The Labour Code provides a special ground for termination of an employment contract at the employer's initiative, whereby the employer may offer the worker or employee termination of the employment relationship against payment of compensation. Although this approach may require significant financial resources from the employer, it is often preferred on account of its speed and the reduced likelihood of court disputes.
It is advisable that the employer's offer be made in writing, although this is not an express requirement under the law. The written offer must contain all the details, including the date of termination of the contract. The absence of certain key elements may render the offer invalid.
Withdrawal and Certification of the Offer
The employer may withdraw the offer, but only up to the moment when it is received by the worker or employee. Once it has been received, it is not subject to revocation or amendment by the employer. Likewise, service must be duly certified, in order to avoid disputes as to compliance with the time limits under Article 331 of the Labour Code.
Amount of the Compensation
The minimum amount of compensation that the employer must offer is four times the last gross monthly salary received by the worker. There is nothing to prevent the parties from agreeing a higher sum, but it may not be lower than this minimum. If a higher compensation is provided for in the individual or collective employment contract, the employer must adhere to it.
The gross labour remuneration on the basis of which the compensation under Article 331 of the Labour Code is calculated includes the basic salary and all additional remuneration of a permanent character specified in the collective employment contract and/or the internal rules on wages and/or the individual contract.
Not included in the gross remuneration are sums for inflation compensation, remuneration for overtime work and other non-permanent payments. Nevertheless, the parties may agree a different basis for calculation, including non-permanent payments, if they so wish. In order not to be regarded as part of the gross remuneration, bonuses or awards must be determined by the employer and depend on certain results, rather than solely on time worked, being unforeseeable and uncertain. It is frequently the inclusion of various sums in the gross remuneration that gives rise to court disputes.
Acceptance of the Offer
The worker or employee must accept the offer within 7 days of receiving it. The acceptance must be in writing, since oral acceptance is invalid. An acceptance made after the expiry of the 7-day period is likewise invalid. If the worker or employee rejects the offer, there is no need to state this in writing – silence is deemed a refusal. In case law it is disputed whether the worker's signature on the offer signifies acceptance or merely certifies that he has received it.
The Employer's Obligations upon Acceptance of the Offer
If the offer is accepted, the employer must pay the compensation within one month of the date of termination of the employment contract. If this time limit is not observed, the termination of the employment contract is deemed to have lapsed and the employment relationship is restored.
The termination order may not be revoked by the employer before the expiry of the one-month period. Likewise, it may not be revoked unilaterally by the employer under Article 344(2) of the Labour Code, since the order under Article 331(1) of the Labour Code is the result of an agreement reached between the parties and may be amended or revoked only by mutual consent.
Where the worker or employee agrees to the offer, the employment contract is terminated on account of the agreement reached, and the termination order has only declaratory significance.
In the event that you need legal advice or assistance in connection with the termination of employment contracts, contact us on telephone 0887550706 or by e-mail: [email protected]
