Across Europe - ALRUD · Dismissals Across Europe’ with updates on legislative changes and...

Individual DismissalsAcross Europe

A Ius Laboris publication

Produced by the Individual Employment RightsInternational Practice Group

2nd EditionPrinted: November 2011

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Ius Laboris is an alliance of leading Human Resources law practitioners. Wehave more than 2,500 lawyers providing local expertise across the globe, withmember firms in over 40 countries and coverage in more than 100 jurisdictions. Human Resources challenges need local expertise within a globalframework. The complexities of national employment law demand it and theIus Laboris members provide it.

In today’s global marketplace, businesses increasingly operate on a regional orinternational scale. Companies that coordinate their employees across multiplejurisdictions must comply with the rules and regulations governing employment, labour, pensions, and immigration law in each of those jurisdictions. As a result retaining legal experts with knowledge and experiencein both international and local Human Resources law is essential for businessesof all sizes.

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Contributors

AUSTRIANatalie SeitzKunz Schima WallentinPorzellangasse 41090 ViennaAustriaT +43 1 313 74 0F +43 1 313 74 80E [email protected]

BELGIUMAnn Witters Claeys & EngelsGeneraal Lemanstraat 742600 Antwerp BelgiumT +32 3 285 97 80F +32 3 285 97 90 E [email protected] www.claeysengels.be

CYPRUSNatasa Aplikiotou Sarah ForsterGeorge Z Georgiou & Associates LLC1st Floor, 1 Eras Street 1060 Nicosia CyprusT +357 22 76 33 40 F +357 22 76 33 43 E [email protected]

[email protected]

CZECH REPUBLICNatasa RandlováRandl Partners City TowerHvezdova 1716/2b140 78 Prague 4Czech RepublicT +420 222 755 311F +420 239 017 574E [email protected]

DENMARKMorten Langer Jens Harkov HansenNorrbom VindingAmerikakajDampfaergevej 262100 CopenhagenDenmarkT +45 35 25 39 40F +45 35 25 39 50E [email protected]

[email protected]

ESTONIASven PappKadri MichelsonRaidla Lejins & Norcous Roosikrantsi 2 10119 Tallinn EstoniaT +372 640 7170 F +372 640 7171 E [email protected]

[email protected]

The Alliance focuses on specific areas of expertise within our eightInternational Practice Groups (IPGs). The IPGs bring together lawyers fromacross the Alliance with expertise in key areas of Human Resources law including Individual Employment Rights, Discrimination, Restructuring andLabour Relations, Pensions, Employee Benefits and Tax, Data Privacy,Occupational Health & Safety and Global Mobility

In our experience, local expertise in these areas of law is crucial to developingcoherent Human Resources strategies that work within a global framework.Our IPGs meet regularly and are well placed to coordinate regional and worldwide requests, drawing on each individual lawyer’s wealth of experience.Clients can access the work of our IPGs, which complement our extensiveportfolio of legal services.

The Individual Employment Rights IPG brings together lawyers from across theAlliance with expertise on the unique issues that arise at different stages in theemployer-employee relationship. Members of this practice group advise clientson a range of issues from structuring employment contracts, identifying andimplementing alternative working week arrangements, creating and implementing performance management plans, staff training, creating cross-border employment policies, terminations and settlement agreements,labour audits and due diligence inquiries for corporate transactions.

For any additional information, please visit our website (www.iuslaboris.com)or feel free to contact us:

Ius Laboris280 Boulevard du SouverainB-1160 Brussels, BelgiumTel. +32 2 761 46 10Fax +32 2 761 46 15Email: [email protected]

FINLANDSeppo HaviaDittmar & IndreniusPohjoisesplanadi 25 A 00100 Helsinki FinlandT +358 9 681 700 F +358 9 652 406 E [email protected]

FRANCELaurent DeschaudCoralie RenaudCapstan509 avenue du Prado13008 MarseilleFranceT +33 4 91 29 03 90F +33 4 91 29 03 99E [email protected]

[email protected]

GERMANYChristoph Crisolli Sandra KönemannKliemt & VollstädtUlmenstrasse 37-3960325 Frankfurt am MainGermanyT +49 69 710 410 0F +49 69 710 410 200E [email protected]

[email protected]

GREECEAlexia Stratou Kremalis Law Firm35 Kyrillou Loukareos114 75 AthensGreeceT +30 210 64 31 387F +30 210 64 60 313E [email protected] www.kremalis.gr

IRELANDAoife BradleyLK Shields Solicitors39/40 Upper Mount StreetDublin 2IrelandT +353 1 661 0866F +353 1 661 0883E [email protected]

ITALYAldo BottiniLea RossiToffoletto e SociVia Rovello, 1220121 MilanItalyT +39 02 721 44 1F +39 02 721 44 500E [email protected]

LUXEMBOURGAlexandra Castegnaro Castegnaro 33, Allée Scheffer2520 LuxembourgLuxembourgT +352 26 86 82 1F +352 26 82 82E [email protected]

NETHERLANDSErik DeurMyra DickhoffBronsgeest Deur AdvocatenDe Lairessestraat 137-1431075 HJ AmsterdamNetherlandsT +31 20 305 33 33F +31 20 305 33 30E [email protected]

[email protected]

NORWAYAmund FougnerTherese Høyer GrimstadAdvokatfirmaet Hjort DAAkersgaten 51P.O.Box 471 Sentrum0105 OsloNorwayT + 47 22 47 18 00F + 47 22 47 18 18E [email protected]

[email protected] www.hjort.no

POLANDGrzegorz Ruszczyk Raczkowski i Wspólnicy sp.k.ul. Ciasna 600-232 WarsawPolandT +48 22 531 52 85F +48 22 531 52 81E [email protected]

PORTUGALBruno Barbosapbbr.a Av. Liberdade, 110, 6º1250 – 146 LisboaPortugalT +351 21 326 47 47F +351 21 352 47 57E [email protected]

RUSSIAOlga PimanovaLaw Firm ALRUD2nd floor – 17 Skakovaya Street 125040 Moscow RussiaT +7 495 234 96 92 F +7 495 956 37 18 E [email protected]

SPAINJosé María CarpenaSagardoy AbogadosC/Tutor 27 28008 Madrid SpainT +34 915 429 040 F +34 915 422 657 E [email protected]

SWEDENUlrika Runelöv Caroline LagergréenElmzell Advokatbyrå ABGamla Brogatan 32111 20 StockholmSwedenT +46 8 21 16 04F +46 8 21 00 03E [email protected]

[email protected] www.elmzell.se

SWITZERLANDMarc-Philippe PrinzLenz & StaehelinBleicherweg 588027 ZurichSwitzerlandT +41 58 450 8000F +41 58 450 8001E [email protected]

TURKEYPelin TirtilBatuhan Sahmay Bener Law OfficeYapi Kredi Plaza, C blok, Kat. 434330 LeventIstanbulTurkeyT +90 212 270 70 50F +90 212 270 68 65E [email protected]

[email protected]

UNITED KINGDOMEllen TempertonHannah Price Lewis Silkin LLP5 Chancery LaneClifford's InnLondon EC4A 1BLEnglandT +44 20 7074 8000F +44 20 7864 1200E [email protected]

[email protected]

EDITORDeborah IshiharaIshihara & Co Limitedwriting – editing – proof readingLondonEnglandT +44 20 8549 2772F +44 20 8549 5455E [email protected]

Ius Laboris

Contents

INTRODUCTION 13

AUSTRIA 15

BELGIUM 31

CYPRUS 47

CZECH REPUBLIC 57

DENMARK 73

ESTONIA 85

FINLAND 97

FRANCE 109

GERMANY 119

GREECE 132

IRELAND 147

ITALY 161

LUXEMBOURG 173

NETHERLANDS 191

NORWAY 207

POLAND 221

PORTUGAL 233

RUSSIA 243

SPAIN 257

SWEDEN 269

SWITZERLAND 283

TURKEY 295

UNITED KINGDOM 309

13

INTRODUCTION

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Introduction

In order to successfully establish operations and manage human resourcesabroad, globalisation increasingly requires international employers to understand and consider specific aspects of various national legal systems andeconomies. Accordingly, management personnel and human resources directors are called upon to consider foreign legal provisions in their dailywork.

On behalf of Ius Laboris, the alliance of leading Human Resources law practitioners, we are delighted to introduce the second edition of ‘IndividualDismissals Across Europe’ with updates on legislative changes and developments. This publication explains the essential principles of individualdismissals in numerous European countries and outlines each country’s respective system for protection against dismissal, prior warnings, notice periods, the selection of employees to dismiss, collective requirements, administrative approvals and the legal impacts of such dismissals. Its purposeis to give executives and consultants a comprehensive overview of the national system without assuming prior knowledge of the subject on the reader’s part.

All authors are lawyers from across the Alliance and have extensive practicalexperience in advising international clients on labour and employment law. Wewould like to express our appreciation to all member firms for their contributions and knowledge-sharing.

For further information on the law in any given state, please contact the relevant Ius Laboris member firm listed above or:

Christoph Crisolli (Kliemt & Vollstädt, Germany)Erik Deur (Bronsgeest Deur Advocaten, Netherlands)

Co-Chairs of the Individual Employment Rights International Practice Group

Austria

1. GENERAL PROTECTION 17

2. SPECIAL CONSIDERATIONS 18

2.1 Discrimination 182.2 Age 182.3 Length of service and fixed-term contracts 182.4 Part-time work and career breaks 192.5 Pregnancy and child care 192.6 Carers 192.7 Employee representatives 192.8 Redundancy 192.9 Other 19

3. RESIGNATION 20

4. AVOIDING UNFAIR DISMISSAL 20

4.1 Grounds for dismissal 204.2 Permissions 214.3 Procedures 224.4 Notification/consultation obligations 234.5 Duration of notice period 244.6 Treatment during notice period 254.7 Payment in lieu of notice 254.8 Other 26

5. CIRCUMSTANCES IN WHICH DISMISSAL WITHOUT NOTICE IS PERMITTED 26

6. SANCTIONS AND ENFORCEMENT 27

6.1 Sanctions for unlawful dismissal 276.2 Void dismissals 286.3 Reinstatement 28

7. WAIVER OF RIGHT TO SUE 29

1. GENERAL PROTECTION

In Austria, a comprehensive system of regulations on protection against dismissal exists, not only concerning the ‘general protection’ of employees butalso the ‘specific protection’ of certain groups. General protection against dismissal comes from s105 of the Labour Constitution Act (the ‘LCA’). Specialprotection against dismissal is based on a number of laws applicable to certaingroups of employees. The provisions regarding periods of notice are containedin s20 of the Employees Act, s77 of the Business Code 1859, and s1159(ff) ofthe Austrian Civil Code (‘Allgemeines Bürgerliches Gesetzbuch’, the ‘ABGB’).

The legal provisions on protection against ordinary termination include procedural rules and provide for the mandatory involvement of the workscouncil. If no works council has been elected, the rules involving the workscouncil do not apply, but the remaining provisions are still applicable.

In addition to the statutory provisions, protection against dismissal is also typically regulated in collective agreements. Collective agreements cover mostemployment in Austria and vary a great deal in how they regulate the termination of employment relationships. General protection against dismissalprotects all employees against:

• dismissals for ‘inadmissible reasons’• ‘socially unjustified’ dismissals.

Employees are also protected against dismissals that are:

• contrary to public policy• in breach of mandatory legal rules.

In all establishments in which at least five employees are regularly employed,all employees are entitled to some protection against ordinary termination. In general, an employee (or the works council) may contest a termination bylodging a complaint with the labour court. If the case is upheld, the termination will be set aside and the employee will be reinstated and entitledto back pay for the duration of the procedure.

The general provisions provided by the LCA do not apply to the statutoryagents of a company (e.g. the members of a board of directors or the managing directors of a private limited company), nor do they apply to executive staff who manage a company.

Employees of very small compasinies (i.e. those with fewer than five employees) are also exempt from the general protection against dismissal.

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2.5 Pregnancy and child carePregnant employees and those taking full- or part-time parental leave are protected. Protection against dismissal for mothers ends, at the earliest, fourmonths after the child is born. However, if the employee goes on full- or part-time maternity leave, then the special protection ends four weeks afterthe maternity leave (see section 4.2).

2.6 CarersEmployees on compassionate leave for the care of dying family membersand/or the care of seriously ill children cannot in principle be dismissed (seesection 4.2).

2.7 Employee representativesMembers of the works council or employees who are preparing to be a candidate for a position on the works council enjoy special protection againstordinary as well as immediate termination (see section 4.2).

2.8 RedundancyAn employer that intends to dismiss a large number of employees within a 30-day period must send written notification to the relevant local EmploymentService (s45(a) ‘Arbeitsmarktförderungsgesetz’, the ‘AMFG’) before proceeding with the first dismissal.

The notification and consultation obligations in relation to the localEmployment Service apply when an employer intends to dismiss:

Number of employees Company sizeto be dismissedAt least 5 employees More than 20 and fewer

than 100 employeesAt least 5% of the employees More than 600 employeesAt least 30 employees Over 600 employeesAt least 5 employees Irrespective of company sizeaged 50 or over

2.9 OtherEmployees fulfilling compulsory military or alternative community service arealso specially protected against dismissal (see section 4.2).

Employees living in a company-owned residence in the course of employmentas a concierge (‘Hausbesorger’) enjoy special protection against dismissals.

Employees employed by a corporation under public law (in contrast to careerpublic servants, who have permanent tenure), enjoy special protection againstdismissal.


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2. SPECIAL CONSIDERATIONS

2.1 DiscriminationDisabled employees are protected if they have been working for at least fouryears with the employer. To qualify for this protection the degree of disabilitymust be officially determined as equal or exceeding 50% of ‘full ability’.Employees with official ‘disabled’ status are not impossible to dismiss but theydo have special protection against dismissal once they have been employed forfour years (see section 4.2).

Disabled employees are also protected against discrimination.

2.2 AgeMale employees born between the years 1935 and 1942, and female employees born between the years 1940 and 1947, are granted individual special protection against unfair dismissal in the Adjustment of EmploymentContracts Act.

2.3 Length of service and fixed-term contractsEmployees with fixed-term contracts can be dismissed only if the possibility oftermination was expressly agreed upon. The general and the special protections need not be taken into consideration when the fixed term ends,but must be taken into consideration if a dismissal is to be made before theagreed time of its expiry.

Note that, during a probationary period, which may last up to one month (s19, paragraph 2 of the Employees Act and s1158, paragraph 2 of theAustrian Civil Code), employment can be terminated at will at any time.

Apprentices have a particularly strong interest in maintaining their apprenticeship contracts, which is why they have an extended probationaryperiod and can be terminated during only the first three months (at any time).After the probationary period, apprentices can no longer be dismissed withoutcause or exceptional circumstances. Upon the termination of an apprenticeship, an employer must continue to employ the apprentice for threemonths (the required period of retention). A (summary) termination of theapprenticeship is allowed only for reasons contained in the exhaustive list provided by law. It must be in written form and must be agreed to by theapprentice’s legal guardians.

2.4 Part-time work and career breaksThere is no special protection for employees working part time (for careerbreaks please see points 2.5 and 2.6).

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A dismissal is classified as socially unjustified when it impacts adversely on theinterests of the employee. To evaluate this, the whole of the employee's circumstances must be taken into account (e.g. the ratio of regular income toexpenses; the reduction in income caused by loss of employment; and thechances of finding a new job in the job market).

A dismissal that has a negative impact on an employee's interests can, however,be justified by reference to other subjective factors (e.g. a breach of duty, frequent sick leave, or below-standard performance). It can also be justified byobjective factors (e.g. termination for business reasons, such as when anorganisation experiences a sales slump, downsizes, shuts down or is re-organised).

An employee can claim that the employer has not fulfilled its social duty, forexample, because it ought to have offered the employee a reasonably acceptable reassignment within the business. If the dismissed employeebelieves that the dismissal will cause him or her greater hardship than it wouldfor comparable employees who work in the same business and have the samejob, then a ‘social comparison’ must be undertaken. However, the employeecan demand a social comparison only if the works council has expressly objected to the dismissal.

Unlawful dismissals or dismissals that are contrary to public policy are void, inaccordance with the general provisions of civil law (s879 of the Austrian CivilCode). An employer may therefore not dismiss an employee (only) in order toinflict harm on him or her (i.e. unless its interest in ending the employmentcontract carries real weight).

4.2 PermissionsEmployees with the official status of being ‘disabled’ are not impossible to dismiss but they do have special protection against dismissal once they havebeen employed for four years. If an employer wants to dismiss a disabledemployee, then it must seek permission in advance from the Committee forthe Disabled of the Federal Welfare and Disabled Persons Agency. Permissionrequested from the Agency subsequent to the dismissal is granted only in veryexceptional cases.

Pregnant women, mothers and fathers on full- or part-time parental leave alsoenjoy special protection against dismissal. The dismissal of protected parents isonly possible if permission from the Court is attained in advance, and is onlypossible for the reasons listed in law (e.g. a plant closure).


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3. RESIGNATION

Generally, a resignation cannot be regarded as a dismissal. However, the resignation of a member of a board of directors may be considered as a dismissal in certain cases.

4. AVOIDING UNFAIR DISMISSAL

4.1 Grounds for dismissal In Austria, as a matter of principle, an employer need not name the groundsfor a dismissal. Dismissals are only subject to periods of notice and terminationdates.

The contractual parties are, however, restricted in their freedom by the general provisions on protection against dismissal. For example, if an employeeor works council contests a dismissal, and it is reviewed by a court of law, thenthe employer must prove or substantiate the grounds for the dismissal.

The employees listed in section 2 above can only be dismissed if the appropriatecourt or authority permits the dismissal and there must be a substantial reasonfor dismissal. Without judicial or official permission, the dismissal is void.

The following are examples of dismissals for inadmissible reasons:

• An employee makes a (not unjustified) claim on the basis of the employment relationship.

• An employee is a safety officer, a member of a works council or a memberof an arbitration board (or is preparing to be a member of an arbitration board).

• An employee is soon to be called up for compulsory military or alternativecommunity service.

• An employee joins a trade union or is or becomes active in one.• the reasons for dismissal are in violation of the Equal Treatment Act.• An employee left an area of danger or took action to prevent danger.

Please note that during the first six months of employment within a company,dismissals can only be contested on the grounds that they are for inadmissiblereasons.

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The dismissal need not be accepted but only received, which means that itmust be received in the employee’s area of influence. The dismissal of anemployee while he or she is on sick leave is permissible and in principle valid.A dismissal that is delivered to an employee while he or she is on holiday is permissible, but only where there is a commensurately long period of notice(six weeks or longer).

4.4 Notification/consultation obligations An employer must notify the works council before it declares an employmentcontract to be terminated. This notification need not take any particular form,but it should be in written form to serve as evidence. Within the next workingweek the works council may then offer its comment on the planned dismissal(the ‘preliminary procedure’). The three phases of this preliminary procedureare:

• notification of the works council• consultation between the works council and the organisation’s owner(s)• works council’s statement of position.

The dismissal is void if no notification takes place, but there are no sanctionsif the consultation does not take place. In the consultation, the works councilmust pay particular attention to social fairness in the choice of which employees are to be dismissed. If there is no works council, then the preliminary procedure is omitted.

Within one working week following the employer’s notice, the works councilhas the option of making a statement of position regarding the employer’sintention to dismiss an employee.

Dismissals that take place within this week are void, unless the works councilhad already submitted a statement of position. The works council can opposethe dismissal, assent to it, or make no statement (abstain from comment). Lateor unclear statements of position by the works council are regarded as if itmade no statement. If the works council declares that it will make no statement, then the employee can be dismissed immediately. The stated intentto make no statement of position must be based on a valid resolution. Theremust be a two-thirds majority for an assenting position, otherwise there mustbe a simple majority. The statement of position can be verbal or written, butto serve best as evidence it should be in written form. A faulty resolution procedure within the works council has no effect on the validity of the resolution, unless the faulty procedure was obvious to the employer.


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In principle, employees who are on compassionate leave (for the care of dyingclose family members and/or the care of seriously ill children) cannot be dismissed. Only in certain exceptional cases may the Labour and Social SecurityCourt give permission for the employment contract to be terminated.

If an employer wants to dismiss a works council member, it must file an actionbefore the Labour and Social Security Court to request permission in advance.The Court may grant permission only if:

• the works council member’s further employment would result insubstantial damage (e.g. in the case of downsizing or the closing down ofbusiness)

• the works council member is incapable of working• the reason is the works council member’s behaviour (persistent breach of

duty).

Permission can also be granted if (serious) grounds for summary dismissal exist.

Young men who fulfil their compulsory military or alternative community service obligations are also specially protected against dismissal. In principle,they cannot be dismissed during compulsory service, unless the Labour andSocial Security Court gives permission in advance.

4.3 Procedures There is no requirement to observe any particular legal form of dismissal. It canbe expressed verbally or in writing.

The employer must first notify the works council of the intended termination.The works council may then comment on the termination (i.e. approve of,acquiesce or object to it) within one week. An employer can only give noticeof termination after receiving the works council’s statement of position orupon lapse of the one-week period following notification to the works council. A violation of the pre-notification requirement makes any terminationvoid (see section 4.4 below).

The notice of termination must be issued within a few days following theworks council’s statement of position, and as a basic principle, it shouldexpressly state the earliest possible termination date.

The employee or the works council can contest the dismissal as being unfairor socially unjustified. The employee must do so within two weeks and theworks council within one week of being informed of the notice of termination.Alternatively, the employee must do so within two weeks and the works council within one week of the notice being delivered.

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length of service is less than three months or if his or her wages are paid onan hourly or daily basis or by piecework, the period of notice is only one day(s1159 of the Civil Code). If an employee’s length of service is more than threemonths, or when his or her wages are paid on a weekly basis, the period ofnotice is one week (s1159 of the Civil Code). If the Business Code applies tothe employee, then it is considered lex specialis with regard to the Civil Codeand supersedes its provisions. For all other blue collar employment contracts,with no differentiation in terms of length of service (i.e. if the Business Codedoes not apply, e.g. if the employer does not have a trade licence), the periodof notice will be 14 days (s1159(b) of the Civil Code).

4.6 Treatment during notice periodDuring the period of notice, reciprocal rights and responsibilities stemmingfrom the employment contract are upheld. Thus, the employee must performhis or her duties and the employer must pay wages or salary.

In principle, an employer is permitted to suspend an employee from work during the period of notice (with his or her right to remuneration retained),although it is recommended to include this possibility in the employment contract and/or to offer the employee to take any outstanding annual leave.

An employee is entitled to claim so-called ‘job search days’. If the employeemakes such a claim, the employer must give him or her paid days off in theweekly amount of at least one-fifth of his or her regular weekly working hours.The job search days are optional if the employee was the one to give notice,but they are mandatory if the employer initiated termination.

4.7 Payment in lieu of noticeAustrian employment law does not provide for ‘payment in lieu of notice’ assuch. However, if the employer does not observe the relevant provisionsregarding the period of notice, the employment contract terminates immediately, although the employee is still entitled to the same financial treatment as if he or she had been dismissed properly under observance of theperiod of notice. The German word for this is ‘Kündigungsentschädigung’meaning ‘dismissal compensation’, although it is often translated (in factincorrectly) as ‘payment in lieu of notice’. Compensation is calculated as theamount of regular wages or salary, plus pro rata compensation for holiday andChristmas pay, for the period that should have been the period of notice towhich the employee was entitled.

4.8 OtherThere are no other actions that employers need to take.


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After notice of termination has been given to an employee, the employer mustinform the works council (the ‘second information’). There are no legal provisions stipulating a deadline for this second notification.

As mentioned in section 2.8 above, an employer that intends to dismiss a larger number of employees within a 30-day period must send written notification to the relevant local Employment Service (s45(a)‘Arbeitsmarktförderungsgesetz’, the ‘AMFG’) before proceeding with the firstdismissal.

The Employment Service must be notified at least 30 days before the first dismissal takes place. An employer can apply to be released from this periodif, for example, there are important business reasons. If an employer fails tonotify the Employment Service, or sends the notification too late, or proceedswith dismissals before the 30 days are over, then all dismissals are consideredineffective, (although the court may make a different finding if an employeechallenges the dismissal).

Before notifying the Employment Service, the employer must notify and consult with the works council (s109, paragraph 1, clause 1(a) of the LCA ands45(a) of the AMFG). The works council must be notified ‘as soon as possible’and in any case early enough for it to be able to consult with the employerregarding the nature of the measures to be taken. In notifying the EmploymentService, the employer must show that the works council has been consulted.

4.5 Duration of notice periodThe period of notice required from the employer depends upon the employee’slength of service. Collective agreements and works agreements can providemore favourable provisions than the statutory ones.

In the absence of another agreement, the only permissible termination datesare those at the end of a quarter (i.e. 31 March, 30 June, 30 September and31 December).

In relation to white collar employees, if an employee has two years’ full service, the period of notice for dismissing him or her will be six weeks; if morethan two years’ full service, two months’ notice will be required; if more thanfive years’ full service, three months’ notice will be required; if more than 15years’ full service, four months’ notice will be required; and if more than 25years’ full service, five months’ notice will be required.

In relation to blue collar employees, the general rule is that there is no differentiation in terms of length of service, and the period of notice for a dismissal is two weeks (s77 of the Business Code). However, if an employee’s

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6. SANCTIONS AND ENFORCEMENT

6.1 Sanctions for unlawful dismissal An employee or the works council can contest a dismissal as socially unjustified or inadmissible.

Whether or on what grounds an employee (or works council member) cancontest a dismissal depends on the works council’s statement of position in thepreliminary procedure:

• If the works council has opposed the dismissal, then it can be fully contested, i.e. it can be contested as both socially unjustified and unfair. It is primarily the works council that has the right to contest, if the employee calls upon it to do so, and it must bring the claim to court within one week of being notified. If the works council was notified beforethe employer gave notice to the employee, the period begins with the datethat the employee received the notice of dismissal. If the works council does not act when called upon by the employee, the employee can contest the dismissal within two weeks after the works council’s deadlineends.

• If the works council assented to the dismissal, then it cannot be contestedon the grounds that it is socially unjustified (the works council’s ‘right to block’). The employee can contest the dismissal as being inadmissible within two weeks of delivery of notice.

• If the works council makes no statement (abstains from comment), then the dismissal can be contested as unfair and socially unjustified. The employee can contest the dismissal within two weeks of delivery of notice.

If there is no works council in an enterprise, although there are at least fiveemployees and thus a works council was possible, then, within two weeks ofdelivery of notice, the employee can contest the dismissal as unfair or sociallyunjustified.

If an employee who has been dismissed claims that it was for an inadmissiblereason (unfair dismissal), this reason need not be proven, only substantiated.

If the dismissal was not declared effectively – because, for example, the preliminary procedure was not followed, or the dismissal was unlawful or contrary to public policy – then an employee can bring an action for affirmation that the employment contract is still valid (an ‘action for affirmation’). The law mentions no deadline for bringing such an action, butthe possible time period in which the employee can make the claim is notunlimited, and the maximum period that is commonly accepted is about sixmonths.


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5. CIRCUMSTANCES IN WHICH DISMISSAL WITHOUT NOTICE IS PERMITTED

In principle, employment contracts can only be terminated by either party withimmediate effect for good cause (summary dismissal), if the terminating partycannot reasonably be expected to continue the employment relationship untilthe period of notice expires. As with other dismissals, there are no requirements as to the form that a summary dismissal must take. It can beexpressed verbally or in written form.

A summary dismissal is justified if it can no longer be reasonably expected thatthe employer should retain the employee, even for the period of notice.Justified grounds include embezzlement, untrustworthiness and persistentbreach of duty.

Examples of justified grounds for white collar workers are provided in s27 ofthe Employees Act. There is an exhaustive list of grounds for blue collar workers in s82 of the Business Code.

A summary dismissal must take place promptly, i.e. with no undue delay.

If a summary dismissal is justified, the dismissed employee loses any claim topayment in lieu of notice or, if the employee was at fault, to severance pay.

The works council must be notified immediately following a summary dismissaland can make a statement of position within three working days, as well asdemand consultation. As in the case of a termination with notice, the workscouncil can oppose the dismissal, assent to it, or make no statement (abstainfrom comment). As regards the right to and the reasons for contesting the dismissal, the procedure is the same as that for claiming general protectionagainst dismissal (the question of socially unjustified dismissal or dismissal forinadmissible reasons). The difference is that the Court must first decidewhether the summary dismissal was justified. If the Court's answer is yes, thecase for invalidation will be dismissed. If not, the summary dismissal will bereinterpreted as a termination and its justification examined in accordancewith the rules for the general protection against dismissal.

In the case of specially protected employees such as those who are on parentalleave, are pregnant, are on the works council or are disabled, the Court mustnormally give permission for a summary dismissal to be declared.

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6.2 Void dismissals A dismissal can be unlawful for many reasons, where:

• mandatory periods of notice and termination dates were not observed • the dismissal occurred for reasons that make it void or contestable:

- illegality- being contrary to public policy- being socially unjustified - unfairness.

6.3 ReinstatementIf an action for invalidation is allowed, the employment contract is retroactivelydeemed to continue. The employer must pay the employee his or her outstanding wages or salary (back pay) as well as court costs. The employee,however, must allow sums to be subtracted that he or she either earned orintentionally omitted to earn in the meantime.

If the dismissal was not declared effectively – because, for example, the preliminary procedure was not followed, or the dismissal was unlawful or contrary to public policy – then the dismissal is void. The employment contractis therefore maintained. The employee can bring an action for affirmation. A decision for the action affirms that the employment relationship still continues to exist. The employer must pay the employee his or her outstandingwages or salary (back pay), as well as court costs and compensation for anyother harm incurred. The employee, however, must allow sums to be subtractedthat he or she either earned or intentionally omitted to earn in the meantime.

In Austria, the law differentiates between dismissals that are void and dismissals that are contestable. A dismissal that is void is ineffective in anycase, and the employment contract is maintained. A contestable dismissal iseffective (and is remedied) if it is not contested by the employee within twoweeks or, alternatively, by the works council within one week.

7. WAIVER OF RIGHT TO SUE

In principle, the employee is not permitted to waive future claims that he orshe would have upon termination (i.e. claims that are not yet actionable by theemployee at the time of the waiver), because the employee may only waiveclaims that have already accrued.

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Belgium




3. RESIGNATION 40








Employment contracts are regulated by the Employment Contracts Act of 3July 1978. Either party can terminate an employment contract for an indefiniteperiod at any time by serving notice, by making a severance payment or inaccordance with the procedures set out in the Civil Code. In general, it is notnecessary to give any reason for the termination or to obtain any administrativeor legal approval. An employment contract for a definite term or a specific taskwill automatically terminate at the end of the agreed period or at the end ofthe task.

Although there are no general protections against dismissal, certain categoriesof employees benefit from specific protection. The protection is found in anumber of specific laws, royal decrees, and collective bargaining agreements(see section 2 below for an outline of the specific protection).


2.1 DiscriminationBy Article 18 of the Act of 10 May 2007 the authorised grounds for dismissalmust not be related to the filing of a complaint about discrimination in generalor the commencement of legal proceedings. The period of protection runs for12 months after filing a complaint or, if legal proceedings have been initiated,until three months after the judgment has received the authority of res judicata.The sanctions available for failure to reinstate an employee in his or her formerposition are either a lump sum indemnity of either EUR 650 or EUR 1,300, orthree or six months’ salary, depending on the circumstances, or an indemnitycovering the actual harm caused. The employee can choose which sanction isto be applied.

By Article 23 of the Act of 7 May 1999, in relation to equal treatment betweenmen and women with regard to employment conditions, the authorisedgrounds for dismissal must not be related to the filing of a complaint or thecommencement of legal proceedings. The period of protection runs for 12months after filing a complaint or, if legal proceedings have been initiated,from the start of the proceedings until three months after the judgment hasreceived the authority of res judicata. The sanctions available are an indemnity inlieu of notice and, for failure to reinstate an employee in or reassign anemployee to his or her previous role, an indemnity of six months’ salary or anindemnity covering the actual harm caused. The employee can choose whichsanction is to be applied.

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The maximum length of a probationary period for white collar employees iseither six months (if the employee’s annual salary does not exceed EUR 36,604in 2011) or 12 months (if the employee’s annual salary exceeds that threshold).

After the minimum probationary period of one month, the employment contract can be terminated during the probationary period with seven days’notice or payment in lieu of notice. After the probationary period has expired,the employer is obliged to comply with the general legal provisions regardingtermination of employment.

2.4 Part-time work and career breaksBy Article 107bis of the Act of 22 January 1985 and Royal Decree of 25November 1998, the authorised grounds for dismissal must not be related toa transition to a part-time contract. The period of protection runs from threemonths before the transition to part-time work until three months after thetransition. The sanctions available are an indemnity in lieu of notice and a protection indemnity equal to six months' salary.

By Article 101 of the Act of 22 January 1985, if an employee is on a full- orpart-time professional career break, the authorised grounds for dismissal (intheir nature and origin) must not be related to a request for leave. The periodof protection runs from the date that the career break agreement is concludedor the date of the employee's request to invoke a right to a career break, untilthree months after the career break ends. The sanctions available are anindemnity in lieu of notice and a protection indemnity equal to six months'salary.

Article 20 of collective bargaining agreement no 77 of 19 December 2001 provides broadly similar rules in relation to career breaks, namely that the periodof protection runs from the date of the employee's written request or the dateof the agreement pursuant to which the leave is granted until three monthsafter the end of the work suspension. The sanctions available are an indemnityin lieu of notice and a protection indemnity equal to six months' salary.

2.5 Pregnancy and child carePregnant women and those having recently given birth to a child are protectedby Article 40 of the Act of 16 March 1971, which states that the authorisedgrounds for dismissal must not relate to the pregnancy. The period of protection runs from the moment the employer is informed of the pregnancyuntil one month after the maternity leave has ended and the available sanctions are an indemnity in lieu of notice and a protection indemnity equalto six months' salary.


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The same Article applies to the filing of a complaint or the commencement oflegal proceedings in relation to discrimination against a female employee ongrounds of gender. The period of protection runs for 12 months after filing acomplaint or, if legal proceedings have been initiated, until three months afterthe judgment has received the authority of res judicata. The sanctions availableare the same as those mentioned above.

By Article 32 of the Act of 4 August 1996, as amended by the Act of 11 June2002, where there has been moral or sexual harassment, the authorisedgrounds for dismissal must not be related to the filing of a complaint or thecommencement of legal proceedings, or the fact that an employee has beena witness to moral or sexual harassment. The period of protection runs for 12months after lodging a complaint or testifying or, if legal proceedings havebeen initiated, from the start of the proceedings until three months after thejudgment has received the authority of res judicata. The sanctions available forfailure to reinstate an employee in his or her former position are an indemnityof six months’ salary or an indemnity covering the actual harm caused. Theemployee can choose which sanction is to be applied.

2.2 AgeEmployees aged 45 years and over can request their employer to finance anoutplacement programme if they are dismissed (collective bargaining agreement no 82).

Employees aged 58 years and over who have seniority of at least 38 years areentitled to a monthly pre-pension indemnity, which is owed from the end ofthe period of notice until the statutory retirement. The amount of the monthlypre-pension indemnity equals 50% of the difference between a referencesalary and an unemployment allowance (usually not in excess of EUR 500 permonth).

2.3 Length of service and fixed-term contractsBy inserting a probationary period clause into the employment contract, bothparties are given the opportunity to assess their professional relationship. Theprobationary period clause will only be valid if the employment contract issigned by the time the employee’s employment with the company commences.

The minimum length of a probationary period for white collar employees isone month. During this period, the employment contract cannot be terminated.If this rule is breached, the employer or employee must pay an indemnity equalto the employee’s remuneration for the remainder of the month, plus sevendays’ wages.

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2.7 Employee representativesThe employee representatives of the (European) works council and/or the committee for prevention and protection at work (the ‘prevention committee’)and any substitute members, as well as any unsuccessful candidates at socialelections that take place every four years within the company, are all protectedagainst discrimination and dismissal.

The period of protection starts to run from the 30th day preceding the posting of the election date for the upcoming elections. It runs for:

• four years after the elections for unsuccessful candidates who presented themselves for the first time

• two years after the elections for unsuccessful candidates at a subsequent candidacy

• the entire time of office until the members elected at the following elections take office (for members and substitute members of the works council and the prevention committee).

As long as they enjoy protected status, these employees may be dismissedonly:

• for serious misconduct, recognised in advance by the employment tribunalin a summary proceeding or

• for ‘commercial or technical reasons’ recognised in advance by the joint committee of industry and/or the employment tribunal.

Failure to observe the strict procedural rules regarding dismissal, as provided inthe Act of 19 March 1991, may result in an adverse finding by the LabourCourt that could expose the company to substantial financial liabilities.

Protected employees are entitled to a lump sum indemnity of two, three orfour years' compensation, depending on whether they have less than ten,between ten and 20, or more than 20 years’ service. In addition, protectedemployees who have requested reinstatement are, upon refusal by the company, entitled to compensation for the remainder of their term of office,in lieu of the normal termination indemnities.

Union delegates can only be dismissed during the term of their office for reasons unrelated to their office. In practice, they can only be dismissed forgross misconduct or for ‘economic and technical reasons’.

Failure to observe the procedural rules regarding dismissal, set out in the collective bargaining agreements concluded at industry level, exposes the


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By Article 5 of the Royal Decree of 17 October 1994 where the mother of thechild is hospitalised or dies, there will be a conversion of maternity leave intopaternity leave. In those circumstances, the authorised grounds for dismissal ofthe father (in their nature and origin) must not be related to a request forleave. The period of protection runs from the moment the employer isinformed of the request for leave until the leave ends. The sanctions availableare an indemnity in lieu of notice and a protection indemnity equal to threemonths' salary.

By Article 15 of collective bargaining agreement no 64 of 29 April 1997, theauthorised grounds for dismissal (in their nature and origin) must not be related to a request for parental leave. The period of protection runs from thedate of the employee’s written notification (i.e. three months before theparental leave begins) until two months after the leave ends. The sanctionsavailable are an indemnity in lieu of notice and a protection indemnity equalto six months' salary.

By Article 11 of collective bargaining agreement no 80 of 27 November 2001the authorised grounds for dismissal must not be related to a request tobreastfeed. The period of protection runs from the moment the employeenotifies the employer she wishes to exercise the right to breastfeed until theend of one month and one day after the period covered by the last medicalcertificate. The sanctions available are an indemnity in lieu of notice and a protection indemnity equal to six months' salary.

By Article 30 of the Act of 3 July 1978, the authorised grounds for dismissalmust not be related to adoption leave. The period of protection runs from twomonths preceding the start date of adoption leave until one month after theleave ends. The sanctions available are an indemnity in lieu of notice and a protection indemnity equal to three months' remuneration.

2.6 CarersBy Article 101 of the Act of 22 January 1985, where an employee has takenleave to assist a person who needs palliative care or who is seriously ill, theauthorised grounds for dismissal (in their nature and origin) must not be relatedto the request for leave. The period of protection runs from the date that theleave agreement is concluded or the date of the employee's request, untilthree months after the leave ends. The sanctions available are an indemnity inlieu of notice and a protection indemnity equal to six months' salary.

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2.9 OtherBy Article 6 of collective bargaining agreement no 39 of 13 December 1983the authorised grounds for dismissal must not be related to the introductionof new technology. The period of protection runs from the date employees areinformed about the new technology until three months after its effectiveimplementation. The sanctions available are an indemnity in lieu of notice anda protection indemnity equal to three months' salary.

By Article 118 of the Act of 22 January 1985 employees are protected duringpaid study leave. The authorised grounds for dismissal must not be related toa request for leave. The period of protection runs from the date of the employee's request until the leave ends. The available sanctions are an indemnity in lieu of notice and a protection indemnity equal to three months'salary.

By Article 9 of the Act of 17 February 1997, the authorised grounds for dismissal must not be related to a request by a night-shift worker for reinstatement to day work. The period of protection runs from the date arequest is made by the employee to end night work until the resumption ofday work. The sanctions available are an indemnity in lieu of notice and a protection indemnity equal to six months' salary.

In relation to health and safety officers, the Act of 20 December 2002 providesthat the authorised grounds for dismissal must not be related to the role of anadviser or whether his or her incompetence can be proven (in which case, aspecific procedure must be followed). The period of protection runs throughoutthe period during which the adviser exercises his or her role. The sanctionsavailable are an indemnity equal to two years’ salary for employees with lessthan 15 years’ service, or three years’ salary for employees with 15 years’ service or more.

By Article 6 of the Act of 19 July 1976, if the employee is a candidate in public political elections the authorised grounds for dismissal must not berelated to the employee’s candidacy. The period of protection runs from receiptof the registered letter in which the employee announces his or her candidatureuntil three months after the election and is extended to six months if the candidate is elected. The sanctions available are an indemnity in lieu of noticeand a protection indemnity equal to six months' salary.


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organisation to payment of a lump sum indemnity, which is payable in addition to the termination indemnity. The lump sum indemnity usuallyamounts to one year's compensation.

2.8 RedundancySpecific procedural and substantive rules apply in the case of collective dismissals. Additional rules apply if the collective dismissal results from the closure of an enterprise (‘plant closure’).

A plant closure occurs where:

• the principal business activity of the entity (or a division of it with at least20 employees during the preceding calendar year) is discontinued, and

• the workforce is reduced to less than 25% of the average of the preceding calendar year.

In practice, a plant closure almost automatically entails a collective dismissal.Under Belgian law, a collective dismissal is defined by two slightly differentstandards.

The procedural rules deem a collective dismissal to occur if, during any given60-day period, notice of termination is given to:

• ten or more employees in an enterprise (a technical business unit), or in adivision of the enterprise, employing more than 20 but less than 100 employees

• 10% or more of the workforce in an enterprise employing 100 or more butless than 300 employees

• 30 or more employees in an enterprise employing 300 employees or more.

The thresholds for the number of employees must be calculated on the basisof the number of employees employed in the year preceding the collective dismissal.

For the purpose of calculating the special indemnity given on account of thecollective dismissal, a collective dismissal is deemed to occur if, during anygiven 60-day period, notice of termination is given to:

• six or more employees in an enterprise employing 20 or more but less than60 employees

• 10% or more of the workforce in an enterprise employing 60 or more employees.

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4.5 Duration of notice periodGiving notice means duly informing the employee of the time period after whichthe contract will be terminated (the ‘period of notice’).

Notice of termination is valid only if it is in writing, specifying the commencement date and the duration of the period of notice. When theemployer gives notice, the statement must be sent by registered mail or be communicated as a writ by a process server.

When the employee gives notice, the statement can be sent by registered mail,be communicated as a writ by a process server, or by simply handing it over tothe employer. The employer must sign the notice to indicate receipt.

For white collar workers, notice is effective as of the first working day of themonth following receipt or presumed receipt of the notice. For blue collar workers, notice is effective as of the Monday following receipt of the notice.

Failure to observe these procedural rules renders the notice void, and entitles theemployee (or employer) to a payment in lieu of notice.

Blue collar employees are entitled to a period of notice (or payment in lieu ofnotice), which is dependent upon their length of service:

Length of service Period of noticeLess than six months 28 daysBetween six months and five years 35 daysBetween five and ten years 42 daysBetween ten and 15 years 56 daysBetween 15 and 20 years 84 daysMore than 20 years 112 days

In certain industries or enterprises, the statutory periods of notice have beenlengthened by collective bargaining agreements concluded at industry or plantlevel.

White collar employees are entitled to a period of notice (or payment in lieu ofnotice), dependent upon their annual gross salary:

• Annual gross salary not exceeding EUR 30,535 (in 2011): three months for each five-year period of employment that has started to run; annual gross salary exceeding EUR 30,535 (in 2011): to be determined by the parties at the earliest possible time once notice is has been given, based on a series of


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3. RESIGNATION

Under Belgian law, the essential terms and conditions of the employment contract cannot be modified unilaterally. If the conditions are significantly andunilaterally changed by the employer, the employee could invoke constructivedismissal. Employment conditions that are generally considered by case law asessential to the employment agreement are remuneration, function and natureof responsibilities, working time, and place of employment.

A unilateral modification of essential terms and conditions by the employer isdeemed to be a breach of contract, entitling the employee to claim severancepay. However, in line with recent case law, the unilateral modification must besignificant in order to support a claim for constructive dismissal.


4.1 Grounds for dismissal In general, an employer is free to give notice or to dismiss at any time and onany grounds, as long as the grounds are not prohibited by law. Prohibitedgrounds are contained in the anti-discrimination legislation and these includereasons of, for example, age, gender and race.

4.2 PermissionsIn general, it is not necessary to give any reason for the dismissal or to obtainany administrative or legal approval (however, please see section 2 above).

4.3 Procedures Normally, there is no set procedure to be followed when dismissing an employee,except with regard to giving notice (see section 4.4 below), or termination forgross misconduct (see section 5), unless there is a collective dismissal or plantclosure (see section 1.2), or unless special protections apply (see section 2).

As stated above, specific procedural and substantive rules apply in the case ofdismissals effected in the context of collective dismissals. Additional rules applyif the collective dismissal results from a plant closure.

4.4 Notification/consultation obligations Normally, there are no notification or consultation procedures, unless there isa collective dismissal or plant closure (see section 1.2 above), or if a collectivebargaining agreement provides for a specific procedure.

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of 13.07%) must be withheld from the indemnity. Specific withholding tax isapplicable.

Termination indemnities are subject to personal income tax at the employees’average tax rate for the preceding income tax year.

In addition to a termination indemnity, a white collar employee may also be entitled to a pro-rata payment of the year-end bonus for the year of termination,if this is provided for by a collective or an individual agreement. Moreover, allwhite collar employees subject to Belgian social security are entitled upon termination to have their accrued holidays paid out.

4.6 Treatment during notice periodDuring the period of notice, the employee is entitled to perform the same jobas before. Furthermore, the employee is entitled to take leave from work ofhalf a day in order to find alternative employment (in the last six months of theperiod of notice, 2 x 0.5 days).

When an employee is given payment in lieu of notice, the employment contract is terminated immediately.

When notice is given to a white collar worker reaching retirement age, theperiod of notice will be reduced to six months, if the employee has five years’or more seniority, and three years if the employee has less than five years’ seniority. If a white collar worker terminates the employment contract, theperiod of notice is reduced to three or one and a half months, depending onthe seniority.

4.7 Payment in lieu of noticeIf no notice period is respected, an indemnity in lieu of notice must be paid.This indemnity corresponds to the remuneration for the notice period that wasnot respected.

4.8 OtherThere are no other matters that the employer needs to consider.


In the case of ‘gross misconduct’ by one of the parties, the other party is entitled to terminate the employment contract with immediate effect withoutgiving notice or payment in lieu of notice.


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factors such as the employee's length of service, role, pay, age and the likely period required for him or her to find alternative employment. The period of notice cannot be shorter than three months per five-year period of employment that has started to run.

• Annual gross salary exceeding EUR 61,071 (in 2011): the period of notice can be agreed between the parties prior to commencing work. The agreed period of notice cannot be shorter than three months per five-year period ofemployment that started running. If no agreement is entered into, the period of notice will be fixed following the rules for white collar employeeswhose annual gross salary exceeds EUR 30,535.

The following elements are included in an employee’s annual gross salary:annual fixed salary; possible variable salary or bonus pay; holiday pay on theentire salary (fixed and variable); year-end bonuses; fringe benefits; employercontributions to group insurance or pension plans; and meal vouchers.

In order to give guidance to parties in out-of-court settlements, a number of formulas have been devised that attempt, by statistical analysis of past courtdecisions, to predict the likely court award for a dismissal. The best known andmost widely used of such formulas is the so-called ‘Claeys’ formula (2008 is thelatest version), devised by one of the partners of ‘Claeys & Engels’.

The Claeys formula is not ‘legally compulsory’. Therefore, even if an employerapplies the Claeys formula, the dismissed white collar employee can still contestthe length of the period of notice before a court. The judge is not bound by theClaeys formula, which is only of indicative value. However, practice shows thatmost courts apply the Claeys formula.

The 2008 Claeys formula is as follows:

(0.87 x Length of service) + (0.06 x Age) + (0.037 x Remuneration x Index2007/Index month of dismissal) – 1.45

Where the annual remuneration equals or exceeds EUR 120,000 per year, the co-efficient for the remuneration needs to be modified, as follows:

(0.87 x Length of service) + (0.06 x Age) + (0.029 x Remuneration x Index2007/Index month of dismissal) – 1.45

On top of the termination indemnity, the company must pay social security contributions at a rate of approximately 35% for white collar employees or 50%for blue collar employees. The employees’ social security contribution (at a rate

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There is also a specific procedure for reinstatement when an employee is protected on the grounds of moral or sexual harassment or non-discrimination(see section 2 above).


During the term of an employment contract it is impossible for an employeeto waive his or her rights, including the right to bring a claim against theemployer. Such a contract would be void.

However, after the employee has received notice of termination, or after thedismissal has taken place, it is possible for the parties to enter into a severanceagreement concerning, for example, the payment of wages, severance and theperiod of notice. In this agreement, the employee can also agree to waive hisor her rights to bring a claim against the employer.


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Gross misconduct is defined as an act so serious that it makes any further co-operation between the parties immediately and definitively impossible. Theburden of proof is on the party that terminated the contract. In the event of adispute, the labour courts have the jurisdiction to determine whether the reasons given for the dismissal actually justify a dismissal for cause.

The law strictly regulates the procedure for termination for gross misconduct.Non-compliance with this procedure results in the party that terminated thecontract having to make a payment in lieu of notice, regardless of the seriousness of the employee’s acts.


6.1 Sanctions for unlawful dismissal If employee representatives in the works council and the prevention committeeare dismissed without compliance with the strict procedural rules, the employeecan request reinstatement. If the employer refuses a request for reinstatement,the employee will also be entitled to compensation for the remainder of his orher term of office as employee representative.

Normally, an employer does not need to give reasons for a dismissal. However,if the termination is not justified and the employee takes the matter to court,the dismissal may be considered to be unfair.

Unfair dismissal entitles blue collar employees to a lump sum indemnity, on topof the normal termination entitlements, equal to six months' compensation.The burden of proof is on the employer.

White collar employees can make a civil law claim for abusive dismissal. Theburden of proof is on the employee. In the event a court finds the abusive dismissal justified, damages will be awarded. Damages are usually fixed on anex aequo et bono basis. Practice shows that the amount of damages will varybetween EUR 1 (a symbolic amount for moral harm) and EUR 25,000.

6.2 Void dismissals A dismissal will never be deemed void.

6.3 ReinstatementAs stated in section 6.2 above, a dismissal will generally not be void. Accordingly,an employer will not in principle be obliged to reinstate a dismissed employee.However, please refer to section 6.1 above with regard to an employee’s right torequest reinstatement.

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Cyprus




3. RESIGNATION 51








In Cyprus, protection is afforded to all employees (both white and blue collarworkers) who are less than 65 years of age, or those who have not retired asa result of custom, law or collective agreement, regardless of the size of theundertaking in which they work.

The general protection against dismissals comes from the Termination ofEmployment Law 24/67, as amended. In addition, Law 28(I)/2001 providesprotection against collective dismissals.

There are a number of other legislative measures affording more specialisedprotection against discrimination, including equal pay and maternity protection.

Qualifying employees are protected against unfair dismissal. The burden ofproof is on the employer to show that the dismissal was fair.


2.1 DiscriminationArticle 28 of the Cypriot Constitution contains a general anti-discriminationprovision that corresponds to Article 14 of the European Convention onHuman Rights. In addition, Cyprus has ratified most international conventionson human rights which include anti-discrimination provisions.

Therefore, an employer may never terminate employment on the grounds ofrace, colour, sex, marital status, religion, political opinion, national extractionor social origin.

2.2 AgeThe age at which a child is deemed to be an adult is 18 years of age. Theemployment of children (under 15 years of age) is prohibited except for thepurposes of, and only with the relevant licence from the Minister of Labour &Social Insurance: vocational or occupational training of a child who hasattained the age of 14; and cultural, artistic, sports or advertising activities.Restricted hours of work and further protections are afforded to all youngadults and children under the age of 18.

The private sector does not have a mandatory retirement age and age can beagreed by the parties, or according to the custom and practice of the

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2.7 Employee representativesAn employer may never terminate employment on the grounds that anemployee is a member of a trade union or a safety committee establishedunder the Safety at Work Law 1988; or that he or she is an employee representative.

2.8 RedundancyCollective dismissal protection applies only where a certain number of employeesare going to be dismissed within a period of 30 days. The dismissals must notbe for reasons relating to the employees’ conduct. The threshold also dependson the size of the organisation:

Number of employees to be Size of the organisationdismissed within a period of 30 days10 or more employees Between 20 and 100 employees10% or more of all employees Between 100 and 300 employees30 or more employees More than 300 employees

2.9 OtherAn employer may not terminate employment on the grounds that the employeehas filed a complaint in good faith, or is participating in proceedings, againstthe employer which involve alleged violations of laws or regulations eithercriminal or civil.

3. RESIGNATION

Article 7 of Law 24/67 states that when an employee resigns from his or heremployment because of the employer’s conduct, the termination is consideredto be a constructive dismissal.

In such a case, the employee must prove that he or she resigned lawfully, butthe resignation was caused by reasons relating to the employer’s conduct. Theburden of proof then reverts to the employer to show that the dismissal waslawful.

Constructive dismissal reasons can include a substantial change in the termsand conditions of employment, including a reduction in salary, harassment,abusive behaviour, and unsuitable working conditions.


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organisation. However, it should be noted that retirees (statutory retirementage is 65) do not have recourse to the employment courts for disputes.

2.3 Length of service and fixed-term contractsAn employee must have completed a minimum six-month ‘trial period’ inorder to be protected against dismissal.

All individuals who are employed for more than six months (i.e. who havecompleted a trial period) by the same employer are protected and have theright not to be unfairly dismissed. This trial period can be extended for up totwo years, but only with the written agreement of the parties at the time ofhiring.

2.4 Part-time work and career breaksEmployees who work on a part-time basis or employees who are on a careerbreak approved by the employer, are afforded the same protection as full-timeemployees.

However, there is no obligation on the employer to accept flexible workinghours for any employee and therefore it is at the employer’s discretion. The only exception is under Article 5 of Maternity Law 100(I)/97.

2.5 Pregnancy and child careAn employed pregnant woman is entitled to maternity leave for 18 consecutiveweeks. An employed woman who has adopted a child under the age of 12 isentitled to 16 weeks of maternity leave.

An employed parent (either male or female) is entitled to take unpaid parentalleave of a total duration of up to 13 weeks for the purpose of taking care of andparticipating in the raising of a child.

An employer may never terminate employment on the grounds of an employeebeing pregnant or on maternity or parental leave.

2.6 CarersAn employee has a right under the law to take leave on the grounds of forcemajeure for urgent family reasons involving a child, spouse, sibling, parent orgrandparent. The leave is a maximum of seven days unpaid per annum.

Nurses and carers working in retirement homes, for example, are treated asnormal employees.

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4.5 Duration of notice periodArticle 9(1) of Law 24/67 provides the following notice periods, depending uponthe employee’s length of service:

Length of service (weeks) The employer’s notice of dismissal26–51 1 week52–103 2 weeks104–155 4 weeks156–207 5 weeks208–259 6 weeks260–311 7 weeksMore than 312 8 weeks

4.6 Treatment during notice periodDuring a notice period given by the employer, an employee has the right totake alternative employment at any point. The employee is also entitled to takepaid leave of up to eight hours a week, but not more than 40 hours in total,to seek new employment.

4.7 Payment in lieu of noticeThe employer has the right to demand a payment in lieu of notice, for whichthe sum paid is equivalent to the applicable notice period, but there is no obligation for any severance or dismissal indemnity.

4.8 OtherPrivate settlement agreements between the employer and the employee canbe concluded provided that such agreements do not violate the minimumamounts set by the law.

Any provision in a contract or agreement providing for the reduction of thelength of the statutory notice period is void ab initio, although the parties havethe right to extend the notice period by contract, collective agreement or forany reason established by law, custom or otherwise.


The employer may dismiss an employee without notice for reasons of grossmisconduct, i.e. misconduct that seriously undermines the purpose of the contract. Some examples include:


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4.1 Grounds for dismissal Article 5 of Law 24/67 provides a list of reasons under which an employeewhose employment has been terminated is not entitled to compensation. It istherefore a list of valid grounds for dismissal. They are as follows:

• when the employee fails to perform his or her work in a reasonably competent manner

• when the employee is made redundant• for reasons of force majeure, not brought about by the negligence or

wilful action of the employer• when the employment is terminated on the expiry of a fixed-term contract,

or upon retirement age (note that the tribunal will consider a series of fixed-term contracts for the same employee as forming a contract of unspecified duration)

• for reasons of gross misconduct that permit the employer to terminate without notice.

4.2 PermissionsNo permissions are required for individual dismissals.

4.3 Procedures The employer is required to give the employee:

• written notice of dismissal, stating the reasons for dismissal• a certificate stating the dates of employment and the duties of the employee

during the course of employment• a notice period (see section 4.5 below), which can be extended but not

reduced, and can be paid in lieu• payment of any outstanding salary, the proportion of annual leave that the

employee has accrued and any other benefits, if applicable.

Note that collective agreements may impose further obligations on the employer.

4.4 Notification/consultation obligations Individual dismissals do not require any specific notifications or consultations.

A specific procedure must be followed for collective dismissals before the dismissals can take place. This includes notifying the Ministry of Labour andSocial Insurance of the proposed dismissals/redundancies and entering into aconsultation procedure.

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6.3 ReinstatementSee section 6.2 above.


The right to bring a claim is statutory and recent case law suggests that it canonly be waived by an express personal agreement. However, even in theabsence of an express agreement, if the minimum compensation is given bythe employer to the dismissed employee, the tribunal will take this intoaccount and is unlikely to continue trying the case, unless there is evidence tojustify granting additional damages.


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• behaviour that makes clear that the employee/employer relationship cannot continue

• a serious misdemeanour by the employee during the course of the employment

• the committing of a criminal offence by the employee during the course ofhis or her employment, without the employer’s consent

• inappropriate behaviour• serious or repeated breaches of work regulations.

It should be noted that if the employer does not exercise its right to dismisswithin a reasonable timeframe, the right is considered to have been waived.


6.1 Sanctions for unlawful dismissal Usually, compensation is awarded comprising a basic award (equivalent to astatutory redundancy payment and calculated in the same way) and a compensatory award. The tribunal has absolute discretion as to the award to begiven as compensation. In calculating the award, the tribunal must take into consideration, amongst other things, the employee’s:

• wage and all other earnings• length of service• possible loss of future career• circumstances surrounding the dismissal• age.

The upper limit on the total award of damages that can be granted by the tribunal is two years’ wages. The award cannot go lower than the statutory minimum for redundancy. It should be noted that if an employee wishes to claimcompensation in excess of two years’ wages, he or she must file a civil action forwrongful dismissal in the District Court, as the tribunal has no jurisdiction.

6.2 Void dismissals Where more than 19 persons are employed and a dismissal has taken placeand has been held either to be flagrantly unlawful or unlawful and done in badfaith, then the tribunal may under the circumstances and, if the employee hasrequested it, order the reinstatement of the employee. It can grant compensationfor the harm suffered as a result of the dismissal, the amount of which mustnot exceed one year’s wages.

This is the only legal provision that makes a dismissal void.

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Czech Republic




3. RESIGNATION 64








The Czech Labour Code contains rather strict conditions governing the dismissal of individual employees who are employed on the basis of permanent employment contracts. The current Labour Code (Act no 262/2006Coll. as amended) has been in effect since January 2007, replacing the oldLabour Code that came into effect in 1965. Unfortunately, the conditions for dismissing employees have generally remained unchanged. Employees are stillregarded as the weaker party in the employment contract, which is reflectedin the high level of protection they are given with regard to dismissals. A system exists such that all employees are protected against dismissal by theLabour Code, if it is not based on one of the legal grounds stipulated within it(see section 4.1 below). Dismissals on any other grounds or dismissals withoutgrounds are prohibited and, therefore, void. The dismissal of employees mustalso be in written form and there are certain formal requirements as to the formof delivery.

The Labour Code stipulates that an employer may give notice to an employeeonly for the reasons explicitly stated within the relevant provisions. In contrast,an employee may give notice to his or her employer for any reason or evenwithout stating a reason.

An upcoming amendment of the Labour Code should come into force as of 1January 2012. Minor changes are expected in relation to dismissal reasons, thelength of the probationary period and the method for agreeing to longernotice periods between the parties.

The provisions of the Labour Code do not stipulate any specific protection forcertain categories of employees against dismissal. However, some exceptionsapply to members (or former members) of trade unions, who cannot be dismissed without the trade union’s prior written consent (see section 4.4below). In addition, an employer cannot dismiss certain employees during a so-called ‘protective period’ (see section 2.9 below).


2.1 DiscriminationThe prohibition against discrimination in the area of employment is generallyregulated by the Labour Code, which provides a duty on the employer toensure equal treatment of all its employees. The Act no 198/2009 on EqualTreatment and Legal Remedies for Protection against Discrimination (the Anti-Discrimination Act) governs the right to equal treatment and protection

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of the employer is not possible. The probationary period does not run duringdays when an employee is sick.

2.4 Part-time work and career breaksThere is no special protection related to part-time employees or career breaksbut the principle of non-discrimination applies to these employees as well. Theemployment may be terminated only based on grounds stipulated by theLabour Code (see section 4.1 below).

2.5 Pregnancy and child careBy s53 of the Labour Code, female employees who are pregnant or on maternity leave, and male or female employees on parental leave are protectedwithin a so-called ‘protective period’.

Pregnant employees can be dismissed by notice of termination of employment ifthere are reasons for termination without notice, the employer or part of it shutsdown, or the employer relocates outside the agreed place of work. Apart fromthese situations the employee falls within a protective period and it is thereforenot possible to terminate her employment. Pregnant employees are protectedfrom termination even if they are not aware of being pregnant.

A female employee on maternity leave and a male employee on parental leaveduring the time when a female employee would be entitled to take maternityleave (i.e. the first 22 weeks after childbirth) can be dismissed only if theemployer (or part of it) shuts down or relocates outside the agreed place ofwork. Dismissal based on other reasons or immediate termination, are not possible (even if there are reasons for immediate termination of employment).

Male or female employees on parental leave (i.e. broadly after 22 weeks following childbirth) cannot be served with immediate termination even if thereare reasons given for such termination. However, such employees can be dismissed by notice of termination for these reasons (see section 5 below).

There is no other protection in relation to the termination of pregnant employeesor employees taking care of a child.

2.6 CarersEmployees who are caregivers have no special protection in relation to employment termination.


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against discrimination in various situations, including termination of employment. The Anti-Discrimination Act recognises the following discriminatory grounds:

• racial or ethnic origin• nationality• sex• sexual orientation• age• disability• religion and beliefs and• political views.

The Anti-Discrimination Act further considers harassment, sexual harassment,victimisation, instructions to discriminate and solicitation of discrimination asdiscrimination, and therefore these behaviours are prohibited.

Termination of employment based on any of the above mentioned grounds isprohibited and therefore void.

2.2 AgeBy law, the employer must ensure equal treatment of all its employees andtreating employees differently as a result of age would be considered discriminatory. There is no additional special protection for employees in relation to their age. Notice of termination may only be given by the employerfor reasons stipulated in the Labour Code (see section 4.1 below).

2.3 Length of service and fixed-term contractsSection 35 of the Labour Code provides that an employer and employee mayagree to a probationary period of no longer than three months, provided thatthis period is agreed in writing before the employment term begins. However,the parties may agree to a shorter period. The agreed probationary period cannot be extended, even with the employee's consent.

The proposed amendment to the Labour Code includes a longer probationaryperiod for managerial employees, of up to six months. However, this amendment will not become effective before 1 January 2012.

In accordance with s66 of the Labour Code, both the employer and theemployee may, during the probationary period, terminate the employmentcontract without stipulating any reasons. They may do so at any time, exceptwithin the first 21 calendar days of any sickness, when termination on the part

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• An employee is temporarily unfit to work because of illness or injury, unlesshe or she intentionally brought on this incapacity or it was caused by inebriation. The protection lasts for the period during which the employeereceives treatment in a medical establishment or spa. In the case of tuberculosis, the protective period is extended for a further six months after the employee's discharge from medical treatment.

• An employee is called up to take part in military exercises or extraordinary(special) military exercises. The protection period starts on the day when the relevant call-up notice is served on the employee and lasts during his or her participation in the exercises and for two weeks after he or she is discharged from the exercises.

• An employee has been given long-term unpaid leave in order to hold public office.

• An employee who is performing night shifts is recognised, on the basis ofa medical report issued by the employer’s preventive health care facility, asbeing temporarily unfit to perform it.

If an employee is served notice of termination and only then enters the protective period, the protective period cannot end sooner than the noticeperiod (see section 4.5 below). In these cases, the employment contract isextended and terminates only after the protective period ends, upon expiry ofthe remaining part of the notice period, unless the employee expressly statesthat he or she will not insist upon the employment contract being extended.

Nonetheless, in certain cases a dismissal during the protective period is admissible and the prohibition will not apply. These exceptions are providedunder s54 of the Labour Code, which permits the dismissal of an employeewhose employment is terminated in the following circumstances:

• The employer’s undertaking (or part of it) is shutting down or relocating (i.e. relocating outside the employee's place of work, as stipulated in the employment contract).

• There are grounds enabling the employer to immediately terminate the employment of all employees without serving notice of termination because of gross breach of their legal obligations relating to the work theyperform. However, special protection applies to female employees on maternity leave and male employees on parental leave during the time when a female employee would be entitled to take maternity leave (i.e. thefirst 22 weeks after childbirth) (see section 2.5 above).

• The employee commits a breach of their legal obligations arising from legalregulations relating to the work that he or she performs (s52(g) of the Labour Code), with the exception of a pregnant employee or an employeeof either gender on maternity or parental leave.


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2.7 Employee representativesPrior to giving notice of termination, the employer must consult with the tradeunion. If the dismissal concerns a member of a trade union, stronger protection applies. In such a case, the employer must ask the relevant tradeunion for prior written consent. If the trade union refuses to grant consent,any subsequent dismissal is unlawful. However, if the other conditions for dismissal are complied with (whether the dismissal is by notice of terminationor summary) and the employer proves so before a court, the court may conclude (in proceedings pursuant to s72 of the Labour Code (see section 6.1below) that the employer cannot fairly (reasonably) be expected to employsuch an employee. In such a case, the dismissal will be valid.

In the case of any other forms of employment termination (i.e. agreement ontermination, termination of employment during the probationary period, ornotice of termination of employment given by the employee), the employer’sonly duty is to inform the trade union.

2.8 RedundancyRules regarding collective dismissals (s62 of the Labour Code) apply only tocertain situations where a particular number of employees are dismissed.These rules apply to the termination of employment contracts taking placeover a period of 30 calendar days, based on a notice of termination by theemployer for reasons of reorganisation (‘organisational changes’). There is alimit to the number of employees who can be dismissed, which varies depending on the size of the employer's undertaking. The thresholds are asfollows:

Number of employees Size of employer's undertakingto be dismissed10 or more employees 20–100 employees10% of employees 101–300 employees30 or more employees 301 or more employees

The thresholds are also met when the employment contracts of at least fiveemployees are terminated by a notice from the employer within a period of 30calendar days, if the employment contracts with the remaining employeeswithin this threshold are terminated by agreement on the same grounds.

2.9 OtherAn employer cannot dismiss certain employees during a so-called ‘protectiveperiod’ (s53 of the Labour Code). Protective periods concern the following situations in particular, where:

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Dismissal is possible only under specific conditions. These conditions are stipulated in s52 of the Labour Code, in accordance with which the employermay serve notice of termination on its employees only on the followinggrounds:

• The employer's undertaking (or part of it) shuts down.• The employer's undertaking (or part of it) relocates.• The employee is made redundant pursuant to a decision by the employer

to effect organisational changes (e.g. a change of technology or a reduction in the number of employees, in order to enhance work efficiency).

• The employee is no longer able to perform his or her work in the long term, because of the state of his or her health. This must be in accordancewith a medical report issued by the employer’s preventive health care facility, as a result of an occupational injury or disease, or the threat of sucha disease.

• The employee is no longer able to perform his or her work in the long term, because of the state of his or her health, in accordance with a medical report issued by the employer’s preventive health care facility.

• The employee does not meet conditions stipulated by law for theperformance of the agreed work or, through no fault of the employer, theemployee does not meet the requirements (provided by the employer) forproper performance of such work. If the employee's failure to meet the requirements results from unsatisfactory work, the notice of termination may be served only if, during the previous twelve months, the employer asked the employee in writing to eliminate the deficiencies, and the employee failed to do so within a reasonable period of time.

• There are grounds upon which the employer might immediately terminatethe employment contract without notice (see section 5 below). Additionally, the employer may do so if there is a serious or systematic, butless serious, breach of legal obligations concerning the work performed bythe employee. In the case of systematic breaches, notice of termination may be served only if, during the previous six months, the employee was warned in writing about the possibility of termination based on such breaches.

Entitlement to severance pay is regulated by the Labour Code. In the case ofan employee being dismissed for organisational changes, he or she is entitledto mandatory severance pay amounting to a minimum of three times his or heraverage monthly earnings. If the employee is being dismissed because of anoccupation-related disease or a work injury, he or she is entitled to mandatoryseverance pay amounting to a minimum of twelve times his or her averagemonthly earnings.


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The provisions relating to unfair dismissal are contained in Part 4 of the LabourCode (s48 and subsequent provisions). These provisions are mandatory andcontracting out is not permissible, although some exceptions apply where thelaw expressly provides for it.

3. RESIGNATION

Czech law does not recognise a resignation as being a dismissal. However, ifan employee resigns under pressure, a court may declare such an act as unlawful because it was not undertaken freely.

Under Czech law, an employee can resign (terminate the employment contract) on the following grounds:

• An employee may terminate his or her employment on any grounds or without stating any grounds. The employee must comply with a minimumnotice period of two months. The notice period commences on the first day of the calendar month following the delivery of the notice of termination to the employer. Employment terminates only after lapse of the notice period.

• An employee may also terminate his or her employment contract immediately, if there are grave conditions, as stipulated by the Labour Code. These are as follows:- the employer has not paid the employee his or her salary, salary

compensation or any part of it within 15 days of the day they weredue, or

- in accordance with the medical report issued by the employer’s preventive health care facility, the employee can no longer perform hisor her work without seriously endangering his or her health, and the employer has not transferred him or her to a suitable job within 15 days of the submission of such a medical report.


4.1 Grounds for dismissal In accordance with the Labour Code, the parties to an employment contractcannot modify the grounds for dismissal, even with the employee’s consent.Any mutual agreements in this regard are unlawful and, instead, the relevantmandatory provisions of the Labour Code will apply automatically.

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If an employee to whom a document is addressed is not at home, the documentmust be deposited on the premises of the postal services’ operator or at themunicipal authority. If the delivery is unsuccessful, the employee will be given written notice of this and invited to collect the document within ten workingdays. At the same time, the employee will be advised from which day and at whattime the document may be collected. When the ten working days expire, the documents will be considered as having been delivered.

If an employee rejects the delivery, then the document will be regarded as being‘technically delivered’. In this situation it is recommendable to have eye-witness accounts of the employee’s rejection, and the eye-witnesses shouldconfirm it in writing on the rejected document itself.

4.4 Notification/consultation obligations In general, no notification or consultation is required for individual dismissals.However, prior to giving notice of termination or immediate termination, theemployer must consult with the trade union, if there is one. Consultation aloneis sufficient to meet the legal obligations and there is no need to reach anagreement. An exception applies for members (or former members) of tradeunions.

Even though the Labour Code does not expressly stipulate it, written notification on employment termination during the probation period shouldgenerally be delivered to the other party to the employment contract at leastthree days in advance of termination of employment. However, breach of thethree-day deadline will not result in the termination during the probation period being unlawful.

4.5 Duration of notice periodThe statutory notice period is a minimum of two months and this can beextended by the mutual agreement of the contractual parties. In such a casethe agreed notice period must be the same for both parties.

The notice period commences on the first day of the calendar month followingthe delivery of the notice of termination to the employee. It expires on the lastday of the relevant calendar month (with some exceptions, e.g. a dismissalbefore a protective period. See section 2.9 above).

4.6 Treatment during notice periodDuring the notice period the employment contract still continues and the ordinary rights and duties of both parties still apply. The employer must assignthe employee work based on the employment contract and pay him or her


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Mandatory severance payments may be increased by mutual agreementbetween the contractual parties, by a collective agreement, or by an internalregulation issued by the employer.

4.2 PermissionsIn general, no permissions are required for individual dismissals except withregard to employers that have trade unions, in which case consultation is necessary (see section 4.4 below).

4.3 Procedures Prior to a dismissal an employer must take into consideration many factors andconditions, including the reasons for dismissal, the prohibited grounds for dismissal, previous warnings, and the prohibition of dismissal during protectiveperiods.

Notice of termination must be given in writing and delivered to the employee.This condition is obligatory in order for the notice to be considered valid (s50 ofthe Labour Code).

The employer can dismiss its employees on the grounds expressly provided in theLabour Code (see section 4.1 above). The notice of termination must clearly specify the reasons for giving notice, as provided by the Labour Code. It is notconsidered sufficient to merely state the particular section of the Labour Code.The employer must specify the reasons that led to the notice of termination, otherwise the dismissal may be unlawful. Once the notice of termination is delivered to the employee, the reasons stated in the notice cannot be changed(e.g. narrowed down or broadened).

In accordance with the mandatory provisions of the Labour Code, documentsconcerning termination of employment come into effect only upon delivery to theother party. Therefore, all documents, including those pertaining to summary dismissals, notices of termination and notices of termination of employment during a probationary period must be delivered to the employee in person (s334of the Labour Code) at the workplace or any other place where the employee canbe reached (e.g. his or her place of residence). Only if personal delivery is not possible, may the documents be delivered by means of electronic communication,and only if the employee has granted written consent to this method of delivery.For this method of delivery, a verified electronic signature must be used by bothparties, which is still not very common in employment situations. The final optionis to send documents by registered mail to be delivered to the employee in person with a certification of delivery. The documents must be sent to theemployee’s last known address.

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wages. The employee must perform work based on the employment contractand comply with all legal obligations relating to the work he or she performs.

In addition, pursuant to Government Decree no 590/2006 Coll. implementingthe Labour Code, the employer must grant an employee leave from work inorder to find a new job. The Decree states that the duration of this leave is halfa day per week during the notice period. This leave is provided without compensation of wages, or with compensation if the employment has beenterminated as a result of organisational changes. Further, upon the employer’sconsent, such periods may be taken together (the half-days could be amalgamated).

4.7 Payment in lieu of noticeAccording to the Labour Code, the employer cannot provide payment in lieuof notice. However, it is quite common to terminate an employment contractby means of an agreement on termination. In such an agreement the partiesmay agree that the employee will be provided with a payment correspondingto the unused notice period in the form of a special bonus (a ‘leaving payment’).

4.8 OtherIn respect of dismissals, the employer is obliged to fill in various forms andderegister the dismissed employee with the state authorities (e.g. in relation tohealth insurance companies and social security administration).


Dismissal without notice with immediate effect (i.e. immediate termination ofemployment) is a specific type of termination that is regulated by s55 of theLabour Code. The Labour Code permits a dismissal without notice only wherevery serious reasons that prevent further duration of employment are given.These are as follows:

• The employee commits a gross breach of legal obligations related to the work that he or she performs (gross breach of obligations is not specifiedin the Labour Code, but depends on the severity of the breach and the particular conditions of each case).

• The employee intentionally commits a criminal offence and is sentenced tounconditional imprisonment for a term exceeding one year, or the employee intentionally commits a criminal offence in the performance of his or her work or in direct connection with it and is sentenced to unconditional imprisonment for at least six months.

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An employer may dismiss an employee without notice only within a two-month period from the date the employer ascertained the grounds for dismissal. The dismissal must be no later than one year after the date whenthe reasons for dismissal arose.

The employer cannot immediately dismiss a female employee who is pregnantor on maternity leave, or a male or female employee on parental leave.

The employer may also summarily terminate employment during a probationaryperiod with no reasons required.


6.1 Sanctions for unlawful dismissal Employees are protected against unlawful dismissal. An employee can bring aclaim for unlawful dismissal of employment no later than two months from thedate when the employment contract was terminated. If the employee does notbring a claim for unlawful dismissal of employment, he or she is treated as dismissed, even if the legal requirements of dismissal have not been fulfilled.

If a court finds that a dismissal was unlawful, and the employee insists on continued employment (i.e. reinstatement), the employment contract will remainin existence, and the employee will be entitled to salary compensation for thedetermined time period (i.e. the period the employee should have beenemployed.

The amount of compensation will be equal to the employee's average earningsas of the date when the employer was notified that the employee insists on theemployment contract continuing, until the date the employer allows the employee to continue in his or her employment, or until valid employment termination takes place.

6.2 Void dismissals Under Czech law employees are granted a significant level of protection inrelation to dismissals and every case of dismissal that is contested in court andfound to be unlawful, is void.

6.3 ReinstatementIf a court finds a case of dismissal to be unlawful, the employment contract continues to exist and the employer must reinstate the unlawfully dismissedemployee, if he or she has claimed reinstatement. If reinstated, the employee


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is entitled to receive salary compensation from the date when the employerwas notified of the employee’s insistence that the employment contract continues and that he should be allowed to work (see section 6.1 above). AsCourt proceedings in the Czech Republic are quite long (between three andfive years), such compensation is often extremely high. It is to be hoped thatthe forthcoming amendment to the Labour Code will bring certain expectedchanges and will limit such compensation in cases where the employee hasenjoyed gainful activities during court proceedings.


It is not possible for a dismissed employee to waive his or her right to sue inadvance. Such a waiver of rights would be deemed unlawful.

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Denmark




3. RESIGNATION 78








In Denmark, no general fairness requirement applies to individual dismissals.But if the employee is covered by the Danish Salaried Employees Act or a collective agreement, the dismissal must be reasonably justified by the conductof the employee or the circumstances of the employer. This means that onlyemployees protected by the Danish Salaried Employees Act or a collectiveagreement can contest the fairness of a dismissal.

The Danish Salaried Employees Act covers most white collar employees, whereasvarious collective agreements may cover both blue collar and white collaremployees (collectively, ‘employees’).

In addition, a number of categories of employees enjoy special protectionagainst dismissal, for example, by reason of their special status as employeerepresentatives or by reason of anti-discrimination law (see section 2 below).

Top executives are not protected against unfair dismissal by legislation or collective agreement. Such protection will thus be specified in the individualservice agreements.


2.1 DiscriminationUnder the Danish Anti-Discrimination Act, employers cannot discriminate inrecruitment, employment and dismissal or with regard to pay and employmentconditions on grounds of race, skin colour, religion or belief, political opinion,sexual orientation, age, disability or national, social or ethnic origin.

The Danish Act on Equal Pay to Men and Women prohibits gender discriminationwith regard to pay. This means that employers must give men and womenequal pay and equal pay conditions for the same work or work of equal value.In addition, employers cannot dismiss an employee for requesting equal pay,including equal pay conditions.

Special protection is also provided by the Danish Act on Equal Treatment ofMen and Women, under which employers are required to treat men andwomen equally in recruitment, employment and dismissal.

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Health and safety representatives benefit from special protection under theDanish Working Environment Act. They enjoy the same protection as unionrepresentatives.

Likewise, similar protection applies to employee directors on the boards ofpublic and private limited companies under the Danish Companies Act. Theprotection also applies to alternate directors.

2.8 RedundancyCollective agreements will usually (directly or indirectly) impose a fairness testwith respect to dismissals, but only for employees who have been continuouslyemployed for a specified period of time, typically nine months. However, provisions of this kind may vary from one collective agreement to another andshould be carefully considered.

The Danish Collective Dismissals Act applies only to large-scale dismissals,which are determined as follows:

Number of employees affected Size of undertaking10 or more employees Between 20 and 100 employees10% or more of all employees Between 100 and 300 employees 30 or more employees More than 300 employees

2.9 OtherOther special protection is provided under the following Acts:

• Employees protected by the Danish Salaried Employees Act are entitled tocompensation if the dismissal is not reasonably justified by the conduct ofthe employee or the circumstances of the employer.

• For employees not covered by the Danish Salaried Employees Act but by acollective agreement, a fairness test will often be directly or indirectly imposed by the relevant collective agreement. With respect to collective agreements made under the Danish Confederation of Trade Unions and the Confederation of Danish Employers, for example, the General Agreement between those two organisations provides that dismissals mustnot be arbitrary.

• Under the Danish Act on Leave for National Service, employees called up for national service are entitled to leave from work for the period of national service and employers cannot dismiss an employee for requestingor taking leave for national service.


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2.2 AgeUnder the Danish Anti-Discrimination Act, employers cannot discriminate inrecruitment, employment and dismissal or with regard to pay and employmentconditions on grounds of age.

2.3 Length of service and fixed-term contractsThe Danish Salaried Employees Act entitles salaried employees (white collaremployees) to compensation for unfair dismissal, but only if they have beencontinuously employed by the same employer for at least one year before thedate of notice. Collective agreements will normally include similar provisions.

With regard to the categories of employees enjoying special protection againstdismissal, whether or not their statutory protection applies will typically notdepend on the length of service.

2.4 Part-time work and career breaksThe Danish Part-Time Employment Act provides that employers cannot dismissan employee simply because of his or her part-time status, refusal to acceptpart-time work or request for part-time work. This means that the dismissalmust be based on reasons other than full-time or part-time work status.

2.5 Pregnancy and child careUnder the Danish Act on Equal Treatment of Men and Women employers areprohibited from dismissing an employee for requesting or taking pregnancy,adoption or maternity, paternity or parental leave. Dismissal for pregnancy-related illness is also prohibited by the Act.

2.6 CarersUnder the Danish Act on Employees’ Entitlement to Absence for SpecialFamily-Related Reasons, employees are, among other things, entitled toabsence from work in the case of a close relative’s illness or injury. Under certain circumstances, employees are also entitled to absence from work tocare for a close relative who suffers from a significant and long-term conditionor a close relative who wishes to die at home. Employers are not allowed todismiss employees for exercising these rights.

2.7 Employee representativesSome categories of employees enjoy special protection against dismissal,including union representatives under most collective agreements. Apart fromenjoying the same protection against dismissal as other employees, union representatives may be dismissed in most industries only for ‘compelling reasons’. In addition, some collective agreements provide for an extended period of notice if a union representative is dismissed.

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4.1 Grounds for dismissal A dismissal must be reasonably justified by the conduct of the employee or thecircumstances of the employer.

In this context, the circumstances of the employer often means financial reasons. For example, in the event that the employer is able to prove a needfor staff reductions, such dismissals will usually be considered reasonably justified. However, when carrying out the dismissals, the employer must ensurethat the selection criteria are not arbitrary and not based on age, gender, religious beliefs or any of the other protected grounds.

Dismissals based on the employee’s conduct cover, for example, sickness andunderperformance. In the majority of these cases, it will be a requirement thatone or more written warnings were given before the dismissal to allow theemployee to remedy the situation and thus avoid dismissal.

4.2 PermissionsNo permissions are required in order to carry out individual dismissals.

4.3 Procedures The Danish Salaried Employees Act and other statutory protection against dismissal do not specify any procedure that must be followed.

However, most collective agreements do specify such a procedure. If theemployee in question is an employee representative, there are also certain procedural requirements that must be met, for example, that the employermust carry out negotiations with the relevant trade union before dismissal.

4.4 Notification/consultation obligations The Danish Salaried Employees Act and other statutory protection against dismissal do not stipulate any notification and consultation obligations thatmust be complied with.

In contrast, a number of collective agreements do stipulate various notificationand consultation obligations that must be complied with.

The Danish Collective Dismissals Act also specifies a notification and consultation procedure that must be followed, but the Act only applies tolarge-scale dismissals (see section 2.8 above).


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• Under the Danish Freedom of Association Act, employers cannot dismiss an employee or refuse to employ a candidate for being or not being a member of an organisation or any particular organisation (positive and negative freedom of association). The Act was amended after two cases before the Grand Chamber of the European Court of Human Rights weredecided in early January 2006, in which the Danish closed-shop system (where employers require prospective employees to be members of a specific organisation) was held to contravene Article 11 of the European Convention on Human Rights. The protection afforded by both the positive and the negative freedom of association ceases if the employing undertaking was set up for the express purpose of promoting particular political, ideological, religious or cultural ideas and the employee’s organisational affiliation is considered to be of importance to the undertaking’s purpose.

• Under the Danish Act on Employees' Rights on Transfer of Undertakings, dismissal on grounds of a transfer of undertaking alone will not be reasonably justified. This does not mean, however, that employees cannotbe dismissed in connection with a transfer of undertaking. For example, dismissals may be reasonably justified if they take place for economic, technical or organisational reasons that entail changes in the workforce.

• In general, there is no specific protection against dismissal for sickness (except if the sickness qualifies as a disability protected by the Danish Anti-Discrimination Act). However, some collective agreements contain protection against dismissal for sickness.

3. RESIGNATION

In the event that an employee chooses to resign as a result of a breach by theemployer, such resignation may constitute constructive dismissal.

If an employer wants to make material changes to an employee’s terms andconditions of employment and this is or may be to the employee’s detriment,such changes may only be implemented by giving the employee his or her contractual notice. However, the employee may choose to consider materialchanges to the terms and conditions as a constructive dismissal and will thenbe entitled to leave his or her job when the period of notice ends.

If the employee qualifies for protection against dismissal under the DanishSalaried Employees Act, a collective agreement or other specific protective provisions, the employee will be entitled to compensation, if the constructivedismissal is not reasonably justified by the conduct of the employee or the circumstances of the employer.

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If the employee obtains such other employment during the notice period, theemployer will in general be entitled to deduct the income from such newemployment from the employee’s pay during the remainder of the notice period. However, for employees covered by the Danish Salaried Employees Act,the employer’s right to do so will be subject to the minimum compensationrule.

In most cases, departing employees can be required to take some or all of theirholiday entitlement, subject to notice in accordance with the Danish HolidayAct.

In addition, employers are entitled to send employees home for lack of workand they will not be required to come into work unless otherwise instructed.However, the need to send home the employees must be real and the purposemust not be to harass them.

4.7 Payment in lieu of noticeEmployees are entitled to a payment in lieu of notice only if they are dismissedwithout notice and such dismissal is not reasonably justified by the employee’sconduct, or if the employee resigns without notice as a result of a materialbreach by the employer.

4.8 OtherThe employer should be aware that the material, documents and other information which have come into the employee’s possession in the course ofhis or her service to the company, whether in physical or electronic form, willremain the property of the company and must thus be returned to the employeron termination.


Dismissal without notice is permitted only in the event of gross misconduct.


6.1 Sanctions for unlawful dismissal If the Danish courts find that a dismissal is contrary to the provisions of the Actsreferred to above or any applicable collective agreement, the employee may beawarded compensation. Award levels will depend on the relevant Act/collectiveagreement:


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4.5 Duration of notice periodFor employees covered by the Danish Salaried Employees Act, the notice to begiven by the employer increases dependent on the employee’s length of service, subject to a maximum notice period of six months. When applying thisprovision, it is important to note that the gradual extension of the notice period is linked to the employee’s length of service at the effective date of termination and not at the date of notice. Moreover, notice must be given sothat it expires on the last day of a calendar month. The following notice periods apply in respect of dismissal:

Length of employment by Notice entitlementthe end of the notice period6 months 1 month3 years 3 months6 years 4 months9 years 5 monthsMore than 9 years 6 months

The parties may agree in writing mutually to extend the notice that each ofthem must give.

Provisions on dismissal form an integral part of a collective agreement. The notice periods stipulated in collective agreements differ from one industryto another. For example, within the manufacturing industry and typical labour-intensive industries, notice periods are normally significantly shorterthan those required under the Danish Salaried Employees Act. Accordingly, anycollective agreement that affects the employee's employment should be fullyconsidered before any dismissals are carried out.

Normally, collective agreements restrict an employer’s right to dismiss duringperiods of sickness, particularly if such sickness is as a result of a work-relatedinjury. Additionally, collective agreements may provide for extended noticeperiods for employee representatives and other employees enjoying specialprotection.

4.6 Treatment during notice periodEmployers must pay an employee his or her usual pay during the notice period. Although employers are entitled to release the employee definitivelyfrom his or her duties during the notice period, the employee will still be entitled to his or her usual pay unless dismissed for gross misconduct, e.g.breach of his or her duty of loyalty to the employer. If released from his or herduties, the employee will be under an obligation to seek and take up other(non-competing) employment.

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In certain cases, however, an unlawful dismissal may be set aside and theemployee reinstated (see section 6.3 below).

6.3 ReinstatementUnder the Danish Act on Equal Treatment of Men and Women, the DanishFreedom of Association Act, the Danish Act on Equal Pay to Men and Womenand a number of collective agreements, an unlawful dismissal may be set asideby the Danish courts and the employee reinstated, if he or she so requests it.However, reinstatement is a sanction that is rarely used in Danish case law.


The parties may enter into a severance agreement specifying that any and allclaims relating to the employee’s employment and dismissal have been settledin full.

Although such a clause will not entirely prevent the employee from suing, itwill be for the employee to prove that the claim has not been settled in full.


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Act Reinstatement Maximumpossible compensation

The Danish Salaried Employees Act No 1–6 months' payThe Danish Act on Equal Treatment of Men and Women Yes No cap – compensation

level often between 6–12 months' pay

The Danish Act on Equal Pay to Men and Women Yes No cap – limited case law,

presumably not significantly higher than 6 months' pay

The Danish Act on Leave for National Service No 26 weeks' payThe Danish Anti-Discrimination Act No No cap – compensation

level often between 6–9 months' pay

The Danish Freedom of Association Act Yes 24 months' payThe Danish Part-Time Employment Act No No cap and

no case law – presumably not significantly higher

than 6 months' payThe Danish Act on Employees' Rights on Transfer of Undertakings No Compensation level will

depend on whether the employee is covered by various provisions in, for example, the Danish Salaried Employees Act

or a collective agreementCollective agreements under the Danish Confederation of Trade Unions and the Confederation of Danish Employers and the General Agreement Yes 52 weeks' pay

6.2 Void dismissals Usually, a dismissal will not be void unless expressly agreed by the parties orunless the employee does not de facto leave the employer after the period ofnotice.

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Estonia




3. RESIGNATION 89








In Estonia, all employees in the private sector are protected against dismissalby the Employment Contract Act, regardless of age, length of service and sizeof undertaking. There is no period under Estonian law during which the dismissal protection does not apply. The Employment Contract Act governsnotice periods, severance pay and requirements in relation to the formalisingof terminations. It provides an exhaustive list of the grounds on which anemployer is entitled to dismiss its employees (see section 4.1 below). Dismissalson any other grounds or dismissals without any grounds are prohibited. Thefactors to be taken into consideration are, most importantly, the grounds fordismissal, the protected categories and the requirements in respect of formalising the dismissal.

The provisions of the Employment Contract Act governing dismissals aremandatory for the parties to an employment contract. More favourable regulations for employees may arise under a collective agreement and/or anindividual employment contract (however, in practice this is not common).

Under Estonian law, members of the management bodies of organisations areexcluded from the scope of the Employment Contract Act and are not protectedagainst dismissal. They can be recalled from their positions without thegrounds for doing so being specified. Whether they have the right to priornotice or severance pay depends solely on the service agreements concludedbetween them and the organisation concerned.

Additional protection applies to certain categories of employees, for example,pregnant employees, employees bringing up a child under three years of ageand employee representatives (see section 2 below).


2.1 DiscriminationAll forms of discrimination, including harassment are prohibited. The prohibitionagainst discrimination is regulated by two main acts: the Equal Treatment Act,and Gender Equality Act.

The Employment Contracts Act provides the general principle of equal treatment applicable in employment relationships. It sets out a duty onemployers to ensure the protection of employees against discrimination, follow the principle of equal treatment and promote equality in accordancewith the Equal Treatment Act and Gender Equality Act.

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any other benefits related to nursing. Termination of the employment contractas a result of employee’s need to care for his or her family member is not permitted.

2.7 Employee representativesAn additional protection applies in relation to employee representatives.Before terminating the employment contract of an employee representative,the employer must first seek the opinions of the employees who chose thatparticular person to represent them or the trade union.

2.8 RedundancyAdditional collective dismissal protection applies when a certain number ofemployees are dismissed within a period of 30 days as a result of a lay-off (i.e.termination of employment following a decrease in the volume of work, reorganisation of work, other cessation of work or insolvency).

Number of employees to be dismissed Size of the organisation5 or more employees Up to 19 employees10 or more employees 20–99 employees10% of employees 100–299 employees30 employees 300 or more employees

2.9 OtherThere are no other relevant rules.

3. RESIGNATION

A resignation cannot be regarded as a dismissal. However, if employer is infundamental breach of the employment contract then the employee has theright to terminate the employment contract unilaterally by submitting termination notice. The employee may do so, in particular, if:

• the employer has subjected the employee to degrading treatment or threatened to do so or allowed the employee's colleagues or third partiesto do so

• the employer has considerably delayed payment of wages• to continue work would pose a real threat to the employee's life, health,

morals or good name.

An employee may also terminate the employment contract (extraordinarily) forreasons arising from the employee, in particular if the employee's state of


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2.2 AgeIn the private sector an employer is not permitted to dismiss an employee forreasons connected to his or her age.

2.3 Length of service and fixed-term contractsAn employee is entitled to protection against dismissal during a trial period,the duration of which is automatically a maximum of four months from thedate that he or she commences employment, unless otherwise agreed in theindividual or collective employment contract. Termination of an employmentcontract during a trial period is somewhat simpler than during the later phases of employment.

If employees working under permanent employment contracts are entitled toremuneration based on length of service in the case of lay-offs, then employeesworking under fixed-term contracts are entitled to special remuneration in thecase of lay-offs. Upon terminating a fixed-term employment contract as aresult of a lay-off, the employer must pay the employee compensation corresponding to the salary that the employee would have been entitled tountil the expiry of the contract term.

2.4 Part-time work and career breaksEmployees working part-time are subject to the same rights as employeesworking full-time. Career breaks are possible if the employer and employeeagree on it, but the law provides no special rules.

2.5 Pregnancy and child careIf an employer is required to lay off employees, it cannot terminate an employment contract with a pregnant woman, a woman who has the right topregnancy and maternity leave or a person who is on parental leave or adoptive parental leave, except upon termination of its activities or a declaration that it is insolvent. In addition, an employer cannot terminate theemployment contract of a pregnant woman or a woman who has the right topregnancy and maternity leave on account of her diminished capacity to work.

Note that employees raising a child under three years of age have preferentialrights with regard to keeping their jobs.

2.6 CarersThe employer must provide nursing leave to an employee who is nursing achild under 12 years of age or another family member who is ill at home.Nursing leave is compensated by the Estonian Health Insurance Fund and theemployer is not obliged to maintain the employee’s salary for this period or pay

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Under Estonian law, dismissal of employees on any other grounds or withoutany grounds is prohibited. However, the Employment Contract Act specificallyprovides an exhaustive list of reasons that cannot be used by an employer asgrounds for termination of an employment contract:

• if an employee is pregnant or has the right to pregnancy and maternity leave

• if an employee is required to perform important family duties• if an employee does not, in the short term, cope with the performance of

his or her duties as a result of his or her state of health• if an employee lawfully represents other employees • if a full-time employee does not want to work part time or if a part-time

employee does not want to work full time• if an employee is in military service or an alternative service, such as

social care, rescue service or emergency service.

If an employee breaches his or her obligations, dismissal is the last resort. The employer may terminate the employment contract if the termination is inproportion to the gravity of the breach(es). As a rule, an employment contractcannot be terminated for an employee’s first breach of duties - a first breachshould be dealt with by a notice. Termination is possible for a first breach onlyif the breach is severe.

If an employer terminates the employment contract of a particular employeeduring a lay-off, because that employee has been unable to work for a longtime in view of his or her state of health or insufficient work skills, non-suitability for the job or inadaptability, the employer must offer theemployee another position within the organisation, if one is available.Termination is allowed only if no other position compatible with the employee’s professional knowledge and skills is available within the organisationor if the employee refuses an offer.

4.2 PermissionsThere are no requirements for permission, except permission where a contractis to be concluded with a minor, in which case the permission of a labourinspector is required.

However, for collective terminations there are certain notification obligationsto be fulfilled in respect of the Estonian Unemployment Insurance Fund (seesection 4.4 below).


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health or family duties do not allow him or her to perform the agreed workand the employer cannot provide other suitable work.

If an employee terminates an employment contract extraordinarily for the reason that an employer is in fundamental breach of the contract, the employermust pay the employee compensation to the extent of three months' averagesalary.


4.1 Grounds for dismissal Pursuant to the Estonian Employment Contract Act, an employer may terminate an employment contract only on the following grounds:

Employee reasons, in particular if he or she has:

• been unable to perform his or her work for a long time because of his orher state of health, resulting in the employment contract no longer beingable to continue (i.e. a decrease in the employee’s capacity to work because of his or her state of health)

• been unable to perform his or her work duties for a long time because ofinsufficient work skills, non-suitability for the job or inadaptability, which prevents the employment contract from continuing (i.e. a decrease in theemployee’s capacity to work)

• in spite of a warning, disregarded the employer’s reasonable instructions orbreached his or her duties

• in spite of the employer’s warning, appeared at work in a state of intoxication

• committed a theft, an act of fraud or an act bringing about the loss of theemployer’s trust in him or her

• brought about a third party’s distrust in the employer• wrongfully and to a significant extent, damaged the employer’s property or

caused the threat of such damage• violated his or her obligation to maintain confidentiality or a restriction of

trade.

Economic reasons as a result of a lay-off, if there is:

• a decrease in the volume of work, a reorganisation of work or other cessation of work

• a cessation of the employer’s activities • a declaration of the employer’s insolvency.

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• ways to support the dismissed employees in their search for a new job, re-training or in-service training.

During the consultation process an employer must provide the employees oremployee representatives with at least the following information, in writing:

• the reasons for the collective termination• the number of employees to be dismissed, and their job titles (an

employer does not need to pre-determine which employees will be maderedundant during the planned lay-off procedure; it only needs to state theapproximate number of employees to be made redundant)

• the number of employees to be dismissed, and their job titles, as well as the selection criteria determining the persons whose employment contracts are to be terminated (it is not necessary to name the employees)

• the period during which the employment contracts are to be terminated (no exact date is necessary, as an approximate date is sufficient)

• the method of calculating the compensation to be paid to the employees,in addition to the benefits provided by law or any collective agreement.

A copy of the letter of information must be sent to the EstonianUnemployment Insurance Fund at the same time as it is sent to the employeesor employee representatives.

After consultation, the employer must inform the Estonian UnemploymentInsurance Fund of the results. Collective termination must not commence untilat least 30 days after the Estonian Unemployment Insurance Fund received theletter of information (but note that this may be extended to 60 days, if theEstonian Unemployment Insurance Fund finds that it is unable to resolveemployment problems arising from the collective termination within 30 calendar days). During this period, the Estonian Unemployment InsuranceFund must seek solutions to the employment problems associated with thecollective dismissals.

4.5 Duration of notice periodThe amount of notice that the employer must give is dependent on theemployee’s length of service with it. If the length of service is:

• less than 1 year, no less than 15 calendar days’ notice is required• 1 to 5 years, no less than 30 calendar days’ notice is required• 5 to 10 years, no less than 60 calendar days’ notice is required• 10 or more years, no less than 90 calendar days’ notice is required.


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4.3 Procedures If there are grounds for termination of the employment contract, the employermust serve a termination notice on the employee. Notice of termination must bein writing and submitted to the employee either by registered mail or served inperson. If it is served in person, the employee must provide his or her signature inexchange for receiving the notice (in case proof is required at a later date that heor she received it). Personal delivery of the notice is the more advisable option andis the more common one. Notice of termination must contain justification for thedismissal and it is best if it also sets out the legal grounds on which terminationhas been made.

Before terminating an employment contract as a result of a lay-off, whenever possible the employer must offer the employee another job.

The employment contract terminates after the notice period lapses or, if theemployee receives financial compensation instead of a notice period, on the datethat the notice is submitted (with certain exceptions in respect of collective terminations).

4.4 Notification/consultation obligations There is a general consultation/notification requirement that applies also incases of dismissal. An employer must inform and consult at least with regardto the following circumstances pertaining to employees:

• the structure of the employer, the staff, changes and proposals which significantly affect the structure of the employer and the staff

• proposals that are likely to bring about substantial changes concerning organisation of work

• proposals that are likely to bring about substantial changes concerning theemployment contract relationships of employees, including termination ofthe employment relationship

• annual reports prepared pursuant to the Accounting Act, not later than fourteen days after approval of the annual report.

A specific consultation process is provided for collective dismissals. Prior to thecollective dismissals the employer must consult with the employee representatives or, if there are none, with the employees themselves, with aview to reaching an agreement on the following issues:

• the possibility of avoiding the termination of employment contracts or reducing the number of terminations

• the measures to be taken to alleviate the consequences of the terminations

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the right to pregnancy and maternity leave, or has been elected to representother employees. The court or Labour Dispute Committee may change theamount of the compensation, depending on the circumstances surrounding termination and the interests of both parties.

An employee may also bring a claim for reinstatement, but if the employer refuses to reinstate the employee (without providing any reasons), then theLabour Dispute Committee or court will not grant the claim.

6.2 Void dismissals Termination of an employment contract without legal grounds or in conflictwith legal norms is void. However, if this occurs, then the employer andemployee each has the right to demand that the Labour Dispute Committeeor the court terminate the employment contract as of the date when the termination should have been effective. Parties to the dispute do not need toprovide reasons, a simple statement is sufficient and the Labour DisputeCommittee or the court must terminate the employment contract.

6.3 ReinstatementAn employee may bring a claim for reinstatement, but if the employer refusesto reinstate the employee (without providing any reasons), then the LabourDispute Committee or court must reject such a claim and will not impose reinstatement.


After receipt of a dismissal notice, the employee may agree not to take anylegal action.


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4.6 Treatment during notice periodEstonian law does not specifically address the treatment of employees duringthe notice period. General employment terms therefore apply and the employeris required to ensure that there is work for the employee and to pay his or hersalary. However, the employer is required to give the employee reasonable timeoff work to look for another job.

4.7 Payment in lieu of noticeIf an employer fails to comply with the requirements in relation to notice periods, it is required to pay compensation to the employee amounting to hisor her average daily salary for each working day of the notice period that theemployer did not observe.

4.8 OtherThere is no need for other action by the employer.


An employer may terminate an employment contract for reasons not relatingto the employee (see section 4.1 above) without adhering to the requirementfor a notice period if, considering all the circumstances and mutual interests ofthe parties, it is not reasonable to demand that the performance of the contract continue until the expiry of the agreed term or term of the notice period (including cases of severe breach).

If an employer terminates an employment contract for economic reasons (i.e.a lay-off), then it must always adhere to the requirements in relation to noticeperiods (in line with the employee’s length of service). Nevertheless, theemployer may choose to pay remuneration in lieu of notice period.


6.1 Sanctions for unlawful dismissal After receiving a notice of dismissal, the employee may challenge the dismissalin the Labour Dispute Committee or a court within one month of receiving it.The burden of proof is on the employee (with certain exceptions). The LabourDispute Committee or court may order the employer to pay compensation to theemployee equal to three months' average wages, if it finds the dismissal to beunjust. The amount of compensation can increase to six months’ average wages,if the employer has unjustly dismissed an employee who is pregnant, who has

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Finland




3. RESIGNATION 102








In Finland, the most relevant statute in terms of the termination of employment contracts is the Employment Contracts Act (55/2001). The Actcontains provisions on, for example, the length of the notice period for a termination, the termination procedure and the compensation to be paid bythe employer in the case of an unlawful dismissal. In addition, numerous collective bargaining agreements contain provisions relating to the terminationof employment contracts.

Finnish employment law extends strong protection to employees, who are typically the weaker parties in employment relationships. This principle of protection is expressed in the mandatory provisions on employee rights. Thisprinciple also has a strong impact on the interpretation of employment legislation and contracts.

Once an employment contract exists, a qualifying employee is entitled to themandatory protection defined in Finnish employment legislation and in the collective bargaining agreements, such as protection against unlawful dismissal or lay-off, discriminatory dismissals and non-compliance with the procedural formalities for dismissal. Qualifying employees are also entitled tofamily leave.

The Employment Contracts Act applies to contracts entered into by an employeeagreeing to perform work personally for an employer under the employer’sdirection and supervision, in return for pay or some other form of remuneration.

It is important to note that when work is performed other than under anemployment contract, for example, as a self-employed contractor, the personperforming the work does not enjoy the protection afforded to employees byemployment legislation and collective bargaining agreements. Individuals arelikely to be regarded as self-employed if they use their own equipment, hiretheir own assistants, take financial risk for the work performed, have responsibility for their own activities and can arrange for a substitute to perform the work. These elements are not by any means an exhaustive list ofthe required characteristics and evaluation is necessary on a case-by-case basis.However, in general, the greater the degree of personal responsibility an individual takes, the more likely that he or she will be considered to be self-employed rather than an employee.

Managing directors do not generally fall within the scope of protection provided by the Employment Contracts Act, but are regarded as administrative

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2.5 Pregnancy and child careSpecific rules apply to employees on maternity, paternity, parental or childcareleave, whose employment contracts cannot, as a rule, be terminated duringsuch leave. The Employment Contracts Act provides a presumption that whena pregnant employee is dismissed, such a dismissal is motivated by the employee's pregnancy, unless the employer proves otherwise.

2.6 CarersCarers enjoy similar protection against dismissals as any other employee.

2.7 Employee representativesThe employment contract of an employee who is a representative of otheremployees (e.g. a shop steward) may only be terminated on specific grounds.To begin with, the representative may be dismissed on individual grounds onlyif a majority of the employees whom he or she represents agree. With regardto redundancies, the employee may only be dismissed if his or her work ceases completely and the employer is unable to arrange other suitable work.

2.8 RedundancyThe Employment Contracts Act provides, in addition to the requirement for arelevant and serious reason, separate termination rules for collective redundancies. An employer may terminate an employment contract providedthat the amount of work has substantially and permanently reduced for financial, production-related or re-organisational reasons.

The reduction is usually considered temporary unless it clearly exceeds a period of 90 days. Additionally, it is required that the employees affected cannot be given suitable alternative work within the company (or, in certaincases, within the group of companies) or be retrained to perform other duties.

As a rule, a valid reason for a redundancy is deemed not to exist if:

• prior to or following the redundancy, a new employee has been employedin order to perform tasks similar to those performed by the employee whohas been made redundant, although operational conditions affecting the employer have not changed

• following the redundancy, a new employee has been employed in order toperform tasks similar to those performed by the employee who has been made redundant, or

• the reorganisation of the work that has been referred to as the reason forthe redundancy does not actually diminish the amount of work available.


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bodies of limited liability companies, and are thus regulated by the provisionsof the Finnish Companies Act (624/2006). The terms of the managing director’s assignment and its termination are regulated primarily by the assignment contract (i.e. the Managing Director Agreement) and general principles of law.

The Employment Contracts Act does not provide protection for employmentcontracts subject to public law, nor does it provide protection for work relatedto leisure activities. In addition, working for the benefit of one’s family is usually not deemed to constitute an employment contract, but it is still possible for a family member to be employed by another family member.


2.1 DiscriminationBoth direct and indirect discrimination are prohibited by statutory provisions oflaw in Finland. Accordingly, discrimination based on age, gender, state of health,disability, ethnic or national origin, nationality, sexual orientation, language, religion, opinion, belief, family ties, trade union activity, political activity or onanother reason corresponding to these is strictly prohibited.

2.2 AgeIndividual dismissals are, however, assessed on the basis of conduct and performance of the individual employee and not on personal characteristics suchas his or her age. Nevertheless, age discrimination is prohibited by law inFinland.

2.3 Length of service and fixed-term contractsDuring a probationary period (generally up to four months, but six months inexceptional circumstances) an employee may be dismissed without notice.

As a rule, a fixed-term employment contract cannot be terminated, unless theemployer and the employee have agreed otherwise and a valid legal reason forthe termination exists.

2.4 Part-time work and career breaksPart-time employees or employees on career breaks enjoy similar protectionagainst dismissals as any other employee unless the reason for the part timework or for the career break requires otherwise. For example, employees onmaternity, parental and child-care leave are specially protected against dismissals (please see section 2.5 below).

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The Employment Contracts Act does not provide specific examples of theemployee-related grounds that are considered as sufficient for termination ofan employment contract, but precedents indicate that a relevant and substantial reason may, in general, be constituted by carelessness, failure tofollow instructions, gross negligence, dishonesty or absence without reason.However, in the case of termination of employment contracts in Finland, theemployer’s and the employee’s overall circumstances are taken into accountwhen assessing the grounds for the termination. However, the size of theorganisation is not a determining factor when defining the criteria for protection against dismissal.

Under the Employment Contracts Act, an employer might have the legal rightto terminate on individual grounds if the employee neglects or seriouslybreaches the duties that fundamentally relate to his or her employment.

Sufficient grounds for termination typically relate to an employee's extendedabsence from work (without permission), abuse of alcohol or drugs, dishonesty, bad behaviour, and certain other breaches, but underperformance,being a more abstract construction, is more legally challenging. Under no circumstances may the employee’s employment contract be terminated on thegrounds of illness or injury, unless it is accompanied by a substantial and long-term reduction of his of her working capacity so that the employer cannot reasonably be expected to continue the employment. The employee'sparticipation in a strike or other industrial action, his or her political, religiousor other opinions, his or her participation in community or association activities or recourse to a judicial procedure do not constitute relevant and substantial reasons for termination.

4.2 PermissionsIn the event of the dismissal of a shopsteward or other employee representative,the majority of the employees represented by that person, must, in accordancewith the Employment Contracts Act, provide their consent to the individualdismissal. No other permissions, such as union permissions, are required forthe dismissal.

4.3 Procedures In situations where there are grounds for an individual dismissal, the employer isgenerally under an obligation to provide the employee with a warning. The purpose of the warning is to give the employee with the opportunity to correcthis or her behaviour, under threat of termination of the employment contract.


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The Act on Co-operation within Undertakings (the ‘Co-operation Act’) provides procedural rules concerning employee cooperation and consultationprior to redundancies. The applicability of and the timelines for the consultation procedure depend on the total number of employees employedby the employer, as well as the total number of employees to be made redundant. Generally, all employers regularly employing at least 20 employeesin Finland are subject to the procedural rules contained in the Co-operationAct. The Co-operation Act does not, however, apply to termination of anemployment contract for a reason attributable to the employee (i.e. individualdismissal).

2.9 OtherThere are no other relevant rules.

3. RESIGNATION

If through its actions or negligence an employer has created circumstanceswhere it is not reasonable for an employee to continue his or her employment,a resignation by the employee may be considered as a dismissal.

Examples of an employer’s actions resulting in an employee’s resignation,which may under certain circumstances be considered as a dismissal, arewhere the employer lays the employee off and the lay-off continues for sucha length of time that the employee resigns in the belief that his or her employment has de facto ended. The same may apply if the employee resignsbecause the terms and conditions of his or her employment contract aresubstantially weakened by the employer.


4.1 Grounds for dismissal In accordance with the Employment Contracts Act, an employer has the rightto terminate the employment only if the reasons behind the termination aresufficiently serious. The Act separates individual grounds that relate to the conduct and performance of an individual employee from collective groundsthat relate to the financial condition of the organisation. Grounds for termination must be based on either individual or collective grounds and thegrounds should not be conflated.

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Duration of employment Notice period Probationary period Termination with immediate effect(up to 4 months)No more than 1 year 14 daysMore than 1 year, but no more than 4 years 1 monthMore than 4 years, but no more than 8 years 2 monthsMore than 8 years, but no more than 12 years 4 monthsMore than 12 years 6 months

Generally, an employment contract concluded for a fixed period cannot be terminated.

The applicable notice periods binding the employee vary from two weeks (ifthe duration of employment is less than five years) to one month (if the duration of employment is more than five years), unless otherwise agreed.

4.6 Treatment during notice periodThe rights and obligations of the parties to the employment contract remainthe same during the notice period. Accordingly, an employee is still under anobligation to perform his or her duties and the employer is obliged to pay himor her a salary and to provide all fringe benefits during the notice period.

4.7 Payment in lieu of noticeAn employer is not under a general obligation to make any severance paymentto the dismissed employee, provided that valid grounds for the dismissal exist.Consequently, the employer’s costs will be limited to the salary payable to theemployee during the applicable notice period (unless otherwise agreed in theindividual employment contract). In the event the employer terminates theemployment relationship without applying the relevant notice period, theemployer is under a statutory obligation to pay the salary for the notice period. In addition, it is not unusual for an employer to pay extra compensationto the employee in connection with an agreement on the termination of theemployment contract (i.e. a severance/compromise agreement) if such anagreement is made.

4.8 OtherIn general, there are no other actions that need be taken by the employer.


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The employer must effect the termination of the employment contract within areasonable period after being informed of the existence of the grounds for individual dismissal. In addition, if an employment contract is to be terminated,the employer must, prior to giving notice, afford the employee the opportunity tobe heard concerning the grounds for the termination. Further, the employee isentitled to be accompanied by an assistant, for example, a colleague or anappointed employee representative when being heard. No special timeframe hasbeen stipulated for this obligation.

After having heard the employee, the employer must, before giving notice of termination, find out whether it is possible to avoid the dismissal (e.g. by assigning the employee to other duties). However, the obligations to considerassigning the employee to other duties and to warn the employee so as to givehim or her the chance to correct the behaviour do not need to be observed if thereason for the termination is of such a nature that the employer cannot reasonably be expected to continue the employment.

Notice of termination should be given in writing personally to the employee concerned. If requested by the employee, the employer must give a written statement of the grounds for the termination, as well as the date the employmentcontract will end. It is advisable to request that the employee also confirms receiptof the notice of termination.

4.4 Notification/consultation obligations The Co-operation Act provides procedural rules relating to collective dismissals, that is, redundancies (see section 2.8 above). The Co-operation Actdoes not, however, apply to individual dismissals and there are therefore nonotification or consultation obligations for individual dismissals.

4.5 Duration of notice periodAn employer may terminate an employment contract concluded for anunspecified period by giving notice, provided that the general requirements forindividual dismissals contained in the Employment Contracts Act are fulfilled.

The employee and the employer may quite freely agree on the length of thenotice period in the employment contract. However, many collective bargaining agreements also contain mandatory minimum provisions regardingthe length of the applicable notice period. If there is no applicable collectivebargaining agreement in place and the parties have not agreed on the noticeperiod, the general provisions of the Employment Contracts Act apply.Accordingly, the notice period binding the employer may vary from 14 days tosix months (when terminated by the employer) depending on the duration ofthe employee's employment relationship, unless otherwise agreed:

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With regard to collective redundancies, a failure to conduct consultations according to the Co-operation Act results in liability to the employee who ismade redundant. The maximum indemnity is EUR 31 570 per redundantemployee. In addition, if the employer fails to comply with the re-employmentobligation during nine months following the termination of the employmentrelationship, the company is liable to compensate the actual damage suffered bythe employee.

6.2 Void dismissals In the event of an unlawful dismissal, the employee does not have a right toreturn to his or her work, but instead is entitled to an indemnity (as explainedin section 6.1 above). Therefore, a dismissal is not void, even where it is unlawful.

6.3 ReinstatementIn Finland, an employer cannot be obliged to reinstate a dismissed employeewhose employment is terminated on individual grounds. Although the dismissed employee has no right to be reinstated, he or she does have a rightto compensation (see section 6.1 above) in cases of unlawful dismissal.


An employee can, in an agreement on the termination of the employmentcontract (i.e. a severance/compromise agreement) waive his or her right toclaim compensation for unlawful dismissal or for any other reason relating tothe employment relationship and to sue the employer. Such a severance/compromise agreement often includes extra compensation to bepaid by the employer to the employee in return for the employee’s waiver.

However, it should be emphasised that an employee cannot validly give a general commitment in advance (e.g. in the employment contract) not to claimcompensation regarding any matter relating to his or her employment relationship.


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Irrespective of the agreed work period or notice period, an employment contract may be rescinded forthwith for particularly serious reasons. Such reasons must always be more serious than reasons for termination with notice.The notice of a rescission must generally be given within 14 days after theemployer has been informed of the existence of the particularly serious reason.

Particularly serious reasons are defined as negligence or behaviour by eitherthe employer or employee or a change in circumstances, which is of such anature that the other party cannot reasonably be expected to continue theemployment relationship, even for the duration of the notice period.

It should also be noted that if an employee has been absent from work for atleast seven days without giving the employer a good reason for the absence,the employer may consider the employment contract cancelled from thebeginning of the absence.


6.1 Sanctions for unlawful dismissal In Finland, employment disputes are investigated and resolved by ordinary courtsof law. The employer has the burden of proof as to the grounds for the dismissal,if the employee challenges the termination. In other words, the employer mustbe able to show that it has legal grounds for termination.

The employer is not obliged to pay compensation relating to lawful terminationsof employment contracts. In the event that an employer terminates the employment contract without sufficient lawful grounds, the dismissed employee is entitled to compensation for unjustified termination. The compensation for unlawful dismissal is determined as an indemnity. The compensation will amount to the equivalent of the employee's salary for a minimum of three months and a maximum of 24 months (however, this mayincrease to 30 months for shop stewards and other employee representatives),depending on the circumstances, for example, the length of employment of theperson dismissed, how well or badly the employer is deemed to have carried outthe relevant procedures and whether the employer has given reasons for the dismissal. In certain exceptional circumstances, the minimum compensation ofthree months may be reduced further.

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France




3. RESIGNATION 113








Protection against individual dismissal comes from the Labour Code, bargainingagreements and case law. Under French labour law, the dismissal of anemployee with a permanent employment contract must be motivated by ‘areal and serious cause’ based on personal or economic grounds.

Employees are protected against dismissal on insufficient grounds and againstfailure by the employer to apply the required procedures.

Recent legislation provides that both parties can end the employment contractby mutual agreement.


2.1 DiscriminationThe Labour Code provides that an employee cannot be dismissed on discriminatory grounds such as his or her sexual orientation, moral opinions,family situation, appearance, ethnic origin, religious beliefs, trade union activities, political opinions or state of health.

In addition, no employee can be dismissed for exercising the right to go onstrike.

The Labour Code provides that no employee can be punished or dismissed forhaving suffered or having refused to suffer harassment from any person forthe purpose of obtaining sexual favours for his or her own benefit or for the benefit of a third party. No employee can be punished or dismissed for havingtestified in relation to any such acts.

2.2 AgeFrench law does not provide specific protection based upon the age of theemployee. If the employee contests the dismissal and the case is judged valid,age will be taken into consideration to determine the amount of any indemnities.

2.3 Length of service and fixed-term contractsFrench law does not provide specific protection based upon length of service.However, the payment of compensation provided by French law or collectivebargaining agreements is proportional to the length of service.

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2.9 OtherAn employee cannot be dismissed during sick leave following an accident orillness that has been officially recognised as being the result of work conditions. The only exception would be for dismissal for gross or willful misconduct.

3. RESIGNATION

When employees submit their resignation, they are subject to a notice periodbut are not entitled to length of service indemnities.

Nevertheless, if the employee’s resignation refers to improper behaviour on thepart of the employer, and this is found to be valid, the resignation is deemedan unlawful dismissal (without real and serious cause) and entitles the employeeto payment for the notice period, length of service indemnities and damages.


4.1 Grounds for dismissal As stated in section 1 above, under French labour law, the dismissal of anemployee with a permanent work contract must be justified by a ‘real and serious cause’ based on personal or economic grounds.

The cause for dismissal must be objective, real, precise and sufficiently seriousto justify a termination.

An individual dismissal on personal grounds may be based on a variety of reasons, including insubordination, professional incompetence, incapacity, actsof disloyalty, failure to observe security rules, etc.

An individual dismissal on economic grounds will only be justified if it is basedon serious economic difficulties of the company (and the group to which itbelongs) or the necessity to restructure the company in order to maintain itscompetitiveness.

4.2 PermissionsFor the intended dismissal of an employee representative, the prior authorisationof the work inspector is required (see section 2.7 above).


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For fixed term contracts, dismissal is prohibited except for serious cause, grossor willful misconduct.

Under French law, gross misconduct is defined as a cause for termination soserious that the continuation of the employment contract is impossible. Willfulmisconduct is defined as behaviour intended to cause harm to the employer.

2.4 Part-time work and career breaksFrench law does not provide specific protection for part time work contracts orcareer breaks.

2.5 Pregnancy and child careThe Labour Code prohibits dismissal during the entire term of pregnancyincluding maternity leave and four weeks following return to work.

In the event of gross or willful misconduct, it is possible to terminate the pregnant employee’s contract.

There is no specific protection for childcare leave.

2.6 CarersUnder French law employees may take leave of absence in order to providecare for a member of their immediate family, but the law does not provide specific protection for caregivers.

2.7 Employee representativesIf the employer intends to dismiss an employee representative, the employermust request the prior authorisation of the work inspector.

If the employee is a member of the work council, the employer must consultthe work council with respect to the proposed dismissal. This procedure alsoallows for the employee to express his or her opinion to the work council.

2.8 RedundancyAdditional procedural protection applies during a collective redundancy (i.e. atermination on economic grounds of two or more employees within a 30-dayperiod).

The employer is required to inform and consult the staff delegates and/orworks council.

Employees covered by collective bargaining agreements can benefit from ahigher level of protection against dismissal.

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The duration of the notice period is fixed in accordance with the work contract, the collective bargaining agreement or the Labour Code, whicheveris more advantageous to the employee.

The Labour Code provides that:

• if the length of service is between six months and two years, the employee is entitled to one month’s notice

• if the length of service is longer than two years, the employee is entitled totwo months’ notice.

4.6 Treatment during notice periodIn principle, during the notice period, the employee continues to work underthe same working conditions and for the same wages.

4.7 Payment in lieu of noticeWhere an employer releases the employee from his or her obligation to workduring the notice period, the employer is required to continue to provide allwages and benefits for the duration of that period.

4.8 OtherThere are no other relevant considerations.


When an employee is dismissed for gross or willful misconduct, the termination is effective immediately upon receipt of the dismissal letter.


6.1 Sanctions for unlawful dismissal An employee can file a complaint with the Employment Tribunal claiming damages, if he or she believes the dismissal was unlawful.

If the dismissal is judged to have been unlawful, the French Labour Code provides an indemnity equivalent to a minimum of six months’ salary, where theemployee has at least two years of service in a company of more than 11employees.

If the employer does not respect the notice period, the employee is entitled toreceive compensation, which is distinct from severance pay.


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4.3 Procedures An employer’s termination of an individual’s permanent contract is subject to specific procedures. These vary according to whether the dismissal is based oneconomic or personal grounds. Termination procedures apply to all employees,regardless of their position, age or length of service.

The procedure for an individual dismissal begins when the employer summons theemployee to attend a mandatory pre-dismissal meeting by registered post orsigned hand delivery.

During this meeting, the employer must give reasons for the proposed termination and solicit the employee’s opinion.

The employee can be assisted by any other employee of the company or by special outside counsel if there is no employee representative within the company.

During a trial period, these procedural rules do not apply.

4.4 Notification/consultation obligations If the employer proceeds with the dismissal after the preliminary meeting, itmust give notice of the dismissal by registered letter explaining the reason(s)for the dismissal.

The employee is entitled to a severance payment calculated in compliance withthe collective bargaining agreement or the Labour Code, whichever is moreadvantageous to the employee.

The Labour Code provides for 1/5 of the monthly remuneration per year ofservice, plus 2/15 of the monthly remuneration per year of service over andabove ten years.

Employees who have been dismissed for gross or willful misconduct are notentitled to any severance payment.

4.5 Duration of notice periodReceipt of the dismissal letter marks the beginning of the notice period.

In the case of dismissal for gross or willful misconduct, there is no notice period and dismissal is effective immediately.

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In order to avoid litigation or a court judgment, the parties can negotiate a settlement agreement referred to as a ‘transaction’ in French law.

A settlement agreement implies that the employee waives his or her right tobring current or future claims against their employer, in exchange for monetary compensation. It includes details of the conflict or the potential litigation that the parties intend to settle, with the respective opinions of bothparties explicitly stated.

French case law requires that a settlement agreement should contain reciprocalconcessions in order for it to be lawful: a settlement agreement is a contractby which the parties can end a conflict by consenting to reciprocal concessions.

Judges who are called upon to evaluate the lawfulness of a settlement agreement must be able to decipher the respective concessions that each partyhas made in the agreement. The concessions do not necessarily need to beequal, but they must have some value.

Once the terms of a settlement agreement are found to have been lawfullyentered into they are binding upon the parties.


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Employees with less than two years’ service, or those employed by a companywith less than 11 employees must prove ‘hardship’ in order to obtain damages.

The employer may also be required by the Court to reimburse unemploymentinsurance for any unemployment allowances paid to the dismissed employee (upto a maximum of six months’ benefits) from the date of the dismissal until thedate on which the court made its decision.

In addition, the employee can obtain compensation not exceeding one month’swages if the dismissal procedure was judged not to have been respected by theemployer.

6.2 Void dismissals The cases where an employee’s termination will be void are expressly specifiedin the Labour Code. They are termination:

• as a result of an employer’s violation of the non-discrimination principle• as a result of a sexual or moral harassment• of a pregnant employee, which is not based upon gross or willful

misconduct• of an employee representative without obtaining prior authorisation from

the work inspector• of an employee during sick leave following an industrial accident or illness • for economic reasons following a job saving plan which has been cancelled

by the court.

6.3 ReinstatementIf the dismissal has been judged unlawful, the Labour Code provides that thecourt may propose the employee’s reinstatement in the organisation.

If either party rejects the proposal for reinstatement, the court will award compensation to the employee.

When a dismissal is declared void by a judge, the employee has the right to bereinstated and the employer must comply with this decision. Nevertheless, theemployee may opt for financial compensation instead.

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Germany




3. RESIGNATION 125








German law provides a comprehensive system of regulations regarding protection against unfair dismissals. Nonetheless, the majority of underlying principles stem from established case law that generally makes dismissals underGerman law both manageable and reliable. The lynchpin of German protectionagainst dismissal is the Act on Protection against Unfair Dismissal(‘Kündigungsschutzgesetz’, the ‘KSchG’). The protection granted by the KSchGgenerally affects all employment relationships in the private sector (though theapplicability to the individual case is contingent upon certain conditions, see section 2.3 below) and most employment relationships in the public sector.

When issuing a termination, an employer must not only observe regulations concerning the protection of employees in general, but must also take intoaccount that certain groups of employees enjoy special protection against dismissal. In addition to this, the employer must assess several factors, includingbut not limited to, the reason for an individual dismissal, previous warningsissued, the applicable notice period, social criteria in the case of redundancies,collective bargaining agreements, and dismissal permits in the case of disability.

While general protection against dismissal is mainly contained in the KSchG andthe German Civil Code (‘Bürgerliches Gesetzbuch’, the ‘BGB’), several Acts existthat provide special protection against dismissals for specific groups of employees (e.g. disabled employees, employees on maternity or parental leaveand members of the Workers Committee) (s15 of the KSchG and see section 2below). Moreover, by s613(a)(4) of the BGB, any dismissal issued because of atransfer of business is unlawful.


2.1 DiscriminationThe German legislator introduced the General Equal Treatment Act(‘Allgemeines Gleichbehandlungsgesetz’, the ‘AGG’) in 2006, protecting allemployees from discrimination on the grounds of, inter alia, race, sex, age andreligious beliefs.

Section 85 et seq. of the German Social Code No IX (‘Sozialgesetzbuch IX’, the‘SGB IX’) provides that a disabled employee may only be dismissed with theprior approval of the German Integration Agency. This applies to dismissalsboth with and without cause (see section 4.2 below).

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If the employment contract is dormant during a career break but otherwisekept alive, the employee will not lose the protection against dismissal that hehad before the break.

2.5 Pregnancy and child careSection 9 of the Act on Maternity Protection (‘Mutterschutzgesetz’, the‘MuSchG’) provides that pregnant women cannot be dismissed without cause.Following the birth, they cannot be dismissed without cause for a period offour months.

Section 18 et seq. of the Act on Child Benefit Allowance and Parental Leave(‘Bundeselternzeit- und Elterngeldgesetz’, the ‘BEEG’) provides that once aparent asks for parental leave, a dismissal is prohibited until the parental leaveexpires.

2.6 CarersThe newly introduced s5 of the Act on Nursing Care Time (‘Pflegezeitgesetz’,the ‘PflegeZG’) protects employees who ask for leave in order to care for family members in acute need. This involves short-term care (e.g. for a sickchild) as well as long-term care (e.g. for a family member suffering from a serious disease). The employee must inform the employer of the need to takeabsence and its envisaged duration, in the case of long-term absence, ten daysin advance of the leave. In both cases the employer may not terminate theemployment contract by reason of the employee’s absence from work until theend of the period of care for the family member. In special cases, the competent authorities may, upon application of the employer, declare the termination permissible.

2.7 Employee representativesWith regard to members of a works council, a dismissal for cause requires theprior approval of the works council itself. Terminations without cause are usually unlawful since s15 of the KSchG provides special protection both during membership and for twelve months after the membership’s end.

2.8 RedundancyIn the case of a so-called ‘mass dismissal’, s17 of the KSchG requires theemployer to notify the Federal Labour Agency 30 days in advance of anyintended termination. A ‘mass dismissal’ in the sense provided in law onlyexists in respect of the dismissal of a certain number of employees, as established on the following staggered scale:


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2.2 AgeThe age of an employee is not per se a reason for dismissal. If the employerwants the employment contract to end upon the employee’s reaching a certain age this must be agreed to by both parties. Employment contracts usually contain a clause to the effect that the contract shall automatically terminate upon the employee’s reaching retirement age.

On the other hand, the mere fact of an employee’s age does not confer protection against dismissal either. Consequently, special provisions to thiseffect are necessary. For example, many collective bargaining agreements prohibit the dismissal of employees aged 55 or older.

The aspect of age may also play a role in the context of discrimination withinthe meaning of the General Equal Treatment Act (‘AllgemeinesGleichbehandlungsgesetz’, the ‘AGG’). For details please see sections 2.4 andthe last paragraph of 4.1. This Act, however, does not grant protection againstdismissal but awards damages to employees who have been discriminated against by their employer.

2.3 Length of service and fixed-term contractsIn accordance with s23, paragraph 1 of the KSchG, the KSchG only applies if:

• the employment contract in question has existed for more than six monthsprior to the dismissal (s1, paragraph 1 of the KSchG), and

• the organisation has more than five employees, provided that their employment contracts were entered into before 31 December 2003. If they were entered into at a later date, the KSchG only applies if the organisation in question has more than ten employees. The number of employees refers to regularly employed personnel, meaning that short-term fluctuations are not relevant.

Assuming the KSchG does not apply because of the size of the organisation,the employer is still not entirely free to issue dismissals as it pleases. It must stillconsider the basic rights granted to employees by the German Civil Code andthe German Constitution, which primarily refer to the right to have and maintain an employment relationship. In light of this, the employer cannot dismiss an employee in an unreasonable or arbitrary manner.

2.4 Part-time work and career breaksIn respect of protection against dismissal, part-time workers are treated in thesame way as full-timers, i.e. they enjoy neither a higher nor suffer a lower levelof protection.

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Furthermore, the KSchG also applies to churches; to so-called‘Tendenzbetriebe’ (i.e. organisations that conduct activities specially protected bythe German Constitution, e.g. newspaper editorial departments protected bythe freedom of the press in accordance with s5, paragraph 1 of the GermanConstitution); and also to organisations active in the area of naval and airbornetransportation. However, for all four of these categories of business, certainmodifications apply.

3. RESIGNATION

Resignation, i.e. termination of the employment contract by the employee, hasthe same legal effect as dismissal: in both cases the employment contractcomes to an end. The question is whether the employee decided to resign ofhis or her own accord or whether he or she was compelled to do so by anaction of the employer. In the latter case one might say that the resignationcan be ‘regarded’ as a dismissal.

However, this is only relevant in two cases:

• If the employee were compelled by the employer’s behaviour to give noticewith immediate effect, he or she may claim damages (s628 BGB).

• If the employee terminates the employment contract voluntarily, he or shemay suffer reductions in unemployment benefits, unless he or she can prove that the employer provoked the resignation.


4.1 Grounds for dismissal German law distinguishes between ‘ordinary’ dismissals (meaning those thatrequire the employer to observe a statutory notice period) and dismissals forcause (which can be made in the case of serious contractual violations withoutobserving a notice period).

An ‘ordinary’ dismissal must be socially justified pursuant to s1, paragraph 2of the KSchG in order for it to be lawful.

The law provides three possible ways to ‘socially justify’ a dismissal:

• reasons relating to the personal attributes of the employee leading to his or her inability to perform contractual duties (e.g. a lack of capability, qualifications or experience), or both long-term or recurring short-term illnesses


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Size of the undertaking Number of dismissals21–59 employees At least 6 employees60–499 employees At least 10% of employees,

but no less than 25 employeesOver 500 employees At least 30 employees

The notice to the Federal Labour Agency is a prerequisite for a lawful termination.

Furthermore, if a works council exists, the employer must provide it, in writing,with information on the following aspects:

• reason(s) for planned dismissals• number of employees and organisational groups concerned• number of employees and groups which are regularly employed at the

undertaking• the point in time in which the dismissals will be issued• the envisaged criteria on the social selection of employees in the case of

redundancies• the calculation of any possible severance pay.

Finally, the employer must supply both the information mentioned above andthe works council’s statement to the Federal Labour Agency. Should no workscouncil exist, the employer must provide all the information directly to theFederal Labour Agency.

2.9 OtherSection 48, paragraph 2 of the German Constitution (the ‘Grundgesetz’) provides protection for Members of Parliament.

Section 58, paragraph 2 of the Act on Emission Control(‘Bundesimmissionsschutzgesetz’, the ‘BImSchG’) applies in the case of the dismissal of an authorised agent for emission control.

Section 2 of the Act on Protection in the Workplace(‘Arbeitsplatzschutzgesetz’, the ‘ArbSchG’) applies in the case of military service, in conjunction with s78, paragraph 1 of the Act on Civil Service(‘Zivildienstgesetz’, the ‘ZDG’), which applies to the civil service.

Executives also enjoy a certain amount of protection, although the KSchG permits the unilaterally enforced termination of an executive’s contract, if heor she performs certain key tasks in an organisation that include being responsible for the hiring and dismissal of employees. Members of a board ofdirectors, however, are excluded from the protection of the KSchG.

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4.2 PermissionsIn certain cases, prior official approval is a prerequisite to ensure that a dismissalis effective. This plays a major role when trying to dismiss a member of a workscouncil for cause or trying to terminate the employment of disabled employees.

Pursuant to s103 of the Works Constitution Act (‘Betriebsverfassungsgesetz’, the‘BetrVG’), the works council must be petitioned for approval prior to the dismissal of one of its members. If the works council refuses to give its approval,the employer can take legal action and claim a substitution of the approval bythe court. If a dismissal for cause is justified, the court will grant the necessaryapproval.

Section 87, paragraph 1 of the SGB IX requires the employer to ask the GermanIntegration Agency for advance permission to dismiss disabled employees. TheGerman Integration Agency then requests statements from the works council, ifone exists, and the representation of disabled employees in the organisation. Itthen decides if it will grant permission for the dismissal, usually within onemonth of the initial request.

4.3 Procedures The procedure to be followed when dismissing an employee depends on the reason for the dismissal and the existence of notification and/or consultation obligations.

If no notification/consultation obligations exist (e.g. because there is no workscouncil within the operation) it is generally sufficient to hand over the notice oftermination to the employee. However, several formalities have to be respected inorder for the notice to be valid:

• The notice must be in writing (i.e. a written letter, but not a fax or email).• It must be signed by a duly authorised representative of the employer

(otherwise the employee may reject the notice for having been given by the wrong person).

• It must be delivered to the employee on time as late receipt of the notice bythe employee automatically leads to a prolongation of the notice period.

• For evidential reasons the employer should not send the notice by ordinary mail but hand it over directly to the employee or have it delivered by a messenger.

There is generally no need to warn the employee about the fact that he or shewill be receiving a notice of dismissal. However, in the case of a dismissal for causebased on a suspicion of misconduct, it is mandatory to confront the employeewith the accusations first.


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• reasons related to the conduct of the employee, e.g. a culpable breach ofcontract or criminal conduct (note: in many cases, a written warning is required before issuing such a dismissal)

• redundancies, where a management decision requires a reorganisation ofthe undertaking, motivated either externally or internally. This encompasses,for example, a drop in orders which requires the employer to implement cutbacks or even close down (parts of) an undertaking entirely, which thenleads to dismissals.

Another important basic principle of German law is that any dismissal must bea measure of last resort. The employer must have exhausted all other availableand reasonable means, including but not limited to transfers, relocation, reassignment or training for other jobs, before an employee may be dismissed.Additionally, a dismissal for misconduct without prior warning (‘Abmahnung’)is generally considered unlawful if the contractual breach is not of an extremelyserious nature.

Returning to redundancies, it is important to note that even if in principle a dismissal would be socially justified and also a measure of last resort, it wouldstill need to meet an additional requirement: the employer needs to select whichemployee is to be dismissed based on social criteria. This process is threefold:

• A pool for selection must be created to include all comparable employeeswithin an entity. Problems in this area are mainly centred on the questionof comparability.

• Assuming the pool has been created, an employer must then evaluate theemployees on the basis of four selection criteria: age, length of service, possible disabilities and maintenance obligations. This is generally accomplished by using a sliding scale that assigns points to certain age categories. The points for each employee are then added up and the results compared. Those employees that score the fewest points are thoseleast affected by a dismissal, meaning they will need to be dismissed first.

• As a last step it is necessary to evaluate if special reasons require the employer to provide an exceptional continuation of the employment contract concerned. This is determined on a case-by-case basis.

Quite often, works agreements prevent the employer from terminating anemployment relationship because of redundancy. In this case, only a specialtermination for cause is effective (e.g. when the employer closes down thewhole organisation and no other employment is possible).

In addition, many collective bargaining agreements prohibit the dismissal ofemployees aged 55 or older. This is often viewed as a problem when considering equal treatment laws.

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Length of service Notice periodProbationary period (up to 6 months) 2 weeksAt least 2 years 1 month towards the end of month

(e.g. for notice given on 28 May, termination will become effective on 30 June; for notice given on 1 June termination will become effective on 31 July)

At least 5 years 2 months towards the end of monthAt least 8 years 3 months towards the end of monthAt least 10 years 4 months towards the end of monthAt least 12 years 5 months towards the end of month At least 15 years 6 months towards the end of monthAt least 20 years 7 months towards the end of month

It is important to note that both individual agreements and collective bargaining agreements may prolong the notice period above and beyond thestatutory minimum. In collective bargaining agreements, it is also possible toreduce the notice period, although this option is rarely used.

Statutory notice periods only apply to terminations issued by the employer. Itis not possible under German law to agree upon notice periods that are shorter for the employer than for the employee. Often, employment contractscomply with this requirement by stating the notice period for the employerextends to the same duration as the notice period for the employee.

4.6 Treatment during notice periodDuring the notice period, the employer cannot treat the employee differentlythan before. It must continue to provide a full salary and the opportunity towork. However, with reasonable cause, the employer is entitled to put theemployee on garden leave (e.g. for violation of trust because of criminal activity).

Additionally, the parties can agree on reducing the employee’s holiday claimsin proportion to the number of days of garden leave.

4.7 Payment in lieu of noticeIn Germany, payment in lieu of notice is rather uncommon because employeeswho contribute to the termination of their employment contract suffer disadvantages in relation to unemployment insurance (e.g. there may be aretention period for unemployment benefits).

4.8 OtherApart from the formalities and procedures (above all, the consultation requirements) already described there are generally no other actions that needbe taken by the employee.


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In the case of existing notification or consultation obligations, these must beobserved by the employer. This is especially relevant if:

• there is a works council (s102 BetrVG, see below section 4.4)• the employee is disabled (s87 paragraph 1 of the SGB IX, see section 4.2).

From a practical point of view this means that the employer must include theseobligations when calculating the timetable, especially if it would like to dismiss theemployee upon a certain date.

4.4 Notification/consultation obligations If there is a works council in the undertaking in question, the following additional factors must be considered when issuing a termination.

The employer must inform the works council in writing of the reasons for theintended dismissal prior to giving notice to the employee (s102 of the BetrVG).If the works council does not respond with a statement within one week (for‘ordinary’ dismissals) or three days (in the case of dismissals for cause), itsapproval is implied by law.

It is important to note, however, that once the employer has requested theworks council’s statement and provided it with sufficient time to respond, itmay go ahead with the dismissal as planned. It is irrelevant for the effectiveness of the dismissal whether the works council agrees or objects tothe termination, as long as it was presented with an opportunity to make astatement. Failure to provide this opportunity can result in a court ruling thedismissal unlawful.

Another important point is that once the works council objects to the planneddismissal, the employee in question may continue to work and request his orher regular salary even after the expiration of the notice period, up until thelabour court rules on the effectiveness of the dismissal.

If the employer terminates an employment contract by observing the noticeperiod, it must give notice in writing pursuant to s623 of the BGB. It does notneed to provide the reasons for an intended dismissal, but must attach theworks council’s statement, should it object to the termination.

4.5 Duration of notice periodIn the event of an ‘ordinary’ dismissal, the employer must observe the applicable notice period when dismissing an employee. The basic statutorynotice period ranges from two weeks to seven months as per the followingsliding scale:

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If the unlawfulness of a dismissal is confirmed by the labour court, the employeris required to continue the employment. It must retroactively pay salary fromthe end of the notice period onwards and must reintegrate the employee intoits operational structure (i.e. reinstate him or her into the former position).

In certain circumstances, the parties can apply to the labour court in order toannul the employment, should the continuation of employment no longer betolerable for them. If an annulment is reached, a severance payment of 0.5%of the gross monthly salary per year of service is mandatory.

6.2 Void dismissals A dismissal is void – in contrast to ‘unlawful’ – if it is not in writing but declaredorally or via fax or email. It is also void if it was issued by a person incapableof contracting. The employee may challenge these issues without having torespect the three week deadline set forth in the KSchG for claims againstunfair dismissals.

6.3 ReinstatementReinstatement can occur in two situations. First, if a dismissal is void or unlawful – this is self-explanatory and therefore requires no further explanation. Of interest is the second situation. Even if a dismissal is effective,the employer must consider reinstatement if:

• the dismissal is justified by an imminent redundancy at the time of termination, but ex post facto it turns out that there is no redundancy (e.g.the employer dismisses an employee because its order books are empty, but a sudden influx of new orders changes this situation), or

• an employee dismissed for personal reasons (e.g. illness) recovers unexpectedly and quickly.

However, a reinstatement in this manner will last no longer than the end ofthe notice period.


Before being given notice of a dismissal, employees cannot validly waive protection against dismissal. After this point in time however, they may agreenot to take court action. Any statement they make to this effect should alwaysbe confirmed in writing and be clear and free of ambiguities.

It should be noted that employees ‘asking for a dismissal’ or ‘agreeing with thecontent of the notice’ do thereby waive the right to take court action.


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Depending on the individual situation and the reason for the dismissal it maybe advisable to seek communication with the employee first. This, however, isup to the employer to decide.


The employment contract may be terminated by either party for cause withimmediate effect (s626 of the BGB), provided that the party issuing the termination cannot reasonably be expected to continue the employment relationship until the notice period has expired.

The employer must issue a termination for cause within a period of two weeksafter learning of the cause for dismissal. If the employer needs time to investigatea possible breach of contract (e.g. if an employee goes on annual leave withoutpermission), the two-week period begins once the investigation is finished.

Assessing the effectiveness of a termination for cause is done in two steps.First, the employer must determine whether the cause for termination is considered serious. Second, it must determine whether it would, in this case,be insufferable for it to issue an ‘ordinary’ dismissal and have the respectiveemployee continue working until the expiration of the regular notice period.

Appropriate reasons include but are not limited to, refusal to work, severe(contractual or criminal) offences, disruptive behaviour, recurring abuse ofalcohol, diseases preventing employees from working, and prison sentences.


6.1 Sanctions for unlawful dismissal After receiving a notice of dismissal, the employee may take legal action. Theemployee can bring a claim if social justification for the dismissal has not beenprovided, within three weeks after the date of notification (s4, paragraph 1 ofthe KSchG). If he or she does not do so, after three weeks, the dismissal isregarded as socially justified and therefore lawful. This three-week period appliesto both ‘ordinary’ dismissals and dismissals for cause.

It should be noted, however, that even after the expiration of the three-weekperiod, the employee may claim the termination was unlawful for a limited number of reasons unrelated to the social justification. These include that thedismissal was issued by an unauthorised person (i.e. not a legal representative ofthe employer) or that it was not issued in writing.

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Greece




3. RESIGNATION 138








If an employer dismisses an individual employee who has unemployment insurance, the employee’s protection comes from Law no 3198/55 (concerningemployees who have a contract of employment with an employer, whether witha public or private organisation); in conjunction with Law no 2112/1920 (inrespect of white collar workers); and Royal Decree no 16/18-8-1920 (in respectof blue collar workers).

For those who are not entitled to the protection described above, additional provisions regarding dismissals are included in Articles 669-674 of the Greek CivilCode.

Further, all employees are protected against unfair and abusive dismissal.Dismissal includes:

• termination of a permanent employment contract – in this case, an employer’s right to dismiss employees is unrestricted and can be exercised freely (in some exceptional cases, the right to dismiss an employee may be restricted either by particular legal provisions or by the terms of the individual contract)

• termination of a fixed-term employment contract (see section 2.3 below)• constructive dismissal – if the employer unilaterally alters an employee’s

employment contract without the employee’s consent and the employee canprove constructive dismissal, the employee can then choose whether he or she is willing to continue the employment relationship under the new terms,or to resign or consider that this unilateral alteration is equivalent to a tacit termination of the existing employment contract.


2.1 DiscriminationAccording to Law 3896/2010 on the equal treatment between men andwomen, termination of the employment contract is prohibited if it is based onreasons of sex or marital status; reasons of retaliatory behaviour on the part ofthe employer, because of the non-compliance of the employee in sexual orother harassment against him; or reasons of retaliation of the employer following testimony or other action on the part of the employee before a courtof law or any other authority.

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2.6 CarersThere is no special protection for carers.

2.7 Employee representativesIn general, it is unlawful to dismiss an employee on the grounds of his or herparticipation in the legitimate action of a trade union. The dismissal of a tradeunion member is unlawful if the employer has not complied with the necessary legal preconditions under Law no 1264/1982 (i.e. the dismissal islawful only if it is justified by specific reasons stipulated by law and is approvedby the Special Committee for trade union members). This protection lasts untilthe end of the trade union member’s service and for one year after it.Members of the works council enjoy the same kind of protection.

2.8 RedundancyIn relation to collective dismissals, special rules apply to employment contractsthat are terminated in organisations employing 20 or more employees at thebeginning of the month when the dismissals take place. In an organisationemploying between 20 and 150 workers, a collective dismissal will occur if atleast six employees are dismissed. In an organisation employing more than 150workers, a collective dismissal will occur if at least 5% (this percentage is determined every calendar year by ministerial decree) of the organisation’sstaff (i.e. up to 30 employees) are dismissed.

The legal definition of a collective dismissal is one which is effected by theemployer for one or more reasons not related to the individual workers concerned.

2.9 OtherThe termination of an employee’s employment contract while he or she is onannual leave is prohibited under the Coercion Law 539/45 (Articles 5 and 6).If an employer breaches this prohibition, sanctions may apply, the main onebeing that the dismissal will be considered as void. The prohibition does notapply in cases of contractually agreed leave (unpaid leave) or where the period of leave is extended beyond the legal duration with the parties’ consent. Moreover, the termination of an employment contract is lawful during the annual period of Law 539/45, since the employee has fulfilled the common preconditions of retirement.

Law no 3514/1928 stipulates that a dismissal that takes place while anemployee is performing national service in the army is void.


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2.2 AgeWith reference to age discrimination when an employee is dismissed, the primary sanction is the invalidity of the dismissal. Consequently, the employerwill be obliged to pay any outstanding wages to the employee from the timeof his or her dismissal until the time of the judgment in the employee’s favour.

In addition, it is not permitted for dismissed persons aged 55-65 to exceed10% of the total number of people dismissed otherwise all dismissals will beinvalid (Article 7(4) and (5) of Law 3863/2010).

2.3 Length of service and fixed-term contractsThe regulations that protect an employee in the event of dismissal will onlyapply if the employee has been employed for a period of more than 12 monthswith the employer. Otherwise, a dismissal can take place without notice andwithout a severance payment being made. However, in that case the employermust still give notice of the termination of the contract to the employee inwriting and declare it to the Greek Manpower Employment Organisation afterwards.

In relation to fixed-term contracts Article 672 of the Greek Civil Code stipulates that, if the employment contract is terminated without a significantreason before the agreed end date (or if the facts giving rise to the significantreason are found not to be significant enough), the termination is unlawful.The dismissed employee can claim damages for loss and also, in specific circumstances, pecuniary damages for non-material harm.

2.4 Part-time work and career breaksThere is no special protection for part-time workers or workers on careerbreaks.

2.5 Pregnancy and child careUnder Greek law, a mother’s rights are protected by specific regulations (Lawno 1302/82, no 2294/94 and no 3896/2010). Article 15 of Law no 1483/84stipulates that the dismissal of a female employee is prohibited during pregnancy and for a period of 15 months after the birth if: she has taken a six-month period of special maternity leave; her maternity leave has ended; orshe is absent from work because of an illness related to the pregnancy. Suchan employee can only be dismissed if there is an important reason (e.g. her failure to observe the employer’s instructions; poor performance; non-performance of her contractual duties; if she has caused the company toincur damages; or gross negligence unconnected to the pregnancy).

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Greek case law illustrates that significant reasons include:

• breach by the employee of an essential term of the employment contract • a finding that the employee is guilty of violence against his or her

employer or supervisors • the offer of improper work to the employee by the employer• inappropriate behaviour• breach of the employer’s directions or rules • working without diligence • winding up the company.

The parties can agree beforehand the specific grounds that they will considerto be significant reasons for the termination of employment. However, the parties’ agreement cannot exclude or impose serious restrictions on theemployer’s right to terminate the employment contract.

The termination of a fixed-term employment contract is informal, thereforethere is no need to complete a specific form. Nevertheless, if such a form isused the significant reason does not need to be set out in it.

As explained in section 2.3 above, if the employment contract is terminatedbefore the agreed end date without a significant reason (or if the facts givingrise to the significant reason are found not to be significant enough), the termination is unlawful and the dismissed employee can claim damages forloss and, in specific circumstances, pecuniary damages for non-material harm.

It should be noted that the employer can terminate the employment contracteven when no significant reason exists. In such a case, however, it must paythe employee’s wages for the total number of months remaining under theemployment contract until the lapse of the agreed end date (i.e. the lawful termination of the contract).

In the case of permanent employment contracts (Articles 669 §2, 670 and 672of the Greek Civil Code), the employer is not required to justify its decision toterminate the employment contract of an employee. Nevertheless, it must actwithin the limits imposed by good faith and the general prohibition againstabusive exercise of its legal right (Article 281 of the Greek Civil Code). Thismeans that the employer’s right to dismiss is not unlimited and without restrictions, but is constrained by the provisions of Article 281 of the GreekCivil Code. The employer has the burden of proof to show that the dismissalwas made in accordance with Article 281.


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3. RESIGNATION

Usually, if an employer alters an employee’s contractual terms with a view toforcing the employee to resign, it commits a serious breach. The employee isthen entitled to end the employment relationship as long he or she does sopromptly and the reason for ending it is caused by the employer’s (attempted)breach. Delaying and continuing to work without protest may indicate that theemployee accepts the breach of contract and as a result the new unfavourableterms will apply.

There are many situations where an employee’s resignation can be consideredas a dismissal: for example, if the employer forces a worker to resign to avoidpaying him or her a severance payment; if the employee decides to resignbecause his or her working conditions will be changed in the near future (thishappens if the employee loses his or her job and remains without any otherwork to do while another employee is assigned to do his or her previous job);or if an employee requests the employer to dismiss him or her (i.e. an agreeddismissal, which is considered as a termination of the employment contractand is counted in the calculations provided for collective dismissals).


4.1 Grounds for dismissal If a fixed-term employment contract is terminated, Articles 669 and 672 of theGreek Civil Code provide that:

• the contract can be terminated after the lapse of an agreed end date, without compensation or giving notice

• employment can be terminated earlier than the agreed end date if there isa significant reason to justify the termination.

The term ‘significant reason’ is not defined by statute, but by case law. Judgesare required to consider the essential issues of the specific employment contract, the customary practices of the company and the facts of the case ingeneral, in order to determine if there is a significant reason for the termination in question.

In short, a significant reason is one which, based on good faith and customarypractices of the company, objectively constitutes an infringement of the essential elements of the employment contract, with the consequence that theemployment relationship cannot continue until the agreed end date.

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The employer must calculate and pay the amount of annual holiday pay andbonuses in the event that the employee has not fully used his or her entitlement. This payment must take place at the same time as delivery of thetermination notice.

For details of the procedures relating to collective redundancies, see section4.4 below. Note in particular that where the purpose is to improve the economic or technical structure of the organisation, case law indicates thatselection criteria should be used (though there is no requirement for this instatute). Thus, in the event of redundancy dismissals, an employer must consider ‘social criteria’, for example younger employees may be preferred toolder ones because it may be easier for them to find alternative employment.Length of service is deemed to be a significant factor and the principle of last-in-first-out applies. However, these types of selection criteria are not obligatory and in all cases it is the employer’s business needs that should determine its redundancy policy.

4.4 Notification/consultation obligations The employer has an obligation to inform the Greek Manpower EmploymentOrganisation within eight days of the date of the dismissal (Article 9 Act No3198/1955).

If an employer makes a collective dismissal, it must follow a specific procedureprovided by Law no 1387/1983 (as amended by Law no 2874/2000), in compliance with Directive 98/59/EC. The employer should first warn employ-ees of possible redundancies and enquire, in cooperation with the tradeunions, whether a suitable alternative solution can be found. In other words,an employer must firstly consult with the employee representatives. In addi-tion, the prevailing opinion among legal commentators is that dismissalsshould take place within a ‘reasonable’ time following the consultation.

If this is not possible, the employer must discuss with the trade union oremployee representatives and agree on the objective criteria for selectingemployees for redundancy. At this point, there are two possible options:

• If they reach a joint decision, dismissals can be made ten days after the announcement of the decision to the Minister of Labour and Social Care.

• If they do not agree, the decision will be made by the Minister of Labour and Social Care within ten days after the decision has been announced tohim or her. In this case, the Minister can either decide to prolong the consultation for another 20 days if asked to do so by one of the parties, orpartly approve or disapprove of the employer’s intentions.


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Greek case law has confirmed that the following situations to be abusive onthe part of the employer:

• dismissal because of revenge against or dislike of an employee• dismissal because the employer wanted to legally assert its rights• dismissal because the employee had different political or religious views

from the employer.

4.2 PermissionsMembers of a trade union board and the founding members of a trade unioncannot be dismissed during the period of their office and one year thereafter(Act No 1264/1982). However, dismissal is permitted if it is justified by a specific reason indicated in the Law and if it is approved by the Committee forthe Protection of Trade Union officials.

Furthermore, employees with special needs (e.g. disabled persons) cannot be dismissed unless the procedure laid down in Law 2643/98 is followed and a decision by the relevant Committee issued.

4.3 Procedures The termination notice must be in writing and must also be explicit, ultimate andcertain. It can be concluded and signed by the employer himself or his legal representative. The termination takes effect only after the employee receives thenotice of his or her dismissal.

The appropriate severance pay must be paid at the time of termination. The severance is always payable irrespective of the reason for termination of the contract, i.e. even in cases where it is terminated for reasons relating to theemployee's individual behaviour (i.e. behaviour contrary to his or her contractualobligations). If the employee refuses to receive the compensation, the employermust deliver it for deposit into the Greek Deposit and Loans Fund (TameioParakatathikon kai Daneion).

The employer must also notify the Employment Office of the dismissal withineight days from the date on which it took place. Non-observance of this formality does not render the termination void, but may result in criminal sanctions for the employer.

The employment must either have been registered in the Social SecurityInstitution’s registries (the ‘IKA’), or the dismissed employee must have beeninsured, otherwise the termination is considered void.

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For the avoidance of doubt, garden leave is not permitted in Greece.

4.8 OtherThe employer should ensure to pay the correct amount of tax when payingcompensation to the employee.


During the first 12 months of employment (the legal probationary period), theemployer can terminate the contract at any time, without notice and withoutmaking a severance payment. Furthermore, the employee can terminate theemployment contract without any prior notice and without paying any compensation, where there has been a criminal procedure against the employeewhich was brought before the termination of the employment, either by theemployer or by any third party, in relation to a ‘delinquency’. The ‘delinquencylevel’ is when the sanction for the crime is imprisonment for between sixmonths and five years. The crime of defamation of a public limited company(Article 364 of the Greek Criminal Code) could be a basis for such a prosecution. The prescribed period is three months from the time the employer became aware of the offence. However, one should keep in mindthe possible complex consequences of this action (e.g. counter-prosecution ofthe company, as well as claims not only for severance pay, but also for additional compensation if the employee is found not guilty of the crime he wasaccused of).

In a situation where a dismissal is to be effected immediately (without givingnotice) the employee is entitled to compensation equal to a specified numberof months’ ‘regular’ salary in proportion to the length of service. If the employeeis given notice (the amount of which depends on the length of service), thelevel of compensation is half the amount that it would be if no notice weregiven.


6.1 Sanctions for unlawful dismissal In the event of an unfair dismissal, employees have three months within whichthey are entitled to bring a claim that the dismissal was unlawful (Article 6 §1 ofLaw no 3198/55). The three-month deadline is depreciative, meaning that if it isnot adhered to by the employee, he or she loses the rights which arise as a resultof the dismissal being unlawful. Furthermore, the employee has six months afterthe termination within which to bring a claim concerning severance payment(Law no 2112/20).


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If the Minister does not make a decision within the ten-day deadline, the collective dismissals may be carried out to the extent agreed by the parties during the consultation.

If the employer proceeds with collective dismissals without following the procedure described above, they are considered to be void. In that case, theemployee representatives could argue that the negotiations should be repeatedon the grounds that the necessary procedure was not duly followed and/or thepreceding negotiations did not take place in good faith. Moreover, the generalprocedures for dismissal must be complied with (see also section 4.3 above).

It is important to note that in general none of these provisions apply toemployees who are dismissed as a result of the closure of an organisation, ifthe closure has been ordered by the Court of First Instance (i.e. the law stillapplies if the closure has been freely decided by the employer itself). For theprovisions not to apply, the closure must be permanent and complete.

4.5 Duration of notice periodUnder Greek law, advance notice of at least 30 days (but not more than sixmonths) is required (Law no 3863/2010, no 3899/2010, no 2112/20, and no3198/55). The precise amount of notice required depends on the length of theemployee’s service with the employer:

Length of service Advance notice required towith the same employer terminate the employment contractUp to 12 months NoneMore than 12 months up to 2 years 1 month2 full years up to 5 years 2 months5 full years up to 10 years 3 months10 full years up to 14 years 4 months15 full years up to 19 years 5 months20 full years or more 6 months

4.6 Treatment during notice periodDuring the notice period the employee would normally provide services to theemployer unless otherwise agreed. It should be noted that ‘garden leave’ isprohibited in Greece.

4.7 Payment in lieu of noticeIn the case of termination without notice, the employee is entitled to severance pay for the number of months for which advance notice shouldhave been given for the termination to be valid.

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Therefore, the employer cannot oblige the employee to sign a compromiseagreement, but it can negotiate it within the framework of its powers asemployer. However, it should be noted that although there is freedom of contract the employee cannot waive certain rights established by law (such asthe right to proceed to litigation) and that compromise agreements may be re-evaluated by the court if litigation takes place.


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These two claims must be made separately, not cumulatively.

6.2 Void dismissals In relation to an unfair dismissal, if the dismissal is void then the employmentrelationship is considered still to exist and the employee can ask for wages inarrears for the period from the termination of the contract until the date of thecourt judgment.

With regard to the termination of a permanent employment contract, byArticle 5 §3 of Law no 3198/55 and the more recent Article 2 of Law no2556/97, it is considered to be void if the employer: refuses to pay the appropriate severance payment at the time the dismissal occurs; does not provide the employee with a notification of termination in writing; or omits toregister the employee’s occupation in the Social Security Institution records (orif it has not insured the employee at all).

If a fixed-term contract is terminated before the agreed end date and withouta significant reason, the termination is unlawful and the dismissed employeecan claim damages for loss and, in some cases, pecuniary damages for non-material harm (Articles 669 and 672 of the Greek Civil Code).

As mentioned above, a dismissal can also be void if it occurs during an employee’s annual leave, while an employee is on national service, or if theemployee is a pregnant woman or a member of a trade union.

Employees can also claim that a dismissal is void on the basis of an unfair judgment, discriminatory selection of those to be dismissed or any other legalcause (relevant to the principle of ‘bona fide’ (Article 281 of the Greek CivilCode).

6.3 ReinstatementIf the dismissal constitutes an abuse of the rights of the employee it will bedeclared void and the employee will be reinstated and receive back pay for theperiod between the dismissal and the court's decision.


By way of a compromise agreement, the employee can lawfully agree that heor she waives the right to bring a claim that a dismissal is void, usually in returnfor a sum of money. This document is a private contract, in which both partiesfreely agree in accordance with the principle of freedom of contract.

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Ireland




3. RESIGNATION 154








In the Republic of Ireland, employees have specific statutory and common lawprotections against dismissal.

The main statutory protections against individual dismissal are to be found in theUnfair Dismissals Acts 1977-2007 (the 'Unfair Dismissals Acts’) and theEmployment Equality Acts 1998-2008 (the ‘Employment Equality Acts’). Theseprotections are supplemented by certain protections contained in other legislation dealing with specific issues such as fixed term workers, part timeworkers and redundancy.

The Unfair Dismissals Acts provide that an employee who satisfies the legal qualifying criteria has a statutory right not to be dismissed unfairly. In general,the Unfair Dismissals Acts provide that every dismissal will be presumed to beunfair unless the employer can show substantial grounds justifying the dismissal.The Unfair Dismissals Acts also provide that certain dismissals are automaticallyunfair, for example a dismissal on the grounds of:

• trade union activities or membership• race, colour or sexual orientation• religious or political opinions• pregnancy, or any matters or needs connected with it• the exercise of certain rights to protective leave (maternity leave, parental

leave, adoptive leave or carer’s leave), or• an employee’s age or gender.

The Employment Equality Acts provide special protection against discriminatorytreatment based upon any one of nine discriminatory grounds and this includesprotection against discriminatory dismissal. The nine discriminatory grounds aregender, marital status, family status, sexual orientation, religion, age, disability,race and membership of the traveller community.

The Unfair Dismissals Acts and the Employment Equality Acts apply to any person:

• working pursuant to a contract of employment, or apprenticeship• employed through a recruitment agency.

In circumstances where an employee is employed via a recruitment agency, thethird party/hirer is deemed to be the employer for the purposes of the UnfairDismissals Acts and any redress that arises. For the purposes of the Employment

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2.3 Length of service and fixed-term contracts

Length of serviceAs mentioned in section 1 above, the Unfair Dismissals Acts contain a servicerequirement of 52 weeks. However, there are certain limited exceptions to thisrule. For instance, where a dismissal is on grounds of trade union membershipor pregnancy of the employee or the employee is exercising certain rights to protective leave (maternity leave, parental leave, adoptive leave or carer’sleave), the employee is protected by the Unfair Dismissals Acts and can claimredress even if he or she has less than 52 weeks’ continuous service with thatemployer.

As mentioned in section 1 above, there is no service requirement for theEmployment Equality Acts and employees are protected even if their continuousservice amounts to a period of less than 52 weeks. A person with less than 52weeks’ continuous service may also bring a claim under the Industrial RelationsActs 1946-2004 (the ‘Industrial Relations Acts’). However, any redress awardedunder the Industrial Relations Acts in such circumstances is generally not binding.

Length of service will also be relevant when calculating any entitlement anemployee may have to a statutory redundancy payment if the employee is dismissed by reason of redundancy. If an employee is entitled to a statutoryredundancy payment, the statutory payment is calculated as follows:

• one week's pay plus• two weeks' pay for every year of service (irrespective of age)

In calculating the above, a week’s pay is capped at EUR 600 per week.

Fixed term contractsThe Unfair Dismissals Acts do not apply to a dismissal which consists only ofthe expiry of the term of a fixed term contract or the ceasing of the purposeof a specified purpose contract without the contract being renewed, providedthe following conditions are adhered to:

• The contract is in writing.• The contract specifies that the Unfair Dismissals Acts will not apply to a

dismissal which consists only of the expiry of the term without it being renewed or the ceasing of the purpose.

• The contract is signed by the employer and the employee.

There is no similar exclusion for the Employment Equality Acts but the expiryof a fixed term or specified purpose contract would normally amount to a non-discriminatory reason for dismissal.


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Equality Acts, the person who is liable for the pay of the agency worker isdeemed to be the employer.

The Unfair Dismissals Acts do not apply to persons who are in the continuousservice of an employer for a period of less than 52 weeks. There are also certainexceptions in relation to age and exceptions for limited categories of public servants and persons undergoing full-time training/apprenticeships with certainstate agencies.

There are limited exceptions contained in the Employment Equality Acts relatedto the grounds of sexual orientation, family, age and disability. However, thereare no similar exceptions for public servants or persons undergoing full-timetraining/apprenticeships. It should also be noted that there is no service requirement for the Employment Equality Acts and employees are protectedeven if their continuous service amounts to a period of less than 52 weeks.


2.1 DiscriminationAs mentioned in section 1 above, the Employment Equality Acts provide special protection against discrimination, discriminatory dismissal and harassment based upon one of the nine discriminatory grounds.

The Employment Equality Acts also provide protection for employees againstvictimisation (including dismissal for reasons of victimisation) for exercising certain rights pursuant to the Employment Equality Acts. For example, it is illegal for an employer to dismiss an employee for making a complaint pursuant to the Employment Equality Acts.

2.2 AgeAs mentioned in section 1 above, the Unfair Dismissals Acts do not apply toemployees who had reached the normal retirement age for employees in thatparticular employment or who have not attained the age of 16. While age isone of the nine discriminatory grounds for the purposes of the EmploymentEquality Acts, the Acts also provide that it shall not constitute discriminationon the age ground to fix different ages for retirement of employees. There isno statutory retirement age for employees in Ireland, other than some limitedcategories of public servants.

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2.5 Pregnancy and child careAs mentioned in section 1 above, the Unfair Dismissals Acts provide that a dismissal on the grounds of the pregnancy of the employee or the employeeexercising certain rights to protective leave (for example, maternity, parentalleave or carer’s leave) is automatically unfair. As mentioned in section 2.3above, where a dismissal is on grounds of the pregnancy of the employee orthe employee exercising certain rights to protective leave (maternity leave,parental leave, adoptive leave or carer’s leave), the employee is protected bythe Unfair Dismissals Acts and can claim redress even if he or she has less than52 weeks’ continuous service with that employer.

As mentioned in section 1 above, family status is included as one of the ninediscriminatory grounds for the purposes of the Employment Equality Acts.

An employee absent from work on protective leave is generally protected fromdismissal during the absence and also has a general right to return to the position held before the protective leave or suitable alternative employment.

2.6 CarersSee section 2.5 above.

2.7 Employee representativesLegislation dealing with information and consultation in Ireland, (in particular,the Employees (Provision of Information and Consultation) Act 2006) providesa general right for the provision of information to, and consultation with,employees and for the appointment of employee representatives. That legislation also provides that such employee representatives must not be dismissed as a result of their status, or reasonable activities, as employee representatives.

2.8 RedundancyThe Protection of Employment Act 1977 (as amended) provides that a collective redundancy means dismissals arising from redundancy where anemployer, in a period of 30 consecutive days, dismisses:

• at least five employees in an establishment normally employing 21–49 employees

• at least ten employees in an establishment normally employing 50–99 employees

• 10% of employees in an establishment normally employing 100–299 employees, or

• 30 employees in an establishment normally employing 300 or more employees.


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The Protection of Employees (Fixed Term Work) Act 2003 (the ‘Fixed TermWork Act’) provides that an employee cannot remain on a series of fixed termcontracts indefinitely and, in certain circumstances, may be entitled to a contract of indefinite duration. In this regard, the Fixed Term Work Act provides that:

• where on or after 14 July 2003 a fixed term employee completes or has completed his or her third year of continuous employment with the employer, or an associate employer, his or her fixed term contract may berenewed by that employer on only one occasion and any such renewal must be for a fixed term of no longer than one year, and

• where after 14 July 2003 a fixed term employee is employed by the employer, or an associate employer, on two or more continuous fixed termcontracts and the date of the first such contract is subsequent to 14 July 2003 the aggregate duration of the contracts must not exceed 4 years.

Where any term of a fixed term contract purports to contravene the aboveparagraphs that term will have no effect and the contract concerned will bedeemed to be a contract of indefinite duration (unless there are objectivegrounds justifying a renewal in the circumstances).

The Fixed Term Work Act also provides that a fixed term employee must notbe treated less favourably than a permanent employee in relation to terms andconditions of employment. An employer must also not penalise an employeefor certain listed matters, including invoking any right the employee may havepursuant to the Fixed Term Work Act. Penalisation for the purposes of theFixed Term Work Act includes dismissal.

2.4 Part-time work and career breaksThe Protection of Employees (Part-Time Work) Act 2001 (the ‘Part Time WorkAct’) provides that a part-time employee must not be treated less favourablythan a full time employee in relation to terms and conditions of employment.An employer must also not penalise an employee for certain listed matters,including invoking any right the employee may have pursuant to the Part TimeWork Act. Penalisation for the purposes of the Part Time Work Act includesdismissal. The provisions of the Employment Equality Acts may also be relevantto part time workers (for example, where part time status results from familycommitments).

There is no specific legislation dealing with career breaks in Ireland, but theprovisions of the Unfair Dismissals Acts and/or Employment Equality Acts maybe relevant depending on the circumstances.

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4.2 PermissionsNo permission is required prior to dismissing an employee.

4.3 Procedures There is a legal obligation on all employers to supply all employees, not later than28 days after commencing employment, with written procedures that theemployer will observe before dismissing an employee. Any changes to the procedure must be notified to the employee within 28 days of the change beingmade.

The use of an appropriate disciplinary procedure is imperative where a dismissal isbeing contemplated by an employer. Failure by an employer to comply withappropriate procedures will be taken into account in determining the appropriateremedy. Procedures should normally include a set of graduated steps rangingfrom verbal and written warnings to suspension on pay and dismissal. It willdepend upon the circumstances of each individual case as to the steps to betaken/number of warnings that ought to be provided prior to dismissal.

In any disciplinary procedure, the rules of constitutional and natural justice applyand the employee should be given an opportunity to rebut the allegations beingmade against him or her. If requested, an employer is legally obliged to providethe employee with the reason(s) for dismissal in writing within 14 days of such arequest being made.

An employer can seek to rely on one or more of the following to show that thedismissal was fair:

CapabilityCapability related dismissals usually centre on issues such as lateness, unsanctioned absenteeism and persistent absence through illness.

CompetenceCompetence refers to an employee’s ability to do his or her job. An employeeneeds to be made aware of the standards that are expected of them.

ConductConduct covers a very large area of behaviour and might be more accuratelytermed ‘misconduct’. There is a need to distinguish between ‘gross’ misconductand ‘ordinary’ instances of misconduct. Gross misconduct is very serious misconduct that may result in immediate (summary) dismissal without notice orpay in lieu of notice.


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If the above thresholds are exceeded, the employer will be required to notifythe Minister for Enterprise, Jobs and Innovation in writing of the proposedredundancies at the earliest opportunity and, in any event, at least 30 daysbefore the first notice of dismissal is served. The employer will also be obligedto consult with the employees’ representatives with a view to reaching agreement and avoiding the proposed redundancies, reducing the number ofemployees affected, mitigating their circumstances by redeploying or retraining and deciding the basis on which it will be decided which particularemployees will be made redundant.

Where the number of dismissals does not reach the thresholds outlined abovein relation to collective redundancy, there is still a duty on the employer to consult with any employee in advance of making any decision to dismiss byreason of redundancy.

2.9 OtherAn employee may have certain rights pursuant to contract (for example, theright to notice or the right to fair procedures) and may make an application tothe common law courts to enforce such rights. Most applications in this regardare made to the High Court.

3. RESIGNATION

A resignation is deemed to be a constructive dismissal in circumstances wherean employee terminates his or her contract of employment, as a result of theway he or she was treated by the employer. However, the employer's conductmust have been such that it was reasonable for the employee to terminate thecontract.


4.1 Grounds for dismissal An employer must show that a dismissal was connected with one or more ofthe potentially fair grounds set out in the Unfair Dismissals Acts. An employermust also show that it acted reasonably and adhered at all times to the principles of natural justice and fair procedures. Pursuant to the UnfairDismissals Acts ‘the dismissal of an employee shall be deemed…to be an unfairdismissal unless, having regard to all the circumstances, there were substantial grounds justifying the dismissal.’

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Duration of employment Minimum notice13 weeks to 2 years 1 week2 to 5 years 2 weeks5 to 10 years 4 weeks10 to 15 years 6 weeks15 years or more 8 weeks

An employee may have a more beneficial notice entitlement in his or her contract of employment, but an employee will, at a minimum, be entitled tothe minimum statutory notice as set out above. As referred to in section 4.3above, cases of gross misconduct are an exception and may result in immediate(summary) dismissal without notice or pay in lieu of notice.

4.6 Treatment during notice periodDuring the period of notice an employee continues to enjoy all the rights andentitlements that he or she would normally enjoy.

4.7 Payment in lieu of noticeAn employer is entitled to pay an employee in lieu of his or her contractual orstatutory notice, if the contract of employment entitles the employer to do soor if the employee is agreeable to this.

4.8 OtherThere are generally no other actions that employers need take.


Certain serious breaches of company rules and custom and practice may resultin an employee’s summary dismissal without notice. The following list, whilenot exhaustive, is an outline of the type of offences that may, depending onthe circumstances of the particular case, constitute gross misconduct and maywarrant summary dismissal:

• deliberate breach of safety regulations• theft of, or malicious damage to, company property, customer property or

another employee’s property• interfering with or falsifying company or client records• assaulting another employee, member of management or customer/client• being in possession of controlled drugs or alcohol while on duty,

irrespective of whether such drugs or alcohol are for personal use or for distribution or sale to others


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RedundancyAn employer will need to establish that a genuine redundancy situation existedand that the employee was fairly selected for redundancy. Objective criteriashould be adopted by an employer when selecting employees for redundancy andthere should be appropriate consultation with the employee concerned (see 2.8above and 4.4 below).

Fair practiceAn employer is required to:

• have appropriate grievance and disciplinary procedures in place• apply the disciplinary procedures to ensure fair treatment and that

constitutional and natural justice is afforded to the employee.

4.4 Notification/consultation obligations In the case of redundancy, an employer is obliged to give notice of redundancy to the employee. In circumstances where the employer engages incollective bargaining with a trade union, it is incumbent upon the employer toconsult with the union in advance of making a final decision. The employershould also adhere to any procedure agreed with the employees, or which hasarisen by custom and practice within the employment. Similarly, in cases of collective redundancy, employers are legally obliged to comply with the consultation requirements prescribed in the Protection of Employment Act1977, as amended (see section 2.8 above).

Further notification and consultation obligations may arise pursuant to theEmployees (Provision of Information and Consultation) Act 2006, dependingon the circumstances. The 2006 Act sets out minimum requirements foremployees to be informed and, in relation to certain developments, consultedby their employer about developments in the business. Developments wouldinclude, for example, changes that may constitute a threat to employmentsuch as dismissals. A minimum of 10% of the workforce must make therequest. The 2006 Act applies to undertakings with at least 50 employees.

4.5 Duration of notice periodThe Minimum Notice and Terms of Employment Acts 1973 to 2005 providethat an employee must be given a minimum period of statutory notice, whichvaries with the length of service:

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• reporting for work under the influence of drugs or alcohol• breach of confidentiality• conviction of a criminal offence• gross insubordination• serious bullying and harassment, victimisation or discriminatory conduct.


6.1 Sanctions for unlawful dismissal The Unfair Dismissals Acts provide for the following remedies:

• Re-instatement – this entitles an employee to return to his or her original position on the same terms and conditions that he or she enjoyed and to compensation for loss of earnings from the date of the dismissal to the dateof reinstatement.

• Re-engagement – this entitles an employee to return to his or her original position or to a different position that might be reasonably suitable and on such terms and conditions as are reasonable having regard to all the circumstances.

• Compensation – an employee may be awarded compensation up to a maximum of two years’ remuneration as a result of being unfairly dismissed.

In relation to discriminatory dismissal, the Employment Equality Acts providefor the same remedies as the Unfair Dismissals Acts. However, the EmploymentEquality Acts also allow the Tribunal to make an order that the employer takea specified course of action and also provide for the possibility of a separateaward of up to two years’ remuneration for discriminatory treatment and/orvictimisation.

The Fixed Term Work Act and Part Time Work Acts provide for the possibility ofcompensation up to a maximum of two years’ remuneration for penalisation.The Fixed Term Work Act also provides for the possibility of reinstatement or re-engagement.

The High Court can order an employer to pay compensation and has an unlimited jurisdiction. The High Court may also make an order of reinstatement.

The Protection of Employment Act 1977 (as amended) provides for fines ofbetween EUR 5,000 and EUR 250,000. The 1977 Act also provides for an awardof up to four weeks remuneration to each employee concerned if the employeris in breach of the 1977 Act.

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6.2 Void dismissals In circumstances of reinstatement, an employee is entitled to return to his orher original position, avail himself or herself of any and all benefits that mayhave accrued in the intervening period and receive compensation for the lossof earnings suffered during the dismissal period. It may thus be said that insuch circumstances the dismissal is treated as being void ab initio.

6.3 ReinstatementReinstatement is not a remedy normally awarded as a Tribunal/Court will notgenerally force persons to work together in circumstances where the relationship has irretrievably broken down.


An employee may lawfully sign an indemnity/waiver or settlement, waiving orcompromising his or her legal rights to litigation, as long as all of the necessary elements of a valid contract exist, such as offer, acceptance, consideration and an intention to create legal relations. It would also be necessary for an employee to obtain independent legal advice prior to signingsuch a document.


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Italy




3. RESIGNATION 165








Italian law (Law 604 of 15 July 1966, Law no 108 of 11 May 1990 and Article18, Law no 300/1970) protects both white collar and blue collar employeesagainst unfair dismissal. In brief, the law protects employees against:

• dismissals without grounds (i.e. without a just cause or justified reason)• discriminatory dismissals (i.e. based on racial, sexual, political, or religious

grounds, age, physical disability, personal opinions, and union membership)• non-compliance with the required formalities (i.e. the dismissal must be in

written form and there is a specific procedure for a dismissal for subjective reasons)

• dismissals during or based on illness, pregnancy, maternity/paternity leave and marriage.

All employees are protected against unfair dismissal, with the exception of:

• executives• domestic employees• employees who are entitled to receive a pension because they satisfy the age

requirements (i.e. they are 65 years old).

In these cases, the law provides only for payment in lieu of the notice period.

The sanctions for unfair dismissal depend on the size of the workforce. For smallorganisations, the sanction may only be damages, but for larger organisationsthe sanctions may be reinstatement and damages (see section 6.3 below).


2.1 DiscriminationThe law protects all employees, with no exception, against discriminatory dismissals (i.e. those based on racial, sexual, political, or religious grounds, age,physical disability, personal opinions, and union membership). Harassment isconsidered to be sexual discrimination. This anti-discrimination protection covers all employees at any level of seniority.

2.2 AgeThe age of an employee does not increase the level of protection against dismissal. Indeed, in the case of an employee over 65, it can exclude protection.

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2.8 RedundancyIn general, the rules on collective dismissals apply if an organisation with morethan 15 employees is planning on dismissing more than five employees within a single unit, or in different units located within the same province,within 120 days, on the basis of a reduction or a transformation of the activities of the organisation. These rules also apply if the organisation is to beclosed down. In this case, the parties must follow specific information and consultation procedures with the trade unions as provided under Law no223/91. The procedure lasts a maximum of 75 days after which the employermay dismiss the employees based on the selection criteria agreed with theunions or in the absence of agreement, those established by law (which coverlength of service, family situation and organisational reasons).

2.9 OtherArticle 2110 of the Italian Civil Code provides that in the case of illness, anemployee is entitled to a specific sick leave suspension period, during which dismissal is ineffective, unless on grounds of gross misconduct. The length ofthe leave is established in the applicable CBA. After the leave has ended theemployee may be dismissed in the normal way by paying an amount in lieu ofnotice.

3. RESIGNATION

Under Italian law, a resignation is not technically considered as a dismissal.

However, it is possible for the employee to resign with immediate effect as aresult of a serious breach of employer’s contractual duties. In this case, theemployee does not need to give any notice and is entitled to payment of anindemnity in lieu of notice, as he or she has been dismissed. Examples of suchbreach of contract include repeatedly delaying payment of the employee’ssalary, demoting the employee, or failing to provide a safe working environment.

If a woman resigns during her pregnancy, she is entitled to payment of anindemnity in lieu of notice as if she were dismissed.

Some collective agreements for executives provide for special supplementarypayments whenever an executive resigns on grounds related to a change ofthe organisation’s ownership or a change of duties that affects his or her position within the organisation.


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2.3 Length of service and fixed-term contractsThe protection against unfair dismissal does not apply when employees are dismissed during a trial period, which by law cannot last longer than sixmonths. In this case, the law does not even require that the employer give anyprior notice of the dismissal.

An employee under a fixed-term contract can be dismissed only for just cause(e.g. misconduct) before the expiry date.

In case of early termination of a fixed-term contract the employee is entitledto receive an amount of damages equal to his or her salary until the expirationof the term.

Fixed-term contracts without indications of temporary reasons will be converted into indefinite contracts.

2.4 Part-time work and career breaksNo general provisions and protections exist for employees in relation to careerbreaks. Employees who are appointed as members of parliament are entitledto unpaid leave and can keep the job until the end of the appointment.

As far as part-time work is concerned, an employee cannot be dismissed forrefusal to convert a part-time arrangement into a full-time one and vice versa.

2.5 Pregnancy and child careLaw no 151 of 26 March 2001 provides protection in relation to pregnancyand parental leave. A dismissal served at any time from the beginning of anemployee’s pregnancy until the end of the child’s first year of life is void. Duringthis period, a woman who resigns has the right to be paid an indemnity in lieuof notice, as if she had been dismissed. For fathers on paternity leave, dismissalis prohibited during the leave itself until the child is one year old.

2.6 CarersNo specific protection exists for employees who require leave in order to carefor others, as they are entitled only to the specific leave granted to them.

2.7 Employee representativesSome collective agreements provide specific procedures for informing tradeunions of dismissals of work council members. Trade unions officials are entitled to unpaid leave.

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An 'objective reason' is an economic reason linked to the re-organisation of abusiness, including production and technical reasons. A typical objective reason for dismissal is when an employee’s position is no longer required andthere are no other suitable positions available within the entire organisation.

The transfer of an undertaking is not considered as a justified reason for a dismissal.

A dismissal based on a justified reason is made with notice or with the payment of an indemnity in lieu of it (for how this indemnity is calculated seesection 4.7 below).

If a dismissal based on a justified reason is served while an employee is on sickleave, it is effective from the day after the period of leave ends.

If an employee exceeds the pre-defined maximum period of sick leave, asdetermined in the applied National Collective Bargaining Agreement (the‘NCBA’), the employer may dismiss the employee.

4.2 PermissionsNo permissions are required.

4.3 Procedures The employer must always serve the dismissal letter in writing. If the employerdoes not indicate the reasons for the dismissal in the dismissal letter, theemployee has 15 days within which to request them. The employer must thenprovide the reasons within eight days of the employee’s request and if it failsto do so, the dismissal will be ineffective. The reasons cannot be modifiedafterwards.

Article 7 of the Workers’ Statute provides a specific procedure for a disciplinarybreach that applies to dismissals both for a just cause and a justified subjectivereason. The employer must send a letter to the employee immediately, objectively describing the facts which have given rise to the disciplinary action.The employer must then wait for the employee's reply, which must be receivedwithin five days. The employee can also make a request for a meeting at whichhe or she can be accompanied by a trade union representative. The employermust send the employee a letter of dismissal (within the term fixed by the relevant collective agreement, or, if there is no collective agreement, withoutunreasonable delay), explaining why it did not accept the employee’sjustifications. Failure to comply with this procedure results in a dismissal whichis void.


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If an employee proves that his or her resignation was extorted or forced, thegeneral principles regarding the unlawfulness of unilateral acts will apply and,as a consequence, the employment contract will not be considered to be lawfully terminated.


4.1 Grounds for dismissal An employer has the right to unilaterally terminate the employment contractif there is a just cause (i.e. a gross misconduct), a justified reason (i.e. an economic reason or the employee’s misconduct), or when an employeeexceeds the period of sick leave to which he or she is entitled.

Just cause A just cause is a serious misbehaviour which prevents the employment contract from continuing, even on a temporary basis (see Aricle 2119 of theItalian Civil Code). A dismissal served on these grounds has immediate effectand no notice need be given. The dismissal should be made immediately afterthe misconduct occurs or as soon as the employer comes to know of the misconduct. A special procedure needs to be followed before serving the dismissal (a so-called ‘disciplinary dismissal’, see section 4.3 below).

The usual amounts associated with the termination of the employee’s contract(i.e. Trattamento di Fine Rapporto or ‘TFR’, which is the mandatory severancepayment), pro rata payments, and an indemnity for unused holidays anduntaken annual leave will be due. The contract terminates immediately aftercommunication of the dismissal even if the employee is on sick leave.

Examples of just cause include stealing, rioting in the office and wilful damageto the organisation’s property. Some collective agreements provide for specificcases of just cause but, in general, misconduct should be evaluated on a case-by-case basis to determine if it constitutes fair grounds for dismissal.

Justified reasonA justified reason for a dismissal can be either subjective or objective.

A 'subjective reason' is a significant breach (but not serious enough to constitute a just cause) of the employee’s legal and contractual obligations.Typical examples of subjective reasons include poor performance and negligence. In this case, the same procedure as for a just cause needs to befollowed before serving the dismissal (the so-called ‘disciplinary dismissal’, seesection 4.3 below).

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4.4 Notification/consultation obligations Notification of any kind of dismissal must be made to the competent labourauthorities.

4.5 Duration of notice periodThe length of the notice period is determined by national collective bargainingagreements according to the category, level and length of service of theemployee concerned. The notice period can range from 15 days (for blue collar workers) to 12 months (for executives).

No notice period is required for a dismissal based on gross misconduct (Article2119 of the Italian Civil Code).

4.6 Treatment during notice periodThe employment relationship ends at the end of the notice period.

During the notice period, all mutual obligations remain in force. However, notethat the notice can be suspended by illness during the notice period.Nevertheless, the notice period can be converted into a payment in lieu, inwhich case the employment relationship will end immediately.

4.7 Payment in lieu of noticeThe payment of an indemnity in lieu of notice must take into account commissions, bonuses, shares in profits or products and any other paymentsmade on a continuing basis, excluding the reimbursement of expenses and calculated as an average over the last 36 months preceding the terminationdate.

4.8 OtherIn order to serve a dismissal for misconduct, the employer must have previouslyposted the disciplinary code on the organisation’s board.


As explained above, a dismissal without notice is permitted on the grounds ofgross misconduct, and during a trial period.

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6.1 Sanctions for unlawful dismissal Sanctions for unlawful dismissal vary according to the size of the organisation.For employees in an organisation with 15 employees or less within the relevantbusiness unit, and 60 employees or less within the entire organisation, as well asfor employees who work for non-profit-making companies (i.e. political bodies,trade unions and cultural, educational or religious organisations), the sanctionsfor an unlawful dismissal are as follows:

• The employer can be ordered to re-hire the employee.• If the employer decides not to re-hire the dismissed employee, or the

employee does not want to be re-hired, the employer must indemnify the employee with an amount which varies between 2.5 and 6 months’ salary.For an organisation with more than 15 employees at national level, the maximum indemnity may increase to ten months' salary for an employee with more than ten years’ service and to 14 months' salary for an employee with more than 20 years’ service.

For companies with more than 15 employees within the relevant unit or withinthe same municipality, or with more than 60 employees within the entire organisation at a national level (even if, within the single business unit, there arenot more than 15 employees), any unlawful dismissal (i.e. a dismissal not servedin writing or not based on a just cause or a justified reason) has the followingsanctions:

• an order for reinstatement of the employee in the same or an equivalent position, and

• payment of damages, consisting of the employee’s salary and social securitycontributions from the date of the dismissal until the date of the reinstatement (a minimum amount of five months). The damages are calculated on the basis of the employee’s total salary.

The sanction for discriminatory dismissals is always reinstatement of theemployee (including executives), regardless of the size of the organisation.

Statutory law stipulates that executives are entitled only to their period of notice.Protection against unfair dismissal for executives is only provided by the CBA ifthe CBA is applied to the employment contract. In particular, an executive is entitled to be given reasons for the dismissal in writing and the reasons must bejustified.


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The employee can choose not to be reinstated and ask for an amount equalto 15 months of salary in lieu of reinstatement.


Employees must challenge a dismissal in writing within 60 days starting fromthe date of receipt of the letter of dismissal. Then they must bring an actionbefore a labour tribunal within 270 days claiming that they have been unfairly dismissed.

However, employees can waive their rights to bring a claim against theemployer for unfair dismissal in a written agreement.


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The executive may challenge the dismissal before a judge or a special arbitrationboard. If the dismissal is not justified, or if the employer provides no reasons oronly verbal reasons for the dismissal, the executive has the right to a supplementary payment, usually within a predefined range, contained in therelevant NCBA (often an amount at least equal to the salary accrued during thenotice period).

6.2 Void dismissals If an employer does not serve the dismissal in writing to the employee, the dismissal is ineffective and the employment contract remains in force.

If an employer fails to follow the specific procedure for a disciplinary breach,as described in section 4.3 above, the dismissal will be regarded as void.

Dismissals based on discriminatory reasons, such as political opinions, religion,membership of a trade union, race, gender or nationality, are void.

Dismissals based on marriage (from the date the marriage is made public, untilone year after the marriage) are also void.

A dismissal served at any time from the beginning of a female employee’spregnancy, until the end of the child’s first year of life is void. For fathers onpaternity leave, dismissal is prohibited during the leave itself until the child isone year old.

The employer must prove that the reasons for the dismissal are not connectedto the marriage or pregnancy, but are for the following reasons:

• There is a just cause.• A company activity has been terminated.• The specific task for which a female employee was hired has been

terminated.• The term of a fixed-term contract has expired.• The trial period has produced negative results.

6.3 ReinstatementIn case of reinstatement, the employment relationship restarts as if it had notbeen interrupted by the unfair dismissal, with all its economic consequences.

If the employer does not reinstate an unfairly dismissed employee, the employer must still pay his or her salary (and social security contributions) andthe contract does not cease.

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Luxembourg




3. RESIGNATION 180








In Luxembourg, the provisions regarding the termination of employment contracts and the protection against dismissal are contained in theLuxembourg Labour Code. However, some collective bargaining agreements(e.g. in relation to the banking and insurance sectors) may provide greater protection against dismissal than that provided by law.

All categories of workers are protected against dismissal, in the sense that theiremployment relationships may only be terminated in accordance with the specific provisions of Luxembourg employment law.

Under Luxembourg employment law, there are four different types of terminationof a permanent employment contract: dismissal with notice, dismissal withoutnotice when it is for gross misconduct, resignation and termination by mutualconsent.

Certain employees or categories of employees benefit from specific additionallegal protection (see section 2 below).

Some collective labour agreements provide additional protection for employeesinvolved in the transfer of an undertaking. The employer cannot dismiss suchemployees for economic reasons for a certain period of time following thedate of the transfer.


2.1 DiscriminationPursuant to special provisions, a dismissal caused by the employer’s reaction toa complaint regarding discrimination based on sex is void.

The dismissal of a victim of and/or witness to sexual harassment is also void.

If a female employee is dismissed on grounds related to her marriage, she may,by registered mail within two months following her dismissal, ask to have itrevoked and to be reinstated.

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A dismissal based on the refusal of a part-time employee to accept overtimework under other conditions than those provided for in the employment contract is also unfair.

2.5 Pregnancy and child careAs soon as an employee’s pregnancy has been medically certified and notifiedto the employer, no dismissal or invitation to a preliminary interview prior to apotential dismissal can be made until the twelfth week following the delivery.In the event of termination before medical confirmation of pregnancy, theemployee has eight days after the notice of dismissal to provide the employerwith a medical certificate (by registered letter) certifying her pregnancy. Within15 days of the dismissal the employee may request the President of the LabourCourt to declare the dismissal void.

In the case of gross misconduct, the employer is, however, allowed to temporarily lay off the employee with immediate effect while awaiting theLabour Court’s ruling on its request to terminate the employment contract.

After maternity leave, either the mother or the father may take parental leave,which is meant for parents who wish to take special leave to educate theirchild. From the last day of the deadline for notice of the parental leave application and for the duration of the leave, the employer is not permitted tonotify the employee of the termination of his/her employment contract, or, ifapplicable, to invite the employee to a preliminary interview, except in the caseof gross misconduct. During the parental leave a dismissal with notice is void.

2.6 CarersEmployees who have taken some days of leave to accompany a relative (mother, father, sister, brother, daughter, son, spouse or legally recognisedpartner) suffering from a terminal illness, are protected against dismissal during their absence. A dismissal with notice notified during that period willbe declared unfair. In the case of gross misconduct, the employer may,however, still terminate the employment contract with immediate effect.

2.7 Employee representatives

Members of the staff delegationThe members of the staff delegation are protected against dismissal duringtheir term of office and for a period of six months after their term of office.The same protection exists for candidates standing for election for a period ofthree months after the election.


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2.2 AgeThe employee’s age determines the amount of compensation in the event ofan unfair dismissal. For example, the courts take into consideration the difficultyfor an older employee of finding new employment. However, older employeesdo not benefit from any specific protection against dismissal.

2.3 Length of service and fixed-term contractsThe employee’s length of service is taken into account in determining the duration of the notice period, the departure allowance and, in the case of anunfair dismissal, the amount of compensation.

During a trial period the protection of employees against dismissal is lessstrong than that of ‘ordinary’ employees. However, the employment relationship cannot be terminated by either of the parties during the first twoweeks of the trial period, except for gross misconduct or by mutual consent.Termination during the trial period does not need to be preceded by a preliminary meeting. Additionally, when terminating the employment relationship during the trial period, the employer is not required to give anyreasons for doing so.

The special dismissal protection that applies to employees on sick leave alsoapplies during the trial period. Therefore, the employment contract is suspendedduring the period of illness and the initial trial period is extended proportionally, up to a maximum of one month. While the employment contract is temporarily suspended, notice cannot be served. However, if thesick leave exceeds the duration of the initial trial period, the employer is authorised to serve notice in accordance with the provisions which prevailedduring the trial period from the first day of the extended trial period onwards.In this case, the end of the notice period must correspond to the end of theextended trial period. If the notice period exceeds the extended trial period,the trial contract is considered to have become a permanent contract.

A fixed-term employment contract will automatically terminate at the end ofthe agreed period, or it may be terminated by one of the parties without noticein the case of gross misconduct, or with the mutual consent of both parties. Atermination by mutual consent must be in writing, comprising two originaldocuments, which must be signed by the employer and the employee. If thisprocedure is not properly carried out, there can be no mutual consent.

2.4 Part-time work and career breaksUnder Article L.124-11(5) and (6) of the Labour Code, a dismissal based on therefusal of an employee to accept part-time or full-time work is unfair.

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Nevertheless, because it is required under Article L.426-9 that there should bespecific authorisation from the court which is more restrictive than the agreement of the joint works council that is required under Article L.425-4), ajudge could declare such a dismissal as unfair. The question remains open.

2.8 RedundancyCollective dismissal protection applies when an employer contemplates dismissing at least:

• seven employees within a period of 30 days• 15 employees within a period of 90 days.

To work out whether these thresholds have been met, by Luxembourg employment law other types of termination of employment contracts (e.g.those which have taken place at the employer’s initiative for one or more reasons unrelated to the employees’ attitude to work, such as pre-retirementdeparture and negotiated departure) must be added to the calculation. Inorder to reach the thresholds, there must be at least four such ‘ordinary’ dismissals.

If the employer is established abroad and the dismissals take place partly inLuxembourg and partly in other countries, all of the dismissals should be takeninto account if, for example, the Luxembourg entity is a branch and not a subsidiary (the latter being considered as a legal entity separate from the groupof companies) or if the different companies can be considered as forming onecommercial and social unit.

A dismissal will be void if it is made on grounds not related to the employeeand notified to the latter prior to the signing of a social plan, if it is madebefore the production of a failure report from the National Conciliation Office,or if it is made before the establishment of a staff delegation or works council, if this is compulsory.

2.9 OtherAn employee is protected against dismissal, even for gross misconduct, for theduration of sick leave, provided he or she informed the employer of the illnesson the very first day of absence, and provided the employee presents a medical certificate within three days of his or her absence. Subject to compliance with these two conditions, protection against dismissal will applyduring the whole period of incapacity for work, for a maximum of 26 weeks.If the illness is intermittent and work is undertaken periodically, the 26-weekprotection against dismissal will start to run again for each new period of incapacity.


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Notification of dismissal or an invitation to a preliminary meeting prior to apotential dismissal will be declared void. Nevertheless, in the case of gross misconduct, the employer can announce an immediate temporary layoff of theemployee and ask the Labour Court to terminate the employee’s employmentcontract.

Members of the European Works CouncilThe same provisions as apply to members of the staff delegation apply to themembers of the European Works Council.

Members of the joint works councilMembers of the joint works council may only be dismissed with notice withthe prior permission of the other members of the joint works council. If thejoint works council does not reach an agreement as to whether the memberconcerned should be dismissed, the dismissal must be authorised by the court.

Under Article L.425-4 of the Labour Code, the dismissal of a member of thejoint works council must comply with the special procedure provided by ArticleL.425-4(1), and if not it will constitute a formal irregularity (Court of Appeal,Luxembourg, 11 May 2006). Nevertheless, in the case of gross misconduct, theemployer can announce the employee’s immediate layoff and ask the court toterminate the contract.

These provisions apply to members of the joint works council during their termof office and for a period of six months afterwards. The same protectionapplies to candidates standing for election for a period of three months afterthe election.

Members of the board of directors of a public company who represent theemployeesUnder Article L.426-9 of the Labour Code, a dismissal with notice withoutcourt authorisation of a member of the board of directors of a public company who represents the employees, is considered as a formal irregularityor as unfair. There is no relevant case law on this point and the Article itself isnot clear on whether the court must declare a dismissal which does not respectthe legal procedure to be unfair or simply irregular. In principle, bearing inmind the rationale of Article L.426-9 and by analogy with Article L.425-4 ofthe Labour Code regarding members of the joint works council, the dismissalshould be declared irregular.

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• By Articles L.415-11 and L.415-12 of the Labour Code, in the case of grossmisconduct, the employer can suspend a staff representative from work withimmediate effect and ask the court for its authorisation to terminate the contract.

• By Article L.425-4 of the Labour Code, the employer requires the permissionof the other members of the joint works council prior to the dismissal with notice of one of its members. If the joint works council does not reach an agreement on the dismissal, the dismissal must be authorised by the court.

• By Article L.426-9 of the Labour Code, the employer requires the permissionof the court in order to dismiss with notice a member of the board of directors of a public company who represents the employees. In the case ofgross misconduct, the employer can suspend the member of the board of directors with immediate effect and ask the court for its authorisation to terminate the contract.

• By Article L.433-1 of the Labour Code, in the case of gross misconduct the employer can suspend a member of the European Works Council with immediate effect from work and ask the court for its authorisation to terminate the employment contract.

• By Article L.337-1 of the Labour Code, in the case of gross misconduct, theemployer can suspend an employee who is on maternity leave with immediate effect and ask the court for its authorisation to terminate the contract.

4.3 Procedures A dismissal (with or without notice) must be given in writing, by registeredmail. Alternatively, a duplicate copy of the letter of dismissal can be countersigned by the employee by way of acknowledgment of receipt of thedismissal. Any verbal dismissal is regarded as unfair. In the case of a dismissalwith notice, the employee may request to be sent the reasons for the dismissalby registered letter within one month of the date of receiving notice of dismissal.

The employer must then reply by registered letter within one month of theemployee’s request, detailing its reasons for terminating the employment contract. If it does not answer within this time, the dismissal will be regarded asunfair by the court.

It is crucial that the reasons for a dismissal with notice are supported by clear andprecise facts. Such facts may include reasons connected with:

• the employee's aptitude• the employee's conduct• the operational needs of the business, establishment or particular

department.


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By Article L.124-11(4) of the Labour Code, the dismissal of an employee fortaking part in a legal strike (which has been duly declared) is considered unfair.

By Article L.124-11(7) of the Labour Code a dismissal based on an employee’sdecision to waive his or her right to an early retirement indemnity is alsodeemed unfair.

3. RESIGNATION

A resignation becomes a dismissal when the employee resigns because theemployer decided to substantially modify the terms and conditions of his orher employment contract in a less favourable manner, without the employee’sconsent.

In this case, a similar procedure to the one applicable in the case of a dismissalmust be complied with (see section 4.3), and the employee is entitled to bringa claim for compensation for unfair dismissal if the modification is based onunlawful reasons.


4.1 Grounds for dismissal Under Article L.124-11 of the Labour Code, a dismissal is regarded as unfairand contrary to social and economic policy if it takes place for unlawful reasons, if it is not well founded on valid grounds related to the employee'saptitude, conduct, or operational needs of the business, establishment or particular department.

If the employee challenges the reasons given by the employer in support of thedismissal, the burden of proof concerning the facts, their validity and gravitylies with the employer.

The employer is entitled to present new evidence before the court, additionalto that set out in the letter of dismissal or in the motivation letter, but may notgive new reasons. This new evidence must not compensate for the imprecisionof the motivation letter or, in the case of a dismissal with immediate effect, thedismissal letter.

4.2 PermissionsUsually, dismissals do not require special permission. However, in some cases permission is required in order to protect certain categories of employees:

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A copy of this invitation must be sent to the staff representatives, if any, or otherwise to the Labour and Mines Inspectorate (‘Inspection du travail et desmines’).

The notification of the preliminary meeting must contain the following information:

• the date, time and place of the interview• an explanation that the employee can be assisted during the interview by

a colleague or a trade union representative (if he or she is to be accompanied by a trade union representative, the trade union concerned must be represented within the staff delegation of the company)

• if the employer wishes to be accompanied by an employee or by arepresentative of an employers’ association, an indication that this will occur.

During the meeting, the employer must:

• tell the employee the reasons for the proposed dismissal• take note of the employee’s answers, as well as those of the person

accompanying him or her.

4.5 Duration of notice periodNotice by the employer must be given as follows:

Length of service Notice requiredLess than 5 years 2 months5 years or more 4 monthsAt least 10 years 6 months

Notice takes effect only on the first or the fifteenth day of the month. Noticegiven before the fifteenth of the month generally takes effect on the fifteenth;notice given after the fourteenth day generally takes effect on the first day ofthe following month.

In relation to an employee’s trial period, a special period of notice is calculatedon the basis of the length of the agreed trial period. One day’s notice of termination must be observed for each week of the agreed period, if the trialperiod is expressed in weeks. If the trial period is expressed in months, thenotice to be given is four days per month of the trial period, with a minimumof 15 days and a maximum of one month. During the trial period the noticeperiod begins to run on the day following the notification of termination.


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Moreover, Luxembourg case law indicates that the motivation letter must informthe employee:

• of exactly what facts, breaches or errors have been taken into considerationand

• that he or she has the right to bring a claim for damages.

Furthermore, the letter must:

• not allow the employer subsequently to put forward different reasons for the dismissal than those which motivated it initially

• enable the court to appreciate the gravity of the reasons.

Note that the court has exclusive authority to assess the gravity of the reasons.If the letter is not precise enough, the court will declare the dismissal unfair.

The size of the undertaking is taken into account to determine whether a preliminary meeting prior to any individual dismissal is necessary or not. Anorganisation employing at least 150 workers must invite the employee concerned to an interview prior to the notification of the dismissal.Organisations that employ fewer than 150 workers are not required to comply with this special procedure. Some collective bargaining agreements(e.g. the agreement applying to the banking sector) may provide an obligationto invite the employee to an interview prior to notification of the dismissal ifonly the threshold of 100 employees is reached.

4.4 Notification/consultation obligations In order to anticipate dismissals, Article L.511-27 of the Labour Code statesthat an employer that regularly employs at least 15 workers must notify thesecretariat of the Committee of Conjuncture (‘Comité de conjoncture’) (whichis a tripartite committee, including representatives of the government, ofemployers and employees) of any dismissal made on grounds not related tothe employee when the notice of dismissal is served, at the latest. This notification can be made by electronic means.

As mentioned in section 4.3 above, an organisation employing at least 150workers must have an interview with the employee concerned prior to thenotification of any individual dismissal. This rule applies to summary dismissalsand dismissals with notice. As far as summary dismissals are concerned, thepreliminary meeting must take place within one month after the employer hasbeen informed of the gross misconduct (see section 5).

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In any event, the notice period must expire before the end of the trial period,otherwise the dismissal is considered as an ‘ordinary’ one. This means that thenotice period is two months and the employer needs to give reasons for thedismissal to the employee in writing, if the latter asks for them.

4.6 Treatment during notice periodAll the terms and conditions of the employment contract continue to exist untilthe end of the notice period. Consequently, during the notice period theemployee must continue working as before, and the employer must pay his orher salary.

However, the employer can exempt the employee from working during thenotice period. This exemption must be given in writing. During the notice period, the employee cannot be treated in a less favourable manner thanbefore and can expect to receive all the benefits that he or she had before thenotice period began. However, the employee cannot ask for reimbursement ofwork-related expenses, such as lunch or travel costs.

In the case of exemption from work, the employee is entitled to begin working for another employer. If the employee is paid less than before, the‘former’ employer only needs to pay the difference between his or her previous salary and the new one, until the end of the notice period.

During the notice period, and provided that the employee has not beenreleased from his or her obligation to perform active work, the employee canask for special leave of a maximum of six days in order to look for a new job.The employee is entitled to be paid during this special leave, if he or she:

• registers with the national job centre• shows that he or she has applied for a job (i.e. the employee must justify

the time spent outside the workplace).

4.7 Payment in lieu of noticeAs already mentioned, the employer can exempt the employee from workingduring the notice period, but it must pay his or her normal salary until the endof it.

If a summary dismissal is regarded as unfair by the court, the employer will berequired to pay compensation to the employee, corresponding to the salarythat the employee would have received if the notice period had been respected.

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4.8 OtherA dismissed employee, except in the case of gross misconduct, is entitled to aseverance allowance if he or she has at least five years’ service within the organisation:

Length of service Severance allowanceLess than 5 years No severance payment5 to 9 years 1 month’s gross salary10 to 14 years 2 months’ gross salary15 to 19 years 3 months’ gross salary20 to 24 years 6 months’ gross salary25 to 29 years 9 months’ gross salary30 years or more 12 months’ gross salary

In order not to make a severance payment, an organisation employing less than20 workers can inform the employee in the dismissal letter that the severancepayment is replaced by an extension of the notice period:

Length of service Extension of the notice period to:5 years 5 months10 years 8 months15 years 9 months20 years 12 months25 years 15 months30 years 18 months


The employer may terminate a contract without notice in the event of grossmisconduct by the employee.

Gross misconduct is considered as conduct which immediately and definitivelymakes it impossible for the working relationship to continue. The assessmentof such conduct is purely factual and lies entirely with the court, which takesinto account the professional behaviour of the employee, his or her level ofeducation, social situation, and any other elements relevant to the assessment.The consequences of the dismissal for the employee are also taken intoaccount.


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Although it is rather difficult to specify exact figures, on average the amountvaries between EUR 500 and EUR 12,500.

Damages for material harmThe amount of damages for material harm greatly depends on the professionalsituation of the employee after the dismissal, as well as his or her age.

In cases of unfair dismissal, damages are determined on the basis of the difference between the salary received from the former employer and that paidby the new employer, or any unemployment benefits received if the employeehas not found another job. This is assessed over a reference period, which is thelength of time that is deemed to be necessary for the employee to find anotherjob, taking into account his or her personal circumstances and the condition ofthe job market at the time of the dismissal.

As a result, the duration of the reference period (usually between two and 24months after the end of the notice period) is based on the following criteria: theemployee’s age, length of service, field of activity, and the efforts he or she hasmade to find a new job.

Settlement agreementsSince court proceedings in cases of unfair dismissal may take time and resultin high costs, another possibility is offered to both the employer and theemployee. Before filing an action for unfair dismissal before the labour court,and in case there is a chance that the dismissal may be regarded as unfair, theparties may come to an agreement in which the employer agrees to pay theemployee financial compensation.

A settlement agreement can also be concluded after the employee has alreadyfiled an action for unfair dismissal before the labour court. In this case, theemployee will undertake to stop this action. Nevertheless, if the employee is aLuxembourg resident and has received unemployment benefits, the LuxembourgState will in principle be a party to this settlement agreement (i.e. the State is aparty to bringing a claim for the reimbursement by the employer of all or part ofthe unemployment benefits paid to the employee over a well-defined referenceperiod).

The indemnities provided in the settlement agreement are usually based on theamounts that a court could foresee in such a case.

Nevertheless, a settlement agreement that takes place after notification of thereasons for dismissal must not be confused with a termination by mutual


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The employee must be notified of the dismissal within one month of theemployer being informed of the gross misconduct. This timeframe is notenforceable if:

• the gross misconduct has been the subject of a criminal lawsuit within themonth following the date that it occurred

• gross misconduct that occurred previously is relied on in order to support the allegation of the current (new) misconduct.

The employer must notify the employee of the dismissal by registered letterand state the reasons in detail, based on the acts or serious breaches of theemployee.

In the case of a dismissal with immediate effect, the employee is not entitledto prior notice, or to a severance payment.


6.1 Sanctions for unlawful dismissal

Irregular dismissalUnder Article L.124-12(3) of the Labour Code, if the labour court concludes thata formal irregularity occurred in relation to a dismissal as a result of an infringement of a formality (e.g. if the employer failed to hold a preliminarymeeting), it must examine the facts of the case. It will sanction the formal irregularity if the dismissal is held to be fair and can order the employer to paythe employee an indemnity of no more than one month’s gross salary. Theemployer is not required to pay the employee this indemnity if the dismissal isdeclared as unfair, in which case the employee will receive damages for thematerial and non-material harm suffered.

Unfair dismissalUnder Luxembourg labour law, there is no provision for pre-determined compensation for damages. The labour courts have very wide-ranging powers todetermine the amount of compensation at their own discretion. However, thelevel of compensation is generally determined as follows:

Damages for non-material harmIn the event of an unfair dismissal, the following criteria are taken into consideration to assess the amount of damages: any problems arising from thedismissal, and the employee’s age, health, and length of service.

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By Article L.337-6 of the Labour Code, a dismissal based on the marriage of afemale employee is void.

By Article L.551-2(2) of the Labour Code, a dismissal during the protectionperiod of an employee declared disabled in his or her last job (i.e. where,because of the employee’s health problems a special commission had determined that the employee was unable to continue to perform his formerjob and that he must be offered another job within the company) is void.

Finally, by Article L.245-5 of the Labour Code, the dismissal of a victim ofand/or witness to sexual harassment is void and by Article L.241-8 of theLabour Code, a dismissal caused by the employer’s reaction to an employee’scomplaint regarding discrimination based on sex is also void. The employeeshould ask for reinstatement by registered letter, addressed to the employer.

When an Article of the Labour Code provides that a dismissal is void, it alsosets out the procedure that needs to be followed for the court to declare itvoid, as it is not automatically so. The employee must follow the procedureand meet specific deadlines. If the court declares that the dismissal is void, theemployer must reinstate the employee, if this is what he or she asks for.

6.3 ReinstatementIn the event of an unfair dismissal, the employee can ask for reinstatement, butthe court can only recommend that the employer reinstates him or her. If theemployer accepts the recommendation of the court to reinstate, no compensation is payable to the employee for unfair dismissal. If the employerrefuses to accept the recommendation, it can be ordered to pay one month’ssalary to the employee, in addition to any compensation for unfair dismissal.


After a dismissal, a dismissed employee can validly agree to waive his or herright to sue by the conclusion of a valid settlement agreement (see section6.1). No such waiver can be signed before dismissal.


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consent (in fact, the employee or his or her lawyer may then assess how likely it would be to successfully file an action before the court). Indeed, theconclusion of a settlement agreement does not prevent the employee fromreceiving unemployment benefits, which is not the case if the employmentcontract is terminated by mutual consent.

In addition, under Article 115-9 of the Luxembourg Tax Code, the amounts stipulated in a settlement agreement are generally exempt from withholding taxup to an amount equivalent to 12 times the current social minimum wage. Thisis because the tax administration considers them as being equal to dismissalindemnities allocated by courts in cases of unfair dismissal.

Moreover, the parties will include a clause in the settlement agreement underwhich the employee must give up the right to file any current or future judicialaction in relation to the employment contract and its termination.

Finally, the parties are free to include special provisions in the settlement agreement, if necessary.

6.2 Void dismissals Pursuant to Luxembourg employment law, certain dismissals can be declaredvoid by the court as follows:

By Articles L.415-11 and L.415-12 of the Labour Code, staff representativesare protected from dismissal with notice for six months after the end of theirmandate. The same protection applies to candidates for the election of staffrepresentatives, for a period of three months. By Article L.433-1 of the LabourCode, the same provisions as apply to staff representatives apply to membersof the European Works Council. Dismissals in these circumstances are deemedvoid.

By Article L.166-2(8) of the Labour Code, a dismissal made on grounds notrelated to the employee and notified to the latter prior to the signing of asocial plan; before the production of a failure report from the NationalConciliation Office; or before the establishment of a staff delegation or workscouncil, if one is compulsory, is void.

By Article L.337-1 of the Labour Code, a dismissal during pregnancy and for aperiod of 12 weeks after the birth is void. In addition, by Articles L.234-48(5)and L.234-54(2) of the Labour Code, dismissal during parental leave is void.(However, in the case of part-time parental leave, a dismissal for gross misconduct remains possible.)

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Netherlands




3. RESIGNATION 195








Most employee protection against dismissal is contained in the LabourRelations Decree 1945 (the ‘Labour Relations Decree’) and Title 10 of Book 7of the Dutch Civil Code (the ‘Civil Code’).


2.1 DiscriminationAs described in section 2.3, the employer cannot dismiss an employee duringa trial period on discriminatory grounds such as part-time employment, age,gender, race, political views, religion, disability, nationality, sexual orientationor civil status. This prohibition also applies to termination after the trial period.Further, the employer is also prohibited from direct or indirect discriminationduring recruitment or during the employment relationship, for example withregard to employee benefits (equal compensation). Indirect discrimination isonly possible if it is objectively justified.

The termination of the employment agreement based on discriminatorygrounds may be declared void. If so, the employee can claim continuation ofhis or her employment agreement and claim back wages.

2.2 AgePursuant to Dutch law, (the Equal Treatment in Employment AgeDiscrimination Act) employment cannot be terminated on the grounds that theemployee has reached a certain age. The exception to this rule is where theemployee reaches the pensionable age, which is currently set at 65.

2.3 Length of service and fixed-term contractsThe parties to an employment contract may agree to a trial period, the duration of which depends on the length of the employment contract. If theemployment contract is for two years or more, the maximum trial period is twomonths. If the employment contract is for less than two years, the maximumtrial period is one month. Deviation from the statutory maximum duration ispossible only under Collective Labour Agreements.

During the trial period, either party may terminate the employment contractwithout giving prior notice (i.e. with immediate effect, see section 5 below)and without the permission of the Employee Insurance Agency (‘UWV-Werkbedrijf’, the ‘UWV’), or the Sub-District Division of the Court (the ‘court’)(see section 4.2 below). In general, termination during the trial period does not

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2.6 CarersThe employer is prohibited from giving notice of termination to an employeefor the reason that he or she applies for or takes up carers’ leave, e.g. parentalleave, adoption leave, short-term leave and long-term leave. The employmentagreement could be terminated based on other grounds, such as poor performance.

2.7 Employee representativesBy Article 7:670 and 7:670a of the Civil Code, an employer is prohibited fromgiving notice of termination without prior permission of the court to a member of a works council (including candidates for this post). It is also prohibited to give notice because of membership of a trade union.

2.8 RedundancyThe Collective Redundancy (Notification) Act provides a number of additionalprocedural rules that must be followed in order to obtain permission to terminate employment contracts, for example, an obligation to enter into consultation with the relevant trade unions. This Act applies if an employerintends to dismiss at least 20 employees employed within one and the sameregion of the UWV within a period of three months.

2.9 OtherBy Article 7:670 of the Civil Code, an employer is prohibited from giving noticeof termination to a sick employee during the first two years of illness. However,this does not apply to an employee who deliberately slows down his or herrecovery or refuses to reintegrate in a suitable alternative position offered bythe employer.

3. RESIGNATION

An employee can lawfully resign by giving notice, taking the notice period intoaccount. In this case, court or UWV permission is not required and the employment will end. However, for the resignation to be effective, the employer must investigate whether the employee knows what he or she isdoing and realises the consequences of the resignation. Under Dutch SocialSecurity regulations, an employee is not entitled to receive any unemploymentbenefits if he or she resigns voluntarily. In the event of a voluntary termination,it is therefore advisable that the employer points out these consequences tothe employee and asks the employee to confirm the resignation in writing.


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give rise to a claim for unreasonable dismissal. However, case law indicatesthat employers cannot dismiss employees during a trial period on unethicalgrounds (e.g. reasons that would result in unequal treatment).

If an employee has been hired through an outside employment agency and issubsequently offered employment directly by the employer for the same job, atrial period is not permitted. The same applies if a fixed-term contract is converted into a permanent contract with the same organisation, unless theemployee will perform completely different duties for which he or she requiressubstantially different skills.

Generally, the employer and employee enter into fixed-term contracts in orderto avoid the difficulties associated with termination of a permanent contract.Fixed-term contracts terminate automatically upon the expiry of the agreedperiod. However, if more than three successive fixed-term contracts areentered into and the period between each of the terms is not more than threemonths, or if the duration of two or three consecutive contracts exceeds atotal period of 36 months, the contract converts by operation of law into apermanent contract, and either UWV or court permission is required to givenotice of termination.

Dismissal before a fixed-term contract has expired is only possible if this isexplicitly agreed upon in the employment contract. However, in such casesUWV or court permission is required.

2.4 Part-time work and career breaksPart-time employees have the same protection against dismissal as full-timeemployees. Employees who are on unpaid leave, such as a sabbatical, alsoreserve their protection against dismissal. An employment agreement cannotbe terminated on the grounds that the employee works part time, and a prohibition against giving notice applies (Article 7:648 of the Civil Code).Pursuant to the Working Hours Adjustment Act, it is also prohibited to terminate the employment contract on the grounds that the employee hasapplied for an adjustment to his or her working hours.

2.5 Pregnancy and child careBy Article 7:670 of the Civil Code, an employer is prohibited from giving noticeof termination to an employee who is pregnant and to an employee who is onmaternity or parental leave.

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within which the redundant employee is identified will be divided into five agegroups. It will then be established what percentage of employees in the totalgroup must be dismissed. This percentage will then be applied to each agegroup and it can then be concluded in which age group the dismissals will fall.Within the relevant age group, the principle of seniority will be applied. Thelast employee to be hired will be the first to be dismissed (the principle of ‘lastin first out’). Deviations from this principle are only permitted in very specialcircumstances.

Employee’s performanceIn order to obtain court or UWV permission to dismiss an employee on thegrounds of poor performance, an application needs to be substantiated withevidence. The employer must not only give evidence of the poor performanceof the employee, but must also show evidence that it has tried to improve hisor her performance and has given the employee reasonable time to do so. It istherefore necessary to ‘build up a file’ by not only discussing problems with theemployee, but also by confirming such discussions in writing. Alternative jobpropositions within the organisation, coaching and/or on-the-job training,might also be relevant.

In practice, an employee’s poor performance in a specific position is consideredto be the employer’s risk. This means that, although it is a lawful reason fordismissal, a severance payment could be awarded to the employee concernedif the poor performance is not his or her fault.

Insurmountable problemsWhere the employer claims that there are insurmountable problems in its relationship with the employee, permission will only be given if the court orUWV is convinced of this and if repair of the relationship (i.e. by way of internal transfer of the employee or mediation) is not possible. In addition, theemployee might be awarded a severance payment, depending on the cause ofthe problems.

4.2 PermissionsWith the exception of the (statutory) managing director of an organisation (seesection 4.9 below), all classes of employees are protected against dismissal in thesense that the employer requires permission to terminate an employment contract. This permission can either be obtained by requesting a permit for termination from the UWV in the district where the employer is located, or byrequesting the court (the Sub-District Division of the Court) to terminate theemployment contract. Until this UWV or court permission is obtained, any noticeof termination by the employer is void.


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Case law has produced a number of examples where the court considered theemployee’s resignation to be void because it had not been confirmed in writing and/or the employee was not fully aware of the consequences of theresignation and had not been informed of these consequences by the employer.In these cases, the employees’ claims for reinstatement were granted.


4.1 Grounds for dismissal Court approval or UWV permission will only be granted if the request for dismissal is based on ‘reasonable grounds’.

From a practical point of view, the grounds for dismissal can be separated intothree categories:

• commercial grounds • grounds related to the employee’s performance • insurmountable problems in the relationship between the employer and

the employee, which may or may not be related to the employee’s performance.

In any of these situations, the employer must convince the UWV or the courtthat dismissal is warranted under the circumstances. It is therefore very important to ensure that the application is properly drafted, well reasoned andsupported by the relevant documentation.

Commercial groundsThe UWV maintains a strict policy when reviewing requests based on commercial grounds such as the restructuring of an organisation. The reasoningbehind the dismissal, as well as the principles of ‘reflection’ (see below) andseniority, and the possibility of an alternative position within the organisationwill be carefully considered. An application to the UWV on the basis of areduction in the workforce as a result of a reduced volume of business willtherefore need to be well substantiated, with evidence that no other suitablepositions are available. The same can be said for a request for termination withthe court. The mere statement that business is slowing will not be consideredas a sufficient reason.

In the event of a dismissal based on commercial grounds, the selection ofwhich employee(s) is/are to be made redundant must be done by applying theprinciple of reflection. This means that a group of interchangeable positions

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The petition should set out the grounds for such a request. The employee willbe given an opportunity to respond to the request and, subsequently, thejudge will hold an oral hearing. After the hearing, the judge will either grantor deny the request for termination of the employment agreement.

The ‘important reasons’ can be divided into two groups:

• Urgent reasonsUrgent reasons are those that could lead to a dismissal without notice, butthe circumstances are such that it is not possible for the employer to fulfilall of the necessary conditions for a dismissal without notice (see section 5below), or the circumstances are such that the reasons would not be sufficient to dismiss without notice.

• A change in circumstancesA change in circumstances must be of such a nature that the employer cannot be asked in all reasonableness to continue the employment of theemployee. Common reasons are those of a business/economic nature, theemployee’s poor performance or a problematic employment relationship.

Even if the judge is of the opinion that the grounds set out in the petition donot justify the requested dismissal, he or she may terminate the contract if, forexample, there is evidence that the relationship between the employer andemployee is materially affected by the conflict so that there is insufficient basisto continue a working relationship.

In the court procedure, the court will determine the date of termination of theemployment contract. It may also take into account the notice period, but generally this will be disregarded.

It is not possible to appeal the decision of the court.

If a court grants termination because of a change in circumstances, it mayaward the employee compensation. Compensation will be awarded if thecourt deems it fair in the circumstances of the case. Such compensation is generally calculated by using the Sub-District Court Formula (although thecourt is not required to use this formula):

Compensation = (A x B) x CA = number of years’ service in proportion to the employee’s age.

In calculating factor A, every year of service before the age of 35 is multiplied by 0.5, every year of service between the age of 35 and 45is multiplied by one, every year of service between the age of 45 and 55 is multiplied by 1.5, and every year above the age of 55 is multipliedby two.


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4.3 Procedures

UWV permission The employer must specify the reasons for the dismissal in the application forUWV permission and these reasons must be substantiated by evidence.

The UWV sends a copy of the application and its exhibits to the employee,inviting him or her to respond within two weeks. Next, both parties are giventhe opportunity to respond to each other's arguments. Sometimes, they aregiven the opportunity to be heard.

The UWV subsequently makes its decision after consultation with a committeeconsisting of an equal number of representatives from employer organisationsand trade unions. If an employee reports that he or she is ill after the application has been received by the UWV, the prohibition (see section 2.9above) against dismissal will not apply.

The UWV assesses whether the proposed termination is reasonable, takinginto account the interests of the employer and the employee, and other factors including those related to the Dutch labour market. Refusal to give per-mission is not uncommon.

The decision of the UWV is irrevocable and is not appealable. The procedurenormally takes two to three months, but it can be shorter if the employerrequests permission on commercial grounds and the employee makes a standard statement confirming that he or she does not object to the proposal.

If the UWV grants permission, the employer must give notice of termination tothe employee and observe the notice period required by law (or as agreed bythe collective labour agreement or individual contract).

The UWV does not have the authority to award a severance payment. It canonly grant or deny permission to give notice. If permission is granted by theUWV, the employee may claim that the effects of dismissal are ‘obviouslyunreasonable’. In this case, he or she may bring a claim for a severance payment or even reinstatement. In its judgment, the court will weigh up all thecircumstances of the case and has the authority to grant reinstatement oraward a severance payment to the employee concerned.

Court permissionThe employer may file a petition with the Sub-District Court (the ‘court’) fortermination of the employment contract for ‘important reasons’ (Article 7:685of the Civil Code).

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4.6 Treatment during notice periodDuring the time that the application is pending before the UWV or the court,and also during the entire notice period, the employee is entitled to paymentof his or her full salary, including statutory holiday allowance, year-end bonus,and contractual fringe benefits.

In certain circumstances, the employer can decide to suspend the employeeduring the notice period, for example, in the event of a seriously problematicemployment relationship. In this case, the employee remains entitled to his orher full salary and any component benefits.

In the Netherlands, no statutory right exists for an employee to enjoy time offfrom work to look for alternative work during the notice period. Often,employees use any unused annual leave for this purpose.

4.7 Payment in lieu of noticePayment in lieu of notice is only permitted with the employee’s consent.

4.8 Other

Termination agreement In order to have an employment agreement terminated as soon as possible without difficulty and with the co-operation of the employee concerned, it iscommon practice in the Netherlands for employers to offer employees compensation in line with the ‘Sub-District Court Formula’ and then stipulate theconditions for termination in a termination agreement. Although there are nospecific rules as to the form of such a mutual agreement, it should be clear thatthe parties have reached an agreement on all the relevant issues. The employeemust agree clearly and unambiguously to the termination, preferably in writing,and should be made aware of all financial consequences this will have. Theemployer must consider with reasonable care whether the employee has indeedconsented to the termination. Despite the fact that the employee agrees withthe termination of his or her employment, he or she will still be entitled to unemployment benefits.

Sometimes, parties follow the so-called ‘pro forma procedure’ in addition to thetermination agreement. This is a formal procedure, although without an oralhearing in court in which the employer and employee agree upon the contentsof the petition and the defence. Usually, the court will make its decision in accordance with the agreement between the parties. The main reason for following a pro forma procedure is that after the court has dissolved the employment agreement, the notice period for the employer is shortened by onemonth, although there will always be a minimum notice period of one month.


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B = gross monthly salary (including fixed salary components such as holidaypay, 13th month and shift allowance)

C = the adjustment factor is an element for the purpose of weighing up any special circumstances of the case. This adjustment factor will generally be 1 when neither the employer nor the employee is to blamefor the termination and the grounds of the termination (e.g. if a job becomes redundant as a result of a business reorganisation). Circumstances may justify an amendment to the adjustment factor, upwards or downwards, especially if one of the parties is to blame forthe termination of the employment contract.

4.4 Notification/consultation obligations Normally, for individual dismissals, no consultation of the works council isrequired, unless the dismissal qualifies as an important change in the management of the company (Article 25 of the Works Council Act), or if itconcerns a managing director (Article 30 of the Works Council Act).

4.5 Duration of notice periodThe statutory notice period that needs to be observed by the employee is onemonth. The statutory notice period to be observed by the employer dependson the employee’s length of service:

Length of service Notice period Less than 5 years 1 monthBetween 5 and less than 10 years 2 monthsBetween 10 and less than 15 years 3 months15 years or more 4 months

The statutory notice period may be extended by the employment contract.However, the notice to be given by the employee cannot exceed six months,and the employer's notice period needs to be double that of the employee’snotice period. Although Collective Labour Agreements can set these rulesaside, the employee’s notice period can never be less than the employer’snotice period.

After permission for dismissal has been obtained from the UWV, or after theparties have followed a pro forma procedure in the court, the employer’snotice period may be shortened by one month, with a minimum notice periodof one month remaining. In a regular court procedure, the court will determinethe termination date, sometimes taking into account the notice period, butusually not.

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The law provides a non-exhaustive list of examples of what can constitute anurgent cause:

• misleading or false statements made while applying for the job• a serious lack of competence in the performance of duties• theft, fraud, or crimes involving a breach of trust• false statements damaging the employer's reputation, and intimidation• intentional damaging of property• divulging of trade or professional secrets• gross negligence in the performance of duties.

The urgent cause must be material and must be communicated as soon aspossible to the employee, preferably in writing. It must also be sufficientlyurgent to warrant immediate and irrevocable termination. A delay before termination will be regarded as evidence that the cause was not urgent(although a brief delay of some days for the purpose of consulting a lawyerhas been accepted by the courts).



Irregular dismissalDismissal without permission of the UWV is voidable. Failure to comply with theproper notice period renders the dismissal irregular, although still effective.Irregular dismissal entitles the dismissed employee to statutory damages. In principle, the amount of damages equals the employee's pay for the number ofdays that he or she should have been given regular notice for. An important consequence of irregular dismissal is that the employee is not bound by any non-competition clause in the employment agreement.

‘Obviously unreasonable’ dismissalIf, despite compliance with the requirements imposed by law, the applicableCollective Labour Agreement and the employment contract, the effects of termination on the dismissed employee are ‘obviously unreasonable’, theemployee may seek redress in court. The limitation period on the employee’sclaim is six months from the effective date of termination.

A claim on the grounds of an ‘obviously unreasonable’ dismissal is filed with therelevant court.


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Managing directorsIf correctly appointed as such, the managing director of an organisation is notprotected against dismissal. The Civil Code (in Book 2, s1 of Article 244) providesthat every managing director can be suspended or terminated at any time by theauthority which is authorised to appoint him. This authority is determined in theorganisation’s Articles of Association. In general, most Articles of Association inthe Netherlands, provide that the General Meeting of Shareholders will be therelevant authority. Should the organisation have a works council, the workscouncil must be asked for advice prior to the dismissal.

The managing director must be informed in good time of the time, date andplace of the meeting of the relevant authority which will decide on his or her dismissal. The director must have the opportunity at this meeting to give his orher opinion on the planned dismissal.

If no explicit exception is made with regard to the employment status of themanaging director, his or her dismissal as a statutory director at this meetingmeans that the employment contract is also automatically terminated. The statutory or contractual notice period must be observed to terminate theemployment contract. This means that after the dismissal at the meeting, themanaging director will remain employed for the duration of the notice period,unless the parties come to an agreement that the employment contract will terminate earlier and that instead of continuing employment during the noticeperiod, financial compensation will be awarded.

If the managing director has reported that he or she is ill before receiving theinvitation to the meeting, he or she will be able to claim protection against thedismissal by reason of the illness. In this case, the managing director can be suspended and/or dismissed from the capacity of managing director, but stays inthe service of the organisation as a ‘normal’ employee. In the case of illness, nonotice can be given and a court decision will be necessary to end the employment relationship.


A party to an employment contract may be confronted with an urgent cause,which makes it unreasonable to continue the employment relationship. If theurgent cause is the result of an act by the employee, the employer is entitledto terminate the employment contract without notice (i.e. with immediateeffect). No UWV or court permission is required.

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6.3 ReinstatementAs already mentioned, if the effects of dismissal are proved to be ‘obviouslyunreasonable’, the employee may bring a claim for reinstatement. The courtwill weigh up all the circumstances of the case and although it has the authorityto grant reinstatement, it rarely does so.


Parties cannot waive the right to address the Sub-District Court in order to terminate the employment agreement, and the court has, at all times, theauthority to award a severance payment.

As explained in section 4.8 above, it is not uncommon to reach an agreement with an employee regarding his or her dismissal. In return for a severance package calculated according to the Sub-District Court Formula, theemployee may agree to accept his or her dismissal and agree upon a ‘full andfinal’ discharge so as to avoid going to court. Again, it is important for theemployer to ensure that the employee realises the consequences of the dismissal, in order that the agreement be lawful. It is therefore advisable forthe employee to obtain legal advice.


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If the effects of termination are obviously unreasonable, the employee may bringa claim for a severance payment or reinstatement, however, the latter is rarelygranted.

The law provides a number of situations that may be considered as ‘obviouslyunreasonable’, the most common of which are:

• when no reason or a mere pretext is given for the termination• when, with regard to financial arrangements made for the employee and his

or her prospects of finding new employment, the hardship endured by theemployee is disproportionate to the interests of the employer

• when termination deviates from the reflection or seniority rules as describedin section 4.1 above.

Managing directorsIn relation specifically to managing directors, as already mentioned, a managingdirector can at any time be suspended or terminated by observing the noticeperiod. However, this does not mean that the organisation is not required to payfinancial compensation. If no compensation is offered to the managing director(or if he or she does not agree to the compensation offered) he or she may bringa claim for compensation (or for additional damages) with the court on the basisthat the dismissal was ‘obviously unreasonable’. Whether the court will come tothe conclusion that the termination was ‘obviously unreasonable’, depends, inter alia, on the following:

• the termination procedure (i.e. the director must have been informed in good time of the time, date and place of the shareholders meeting in whichhe or she was to be dismissed; he or she must have had the opportunity atthis meeting to give his or her opinion on the planned decision)

• the reasons for dismissal• whether or not financial compensation was paid.

6.2 Void dismissals Under Dutch law, there is no concept of constructive dismissal. However, if anemployee is forced to resign the resignation will be void.

If the employer gives notice of termination to any employee who benefits fromspecial protection against dismissal (see section 2 above), the dismissal will bevoidable. Alternatively, the employer could ask the relevant court to terminatethe contract of such an employee. In such a case, it needs to be made clearthat the special protection afforded to the employee concerned bears no relation to the contemplated termination of the employment contract.

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Norway




3. RESIGNATION 213








In Norway, employees have very strong employment protection rights.Norwegian law recognises the importance for the individual of beingemployed and that involuntary termination of employment greatly affects theindividual, both personally and financially, and also the employee’s family. As aresult Norwegian law sets out the situations in which an employer may givenotice of termination and the procedures that are required to be followed insuch situations.

Norwegian law regarding protection against dismissal is primarily codified inAct no 62 of 17 June 2005, the Working Environment Act (the ‘WEA’), relating to the work environment, working hours and employment protection.It applies to all organisations that engage employees, unless otherwise stated.Several economic sectors are fully or partly exempt from the Act, for example,shipping, hunting and fishing (including the processing of the catch on boardships). Military aviation is covered by the Aviation Act (Act no 11) of 11 June1993, and is therefore exempt from the WEA. Similarly, Act no 3 of 4 March1983 relating to Civil Servants, applies to employees of the Norwegian CivilService.

The employment protection rights cover all employees, including senior management personnel, and both full-time and part-time employees. An‘employee’ is defined in the WEA as ‘anyone who performs work in the service of another’ – in other words, as long as the employer has engaged anemployee to perform work, it must ensure that the provisions of the WEA arecomplied with.

Special provisions apply to the chief executives of organisations. The WEA permits an employer to enter into an agreement with a chief executive, making the employment protection rules void. A consequence of this is thatthe employer does not need to justify the termination of the chief executive’semployment.

Chapter 15 of the WEA contains provisions including, inter alia, a requirementto discuss the matter with the employee and the employee’s representativebefore making a decision regarding dismissal with notice, unless the employee does not desire this, and an obligation to provide information andcarry out a consultation prior to a collective dismissal. Further, Chapter 15 alsorelates to notice periods, formal requirements for a notice of termination andthe consequences of negligently failing to comply with these formal requirements. They also relate to an employee’s right to remain in his or her

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• it has a just cause that does not involve ‘disproportionate intervention’ in relation to the persons so treated and that it is necessary for the performance of the work or profession (i.e. it is a proportionate means toachieve a legitimate aim)

• the treatment is necessary to the achievement of a just cause and does notinvolve ‘disproportionate intervention’ in relation to the persons so treated(i.e. it is a proportionate means to achieve a legitimate aim).

Complaints regarding breaches of anti-discrimination legislation may bebrought before the court or the Equality and Anti-Discrimination Tribunal.

2.2 AgeThe main rule is that a dismissal by reason of age before an employee reaches70 is not objectively justified (see s15-13a of the WEA). However, a lower agefor compulsory retirement may be agreed between the parties provided theage limit set has a ‘just cause’ and does not involve a ‘disproportionate inter-vention’ in relation to the person involved (i.e. it is a proportionate means toachieve a legitimate aim).

2.3 Length of service and fixed-term contractsNo special protection exists in relation to this group beyond the overall protection provided by law.

Dismissal protection applies throughout the whole period of employment.However, a trial period limited to six months may be agreed upon between theemployee and the employer. During the trial period, the grounds that are justifiable for a notice of termination differ from those that usually apply toother stages of the employment relationship (see section 4.1). However, somedismissal protection still exists during the trial period, for example, a dismissalmust be justified by the employee’s lack of suitability for the work, or lack ofproficiency or reliability.

2.4 Part-time work and career breaksNo special protection exists in relation to this group beyond the overall protection provided by law.

2.5 Pregnancy and child careA notice of termination cannot be justified by an employee’s pregnancy.Pregnancy will be deemed to be the reason for the dismissal of a pregnantemployee unless other grounds are shown to be highly probable.


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position during a dispute connected with a notice of termination and the consequences of an unjustified notice or dismissal.

Chapter 15 of the WEA grants some groups of employees additional employment protection (e.g. disabled employees, employees on maternity orparental leave, sick employees, those involved with adoption, members of thework council and employees on military service) (see section 2 below). Theadditional employment protection prevents employees in these kinds of situations, which usually only last for a limited period, from losing their positions. Moreover, a dismissal as a result of a transfer of an undertaking orpart of one is deemed to be unlawful.


2.1 DiscriminationVarious legislation offers protection against discrimination. The WEA, theGender Equality Act and the Anti-Discrimination Act are the main Acts in relation to this.

Chapter 13 of the WEA implements Directive 200/78/EC and provides protection against direct and indirect discrimination on the basis of politicalviews, membership of a trade union, sexual orientation, disability or age.Harassment and instruction to discriminate against a person is regarded as discrimination. The law provides protection in all aspects of employment,including:

• advertising of posts, appointments, relocation and promotion• training and other forms of competence development• pay and working conditions and• termination of employment.

In the case of discrimination on the basis of gender, the Gender Equality Actapplies. For discrimination on the basis of ethnic origin, national origin, ancestry, colour, language, religion and ethnical orientation, the Anti-Discrimination Act applies. The Anti-Discrimination and Accessibility Actapplies in the case of discrimination on the basis of disability.

There are some exceptions to the prohibition against discrimination to theeffect that different treatment may be lawful if:

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An employee on maternity leave or paternity leave must not be given noticeof dismissal that becomes effective during the period of absence if the employer is aware that the absence is for such a reason or the employee notifies the employer without undue delay that the absence is for such a reason. If the employee is lawfully dismissed during this period, the notice willbe valid but the period must be extended accordingly.

2.6 CarersNo special protection exists in relation to this group beyond the overall protection provided by law.

2.7 Employee representativesNo special protection exists in relation to this group beyond the overall protection provided by law. However, it may follow from collective pay agreements that the notice period for employee representatives is longer thanthat provided in the ordinary rules set out in the WEA.

2.8 RedundancyUnder the WEA, collective dismissals are defined as dismissals of at least tenemployees within a period of 30 days. In addition, other instances whenemployment ends such as where an employee takes early retirement or resigns(if particularly advantageous terms of the resignation have been instrumentalin bringing it about) will count, if at least five employees are dismissed.

If an employer intends to make a collective dismissal, it must notify the Labourand Welfare Service (the ‘NAV’). A collective dismissal takes effect 30 days atthe earliest after notification to the NAV.

The WEA contains detailed provisions on the particular information that theemployer must give to the employees’ elected representatives when collectivedismissals are proposed, including a written notification concerning:

• the grounds for any redundancies• the number of employees who may be made redundant• the categories of workers to which they belong• the number of employees normally employed• the groups of employees normally employed• the period during which such redundancies may be effected• the selection criteria for selecting those who may be made redundant• the criteria for calculating extraordinary severance pay, if applicable.

Such notification must be given at the earliest opportunity and, at the latest,at the same time as the employer calls a consultation meeting.

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2.9 OtherA notice of termination cannot be justified by an employee’s incapacity towork (including incapacity caused by an accident or illness) for the first 12months after the incapacity first occurred. However, this does not prevent theemployer from giving notice of termination to such an employee that is justified on other grounds (e.g. in the case of collective redundancies).Nevertheless, if the employer gives a notice of termination to the employeeduring the first 12 months of his or her incapacity, the employer has a strongerburden of proof to evidence that the notice of termination was not givenbecause of the incapacity itself.

3. RESIGNATION

Generally, a resignation cannot be regarded as a dismissal, except if it occursas a result of pressure from the employer, in which case it could be consideredas a dismissal.

Crucial in the assessment is whether or not the employee had a choice – wouldhe or she have been dismissed if he or she had not handed in his or her resignation? If the answer is yes, this may lead to the resignation beingdeemed a dismissal.


4.1 Grounds for dismissal Employees are protected against a notice of termination that is based onunjustifiable grounds. Employees cannot be given a notice of terminationunless it is warranted by circumstances connected with the organisation, theemployer or the employee. Each case must be considered individually and thedetermining factor will be an assessment of the circumstances surrounding thenotice of termination.

As already mentioned, s15-7 of the WEA contains the material requirementsand justifiable grounds that must be fulfilled if a notice of termination is to bedeemed lawful. A notice of termination must be justified by either:

• Reasons related to the employeeRelevant justifiable grounds include unlawful absence, deficient work performance, a refusal to obey orders, theft, breach of the duty of loyaltytowards the employer, abuse of drugs, breach of non-competition clauses,harassment, victimisation and breach of professional disclosure; or


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make other employees change positions in order to create work, nor does itneed to set up new positions.

Further, if a number of employees in an organisation will receive notices of termination for reasons related to the organisation, the selection group mustbe decided upon. Legal practice indicates that an objective assessment isrequired when choosing which employees are to be made redundant. Thechoice of employees is based on a number of factors and different factors carrydifferent levels of importance, depending on the particular aspects of eachcase, each business’ needs and the market situation. Relevant factors mayinclude:

• length of service• attainment of results• qualifications• suitability• disadvantages for the employee of being made redundant• any relevant social factors.

In addition, rules regarding which employees are to be made redundant maybe contained in collective agreements. For example, pursuant to the collectiveagreement between the ‘NHO’ (Confederation of Norwegian Business andIndustry) and the ‘LO’ (The Norwegian Federation of Trade Unions), length ofservice is the main criterion in relation to redundancies involving unionisedemployees. However, length of service can be deviated from if the reason isobjectively justified.

4.4 Notification/consultation obligations As already mentioned in section 4.3 above, the employer is required to have aconsultation with the employee. If a discussion does not take place, this doesnot necessarily imply that the notice of termination will be considered asunlawful. However, whether the lack of discussion as part of the procedure hashad any impact on the decision to issue the notice of termination to theemployee requires a holistic evaluation of all the relevant facts. In other words,has the employer taken the decision concerning the notice of termination onsufficiently factual grounds?

The employer must give the notice of dismissal in writing (s15-4 of the WEA)and it must either be delivered personally or sent by registered letter. Thenotice period will start to run from the first day of the following month.Pursuant to s15-4, the notice letter must fulfil certain requirements in order forit to be effective. The notice must contain information pertaining to:


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• Reasons related to the employerA reduction in production, rationalisation measures and other types of readjustments are the most common reasons for dismissals based on circumstances relating to the organisation. The transfer of an undertakingis not in itself a justifiable reason to dismiss.

4.2 PermissionsIn Norway, no prior approval is required for a dismissal. As already mentioned, inthe event of a collective dismissal, the employer must notify the NAV. However,no prior approval is needed.

4.3 Procedures The WEA includes a number of provisions requiring the employer to discussany issues of concern with employee representatives and/or with the employees who are particularly affected by them.

Prior to making a decision as to whether to give a notice of termination or not,the employer must discuss the situation with the employee and an employeerepresentative, unless the employee objects to the presence of the employeerepresentative (s15-1 of the WEA). The purpose of this meeting is to ensurethat the employer has sufficient information before making the decision.During the meeting, the employee must be given the opportunity to put forward any information or opinion regarding a possible notice of termination.Such information may include social circumstances and the employee’s opinion on the selection of employees during the redundancy process.Discussions are of considerable importance if a notice of termination is beingconsidered because of the employee’s deficient work performance. Theemployee may put forward circumstances to show that making a notice of termination would be unreasonable, or to prove that the employee’s behaviouris excusable.

For documentation purposes, the request for such a consultation should be inwriting. Further, the employer should ensure that written minutes of the meeting are drawn up and signed by both parties.

Notice of termination based on reasons related to the organisation (i.e. curtailed operations or rationalisation measures) will not be objectively justifiedif the employer has other suitable work to offer the employee, implying thatthe employer must offer the employee work that it has available. This includesboth existing work and work which will arise in the near future, for example,as a result of a structural reorganisation. The work available does not need tocorrespond to a particular position. However, the employer does not need to

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months when dismissed after the age of 50, at least five months after the ageof 55, and at least six months after the age of 60.

4.6 Treatment during notice periodUntil the expiry of the notice period, the employer must continue to employand remunerate the employee. The employee has the right to continue his orher daily work. All rights and obligations arising from the employment contractcontinue.

If the employee disputes a notice of termination, the employer may requestthe court to order the employee to leave his or her position during the dispute.The court may do so if it finds that to continue the employment would beunreasonable, given the special circumstances of the case. However, this is arule of exception and applies only to special cases.

4.7 Payment in lieu of noticeUntil the expiry of the notice period all employees have a right to work and toreceive wages. The employer cannot unilaterally instruct the employee toresign from his or her work during the notice period even if the employee payshis or her wages during the period (see section 4.6 above). Payment in lieu ofnotice requires the employee’s consent.

4.8 OtherThere are no other actions that the employer needs to take.


Both the employer and the employee have the right to terminate the contractwith immediate effect in the event of a gross breach of contract by the otherparty. Dismissal without notice refers to a situation where the employer terminates the employment contract with immediate effect as a result of agross breach of contract on the part of the employee (s15-14 of the WEA). Theconsequence of such a dismissal is that the employee has no right to continueto work. The employee also loses the right to salary and other benefits pursuant to the employment contract.

The dismissal order must be given within a reasonable time of the employerbecoming aware of the offence. Normally, grounds such as breach of trust orunlawful absence will constitute sufficient reason. The determining factor isthat a gross breach of loyalty has occurred.


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• the employee’s right to request negotiations and to institute legalproceedings

• the employee’s right to remain in his or her post until the conflict is settled• the time limits applicable to requesting negotiations, instituting legal

proceedings and remaining in a post• the name of the employer and the relevant defendant in the event of legal

proceedings• any relevant preferential rights.

If the employer fails to give the notice in writing or does not include the necessary information, and the employee institutes legal proceedings withinfour months of the date that the notice was given, the notice will be heldunlawful (unless special circumstances make this clearly unreasonable).

If the reason for the notice of termination is redundancy, it must also containinformation on any preferential rights to a new appointment in the organisation (s14-2(1) of the WEA).

Section 17-3(1) of the WEA stipulates that the employee may, after receivingthe notice, request a negotiation with the employer. The employee must raisethis claim in writing within two weeks of receiving the notice of dismissal.

Employees who dispute a notice of termination may, as a general rule, remainin their position until the date that a legally binding judgment is made (s15-11(2) of the WEA). The consequence of this privilege is that the employee has the right to continue in his or her position until the legal processdetermining the lawfulness of the notice of termination is concluded.Therefore, the employee is also entitled to receive his or her monthly salary andall other benefits arising from the employment. This privilege implies that allthe rights and obligations contained in the employment contract continue.

4.5 Duration of notice periodThe employee is entitled to a certain minimum notice period, the length ofwhich depends on length of service and age. Unless otherwise agreed in writing or contained in a collective pay agreement, one month’s notice mustbe given to the employee. Before notice is given, a shorter notice period maybe concluded between the employee’s elected representatives and the organisation, if it is bound by a collective pay agreement. An employee whohas been continuously employed for at least five years is entitled to receive twomonths’ notice. If employed continuously for at least ten years, the employeeis entitled to receive three months’ notice. An employee who has been continuously employed for at least ten years must have a notice period of four

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The employee and the employer may reach an agreement to terminate theemployment contract, if the employee waives his or her employment protection rights. The agreement should be balanced in such a way that therights that are waived are compensated by a severance pay agreement. Suchan agreement may be entered into instead of a dismissal (before notice of termination is actually given) or it may replace a notice of termination to theextent that the employer withdraws the notice of termination.

In the case of collective redundancies, it is quite common that an employeroffers severance pay agreements. If a conflict between the employer and theemployee is the reason for a possible notice of termination, the employer maypropose a severance pay agreement and in many cases, the employee will seeksuch an agreement. The core of such a severance pay agreement is that inreturn for a severance payment, the employee cannot challenge the lawfulnessof the termination of employment.

As already mentioned, particular provisions apply in respect of notice of termination of a chief executive. Pursuant to s15-16 of the WEA, a chief executive can enter into an agreement in which he or she waives his or herrights in the event of a notice of termination. Such an agreement must beentered into before any decision is made with regard to the timing of a noticeof termination. The employer can terminate the employment with the chiefexecutive immediately, even if there are no justifiable grounds for dismissal.


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6.1 Sanctions for unlawful dismissal The effect of an unfair notice of termination may be that the notice of termination is held to be unlawful, in which case the employment relationshipremains in force (s15-12 (1) of the WEA). Even if a notice of termination isdeemed to be unlawful, the employer may ask for a court order to end theemployment. The court’s decision is based on a consideration of the interests ofboth parties. If the court finds that it is clearly unreasonable for the employmentto continue, it may order the employment to end.

Furthermore, the employee may be entitled to compensation (s15-12 (2) of theWEA), the nature of which will be determined by the court. The court considers what seems reasonable in view of the employee’s financial losses,the circumstances of both the employer and the employee, and other facts ofthe case. The provision includes the possibility to grant damages for non-material losses.

The right to damages pursuant to the WEA is conditional upon the court deciding that the notice of termination or dismissal is unlawful. However, evenif a notice of termination or dismissal is held to be lawful, this does not preventan employee from bringing a claim for damages pursuant to the general principles of the law on damages.

6.2 Void dismissals An unfair dismissal will be deemed void if so required by the employee and theemployment relationship will remain in force (see WEA s15-12 (1)). However,in special cases, and if so demanded by the employer, the court may order termination of the employment if it deems it to be manifestly unreasonable forit to continue.

6.3 ReinstatementSee section 6.2 above.

Further, employees who dispute a notice of termination may, as a rule, remainin their positions until a legally binding judgment has been made (see section4.4 above). If an employee has been unlawfully locked out of his place of workafter the notice period has ended, he or she may request to resume work andwill be entitled to do so within four weeks of the lockout.

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Poland




3. RESIGNATION 226








Under Polish law, the protection for employees against dismissal comes fromthe Polish Labour Code and various other pieces of employment legislation(e.g. the Act on Trade Unions, the Act on Social Labour Inspection, the Act onSpecial Principles of Termination of Employment with Employees for Reasonsnot Related to Employees).

All employees qualify for general protection and specific classes qualify for special protection, which may consist of an absolute prohibition against termination or a requirement to obtain consent (e.g. the consent of a tradeunion) to the termination (see section 2 below).

There are certain formalities and restrictions in relation to termination ofemployment, which are subject to extensive jurisdictional interpretation,including significant judgments by the Polish Supreme Court andConstitutional Tribunal. They are regularly taken into consideration and play asignificant role in legal practice.

The formalities and restrictions in respect of termination form the so-called‘general protection’ of employment. For instance, termination of permanentemployment contracts must always be substantiated by a justified reason,which in the case of a court dispute should be evidenced by the employer.There are notice periods which must be observed, unless the termination qualifies for immediate termination (see section 5 below). Individual consultation with trade unions should be carried out for the dismissal of anemployee who is protected by a trade union.

Under Polish law, employment may be terminated unilaterally by the employer‘with notice’ or ‘without notice’. Termination ‘with notice’ may be used if thereis a ‘justified reason’. The employer must then observe the relevant notice period (see section 4.5 below). Only fixed-term employment agreements maybe terminated ‘with notice’ without stating the reason. Termination ‘withoutnotice’ may be used in cases specifically provided for by law, most importantly inthe case of a ‘serious breach of an employee’s basic duties’ (see section 5below).


2.1 DiscriminationTermination must not be based on the prohibited discriminatory criteria whichinclude gender, age, disability, race, religion, nationality, political orientation,

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In general, the employer may neither serve notice of termination nor terminatethe employment of an employee during pregnancy, maternity leave or child care leave.

Further, the employer must not serve notice of termination nor terminate theemployment if an employee who is entitled to child care leave asks to decreasehis or her working hours. Such protection lasts up to 12 months.

It is possible to terminate the employment ‘without notice’ if the terminationqualifies for immediate termination (see section 5 below). In the case of pregnancy and maternity leave the additional consent of the trade union isrequired (if there is one).

2.6 CarersThere are specific circumstances when an employee is entitled to leave in orderto take care of or look after a child or a relative. Such leave is considered as a justified absence from work, which makes it impossible to serve notice of termination.

2.7 Employee representativesTrade union leaders and members of the works council enjoy special protection against dismissal. Termination (both with and without notice) of atrade union leader or a works council member requires the consent of thetrade union or the works council, respectively.

2.8 RedundancyThe specific rules regarding collective dismissals apply only to employersemploying 20 or more employees. Although such rules relax the protection ofemployees (both general and special protection), they also introduce certainconsultation procedures and an obligation to make a statutory severance payment to the dismissed employees.

A collective dismissal takes place when an employer terminates employmentcontracts for reasons not concerning the employees, within a period notexceeding 30 days. A collective dismissal takes place if the employer dismisses:

• 10 or more employees – if the employer employs between 20 and 99 employees

• 10% of employees – if the employer employs between 100 and 299 employees

• 30 or more employees – if the employer employs 300 or more employees.


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union membership, ethnic origin, belief, and sexual orientation. In Poland, thelist of discriminatory grounds is non-exhaustive – employees may assert thatthey were wronged by an act of discrimination based on other unfair criteria.

2.2 AgeThe employer cannot serve notice of termination on an employee who willreach the retirement age within no more than four years. It is possible to servenotice before this period of protection, even if the notice ends during the period of protection. The general retirement age in Poland is 65 years for menand 60 for women.

2.3 Length of service and fixed-term contractsLength of service does not affect protection against termination, although itdoes determine, for example, periods of notice of termination (see section 4.5below).

A fixed-term contract may be terminated if it is concluded for a period exceeding six months and provides for the possibility of earlier terminationupon two weeks’ notice. A fixed-term contract concluded for less than sixmonths cannot be terminated.

Polish law also recognises a special type of employment contract during a trialperiod, which can be concluded for a period of up to three months. It can beterminated with notice by the employer without stating the reason. In general, during such a contract, protection of both general and specialemployment is relaxed, but not fully waived.

2.4 Part-time work and career breaksAll rules applicable to full-time workers apply also to those employed on apart-time basis. Termination cannot be based on the fact that an employmentcontract is for part-time or full-time employment.

In general, career breaks, which in Poland could be in the form of unpaid annual leave, protect employees from termination of employment for a period of up to one month. Thereafter, the employment may be terminated‘without notice’.

2.5 Pregnancy and child careProtection exists for pregnant women, for women taking maternity and foremployees taking child care leave.

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If the employment conditions are unilaterally altered by the employer by serving on the employee a so-called ‘notice of alteration of terms of employment’ and the employee rejects the new proposed terms, the employment will terminate upon the lapse of the relevant notice period.Should the employee accept the new terms, they will come into effect as ofthe end of the notice period.


4.1 Grounds for dismissal Termination of a permanent employment contract must be based on a justifiedreason. The letter of notice of termination must indicate the reason justifyingthe termination, and the reason should be precise and factual. The notice mustalso meet certain other formal requirements, for example, it must be in written form, signed by person(s) duly authorised to act on behalf of theemployer in employment-related matters and it must contain instructionsregarding the right to appeal against the notice of termination to the court.

The justifying reason may occur on the part of the employee or the employer.Justifying reasons on the part of the employee are, in principle, instances ofunsatisfactory performance or inappropriate conduct. Justifying reasons on thepart of the employer include organisational changes and elimination of thejob.

Additionally, the employer must observe the rules in relation to general protection (e.g. a trade union consultation) and check if the employee is notunder special protection.

4.2 PermissionsIn general, prior administrative approvals are not required to terminate employment contracts.

Consent may be required to terminate the employment contracts of employeeswho enjoy special protection (see section 2 above).

4.3 Procedures The employer is not required to take any special measures before the dismissal,such as undertaking progressive counselling or an improvement period.

As a matter of procedure, the employer need only consult with the trade unionregarding the individual dismissal (see section 4.4 below), if applicable.


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2.9 OtherSpecific protection also exists for the following classes of employees:

• employees taking justified absences – notice of termination may not be served

• social labour inspectors – the employer may neither serve notice nor terminate the employment of a social labour inspector during his or her term of office and for one year following the expiration of his or her termof office. Termination without notice is possible only with the consent of the relevant trade union

• members of local government bodies – employment may be terminated only with the consent of the relevant local governmental body

• employees in military service – in general, their employment may not be terminated and notice may not be served during the military service

• war veterans and persons injured and disabled in war or military service –termination of employment may only be made with the consent of the relevant district governor (‘starosta’)

• temporary members of the boards of regional auditory (accounting) chambers – employment may be terminated only with the consent of the relevant auditory chamber

• doctors elected to fulfil functions in veterinary and medical chambers – notice may only be served with the consent of the veterinary and medicalcouncil

• pharmacists who fulfil functions in pharmaceutical chambers – notice mayonly be served with the consent of the relevant pharmaceutical council

• nurses and midwives who fulfil functions in nursing chambers – employersmay serve notice or terminate employment only with the consent of the relevant district nursing council.

3. RESIGNATION

Polish labour law does not recognise the concept of resignation in terms of a‘constructive dismissal’.

The nearest concept is a termination of employment by an employee ‘withoutnotice’ for ‘serious breach of the employer's basic duties’. If termination by anemployee of his or her employment is found lawful and justified by a labourcourt, the employment is considered terminated by employer ‘with notice’.Additionally, the employee is entitled to compensation in the amount of his orher remuneration for the applicable period of notice.

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The employer is entitled to shorten the notice period from three months to onemonth if termination is necessary for a reason on the part of the employer (seesection 4.1 above). In such a case, the employee should be provided with compensation equal to the remuneration for the remainder of the notice period.

Notice periods expressed in months lapse at the end of a calendar month (i.e.three months' notice comprises three full calendar months) and notice periodsexpressed in weeks lapse on a Saturday.

4.6 Treatment during notice periodDuring the notice period, the employment relationship remains in force. Theemployee must perform work and the employer must pay his or her remuneration.

The employer can demand that the employee take his or her unused annualleave (if any) during the notice period.

The employer must release the employee from work to look for other employment. The employee is entitled to remuneration during this time offwork. The amount of time off that the employee is permitted depends on howmuch notice the employer gives:

• two working days, if the notice is either one month or two weeks • three working days, if the notice is three months.

Releasing an employee from work in any other way requires the employee’sconsent. In practice, if the employer undertakes to pay the employee’s remuneration during the release, it is rare for an employee to refuse his or herconsent.

4.7 Payment in lieu of noticeUnder Polish law, there is no concept of ‘payment in lieu of notice’. In practice, employees are released from work during the notice period and havethe right to any remuneration earned during that time.

4.8 OtherIf an employer, employing at least 20 employees, dismisses an employee for reasons to do with the employer, the employee is entitled to an amount of statutory severance pay based on length of service:

• one month’s remuneration if an employee’s length of service with an employer is less than two years


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A specific notification and consultation procedure applies in the case of collective dismissals (see section 4.4 below).

4.4 Notification/consultation obligations The trade union should be consulted about a notice of termination of a permanent employment contract, as well as termination without notice of anyemployment agreement, if the employee to be dismissed is protected by thetrade union (as a member or protected non-member). However, the employeris not bound by the opinion of the trade union.

In cases of collective dismissal, the employer must conduct aninformation/consultation process with the works council. The works councilshould be informed of the nature of the dismissal and also consulted in thisrespect. The procedure should be completed before the decision on the collective dismissal is taken. Additionally, the employer should conduct consultations with the trade unions (or in the absence of trade unions, withspecially elected employee representatives) and fulfil certain notification obligations towards the local employment office(s).

If the employer intends to terminate at least 50 employees within a three-month period, it must agree with the local employment office on thescope and forms of assistance for the dismissed employees.

4.5 Duration of notice periodThe notice period for termination of a permanent employment contractdepends on the employee’s length of service with the employer:

• two weeks if the employee has been employed for less than six months• one month if the employee has been employed for at least six months• three months if the employee has been employed for at least three years.

A fixed-term contract can be terminated with two weeks’ notice if it is concluded for a period exceeding six months and it provides for the possibility of earlier termination with notice (compare section 2.3. above).Otherwise, it cannot be terminated with notice unless the reasons for doing sodo not concern the employee (e.g. in the event of organisational changes orelimination of the job).

The notice periods for termination of an employment contract during a trialperiod are as follows:

• three working days if the trial period does not exceed two weeks• one week if the trial period is longer than two weeks• two weeks if the trial period is three months (i.e. the maximum length).

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6.1 Sanctions for unlawful dismissal The employee has the right to appeal to the labour court against a terminationof employment. If the labour court finds the appeal to be justified, it may reinstate the employee or award compensation. Compensation is awarded whenreinstatement is ‘impossible or pointless’.

When the employee is reinstated he or she will also be awarded a ‘payment forthe time of unemployment’. In principle, this payment is capped at two months'remuneration (in the case of a termination ‘with notice’) or three months' remuneration (in the case of a termination ‘without notice’). However, the payment will be equal to the remuneration for the entire period between dismissal and reinstatement (legal proceedings often take two to three years) ifthe employee was dismissed in breach of special protection. If the employee wasdismissed in breach of special protection the court must, in principle, reinstatehim or her (i.e. it does not have the option to award compensation instead).

The Labour Code provides that the compensation, when awarded instead ofreinstatement, cannot exceed three months' remuneration. However, the latestruling of the Constitutional Tribunal indicates that the employee may bring aclaim for compensation amounting to all the losses that he or she has incurred.

6.2 Void dismissals A dismissal is never void. The Supreme Court has examined the concept of avoid mutual agreement in the case of a termination of employment in order tocircumvent the effect of a transfer of an undertaking (i.e. to avoid a transferof the employee to the transferee). This concept is very controversial in Poland.

6.3 ReinstatementThe employer may be ordered to reinstate an unlawfully dismissed employee.The court will reinstate the employee, unless it is ‘impossible or pointless’ todo so. If the employee was dismissed in breach of special protection, the courtmust in principle reinstate him or her.


The employee cannot waive the right to sue.


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• two months’ remuneration if it is between two and eight years• three months’ remuneration if it is more than eight years.

The maximum amount of severance pay is approximately EUR 5,200 (for 2011).Severance pay becomes payable upon the lapse of the notice period.


Dismissal without notice is permitted whether the employee is at fault or not,but only in accordance with the provisions of the Polish Labour Code.

Dismissal without notice because an employee is at fault is permitted in thefollowing circumstances:

• if there has been a serious breach of the employee's basic duties• if the employee has committed an offence which renders further

employment impossible and this is obvious or has been established by a non-appealable judgment

• if the employee has lost the rights necessary in order to perform the dutiesconnected with his or her job because of his or her fault.

Dismissal without notice when the employee is not at fault is permitted in thefollowing circumstances:

• if the employee is unable to work by reason of illness- for a period of more than three months, and the employee has been

employed by the respective employer for less than six monthsfor a period that extends beyond that during which he or she is

entitled to receive sick pay and sickness-related benefit and the first three months that he or she can receive rehabilitation benefit, and heor she has been employed by the respective employer for at least six months, or has become unfit for work because of an accident at workor an occupational illness

• if the employee has a justified reason for being absent from work for any other reasons for a period longer than one month.

It is also possible for an employee to terminate employment without notice.

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Portugal




3. RESIGNATION 237








In Portugal, protection against dismissal comes from the PortugueseConstitution (Article 53 et seq.) (the ‘Constitution’) and the Portuguese LabourCode (Article 351 et seq.) (the ‘Labour Code’).

As a general principle, an employer is not permitted to terminate an employment contract without ‘just cause’.

Certain categories of employees benefit from special legislative protection (seesection 2 below). If these individuals are dismissed, their dismissal is presumedto be without just cause (i.e. unlawful).

As long as the legal requirements are met (notably in relation to procedure andgrounds for dismissal), the employer may dismiss an employee.


2.1 DiscriminationAn employer is expressly prohibited from dismissing an employee for discriminatory reasons, notably based on political, ideological, ethnic or religious grounds, even when the employer invokes a different reason.

There is a general principle of non-discrimination, applicable to both employees and job candidates. According to this principle, an individual cannot be discriminated against on the basis of, among other things, birth,race, sex, religion, opinion or any other personal, social or political circumstances. Both direct and indirect discrimination are prohibited underPortuguese law.

According to Portuguese law:

• Direct discrimination occurs when a person is treated less favourably thanother people in a similar situation for reasons of, for example birth, race orsex.

• Indirect discrimination occurs when an apparently neutral provision, criterion or practice may cause harmful effects on a person, unless the provision, criterion or practice can be objectively and reasonably justified.

• Harassment is considered to be a form of discrimination.• An instruction to discriminate is also deemed to be a form of

discrimination.

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• the need for a reduction in personnel for economic, technical or organisational reasons (i.e. resulting from ‘objective causes’), not related tothe employee’s conduct.

The provisions only apply when a certain number of employees are to be maderedundant within a three-month period. The qualifying number of employeesvaries, depending on the size of the organisation:

Number of employees Size of the organisationto be dismissedAt least 2 Between 2 and 50 employeesAt least 5 More than 50 employees

2.9 OtherThere are no other relevant protections.

3. RESIGNATION

Generally, a resignation cannot be regarded as a dismissal.

The employee is entitled to terminate his or her employment contract with faircause should the employer breach either the contract or the employee’s rights,as set out in law.


4.1 Grounds for dismissal In general, an employer is not permitted to terminate an employee’s employment without ‘just cause’, nor is it permitted to fire an employeebecause of his or her poor performance, unless there is an abnormal reductionin the employee’s productivity and the necessary disciplinary procedure hasbeen followed.

Generally, just cause arises as a result of the intentional behaviour or acts ofan employee that, because of their seriousness, make it immediately and practically impossible for the employment relationship to continue.

The following types of behaviour or acts constitute ‘just cause’ for a dismissal:


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2.2 AgeThere is no specific protection for employees in relation to age.

2.3 Length of service and fixed-term contractsThere is no specific protection for employees in relation to length of serviceand fixed-term contracts.

2.4 Part-time work and career breaksThere is no specific protection for employees in relation to part-time work andcareer breaks.

2.5 Pregnancy and child careAn employer is prohibited from dismissing pregnant employees, employeeswho have recently given birth, who are breastfeeding, or who are takingparental leave. If there are grounds for a fair dismissal, the Commission forEquality (the ‘CITE’) must be consulted prior to the dismissal taking place.

2.6 CarersThere is no specific protection for employees who require leave to care for others.

2.7 Employee representativesThe dismissal of candidates for trade union associations, or employees whoare, or have been, members of such bodies within the last three years is considered unlawful.

2.8 RedundancyIn relation to dismissals occurring as a result of job terminations (i.e. if therequirements for a collective dismissal exist but the threshold is not reached),factors such as an employee’s length of service in the same post, in the specific professional field and within the organisation, must be considered inorder to determine which employees are to be made redundant.

A collective dismissal occurs when the employer, on its own initiative, terminates a certain number of individual employment contracts, dependingon the size of the organisation.

The terminations can occur simultaneously or successively over a period ofthree months and must take place for one or more of the following reasons:

• a final closure of the organisation• a closure of one or more departments within the organisation

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Upon termination of the employment contract, the employer must deliver alabour certificate to the employee, indicating the date that he or she commenced work, the date of termination and the post(s) that he or she occupied within the organisation. In addition, the employer must deliver certain other official documents to the employee, including those required bysocial security law.

4.4 Notification/consultation obligations In cases of dismissal on the grounds of just cause, once the disciplinary procedure has been followed, the process is notified to the workers’ committeeand, if the employee is a trade union representative, also to the respectivetrade union. These bodies may, within five working days, submit their opinionon the proposed dismissal. The opinion provided is not binding on the employer.

4.5 Duration of notice periodPortuguese law does not provide any particular notice period for a dismissal.

In relation to a dismissal based on the grounds of unsuitability for the job, theemployer must comply with the following notice periods:

• 15 days if the employee’s length of service is less than one year• 30 days if the employee’s length of service is at least one year but less than

five years• 60 days if the employee’s length of service is at least five years but less than

ten years• 75 days if the employee’s length of service is ten years or more.

If the employer does not comply with the notice requirements, the employment contract terminates at the end of the appropriate notice period,and the employer must pay the employee the remuneration corresponding tothat period.

The same notice periods apply to collective dismissals.

4.6 Treatment during notice periodDuring their notice period (in relation to unsuitability for the job), employeesare entitled to take the equivalent of two days’ paid leave per week to searchfor new employment. The employee may choose to spread this leave over thecourse of the working week.

Until the expiration of the notice period, the employer must employ and remunerate the employee.


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• unlawful non-compliance with orders given by the employee’s superiors• breach of other employees’ rights and guarantees • persistent disinterest in doing the job with the required level of care• making false statements to justify absences• an abnormal reduction in productivity.

If a dismissal is based on one of the grounds mentioned above, the employeris entitled to terminate the employment contract without paying the employee an indemnity or compensation.

In addition, the employer is entitled to terminate an employment contract ifthe employee is unsuitable for the job. Unsuitability may occur in the following situations:

• where there is a continued reduction in the employee’s productivity or quality of work

• where the equipment allocated to the job or used by the employee continually breaks down

• where the employee’s work endangers his or her own health and safety orthat of the other employees or third parties.

Unsuitability for the job may also occur in the context of complex technical ormanagerial positions if the employee fails to achieve the agreed objectives ofthe role because of his or her performance, provided that it is also practicallyimpossible for the employment relationship to continue.

4.2 PermissionsNo permissions are required for individual dismissals (except, as already mentioned in relation to pregnant employees, employees who have recentlygiven birth, who are breastfeeding, or taking parental leave).

4.3 Procedures A dismissal based on just cause must be preceded by a formal disciplinaryprocess whereby the employer must provide to the employee a written noticeof the reasons for dismissal (a ‘notice of offence’) and the employee must begiven the opportunity to respond to the stated reasons.

Once this process has been concluded and notified to the works council ortrade union (see section 4.4 below), the employer has 30 days to issue a noticeof its decision, otherwise the right to dismiss will expire. A decision to dismissan employee should be in writing and should set out the reasons for the dismissal. The dismissal statement becomes effective as soon as the employeereceives it.

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6.2 Void dismissals Failure to comply with the proper procedures may cause the dismissal to beinvalid and it could be declared void.

6.3 ReinstatementAs mentioned in section 6.1, if the dismissal is declared unlawful, the employermay be ordered to reinstate the employee. In most cases, the employee canchoose to receive compensation rather than be reinstated.

With regard to micro-undertakings (i.e. organisations employing a maximumof ten employees) or employees who hold management or director positions,the employer can oppose the reinstatement if it demonstrates that theemployee’s reinstatement would be severely detrimental and upsetting to theorganisation. If the court decides in favour of the employer, the amount ofcompensation is between 30 and 60 days’ basic salary, plus length of servicepayments for each full year of service (to a minimum of six months’ pay).


The right to sue is considered as a natural right while the employment contractis in force and therefore no waiver is possible during this time. However, underPortuguese law, after the dismissal has taken place, the parties are free toagree that the employee will not sue the employer.


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4.7 Payment in lieu of noticeThe employer cannot make a payment in lieu of notice, even in cases of collective dismissal or dismissal based on the grounds of unsuitability.

4.8 OtherThere are no other actions that the employer need take.


Gross misconduct (see section 4.1 above) entitles an employer to terminate thecontract without notice (as long as the legal procedure is complied with – seesection 4.3).


6.1 Sanctions for unlawful dismissal Any type of dismissal (notably a dismissal based on just cause) is unlawful if:

• it has not been preceded by the relevant procedure• it is based on political, ideological, ethnic or religious reasons, even if other

reasons have also been invoked• the reasons invoked to justify the dismissal are considered to be unlawful.

If the dismissal is declared unlawful, the employer may be ordered to:

• indemnify the employee for all harm (material and non-material) caused• reinstate the employee in his or her former position.

The employee is also entitled to receive the remuneration that he or she failedto receive from the date of the dismissal until the date of the court’s final decision.

In most cases, the employee can choose to receive compensation rather thanbe reinstated. The amount of compensation is between 15 and 45 days’ basicsalary, plus length of service payments for each full year of service, taking intoaccount the level of salary and the degree of unlawfulness. The amount ofcompensation cannot be less than the equivalent of three months’ pay.

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Russia




3. RESIGNATION 249








In Russia, general protection against dismissal comes from the provisions of theRussian Labour Code of 30 December 2001, the Federal Law on Employment,the Provision of the Russian Government for Procedures to Assist Employmentin Cases of a Collective Dismissal, and various regional and industrial agreements.

The Labour Code and other federal laws provide a complete list of circumstances in which the employer is entitled to conduct a dismissal. Whendismissing an employee the employer must justify its actions by proving certainlegally relevant facts (usually, there are a number of them) and following certain procedures (e.g. relating to notifications and severance payments).

The general principle is that protection is granted to all employees, althoughcertain employees are entitled to special protection against dismissal (see section 2 below). Under the Labour Code, the employer can terminate anemployee’s employment contract on one of the grounds expressly stipulatedby law (see section 4.1 below), if it is done in compliance with the relevant procedure (see section 4.4 below).

The law aims to protect employees against wrongful dismissals (i.e. those notbased on the grounds provided by law and/or in violation of the proceduresprovided by law) and to provide them with compensation in the event ofredundancy, liquidation of the organisation, or termination of an individualentrepreneur’s business activity. In general, all employees have the same levelof protection, although general directors (i.e. chief executive officers) have ahigher level of protection in terms of compensation. The amount of compensation paid to general directors in the event of a termination ofemployment in the absence of any wrongful acts or omissions on their part,should not be less than three average months’ salary.

In certain cases additional criteria should be considered by the employer. Forexample, the Labour Code provides that employees with a higher level of efficiency and qualifications should have priority in cases of staff redundancy.When choosing which employees to dismiss, if their efficiency and qualifications are identical, the employer gives preference to employees who:

• have a family, including two or more dependants• are the sole breadwinner within their family• have sustained a severe injury at work or suffered an occupational illness

while working for the employer

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• those employed after succeeding in a competition for a job, where the competition was conducted in accordance with all legal requirements

• those invited to work with the organisation as a result of a transfer from adifferent employer, under an agreement between the two employers

• graduates employed for the first time, within one year of graduating in their specialist field

• those elected to elective posts (i.e. certain public sector positions), provided that they receive remuneration

• those working under employment contracts with a maximum term of twomonths.

If the employment contract does not contain a trial period, the employee isemployed without needing to undergo probation.

As a general rule, the trial period cannot exceed three months, or six monthsfor the heads of organisations, their deputies, and chief accountants and theirdeputies.

See section 2.5 below with regard to female employees on fixed-term contracts.

2.4 Part-time work and career breaksThere is no special protection from dismissals for employees on part-time workor career breaks. Part-time work implies that the employee receives remuneration pro rata for the time he or she has actually worked. Part-timework does not lead to any restrictions of rights of employees with respect to,for example, the length of annual paid leave or the calculation of employmentrecords in comparison with full-time employees.

2.5 Pregnancy and child careThe Russian Criminal Code provides sanctions for unfair dismissal of a pregnant woman or a woman with a child under three years of age.

An employer cannot dismiss pregnant employees on their own initiative exceptif the organisation goes into liquidation or the business activity of an individual entrepreneur is terminated.

With regard to a pregnant employee with a fixed-term employment contract,it should continue until the end of her pregnancy. However, a pregnantemployee can be dismissed before the end of her pregnancy if (i) the effectiveterm of her employment contract ends during the pregnancy; (ii) the employment contract with the pregnant employee was concluded for a fixed


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• are disabled veterans• at the employer's request, are improving their qualifications while

continuing to work.


2.1 DiscriminationThe Labour Code provides for equal opportunities for all to exercise theiremployment rights. It prohibits any discrimination in the field of employment.During the recruitment process, an employer must only consider a job applicant’s professional qualities. Any reason for refusing to hire a job applicant that is not related to his or her professional qualities is deemed to beunlawful. In this respect, a job vacancy with specific requirements in relationto a particular age, sex, place of residence or appearance, is prohibited in law.

Discrimination against a job applicant on the grounds of his or her disability isprohibited. Under the Labour Code, organisations with 100 or moreemployees must comply with a specific quota for employing disabled personsthat is equal to a percentage of the average number of employees in theorganisation (but not less than two and no more than 4%).

2.2 AgeThe employer can dismiss employees under the age of 18 on its own initiativeonly with the consent of the relevant state labour inspectorate and commission for juvenile affairs and protection of their rights (except if it is anorganisation going into liquidation or an individual entrepreneur whose business activity is terminated).

No other protection exists in relation to age.

2.3 Length of service and fixed-term contractsDuring a trial period, each employee on probation enjoys the same rights asother employees, except with regard to termination of employment. Theiremployment can be terminated with three days’ notice and an explanation ofthe reasons for the dismissal.

A trial period is prohibited for certain categories of employees:

• pregnant women and women with children under the age of one and a half

• those under the age of 18

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term to enable the pregnant employee to cover for an absent employee; and(iii) the pregnant employee refuses to give her consent in writing to transfer toanother available job (e.g. a vacant position requiring the same or a lower levelof qualifications, or a lower-paid job), which she can perform in her state ofhealth. The employer must offer the employee all the vacancies available in therelevant area which meet the said requirements. The employer must offervacancies in other areas if there is a provision to this effect in the collectiveagreement, any other industrial, or regional or other relevant agreement or inthe employment contract.

Certain employees cannot be dismissed on the grounds of staff redundancy orreduction, failure to perform the work assigned to them because of insufficientqualification, a change in ownership of the organisation’s property, an unjustifiable decision that has resulted in damage to or illegal use of property(if the employee is the head of an organisation, branch or representative office,a deputy or chief accountant). These are:

• female employees who have a child under the age of 3• single mothers who have a child under the age of 14 (or under the age of

18 if they are disabled)• other employees bringing up a child under the age of 14 (or under the age

of 18 if they are disabled), if the child has no mother.

2.6 CarersThere is no protection against dismissal for employees who require leave to carefor others, beyond the general protections described above.

2.7 Employee representativesProtection against dismissal exists for members of trade unions and labour dispute commissions. When dismissing a trade union member on one of thespecific grounds provided by law, the employer should request the ‘motivatedopinion’ of the elected body of the primary trade union organisation, althoughits opinion is not binding on the employer.

2.8 RedundancyDepending on the intended number of employees to be dismissed, the dismissal may be considered as a collective dismissal. The exact thresholds forcollective dismissals are provided in agreements that are specifically related tothe particular industry sector and/or region. For example, the Tri-PartyAgreement between the Moscow Government, the Moscow trade union associations and the Moscow unions of manufacturers and entrepreneurs hasestablished that the following thresholds constitute a collective dismissal:

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• dismissal of employees if an organisation with 15 or more employees goesinto liquidation

• dismissal of 50 or more employees within 30 days as a result of staff redundancies or reduction



• dismissal of more than 25% of the organisation’s staff within one month.

Regional and/or industry sector agreements can stipulate additional criteria fora collective dismissal.

2.9 OtherThe employer cannot terminate at its initiative the employment of an employeewho is on sick leave or annual leave (unless the organisation is wound up).

3. RESIGNATION

A resignation can be considered as a dismissal (an unlawful dismissal) whenthe employee proves in court that he or she was made to resign under pressure (i.e. was not acting of his or her own free will).


4.1 Grounds for dismissal To avoid unlawful dismissals, employers should comply with the grounds fordismissal and dismissal procedures provided by law.

Under the Russian Labour Code, the employer may lawfully terminate employment on the following grounds:

• liquidation of the organisation or termination of an individual entrepreneur’s business activity

• staff redundancies or reduction (if the transfer of an employee to a different job with the employee’s consent is not possible)

• the employee’s unfitness for the work assigned to him or her, as evidencedby an assessment of the employee’s performance, because of insufficient qualifications, provided that it is impossible to transfer the employee (withhis or her consent) to another position more suitable to his or her qualifications within the same organisation


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As explained in section 2.2 above, prior to the employer initiating termination ofan employment contract with an employee under 18 years of age, it must obtainthe permission of the relevant labour inspectorate and the commission for juvenile affairs and protection of their rights.

4.3 Procedures Depending on the grounds for dismissal, there are specific legal requirementsas to the dismissal procedure. For example, if an employer dismisses anemployee for failing to fulfil the functions of the job, it must record the failurein writing and any disciplinary actions taken. If the employer dismisses anemployee on the grounds of insufficient qualifications, this fact should beproved by an assessment of his or her performance, and other requirementsstipulated by law must be met.

To terminate employment the employer must issue a special order (a standardised form stipulated by law) indicating the grounds for the dismissalwhich refers to the relevant provision of the Labour Code.

The employee must familiarise himself or herself with the employer’s order andsign it. If it is not possible to present the document to the employee, or if heor she refuses to sign it, a special note to this effect must be made on theorder.

In all cases, the date of termination of the employment contract is the last dayof the employee's work, except if the employee has not actually been workingand the job was left open for him or her under the Labour Code or anotherfederal law.

On the day of termination of the employment contract the employer settlesaccounts with the employee and hands over his or her work record book (adocument recording an employee’s employment history, including the groundsfor employment termination) as well as copies of other documents related tothe job.

4.4 Notification/consultation obligations As already mentioned, it is necessary for the employer to obtain the ‘motivatedopinion’ of the trade union’s elected body if it dismisses a trade union member on the grounds of redundancy, insufficient qualifications or persistentfailure to perform his or her duties, provided that he or she has undergone adisciplinary procedure. The opinion of the trade union is not binding on theemployer.


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• a change in ownership of the organisation’s property (in this case, the employer only has the right to terminate the employment contracts of thehead of the organisation, the deputy heads and the chief accountant)

• persistent failure by the employee to fulfil his or her duties, if the employee has already been subject to disciplinary procedures

• a single gross failure by the employee to perform his or her duties (e.g. truancy, appearing at work under the influence of alcohol, narcotics or other intoxicating substances)

• an employee whose job involves direct contact with the finances, property or other assets of the employer commits a breach of trust, for example, by theft

• an employee who is engaged in an educational role commits an immoral act that is incompatible with that role

• the head of the organisation (or a branch or representative office), the deputies or chief accountant make an unjustifiable decision that results indamage to property, illegal use of property or other damage to the organisation’s property

• a single gross failure by the head of the organisation (or a branch or representative office) or his deputies to perform their duties

• an employee submits forged documents to the employer when concludingthe employment contract

• situations stipulated by the employment contract with the head of the organisation or members of the collective executive body

• other reasons stipulated by the Labour Code and federal laws.

In some cases, the employer must offer the employee any other vacant position available which corresponds to his or her state of health. Only if thereare no such vacant positions or the employee refuses to take the job(s) offeredcan the employer carry out the dismissal.

4.2 PermissionsThe employer must obtain the prior consent of the respective senior elected bodyof the primary trade union organisation to dismiss the head (or one of thedeputies) of (i) an elected collective body the primary trade union organisation, or (ii) an elected collective body of a trade union organisation of abusiness unit in the company, if the head or deputy is also required to work asan employee. If no such senior elected trade union body exists, the dismissal procedure takes place in the same way as for ordinary trade union members, i.e.the employer must request the trade union’s ‘motivated opinion’ but will not bebound by it (see section 2.7).

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Minimum notice periods to be observed by the employee are:

• two weeks’ notice if the employee resigns on his or her own initiative • one month’s notice if the employee is head of the organisation • three days’ notice if the employee is a temporary worker (i.e. works under

an employment contract with a maximum term of two months) or a seasonal worker.

The law also provides for specific notice periods for certain professions andother cases.

The employee has the right to resign without notice if it is impossible to continue working (e.g. because he or she is retiring or has been admitted toan educational institution) or because the employer has violated labour legislation, local acts, or the employment contract.

The parties may agree to terminate the employment contract before the noticeperiod expires.

4.6 Treatment during notice periodDuring the notice period, the employer and employee’s rights and responsibilities as stipulated in the employment contract remain in force. Theemployee must perform his or her duties and the employer must remuneratethe employee.

If the employee resigns of his or her own free will, he or she reserves the rightto withdraw the resignation at any time until the date that the notice periodexpires. If this happens, the resignation is ineffective unless another employeehas been offered and has accepted the job in writing and the employer cannot, by law, refuse to hire him or her.

An employee has the right to stop working upon expiry of the notice period.However, if an employment contract is not terminated when the notice periodexpires and the employee does not insist on resigning, it remains in force.

4.7 Payment in lieu of noticeIn the case of liquidation or redundancies, the employer can terminate anemployee’s employment contract with his or her written consent before thetwo-month notice period expires. The employer must pay additional compensation to the employee amounting to his or her average earnings calculated pro rata for the time remaining until the date that the notice period expires.


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The dismissal can take place within one month after the trade union providesits ‘motivated opinion’.

In the case of planned redundancies, the employer must submit a written notification of its intention to the trade union’s elected body no less than twomonths in advance, or three months in advance if such redundancies may leadto a collective dismissal.

Under the Provision of the Russian Government for Procedures to AssistEmployment in Cases of a Collective Dismissal and the Federal Law onEmployment, the employer must also notify state bodies of a planned collective dismissal. It must provide the state employment service with certaininformation related to every employee who is going to be dismissed, no lessthan two months in advance. If the redundancy is likely to lead to a collectivedismissal, notice to the state employment services should also be made threemonths in advance (i.e. there will be two notices: one being three months andanother being two months, in advance).

4.5 Duration of notice periodUnder the Russian Labour Code, the following minimum notice periods mustbe observed by the employer:

• three days’ notice for termination of a fixed-term employment contract because its term is expiring (if the employer does not notify the employeein a timely way and the latter continues to work, he or she is considered to be working under a permanent employment contract)

• three days’ notice for termination of the employment contract during a trial period (both on the employer’s or employee’s initiative)

• two months’ notice for liquidation of the organisation or for redundancies.The employer must notify all employees personally by presenting them with written notification. The employees confirm their familiarisation withthe notification by signing it. Seasonal workers require seven days’ noticein such circumstances and temporary employees (working under an employment contract with a maximum term of two months) require threedays’ notice.

There is no legal requirement with regard to notice periods for termination ofemployment on the initiative of the employer other than those describedabove when dismissing employees working under a permanent contract. Suchterms can be provided in the employer’s local acts (e.g. the staff handbook),and in the employment contract.

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If the state labour inspectorate finds the dismissal unlawful, it issues theemployer with a binding injunction to reinstate the employee in his or her position and pay compensation for the whole period of forced absence fromwork.

The employee may request the court to limit its decision only to an award ofcompensation.

At the employee’s request the court may decide to change the wording of thegrounds for the dismissal to wording that is more beneficial for the employee,for example, depending on the circumstances of the case that could be ‘theemployee resigned of his or her own will’ or ‘the employment contract terminated as a result of the expiry of a fixed term’ (if the term expires by thedate of the court hearing).


Any waiver by the employee of his or her right to sue is void. Both the employer and the employee may agree by mutual consent to terminate theemployment at any time. The parties can conclude a termination agreementcontaining provisions relating to both their interests. The agreement on termination of the employment by mutual consent can be revoked only withthe parties’ mutual consent.


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4.8 OtherThe employer must issue a company order upon dismissal of the employee;make all relevant entries in the labour book; and pay all sums due to theemployee.


Generally, no notice period is required for dismissals, except in the circumstances already described in section 4.5 above.


6.1 Sanctions for unlawful dismissal As already mentioned, pregnant women and women with children under theage of three can be dismissed on the employer’s initiative only if the organisationgoes into liquidation. If the employer breaches this provision, it may face criminal liability in the form of a fine of up to EUR 5,000 (RUB 200,000).Alternatively, the individual responsible for the dismissal may face paying a fineamounting to 18 months’ salary (other income may be taken into account), orhe or she may be ordered to perform between 120 and 180 hours’ compulsoryservice.

In addition, the dismissal of employees in connection with a collective labour dispute or the calling of a strike, is prohibited. A breach of this kind may resultin the imposition of an administrative fine of EUR 100 – 125 (RUB 4,000 – 5,000).

6.2 Void dismissals A dismissal can be declared void both by the court and the state labour inspectorate. For a dismissal to be lawful, it must be made on lawful groundsand the relevant party must observe statutory procedures.

6.3 ReinstatementIf the court decides that the dismissal was unlawful, the employee must be reinstated at his or her request. Cases concerning reinstatement must be considered and resolved within one month, therefore, the court must make itsdecision quickly. The employee is awarded compensation for the duration ofthe period of the forced absence from work (under duress). The amount of this compensation is generally calculated according to the employee’s average remuneration for the previous 12 months of his or her employment. Theemployee can also be awarded compensation for any moral harm suffered, ifhe or she brought a claim for this.

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Spain




3. RESIGNATION 261








Protection against dismissal comes from Article 35 of the Spanish Constitutionand Article 4 of the Workers’ Statute. All employees have exactly the samelevel of protection. However, managers and executives are subject to the provisions of the Royal Decree 1382/85 of 1 August 1985. The dismissal of amanager is unrestricted (without cause), but usually the amount of the payment in lieu of notice and the severance payment are very high.


2.1 DiscriminationShould a dismissal be based on any of the discriminatory grounds foreseen inthe Spanish Constitution or be a violation of the fundamental rights of theemployee, it will be considered void by Spanish Courts.

Spanish law also considers the dismissal of a woman suffering gender violencewho asks for a reduction in her working time, geographical mobility or the suspension of her employment relationship to be void.

2.2 AgeIn Spain, there is specific legal protection against dismissals based on the ageof employees. When an employee reaches 65 years old, the applicable collective bargaining agreement may allow for his or her mandatory retirementas long as the company adopts measures aimed at promoting employment.

2.3 Length of service and fixed-term contractsUnder Spanish law, trial periods are limited to:

• six months for employees in technical posts, holding a university degree• two months for other employees (this becomes three months in

organisations with fewer than 25 employees).

The length of trial periods is often varied by collective agreement.

During the trial period, which must be confirmed in writing, an employee onprobation enjoys the same rights as other employees except with regard to termination of employment, which may take effect at the request of eitherparty.

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2.6 CarersSpanish law protects those employees who ask for a work reduction so as to takecare of disabled persons who are unable to perform any remunerated activity.

The same protection applies to those employees who ask for a work reduction inorder to take care of their closest relatives who, by reason of age, sickness or accident need special care. The relatives must not perform any remunerated activity.

2.7 Employee representativesEmployee representatives enjoy special protection against dismissal and mustbe the ‘last out’ in collective redundancies. Other than that, there are no general provisions or customs that apply to them.

2.8 RedundancyArticle 51 of the Workers’ Statute defines a collective dismissal as one where,within 90 days, a certain (minimum) number of employees are dismissed inproportion to the total number of employees within the organisation:

Total number of employees Number of employees dismissedLess than 100 10 or more100 to 300 10% or moreMore than 300 30 or more

In a collective dismissal, factors such as an employee’s age, length of service,personal circumstances and other criteria are taken into account when deciding which employees are going to be made redundant.

Senior executives cannot be treated as part of a collective redundancy.

2.9 OtherSpanish law does not provide any other relevant rules.

3. RESIGNATION

If the employer commits a serious breach of the employment contract, theemployee is justified in bringing a claim for compensation for unfair dismissal.Serious breaches on the part of the employer include:


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If an employee is affected by a temporary disability, maternity-related issues,adoption or becoming a foster parent while on probation, the trial period isinterrupted. This is permitted provided that there is mutual agreementbetween the parties concerned.

During a trial period either party may terminate the employment contract, verbally or in writing, without any requirement to give reasons.

2.4 Part-time work and career breaksIn Spain, there is no specific protection for part-time employees.

If an employee’s career is interrupted by a voluntary or forced career break,there are several levels of protection.

The break is ‘forced’ when the employee is chosen to perform services in thePublic Administration. The employee will be entitled to be readmitted in his orher former job during all of the period of time in the Public Administration andhis or her level of seniority must be respected. In the month after the employee leaves the Public Administration, he or she will need to ask for re-admission to the original post.

Those employees with at least one year of seniority in the organisation may askfor voluntary leave of between four months and five years. In these cases, theemployee only has the right to the reinstatement should there be a vacancy inthe organisation in a similar professional category.

2.5 Pregnancy and child careSpanish legislation gives special protection to pregnant women and recentmothers in that their dismissals are considered void if no adequate reasons areprovided to the court. The protection covers the following:

• pregnant women• women during maternity leave, ‘pregnancy risk’, ‘breastfeeding risk’,

sickness related to maternity, natural breastfeeding or adoption• women during the first year of leave to take care of children • recent mothers until the child is nine months old fathers on paternity leave

until the son is nine months old• fathers on paternity leave until the son is nine months old• women who have asked for a work reduction to take care of children until

the child is eight years old.

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• harassment on grounds of race, religion or faith, opinions, age or sexual orientation against the employer or the people working within the organisation.

In all of the instances listed above, there is no entitlement to a severance payment and the dismissal may be made summarily. However, a formal written notice must still be served.

Objective dismissalTermination with notice cannot be arbitrary and must be justifiable. TheWorkers' Statute distinguishes four categories of justifiable ‘objective’ groundsfor dismissal:

• the incapacity of the employee arising after a trial period has elapsed• the employee’s failure to adapt to technical modifications in the job,

provided that these are reasonable and have been in use for more than two months (the employee must have received up to three months’ retraining)

• the need to eliminate particular jobs on the grounds of technology, economics, or organisational productivity and efficiency (but only where the number of employees affected is below that which would lead to a collective dismissal)

• absences from work, even where they are justified but intermittent, whichreaches 20% of working days in two consecutive months, or 25% in fourseparate months within a period of 12 months, provided that the total absence rates of staff in the workplace exceed 2.5% in the same time periods.

If an employee does not attend work for any of the following reasons, his orher non-attendance will not be counted as an absence:

• participation in a legal strike• pursuit of legal representation for workers• injury in an accident at work• maternity leave, suspension of contract for risk during pregnancy and

breastfeeding, illness during pregnancy, childbirth or breastfeeding, or parental leave

• annual leave• illness or injury in an accident outside the workplace provided the absence

has been approved by the official health services and lasts for more than 20 consecutive days, or the absence is caused by the physical or psychological results of violence and has been approved by the social services or health services, where appropriate.


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• substantially and unilaterally modifying the employee’s working conditionswhere these modifications have serious and adverse effects on the employee

• defaulting in paying the employee’s agreed remuneration, or continuouslydelaying payment

• any other serious breaches by the employer of its contractual obligations,except those caused by ‘force majeure’.

In such a case, the employee must apply to the labour court for termination ofthe employment contract. The employer must pay a severance payment forunfair dismissal, which amounts to 45 days’ wages per year of service, up to amaximum of 42 months’ wages.

In the case of an employee’s resignation without cause, he or she must givenotice to the employer in accordance with the relevant collective agreement oremployment contract, or in accordance with the common practice of theorganisation (in general, this is 15 days). If the employee does not give notice,he or she must pay compensation to the employer.

In Spain, should an organisation not wish to readmit an employee after voluntary leave and indicates that there is no position in a similar professionalcategory or does not respond, this is considered to be an indirect dismissal. Inthis situation, the employee may claim for dismissal.


4.1 Grounds for dismissal

Disciplinary dismissalCommon grounds for a disciplinary dismissal (otherwise known as a ‘summarydismissal’) are serious breaches of contract on the part of the employee, suchas:

• unjustified and persistent lateness or absenteeism• insubordination or lack of discipline• insulting/mistreating fellow employees or the employer• habitual abuse of alcohol/drugs if it affects performance• lack of loyalty, fraud or abuse of confidence• continued and deliberate decline in the normal output of work• carrying on his or her own business or working for another

organisation/person without the employer’s consent (i.e. where he is eithercompeting with the organisation or is in breach of a non-compete clause)

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4.6 Treatment during notice periodDuring the notice period the employee must work, but the employer usuallymakes a payment in lieu of notice in order to end the employment relationship.

In the case of an ‘objective’ dismissal, the employee is entitled to paid leave ofsix hours per week during the notice period in order to look for alternativeemployment.

4.7 Payment in lieu of noticeIn general, if the employee or the employer does not respect the notice period, a payment in lieu of notice must be made.

As already mentioned in section 4.6 above, the employer usually makes a payment in lieu of notice in order to end the employment relationship duringthe notice period.

4.8 OtherThere are no other actions that employers need take in relation to dismissals.


Dismissals for gross misconduct do not require the employer to give notice.


6.1 Sanctions for unlawful dismissal An unfair dismissal occurs when the reasons or grounds given for dismissing theemployee are found to be untrue, or when the procedural requirements havenot been complied with.

In cases of unfair dismissal, the labour court judge must order that the employeebe reinstated. In the event that the employer chooses not to reinstate theemployee, the labour court judge must specify the amount of compensationto be paid to the employee. If the employee is an employee representative, theemployee may elect whether he or she wants to be reinstated or receive compensation for the dismissal.

The statutory severance payment is 45 days’ salary per year of service up to amaximum of 42 months’ salary. Periods of service of less than one year arepaid on a pro rata basis.


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If a dismissal takes place for ‘objective’ reasons, a severance indemnity is calculated at 20 days’ pay per year of service, up to a maximum of 12 months’pay.


4.3 Procedures The employer is required to give to the employee:

• a written notice of dismissal• a company certificate (‘certificado de empresa’) and documents relating to

social security contributions (these documents are sent directly to the Public Employment Service electronically)

• a draft document certifying final settlement of sums owing to the dismissed employee (‘finiquito’)

• a severance payment, payment of outstanding salary and other monies owed to the employee.

The employee should sign the finiquito receipt, although this is not compulsory.Usually, this is used as evidence of termination of the employment relationship.The employee may request that an employee representative be present duringthis procedure.

Collective bargaining agreements may establish other formal requirements fordismissals.

In a disciplinary dismissal, if the employee is an employee representative, an‘adversary’ proceeding must take place in which, in addition to the employeeconcerned, the rest of the members of the representative body to which theemployee belongs have a right to be heard. In a disciplinary dismissal, if theemployee is a member of a trade union, the employer will first hear from thedelegates of the relevant section of that trade union.

4.4 Notification/consultation obligations The employer is required to bring to the attention of the Workers’ Committeethe documents referred to in section 4.3 relating to the termination of the contract.

4.5 Duration of notice periodIn the case of an ‘objective’ dismissal, the notice period is 15 days. Note thatthere are no notice periods for disciplinary dismissals.

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6.2 Void dismissals Under Articles 55.5 and 55.6 of the Workers Statute, the following dismissalsare void:

• a dismissal motivated by one of the discriminatory grounds prohibited by the Spanish Constitution or by law (i.e. sex, civil status, age, race, sexual orientation)

• a dismissal which violates the fundamental rights and political freedoms ofthe employee

• a dismissal of an employee during the suspension of his or her employmentagreement as a result of maternity or paternity leave, adoption or a fostercare placement

• a dismissal of a pregnant employee as of the start of the pregnancy until the beginning of the maternity leave, even if the employer does not knowabout the pregnancy at the time of the dismissal

• a dismissal of an employee who has requested permission to breastfeed ora reduction in working hours in order to care for a minor under the age ofsix or a disabled person

• a dismissal of an employee within a period of nine months of him or her returning to work after a contract suspension period related to maternity,adoption, foster care or parental leave

• a dismissal of an employee who is a victim of gender violence who exercises his or her right to reduce or reorganise work, to move his or herlocation of work or to suspend the employment contract

• a dismissal of an employee who has requested leave to care for a child under the age of three or to care for a family member, within nine monthsof the date of birth or adoption.

6.3 ReinstatementAs already mentioned in section 6.1 above, a finding that a dismissal is voidresults in the immediate reinstatement of the employee with back-payment ofany lost salary.

If the employer does not comply with the judge’s order to reinstate the dismissed employee, he or she is entitled to additional compensation of up to15 days’ wages per year of service, up to a maximum of 12 months.


Generally, the right to sue cannot be waived. The employer and the employee maysign a document in which they agree to a valid termination. However, the courtsusually rule that this document is in itself not enough to waive the right to sue.

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Sweden




3. RESIGNATION 273








Swedish legislation on protection against dismissal is primarily contained in theEmployment Protection Act (SFS 1982:80) (‘Lagen om Anställningsskydd’, the‘LAS’). However, further provisions on employment protection may also befound in:

• the Public Employment Act (SFS 1994:260)• the Co-Determination Act (SFS 1976:580)• the Employment Promotion Act (SFS 1974:13)• the Trade Union Representatives Act (SFS 1974:358)• the Parental Leave Act (SFS 1995:584)• the Discrimination Act (SFS 2008:567).

The LAS includes a number of provisions relating to termination of employment contracts, for example, the notice procedure and other formalrequirements. The LAS applies to employees in both private and public organisations, although there are specific statutory provisions that apply to thestate sector. The following employees, however, are excluded from the provisions of the LAS:

• employees whose duties and conditions of employment are such that theymay be deemed to occupy a managerial or comparable position

• employees who are members of the employer’s family• employees employed to perform work in the employer’s household• employees who are employed to work with special employment support,

in sheltered employment, or in development employment (note that ‘development employment’ is employment that can be offered to individuals with a physical, mental or intellectual impairment).

The LAS applies to all employers, except if there are specific legislative provisions to the contrary. In contrast to, for example, German law whichexempts employers with no more than five employees, the LAS applies to verysmall undertakings. Additionally, the legal provisions on redundancy dismissalsapply regardless of the number of employees subject to dismissal.

Specific groups of employees enjoy additional protection against dismissal (e.g.employees with reduced working capacity, employees on parental leave andunion representatives; see section 2 below).

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2.5 Pregnancy and child careIf an employee who is on parental leave is given notice of dismissal by reasonof redundancy, the period of notice will start to run when the employee hascompletely or partially resumed work or when the employee would haveresumed his or her work (as set out in the notice of parental leave that applieswhen the notice of termination is given).

2.6 CarersAn employee must be granted leave if someone in the family suddenly becomesill or has an accident and it is necessary for the employee to be with the familymember immediately. The employer is prohibited from dismissing the employeefor taking leave on these grounds.

2.7 Employee representativesUpon termination by reason of redundancy, if a trade union representative isimportant to the union work at the workplace, he or she must be given priority for continued work.

2.8 RedundancyA collective agreement may stipulate certain deviations from the order of priority rules (see section 4.1 below in relation to order of priority rules).

Employees whose employment has been terminated as a consequence ofredundancy, have rights of priority for re-employment in the organisation inwhich they were previously employed (see section 4.1 below in relation torights of priority). The right to re-employment, however, is contingent uponthe employee having been employed by the employer for a total of more thantwelve months during the last three years or, in the case of a former seasonalemployee’s right to re-employment for new seasonal employment, six monthsduring the past two years, provided that the employee is sufficiently qualifiedfor the new employment.

2.9 OtherThere are no other special considerations.

3. RESIGNATION

If an employee has been provoked by his or her employer into giving notice,this may be considered equivalent to notice of dismissal or summary dismissalby the employer.


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2.1 DiscriminationThe employer cannot terminate an employment (including the employment ofa probationary employee) on discriminatory grounds.

Further, an employee who has reduced working capacity and who has, therefore, been given special duties by the employer must, in accordance withthe LAS, be given priority for continued work, notwithstanding the rules onpriority, provided this can be accomplished without serious inconvenience tothe employer.

2.2 AgeUnder the order of priority rules (see section 4.1 below), if two or moreemployees’ length of service is equal, priority is given to the older employee(s).This applies regardless of the number of employees subject to dismissal.

According to the Discrimination Act the dismissal of an employee by reason ofhis or her age is not permitted. However, employers subject to the LAS areentitled to terminate an employment relationship when the employee reachesthe age of 67.

2.3 Length of service and fixed-term contractsThe LAS permits probationary employment for a period of not more than sixmonths and either party to a probationary employment contract is entitled toterminate it during this period. Neither the employer nor the employee needsto give any reason for termination. The employer cannot, however, terminateemployment on discriminatory grounds.

2.4 Part-time work and career breaksEntitlement to leave for study purposes is governed by the Educational LeaveAct. According to this Act, all employees who fulfil the basic requirement ofsix months of employment are entitled to leave for study. The leave is withoutpay and no maximum time period is prescribed. Employees who have beenemployed for at least six months are also covered by the Right to Leave toConduct a Business Operation Act, which entitles them to a maximum of sixmonths’ leave in order to start their own business. However, the business mustnot be in competition with the employer’s business.

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coverage. If employees have an equal length of employment, priority is given tothe older employee. An employee who is entitled to receive a new job must,however, have sufficient qualifications for the new position in question.

An organisation with no more than ten employees may exempt a maximum oftwo employees from the order of priority requirements, if they are of particularimportance to operations. When calculating the number of employees withinthe organisation, the employees referred to in section 1 above are not included,that is, employees whose duties and conditions of employment are such thatthey may be deemed to occupy a managerial or comparable position.

If notice of termination is given for reasons relating to a specific individual, it isconsidered to have occurred on personal grounds. All notice of termination forpersonal reasons made by the employer must be based on objective grounds andthe burden of proof lies with the employer. It requires a rather serious act of misbehaviour or gross misconduct of some kind by the employee in order tomake it possible for the employer to terminate the employment. Isolatedinstances of misconduct, provided that they do not involve gross negligence,have in many cases been deemed not to constitute grounds for dismissal by theLabour Court.

Before an employer initiates a termination for personal reasons, it must normally make a clear statement to the employee that he or she has neglectedhis or her duties under the employment contract. Further, the employer mustmake it clear that the employee’s negligence cannot be tolerated and that, ifcontinued, the employer may consider terminating the employment contract.Such a statement, notification and/or warning, could be made verbally, but itis preferable that it should be in writing.

If the employer invokes personal reasons for a termination it is required that atleast one reason for the termination has come to the employer’s knowledgewithin two months of the commencement of the termination procedure, inother words, the employer should initiate actions within two months after theemployee has misbehaved. If the employer can show at least one instance ofmisbehaviour or gross misconduct within these two months, previous misbehaviour or acts of gross misconduct can also be invoked.

As already mentioned, objective grounds for notice of termination do not existwhere it is reasonable to require the employer to provide other work for theemployee within the organisation. However, this obligation is much more limited when it is a question of termination for personal reasons than for redundancy.


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4.1 Grounds for dismissal Termination with notice can be on the grounds of redundancy or for personalreasons relating to the employee.

Note that an employee can give notice of termination of the employment without specifying the reason(s).

Notice of termination by the employer must be based on objective grounds.Objective grounds for notice of termination do not exist where it is reasonableto require the employer to provide other work for the employee within theorganisation. The employer must first investigate whether there are any vacantpositions for which the employee is sufficiently qualified. This obligation alsoextends to vacant positions in other geographical locations. There is, however,no obligation to offer relocation in other companies within a corporate groupsince the relocation obligation only applies to the legal entity where the employee is employed. There is no obligation to establish new positions in orderto avoid dismissal.

As a matter of principle, redundancy and shortage of work constitute objectivegrounds for dismissal. Redundancy is the common denominator for all groundsfor termination other than those related to personal reasons. Redundancy covers not only situations where there is no work for employees (e.g. because ofa cutback in operations) but also in other cases if the decisive considerations areof a purely business nature. The employer may, for example, close down a business regardless of whether it is profitable or not, or restructure the businessas a result of new technology or the use of contracted-in employees. The courtsdo not examine business considerations made by organisations which lead tocutbacks in operations, including reduced workforce, unless there is reason tosuspect that a dismissal is not caused by business considerations in the senseenvisaged by the LAS, but is for personal reasons (i.e. a fictitious redundancy).

The employer enjoys considerable freedom to terminate employment for business reasons. The selection of employees to be terminated is, however, strictly regulated.

Under the order of priority rules, employees with a longer period of employmenthave priority over employees with a shorter period of employment, referred toas the ‘last-in-first-out’ principle. Based on the aggregate period of employmentwithin the organisation, a seniority list is drawn up for each unit and for eachgroup of employees who belong to the same area of collective agreement

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Number of employees affected Time limits for notificationby the terminationsUp to 25 employees 2 months before the cutback25 to 100 employees 4 months before the cutbackMore than 100 employees 6 months before the cutback

The notification to the Employment Service is not a prerequisite for the terminations to be lawful, but failure to do so can render an obligation to paydamages to it.

The notification to the Employment Service must contain the same informationas the trade unions are entitled to, in writing, although it does not need tocontain information about the method of calculating potential severance payments.

A trade union has the right to negotiate with an employer on all questionsregarding the relationship between the employer and an employee who is amember of the trade union. This general negotiation right applies even if thetrade union and the employer are not bound by a collective agreement. If anemployer is bound by a collective agreement, the employer must on its owninitiative enter into negotiations with the trade union(s). These so-called ‘primary negotiations’ must be initiated before the employer makes any decision regarding significant changes in the business or to the working andemployment conditions for employees who belong to the trade union. Suchchanges in the business include redundancy dismissals or a transfer of anundertaking or a part of one. Employers not bound by a collective agreementmust also call for primary negotiations regarding questions of redundancy dismissals or a transfer of an undertaking. In this case, the employer must initiate negotiations with every trade union which has members at the workplace.

In a redundancy situation, the employer must, in connection with the primarynegotiations, present the following information to the trade union(s) (seeDirective 75/129/EEC):

• the reasons for the planned dismissals• the planned number of employees affected and the categories (white and/or

blue collar workers) they belong to• the number of employees normally employed and the categories (white

and/or blue collar workers) they belong to• the planned time period during which the dismissals are to be carried out• the method of calculating potential severance payments that will be paid in

addition to any monies owed under the provisions of collective agreementsor the law.


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Further, under Directive 2001/23/EC (formerly 77/187/ EEC and 98/50 EC) andthe LAS, a transfer of an undertaking, a business or a part of a business does notby itself constitute objective grounds for giving notice of termination of employment. This does not, however, prevent an employer from giving notice oftermination as a consequence of commercial, technical or organisational reasonsthat include changes to the workforce.

4.2 PermissionsThe employer is not required to obtain any permission prior to carrying out a dismissal.

4.3 Procedures The employer must give the employee notice of dismissal in writing, but a failure to do so will not make the notice void. However, it may entitle theemployee to bring a claim for minor damages. In the notice of dismissal, theemployer must state the procedure to be followed by the employee if he orshe wishes to bring a claim for damages as a consequence of the dismissal. Ifthe cause of termination is redundancy, such notice must also state whetheror not the employee has a right of priority for re-employment.

The notice of termination should state that the employment is terminated forpersonal reasons. It should also state the notice period and what the employee should do if he or she wishes to contend that the termination isunlawful and bring a claim for damages. However, failure to perform these formal requirements will not make the dismissal unlawful.

The employer must inform the employee in writing of the planned terminationtwo weeks before written notice of termination is given (and notify theemployee’s trade union if the employee in question is a member of such anorganisation.

4.4 Notification/consultation obligations If there is a plan to reduce the number of employees by more than five persons,or if the reduction will supposedly result in more than 20 dismissals during a period of 90 days, the employer must notify the Employment Service (a specialpublic authority). Under the Act concerning certain Measures to PromoteEmployment, notification must be given within certain time limits, which aredetermined according to the number of employees affected by the terminations.The time limits are as follows:

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4.7 Payment in lieu of noticeEmployees are entitled to pay and other benefits during the period of notice.Any payment in lieu must be at least equal to this amount.

4.8 OtherNote that there is no requirement under Swedish law to uphold a social plan.


Termination without notice (i.e. summary dismissal) is possible in rare situationswhere the employee has grossly neglected his or her duties towards theemployer. The seriousness of the circumstances serves as guidance when theemployer is determining whether termination with notice or summary dismissal should be considered.

An employee may resign from his or her employment with immediate effect ifthe employer has, in a material respect, failed to fulfil its obligations to theemployee.


6.1 Sanctions for unlawful dismissal An employer that is in breach of the formal and substantial provisions of the LASmay be held liable for both compensatory and punitive damages. Reinstatementis also a remedy under the LAS (see section 6.3 below). Maximum compensatorydamages are determined according to the employee’s total length of service:

Aggregate period of employment Maximum compensatory damagesLess than 5 years 16 months’ salary5 to 10 years 24 months’ salary10 years or more 32 months’ salary

However, compensatory damages cannot be calculated on the basis of a greaternumber of months than have actually been worked with the employer. Wherethe employee has been employed for less than six months, the amount must correspond to six months' pay.

Further, the compensatory damages will in most cases be less than the maximumdescribed above, since they are calculated based on the employee’s actual lossof income during the period of unemployment. If the dismissed employee earns


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4.5 Duration of notice periodUnder the LAS, employers must observe the following notice periods:

Aggregate period of employment Notice period Less than 2 years 1 month2 to 4 years 2 months4 to 6 years 3 months6 to 8 years 4 months8 to 10 years 5 monthsMore than 10 years 6 months

A collective agreement may stipulate different notice periods to the ones setout above.

Under the LAS, the notice period that employees must observe is one month.Deviations from this statutory notice period can, however, be made either bythe relevant collective agreement or the individual employment contract. Ifemployees leave their employment without observing the required notice period, they can be held liable to pay compensation to the employer for lossor harm caused (although this is not very common).

4.6 Treatment during notice periodAn employee who has been given notice is entitled to retain pay and otheremployment benefits during the period of notice, notwithstanding that theemployee is not assigned any duties, or is assigned duties that differ fromthose previously performed.

Where the employer has stated that the employee need not be available forwork following notice of termination or need only work for part of the periodof notice, any income earned by the employee from other employment duringthe same period may be deducted by the employer from benefits payable bythe employer. The employer is also entitled to deduct income that it is clear theemployee could have earned from other suitable employment during this period.

An employee who has been given notice of termination may not be transferred to another locality during the period of notice if his or her opportunity to seek new employment is thereby not insignificantly diminished.

An employee who has received notice of termination is also entitled, duringthe period of notice, to reasonable leave of absence from the employmentwith full employment benefits in order to visit an employment agency or otherwise seek work.

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an income from new employment, he or she is not entitled to damages for financial loss (except to the extent that he or she continues to suffer loss becausethe salary from the new employment is lower). Punitive damages are limited toapproximately EUR 13,000 (SEK 120,000).

There are no criminal sanctions relating to employment protection against dismissal.

An employee who is laid off is entitled to the same pay and other benefits as ifhe or she had been allowed to continue working. However, this does not applyif the lay-off is a consequence of the seasonal nature of the work or the fact thatthe work is otherwise inherently irregular.

6.2 Void dismissals Where an employee has been summarily dismissed or given notice of dismissalfor personal reasons, the notice or summary dismissal may be declared invalidupon the application of the employee.

6.3 ReinstatementAs mentioned above (see section 6.1) reinstatement is also available under theLAS if the employee has been summarily dismissed or been given notice of dismissal for personal reasons. If the employer refuses to reinstate the employeein accordance with a court decision, the employment ceases as a result of thisrefusal. Instead, the employer will be required to pay compensatory damagesto the employee. The maximum compensatory damages are determined inaccordance with the employee’s total length of service (see section 6.1).


It is not possible for an employee to waive his or her right to sue.

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Switzerland




3. RESIGNATION 287








In Switzerland, protection against dismissal is mainly derived from Articles 334to 340(c) of the Swiss Code of Obligations (the ‘CO’).

Additional provisions protecting employees against dismissal can be found inother Acts, such as the Federal Act on the Equal Treatment of Women andMen (the ‘ETA’).

Under Swiss law, all employees are protected equally against dismissal at animproper time, unfair notice of termination and unjustified dismissal withoutnotice (see section 5 below).

There are no specific protected classes of individuals, as the provisions of theCO are generally applicable to all contractual relationships between employerand employee.

Generally, a notice of termination may be deemed unfair if it is given for oneof the following reasons.An inherent characteristic of the employee (such as age, race or sex), unlesssuch characteristic relates to the employment or negatively impacts on

• The employee exercises a constitutional right, unless the exercise of such right violates a duty of the employment relationship or significantly impairsco-operation within the enterprise.

• The employee asserts, in good faith, his or her rights arising from the employment relationship (in which case a notice of termination would beconsidered an act of retaliation), or the employer seeks to frustrate the enforcement of claims of the employee deriving from the employment contract.

• The employee performs compulsory military or civil service.• The employee is a member of an employees’ association, or refuses to be

a member of such an association, or the employee lawfully performs a union activity.

• The employer fails to comply with its consultation obligations in connectionwith a mass dismissal.

Further, the employer is by law restricted from giving notice of termination during certain time periods. The relevant ‘restricted periods’ are as follows:

• during an employee’s pregnancy and for the first 16 weeks following childbirth

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2.6 CarersThere is no specific protection for carers beyond the general principles set out insection 1 above.

2.7 Employee representativesAs mentioned in section 1 above, generally, notice of termination may bedeemed unfair if it is given because the employee is a member of an employees’ association, or refuses to be a member of such an association, orthe employee lawfully exercises a union activity. There is no specific protectionbeyond this general principle.

2.8 RedundancyA notice of termination constitutes a collective dismissal if it is given by theemployer for economic reasons (i.e. reasons unrelated to the personal attributes of the employees) within a period of 30 days and it affects a certainminimum number of employees in proportion to the total number (of employees):

Total number of employees Number of employees to be dismissed

More than 20 but fewer than 100 10 or moreMore than 100 but fewer than 300 10% or more300 or more 30 or more

2.9 OtherThere are no specific protected classes of individuals, as the provisions of the COare generally applicable to all contractual relationships between employer andemployee.

As mentioned in section 1 above, a notice of termination may be deemed unfairif it is given because the employee performs compulsory military or civil service.

3. RESIGNATION

An employee can lawfully resign by giving notice at any time, effective as perthe expiry of the notice period.

There is no concept of ‘constructive dismissal’ under Swiss employment law.The termination of employment must be express and is typically made in writing. It is, however, possible to terminate the employment contract and atthe same time offer new employment with modified terms and conditions.


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• during the time an employee is prevented from working by reason of illness or accident (i.e. a period of 30 days in the first year of service; 90 days from the second to the fifth year of service inclusive; and 180 days asfrom the sixth year of service)

• during compulsory military or civil defence service of more than 11 days, and for four weeks prior to and following such service.


2.1 DiscriminationAs mentioned above, generally, notice of termination may be deemed unfair ifit is given for qualities inherent in the other party’s personality (such as age,race, gender or origin), unless such characteristics relate to the employment orsignificantly impair co-operation within the organisation. Further, the ETA provides for specific protection against dismissals based on gender.

2.2 AgeGenerally, employees are protected against dismissal by reason of an inherentcharacteristic of the employee (such as age, race or sex), unless such characteristic relates to the employment or negatively impacts on co-operationon an operational level. There is no specific protection beyond this generalprinciple.

2.3 Length of service and fixed-term contractsUnless otherwise agreed in writing, the first month of a permanent employment contract is considered as the trial period.

During the trial period, the employment relationship may be terminated at anytime with seven days’ notice, although the parties may agree in writing on adifferent notice period.

2.4 Part-time work and career breaksThere is no specific protection beyond the general principles set out in section1 above.

2.5 Pregnancy and child careAs mentioned above, a female employee is protected against dismissal duringthe ‘restricted period’, which is during pregnancy and for 16 weeks followingthe birth. There is no specific protection beyond this general principle.

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employees are to be dismissed in the event of a collective dismissal. Furthermore, there is a general right for employees to be treated equally, especially in the event of collective dismissals. Selection criteria such as gender, race, nationality and ethnic origin are not admissible and violate the principle of equal treatment.

Generally accepted criteria used to determine which employees are to be dismissed are, for example, those in relation to the performance of theemployee or the organisation.

The employer’s notice of termination of the employment relationship is unfairif it is given in connection with a collective dismissal without prior consultationwith the works council or the employees themselves. An employer that givesunfair notice in the context of a collective dismissal must pay compensation ofup to two months’ salary per employee.

An employment agreement can end 30 days at the earliest after notificationof the intended collective dismissal (after completion of the consultation period) to the cantonal labour office. Consequently, if this notification is notcarried out correctly, a notice of termination is unlawful.

4.4 Notification/consultation obligations No notification/consultation obligations are required for individual dismissals.

With regard to collective dismissals, if the employer envisages a collective dismissal, it must consult with the works council or, if one does not exist, allemployees.

The consultation period begins with notification by means of the information letter described in section 4.3 above. During this period, the works council or theemployees themselves must have the opportunity to make suggestions on howto avoid the redundancies, limit the number of redundancies and alleviate theirconsequences. Although the employer is not obliged to follow any of the suggestions put forward, it does not comply with its consultation obligations ifthe final decision to dismiss the employees was taken prior to the conclusion ofthe consultation period.

Swiss law does not stipulate a minimum duration for the consultation period. By a recent decision of the Swiss Federal Supreme Court, five calendar days aredeemed not to be sufficient. In practice, a consultation period of between oneand three calendar weeks is regarded as sufficient.


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4.1 Grounds for dismissal In principle, provided that the relevant statutory or contractual notice period iscomplied with, the employer does not need to invoke a particular reason to terminate an employment relationship. However, the employee is protectedagainst termination at an improper time and against unfair termination. Furtherprotection is granted under the ETA (see sections 4.5 and 6.3 below).


4.3 Procedures Although not required by law for individual dismissals, it is recommended thatthe employer gives notice of termination in writing. Individual employmentagreements, collective bargaining agreements and company rules may alsostipulate that notice must be given in writing. The manner of giving notice oftermination must not violate the employee’s personal rights. The employermust inform the employee of certain social security issues related to the termination of employment. Except for collective dismissals, no governmentalagency or trade union board need be involved.

In relation to a collective dismissal, if the thresholds are reached, the followingprocedure applies:

• As a first step, the employer must provide the necessary information in writing to the employee’s representative body (i.e. the works council) or, ifone does not exist, all employees. The information letter must contain details on:- the reasons for the collective dismissal- the number of employees to be made redundant- the number of employees usually employed- the time period within which notification of the redundancies is to be

given.The employer must send a copy of the information letter to the relevant labour office.

• The employer must then have a consultation with the works council or theemployees (see section 4.4 below).

• Only after execution of the notification requirements can the employer terminate the employment relationships by giving notice to the employeesto be made redundant. However, the restrictions described in section 4.1 above (protection against termination at an improper time and unfair termination) must be taken into account when determining which

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4.7 Payment in lieu of noticeThe employer must pay the employee’s salary and keep the employee insuredfor the entire notice period, even if it releases the employee from renderingservices to the organisation.

4.8 OtherUpon the request of the employee, an employer must provide the reasons fora dismissal in writing.


For lawful reasons, both the employee and the employer may terminate anemployment relationship without notice at any time, with immediate effect.The employment contract may also be terminated with immediate effect after(ordinary) notice of termination has already been given. A lawful reason is considered to be, in particular, any circumstances under which the terminatingparty cannot in good faith be expected to continue the employment relationship. It is for the court to decide whether a lawful reason has beengiven. Unanimous legal commentary and case law indicate that only a seriousbreach that destroys mutual trust may be considered as a lawful reason (forlegal consequences, see section 6 below).



Unfair notice of terminationUnlike notice given by the employer during a restricted period, in principle, unfairnotice of termination is lawful. However, the party that unfairly gives notice oftermination must pay a penalty to the other party. The amount of the penalty isdetermined by the court and must not exceed an amount equal to the employee's wages for six months (or two months in the case of unfair notice oftermination in connection with a collective dismissal).

Unjustified dismissal without noticeIf the employer terminates the employment contract with immediate effect without lawful reason (‘unjustified dismissal’), the employee can bring a claim forcompensation equivalent to that which he or she would have earned if theemployment relationship had been terminated by observing the relevant noticeperiod or until the expiry of the specified term of employment. Furthermore, thejudge can order the employer to pay the employee a penalty of up to six months’salary.


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If the consultation with the works council or the employees themselves does notresult in a substantial reduction in the number of dismissals, after completion ofthe consultation period the employer must notify the relevant labour office inwriting of all the intended redundancies as a result of a planned collective dismissal. This notification to the labour office must include the results of theconsultation with the works council or the employees and a copy of this notification must also be sent to the works council or the employees.

4.5 Duration of notice periodUnless otherwise stipulated by written agreement in the contract, the noticeperiod is one month during the first year of service, two months from the second to the end of the ninth year of service and three months thereafter. Theemployment contract can contain the optional provision that the terminationdate is at the end of a month. A minimum notice period of one month mayonly be reduced by a collective employment agreement and only in relation tothe first year of service. As a general rule, the notice periods for the employerand the employee must not differ.

Length of service Statutory notice period1 year 1 monthBetween 2 and 9 years 2 monthsMore than 9 years 3 months

Unlike notice given by the employer during a restricted period (see section 1above), unfair notice of termination is lawful. The term of the employmentrelationship is not influenced by unfair notice of termination.

An employee can challenge notice of termination given by the employer byinitiating proceedings under the ETA, unless the employer can prove lawfulgrounds for the termination. The employee may ask to be provisionally reinstated for the duration of the proceedings. Alternatively, the employeemay claim compensation under the provisions relating to unfair notice of termination (see section 6 below).

4.6 Treatment during notice periodExcept in the case of immediate termination for lawful reasons, the employermust comply with the notice period required by law or agreed in the individual employment contract. In principle, the employer can release theemployee from his or her contractual obligations with immediate effect (gardening leave). However, it must still pay the employee’s full salary for thewhole notice period. The employment relationship continues until the relevantnotice period has lapsed.

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Severance payUnder Swiss law, the employer is not required to make a severance payment inthe event of dismissal. Although a provision exists under which employees overthe age of 50 and with at least 20 years’ service are entitled to severance pay,this provision is not particularly important in practice because it is substituted bybenefits granted by the (mandatory) company pension plan. However, severancepay may be stipulated in an individual or collective employment agreement.

6.2 Void dismissals Notice of termination given by the employer during a restricted period is voidand must be given again once the restricted period has expired. An employee's absence because of a serious illness may continue, but once therestricted period has expired, the employer may lawfully give notice.

If notice of termination is given a restricted period commences, and if thenotice period has not yet expired, the expiry of the notice period is suspendedand continues only after the restricted period ends.

6.3 ReinstatementSwiss law does not require the employer to reinstate a dismissed employee.However, under the ETA, during complaint procedures the employee may askto be provisionally reinstated for the duration of the proceedings.


During the course of the employment relationship and for one month after itterminates, the employee cannot waive any claims resulting from the mandatory provisions of law or a collective employment agreement. For example, the employee cannot waive the right to bring a claim for payment ofagreed compensation for any overtime that he or she has already worked.

However, an employment contract may be terminated at any time by mutualagreement between the employee and the employer by stipulating that a finalpayment is made to the employee. In practice, termination by mutual agreement is frequently used to settle outstanding issues after notice has beengiven. An agreement to make a final payment is permissible if, at a minimum,it includes payments resulting from the mandatory provisions of law or a collective employment agreement.

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Turkey




3. RESIGNATION 299








Protection against dismissal comes from Article 49 (the right and duty to work)of the Turkish Constitution and Article 18 of the Labour Law.

An employer must provide a ‘lawful’ or ‘justified’ reason to dismiss employeeswho are entitled to job security. Yet even for employees not entitled to jobsecurity, the employer should not dismiss them in bad faith. If it does so, theemployees can bring a claim against it for termination in bad faith.

By Article 18 of the Labour Law, if the employer has more than 30 employeesglobally, its employees benefit from job security if they:

• have been in an employment relationship with the organisation for more than six months

• are working under a permanent employment contract• are not considered to be an ‘employer representative’ who is authorised to

manage the entire organisation (e.g. a general manager) or his or her assistant

• are not an employer representative’s assistant who is authorised to manage the entire workplace and to recruit/terminate employees.

In addition to the above criteria, when dismissing an employee who is entitledto job security the employer only needs to consider those matters relating towhether the termination is lawfully established based on ‘justified’ or ‘lawful’grounds. Under the Labour Law, there are generally no additional considerations such as age or length of service that the employer must adhereto for individual dismissals.


2.1 DiscriminationAccording to Article 48 of the Constitution, each individual has the freedomand the right to work in the field of his or her choice.

In addition, the Labour Law and the Constitution prohibit an employer fromdiscriminating against an employee on the grounds of language, race, sex,political opinion, philosophical belief, religion and sect, pregnancy or any othersimilar reasons.

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2.6 CarersThere are no relevant rules.

2.7 Employee representativesThere are no employee representatives in Turkey.

2.8 RedundancyBy Article 29 of the Labour Law, a collective dismissal is considered to takeplace when a certain number of employment contracts are terminated withina 30-day period, depending on the size of the organisation:

Number of employees dismissed Size of organisation10 employees 20 to100 employees10% of all employees 101 to 300 employees30 or more employees 301 or more employees

2.9 OtherThere are no relevant rules.

3. RESIGNATION

A resignation is regarded as a dismissal when an employee is forced to resignby the employer. In that case the employee may bring a claim that he or shehas been forced to resign and the court may determine if this resignation isactually an unlawful dismissal.

If the resignation letter is handwritten by the employee, it will be harder forthe employee to claim that he or she was forced to resign by the employer. Noreference to a severance payment and/or a notification payment should bemade in the resignation letter or in the certificate of release and waiver, otherwise the resignation will be deemed a dismissal in the event of a dispute.


4.1 Grounds for dismissal By Article 18 of the Labour Law, if the employee is entitled to job security, a ‘lawful’ reason must exist in order to terminate his or her employment. The lawful reason must arise from the incompatibility of the employee with the jobor the behaviour or conduct of the employee when it is contrary to the standardsrequired by the organisation, workplace or the work itself.


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Additionally, except for biological reasons or reasons related to the nature ofthe job, an employer must not discriminate, either directly or indirectly, againstan employee in the conclusion, conditions, execution and termination of theemployment contract on account of his or her gender or maternity status.

Article 18 of the Labour Law expressly states those reasons that are considered not to be valid reasons for dismissal for employees entitled to jobsecurity (see section 1): an employee’s race, colour, gender, marital status, religion, political opinion or other similar reasons (such as union membership).

2.2 AgeCourt of Appeal decisions indicate that the employer can determine a reasonable age at which to dismiss/retire employees, provided that all employees are notified in advance and such retirement is carried out in a reasonable manner.

2.3 Length of service and fixed-term contractsBy Article 15 of the Labour Law, an employer and employee may agree toestablish a trial period preceding commencement of the employment relationship. This trial period must be stipulated in the employment contractand should not exceed two months. In contrast to general termination provisions, during the trial period the employee or employer may terminate theemployment contract without notice or compensation and without any particular cause. However, the employee’s rights relating to wages and otherbenefits for the days worked are reserved.

As already mentioned, the employee is not entitled to job security until theemployment relationship has existed for at least six months.

Note, however, if a certain number of employment contracts are terminatedwithin one month, then this is considered to be a collective dismissal and theemployer must then abide by the relevant provisions and procedure for collective dismissals (see sections 2.8 and 4.4 below).

2.4 Part-time work and career breaksUnless there are essential reasons for differential treatment, an employer mustnot discriminate between a full-time and a part-time employee.

2.5 Pregnancy and child careAn employer cannot dismiss a pregnant employee or an employee on maternity leave, unless the dismissal is for a reason unrelated to that employee’s pregnancy or maternity leave.

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In terms of termination for justified reasons (i.e. summary dismissal), see section5 below.

4.2 PermissionsUnder Turkish legislation, no permissions are required for individual dismissals.

4.3 Procedures By Article 19 of the Labour Law, an employer must provide a written termination notice explicitly stating the reason for the termination. A permanent employment contract cannot be terminated on the grounds of theemployee’s behaviour or productivity prior to hearing his or her defenceagainst the allegations. However, by Article 25(II) of the Labour Law (whichcovers termination as a result of the employee’s failure to act in accordancewith ethics and good faith), the employer reserves the right to terminateemployment.

By Article 20 of the Labour Law, an employee who has job security and whoseemployment is terminated, is entitled to bring a claim against the employerwithin one month after receiving notification of termination, stating that thereis no ‘lawful reason’ for termination. In such a case, the burden of proof is onthe employer to prove that the termination was lawful.

4.4 Notification/consultation obligations In Turkey, there are no works councils to be notified or consulted.

However, in the event of a collective dismissal, the employer must notify the representatives of the trade union, the relevant local directorate and the TurkishLabour Institution in writing at least 30 days in advance.

In addition, if there is a workplace trade union, following the above mentionednotification, a meeting will be held between the workplace trade union representatives and the employer to discuss the issues related to the preventionof collective dismissal, decreasing of the number of employees to be dismissedor minimising the negative effects of a collective dismissal.

4.5 Duration of notice periodBy Article 17 of the Labour Law, a permanent employment contract may beterminated with notice. The notice period is determined according to theemployee’s length of service, as follows:

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Duration of service Notice requiredLess than 6 months 2 weeks6 months to 1.5 years 4 weeks1.5 years to 3 years 6 weeksMore than 3 years 8 weeks

These are minimum notice periods and may be increased by the provisions ofindividual employment contracts.

As long as payment in lieu of notice is made to the employee, the employer isentitled to terminate the employment with immediate effect.

There is no notice period if the dismissal is for justified reasons (see section 5below).

4.6 Treatment during notice periodIf a dismissal is for a lawful reason, the employer must permit the employee toseek alternative work within business hours and within the notice period. Theemployee is entitled to take this time off without any deduction from his orher wages. The employee must be given no less than two hours off per dayand the employee may accumulate these hours and use them at one time ifhe or she so wishes. However, an employee wishing to use the accumulatedhours must inform the employer of the dates in advance.

If the employer does not permit the employee time off to seek new work orgives less time than stipulated by law, the employee must be reimbursed double the amount of his or her wages for the total time that he or she wasdeprived of.

4.7 Payment in lieu of noticeDuring the notice period, the employee must continue working, but it is customary for the employer to provide payment in lieu of notice in order tomore quickly conclude the employment relationship. In cases of payment inlieu of notice, all benefits which can be measured in monetary terms emanating from the employment contract and Labour Law must be paid inaddition to the salary.



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No wages are paid for the period during which the employee fails to report towork as a result of the suspension of his or her contract.

For immoral, dishonourable or malicious conduct or similar behaviour

• If, when the contract was concluded, the employee misled the employer by falsely claiming to possess qualifications or to satisfy requirements which are essential to the contract, or by giving false information or making false statements.

• If the employee is guilty of any statement or action constituting an offenceagainst the honour or dignity of the employer, or a family member of oneof his or her colleagues. Or if the employee makes groundless accusationsagainst the employer in matters affecting the employer’s honour or dignity.

• If the employee sexually harasses another employee within the organisation.

• If the employee assaults or threatens the employer, a fellow employee or afamily member of a colleague, or if he or she violates the provisions of Article 84.

• If the employee commits a dishonest act against the employer, such as a breach of trust, theft or disclosure of the employer’s trade secrets.

• If the employee commits an offence on the premises of the organisation and this offence is punishable by a prison sentence of at least seven days without probation.

• If, without the employer’s permission or a good reason, the employee is absent from work for two consecutive days, or on three working days in acalendar month, or twice in one month on the working day following a rest day.

• If the employee refuses, after being given a warning, to perform his or her duties.

• If the employee either wilfully or through gross negligence damages machinery, equipment or other articles or materials in his or her care, whether these are the employer’s property or not, and the damage cannot be offset by his or her monthly salary.

For force majeure

• Any event preventing the employee from performing his or her duties formore than one week is considered to be a force majeure.

• If the employee’s absence from work exceeds the notice period provided by Article 17 because he or she is taken into police custody or arrested.


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Under the Labour Law, there are two instances where dismissal without noticeis possible:

• dismissal during the trial period (as explained in section 2.2 above)• immediate termination for justified reasons (as explained below).

Termination for justified reasons (immediate termination)The employer and employees are entitled to terminate the employment relationship for ‘justified’ reasons with immediate effect without giving notice.The reasons that are considered to be justified are those provided by Article 25of the Labour Law.

By Article 26 of the Labour Law, termination for justified reasons must takeplace within six working days immediately following acknowledgement of themisconduct and, in any case, no later than one year after the misconduct. Thestatutory limitation of one year is not applicable if the employee has receivedmonetary gain from the misconduct concerned.

Immediate termination by employerIn the following circumstances an employer is entitled to terminate an employee’s employment with immediate effect:

For reasons of health

• If the employee has contracted a disease or suffered an injury as a result ofhis or her own deliberate act, carelessness or drunkenness, and as a consequence is absent for three successive days or for more than five working days in one month.

• If the Health Committee has determined that the harm suffered is incurable and unrelated to the performance of the employee’s duties. If theillness or accident is not the employee’s fault, but caused by reasons otherthan those described above, and in cases of pregnancy or childbirth, the employer is entitled to terminate the contract if the time needed for recovery from the illness or injury lasts for six weeks more than the noticeperiod provided by Article 17.

In cases of pregnancy or childbirth, the period mentioned above begins at theend of the maternity leave.

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• If, where wages have been fixed at a piece or task rate, the employer assigns the employee fewer pieces or smaller tasks than that which was originally agreed and fails to make good this deficit by assigning him or her extra work on another day, or if it fails to implement the conditions of the employment.

For force majeure

if this necessitates the suspension of work at the place where the employee isworking for more than one week, the employee is eligible to receive a severance payment, provided that he or she has been employed with theorganisation for more than one year.


6.1 Sanctions for unlawful dismissal By Article 21 of the Labour Law, if for no reason the employer terminates theemployment of an employee who has job security, the employee has the right tobring a claim for reinstatement within one month of termination. In this case, ifthe employer is not able to provide lawful or justified reasons, the court will conclude that the termination is unlawful and award the employee reinstatement within one month of his or her request. If the employee is not reinstated upon his or her request, compensation of between four and eightmonths’ wages must be given.

In addition to compensation, the employee is paid up to four months’ wages andother benefits for the period that he or she is not reinstated in work until thedate of the court’s final verdict.

If advance notice pay or a severance payment has already been paid to the reinstated employee, that figure is deducted from the amount of compensation.

In a similar way, the employee can bring a claim against the employer, statingthat the reason given by the employer was unjustified. In this case, if the courtfinds the employee’s claim to be reasonable, the lawfulness of the employer’sreason is examined by the court. The process explained in section 4.3 thenapplies.

6.2 Void dismissals The following grounds do not constitute a lawful reason for termination anddismissal of an employee on any of these grounds is considered to be void:


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In relation to terminations for justified reasons, including immoral, dishonourable or malicious conduct or similar behaviour, the employee is notentitled to a severance payment.

The employee may always bring a claim if the termination does not complywith the grounds cited above.

Immediate termination by employeeThe employee is also entitled to terminate the employment contract withimmediate effect and without giving notice on one of the following grounds:

For reasons of health

• If the performance of the work stipulated in the employment contract endangers the employee’s health or life for a reason which was impossibleto foresee at the time the contract was concluded.

• If the employer, its representatives or another employee are always near orin direct contact with the employee concerned and those individuals aresuffering from an infectious disease or from a disease which is not causedby the nature of the employee’s work.

For immoral, dishonourable or malicious conduct or other similarbehaviour

• If, when the employment contract was concluded, the employer misled theemployee by incorrectly stating the conditions of work, by giving false information or by making false statements concerning any essential pointof the employment contract.

• If the employer is guilty of any statement or action constituting an offenceagainst the honour or reputation of the employee or his or her family member, or if the employer sexually harasses the employee.

• If the employer forces or threatens the employee or his or her family member to commit an illegal act, commits an offence against the employee or his or her family member which is punishable by a prison sentence, or makes serious and groundless accusations against the employee affecting his or her reputation.

• If the employee was sexually harassed by another employee or by third parties within the organisation, but adequate measures were not taken, although the employer was informed of such conduct.

• If the employer fails to calculate or pay the employee’s wages in compliance with the Labour Law and the terms of the employment contract.

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• The employee is a member of a trade union or participates in trade unionactivities outside working hours, or within working hours with the employer’s consent.

• The employee is a trade union representative within the workplace.• The employee makes an application to administrative or judicial authorities

or participates in an existing procedure against the employer in order to make the employer fulfil its contractual obligations or those arising in lawagainst the employee.

• Terminations based on race, colour, gender, marital status, family obligations, pregnancy, birth, religion, political opinion and similar reasons.

• The employee fails to work during the periods when it is prohibited to employ female workers (i.e. during maternity leave).

• The employee is temporarily absent from work while he or she is recovering from an illness or accident.

6.3 ReinstatementAs already explained in section 6.1 above, the court may order the employerto reinstate an employee who has job security, if the dismissal is deemed notto have been made for lawful or justified reasons and is therefore void.However, the employer may choose not to comply with such an order andinstead pay compensation.


The employee may only lawfully waive his or her rights within the period thathe or she is entitled to exercise them. Therefore, there can be no waiver ofrights of the employee that it is not yet possible to determine. The employeemay bring a claim stating that the waiver of his or her right to sue is not whathe or she intended and that it was obtained under duress.

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United Kingdom




3. RESIGNATION 315








In the United Kingdom, there are two types of claim which can be brought byemployees on termination of employment:

• Wrongful dismissal – this is a common law claim that the dismissal was inbreach of the terms of the contract of employment.

• Unfair dismissal – this is a statutory claim focusing on the reasonableness of the employer’s decision to dismiss the employee or the way in which thedismissal was carried out.

Wrongful dismissalThe most common situation leading to a wrongful dismissal claim is theemployer’s failure to give proper or sufficient notice of termination of employment. See section 4.5 below for an outline of the minimum notice towhich an employee should be entitled.

Dismissal without notice is often called ‘summary dismissal’. Employment contracts often contain provisions for dismissal without notice in certain situations (e.g. insanity, insolvency, serious breach of the terms of the contract). See section 5 below. Dismissal without notice where the employer isnot entitled to do so, for example, because the employee is not guilty of thegross misconduct in question, constitutes a wrongful dismissal. An employeecan also claim wrongful dismissal where he or she resigns in response to a serious breach of contract by the employer, which can include a breach of theimplied duty of trust and confidence between employer and employee thatexists in all contracts of employment.

A wrongful dismissal entitles the employee to damages to compensate for thebreach of contract. These are calculated by reference to the employee’s contractual entitlement. The court or tribunal seeks to put the employee in thefinancial position he or she would have been in had the contract been honoured. The calculation therefore takes account of:

• the effects of taxation• mitigation (i.e. whether the employee has a new job)• the effect of accelerated receipt of lump sum compensation• specific contractual provisions (e.g. bonuses, commission or profit-related

pay).

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2.1 DiscriminationProtection against discrimination applies throughout the employment relationship, including on termination, and is based on the following ‘protected characteristics’: sex, marital status, gender reassignment, pregnancyor maternity, race, religion or belief, sexual orientation, age and disability.

There is no qualifying period of service required for bringing a tribunal complaint under the discrimination legislation, and no upper limit on the compensation recoverable.

Discrimination may take the form of direct or indirect discrimination, harassment or victimisation. Direct discrimination is less favourable treatmentof an individual because of a protected characteristic. The employer has nodefence of justification (except where the claim is one of age discrimination).Indirect discrimination occurs where on the surface, the employer treats individuals equally, but in reality a significant proportion of individuals whoshare a protected characteristic are disadvantaged. Such discrimination isunlawful unless the employer can justify it on objective grounds in the circumstances of the case.

Harassment occurs where the employee is subjected to unwanted conductrelated to a protected characteristic which creates a certain type of inappropriateenvironment. Victimisation occurs where an employee is subjected to a detriment because he or she has complained about discrimination, or helpedsomeone else to do so.

2.2 AgeThe dismissal of an employee on the grounds of age (including forcing anemployee to retire at a certain age) will be unlawful discrimination unless it canbe objectively justified as being a proportionate means of achieving a legitimate aim. See section 2.1 above.

2.3 Length of service and fixed-term contractsIn general (though not exclusively), in order to be entitled to protection againstunfair dismissal an employee must have one or more years’ continuous servicewith the same or an associated employer (although at the time of writing thegovernment has set out proposals that this should be increased to a minimumof two years’ service).

Most employees with less than one year’s continuous service are not protectedagainst unfair dismissal. This is the only period during which dismissal


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Where an employee is entitled to a long notice period, or has a fixed-term contract which does not allow for earlier termination, the damages can besubstantial, particularly where the case involves a senior employee entitled tobenefits such as bonuses and executive share options.

If disciplinary procedures are incorporated into the contract of employment,then failure to follow these on the employer’s part can amount to a breach ofcontract and therefore wrongful dismissal. The employee can claim for lossesincurred during the period by which the employment would have beenextended while the employer was following the correct disciplinary procedure.

Unfair dismissalAll employees who satisfy the relevant qualifying criteria have the right not tobe unfairly dismissed, regardless of the size of the undertaking in which theywork. There is no distinction in the UK between white collar and blue collarworkers.

The general protection against dismissal comes from s94 of the EmploymentRights Act 1996, which protects qualifying employees against unfair dismissal.An employee claiming unfair dismissal must first show that he or she has beendismissed. Dismissal includes:

• express dismissal• expiry of a fixed-term contract without renewal on the same terms• constructive dismissal (see section 3 below).

Express dismissal is usually clear, although sometimes the employer does notcommunicate the dismissal to the employee or does not specify when the dismissal is to take effect, in which case the employee will remain employed.Problems may arise if words or actions are ambiguous (e.g. if an employer dismisses by saying, ‘If you don’t like the job, you might as well go’). In unclearcases, tribunals look at all the circumstances and decide how a reasonableemployee would interpret the employer’s words or actions.

A claim for unfair dismissal focuses on the reasonableness of either theemployer’s decision to dismiss and/or the procedure followed by the employerin carrying out the dismissal. A dismissal which is in accordance with the termsof the contract of employment may nevertheless be held to be unfair.

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2.8 RedundancyWhere an employer proposes to dismiss 20 or more employees from the sameestablishment for reason of redundancy within 90 days or less, special rulesregarding collective dismissals apply. It must inform and consult with employeerepresentatives in advance. The consultation must start at least 30 days beforethe first redundancy dismissal takes place, or 90 days where 100 or moreredundancies are proposed. The consultation should take place with recognised trade union representatives, or alternatively with elected employeerepresentatives. The employer must give specific written information to therepresentatives, and consult ‘with a view to reaching agreement’ on specificissues, including how to avoid or reduce dismissals and how to mitigate theconsequences of dismissals. The penalty for failure to comply is up to 90 days’pay per affected employee.

2.9 OtherSee section 4.1 below for the full list of circumstances in which dismissal will beautomatically unfair.

3. RESIGNATION

A resignation could be regarded as a dismissal when it amounts to a constructive dismissal. To succeed in a constructive dismissal claim the employeemust show that the employer has committed a serious (or ‘repudiatory’)breach of contract, or is clearly intending to do so. The breach may occur byreason of a one-off act by the employer or a series of acts, which cumulativelybreach the contract in a fundamental manner.

The breach must be serious enough to destroy the employment relationship(e.g. a demotion, a change in duties, a failure to supply safety equipmentdespite frequent requests, or refusing to honour an agreement about pay).Breach of an implied term of the contract (e.g. the duty to maintain a relationship of trust and confidence with the employee) may also amount to arepudiatory breach. See section 1 above.

The employee must leave promptly and by reason of the employer's breach inorder to succeed in a constructive dismissal claim. Delaying and continuing towork without protest may ‘affirm’ the breach of contract, so that the breachlapses.


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protection does not apply. However, see section 4.1 below for a list of protected dismissals where it is not necessary to have one year’s service to beprotected against unfair dismissal.

Fixed-term contracts end after a specified period of time or on a specifiedexpiry date. A failure to renew or extend the contract amounts to a dismissal.

See section 4.3 ‘Redundancy dismissals’ below in relation to statutory redundancy payments, which must be calculated according to age and lengthof service.

2.4 Part-time work and career breaksDismissal of a part-time worker on grounds of their part-time status is considered to be an automatically unfair reason for dismissal. See section 4.1below.

Employees on career breaks that are not related to maternity, paternity, adoption or parental leave have no specific protection against unfair dismissalin the same way as fixed-term or part-time workers although, if dismissedunfairly, they will still be entitled to bring a claim of unfair dismissal if they haveone year’s continuous service.

2.5 Pregnancy and child careDismissing an employee for pregnancy or other pregnancy-related reasons isdeemed to be an automatically unfair reason for dismissal. See section 4.1below. It will also be an act of unlawful discrimination entitling the employeeto unlimited compensation.

2.6 CarersThe dismissal of an employee because they have made a statutory request towork flexibly will be automatically unfair. See section 4.1 below. An employeemay make a statutory request to work flexibly in order to care for a child under17 years old (or 18 if the child is disabled) or an adult over 18 who is in need ofcare. There is no minimum level of service required to bring a claim for unfair dismissal in such a case, although an employee must have 26 weeks’ continuousemployment in order to make a statutory request for flexible working.

2.7 Employee representativesThe dismissal of an employee that is related to that employee’s status as anemployee representative or membership or non-membership of a trade unionwill be automatically unfair. See section 4.1 below.

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In an unfair dismissal claim an employment tribunal (the only court that considers such claims) will address three fundamental issues:

• the reason or principal reason for the dismissal – see the five potentially ‘fair’reasons above. All other reasons would be unfair

• whether the employer acted reasonably in treating the reason for dismissal as sufficient grounds for dismissal

• whether the employer followed fair dismissal procedures.

It is recognised that different employers treat different situations in differentways. If the employment tribunal considers the decision to dismiss to fall outsidethe band of reasonable responses of a reasonable employer, the dismissal will bedeemed to be unfair.

4.2 PermissionsAn employer never needs to seek the permission of any statutory body beforedismissing an employee.

4.3 Procedures In a claim for unfair dismissal, once the reason for the dismissal is established,and assuming that it is not an automatically unfair reason, the tribunal goeson to determine whether the dismissal is fair or unfair, the key question beingwhether or not the employer acted reasonably in dismissing the employee forthe reason in question. The outcome largely depends on whether the employerfollowed the procedure appropriate for the type of reason for dismissal.

Minimum proceduresIn unfair dismissal cases employment tribunals will often take into account theCode of Practice on Disciplinary and Grievance procedures prepared by theAdvisory, Conciliation and Arbitration Service (ACAS). The Code is not legallybinding but if there has been an unreasonable failure to comply with it, anemployment tribunal has the power to adjust compensation by up to 25% – either upwards or downwards, depending on which party is at fault.

In cases of misconduct or poor performance, the Code obliges employers togather appropriate evidence, inform the employee of the concerns in writingand then hold a meeting during which the employee is given a fair opportunityto respond, before any disciplinary action is taken. The employee must begiven a right of appeal if he or she is dissatisfied with the decision. In relationto grievances, the Code encourages employers to explore ways of resolvinggrievances informally where appropriate. It provides for a multi-stage formalprocedure where this is not possible, involving a meeting with the employeeand a right of appeal from the grievance decision.


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4.1 Grounds for dismissal There are five ‘fair’ reasons for which an employee can be fairly dismissed:

• the employee’s capability or qualifications for performing work of the kind he or she was employed to do (capability and qualifications dismissals)

• the employee’s conduct (misconduct dismissals) • the employee’s redundancy (redundancy dismissals)• the employee could not continue to work in the position which he or

she held without contravention (either on his or her part or that of the employer) of a statutory duty or restriction

• some other substantial reason justifying the dismissal of an employee holding the position that he or she held (e.g. a business reorganisation).

In each case, it is not enough simply to have a fair reason for dismissal. Theappropriate procedure must also be followed (see 4.3 below).

Some reasons for dismissal are automatically unfair without a tribunal considering the second stage of reasonableness, and in most cases, no minimumlevel of service is required. Examples include:

• certain specified dismissals for health and safety reasons • dismissal for pregnancy or for pregnancy-related reasons• dismissal for asserting certain statutory rights• dismissal relating to union membership or non-membership • dismissal connected with a transfer of undertaking (however, the minimum

level of service is required)• dismissal for being a trustee of an occupational pension scheme • dismissal for being an employee representative for collective

redundancy/TUPE consultations, or for being a workforce representative under the Working Time Regulations 1998, or in connection with the European Works Council and information and consultation activities

• dismissal for refusing to forego rights under the Working Time Regulations 1998

• dismissal for refusing to forego rights as a shop or betting shop worker• dismissal for ‘whistle-blowing’• dismissal for asserting rights to the national minimum wage• dismissal for applying for flexible working rights• dismissal for being a part-time worker or a fixed-term employee.

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Misconduct dismissalsA tribunal will enquire whether the employer: genuinely believed in the guiltof the employee; had reasonable grounds to sustain that belief; and carriedout as much investigation as was reasonable at the stage at which it formedits belief.

The employer need not have conclusive direct proof of misconduct. A genuineand reasonable belief, reasonably tested, is sufficient.

Below are some guidelines for handling disciplinary misconduct dismissals:

• investigate the alleged or suspected misconduct objectively• constitute a disciplinary panel with different membership to the

investigation panel• ensure the employee is warned at all stages of the possible consequences• allow the employee to be accompanied at the disciplinary hearing by a

trade union representative or a fellow employee of his or her choice• inform the employee before the hearing of the details of the complaint(s)

made against him or her• at the hearing, allow the employee a chance to answer fully the allegations

made, allow the employee or representative to ask questions, explain his or her case and put forward mitigating factors that may have an effect onthe sanction

• where appropriate, allow the employee to call witnesses and consider allowing cross-examination by the employee or his or her representative

• ensure consistency as between employees with respect to sanctions imposed

• when deciding a sanction, take into account the work record, length of service, conduct during proceedings and objective seriousness of the offence

• provide a right of appeal with a panel independent of the investigation anddisciplinary panel and specify the appeal procedure to be followed

• take a very careful note of all investigations, disciplinary and appeal hearings.

Redundancy dismissalsEmployees who have been continuously employed by their employer for atleast two years are entitled to a statutory redundancy payment if they are dismissed on grounds of redundancy. However, an employee loses the right toa redundancy payment if he or she unreasonably refuses an offer of suitablealternative employment.


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The Code incorporates general principles of natural justice and good practicesuch as ensuring each stage of the procedure is completed without unduedelay, allowing the employee to be accompanied in formal meetings andensuring appeals are heard wherever possible by someone at a more seniorlevel in the organisation.

The procedures above are minimum standards, and the employer should alsoconsider the following, depending on the reason for the dismissal.

Capability and qualifications dismissalsThe employer is not obliged to show that its belief in the employee’s incompetence is correct, only that it had reasonable grounds for it and that ithad taken reasonable steps to verify its conclusions.

Capability dismissals generally fall into one of two categories: poor performance (e.g. because of incompetence) and failure to fulfil dutiesbecause of illness. If incapability is because of a mental or physical conditionsuffered by the employee, the employer must take care not to discriminateunlawfully on grounds of disability.

Fair dismissals based on capabilities or qualifications usually follow a progressive disciplinary procedure. The basic steps are:

• a careful, objective appraisal of the employee’s performance (and failures of performance), including explanation to the employee of the deficienciesand the standards to be achieved

• adequate warnings of the consequences of a failure to improve (verbal orwritten as appropriate, in accordance with the disciplinary procedure adopted and the stage reached)

• a reasonable opportunity to improve• reasonable support (e.g. further training) with a view to securing

improvement.

Failing to follow any of these procedural steps is likely to render the dismissalunfair.

If the employee still fails to meet the required standard, the employer shouldalso consider alternative employment more suited to the employee’s ability.There is no duty to create a new position, only to give reasonable consideration to whether there is scope for redeployment.

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Redundancy situations arise where: the business as a whole is closing down;the particular part of the business in which the employee worked is closingdown; the business is closing down in a particular location; or the businessneeds fewer employees to carry out the work that the particular employee isemployed to do.

Employees who are dismissed as redundant may also claim unfair dismissal (seeabove). Even if the employer can establish a genuine redundancy as the reason for dismissal, it might still be found to be unfair, for example, becausethe employer adopted an unreasonable method of selection, or failed toengage in adequate consultation with the employee.

To dismiss fairly for redundancy an employer must follow a fair procedure. Thiswill involve:

• warning about possible redundancies• consulting with the individuals likely to be affected• where appropriate, agreeing with the union or employee representatives

on objective non-discriminatory criteria for selecting those who will potentially be made redundant

• ensuring selection is fair and in accordance with the criteria• considering whether suitable alternative employment can be offered to

those employees selected for redundancy.

Before applying any selection criteria, it is important to identify the pool ofemployees to whom the criteria are to be applied. Consider:

• whether other groups of employees were doing similar work to the identified pool

• whether employees’ jobs are interchangeable• whether the redundant employee's inclusion in the pool is consistent with

his or her job • having established the pool, whether the pool was agreed with the union

(if appropriate).

Selection criteria must be non-discriminatory, objective and verifiable, and aswell as being reasonable in themselves, they must be applied in a reasonablemanner. ‘Last-in-first-out’ is objective and verifiable but may not address theemployer's business needs and is likely to discriminate on the grounds of ageand/or gender (younger workers and women, who are more likely to havetaken a career break, are likely to have shorter periods of service).

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An employee loses the right to a redundancy payment if he or she unreasonably refuses an offer of suitable alternative employment. The offermust be made before the end of the original employment, and it must takeeffect either immediately at the end of the original employment or after aninterval of not more than four weeks.

If the terms of the new contract differ from the original one, there is a statutory four-week trial period for the employee to decide whether the alternative employment is suitable. If the employee unreasonably decides thatit is not, he or she is not entitled to a redundancy payment. The reasonablenessof the employee's refusal is determined subjectively, taking into account theemployee’s point of view.

The amount of the redundancy payment is based upon the employee’s age,length of service and gross average wage. The basic calculation is:

• one-and-a-half weeks’ pay for each year of service when the employee wasnot below the age of 41

• one week’s pay for each year in which the employee was not below the age of 22

• half a week’s pay for any other years of employment.

The maximum ‘week’s pay’ for these purposes is currently £400, which meansthat the maximum possible statutory redundancy payment is currently£12,000. These maximum figures tend to be increased annually by the government.

Employees may be entitled to more generous redundancy/severance paymentsunder the terms of their contracts of employment. If an employee was notpaid the enhanced contractual redundancy pay to which he or she is entitled,there would be a claim for breach of contract in either the courts or theemployment tribunal.

Dismissals where it would contravene an enactment to allow the employee tocontinue to be employedThese dismissals are rare but occur where, for example, someone employed asa driver loses his or her licence. In such a case, the employer must considerwhether there is other suitable work available (although there is no need tocreate it).


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• If there is a notice provision in the contract of employment (whether written or verbal) then that will apply, unless it is less than the statutory minimum, in which case that minimum is substituted.

• In the absence of any contractual provision, a reasonable period of noticewill be implied into the contract that, depending on length of service andjob status, may be more than the statutory minimum.

• In a fixed-term contract, unless there is a provision for earlier dismissal bynotice, the contract will continue until the fixed term expires, even if the fixed term is for several years.

4.6 Treatment during notice periodEmployers often pay in lieu of notice if they do not want employees to workduring the period of notice or, if they have a contractual right to do so, placethe employee on ‘garden leave’, requiring the employee to stay at home.

4.7 Payment in lieu of noticeEmployers may wish to give a payment in lieu of notice if they do not wish anemployee to work during the notice period. Some contracts expressly allowpay in lieu of notice; others do not. If the contract permits pay in lieu, then todo so is not a breach of contract, but such payment will normally be subjectto tax.

If the contract does not say that the employer can pay in lieu, then the payment effectively amounts to payment in advance of damages for theemployer’s breach of the contractual notice provisions. It should, therefore,cover the value of any fringe benefits, commission and so on, which theemployer loses during the notice period. However, as such an action doesamount to a breach of contract by the employer, its rights under the contractfall away, and so any post-termination restrictive covenants will become unenforceable.

A payment in lieu of notice will generally be free of tax (up to £30,000) so longas the employee had neither an express nor implied contractual right to receiveit.



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Dismissals for some other substantial reason (‘SOSR’)Most fair dismissals for SOSR result from business reorganisations. The employermust prove the reorganisation is advantageous for the business, and must takeinto account its employees’ interests when considering whether it has a sound,good business reason for the dismissal.

Consulting with employees, negotiating with unions or employee representatives, providing incentives to accept the change, and allowing timefor employees to adapt are likely to go towards the reasonableness of a dismissal of an employee who refused to accept the change.

Other dismissals, which may amount to ‘some other substantial reason’include dismissal at the behest of third parties (e.g. customers), temporaryengagements and personality clashes.

4.4 Notification/consultation obligations In the United Kingdom, there is no obligation to notify or consult anyone otherthan the employee concerned, save in the context of collective redundancy dismissals where an employer proposes to dismiss 20 or more employees fromthe same establishment for reason of redundancy within 90 days or less. See section 2.8 above.

A redundancy dismissal is likely to be unfair if the individual employee has notbeen consulted. Consultation is needed so the employee knows the relevantfacts, can discuss possible alternative solutions and whether alternative employment is available.

Also, employees with one year’s continuous service at the time of dismissal canrequest a written statement of the reasons for dismissal. These must be provided within 14 days of the request and must contain enough informationfor the employee to know why he or she was dismissed. Failure to give written reasons, or providing untrue or inadequate reasons, enables anemployee to complain to an employment tribunal, which can award up to twoweeks' pay in compensation and make a declaration as to what it finds werethe reason(s) for the dismissal.

4.5 Duration of notice periodGenerally, an employee's entitlement to notice is as follows:

• After one month’s service, employees are entitled to statutory minimum notice. If they have less than two years’ service they are entitled to one week’s notice. After that, they are entitled to one week’s notice for each year of service up to a maximum of 12 weeks.

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6.2 Void dismissals See section 6.3 below.

6.3 ReinstatementIf a dismissal is unfair, the tribunal may order reinstatement or re-engagementof the employee, but this is very rare in practice. If it is ordered and the employer refuses to comply, additional compensation is owed. However, theemployer cannot be forced to take the employee back and the dismissal willnot be considered void.


Employees can waive their rights to bring a claim for unfair dismissal by wayof a compromise agreement, usually in return for money. There are certainstatutory requirements that must be met in order for such an agreement to belegally binding, including that the employee must have received legal advicefrom an independent qualified lawyer or other adviser permitted by statute.


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Most employment contracts provide for dismissal without notice in certain situations (e.g. serious or gross misconduct, insanity, insolvency and convictionfor an indictable offence).

Under common law, an employee may be dismissed for gross misconductwithout notice or pay in lieu, provided that the misconduct is so grave as to bea fundamental breach of the contract.

Dismissal without notice where the employer is not entitled to do so (e.g.because the employee is not guilty of the gross misconduct in question) constitutes wrongful dismissal, and would entitle the employee to damages tocompensate for breach of contract. See section 1 above.


6.1 Sanctions for unlawful dismissal An employee can make an application to an employment tribunal claimingunfair dismissal. The application should give particulars of the grounds of thecomplaint and generally must be received within three months of the employee’s effective date of termination.

In the event of a successful claim for unfair dismissal, the tribunal may order reinstatement or re-engagement of the employee if this is practicable in the circumstances, but this is very rare in practice. In most cases, the remedy awarded is compensation. This comprises a basic award (equivalent to a statutory redundancy payment – see section 4.3 above) and a compensatoryaward. The upper limit on the compensatory award is currently £68,400. Thecompensatory award is what the tribunal considers ‘just and equitable’ in all thecircumstances taking into account the employee’s losses since the dismissal, andlooking into the future. The employee is expected to mitigate his or her loss bymaking reasonable efforts to find a new job. Damages are not paid for injury tofeelings or in respect of loss arising from the manner of dismissal.

Various factors may go to reduce the unfair dismissal compensatory award. Forexample, the tribunal may make a percentage reduction to reflect the fact thatthe employee contributed to the dismissal by his or her own fault. Or, if the dismissal is unfair because the employer adopted an unfair procedure, the tribunal may reduce the award if the employee may have been dismissed in anyevent even if proper procedures had been followed.

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A Ius Laboris publication

Produced by the Individual Employment RightsInternational Practice Group

2nd EditionPrinted: November 2011

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