The Labour Code sets out the specific grounds on which an employer may terminate an employment contract with notice. Each case must be approached individually and with precision, in order to avoid errors that may lead to the employee appealing against the dismissal.
Common omissions when terminating a contract with notice are the incorrect indication of the grounds, the absence of the required reasons, and the failure to carry out, or the improper carrying out of, the mandatory selection. These errors may give employees legal grounds to successfully appeal against their dismissal in court.
Grounds for termination of an employment contract with notice by the employer
1. Closure of the enterprise
Article 328, paragraph 1, item 1 of the Labour Code provides the possibility of terminating employment contracts in the event of the complete cessation of the enterprise's activity. According to case law, „closure of the enterprise“ means the definitive termination of the existence of the relevant legal entity, and on this ground the contracts of all employees are terminated, not only those of certain departments.
The closure of an enterprise covers situations of liquidation or a declaration of insolvency of the employer. If the activity continues, but through restructuring such as a merger, spin-off or transfer of units, this is not regarded as closure of the enterprise, and the employment contracts pass to the new employer. In such cases the employer has no obligation to carry out a selection or to apply the protection under Article 333 of the Labour Code.
2. Closure of part of the enterprise
The closure of part of the enterprise, governed by Article 328, paragraph 1, item 2, proposition 1 of the Labour Code, applies where the activity of an organisationally distinct unit ceases. This does not include the restructuring and transfer of activities between different departments or services.
According to case law, the distinct units that may be closed on this ground have an independent organisational structure that carries out a specific activity and has managerial autonomy. The assessment includes whether the unit has a separate staffing schedule, the ability to carry out independent commercial activity, and whether its manager controls all the necessary resources.
Where an employment contract is terminated due to the closure of part of the enterprise, the employer has the right of selection and may dismiss employees with lower qualifications and poorer results. The preliminary protection under Article 333 of the Labour Code also applies.
3. Staff reduction
Article 328, paragraph 1, item 2, proposition 2 of the Labour Code provides the possibility of terminating an employment contract in the event of a staff reduction. For the dismissal to be lawful, the reduction must be genuine, i.e. the position must be abolished entirely, and not merely have the distribution of its functions changed.
The employer must certify the change by means of documents, such as an order for a new staffing schedule or job descriptions clearly showing the functions of the abolished position. A staff reduction requires the preliminary protection under Article 333 and an obligation to carry out a selection where the position, or part of it, is transferred to other employees.
The employer is not entitled to dismiss an employee on this ground if that employee falls under the protection of Article 333 and performs specific functions, such as a female employee on pregnancy and maternity leave.
4. Reduction in the volume of work
The ground under Article 328, paragraph 1, item 3 of the Labour Code for terminating an employment contract is used where there is a reduction in the volume of work that is lasting and covers an extended period of time, such that it necessitates the removal of specific job functions.
The employer is obliged to conduct a selection procedure, retaining the employees with higher qualifications and better professional qualities. It must also obtain authorisation from the Labour Inspectorate if the employee is protected under Article 333. This protection applies to workers who are pregnant, undergoing in vitro treatment, or on pregnancy and maternity leave.
5. Stoppage of work for more than 15 working days
Article 328, paragraph 1, item 4 of the Labour Code provides for the termination of an employment contract where the work of the enterprise or of a particular unit is stopped for more than 15 working days. On this ground, the cessation of activity must affect not individual employees but a structurally distinct unit or the entire enterprise.
In this case the employer is not obliged to carry out a selection, and the protection under Article 333 does not apply, except for the protected categories of employees, such as pregnant women or persons on pregnancy and maternity leave.
6. Lack of the qualities for the effective performance of the work
The ground under Article 328, paragraph 1, item 5 of the Labour Code applies where the worker does not possess the qualities necessary for the effective performance of the position. It is important for the employer to give reasons for its order, clearly indicating which qualities are lacking and how those deficiencies hinder the effective performance of the duties.
No selection is required, but the preliminary protection under Article 333 applies.
7. Lack of education or professional qualification
Article 328, paragraph 1, item 6 of the Labour Code covers cases where the employee does not possess the education or qualification necessary for the position held. It is important that these requirements be newly introduced and that the employee did not possess them at the time of hiring. The employer has the right to change the employee's job description, but not to require additional skills that are not necessary for the position.
8. Change in the requirements for the position
Under Article 328, paragraph 1, item 11 of the Labour Code, the employer may terminate an employment contract where there is a change in the requirements for the position, other than those concerning education and qualification. This may include command of a language, a requirement for a certain length of service, and others. The protection under Article 333 applies, but there is no obligation to carry out a selection.
9. Refusal of the employee to follow the enterprise
If an enterprise or a division relocates to another populated area, the employee has the right to refuse the relocation, which leads to the termination of the employment contract under Article 328, paragraph 1, item 7 of the Labour Code. The protection under Article 333 does not apply, except for an employee on pregnancy and maternity leave.
10. Vacating a position to reinstate an unlawfully dismissed employee
Article 328, paragraph 1, item 8 of the Labour Code requires the vacating of the position held where an unlawfully dismissed employee who has won a case for reinstatement to his former position is to be reinstated.
11. Objective impossibility of performing the employment contract
Where the employee is unable to perform his work for reasons beyond the control of either himself or the employer, the employment relationship may be terminated on the ground of Article 328, paragraph 1, item 9.
12. Contract with an employee who is a pensioner
Under Article 328, paragraph 1, items 10б and 10в, the employer may terminate the contract of an employee who is a pensioner at the time the contract is signed. This includes persons receiving a pension for insured length of service and old age, including those who have taken early retirement under Article 68а of the Social Insurance Code. Where the employee receives another type of pension, he cannot be dismissed on these grounds.
13. Acquisition of the right to a pension for insured length of service and old age
The ground under Article 328, paragraph 1, item 10 of the Labour Code covers cases where the employee has acquired the right to a pension for insured length of service and old age during his employment relationship.
14. Retirement with a reduced pension under Article 68а of the Social Insurance Code
According to Article 328, paragraph 1, item 10а of the Labour Code, termination of an employment contract is possible where a pension for insured length of service and old age is granted at a reduced amount under the procedure of Article 68а of the Social Insurance Code.
Conclusion
Each of the listed cases for terminating an employment contract with notice requires precise preparation of the documents and compliance with the statutory requirements, in order to avoid court disputes and successful appeals against the dismissal by employees.
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