Employment 2022 Comparisons

The following developments have occurred in the past year:

• the Ministerial Agreement 158-2022, Sanitary Alerts and Sanitary Provisions System for Adapting to the New Reality; and
• the Governmental Agreement 179-2022, Regulations on Prevention Measures to Mitigate the Spread of SARS COV-2 in the Workplace.

There are no regulations regarding the classification of blue-collar and white-collar employees. Notwithstanding this, there are special regulations for agricultural and cattle-raising work, work performed by women and minors, work performed in person (as opposed to teleworking), domestic services, transportation services, apprenticeship work, and work at sea and navigable routes.

There are three different type of labour contracts:

• contracts for an indefinite period, when the date of termination is not specified;
• contracts for a fixed term, when the date of termination is specified or when the occurrence of some fact or circumstance has been foreseen, such as the termination of work that will inevitably put an end to the employment relationship; and
• contracts for a certain piece of work, when the price for the worker’s services is generally set or estimated from the moment that the work starts until it concludes, subject to the work being performed.

Nevertheless, as general rule, any individual employment agreement must be deemed as having been executed for an indefinite period, unless legitimate and express proof or stipulation to the contrary exists. For fixed-term contracts that are executed in a business whose activities are permanent or continuous, if at the expiration of the term the cause from which the contract originates subsists, such contracts must be considered indefinite. Accordingly, fixed-term contracts must be considered as an exception.

The individual labour contract must be in written form, although there are a few exceptions regarding agricultural or cattle jobs, domestic services, and temporary jobs for no more than 60 days.

The written employment agreement must contain:

• the names, surnames, age, sex, civil status, nationality, and residence of the contracting parties;
• the start date of the employment relationship;
• the indication of the services the worker commits themself to render, or the nature of the work to be performed, specifying the characteristics and the conditions of the work as much as possible;
• the place(s) where the services or the works must be rendered or performed;
• the precise designation of the place where the worker will live if they are hired to render services or perform work in a place different from the one where they habitually live;
• the duration of the agreement or the indication that it is for an indefinite period or for the performance of certain work;
• the length of the work shifts and the hours in which it must be rendered;
• the salary, benefit, commission, or participation in the profits that the worker must receive, whether it must be calculated by time unit, work unit or in some other manner, and the payment manner, period, and place;
• the rest of the legal stipulations that the parties may agree on;
• the place and date of the execution of the agreement; and
• the signatures of the contracting parties.

The labour contract must be registered electronically before the Ministry of Labour within 15 days after its execution, amendment, or novation. The employee must have a copy of the contract duly registered.

The labour contract must be in Spanish. The use of foreign languages in the orders, instructions, notices, or provisions given to the workers is prohibited. The posts of the persons who immediately manage or supervise the performance of the work must be held by persons who speak the Spanish language.

Diurnal, Nocturnal and Mixed Shifts

The ordinary diurnal effective work shift may not be longer than eight hours per day or exceed a total of 44 hours per week. The ordinary nocturnal effective work shift cannot be longer than six hours per day or exceed a total of 36 hours per week. The ordinary mixed effective work shift may not exceed seven hours per week or a total of 42 hours per week.

Mixed shifts refer to those that are performed during a time that includes part of the diurnal period and part of the nocturnal period. Nevertheless, a mixed shift in which four or more hours are worked during the nocturnal period is understood to be a nocturnal shift.

Diurnal work is performed between 6am and 6pm of the same day. Nocturnal work is performed between 6pm of one day and 6am of the following day. Those who hold the positions of employer representatives (managers, administrators, etc), senior employees, trusted employees or those who work without immediate superior supervision are not subject to working time limits, but they may not be obliged to work more than 12 hours per day.

In general terms, flexible arrangements are possible. The work shift may be increased between employers and workers up to two hours per day, subject to the condition that the employees do not work more than the corresponding limits of the ordinary diurnal, mixed or nocturnal work shift week.

Part-Time Work

Part-time work is regulated according to Convention No 175 of the International Labour Organization (ILO) on part-time work, approved by the Congress of the Republic of Guatemala Decree 2-2017, and Government Agreement 89-2019 Regulation of ILO Convention 175 on part-time work. A worker is part time when they provide personal services for a period shorter than that established for the ordinary (diurnal, nocturnal or mixed) working day in the Labour Code (see the first paragraph). The transfer of a full-time worker to part time or vice versa is allowed if it is voluntary. An employer is not allowed to impose it, so the worker's consent must be expressly stated.

Implementation requires the following:

• the parties must agree on an ordinary working day, with a few hours less than those established by the Labour Code;
• for new employees, the part-time hours or part-time working day agreed between the parties must be included in the employment contract;
• for current employees, the employment contract must be modified, expressly indicating that, by mutual agreement, they agree to part-time work;
• within 15 calendar days of the signing of the employment contract or its modification, it must be registered with the Ministry of Labour and Social Security.

It can be implemented for office workers and field workers. In the latter case, the possibility that field workers are not subject to limitations on working hours cannot be considered, since a necessary condition is that a shorter ordinary working day is agreed.

Overtime

Effective work performed beyond the time limits of the ordinary diurnal, mixed or nocturnal work shift week, or which exceeds the limit that may be agreed on contractually, constitutes overtime and must be remunerated at a rate at least 50% higher than the minimum wage or than the higher wage that the parties have stipulated. Not considered overtime are hours that the worker may work to correct errors attributable only to the worker themself, committed during the ordinary work shift, as well as hours that are a consequence of a worker's lack of activity during such work shift, provided that such lack of activity is attributable to the worker.

A salary or wage is the compensation that the employer must pay the worker in compliance with the employment agreement or relationship in effect between them. Save for the legal exceptions, any service rendered by a worker to their employer must be remunerated by the employer. The calculation of this remuneration, for the purpose of pay, may be agreed based on:

• time unit (monthly, fortnightly, weekly, daily or hourly);
• work unit (by piece, task, lump sum or by piece of work); and
• participation in the profits, sales or collections the employer may make, but in no case will the worker assume the employer's risk of liability

To set the amount of the salary for each type of work, the intensity and quality of the work, the weather, and the quality of life must be considered. Equal salaries should be paid for the same work performed in equal positions and conditions of efficiency and at equal levels of seniority.

Minimum Wage

Every worker is entitled to receive a minimum wage that covers their normal material, moral and cultural needs. Such wage must be periodically set according to each type of work. This calculation must also consider the different types of work shifts. Operating under the Ministry of Labour and Social Provision, the National Wage Commission, a technical and consulting body of the commissions of employers and workers, is in charge of counselling the Ministry on the general wage policy. The establishment of the minimum salary automatically modifies the employment agreements in which a lower one had been stipulated and does not imply the worker’s waiver or the employer’s abandonment of pre-existing covenants more favourable to the worker. When the minimum salaries are set through a collective bargaining agreement, the commissions and the Ministry shall refrain from setting a minimum wage in the business, zone, or economic activity that the agreement covers.

Currently the minimum wage is fixed every year. For the year 2022, the minimum wage was fixed, applying a specific wage by day, hour and month for the following activities:

• agricultural;
• non-agricultural; and
• export and factory work.

Additionally, every month, the employer must pay GTQ250 per employee as a productivity incentive bonus.

Fringe benefits of any nature that are generally granted to the workers for rendering their services, must be understood to constitute 30% of the total amount of the salaries received, unless a covenant to the contrary exists.

The employer also must comply with the payment of an annual bonus (Bonus 14) equal to 100% of the ordinary salary for a full year of work, calculated from 1 July of a given year to 30 June of the next year, and the payment of a Christmas bonus equal to 100% of the ordinary salary for a full year of work that is calculated from 1 December of a given year to 30 November of the next year.

Vacations

Every worker has the right to enjoy a paid day of rest after each workweek. The week shall be computed of five to six days according to the custom in the business or workplace. For workers who are payed based on work unit or for commission, a sixth of the total salary received for a week shall be added.

The religious holidays with pay for private workers are 1 January; Holy Thursday, Friday and Saturday; 1 May; 30 June; 15 September; 20 October; 1 November; half of 24 December starting from noon; 25 December; half of 31 December starting from noon; and the day of the local festivity shall be a paid holiday for private workers. In compliance with the Law to Promote Domestic Tourism, a holiday shall be moved to the immediate prior Monday if it occurs on a Tuesday or Wednesday, or to the immediately following Monday if it occurs on a Thursday, Friday, Saturday or Sunday. The exact date on which the holiday must be enjoyed will vary from year to year. Other special holidays are Secretary’s Day, 26 April and Mother’s Day, which is on 10 May.

The Labour Code establishes the employers' obligation to grant leaves of absence with pay to workers in the following cases:

• For the death of the spouse, parents or son occurs, three days.
• Marriage, five days.
• For the birth of a child, two days.
• When the employer expressly authorises or permits other leaves of absences and has indicated that they shall also be paid.
• To respond to judicial summons.
• For the performance of a union duty if it is limited to the members of the executive board and does not exceed six days in the same calendar month, for each employee (see 6.1 Status/Role of Unions).
• In the rest of the cases specifically provided in the covenant or collective bargaining agreement.

Other types include remunerated leaves of absence, rests, and vacations that the law imposes or that the employer grants with pay, diseases, pre-natal and post-natal leaves of absence, and leaves resulting from other social risks that may produce provable temporary incapacity to perform work.

Every worker is entitled to a remunerated vacation period after each year of continuous work at the service of the same employer, the minimum duration of which is 15 business days. The vacations are not compensable in money unless the worker who has had acquired the right to enjoy them has not done so due to stopping work. Rendering services to any other person during the vacation period is prohibited.

When the worker stops work before completing a year of continuous service, or before acquiring the right to a new period, the employer must compensate them monetarily for the proportional vacation time in accordance with their length of service.

The workers must enjoy their vacation periods without interruptions and are only obliged to divide them in two parts as a maximum, when the work is of a special nature that does not allow a very prolonged absence. The workers must enjoy their vacation periods without interruptions. The vacations are not accrued year after year with the purpose of enjoying a longer period of rest afterwards, but the worker may demand, at the termination of the agreement, the compensation in cash of the vacations missed up to the last five years.

Maternity Leave

The working mother shall enjoy a paid leave of absence with 100% of her salary during the 30 days preceding childbirth and the following 54 days; the days that she cannot enjoy before childbirth shall be accrued so that she may enjoy them in the post-childbirth stage, so that the working mother may be able to enjoy 84 days of effective time off during this period. This worker has the right to be paid her salary by the employer, unless she was covered by the benefits of the Guatemalan Social Security Institute, in which case the regulations of the Institute apply. She also has the right to return to her post once the post-childbirth leave of absence concludes, or if the respective period is prolonged due to medical prescription, to the same post or to a post equivalent in remuneration related to her capabilities, capacity and competence. If a miscarriage or a non-viable premature childbirth occurs, the remunerated leaves of absence must be reduced to half. In case the interested party remains absent from her work for a longer time than the time granted, as a consequence of disease that, according to a medical certificate, arose from her pregnancy or childbirth and that incapacitates her to work, she retains the right to half of the benefits during the length of her recovery, provided that it does not exceed three months starting from the moment at which she left her work. The female worker that adopts a minor shall also have the right to a post-childbirth leave of absence so that both mother and child may enjoy an adaptation period. In such case, the leave of absence shall start from day immediately following the adoption. To enjoy such benefit, the female worker must file the corresponding documents in which the adoption proceedings are attested.

Every female worker in the nursing period is entitled to half an hour twice per day to feed her child. The female worker in the nursing period may accrue the two half hours to which she is entitled and begin work one hour after the start of the shift or leave one hour before the shift ends, with the purpose of feeding her child. Such hour shall be remunerated, and a breach of this obligation to remunerate shall give rise to the corresponding sanction.

The nursing period must be calculated starting from the date at which the mother returns to work and up to ten months afterwards, unless the period was prolonged due to medical prescription.

Health-Related Leave

Any employer with three or more employees is required to be registered in the social security system. Employers and workers must contribute financially to the Guatemalan Social Security Institute. For disability coverage for sickness, the regulation starts on day four of sickness up until the 26th week. Different suspension periods due to different illnesses cannot be more than 52 weeks in a period of 24 months. During this period, the labour relationship is suspended, and the Guatemalan Social Security Institute (GSSI) will cover ⅔ of the employee’s salary that has the limit of USD16 per day. To obtain the coverage from the social security it will be necessary to obtain the medical authorisation for the employee. The employer has the obligation to pay full salary from day one to three and grant leave of absence for the rest of the period the GSSI deems as necessary to recover. During the suspension ordered by the GSSI, the employer will have to comply with the order of suspension and not require the employee to work. Also, during this period, it is prohibited to pay any salary to the employee. No social contribution must be paid until the employee is recovered and has come back to work.

Confidentiality

Employees are obliged to keep the technical, commercial, or manufacturing secrets of products in which they are involved in the manufacturing process, The higher the position or level of responsibility of the worker, the higher the degree of fidelity with which they must guard these secrets. They must also conceal the reserved administrative affairs, the disclosure of which may cause loss to the business. The infringement of this obligation is just cause for termination of the labour contract by the employer without liability and obligation to pay severance.

There are not applicable regulations regarding non-disparagement requirements.

The labour agreement may include provisions regarding confidential information, competition restriction, intellectual property and trade secrets, and conflict of interest. Upon termination of the employment relationship, non-compete clauses are not permitted, and if included, they are not enforceable as they are deemed to limit free access to work, which is a constitutional right. Non-compete clauses also violate the provisions of the Labour Code. 

There are no regulations regarding non-solicitation clauses. However, clauses of this type included in a labour contract will not be enforceable upon termination of the employment agreement.

Guatemala does not have privacy and data protection laws or data processing laws. However, the Public Information Access Law is applicable because it includes key data protection concepts, such as personal data and sensitive personal data. Accordingly, previous authorisation of the employees is required to share personal data.

Hiring less than 90% Guatemalan workers and paying them less than 85% of the total of the salaries that are received in their respective businesses is prohibited for employers, with the exception of certain stipulations in special laws. This limit is not applicable to managers, directors, administrators, superintendents, and general heads of the businesses.

If a company needs to hire foreign employees, it is necessary, with respect to the foreign employee, to file for temporary residence before the Guatemala Immigration Institute and then to file for a work permit before the Ministry of Labour. The foreign person cannot be hired nor sign a labour agreement until the work permit has been granted. The work permit is issued for a period of one year. It must be renewed 15 business days before the permit expires.

A union is a permanent association of employees, of employers, or of persons with an independent profession or occupation organised exclusively for the study, improvement, and protection of their corresponding social and economic interests in common.

The organisation of a labour union requires the written consent of 20 or more employees. Unions shall be empowered to initiate operations from the moment they are registered at the Public Union Registry. Nevertheless, before their corresponding registration, they shall be able to:

• hold meetings to appoint their provisional executive committee and their provisional advisory council, and to hold meetings of said bodies and of the general meeting, as well as to hold meetings to discuss and approve their statutes;
• to take the pertaining actions aiming to obtain legal capacity and to register the statutes of the union.

Eligibility

Any employee who is 14 years old or older can join a labour union; nevertheless, minors cannot be members of the executive committee or of the advisory council of labour unions. No person can be a member of two or more labour unions simultaneously. The employer’s representatives and other similar employees who, due to their hierarchical position in the business, are obliged to defend the employer’s interests primarily, may not lawfully become members of a labour union. All the exceptional cases shall be provided for in the pertaining statutes, and they will have regard only to the nature of the positions to be excluded, and not to the persons who perform them. Said exceptions shall not be passed without the approval of the General Labour Inspectorate.

Rights of Members

The law provides special protection for unions and its members granting the following rights:

• To participate in the organisation of a union without the risk of being dismissed by the employer, from the date on which the General Labour Inspectorate is informed of the application for the filing of the constitution of the union. Employees participating in the constitution of a union may not be dismissed, because they enjoy irremovability, unless the employer may prove before a labour court the breach of the labour contract and a fair cause to dismiss the employee. This protection will be in place until 60 days after the filing of the union at the Ministry of Labour and Social Provision.
• The members of the provisional executive board and the executive board enjoy irremovability during the time they are in their posts (two years) and during 12 months after they have finished in their posts, unless the employer may prove before a labour court the breach of the labour contract and a fair cause to dismiss the employee.
• To obtain leaves of absence with pay for the performance of a union duty, provided that it is limited to the members of the executive board and does not exceed six days in the same calendar month, for each one of them. Notwithstanding the above, the employer must grant leave of absence without pay to the members of this executive board that so request it, for the time necessary to attend to the duties of their positions.
• To obtain leaves of absence with pay in all the cases established in the covenant or collective bargaining agreement.

Restrictions on Members

The members of the unions have the following prohibitions:

• executive board members are prohibited from leaving work during working hours without justified cause or without the permission of the employer or of the worker's immediate superior;
• employees are prohibited from making during work or storing within the establishment political propaganda or propaganda contrary to the democratic institutions created by the Constitution, and from performing any act that may signify coercion in breach of the liberty of conscience that established by the Constitution;
• employees are prohibited from performing acts or breaches of the labour provisions which constitute manifest acts of sabotage to the normal production of the business.

Employers' Obligations

The employers have the following obligations regarding unions:

• Deduct from the employees’ salary the ordinary and extraordinary fees that they may have to pay to their corresponding union or cooperative society, provided that the interested party or the relevant legally constituted organisation requests it. In this case, the union or the cooperative society must attest its legal capacity just once and make the collection in stubs authorised by the General Directorate of Labour, proving that the fees in relation to which it requests a discount are authorised by its statutes, or, in case of extraordinary fees, by a general meeting.
• Grant leaves of absence with pay to the employees for the performance of a union duty, provided that it is limited to the members of the executive board and does not exceed six days in the same calendar month, for each one of them. Notwithstanding the above, the employer must grant leave of absence without pay to the members of this executive board that so request it, for the time necessary to attend to the duties of their positions.
• Grant leaves of absence with pay to the employees in all the cases established in the covenant or collective bargaining agreement.
• Employers who dismiss an employee during the irremovability period must reinstall the employee in their previous position. In this case, the employers have the obligation to pay to the Ministry of Labour and Social Provision a fine of 50 monthly minimum wages, and also the employer shall pay the salaries and labour benefits that had not been paid during the time that the employee did not work. If the reinstatement takes more than seven days, the fine will be increased by 50%.
• The employers who dismiss an employee during the procedure of a collective conflict without a judge-written authorisation must reinstall the employee in their previous position. In this case, the employers have the obligation to pay to the Ministry of Labour and Social Provision a fine of 10 to 50 monthly minimum wages, and also the employer shall pay the salaries and labour benefits that had not been paid during the time that the employee did not work. If the reinstatement takes more than 7 days, the fine will be increased by 50%. In case the employer does not comply with the order to reinstall the employee, they shall be liable before a criminal court.

Prohibitions on Employers

Also, the employers have the following prohibitions:

• The employers are prohibited from forcing or trying to force the employees, whatever the means they may adopt, to withdraw from the unions or legal groups they may belong to or that prevent them from entering unions or legal groups.
• The employers are prohibited from dismissing the employees who enjoy irremovability, when participating in the constitution of a union, until 60 days after the filing of the union at the Ministry of Labour and Social Provision, unless the dismissal was for a justified cause according to Article 77 of the Labour Code. In this case, the employer must bring the dismissal before the labour courts and must prove the breach and may not dismiss the employee before having the express and written authorisation of the court.

There are no applicable regulations for employee representative bodies.

One or more unions may execute a collective bargaining agreement with one or more employers or one or more employee's unions to establish the labour conditions at the workplace. The collective bargaining agreement is considered professional law and it is applicable to all the labour agreements that exist or will be executed in the future in the business.

Negotiations

In negotiating a collective bargaining agreement, the union or the employer shall deliver the draft of the agreement to the other party for its consideration, through the labour authorities. In such case, the draft may be discussed with the intervention of the labour authorities or mediators. Where an agreement has not been reached within 30 days of the beginning of this process, any of the parties may present before a labour court the collective conflict to be solved by the court. The procedure must follow the regulations established in the Labour Code.

Formal Requirements

The collective bargaining agreement must be executed in written form with three copies: one copy for each party, and the third copy shall be sent to the Ministry of Labour and Social Provision. The Ministry must examine the collective bargaining agreement to ensure that it complies with all applicable labour regulations.

Contents of the Agreement

The collective bargaining agreement must contain the following.

• The profession, jobs, activities, and workplaces included in the agreement.
• The term and start date. The collective bargaining agreement shall be in force for a term no less than a year and no greater than three years. If none of the parties notifies its intention to denounce or modify the collective bargaining agreement at least a month before of the expiration of its term, it will be extended automatically for another term of the same length.
• Other stipulations regarding work shifts, rests, vacations, wages, or minimum wages.
• The place and date of the execution of the agreement.

A clause that obliges the employer to admit as employees only those who are union members will not be valid.

Denouncing an agreement

The denouncing of a collective bargaining agreement does not imply its termination nor the removal of the labour benefits that it contains. The only purpose of denouncing the agreement is to allow the parties to begin negotiating a new collective bargaining agreement.

Multi-regional Businesses

If, due to the nature of its activities, a business must distribute the execution of its work in several regions of the country, and more than ¼ of the employees in that business or production centre are members of a union, the employer shall be obligated to negotiate a collective agreement on employment conditions with the corresponding labour union, at the labour union’s request.

For such purpose, the following rules shall be respected.

• The aforementioned percentage shall be estimated over the total number of employees who render their services in such business or production centre.
• If several labour unions coexist within the same business or production centre, the collective agreement shall be negotiated with the labour union that has the highest number of employees directly affected by the negotiation. In such case, the agreement shall not be entered into in conditions that are less favourable to the employees than the conditions provided for in the contracts in effect within the same business or production centre.
• If, due to the nature of its activities, a business or production centre has employees who belong to different professions or occupations, the collective agreement shall be negotiated with the group of labour unions that represent each of the different professions or occupations, provided that the labour unions so agree. Where they do not reach an agreement in this regard, the labour union corresponding to each profession or occupation can demand that a collective agreement is negotiated with it to determine the conditions pertaining to said profession or occupation within the same business or production centre.

Multiple Labour Unions

If several labour unions exist within the same company, the corresponding collective employment contracts may coexist; nevertheless, if the terms of one collective employment contract imply better conditions for its employees than those provided for in another collective employment contract applicable to a different employee group, the former's terms shall be applied to the latter, provided that the work is being executed under the same employment conditions.

Parties Involved

The provisions of the collective agreement on employment conditions are binding for:

• the contracting parties;
• all the persons who are employed in the business or production centre to which the agreement refers when the agreement becomes effective; and
• whoever enters, in the future, into individual or collective employment contracts within the same business or production centre bound by the collective agreement shall not be subject to conditions that are less favourable than the conditions provided for in the collective agreement.

Termination

The labour contract can be terminated in the following cases:

• resignation;
• mutual agreement;
• dismissal without just cause;
• dismissal with just cause; and
• termination due to indirect dismissal.

In case of dismissal without just cause, the motivation (or just cause) must be previously determined, and the employer must have enough evidence. The procedure to follow will depend on the cause of termination.

Collective Redundancies

There are no applicable regulations regarding collective redundancies. Notwithstanding, in dismissals of ten or more employees, the General Labour Inspectorate may intervene to verify that the employees will receive the final labour payments according to the law.

There is no notice period obligation for dismissal. However, the following rules apply.

Dismissal with Just Cause

In a case of dismissal with just cause, the employer must give a prior private hearing to the employee to give them the opportunity to file or explain evidence to defend their case. The employer must obtain written evidence of this previous private hearing.

Termination of the employment agreement in accordance with one or several of the causes listed for justified dismissal comes into effect when the employer communicates it in writing to the worker indicating the motive for the dismissal and they effectively stop working, and after the above-mentioned hearing has occurred. Notwithstanding, the worker enjoys the right of summoning the employer before the labour and social provision courts before the prescription term runs out (30 days after dismissal), so that the employer may prove the just cause on which the dismissal is based. If the employer cannot prove such cause, they must pay the worker:

• the compensation that, according to this Code, corresponds to them; and
• the salaries that the worker may have missed from the moment of dismissal until the payment of compensation, up to a maximum of 12 months-worth of salary

The employer must also pay the court costs.

The employer may proceed with the termination without the intervention of any labour authority. Notwithstanding, the employer may request external advice if needed.

Termination Without Just Cause or Due to Unjustified and Indirect Dismissal

In a case of termination of a labour agreement without just cause or in case of termination of a labour agreement due to unjustified and indirect dismissal, the employer must pay to the employee the following.

Severance

A severance payment equivalent to one month's salary for each year of continued services. If services have not yet reached a year, then the payment is proportionate to the period worked. The date on which the employment relationship started is used to calculate the continued services.

The severance pay for time served is also governed by the following rules.

• Its amount may not be the object of set-off, sale, or assignment, nor may it be garnished, except for in complying with ongoing alimony and child support obligations.
• Its amount must be calculated taking as its base the average of the salaries received by the employee during the last six months in which the employment agreement was in effect, or the period the employee may have worked, if less than six months.
• The continuity of the work is not interrupted by disease, vacations, leaves of absence, legal strike, or other analogous causes that, according to Guatemalan labour law, suspend and do not terminate the employment agreement.
• Any clause of the agreement that would tend to interrupt the continuity of the services rendered or to be rendered is null and void, ipso jure.

The severance pay is calculated using the following method.

Ordinary salary (the average of the last six months received by the employee) + extraordinary salary (if applicable, the average of the last six months received by the employee) + one twelfth of the Christmas bonus + one twelfth of the mid-year annual bonus, multiplied by the period worked in days. The sum of all the above is divided by 365 days.

Proportional labour benefits

These include proportional vacations days and pending vacation days to be taken (up to the last five years), proportional annual bonus, and proportional Christmas bonus.

Economic Advantages

Article 90 of the Labour Code addresses the possibility that employees will receive part of their salary by means of benefits or compensation not in specie, called “economic advantages” (eg, food or transportation, not considered necessary for the performance of work). This constitutes an exception to the obligation that salary payments must be in legal currency.

These economic advantages may constitute 30% of the total amount of the salary. Article 90 also establishes that they can be of “any nature”, which is vague and has caused problems in interpretation. However, the following benefits or forms of compensation do not constitute economic advantages:

• those generally granted to all employees or if the benefits constitute welfare (eg, medical insurance);
• those contained in a labour union agreement; or
• those granted for the performance of work or work tools (eg, a car for a salesperson to cover their sales route)
• those granted as necessary conditions to perform the labour activities by the employees.

If the employee can prove with appropriate evidence that they received economic advantages during the labour relationship, 30% of the severance would have to be added in calculation. The claim of economic advantages can only be made in case of dismissal without just cause or in case of indirect and unjustified dismissal.

Just Causes for Termination by the Employer

According to Article 77 of the Labour Code, the just causes that give the employer the right to terminate the employment agreement, with no liability on their part, are the following.

• When the worker conducts themself during work in a manner that is openly immoral or when they resort to libel, slander or violence against the employer or supervisors.
• When the worker commits acts listed above against a co-worker during work time, provided that the there is a serious breach of discipline, or the work is interrupted because of such act.
• When the worker, outside of the place where the work is being performed and during working hours, resorts to libel, slander or violence against their employer or supervisors, provided that such acts have not been provoked and that, as a result, the co-operation and harmony needed to perform work are made impossible.
• When the worker commits some crime or misdemeanour against the property in prejudice of the employer, of a co-worker or of a third party inside the work premises. Likewise, when a worker causes, by carelessness or negligence, material damage to the machines, tools, raw materials, products, or another work-related item. 
• When the worker reveals the secrets to which Article 63(g) of the Labour Code refers.
• When the worker stops going to work without permission from their employer or with no justified cause for two whole and consecutive working days or for six half-working days in the same calendar month. The justification for the absence must be made at the time work is resumed, if it has not been done before.
• When the worker manifestly fails to adopt the preventive measures or indicated procedures to avoid accidents or diseases, or when the worker fails to obey the provisions or instructions the employer or supervisors may have clearly indicated to them.
• When the worker infringes any of the prohibitions of Article 64 of the Labour Code:
1. leaving work during working hours without justified cause or without the permission of the employer or of its immediate superiors.
2. making during work or within the premises, political propaganda or propaganda contrary to the democratic institutions created by the Constitution or performing any act that may signify coercion of the liberty of conscience that the Constitution establishes.
3. working in a state of drunkenness, under the influence of stupefacient drugs or in any other comparable abnormal condition.
4. using the utensils or tools supplied by the employer for a different purpose than the one for which they are normally intended.
5. carrying weapons of any kind during working hours or within the work premises, except in special cases duly authorised by the laws, or when these items are cutting or puncture-cutting instruments or can be considered equipment suitable for work; and
6. performing acts or breaches of the labour provisions which constitute manifest acts of sabotage to the normal production of the business; or when the employee infringes the duly-approved work rules, after the employer has warned the once in writing. 
• When the worker, upon executing the agreement, has imparted on the employer a mistaken understanding of the employee's own attributes or experience, by pretending to have qualities, conditions, or knowledge that they evidently do not possess, or presenting the employer with references or personal testimonials subsequently proved to be false, or performing the work in a manner that clearly shows their incapacity in the performance of the work for which they may have been hired.
• When the worker suffers the punishment of imprisonment or when correctional imprisonment is imposed on them by a final judgment; and
• When the worker makes any other serious breach of the obligations imposed by the agreement.

In all cases where the dismissal is based on an act sanctioned by the criminal laws, the right of the employer to institute the corresponding actions before the general criminal authorities remains safeguarded.

Just Causes for Termination by the Employee

As per Article 79 of the Labour Code, the just causes that entitle the worker to terminate the employment agreement with no liability on their part are the following.

• When the employer does not pay the worker the complete salary that may correspond to them, at the agreed upon time or place. The deductions authorised by the law remain safeguarded.
• When the employer commits a breach of probity or honesty during work, or conducts themself in a manner openly immoral or resorts to libel, slander, or violence against the worker.
• When the employer directly, one of their relatives, dependents or one of the persons that lives in the employer’s house commits, with the employer's authorisation or tolerance, some of the acts listed in the point above against the worker.
• When the employer directly or through relatives or dependents maliciously causes a material harm to the worker’s tools or utensils.
• When the employer or one of their representatives resorts to libel, slander, or violence against the worker outside of the place where the work is performed and outside of working hours, provided that such acts are not provoked and that as, a consequence of them, the co-operation and harmony necessary to fulfil of the working agreement are made impossible.
• When the employer, a member of their family or a representative of theirs or another worker is suffering from some contagious disease, provided that the worker must remain in immediate contact with the relevant person.
• When there is grave danger to the security and health of the worker and their family, either due to the absence of hygienic conditions in the workplace, for excessive unsanitary conditions of the region or because the employer does not comply with the preventive and security measures established by the legal provisions.   
• When the employer compromises, by inexcusable imprudence or carelessness, the safety of the place where the work is performed or the safety of the persons there.
• When the employer infringes any of the prohibitions contained in Article 62 of the Labour Code. The employer is prohibited from:
1. inducing or demanding from the workers that they make purchases from certain stores or persons;
2. demanding or accepting money or other compensation from the workers as a reward so that they are admitted to the job or for any other concession or privilege that may be related to the working conditions in general;
3. forcing or trying to force the workers to withdraw from the unions or legal groups they may belong to or forcing them to enter unions or legal groups;
4. influencing the workers' political decisions or religious convictions;
5. retaining, by their own will, the tools or objects of the worker either as a guarantee or as compensation or through any other non-assignable title;
6. making or authorising mandatory collections or subscriptions between the workers unless they are imposed by the law;
7. directing or permitting that work be carried out in a state of drunkenness or under the influence of drugs or in any other comparable abnormal condition; and
8. performing any other act that restricts the rights the worker has under the law.
• When the employer or a representative demotes the worker to a lower position or one with less pay, or fundamentally or permanently alters any other of the working conditions. Nevertheless, where the worker has been promoted to a position that includes different duties from the ones performed by them in the former position, the employer may return that worker to their original position during the trial period if the employer establishes the manifest incompetence of the worker in the performance of the position to which they were promoted. When the promotion or salary increase was made in a temporary manner, due to qualified circumstances, the employer does not incur liability if they return the worker to their original conditions.
• When the employer seriously breaches any other obligations the agreement imposes on them.

The termination of the agreement in accordance with one or several of the above-mentioned causes comes into effect from the moment the worker communicates it to the employer, and the worker stops fulfilling their position immediately and effectively. The time that may be used to hand over the post shall not be considered included within the labour relationship, but the employer must remunerate the worker for this time in accordance with the salary that may correspond to them. In this case, the employer is entitled to summon the worker before the labour and social provision courts before the prescription term runs out, with the purpose of proving that the employee left their work without just cause. If the employer proves this, in the cases of agreements for an indefinite period, the worker must pay the amount corresponding to the notice period and the losses and damages the employer may have been caused according to an estimate the courts must make; and if the agreements are for a set term or for a certain work, the worker must pay the benefits that Article 84 of Labour Code indicates.

The employer’s rights to justifiably dismiss the workers last for 20 business days, which start running from the moment the cause to terminate the agreement becomes known. The worker’s rights to effectively and with just cause terminate their employment agreement last for 20 business days, starting from the moment in which the employer gave cause for the separation or indirect dismissal. The worker’s rights to claim against their employer in cases of dismissal last for 30 business days starting from the termination of the agreement.

Termination agreements are not permissible.

It is not possible to terminate the labour agreement in the following cases.

• Dismissing female workers that are pregnant or in their nursing period. They enjoy special protection in which employment cannot be terminated unless the dismissal is for a justified cause originating from a serious breach of the obligations derived from the agreement, in accordance with what is provided in Article 77 of the Labour Code. In this case, the employer must bring the dismissal before the labour courts and must prove the breach; the employer cannot dismiss the party before having the express and written authorisation of the court. If the employer does not comply with the preceding provision, the female worker may request the courts to exercise her reinstatement right in the post she had been performing, and she shall have the right to be paid the salaries that were not received during the time that she did not work.
• Dismissing employees that have suspended the labour agreement due to illness, accident, or vacations.
• Dismissing employees who are forming a union during the period of 60 days after the inscription of the union. If a worker incurred grounds of dismissal according to Article 77 of the Labour Code, the employer may initiate cancellation of the labour agreement before a labour judge.
• Dismissing up to five members of the executive committee of a union during the time they occupy these positions and up to 12 months after they have left these positions.

There are no specific grounds for wrongful dismissal claims. In every case in which an employer terminates a labour agreement without just cause and without fulfilling the obligation to pay severance and proportional labour benefits, they be subjected to a lawsuit. The employer has the burden of proof that the termination of the labour agreement was with just cause; otherwise, a labour judge will rule in favour of the employee.

There are no specific laws, for claims on ant-discrimination, but the Labour Code contains provisions against discrimination by reason of race, religion, political creeds, and economic situation in the social assistance, educational, cultural, recreational, or commercial establishments that operate for the use or benefit of the workers, in private businesses or workplaces, and in those that the government creates for workers.

Also, discrimination by reason of gender, race, religion, political creeds, economic situation, educational institution, or discrimination of any other kind in obtaining employment in any workplace is prohibited. The access that male or female workers have to these establishments may not be assessed by the amount of their salaries or by the importance of the posts they perform.

Employers are prohibited from the following.

• Announcing employment offers that include as requirements gender, race, ethnic group, or civil status of the person, except where, due to the nature of the work, a person with certain characteristics is required. In this case, the employer must request authorisation before the General Labour Inspectorate and the National Women’s Office.
• Treating differently single and married women and/or those with family responsibilities, for the purposes of work.

Criminal Code

The Criminal Code states that discrimination will be understood as any distinction, exclusion, restriction or preference based on reasons of gender, race, ethnicity, language, age, religion, economic situation, disease, disability, marital status, or any other reason or circumstance which impedes or hinders a person, group of persons or associations in the exercise of a legally established right including customary law, in accordance with the Constitution and the international treaties on human rights. Anyone who, by an action or omission, engages in the conduct described in the previous paragraph, will be punished with one to three years in prison and a fine of GTQ500-3000. The punishment will increase by ⅓ in the following cases:

• where the discrimination is due to linguistic, cultural or ethnic reasons;
• where a person spreads, supports or encourages discriminatory ideas;
• when the act is committed by a public official or public employee during the performance of their work; and
• when the act is committed by a private person during the performance of public service.

There are specialised forums with competence to resolve labour claims. There is an administrative forum before the General Labour Inspectorate (Ministry of Labour), and the judicial forum before the labour courts. The process begins when the employee files a complaint before the General Labour Inspectorate to reach an agreement with the employer. If the parties do not reach an agreement, the employee may file a lawsuit before a labour court before the prescription term runs out (30 days after termination, or 30 days after the last hearing at the General Labour Inspectorate).

Guatemalan law does not recognise class action claims, but it is possible to file a judicial claim if more than one employee has the same complaint due to the same facts against the employer. Accordingly, in this case they can file a lawsuit together.

Arbitration is excluded as a procedure for labour claims.

In labour litigation, the parties cannot agree in advance on the attorneys’ fees. Only if the employee obtains a favourable final judgement, the judge may consider requiring the employer to pay the legal fees of the employee’s attorney.