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:
• The need for a certain job ceases due to economic, technical or organizational reasons (business-related dismissal),
• The worker is not able to properly perform his or her employment obligations due to certain permanent characteristics or abilities (dismissal on personal grounds),
• The worker has violated employment obligations (dismissal due to misconduct by the worker), or
• The worker has not performed satisfactorily during the probationary period (dismissal due to dissatisfaction with probation work)

Business and personal grounds for a termination are allowed only if the employer is not able to reassign the worker to another job position. The employer who has dismissed a worker on business grounds may not employ another worker in the same job position for a period of six months after the dismissal.

Prior to ordinary dismissal due to the behaviour of the worker, the employer is obliged to caution the worker in writing of the obligation stemming from employment and to indicate the possibility of dismissal in case of continued violation of this obligation, unless there are circumstances due to which there is no justification expecting the employer to do so. Prior to ordinary or extraordinary dismissal on the grounds of behaviour by the worker, the employer is obliged to allow the worker to present his or her defence, unless there are circumstances due to which there is no justification expecting 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 worker have a justifiable reason to terminate the open-ended or fixed-term employment contract, without the obligation of complying with the stipulated or agreed notice period (extraordinary dismissal), if the reasons include a particularly serious breach of employment conditions or other important facts, circumstances and interests of both contracting parties, that the continuation of employment is not possible. The employment contract may be terminated in exceptional circumstances only within fifteen days from receiving information about grounds for which extraordinary dismissal is given.

Termination of employment contract, when unilaterally given by the employer, must be delivered to the worker in writing. The worker is entitled to submit a request for the protection of his or her rights within 15 days of receiving notice of dismissal. If employer does not comply with the worker’s request for protection of rights within fifteen days of submitting the submission request, the worker may request the protection of violated rights before the competent court within a further period of fifteen days.

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.