The employment contract law specifies the circumstances in which the employer has the right to terminate an employment contract. The employer may terminate an employment contract only for an appropriate and serious reason.
Dismissal is only possible if the employee holds a permanent employment contract. An employee on a short term contract cannot be dismissed, unless a dismissal clause has been specifically agreed upon and included in the employment contract. A short term contract expires without any dismissal procedure when the tenure of the contract comes to an end, or when an agreed project finishes. An employment contract with a tenure of more than five years is an exception to this rule. An employee on such a contract may be dismissed at the end of five years on the same grounds and method as an employee who holds a permanent position.
The most common reasons for dismissal are the deterioration in the employer’s financial situation and/or the re-organisation of production which means that the employer no longer has enough work to offer. However, prior to any dismissal due to a decrease in workload, the employer is obliged to try to organise some other work or training for the employee.
The employer may also unilaterally change the nature of employment from a full-time position to part-time for financial reasons or due to re-structuring of production. However, to do this, the employer is required to apply the contractual period of notice.
A company may be fully or partially sold to a new owner. However, such acquisition on its own is not a sufficient basis for the dismissal of an employee. The reason for any dismissal must be legally grounded.
If an employer goes into liquidation, any employment contract, whatever its tenure, can be terminated by either party. Similarly, should the employer have become deceased both the employee and the parties to the estate of the deceased have the right to terminate any employment contract, regarless of its tenure. The right of termination of a contract must be used within three months of the death of the employer.
The employer may also terminate a permanent employment contract for reasons which originate from the employee. However any such reason must be appropriate and serious, such as gravely neglecting the duties stated in the employment contract or breaking the law. For example, the employer has the right to terminate an employment contract, where the employee continues to arrive significantly late for work after having been warned.
Nevertheless, employees cannot be dimissed unless they have been warned and, thus, been given the opportunity to change their behaviour.
The employee does not need any particular reason for terminating an employment contract.
Dismissal of an employee who is pregnant or on family leave
The employer may not terminate an employment contract for the reason that the employee is pregnant or if the employee is on family leave as specified by the law on employment contracts. Should an employer terminate the employment contract of a pregnant employee or an employee on family leave, the dismissal will be taken to have been caused by the pregnancy or the family leave, unless the employer can prove otherwise.
The employer may only terminate the employment contract of an employee who is on maternity leave, special maternity leave, paternity leave, parenting leave or on care leave, for financial or production-related reasons, if the employer ceases to operate as a business.