All questions

Discontinuing employment

i Dismissal

Since 1 April 2014, all employees have the right to know the concrete reasons that have led to their dismissal. Previously, except in certain situations, only blue-collar employees and employees dismissed for serious wrongdoing enjoyed that right. Employees may also seek damages if they consider that they have been dismissed on manifestly unreasonable grounds. In practice, the grounds for termination will often be stated in the document that employers submit to the National Employment Office. This document is at the same time communicated to the employee so that he or she may claim unemployment benefits.

Normally, there are no notification and consultation procedures unless there is a collective dismissal or plant closure, or if a collective bargaining agreement provides for a specific procedure. Offers of suitable alternative employment are not required.

The termination of an employment contract is always definitive. The only remedy is financial compensation. There is no possibility for obligatory reinstatement of the employee. Certain categories of employees are statutorily protected against dismissal, such as members and candidates of the works council, members of a trade union delegation, pregnant employees and employees on maternity or parental leave.

Employment contracts concluded for an indefinite period may only be terminated by one of the parties through prior notification of a notice period. Termination for serious reason constitutes, in principle, the only permissible circumstance for unilateral termination without prior notice. In practice, however, it is possible for either of the parties to terminate the contract without prior notice, provided compensation is paid.

Since 1 January 2014, notice periods are the same for all employees in all sectors subject to exceptions. It is not clear whether the employer and employee are able to agree on a notice period different from that contained in the AEC, but there is no provision in the AEC that would suggest that it is prohibited, as long the different provision is favourable to employees.

ii Redundancies

Where multiple redundancies qualify as a collective dismissal, the legislation on collective dismissals applies and possibly the legislation regarding the closure of enterprises. A collective dismissal triggers the prior information and consultation obligations towards the employees (either through the works council or, if there is none, the union delegation, or, failing this, the employees in person). The intention to proceed with collective dismissal must also be communicated to the competent administration (the director of the subregional employment office). In principle, a collective dismissal gives rise to the payment of a special monthly compensation in addition to any indemnity due in lieu of notice.

In the majority of cases, employers and trade union organisations establish a social plan granting additional compensation to the workers concerned and other measures with a view towards reducing the consequences of collective dismissal (e.g., early retirement schemes).

Note that the concept of collective dismissal varies according to whether consideration is given to the right of employees to prior information and consultation, or to the right of employees to receive compensation.

In some sectors there will also be specific obligations for employers if the multiple redundancies do not meet the thresholds of the national legislation.