Termination

Notice

Are employers required to give notice of termination?

According to the Termination of Employment Law, the statutory minimum notice varies from one to eight weeks, according to the employee’s period of continuous employment. A dismissal without notice or payment in lieu of notice can take place only in the following circumstances:

  • The employee’s conduct indicates that the relationship between the employer and employee cannot reasonably be expected to continue under the circumstances.
  • The employee has committed a serious disciplinary or criminal offence.
  • The employee has behaved indecently.
  • The employee has repeatedly violated or ignored employment rules.

Redundancies

What are the rules that govern redundancy procedures?

Under Section 18 of the Termination of Employment Law, the following constitute grounds for dismissal due to redundancy:

  • the employer has ceased to carry on the business that employs the employee;
  • the employer has ceased to carry on the business at the place in which the employee was employed; or
  • any of the following grounds relating to the operation of the business:
    • modernisation, automation or any other change in the methods of production or organisation which reduces the number of required employees;
    • changes in the products, production methods or necessary expertise of the employees;
    • the abolition of departments;
    • difficulties in placing products on the market or regarding credit;
    • the lack of orders or raw materials;
    • a shortage of means of production; or
    • a reduction of the volume of work or the business itself.

A written notice of termination must be given to the employee, which outlines that the employee has been terminated for redundancy reasons and includes a notice period. Immediate termination is possible only if the employer pays the relevant wages in lieu of notice.

The statutory minimum notice period varies from between one and eight weeks, according to the employee’s period of continuous employment.

Pursuant to Section 21 of the Termination of Employment Law, the employer must notify the Ministry of Labour, Welfare and Social Insurance of any foreseeable redundancy at least one month in advance of the foreseen date of termination, and must include the following information:

  • the number of potential redundant employees;
  • the affected sector of the business;
  • the professions and, where possible, the names and family obligations of the affected employees; and
  • the grounds for the redundancy.

If an employee is made redundant, they will receive payment from the state-administered Redundancy Fund to which all employers contribute, according to their length of service, provided that they have completed at least 104 weeks’ continuous employment with their employer.

Are there particular rules for collective redundancies/mass layoffs?

Employers that intend to proceed with collective dismissals must consult in good time with worker representatives to reach an agreement. The employer must notify the Ministry of Labour and Social Security in writing of any intended collective redundancies as soon as possible. Any intended collective redundancies which have been notified to the ministry will be valid after 30 days following notification.

Protections

What protections do employees have on dismissal?

Employees are generally protected from dismissal for any reason that is not a legally justified ground for dismissal.

It is a criminal offence to dismiss a pregnant employee from the time of being presented with a doctor's certificate of pregnancy up to three months after the end of maternity leave.

It is also illegal to dismiss an employee on leave due to an incapacity, unless certain conditions are satisfied.

Further, an employer cannot dismiss an employee based on their:

  • race;
  • gender;
  • religious beliefs;
  • nationality; or
  • social origin.

A dismissed employee can bring a claim for damages for unlawful or wrongful dismissal at the Industrial Disputes Tribunal, which has exclusive jurisdiction to determine matters arising from the contract of employment and termination. Alternatively, an employee has the right to file a claim for breach of contract at the district courts, if their claim exceeds the equivalent amount of two years' salary (which is the maximum amount of compensation that can be ordered by the Industrial Dispute Tribunal).

In addition, an illegally dismissed employee is entitled to payment in lieu of notice, which is calculated on the basis of the scale mentioned above.

Depending on the circumstances, an employee may also claim general damages for breach of contract or loss of career prospects and any special damages suffered as a result of the termination.

In cases of unlawful termination of employment and provided that the employer’s total workforce exceeds 19 persons, the courts can order the employer to re-employ the employee. However, this discretionary power is rarely exercised.

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