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Termination

Notice

Are employers required to give notice of termination?

The notice period usually depends on the employee’s length of service and is generally determined by the Salaried Employees Act, a collective bargaining agreement or the individual employment contract. According to the Salaried Employees Act, employees are entitled to a notice period of one to six months. In some cases, the statutory notice period has been prolonged by individual agreement. The notice periods contained in the collective bargaining agreements vary significantly, but are typically shorter than those of the Salaried Employees Act. The notice period will usually cease at the end of a month.

Redundancies

What are the rules that govern redundancy procedures?

Termination of employees is regulated by the Salaried Employees Act, individual contracts and collective bargaining agreements.

Employers may dismiss employees due to:

  • unsatisfactory performance or misconduct; or
  • business-related reasons (eg, finance or reorganisation). 

For salaried employees or employees covered by a collective bargaining agreement, the employer must provide a justified reason in order to terminate the employment contract. To avoid unjustified termination in cases in which termination is due to employee performance, the employer should normally issue one or more written warnings before dismissal, as the employee should been given the opportunity to improve.

Serious employee misconduct entitles the employer to terminate the employment relationship without further notice.

Are there particular rules for collective redundancies/mass layoffs?

Collective redundancies are covered by the Act on Collective Redundancies and collective bargaining agreements. The rules apply in connection with redundancies contemplated by an enterprise where the redundancies within a 30-day period will comprise:

  • at least 10 redundancies in enterprises normally employing more than 20 and fewer than 100 employees;
  • at least 10% of the number of employees in enterprises normally employing at least 100, but fewer than 300 employees; or
  • at least 30 redundancies in enterprises normally employing 300 employees or more.

In case of mass redundancies, notice must be given to the employees or their representatives. The employer is obliged to consult employees to avoid or decrease the amount of redundancies and should provide the works councils with the required information about the employees affected by the mass redundancies.

If an employer fails to inform and consult on a mass redundancy, trade unions can assist employees with claims. If a claim is successful, the employer may be subject to a fine or compensation of up to 30 days’ salary per affected employee.

Protections

What protections do employees have on dismissal?

Employers may dismiss employees due to:

  • unsatisfactory performance or misconduct; or
  • business-related reasons (eg, finance or reorganisation).  

For salaried employees or employees covered by a collective bargaining agreement, the employer must provide a justified reason in order to terminate the employment contract. To avoid unjustified termination in cases in which termination is due to the employee’s performance, the employer should normally give one or more written warnings before dismissal.

Serious employee misconduct entitles the employer to terminate the employment relationship without further notice.

A warning is often required before a dismissal, particularly in the case of unsatisfactory performance or lack of cooperation, as the employer should be given the opportunity to improve. 

Certain groups of employee enjoy special protection. In connection with a termination, it is very important to check whether the employee in question may belong to one of the following groups:

  • pregnant employees;
  • employees on pregnancy, maternity or parental leave;
  • senior employees (depending on age);
  • employees who enjoy protection against discrimination;
  • employees who are members of company boards or safety committees or who are elected as employee representatives;
  • part-time or fixed-term employees; or
  • trainees.

Generally, it is more difficult for employers to justify dismissal of protected employees. The employer risks having to pay compensation, which for some groups may amount to six to 12 months’ salary. 

Compelling reasons are required to terminate employment of these categories of employee.

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