Termination of Employment in Mongolia

1) What types of employment termination are there?

Under Mongolia's Labor Law, employment can terminate for the following reasons:

1. Mutual agreement between parties;
2. Death of the employee;
3. Expiration of the employment agreement;
4. Termination mandated by a competent authority;
5. Reinstatement of an employee to his/her previous job or position;
6. Court decision sentencing the employee for a crime;
7. Court ruling on the employee's lack of legal capacity;
8. Employee appointed or selected for another position;
9. Initiation of termination by either party.

2) What are the legal grounds for termination initiated by the employer?

Employment relations can be terminated by the employer for several reasons:

1. liquidation of the business or job reduction;
2. employee's lack of qualifications or skills;
3. inability to work due to health reasons with no available positions;
4. repeated or serious labor disciplinary breaches as specified in the employment contract.

According to the Labor Law, it is prohibited to terminate the employment of a pregnant woman or a parent (single father) with children under the age of three at the employer's initiative.

3) What are the legal procedures required for terminating an employee?

An employee may leave the workplace 30 days after notifying the employer of the termination in writing. The employee is required to return all tools, equipment, appliances, property provided for the performance of their job duties, documents created in the course of their work, hard and soft data, and any other relevant items to the employer.

The employer is responsible for calculating and providing the employee's salary for the period worked after the termination notice. If an employee disagrees with their employer's decision to terminate their employment, they have the right to dispute this decision through labor dispute institutions or a court.

4) What are the mandatory notice periods for termination?

Both the employer and employee must provide a written or electronic notice of termination 30 days in advance.

An employer must provide written notice of any mass layoff to the labor organization overseeing its jurisdiction within 30 days of making that decision.

5) What severance pay and compensation are employees entitled to?

Employers must provide a one-time severance payment to terminated employees based on their length of service, ranging from one to four months of base salary. This payment applies regardless of eligibility for severance pay from the social insurance fund and may be increased through legislation or collective agreements. In cases of mass layoffs due to liquidation of a business, employees' salaries will be prioritized for payment.

6) How should employers handle termination due to poor performance or misconduct?

Employers can terminate an employee if they do not meet job qualifications. Before termination, the employee must receive a warning and a reasonable timeframe to improve their skills. Disciplinary measures may include warnings or a salary reduction of up to 20% for no more than three months. The employer must notify the employee of the intended action and allow for an explanation. Employers can also evaluate performance and enforce disciplinary actions per their Internal Labor Policy and relevant regulations.

7) What legal recourse is available to employees in case of unlawful termination?

If an employee disagrees with their termination, they can file a complaint with the Labor Dispute Settlement Commission within 30 days. If no Commission exists, the complaint should go to the Tripartite Labor Dispute Settlement Committee of the Soum or District. The complaint must be resolved within 10 working days, with both parties involved. If an agreement is reached, it will be documented and signed by both sides. If resolution is not possible through these bodies, the employee may take the matter to court.

8) What is the procedure for terminating an employment contract with foreign nationals?

According to Article 30 of the Law on Workforce Migration, a foreign employee's work permit can be revoked under several circumstances, including if the labor contract is canceled due to the employee's fault, if they are physically unfit for the job, leave without authorization, transfer to another employer without permission, use forged documents, commit a crime, or lose their ability to work.

Article 65 of the Law on Labor states that for foreign executives, employment contracts can be terminated if the employee performs poorly, the company ownership changes, mismanages property, or loses the employer's trust due to serious violations of internal regulations.

Author: Baigalmaa Purevsuren