Employment law

• drafting and reviewing employment contracts, job descriptions, non-compete agreements and study contracts
• preparing and reviewing employer’s internal policies
• termination of the employment relationship: preparing termination by notice, termination with immediate effect and termination by mutual agreement
• enforcement of employment law claims in out-of-court negotiations and in employment actions

The three routes to terminating the employment relationship

Under Act I of 2012 on the Labour Code, an employment relationship may be terminated by mutual agreement, by termination by notice or by termination with immediate effect. The ground for termination must be clearly apparent from the reasons given, and the truth and the reasonableness of the ground relied upon in the terminating legal statement are to be proved by the party making that statement.

The employer is obliged to give reasons for its termination by notice. The ground may be one connected with the employee’s conduct in relation to the employment relationship, with the employee’s ability, or with the employer’s operations. These three categories are exhaustive: anything falling outside them is not capable of constituting a lawful ground for termination by notice.

Termination with immediate effect

This is available where the other party wilfully or by gross negligence commits a substantial breach of a material obligation arising from the employment relationship, or otherwise engages in conduct which renders the maintenance of the employment relationship impossible.

The time limit is strict: the right of termination with immediate effect may be exercised within fifteen days of becoming aware of the ground on which it is based, but at the latest within one year of the occurrence of that ground. Where a criminal offence has been committed, it may be exercised until the limitation period for criminal liability expires.

The time limits on which most cases founder

In employment law, delay alone may be decisive. The statement of claim must be lodged within thirty days of the communication of the employer’s legal statement where, among other matters, the claim concerns the unilateral amendment of the employment contract, the unlawfulness of the termination of the employment relationship, a legal consequence applied on account of the employee’s breach of obligation, or a notice to pay.

Other employment law claims become time-barred after three years; a claim for compensation for damage caused by a criminal offence becomes time-barred after five years or, where the limitation period for criminal liability is longer, after a period corresponding to that period. Limitation is taken into account by the court of its own motion.

For this reason, if you have received a termination by notice or a notice to pay, the first step is to record the date, not to dispute the matter.

Agreements alongside the employment relationship

The two characteristic agreements connected with the employment relationship are the non-compete agreement and the study contract. The Act regulates them separately, and in practice both are frequently drawn up defectively: with the non-compete agreement it is the consideration and the extent of the restriction, and with the study contract the duration of the undertaking and the repayment conditions, that give rise to subsequent dispute.

Frequently asked questions

I have been given notice. How much time do I have to act?

A statement of claim concerning unlawful termination must be lodged within thirty days of the communication of the legal statement. That period is not extended by attempting to negotiate with the employer.

Who has to prove that the ground for the termination by notice is true?

The truth and the reasonableness of the ground relied upon in the terminating legal statement are to be proved by the party making that statement — in the case of a termination by notice given by the employer, therefore, by the employer.

As an employer, what should I pay attention to when giving notice?

To the reasons given and to the time limit. The ground must be clearly apparent and must fall within one of the three statutory categories; and in the case of termination with immediate effect, the fifteen-day time limit runs from becoming aware of the ground.