Procedures For Terminating the Agreement
The dismissal can be ordinary and extraordinary. For both types, there are specific grounds prescribed by law. The notice period is agreed in the employment agreement or defined by law. Before ordinary termination caused by the employee’s misconduct, the employer shall deliver a warning in writing due to an employment obligation breach and point out the possibility of termination, this can be omitted if there are circumstances in which this is not to be expected from the employer. Before ordinary and extraordinary dismissal, the employer shall enable the employee to lay out his/her defence for their conduct, unless under the circumstances this is not expected from the employer.
Extraordinary termination by the employer or the employee is granted without notice if there is a justified reason for termination that is a particularly difficult breach of obligations or another extremely important fact, that bearing in mind all the circumstances and interests of both parties the continuation of employment is not possible. The limitation is 15 days since becoming aware of the fact that represents the grounds for dismissal.
An employee can terminate the employment agreement without stating a reason with a notice period which cannot be longer than one month if the employee has an especially important reason.
Termination On Notice
Notice periods can be agreed in the employment agreement, and if not, it is the one prescribed by law and it depends on the time the employee was employed. In case that the reason for dismissal is due to the employee’s misconduct, the notice period prescribed by law can be shortened.
Termination By Reason Of The Employee's Age
The employment can be terminated when the employee reaches 65 years of age and has 15 years of pensionable service.
Automatic Termination In Cases Of Force Majeure
There are no relevant provisions that grant automatic termination due to force majeure.
If the employer will no longer need at least 20 employees in 90 days, out of which at least five employee’s dismissals would be based on business reasons, that employer is obligated to, in an appropriate and timely manner, conduct a consultation with the works council to conclude an agreement for the purpose of eliminating and/or reducing the number of no longer needed employees. The employer shall notify the competent public employment service body about this consultation. The employees cannot be dismissed before a period of 30 days has passed since delivering the notice of consultation. The competent body can prolong the notice period for an additional 30 days if it can secure the continuance of employment for that employee.
Termination By Parties’ Agreement
This agreement must be concluded in writing.
Directors Or Other Senior Officers
As regulated by their agreement, otherwise the rules from the Employment Act apply apart from the provisions of employment for a certain period, termination, notice period and severance payment.
Special Rules For Categories Of Employee
Employees who are under 18 have special provisions and limitation in relation to working hours – the maximum working hours in 24 hours is 8 hours, overtime work is banned for minors. Night work is generally banned, except in certain circumstances.
Night workers are considered to be employees who are working regularly at least 3 hours during night work and they should not be working longer than an average 8 hours for each 24 hours in a 4-month period.
During pregnancy leave, maternity, paternity, adoption leave, part-time work due to intensive care of the child, pregnancy leave, leave of the mother who is breastfeeding and leave or part-time work due to intensive care of a child with special needs, within 15 days since the termination of pregnancy or using the mentioned rights, the employer cannot terminate the employment. The employer is notified within 15 days since the notice of termination is given that one of the mentioned reasons exist the termination is null and void, however in cases of winding up based on a special provision, the termination can be valid if it is based on business reasons.
Employment cannot be terminated while the employee is healing and /or recovering from a professional illness or work-related injury.
There is an Act on the Protection of Reporters of Irregularities by which employers who are employing more than 50 persons have to form an internal mechanism for the reporting of irregularities. The employer cannot place the employee in an unfavourable position due to reporting of irregularities, i.e., termination of employment, withholding pay, inability to be promoted, etc.
Specific Rules For Companies in Financial Difficulties
There is an Act on Insurance of Employees’ Claims in the Event of Bankruptcy of the Employer which grants the protection of material rights of employees in cases of bankruptcy or account block of the employer. Apart from this, the rules for termination due to business reasons apply.
Special Rules For Garden Leave
Garden leave is possible during the notice period which is followed by termination of employment. The employee during the notice period and on garden leave should be paid the usual salary and the employer will recognise all the rights of the employee as if the employee is not on garden leave.
Restricting Future Activities
Contractual non-compete clauses are binding for the employee if agreed upon and if during the duration of non-compete the employer is paying the compensation at least in the amount of one-half of the average pay paid to the employee in the last three months before the termination of employment. The non-compete can be valid even without the compensation from the employer if a contractual penalty was agreed. The contractual non-compete must be concluded in writing and cannot last longer than two years since the employment termination.
The employee has the right to a severance payment if the employer is terminating the agreement after two years of continuous work unless the reason for dismissal is caused by the employee’s conduct. The agreed severance payment cannot be agreed in the amount of less than one-third of the average employee’s pay in the last three months of work for each full year of continuous employment, however, unless otherwise agreed this amount cannot be higher than six average pays.
Special Tax Provisions And Severance Payments
Severance payments are tax-deductible up to a prescribed amount after which they are taxed as a normal salary.
Allowances Payable To Employees After Termination
All allowances that are agreed upon can be paid to employees.
Time Limits For Claims Following Termination
After delivery of the dismissal notice, the employee must within 15 days request from the employer to stop infringing the employee’s rights. The employer has 15 days after the delivery of the employee’s request to comply with the request, if not done so by the employer the employee has an additional 15 days to file an action before the competent court.