1. Grounds for Termination
An employment contract can be terminated only on the grounds listed in the Labour Code. This means that both the parties to a collective labour agreement and the parties to the contract cannot establish other grounds for terminating the employment contract. They cannot combine or modify individual grounds, either.
As follows from the provisions of the Labour Code, settlement agreements and terminating the employment relation without notice pertain to all types of employment contracts. The employment notice applies to the employment contract of a trial period, fixed-term, and unlimited period.
2. Individual Dismissals
Collective dismissals are those, which are made in the event where the employer who employs at least 20 employees needs to terminate multiple employment relations where the employees are not at fault. The collective dismissal must take place within 30 days and pertain to at least: 1) 10 employees when the employer employs less than 100 employees; 2) 10% of employees when the employer employs at least 100 employees, however not more than 300 employees; or 3) 30 employees when the employer employs 300 or more employees.
The employer is obligated to consult with the company’s trade organizations or with employee representatives prior to a collective dismissal. The consultations lead to concluding a settlement agreement defining the principles of actions in the matters concerning employees under the intended collective dismissal.
3. Termination Agreement
The Labour Code lists three reasons for immediate termination due to employee misconduct. The list is exhaustive. The employer does not have to exercise the option should he decide that the employee’s faulty behavior makes it possible to continue employing such an employee. The reasons are: 1) gross violation of the employee’s basic employee duties; 2) the employee’s committing of a crime during the employment relation which makes it impossible to continue the employment relation; 3) the employee has lost his/ her authorizations which are necessary for him/her to perform the work at a given position. Additionally, the employer can terminate an employment contract with an employee effective immediately where the employee is not at fault in the case of a prolonged unexcused absence of the employee at work.
a. Is severance pay required?
In connection with terminating employment relations within a collective dismissal and individual dismissals for reasons which do not concern the employee (if the employer employs at least 20 employees), the employee is entitled to a severance payment in the amount which depends on the duration of the employee’s service and on the amount of his/her salary. The amount of the severance payment may not, however, exceed the amount of 15 times of a minimum remuneration for work as set forth in the provisions of the Act on minimum wage (approx. 6.300 EUR).
There are also special categories of employees whose dismissal requires the employer to pay a specified amount of severance payment. Such employees are government agency representatives, teachers and persons who perform home-based work, among others.
The Labour Code also provides for severance payment to an employee in connection with his/her retirement or disability, and the payment of a death benefit.
4. Separation Agreements
There is neither practice nor respective labour law regarding Separation Agreements.
5. Remedies for employee seeking to challenge wrongful termination
An employee seeking to challenge wrongful termination can file an appeal with a labour court. Most types of employment notices can be appealed against and the appeal should be filed with a competent labour court within 7 days from the delivery of the employment notice. In such a case, the employee can demand a ruling stating ineffectiveness of the termination of employment or reinstating him/her at work on previous terms or a payment of damages.
In the event of terminating an employment contract effective immediately, which took place with a violation of current provisions of law, the employee is entitled to a claim for reinstating him/her at work or for damages. The demand to reinstate him/her at work or to be paid damages is filed with a labour court within 14 days from the receipt of the notification on terminating the employment contract without notice or from the day of expiration of the employment contract.