Companies do not need grounds for termination, but there is a 40% penalty applicable to the “FGTS” account balance. FGTS is a severence indemnity fund and consists in a 8% deposit of a worker’s salary made by the employer and collected by federal government.
Termination with cause is also foreseen in the legislation. There is a list of conducts by employee that gives rise to the termination with grounds. In this case, no indemnification is payable to the employee upon termination of his/her employment contract, but the employer has the burden of proof as to any of the legal situations above.