Termination of employment

Pursuant to the Labour Code, an employment relationship may be terminated:

• by agreement
• by notice of termination
• by immediate termination
• by termination within the probationary period[1]

Termination of employment within the probationary period

A probationary period is agreed between the employer and the employee primarily for the employer to test the employee’s professional abilities, in other words, to assess whether the employee meets the employer’s expectations for the job. On the other hand, employees use the probationary period to find out whether the work, place of its performance, financial remuneration and other working conditions suit them. The purpose of the probationary period is, among other things, to considerably simplify the possibility of unilaterally terminating the employment relationship. Both the employer and the employee may terminate the employment during the probationary period for any reason or without stating a reason. In such a case, the employment relationship is terminated upon the delivery of the notice of immediate termination during the probationary period to the addressee unless a later date is specified in the notice. However, the employer must be careful not to terminate the employment relationship immediately during the probationary period for reasons that are discriminatory, i.e. for reasons relating to the employee’s gender, age, sexual orientation, origin, health status, etc.

But there is one limitation on the employer’s part. The employer cannot terminate the employment relationship within the first 14 days of the employee’s temporary incapacity for work or quarantine.  By this regulation, the legislator seeks to prevent employers from trying to avoid their obligation to provide employees with wage compensation during the first days of incapacity for work. On the other hand, the probationary period is extended by the duration of all-day obstacles to work on the employee’s part. This prevents employees from intentionally trying to avoid termination of their employment by being on sick leave while still in the probationary period.  For the termination of employment during the probationary period to be valid, it must be made in writing. If this requirement is not met, such termination is disregarded by law. 

Employment termination agreement

An employment termination agreement is the preferred way to terminate an employment relationship with dignity. The employer and the employee may conclude it at any time and no reason is required. From a formal point of view, it is a relatively simple bilateral legal act that is not bound by almost any statutory requirements, as is the case with termination by notice or immediate termination. The employment is terminated by consensus of the parties on the date agreed by the parties, provided that this date may not be earlier than the date on which the agreement is signed. In addition to the joint expression of will to terminate the employment relationship, an arrangement on the date of termination of the employment relationship is the only element of the agreement envisaged by the Labour Code, which is very important with regard to the correct assessment of the consequences associated with the termination of the employment relationship. It is preferable to specify the moment of termination by indicating a particular date, but it can also be specified otherwise (e.g. the date of signing the agreement, the date on which entitlement to pension arises, the date of completion of certain work, etc.). If this date is not specified, the employment relationship is terminated upon the conclusion of the agreement.

Although the agreement does not have to specify the reasons for terminating the employment, it is still advisable, at least from the employee’s perspective, to indicate at least reasons of an organisational nature and reasons consisting in the health condition of the employee who can no longer perform previous work as the Labour Code links these to the right to severance pay. Not stating these reasons in the agreement is without prejudice to the right to severance pay, however, the employee is put in a position where he will be forced to prove the existence of these reasons in the event of a dispute with the employer. Stating a reason may also be relevant if the employee applies for unemployment benefit after the termination of the employment relationship because if the agreement does not specify any serious reason for terminating the employment relationship, the employee is entitled to an unemployment benefit of only 45% of the average monthly net wage. The employment termination agreement must be concluded in writing and each party must obtain one counterpart.

Notice of termination of employment

Termination of employment by notice is a legal act that can be used to terminate the employment relationship unilaterally both by the employer and the employee, i.e. also against the will of the other party to the employment relationship. This is precisely why this method of termination of employment is subject to stricter statutory requirements if the employment is terminated by the employer, which protects the employee as the weaker party to the employment relationship. The employer may terminate the employment relationship by notice of termination only for reasons defined by law, and these reasons may not be contractually expanded or narrowed. On the other hand, the employee may terminate the employment relationship by notice for any reason and also without stating a reason.

The employer may terminate the employment by notice for the following reasons:

• organisational changes consisting in the dissolution of the employer’s undertaking or part thereof
• relocation of the employer’s undertaking or part thereof
• the employee becomes redundant
• the employee loses the ability to perform his/her previous work because of an occupational accident, occupational disease or the risk of such a disease or because the maximum permissible exposure has been reached
• the employee’s long-term incapacity to perform his/her previous work
• the employee does not meet the prerequisites or requirements for the performance of the work for which the employer could immediately terminate the employment relationship with the employee and violation of an obligation arising from legal regulations relating to the work performed by the employee
• violation of the established regime of the insured person temporarily incapable of work

Moreover, the aforementioned reasons for termination by notice must always be reviewed in the context of whether the particular employee is not subject to a prohibition on termination by notice, i.e. whether the employee is in a protection period. If there is such a prohibition, the employment cannot be terminated by notice, and if the employer nevertheless does so, the termination by notice would be found invalid by the court. A notice of termination must always be made in writing and must be delivered to the other party to the labour relation. Otherwise, such a notice of termination is disregarded (it is treated as if it does not exist). The employment relationship is terminated not upon the delivery of the notice to the addressee but upon expiry of the notice period, which must be the same for both the employer and the employee – at least two months. The notice period commences on the first day of the calendar month following the delivery of the notice and terminates on the last day of the calendar month concerned.

Immediate termination of employment

Even in labour relations, there are situations where a problem arises that needs to be addressed immediately. Therefore, the Labour Code provides an exceptional measure that can be used to terminate the employment relationship immediately. Both the employer and the employee have the right to terminate the employment relationship immediately, but each only for reasons defined by law. The employment relationship is then terminated on the date on which the notice of immediate termination is delivered to the other party to the labour relation without exception.

The employer may terminate the employment immediately only in these cases:

• the employee has been convicted of a deliberate criminal offence and sentenced to an unconditional sentence of imprisonment
• the employee has breached his/her job duties in a particularly serious manner

The employee may terminate the employment immediately only in these cases:

• the employee can no longer perform his/her work without a serious threat to his/her health according to a medical certificate and the employer has not allowed the employee to perform some suitable alternative work
• the employer has not paid the employee’s wage, salary or compensation thereof within 15 days after the due date

Conclusion

If all the statutory requirements for the termination of employment are not met, the legal act in question may be declared invalid. However, the invalidity must be appealed to the competent court within a specified time limit. Both the employer and the employee may seek a declaration that the termination of the employment relationship and the claims arising therefrom are invalid. These are usually cases where an employee is served a notice of termination without the statutory requirements being actually met, especially where the employee receives the notice for other than a statutory reason or where the employment relationship is terminated orally and not in the form prescribed by law.

If you believe that you have been wrongfully terminated, you can apply to the court within two months of the date on which your employment relationship was to be terminated for a review of the validity of the termination by one of the above methods. However, the time limit is a lapse period, which means that the right ceases to exist after the expiry of the time limit and it is no longer possible to seek a declaration that the legal act terminating the employment relationship is invalid. It is therefore advisable to have the action for the annulment of the termination of employment drafted by experts to avoid losing the right to challenge its invalidity. We will be happy to provide you with the necessary legal assistance in this regard.

[1] Section 34(4) of the Labour Code provides for a special case of termination of an employment relationship and establishes the right to withdraw from the employment contract if the employee does not commence work on the agreed date, but the employer may withdraw only until the employee actually commences work (even if later than on the agreed date of commencement).

What issues do we typically handle for clients in relation to termination of employment?

• I believe my employment has been terminated unlawfully, what should I do?
• How to draw up a notice of termination of employment?
• Model notices of termination
• Confirmation of delivery of notice of termination and protection against invalid delivery
• Calculation of leave after termination
• Agreement on severance pay
• How to draw up an employment termination agreement?
• What is required to terminate employment during the probationary period?
• What is a lapse period?
• Expiry of the agreed term of employment
• Termination of employment due to the employee’s death
• Challenging the notice of termination
• What are the conditions for immediate termination of employment?
• When and under what conditions may the employer terminate an employment relationship?