Dismissing an employee in Uzbekistan at the employer's initiative is only possible on the grounds listed in Article 161 of the Labour Code of 28.10.2022 (in force since 30.04.2023) and by following the procedure: written notice for the required period, severance pay where it applies, full settlement on the last day and recording the termination in the Unified National Labour System. For liquidation or redundancy the employee must be warned at least two months in advance, and severance ranges from 50% to 200% of average monthly earnings depending on length of service with that employer. Below are the grounds, deadlines, settlement and common mistakes.
Grounds for terminating an employment contract
An employment contract ends by mutual agreement, at the employee's initiative, on expiry, at the employer's initiative or due to circumstances beyond the parties' control. For an employer the riskiest group is dismissal at its own initiative: here the law gives a closed list of grounds.
Employer's initiative (Art. 161 Labour Code)
- Liquidation of the organisation or its separate division, or a sole proprietor ceasing business.
- Reduction of headcount or staff due to changes in technology, organisation of production and work, or a reduced volume of work.
- The employee does not fit the position because of insufficient qualifications.
- Systematic breach of duties — a repeated offence within a year after a disciplinary sanction.
- A single gross breach of duties (list in Art. 162).
- Other grounds provided by the Code or other laws.
When dismissal is not allowed (Art. 163)
The employer may not terminate a contract during temporary incapacity for work or leave, during a business trip, while the employee is released for state or public duties, in breach of the ban on discrimination, or without observing the guarantees for pregnant women and employees with a child under three. The restrictions on sick leave, holidays, business trips and public duties do not apply when the organisation is liquidated or a sole proprietor ceases business.
If the collective agreement requires the trade union committee's consent, obtain it in advance: the union replies within ten days, and once consent is given the employee must be dismissed within a month (Art. 164).
Notice periods
The employer gives notice in writing, against signature. The period depends on the ground (Art. 165). An employee who resigns must warn the employer at least 14 calendar days in advance (Art. 160 part 1).
| Ground | Notice period | Severance pay |
|---|---|---|
| Liquidation, sole proprietor ceasing business | At least 2 months | Yes |
| Redundancy (headcount or staff reduction) | At least 2 months | Yes |
| Change of owner (head, deputies, chief accountant) | At least 2 months | Under special rules |
| Insufficient qualifications | At least 2 weeks | Yes |
| Employee misconduct (Art. 161 items 4–5) | At least 3 days | No |
| Resignation | Employee gives 14 calendar days' notice | No |
| Mutual agreement, expiry of a fixed-term contract | Under the agreement / contract | No (unless the contract provides it) |
The employer may replace the notice period with a cash payment equal to its length; this does not replace other payments. During the notice period (except dismissal for misconduct) the employee may take at least one day off a week with pay to look for a new job.
In liquidation and redundancy the employer must also inform the trade union body and the local labour authority at least two months in advance and enter data on each employee being released into the Unified National Labour System (Art. 166). In a redundancy, the preferential right to keep the job applies: first qualifications and productivity, then social criteria — two or more dependants, sole earner in the family, long service with the employer and others (Art. 167).
Severance pay: how much and to whom
Severance is paid on dismissal under items 1–3 of Article 161 (liquidation, redundancy, insufficient qualifications) and in a number of circumstances beyond the parties' control (Art. 168). It is not paid on mutual agreement, resignation, expiry of a fixed-term contract or dismissal for misconduct — unless the employment or collective agreement says otherwise.
The minimum amount under Article 173 depends on length of service with that employer:
- under 3 years — 50% of average monthly earnings;
- 3 to 5 years — 75%;
- 5 to 10 years — 100%;
- 10 to 15 years — 150%;
- over 15 years — 200%.
Average earnings are calculated under Article 257. A collective or employment agreement may set higher amounts, but not lower than the statutory minimum.
Final settlement on the last day
All amounts due to the employee are paid on the day the contract ends (Art. 172). If the employee did not work that day, payment is made no later than three days after they request settlement. The settlement includes:
- salary for days worked in the month of dismissal;
- compensation for all unused days of annual leave (or leave followed by dismissal at the employee's request);
- severance pay, if due;
- payment in lieu of notice, if the employer chose it;
- other payments under the employment and collective agreements.
Personal income tax is withheld and social tax is charged on salary and leave compensation in the usual way. It is convenient to run the settlement together with the regular payroll — this is handled by our payroll service.
Paperwork: order and the Unified National Labour System
- Prepare the underlying document: resignation letter, agreement, redundancy order, reports on disciplinary offences.
- Hand over written notice against signature where required. Record any refusal to sign in a written statement.
- Issue an order terminating the contract with an exact reference to the article and item of the Labour Code.
- Record the termination in the Unified National Labour System (my.mehnat.uz). Since 1 January 2020 work record books are kept electronically, and the reason for dismissal is not entered in them.
- Pay the final settlement and, on request, issue certificates of earnings and length of service.
For more on HR documents and contract registration, see HR records in Uzbekistan.
Typical disputes and how to avoid them
- Redundancy without a real reduction. A position is removed and a month later a similar one is created under another name. The court reinstates the employee and awards average earnings for the period of forced absence.
- Wrong notice period or form. Oral notice or missing days are a frequent reason for reinstatement.
- Dismissal during sick leave or holiday. Directly prohibited by Article 163, except in liquidation.
- Unproven misconduct. Items 4–5 require explanations, reports and disciplinary orders issued on time.
- Late settlement. Paying after the last day breaches Article 172 and gives grounds for a complaint.
If several people are leaving or the situation is contentious, check the documents in advance. WealthWise's Small Business plan (from UZS 5,490,000 a month) includes HR administration and payroll; a one-off review is available as a consultation at UZS 500,000 per hour, with the first 30 minutes free.
Frequently asked questions
How much notice must an employee get before redundancy?
At least two months, in writing and against signature. The notice period may be replaced with a cash payment equal to its length.
How much is severance pay on redundancy?
At least 50% of average monthly earnings for service under 3 years with that employer, 75% for 3–5 years, 100% for 5–10 years, 150% for 10–15 years and 200% for over 15 years.
When must the final settlement be paid?
On the day the employment contract ends. If the employee did not work that day — no later than three days after they request settlement.
Is severance paid when an employee resigns?
No, unless the employment or collective agreement provides otherwise. The employee receives salary and compensation for unused leave.
Can an employee on sick leave be dismissed?
Not at the employer's initiative, except when the organisation is liquidated or a sole proprietor ceases business.
This article reflects the Labour Code as of 2026. Legislation changes, so check the current wording or consult a specialist before dismissing an employee.