it in the work card, notify the authorities and pay the termination amounts, itemized, within 10 days of the end of the contract, in cash, bank deposit or certified check. Offsets against the termination payment may not exceed one month's pay. Late payment triggers an administrative fine of 160 BTN per worker and a payment to the employee equal to one month's salary. Since 2017 no union or ministry ratification of the termination is required, and the work card entry allows the employee to claim unemployment insurance and withdraw FGTS.
Cost to do it: One month's salary to the employee if paid late, plus the administrative fine.
Example: Salary R$8,000.00: paying termination amounts on day 12 costs an extra R$8,000.00 to the employee. / About US$1,454.36.CLT art. 477 as worded by Lei nº 13.467 of 13 July 2017 and Lei nº 7.855 of 24 October 1989, CLT art. 477 caput and §§ 2, 4, 5, 6, 8 and 10, 2017-07-13 official text · verified 2026-10-27 · changed: Lei nº 13.467 of 13 July 2017 removed mandatory union or ministry ratification of terminations and set a single 10 day payment deadline.

5. On dismissal without just cause the employer deposits a fine of 40 percent of all FGTS deposits made during the contract, corrected with interest (20 percent for mutual fault or force majeure recognized by the Labor Court), plus the deposits for the termination month and the prior month.
Cost to do it: 40 percent of corrected FGTS deposits.
Example: Corrected deposits of R$43,000.00: fine R$17,200.00. / About US$3,126.87.Lei nº 8.036 of 11 May 1990, art. 18 as worded by Lei nº 9.491 of 1997, Art. 18 caput and §§ 1 to 3, 1990-05-11 official text · verified 2026-10-27

6. The employee receives the 13th salary proportional to months worked (fractions of 15 days or more count as a month), calculated on the pay of the termination month, and accrued vacation plus proportional vacation at 1/12 per month, each with the one third bonus. These are owed on dismissal without cause; on just cause only vacation already earned is owed.
Cost to do it: Proportional 13th salary and vacation plus one third, accrued monthly.Lei nº 4.090 of 13 July 1962, arts. 1 and 3; CLT arts. 146 and 147, Lei nº 4.090 arts. 1 §§ 1 and 2 and 3; CLT arts. 146 and 147, 1962-07-13 official text · verified 2026-10-27

7. Employer and employee may end the contract by mutual agreement. The employer then pays half of the notice (if paid in lieu) and half of the FGTS fine, that is 20 percent, and all other amounts in full. The employee may withdraw up to 80 percent of the FGTS balance but is not entitled to unemployment insurance.
Cost to do it: Half of notice and a 20 percent FGTS fine instead of 40 percent.
Example: Same employee: notice R$5,600.00 instead of R$11,200.00; FGTS fine R$8,600.00 instead of R$17,200.00. / Savings of about US$2,581.49 against a dismissal without cause.CLT art. 484-A inserted by Lei nº 13.467 of 13 July 2017, CLT art. 484-A, I and II, §§ 1 and 2, 2017-07-13 official text · verified 2026-10-27

8. Individual, plural and collective dismissals are treated alike, with no need for prior union authorization or a collective agreement. However, the Federal Supreme Court held that prior union intervention is an essential procedural requirement for mass dismissals, which is not the same as union authorization or the signing of a collective agreement.
Cost to do it: Time and advisory cost of a documented consultation with the union before a mass layoff.CLT art. 477-A inserted by Lei nº 13.467 of 13 July 2017; Supremo Tribunal Federal, RE 999.435 (Tema 638), judged 8 June 2022, final 23 June 2023, CLT art. 477-A; Tema 638 thesis, 2022-06-08 official text · verified 2026-10-27

9. A voluntary dismissal plan (PDV) set in a collective convention or agreement gives a full and irrevocable release of employment rights, unless the parties agree otherwise. Employer and employee may also sign, before the union, an annual release term for the obligations it lists.
Cost to do it: Plan incentives agreed with the union; release limited to what the instrument states.CLT arts. 477-B and 507-B inserted by Lei nº 13.467 of 13 July 2017, CLT arts. 477-B and 507-B, 2017-07-13 official text · verified 2026-10-27

10. Some employees cannot be dismissed without cause: a pregnant employee from confirmation of pregnancy, even during notice, under the constitutional stability (also adoptive parents with provisional guardianship); employee members of the CIPA accident and harassment committee, except for disciplinary, technical, economic or financial reasons proved by the employer; union candidates and officers, including alternates, from registration of candidacy until 1 year after the term, except serious misconduct; members of the employee representation committee from candidacy until 1 year after the term; workers returning from accident leave, for 12 months; and a worker with a disability under the quota, who may be dismissed only after a similar replacement is hired.
Cost to do it: Dismissing a protected employee exposes the employer to reinstatement or pay for the whole protected period.CLT arts. 391-A, 165, 510-D § 3 and 543 § 3; Constituição Federal art. 8, VIII; Lei nº 8.213 of 24 July 1991 arts. 93 § 1 and 118, CLT arts. 391-A, 165, 510-D § 3, 543 § 3; CF art. 8, VIII; Lei nº 8.213 arts. 93 § 1 and 118, 1988-10-05 official text · verified 2026-10-27

11. From 1 January 2027 a father on paternity leave is protected from arbitrary or unjust dismissal from the start of the leave until one month after it ends. If the employer ends the contract after the employee's notice and before the leave in a way that prevents it, the employer owes double the leave period as compensation.
Cost to do it: Double the salary for the leave period if a termination prevents the leave.Lei nº 15.371 of 31 March 2026 (in force 1 January 2027), Arts. 4 and 14, 2026-03-31 official text · verified 2026-10-27 · changed: New job protection for fathers created by Lei nº 15.371 of 31 March 2026, in force 1 January 2027.

Item	Dismissal without cause (R$)	Mutual agreement (R$)	Dismissal without cause (US$)
Salary balance, 15 days	4,000.00	4,000.00	727.18
Notice paid in lieu, 42 days	11,200.00	5,600.00	2,036.10
Proportional 13th salary, 11/12	7,333.33	7,333.33	1,333.16
Proportional vacation, 5/12	3,333.33	3,333.33	605.98
One third on vacation	1,111.11	1,111.11	201.99
Paid to employee	26,977.77	21,377.77	4,904.42
FGTS fine deposited	17,200.00	8,600.00	3,126.87
Total cost	44,177.77	29,977.77	8,031.30

Termination amounts for an employee on R$8,000.00 a month hired 1 July 2022 and dismissed on 15 October 2026 with notice paid in lieu (42 days, projected to 26 November 2026), corrected FGTS deposits of R$43,000.00. Sources: Lei nº 12.506 art. 1; CLT arts. 146, 147, 484-A, 487; Lei nº 4.090 arts. 1 and 3; Lei nº 8.036 art. 18. FGTS on salary, notice and 13th, and income tax, excluded. USD at R$5.5007.

Worked example

In the case in the table, dismissal without cause costs R$44,177.77 (US$8,031.30) in termination amounts and the FGTS fine; a mutual agreement costs R$29,977.77 (US$5,449.81), but the employee loses unemployment insurance and may withdraw only 80 percent of the FGTS balance. Either way the payment is due within 10 days of the end of the contract.

Step by step

Check protections first: pregnancy, accident return within 12 months, CIPA, union or employee committee roles, disability quota, and from 2027 paternity leave.
Decide between notice worked (with 2 hours less a day or 7 days off) and notice paid in lieu.
Calculate notice days (30 plus 3 per full year, maximum 90) and project the notice period for 13th salary and vacation.
Run the dismissal medical exam, record the termination in eSocial and the work card, and pay the FGTS rescission guide with the 40 percent fine.
Pay all termination amounts, itemized, within 10 days of the end of the contract.
For mass layoffs, document prior dialogue with the union before notices go out.

Common traps

Paying termination amounts on day 11 costs one extra monthly salary to the employee (CLT art. 477 § 8).
Notice paid in lieu still counts as service time, so it extends the 13th salary and vacation proportions (CLT art. 487 § 1).
Just cause must fit a ground in CLT art. 482 and be applied promptly; weak cases are converted to dismissal without cause with all indemnities.
A pregnancy confirmed during the notice period still gives stability (CLT art. 391-A).
Mass dismissals without prior union intervention breach the Tema 638 thesis even though no union approval is required.
A mutual agreement bars unemployment insurance; employees sometimes later claim it was a disguised dismissal.

Sources

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