Discontinuing employmenti Dismissal
The methods of terminating an employment contract in Slovenia are explicitly defined in the ERA and are as follows:
- upon the expiration of the period for which the employment contract was concluded;
- upon the death of the employee or employer, where the latter is a natural person;
- by agreement;
- by ordinary or extraordinary termination;
- by a court judgment;
- by law in the cases stipulated by this Act; or
- in any other case stipulated by the law.
The employment contract must be terminated in writing, regardless of whether it is terminated by the employee or the employer. If an employment contract is terminated by the employee, the latter need not provide an explanation. However, if it is terminated by the employer, the cause of termination must be explained in all cases and the employee must be cautioned about legal protection and his or her rights arising from unemployment insurance. An employment contract may only be terminated entirely. The employer must serve the termination notice on the employee in person. On the day notice is served, the notice periods and the period for claiming judicial protection commence. As a rule, the termination notice is served by the employer at its premises to the employee in person or at the employee's address (indicated in the employment contract) by a registered letter in a special ZPP envelope, or by publication on the bulletin board.
An employer may ordinarily and extraordinarily terminate an employment contract with cause, or it may ordinarily terminate it owing to an occupational disability, for business reasons or owing to the employee's incapacity to perform work owing to disability under the terms and conditions laid down in the employment contract, in accordance with the regulations governing pension and disability insurance, and the regulations governing the vocational rehabilitation and employment of disabled persons. Ordinary termination with cause and extraordinary termination of the employment contract by the employer must be based on a substantiated reason. The ordinary termination of an employment contract owing to an occupational disability does not constitute fault on the part of the employee, but nevertheless the employer must provide a substantiated reason for termination in this case as well. The voluntary payment of severance does not give an employer the right to terminate an employee's employment contract without reason. In practice, however, if the offered severance pay is accepted by the employee, the employment contract is considered terminated by agreement.
Prior to ordinary termination of an employment contract with cause, the employer is obligated, within 60 days of becoming aware of the violation and within six months of the occurrence of the violation, to remind the worker in writing of the question of the fulfilment of obligations and the possibility of cancellation of his or her employment contract if the worker repeats the violation of the contractual and other obligations deriving from the employment relationship within one year (unless otherwise stipulated by a branch collective agreement but for no longer than two years) of the receipt of the written warning.
In the case of ordinary termination of an employment contract with cause, and extraordinary termination and ordinary termination owing to an occupational disability, an employer is obligated to first inform the employee in writing about the reasons for termination, provide an explanation and allow the employee to defend himself or herself within a reasonable period (a minimum of three days).
If so required by the employee, the employer must inform the trade union of which the employee is a member in writing about the intended ordinary or extraordinary termination of the employment contract upon the initiation of the termination procedure. If no trade union exists within the employer's organisation, the role of the workers' council or the workers' representative is identical to the role of a trade union. The trade union, workers' council or workers' representative may give its opinion within six days; it may deliver a negative opinion if it considers that there are no substantiated reasons or that the procedure was not implemented in accordance with the ERA. It must explain its opinion in writing. Irrespective of an unfavourable opinion of the trade union, workers' council or workers' representative, the employer may cancel the employment contract with the worker. The role of the trade union differs in case of termination of the employment contract of a workers' representative, as they are protected by the ERA from having their employment contract terminated by the employer. In such a case the trade union may oppose the ordinary termination owing to an occupational disability or cause, or the extraordinary termination of the employment contract, as a result of which the employee may request a stay of termination of the employment contract. If this occurs, the termination of the employment contract will not be effective until the expiration of the term for arbitration or judicial protection. If the employee proposes a temporary injunction to stay the termination of the employment contract in a lawsuit contesting the termination, the stay may be prolonged until the court hands down a decision about the proposal for the issue of a temporary injunction (the deadlines in which a court must render a decision in such a case are extremely short, as is the appeal procedure).
If the employment contract is terminated with cause, an employee is not entitled to severance pay. However, in the case of an ordinary termination of the employment contract with cause or owing to an occupational disability, an employee is entitled to a notice period, which is 15 days for the latter, while the length of the notice period for the former is stipulated in the ERA and differs depending on the length of service with the employer:
- 15 days for up to one year of service with the employer;
- 30 days for a period exceeding one year of service with the employer;
- after a two-year period of employment with the employer, the 30-day notice period shall increase for each year of employment with the employer by two days, but shall not exceed 60 days; and
- after a period of 25 years of service with the employer, the period of notice shall be 80 days unless a different notice period is specified by a branch collective agreement, but in no circumstances can it be less than 60 days.
The above also applies in case of ordinary termination of the employment contract for business reasons. Instead of enforcing part of or the entire notice period, the worker and employer may agree in writing on adequate compensation. The extraordinary termination of an employment contract – regardless of whether it is terminated by the employer or the employee – is without notice.
In the case of an ordinary termination with cause and the extraordinary termination of the employment contract, the employer has no financial obligations towards the employee and after termination the employee has no preferential right to re-employment with the employer. This is not the case in the ordinary termination of an employment contract owing to an occupational disability. As this termination does not constitute a termination with cause, the employer is obligated to pay severance to the employee, which is calculated based on the average monthly salary of the employee in the three months preceding the termination and the number of years in service with the employer. The severance pay may not exceed 10 times the average monthly salary of the employee, unless provided otherwise in the branch collective agreement.
If an employment contract is terminated extraordinarily by the employee (which is only possible in the cases listed in the ERA), the employee must inform the employer and the labour inspector about the employer's breach of obligations in writing prior to termination. An employee is entitled to request salary compensation from the employer for the period of notice and severance pay as though the employment contract was terminated by the employer.
The ERA protects some categories of employee from having their employment contracts terminated by the employer. These categories include workers' representatives, pregnant employees and recent mothers for up to one year after birth if they breastfeed the child, and parents on parental leave with full absence from work and for one month afterwards. The employment contract of employees during pregnancy and while breastfeeding, and employees on parental leave with full absence from work may be terminated if the employer obtains the consent of the Labour Inspector, provided that the employment contract termination is extraordinary or owing to the initiation of a winding-up procedure of the employer.ii Redundancies
An employer may only terminate the employment contract if there is a substantiated reason preventing further work under the terms and conditions of the employment contract. An employer may terminate an employment contract for business reasons when the need for specific work under the terms and conditions of the employment contract has ceased for economic, organisational, technological, structural and similar reasons.
The deadlines and procedures that the employer has to comply with in the case of termination for business reasons depend on the total number of employees and the number of redundancies. If an employer that employs more than 20 and fewer than 100 employees is making at least 10 employees redundant, if an employer that employs at least 100 and fewer than 300 employees is making at least 10 per cent of employees redundant and if an employer that employs 300 or more employees is making at least 30 employees redundant, it is obligated to terminate the employment contracts by (1) following a special procedure, (2) preparing a dismissal programme for the redundant employees, and (3) notifying the trade union and the Employment Service of Slovenia about the reasons for the redundancies, and the number and projected categories of employees to be made redundant.
The trade union plays an important role in the preparation of the dismissal programme for redundant employees, as the employer must first consult with the trade union about all the material circumstances of termination and agree with it on the proposed criteria for determining the redundant employees, possible ways of avoiding and limiting the number of terminations, and the possible measures to prevent and mitigate harmful consequences.
The employer cannot terminate the employment contract of workers' representatives and employees who are soon to be retired (those aged 58 or over and those who will meet the requirements for retirement after five years of pensionable service) for business reasons unless it submits new and appropriate employment contracts to them to sign, or if they are receiving the unemployment benefit from the Employment Service of Slovenia until they are able to fulfil the minimum conditions for the old-age pension. The employer also cannot terminate the employment contract of an employee for business reasons during pregnancy and breastfeeding up to the child's first year, or the employment contracts of employees on parental leave and the disabled. In case of the ordinary termination of an employment contract for business reasons and owing to an occupational disability, the employer can consider the possibility of offering the employee another appropriate work position (i.e., work that requires the same level and type of education as the work performed in the redundant position, to be performed in the working hours agreed in the previous employment contract and at a location that is not more than three hours' travel in both directions by public transport from the employee's residence).
If the employer wishes to ordinarily terminate the employment contract of a disabled employee owing to business reasons or disability (the difference is that in the former case, the employer no longer needs the work performed by the employee under the employment contract, while in the latter case the employer has no work that could be performed by an employee who has work-related disabilities recognised by a special decision), the Act prescribes that before termination, the employer must obtain an opinion from a special committee composed of the representatives of the institutions administering disability insurance (i.e., the Pension and Disability Insurance Institute of Slovenia, the Employment Service of Slovenia and the Labour Inspectorate of Slovenia, as well as representatives of the employers and trade unions).
If an employee's employment contract is terminated for business reasons or disability, he or she is entitled to special severance pay (the conditions and amount are the same as for termination for an occupational disability) and his or her employment relationship ceases when the notice period expires, which is the same as in the case of termination owing to an occupational disability.
Bankruptcy, court liquidation, compulsory settlement and other forms of company winding-up also constitute reasons for the termination of employment contracts. In this case, the notice period is shorter (15 to 30 days) and the employees whose employment contracts are terminated are entitled to severance pay, which is equal to that for an employment contract termination for business reasons or owing to an occupational disability.