Consensual dismissal: what does the law say about it?

Dismissal is part of the professional cycle and can occur in various ways, such as dismissal for just cause, without just cause and consensual dismissal, which stands out for being an agreement between the employee and the company. 

In this format, neither party is taken by surprise, as the process takes place by mutual agreement. Do you want to understand how consensual dismissal works and what the law says about it? Read on!

What is consensual dismissal?

Consensual dismissal, formalized by the 2017 Labor Reform, occurs when the employee and the company decide together to end the employment contract. In this type of termination, the resignation is made in a mutual and agreed manner, without a unilateral break.

This option is interesting when the employee doesn't want to stay with the company, but doesn't want to lose rights such as withdrawing their FGTS, thus ensuring a more beneficial termination for both.

How does consensual dismissal work?

The process begins when the parties agree that the employment contract should be terminated. After this consensus, the severance pay is calculated according to the rules of the Labor Reform. The main difference in relation to dismissal without just cause is the reduction in the FGTS fine.

Main points of consensual dismissal:

• The employee receives a 20% fine on the FGTS balance (instead of 40%).
• You can withdraw up to 80% of your accumulated FGTS balance.
• There is no right to unemployment insurance.
• The employee receives notice, if applicable, and other severance pay, such as proportional vacation and 13th birthday.

What are the advantages of this type of dismissal?

Consensual dismissal offers benefits for both the company and the employee. For the employer, there are savings, as the FGTS fine is reduced. In addition, the dismissal takes place amicably, which helps to maintain a good relationship with the former employee and avoid labor disputes.

For the employee, the advantages include the possibility of withdrawing part of the FGTS and guaranteeing their severance pay, such as vacation pay and a proportional 13th salary. Even without unemployment insurance, the employee receives a financial reserve that can be useful for the transition to a new job or project.

How do I calculate severance pay?

The calculation of severance pay in consensual dismissal follows the same principles as dismissal without just cause, with some modifications. Severance pay includes:

• notice: if the notice has been worked or indemnified, the corresponding amount will be paid to the employee;
• Proportional 13th salary: the worker receives the amount proportional to the time worked during the year;
• overdue and proportional vacation: The employee receives overdue or proportional vacation, plus 1/3 of the amount;
• FGTS fine: The fine paid by the employer will be 20% of the FGTS balance, not 40% as in dismissal without just cause;
• FGTS withdrawal: Workers can withdraw up to 80% of their FGTS balance.

It is worth remembering that unemployment insurance is not payable in this type of dismissal.

What does the law say about consensual dismissal?

The 2017 Labor Reform (Law 13.467/2017) regulates consensual dismissal, offering clear guidelines on how this type of termination should be carried out. The law guarantees that the termination takes place in a fair and agreed manner, ensuring rights for the employee and benefits for the employer.

Workers are entitled to withdraw 80% of their FGTS and receive severance pay such as vacation pay and a proportional 13th bonus. However, the FGTS fine is 20% and unemployment insurance is not granted. 

For the employer, there is a reduction in termination costs and legal certainty, since the process is done by consensus and thus avoids possible labor lawsuits.

In addition, the documentation for this type of termination must be formalized and signed by both parties to certify the legality of the process.

Consensual dismissal is advantageous for those who want to end an employment relationship legally and without damage. It offers benefits for the employer, by reducing costs, and for the employee, who preserves part of their rights and severance pay.

Want to learn more about other types of dismissal? Visit our content "Dismissal for just cause: main reasons and how to proceed" to learn more about the different types of dismissal and their legal implications.

In a nutshell

What is consensual dismissal?

Consensual dismissal, formalized by the 2017 Labor Reform, occurs when the company and the employee decide together to end the employment relationship - that is, the dismissal is made in a mutual and agreed manner, without a unilateral break.

What are the advantages of consensual dismissal?

For the employer, one of the advantages is savings, because the FGTS fine is reduced. For the employee, the advantages are the possibility of withdrawing part of the FGTS and guaranteeing severance pay such as vacation pay and a proportional 13th salary. For both, there is the advantage that the termination is amicable.

How do I calculate severance pay?

The calculation of severance pay in consensual dismissal follows the same principles as dismissal without just cause, with some modifications. The severance pay includes: notice period, proportional 13th salary, overdue and proportional vacation, fine and withdrawal of FGTS.

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