Termination of the employment contract

The provisions of the Labour Act stipulate that either the employer or worker may terminate the employment contract.

There are two basic way of terminating employment contracts:
1. Ordinary termination of an employment contract, and
2. Extraordinary termination of an employment contract.

The employer may terminate the employment contract subject to a stipulated or agreed notice period (ordinary dismissal), if there is a justified reason and for the following cases:

• if the need to perform a certain job ceases due to economic, technological or organizational reasons (business-related dismissal),
• if the worker is unable to properly fulfill his obligations from the employment relationship due to certain permanent characteristics or abilities (personally conditioned dismissal),
• if the employee violates the obligations of the employment relationship (dismissal due to hidden behavior of the employee) or
• if the worker was not satisfied with the probationary period (dismissal due to dissatisfaction with the probationary period).

An employer who terminated an employee through business-related dismissal may not hire another employee for the same jobs for six months from the date of delivery of the decision on the termination of the employment contract to the employee.
Before a regular termination due to the employee’s behavior, the employer is obliged to warn the employee in writing of the obligation from the employment relationship and indicate the possibility of termination in case of continued violation of this obligation, unless there are circumstances that make it unreasonable to expect the employer to do so.

The worker may terminate the employment contract in line with the stipulated or agreed notice period, without stating reasons.
The employer and the employee have a justifiable reason for terminating the employment contract concluded for an indefinite or fixed period of time, without the obligation to comply with the stipulated or agreed notice period (extraordinary cancellation), if due to a particularly serious breach of an obligation from the employment relationship or some other particularly important fact, while respecting all circumstances and interests of both contracting parties, continuation of the employment relationship is not possible.

The termination period is subject to the duration of employment and is stipulated by law, varying between two weeks for persons who have worked for less than one year to three months for persons whose employment has lasted for 20 consecutive years. The termination period starts on the date of delivering the notice of termination of the employment contract.

Severance pay
In case of ordinary termination of the employment contract, the worker is entitled to severance pay, the amount of which is based on continuous employment duration with the same employer. Severance pay may not be contracted, i.e., determined as an amount lower than the amount equal to one third of the average monthly salary that the worker earned immediately three months prior to termination of the employment contract, and multiplied by each completed year of work with the respective employer. Unless otherwise provided by law, collective agreements, rulebooks or the actual employment contract, the total amount of severance pay may not exceed six average monthly salaries earned by a worker in three months immediately prior to termination of the employment contract. The worker who has worked for the same employer for less than two years is not entitled to severance pay.