Ecuador Unjustified Dismissal Indemnity Calculator
Ecuador · EmploymentCalculate the indemnity for unjustified dismissal (despido intempestivo) in Ecuador under Article 188 of the Labor Code: 3 months of compensation up to 3 years of service, 1 per year from there, capped at 25. Shows the severance-notice bonus separately.
How is it calculated?
Article 188 of the Labor Code: if the employer ends the employment relationship without just cause, the worker is compensated with 3 months of compensation up to 3 years of service and, beyond 3 years, with 1 month of compensation per year of service, up to a cap of 25 months. A fraction of a year counts as a full year (4 years and 2 months count as 5 years). The base is the compensation the worker was receiving at the time of dismissal, including legally computable items; under a binding precedent from the National Court of Justice (Resolution 02-2025), if a more recent compensation figure is more favorable, that one is used. In addition to the indemnity, the severance-notice bonus under Article 185 applies: 25% of the last compensation for each full year of service, shown separately. This calculator doesn't include pending salary, bonuses, vacation, or reserve funds (for that, the final settlement) and doesn't assess whether the dismissal was actually unjustified: that's determined by a judge or the Ministry of Labor.
Examples
Up to 3 years: hired 01/01/2025, dismissed 06/30/2026, compensation of 1,000
1 year and 6 months: 3 compensations = 3,000. Severance-notice bonus separately: 250.
More than 3 years: hired 01/01/2022, dismissed 03/01/2026
4 years and 2 months count as 5 years: 5 compensations = 5,000. Severance notice separately: 1,000 for 4 full years.
25-compensation cap: hired 01/01/2000
27 compensations would apply, but the maximum is 25: 25,000.
How the indemnity is calculated (Article 188)
With up to 3 years of service, 3 compensations apply; with more than 3, one compensation per year, up to a maximum of 25. A fraction of a year counts as a full year.
| Seniority | Indemnity |
|---|---|
| Up to 3 years | 3 compensations |
| More than 3 years | 1 compensation per year (fraction = full year) |
| Cap | 25 compensations |
After the dismissal
The indemnity doesn't include your pending salary, bonuses, vacation, or reserve funds: those are calculated separately in the final settlement.
Sources
- Ministry of Labor and Human Development (Ecuador) — Labor Code: thirteenth- and fourteenth-month bonuses, vacation, severance notice, unjustified dismissal, overtime, and profit sharing — in effect since January 2026 · reviewed on September 25, 2026
- National Court of Justice (Ecuador) — Resolution 02-2025: binding precedent on the base compensation for the unjustified dismissal indemnity (most favorable recent compensation) — in effect since January 2025 · reviewed on September 25, 2026