Armenia Employment Termination Law: The Complete Guide
Armenian labor law sets strict rules for how employers may end employment relationships. Every employer-initiated termination must be based on a specific ground listed in Article 113 of the Labour Code — the list is exhaustive, and any termination outside it is unlawful. Getting the ground, notice period, severance calculation, and documentation right is not optional: courts routinely reinstate employees and award substantial compensation when employers cut corners.
This guide covers every aspect of employment termination under Armenian law — from the full list of lawful dismissal grounds to notice periods, severance pay, protected employees, final settlement obligations, and what happens when a termination is challenged in court. For broader employment compliance guidance, see our Employment & Labor Compliance service page.
At a glance
| Legal basis | Labour Code of the Republic of Armenia (HO-124-N), Articles 112–117, 129–130 |
| Termination grounds | Exhaustive list under Article 113 — any termination outside these grounds is unlawful |
| Notice range | 0 days (gross misconduct) to 2 months (liquidation/redundancy) |
| Severance range | 10–44 average daily wages (graduated) or 1 month average salary (flat), depending on ground |
| Filing deadline for wrongful termination | 2 months from receipt of dismissal order |
| Criminal liability | Yes — dismissing a pregnant employee or parent of child under 3 (Criminal Code Art. 171) |
| Digital system | Digital Employment Contract System mandatory from July 1, 2027 |
In this article:
- Lawful grounds for employer-initiated termination (Article 113)
- Dismissal for cause: insubordination, misconduct, and loss of trust
- Notice periods and pay in lieu
- Severance pay and final settlement
- Protected employees and prohibited dismissals
- Required procedure and documentation
- Who has authority to terminate in an Armenian CJSC?
- Challenging unlawful dismissal
- The Digital Employment Contract System
- Frequently asked questions
Lawful grounds for employer-initiated termination
Article 113 of the Labour Code contains the complete, exhaustive list of grounds on which an employer may terminate an employment contract. If the employer cannot point to one of these grounds and prove it was properly applied, the termination is unlawful and can be overturned by a court.
| Ground | Article | Notice | Severance |
|---|---|---|---|
| Liquidation / cessation of activity | 113(1)(1) | 2 months | 1 month avg salary |
| Staff reduction / redundancy | 113(1)(2) | 2 months | 1 month avg salary |
| Permanent change of conditions (refused) | 113(1)(3) | 14–60 days (by tenure) | 10–44 daily wages (by tenure) |
| Loss of required qualification | 113(1)(4) | 14–60 days (by tenure) | 10–44 daily wages (by tenure) |
| Unsuitability for position | 113(1)(5) | 14–60 days (by tenure) | 10–44 daily wages (by tenure) |
| Health-based inability (medical-social expertise) | 113(1)(6) | 14–60 days (by tenure) | 10–44 daily wages (by tenure) |
| Material damage + loss of trust | 113(1)(7) | No notice | None |
| Reinstatement of prior employee | 113(1)(4) | 2 months | 1 month avg salary |
| Repeated non-performance (2 prior penalties) | 113(1.1)(1) | No notice | None |
| Serious misconduct / gross violation | 113(1.1)(2) | No notice | None |
| Unjustified absence (absenteeism) | 113(1.1)(3) | No notice | None |
| Revocation of work authorization | 113(1)(13) | 3 business days | None |
| Employee resignation | Art. 112 | 30 days (employee gives notice) | None |
| Probation (either party) | Art. 93 | 3 days | None |
Employers must also consider whether the employee falls into a protected category before initiating termination. Even a valid ground will not save a dismissal that violates a statutory protection.
Dismissal for cause: insubordination, misconduct, and loss of trust
Cause-based dismissals under Armenian law fall into three categories, each with different procedural requirements. These are the grounds that allow termination without notice and without severance — but only if the employer follows the correct process.
Repeated non-performance / insubordination
Under Article 113(1.1)(1), an employer may terminate for systematic failure to perform duties — what common-law systems call “insubordination” — but only after imposing at least two prior unexpired disciplinary penalties (Article 121). The disciplinary measures available under Armenian law are graduated: written warning (first/minor), strict warning (serious/repeated), and termination (severe). Each penalty must be documented and proportionate. The employer must invite the employee to provide a written explanation before imposing any disciplinary measure, and the decision must be issued within one month of detection or six months of the incident.
Serious misconduct / gross violation
Article 113(1.1)(2) permits immediate termination for a single serious violation — such as gross negligence, theft, disclosure of confidential information, appearing at work under the influence of alcohol or drugs, or refusing a mandatory medical examination. Unlike repeated non-performance, this ground does not require prior warnings. However, the employer must still document the violation, follow internal disciplinary procedures, and issue a formal dismissal order stating the facts and legal basis.
Loss of trust
Article 113(1)(7) allows termination where an employee has caused or could cause material damage to the employer and there has been a loss of trust. This ground applies to positions of special trust — typically finance, accounting, treasury, custody of assets, or roles with access to confidential information. The employer must demonstrate credible evidence of the risk or actual damage; courts expect a documented pattern of conduct or a serious single event, not a minor one-off incident. A written explanation must be requested from the employee before the dismissal order is issued.
Notice periods and pay in lieu
Armenian law ties notice periods to both the termination ground and the employee’s length of service. There are three distinct notice regimes.
Flat two-month notice — liquidation and redundancy
When termination is due to liquidation of the employer (Art. 113(1)(1)) or staff reduction (Art. 113(1)(2)), the employer must provide at least two months’ advance written notice, regardless of the employee’s tenure. This applies to every affected employee.
Graduated notice — employee-specific, non-disciplinary grounds
For terminations based on unsuitability, health-based incapacity, change of conditions, or similar non-fault grounds, notice periods scale with the employee’s continuous service:
| Continuous service | Minimum notice | Severance (Regime 2) |
|---|---|---|
| Less than 1 year | 14 days | 10 average daily wages |
| 1 to 5 years | 35 days | 25 average daily wages |
| 5 to 10 years | 42 days | 30 average daily wages |
| 10 to 15 years | 49 days | 35 average daily wages |
| Over 15 years | 60 days | 44 average daily wages |
No notice required — immediate termination for cause
Gross misconduct, loss of trust, intoxication at work, unexcused full-day absence, and refusal of a mandatory medical examination all allow immediate termination without notice. Revocation of work authorization or residence permit requires only three business days’ notice.
Pay in lieu of notice and job search time
An employer may choose to terminate immediately before the notice period expires, but must compensate the employee at the average daily wage rate for each remaining day of notice. This payment is in addition to — not a substitute for — any severance owed. During the notice period, Article 115(4) grants the employee at least 10% of their daily working hours (paid at average salary) to seek new employment.
Employee resignation
An employee on an indefinite-term contract must give 30 days’ written notice under Article 112. A shorter five-day notice applies in urgent cases (illness or employer violation of law). The employee retains a three-day withdrawal right — they may rescind their resignation within three days of submitting it. During probation (Article 93), either party may terminate with three days’ notice.
Severance pay and final settlement
Article 129 establishes two separate severance regimes, triggered by different termination grounds.
Regime 1 — flat one month average salary
Applies when termination is due to liquidation, staff reduction/redundancy, or reinstatement of a previously dismissed employee (Art. 113(1)(1), (2), and (4)). The employer pays one full calendar month’s average salary regardless of the employee’s length of service.
Regime 2 — graduated scale by tenure
Applies when termination is due to unsuitability, health-based incapacity, refusal of changed conditions, or military service (Art. 113(1)(3), (5), (6), (7); Art. 109(1)(9); Art. 124). The amount scales with the employee’s continuous service, from 10 average daily wages (under 1 year) to 44 average daily wages (over 15 years) — see the notice and severance table above.
No severance is owed for disciplinary/cause-based terminations, employee resignation, or probation termination. Collective agreements may provide higher amounts (Art. 129(2)).
Final settlement: unpaid wages and leave compensation
Under Article 130, all final payments are due on the employee’s last working day. This includes accrued salary through the last day, overtime, bonuses, severance (if applicable), pay in lieu of notice, and compensation for all unused annual leave (Article 170). An employee being dismissed for any reason other than gross misconduct may alternatively request to take unused leave before the termination date, extending the employment relationship through the leave period.
Protected employees and prohibited dismissals
Armenian law prohibits employer-initiated termination for several categories of employees. Most protections are conditional — they include narrow exceptions, primarily for employer liquidation.
| Protected category | Legal basis | Exceptions |
|---|---|---|
| Pregnant employees (from medical certificate to 1 month post-maternity leave) | Art. 114, 117 | Liquidation, gross misconduct, loss of trust |
| Employees on maternity leave | Art. 114, 117 | Liquidation, gross misconduct, loss of trust |
| Employees caring for a child under 1 year (any parent) | Art. 117 | Liquidation, bankruptcy/death of employer, probation failure |
| Employees on sick leave / temporary disability | Art. 114 | Liquidation, gross misconduct |
| Employees on any leave (including childcare leave up to age 3) | Art. 114(1)(2), Art. 173 | Liquidation |
| Trade union representatives | Art. 23, 56 | Liquidation (prior labor inspectorate consent otherwise required) |
Retirement age was removed as a standalone ground for employer-initiated termination by the May 2023 amendments (HO-160-N). Age-based termination is now treated as discriminatory under Article 3.1 of the Labour Code.
Required procedure and documentation
Even with a valid ground, a termination can be overturned if the employer fails to follow proper procedure. Here is the step-by-step process for a lawful employer-initiated termination.
Identify the legal ground
Confirm which Article 113 ground applies. Gather supporting documentation — medical certificates, performance records, financial evidence, attendance logs, or restructuring plans. For redundancy, the employer must offer alternative suitable positions within the organization before terminating.
Request a written explanation (disciplinary cases)
For cause-based terminations, invite the employee to submit a written explanation of the alleged violation. Consider the explanation, evidence, and the employee’s past record before deciding on the measure. The decision must be issued within one month of detection or six months of the incident.
Issue the termination order
Draft a written termination order stating the specific legal ground, factual basis, termination date, and any relevant calculations (notice, severance). The order must be signed by an authorized representative.
Deliver within three days
Under the December 2024 amendments, the employer must provide the employee with a copy of the signed termination order within three calendar days. Where the Digital Employment Contract System is used, delivery can be effected through the platform’s notification functions, providing traceable proof of service.
Complete the final settlement
On the last working day, pay all amounts due: salary, overtime, bonuses, unused leave compensation, severance, and pay in lieu of notice. Complete payroll and tax reporting. If your workforce includes foreign employees, coordinate immigration status and departure timelines — see our guides on visas and residence permits.
Mass layoff notifications
Under Article 116, if the employer plans to dismiss more than 10% of total employees (minimum 10) within a two-month period, it must submit data on the number of dismissed employees — broken down by profession, gender, and age — to the state employment authority and the employees’ representative at least two months before the terminations take effect. In redundancy situations, preferential retention applies to certain military/disability-related categories and families of fallen servicemembers, with collective agreements potentially adding other priority groups.
Who has authority to terminate employment in an Armenian CJSC?
Under the Law on Joint Stock Companies, the general director (CEO) of a CJSC has express operational authority to conclude employment agreements and to dismiss employees, including C-suite executives like a COO — so long as the termination complies with Armenian labor law requirements (proper ground, notice, procedure, protections).
Two important corporate governance limits apply. First, the board may control the administrative structure and staff list — if a position is embedded in the board-approved structure, changes to that structure may require board action. Second, if the “executive” is not merely an employee but serves as a member of the corporate executive body (e.g., a collegial executive organ defined in the charter), then formation and early termination of that body’s powers is reserved to the general meeting or the board, depending on the charter.
In practice, this means the CEO can terminate a COO who is a regular employee, but removing the CEO or other “executive body” members requires a meeting or board decision. Executives receive the same statutory notice and severance protections as other employees — unless a more favorable employment contract or governance agreement provides otherwise. For company registration and corporate structuring matters, see our business registration guide.
Challenging unlawful dismissal
An employee who believes their termination was unlawful has two months from receipt of the dismissal order to file a claim in the Court of First Instance of General Jurisdiction. The employer bears the effective burden of proving that the termination was based on a lawful ground and followed proper procedure.
Under Article 265, courts may order reinstatement plus back pay for the entire period of forced idleness, calculated as average daily salary multiplied by the working days missed. If the employee found alternative work during the dispute, the October 2024 amendment (HO-364-N) requires courts to account for that income when calculating compensation. Where reinstatement is impractical due to economic, technological, or organizational reasons, courts may instead award non-reinstatement compensation ranging from one to twelve times the employee’s average salary.
Recent Court of Cassation decisions (2025) confirm that courts closely scrutinize the formality and completeness of the employer’s dismissal order and are willing to apply the full range of Article 265 remedies, including the maximum 12x non-reinstatement compensation. There is no statute of limitations for unpaid wage claims, making final settlement compliance critical even years after termination.
The Digital Employment Contract System
The December 2024 amendments (Law HO-525-N) introduced a nationwide digital system for employment contracts, including electronic execution of hiring, amendments, and terminations. The system is currently voluntary but becomes mandatory from July 1, 2027, with limited exceptions. Employers then have 12 months to upload existing paper contracts into the platform.
For terminations, the practical impact is that dismissal orders, three-day delivery obligations, and proof of service can all be handled electronically through the platform. Employers should begin mapping their active contracts and termination workflows now, assign platform administrators, and coordinate with counsel on digital document templates to ensure a smooth transition.
The December 2024 law did not change any severance amounts, notice periods, or termination grounds — it addressed only the digital infrastructure for employment documentation. For comprehensive guidance on employment compliance in Armenia, including the digital system, see our Employment & Labor Compliance service page.
Frequently asked questions
What does “loss of trust” mean under Article 113 of the Armenian Labor Code?
Can an employee be dismissed for insubordination or repeated refusal to follow instructions?
In which cases can an employer terminate employment without notice?
Can an employee resign immediately if the employer failed to pay wages on time?
When must final wages, unused leave, and severance be paid after termination?
Can a CEO of an Armenian CJSC terminate a COO, or is board approval required?
Which employees are protected from dismissal under Armenian law?
What remedies exist if a dismissal is found unlawful?
If you’re managing workforce transitions and need compliance support, learn more about our Employer of Record services in Armenia to streamline employment administration.
