Normal termination procedure
Immediate termination procedure
As a general rule, under the Albanian Labour Code(1) an employment agreement is entered into for an indefinite term. However, for jobs of a temporary nature, an employment agreement can also be entered into for a fixed period of time.
With regard to the termination of an employment agreement, the code distinguishes between:
- the normal termination procedure (ie, occurring for opportunity reasons); and
- the immediate termination procedure (ie, occurring for reasonable and grave causes which render impossible the continuation of employment).
Pursuant to Article 149 of the code, a fixed-term employment agreement can be terminated only upon the expiration of its term. The termination of a fixed-term employment agreement for opportunity reasons is prohibited. However, either party may validly terminate a fixed-term employment agreement for reasonable cause, thus justifying its immediate termination.
Pursuant to Article 141 either party may terminate an indefinite employment agreement, as long as the legal notice period is observed. The duration of the notice period varies, depending on the length of time for which the employee has worked for the employer.(2)
However, based on Articles 144 and following of the code, a normal termination of an employment agreement by the employer must also fulfil the following conditions:
- The employer must observe the termination procedure; and
- The termination must not be motivated by any of the "abusive" motives listed in Article 146.(3)
Article 144 states that an employer which intends to terminate an indefinite-term employment agreement should first organise a preliminary meeting with the employee, of which the employee should be notified in writing at least 72 hours in advance. The aim of this meeting is for both parties to discuss the reasons for the possible termination, and to give the employee the opportunity to express himself or herself and to be heard. If, after the discussion, the employer is still determined to terminate the employment agreement, it should notify the employee of its final decision within between 48 hours and one week of the preliminary meeting.
With regard to the motivation for termination, in its 2007 decision in Klobocishta v Italian Institute of External Affairs the Albanian High Court confirmed that Article 141 does not oblige the terminating party to give reasons for its decision in order to terminate the employment agreement. Moreover, the high court stated that both parties can terminate an employment agreement without giving a reason, provided that they observe the notice period and the termination procedure. The only limit to such freedom (as recognised by law) is that the employment agreement should not be terminated for one of the "abusive" reasons listed in Article 146.
Finally, based on Article 147 (as per the applicable legislation), the employer cannot terminate an employment agreement during a period in which:
- a male employee is completing his military service;
- an employee is receiving temporary work incapacity benefits - from either the employer or social insurance - for a maximum period of one year; or
- an employee is taking his or her annual leave.
If an employment agreement is terminated in violation of Article 147, the employer could end up having to pay compensation to the employee for unjustified termination of the employment agreement. The compensation could amount to up to 12 months' wages, plus two months' wages in case of non-compliance with the termination procedure.
Immediate termination procedure
The code also provides for both parties to terminate immediately an employment agreement (whether fixed term or indefinite) for reasonable cause (defined as "grave or serious circumstances" which prevent the continuation of the employment relations based on the principle of good faith) without observing the notice period.
The termination procedure outlined in Article 144 (see above) should be observed even in the case of immediate termination of the employment agreement by the employer.
For further information on this topic please contact Selena Ymeri at Hoxha Memi & Hoxha by telephone (+355 4 2 27 4558), fax (+355 4 2 244 047) or email (firstname.lastname@example.org).
(1) Law 7961/1995 (as amended).
(2) Accordingly, pursuant to Articles 142 and 143, the advance notice will be:
- five days for employees who have worked for the employer for less than three months (considered as the probation period);
- one month for employees during the first year of employment;
- two months for employees who have worked for the employer for two to five years; and
- three months for employees who have worked for the employer for over five years.
(3) As per said article, the termination of an employment agreement is considered to be "abusive" if:
- the employee has complaints deriving from the employment agreement;
- the employee has satisfied his or her legal obligations;
- the termination is due to personal reasons related to the employee (eg, race, sex, age, civil status, family obligations, pregnancy);
- the termination relates to the exercise of a constitutional right by the employee that does not violate any obligation stemming from the employment agreement; or
- the termination is due to the employee's membership or non-membership in a trade union founded in conformity with the law, or to his or her participation in a trade union activity in conformity with the law.