Termination of Employment Relationships, Lecture notes of Law

Download Termination of Employment Relationships and more Lecture notes Law in PDF only on Docsity! European Commission Termination of Employment Relationships Legal situation in the following Member States of the European Union: Bulgaria, Cyprus, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Romania, Slovakia and Slovenia 3 SUMMARY This synthesis report provides an overview of the legal situation as regards termination of employment relationships in the 12 new Member States of the European Union: 10 new Member States since 1 May 2004 (the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Slovakia, Slovenia and Cyprus) and two new Member States since 1 January 2007 (Romania and Bulgaria). It is an extension of the scope of the report »Termination of employment relationships: Legal situation in the Member States of the European Union«, which was first published by the Commission (DG for Employment and Social Affairs) in 1997 and updated in April 2006 and which covers the 15 Member States of the pre-enlargement European Union (EU-15). Together, these two synthesis reports give a comprehensive overview of the termination of employment relationships in the entire European Union, which enables comparison between the legal regulations of all Member States, showing their differences, but also similarities and common trends as well. In all new Member States, the termination of employment relationship is not left entirely to the free will of the contracting parties; it is regulated by the labour legislation, which sets limits to the employer. In all new Member States the laws (statutes) are the most important legal source for the termination of employment relationships. Some issues are dealt with also by the government regulations. Besides, there are collective agreements, internal company rules, work rules and an individual contract of employment. It is a common feature for nearly all new Member States that collective bargaining is not very developed and is concentrated mainly at the enterprise level. This is one of the major reasons for collective agreements not being very important source of law in the matter of termination of employment relationships. In the majority of new Member States the ‘judge-made law’ and the custom do not constitute a formal source of law. Nevertheless, the case-law of labour courts and/or of the Constitutional Courts is rather important for the interpretation of legal rules on the termination of employment. The custom is practically of no relevance. In all new Member States different ways of terminating the employment relationship are regulated by labour legislation, but the majority of its provisions are dedicated to a dismissal, e.g. termination of employment relationship at the initiative of the employer. The employer’s free will is limited when dismissing an employee. The employer may dismiss an employee only if there is a valid reason justifying a dismissal. There are differences between the Member States as regards how these valid reasons, justifying grounds for a dismissal are defined: in some new Member States the law exhaustively specifies numerous grounds in detail (which may then be grouped into more general types of reasons), whereas in others they are defined by using the general clause. Not in all new Member States the law distinguishes between disciplinary reasons, reasons related to employee’s capacities or personal attributes and economic reasons. A comparison of solutions of the same/similar factual situations in different Member States is sometimes difficult. For instance, reaching the retirement age or fulfilling the retirement conditions is in 4 certain cases a ground for ex lege termination of employment (exceptionally), in certain Member States this is a valid reason for a dismissal, in others it is a prohibited ground, which may never justify a dismissal, in certain Member States from that time on the employee is guaranteed less protection against dismissal, for example, employer may dismiss an employee without stating any reason justifying it (ad nutum dismissal), etc. In one Member State imprisonment may be a ground for ex lege termination of employment, in another a valid reason for a dismissal (depending on the length of imprisonment) and in a third one, under certain conditions, even a ground for a suspension of the employment contract, thus preventing an employment contract to come to an end. There are other such examples: health condition of the employee, death of the employer, insolvency of the employer, etc.). Of course, in all new Member States the economic reason(s) (although in some cases differently denominated) is dealt with separately by labour legislation and the employees in all new Member States are given the highest level of rights in this case of termination of employment relationship. Besides, also collective dismissals have special rules to follow, which are rather similar in all new Member States, mostly due to the EC Directive on this matter. Besides defining valid reasons by the general clause or by enumerating them more specifically, certain grounds are explicitly prohibited by law in all new Member States – they may never be valid reasons for a dismissal (for instance, trade union membership or activity, pregnancy, maternity leave, race, colour, sex, age, religion, social origin, etc.). See Tables 1(a), 1(b), 1(c). There are time limits, too, which apply in certain cases or in relation to certain reasons for a dismissal (violations of employee’s duties for example). The employer has to dismiss the employee for a particular reason within the set time limits, otherwise this reason cannot be used for justifying a dismissal later, after the expiry of the prescribed time limits. There are differences as regards the ‘ultima ratio’ rule between the new Member States. But in most of them, the law provides for measures aiming to prevent a dismissal if there are other possibilities for the continuing of the employment relationship. For example, in many new Member States, in case of a dismissal for economic reasons or for reasons related to (in)capacity or other personal attributes of the employee, the employer has to check whether there are alternatives to a dismissal – whether it is possible to find another work/job for the employee within the company or to retrain and/or to employ him/her under different circumstances. If so, the employer has to offer other suitable job to the employee. Besides, in many new Member States the employer has to warn the employee first and only if the violations repeat, the employer may dismiss the employee (unless the violations or breaches are serious enough to justify immediate termination of employment relationship, i.e. summary dismissal, or dismissal without prior warning). The employer has to fulfil different procedural requirements, depending on the type of the reason of dismissal. There are certain differences between the Member States, yet, the formal/procedural requirements may include the following: for example, prior to a dismissal, the employer has to warn the employee, give her/him an opportunity to defend her/himself, the trade union has to be informed, the letter of 5 dismissal has to be in writing, stating the reason for the dismissal and explaining it, and it has to be delivered to the employee personally, etc.. In all new Member States, the dismissal requires a written form (see Table 2); there are differences as regards the consequences of non-compliance to this rule (in some Member States the written form in prescribed ad solemnitatem, in the others just ad probationem). In all new Member States, the labour legislation provides for a special legal protection for certain categories of workers in relation to the termination of employment relationship. But there are quite important differences as regards the categories of employees which enjoy special protection whereby (there are no differences for certain categories of employees, for instance pregnant employees) and as regards the extent of special protection against dismissal. Typical categories of employees who enjoy special protection include employees’ representatives, pregnant women, workers with family responsibilities, workers with disabilities, older workers. The special protection may further provide for: prohibition of dismissal during a certain protected period; obligation of the employer to acquire prior consent of a particular body (e.g. labour inspectorate, trade union); prohibition of dismissal on particular grounds; only certain grounds for a dismissal may be used during the protected period; suspension of expiry of the period of notice during the protected period; etc. There are major differences between the new Member States as regards the legal regulation on the period of notice (see Table 3). In all new Member States, as a rule, the employer has to observe a certain minimum period of notice. In some new Member States, the periods of notice are the same for the employers and for the employees, whereas in others the employer has to observe longer periods of notice than the employee wishing to resign. In most of the new Member States periods of notice depend on the length of service with the employer, yet not in all. In some new Member States there are different, usually shorter periods of notice for certain flexible types of employment contracts (e.g. fixed-term, part- time, etc.). It is interesting that in the majority of the new Member States the same rules on dismissals apply to open-ended as well as to fixed-term contracts of employment. In many new Member States the employee has the right to time-off during the period of notice, without loss of earnings, in order to seek for another job. In all new Member States, the law also regulates the right to a severance payment. In all new Member States (except one) the employees dismissed for economic reasons have a right to a severance payment or another kind of compensation, whereas in case of disciplinary dismissal employees are not entitled to any payments. However, there are important differences as regards severance payments in the case of dismissal related to incapacity or personal attributes of the employee, yet, in the majority of the new Member States the employees have the right to severance payments in most of these cases, as well. There are differences between Member States as regards the conditions for entitlement to the severance payments or other compensations and as regards the amounts of payments. See Tables 5(a), 5(b), 5(c). In nearly all new Member States, the employer may dismiss an employee immediately, without any period of notice, in exceptional cases, mainly connected with grave misconduct of an employee (summary dismissal). In some new Member States, a disciplinary dismissal is always a summary dismissal, without notice period and without any severance payments, but, on the other 8 TABLE OF CONTENTS SUMMARY.....................................................................................................................................3 1. INTRODUCTION....................................................................................................................10 2. SOURCES OF LAW................................................................................................................12 2.1. Constitutional status of the rules on the right to work and other important constitutional provisions ............................................................................................................................ 12 2.2. International agreements and conventions .......................................................................... 13 2.3. Sources of law and their hierarchy...................................................................................... 14 2.4. Role of judge-made law and custom................................................................................... 18 3. SCOPE OF THE RULES GOVERNING THE TERMINATION OF AN EMPLOYMENT RELATIONSHIP, SPECIAL ARRANGEMENTS....................................19 3.1. Ways of terminating an employment relationship .............................................................. 19 3.2. Exceptions or specific requirements for certain employers or sectors................................ 21 3.3. Exceptions or specific requirements for certain types of contract ...................................... 23 3.4. Exceptions or specific requirements for certain categories of employer ............................ 29 3.5. Exceptions or specific requirements for certain categories of employees .......................... 30 4. MUTUAL AGREEMENT.......................................................................................................35 4.1. Substantive conditions......................................................................................................... 35 4.2. Formal requirements ........................................................................................................... 36 4.3. Effects of the agreement...................................................................................................... 37 4.4. Remedies ............................................................................................................................. 39 4.5. Vitiating factors................................................................................................................... 41 4.6. Penalties .............................................................................................................................. 42 4.7. Collective agreements ......................................................................................................... 42 4.8. Relation to other forms of termination................................................................................ 42 5. TERMINATION OTHERWISE THAN AT THE WISH OF THE PARTIES..................44 5.1. Grounds for a contract to come to an end by operation of law ........................................... 44 5.2. Procedural requirements...................................................................................................... 47 5.3. Effects of the existence of a ground .................................................................................... 48 5.4. Remedies ............................................................................................................................. 49 5.5. Penalties .............................................................................................................................. 49 5.6. Collective agreements ......................................................................................................... 50 6. DISMISSAL..............................................................................................................................51 6.1. Introductory overview ......................................................................................................... 51 6.2. Dismissal contrary to certain specified rights or civil liberties........................................... 55 6.3. Dismissal on ‘disciplinary’ grounds.................................................................................... 60 6.4. Dismissal at the initiative of the employer for reasons related to the capacities or personal attributes of the employee, excluding those related to misconduct..................................... 77 6.5. Dismissal for economic reasons.......................................................................................... 89 7. RESIGNATION BY THE EMPLOYEE..............................................................................105 7.1. Substantive conditions....................................................................................................... 105 9 7.2. Desertion of the post ......................................................................................................... 108 7.3. Procedural requirements.................................................................................................... 109 7.4. Effects of the resignation................................................................................................... 110 7.5. Remedies ........................................................................................................................... 110 7.6. Compensation to the employer.......................................................................................... 112 7.7. 'Contrived' resignation....................................................................................................... 112 7.8. Resignation for proper cause............................................................................................. 112 7.9. Collective agreements ....................................................................................................... 112 8. TERMINATION OF AN EMPLOYMENT RELATIONSHIP DURING THE PROBATIONARY PERIOD ....................................................................................................114 9. GENERAL QUESTIONS RELATING TO ALL FORMS OF TERMINATION OF EMPLOYMENT RELATIONSHIPS ......................................................................................120 9.1. Non-competition agreements ............................................................................................ 120 9.2. Agreements to the effect that the employee will not terminate the contract during a certain period................................................................................................................................. 124 9.3. Issuing of a reference ........................................................................................................ 125 9.4. Full and final settlement .................................................................................................... 127 BIBLIOGRAPHY ......................................................................................................................129 APPENDIX: Tables....................................................................................................................132 10 1. INTRODUCTION The aim of this synthesis report is to provide a comprehensive overview of the legal situation as regards termination of employment relationships in the 12 new Member States of the European Union (EU).1 Together with the report which covers the 15 Member States of the pre- enlargement EU,2 it aims at enabling the comparison between the legal regulations, showing their differences, but also similarities and common trends. The termination of employment relationship is one of the most important, but also conflicting issues of labour law and has drawn, from the beginnings, the attention of social partners. Nowadays, the importance of the issue is seen within the context of the debate on flexicurity. Legal regulation has to provide an adequate equilibrium between the need for security (protection) of employment and the need for flexibility, which is not always very easy. In all new Member States (as well as ‘the old’ ones), the termination of employment relationship is not left entirely to the free will of the contracting parties; it is regulated by labour legislation which sets limits to the employer, thus ensuring protection for 1 This synthesis report covers: The 10 new Member States since 1 May 2004 (the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Slovakia, Slovenia and Cyprus) and the two new Member States since 1 January 2007 (Romania and Bulgaria). 2 It was first published by the Commission in 1997 and updated in April 2006: “Termination of Employment Relationships: Legal Situation in the Member States of the European Union”, European Commission – DG for Employment, Social Affairs and Equal Opportunities, Brussels, 2006 (http://ec.europa.eu/employment_social/labour_law/d ocs/termination_emp_relation_report_updated_en.pdf ). workers. It is a common characteristic of all new Member States that the employees enjoy the right not to be unfairly dismissed, i.e. not to be dismissed without a valid reason justifying a dismissal. This is considered as an international and European standard (ILO Convention No. 158 and Article 24 of the Revised European Social Charter). The importance of employees’ representatives has been more and more emphasised; their role within the procedure of collective dismissals is regulated according to the principles of Directive 98/59/EC on collective redundancies. Other international standards have influenced the legal regulations of termination of employment in the given countries as well. Most of the new Member States follow the continental legal tradition, whereas Cyprus and Malta are more under the influence of the common law tradition. All of the new Member States had to adjust their legislation due to the harmonisation process with the acquis communautaire. And most of them experienced the transition from a socialist to a capitalist market economy. Therefore, in many of the new Member States the legal regulation of termination of employment has been changed and amended many times during the last fifteen years. In many of the new Member States, also as a result of the above mentioned circumstances, labour law has been codified recently (Estonia and Hungary in the early 1990’s, Latvia, Lithuania, Malta, Romania, Slovakia and Slovenia in the 2000’s). In the new Member States, many solutions regarding the legal regulation of termination of employment are similar, many, though, also different. The legal regulation of the termination of employment relationship is inevitably related 13 protection of work by Article 66. According to Article 66 of the Constitution, “the state shall create opportunities for employment and work, and shall ensure the protection of both by law”. 2.2. International agreements and conventions The following ILO Conventions have been ratified3: - Convention No. 158 concerning Termination of Employment at the Initiative of the Employer, 1982 has been ratified by Cyprus (1985), Latvia (1994) and Slovenia (1992; bound by the convention since 1984 within the former Yugoslavia); - Convention No. 135 concerning Protection and Facilities to be Afforded to Workers' Representatives in the Undertaking, 1971 has been ratified by Cyprus (1996), the Czech Republic (2000), Estonia (1996), Hungary (1972), Latvia (1992), Lithuania (1994), Malta (1988), Poland (1977), Romania (1975), Slovenia (1992, bound by the convention since 1982 within the former Yugoslavia); the convention has not been ratified by Bulgaria and Slovakia; - Convention No. 145 concerning Continuity of Employment of Seafarers, 1976 has been ratified by Hungary (1978) and Poland (1979); - Convention No. 151 concerning Protection of the Right to Organise and Procedures for Determining Conditions of Employment in the Public Service, 1978 has been ratified by Cyprus (1981), Hungary (1994), Latvia (1992) and Poland (1982). 3 Source: ILOLEX (www.ilo.org/ilolex/english/, 10 February 2007). Certain new Member States have ratified also many other ILO conventions, being partly relevant to the issue of termination of employment (for instance conventions on maternity protection, prohibition of discrimination in employment, etc.). The European Social Charter of the Council of Europe:4 - The revised European Social Charter, 1996 of the Council of Europe has been ratified by the following new Member States: Bulgaria (2000), Cyprus (2000), Estonia (2000), Lithuania (2001), Malta (2005), Romania (1999), Slovenia (1999). They are all bound by Article 24 which provides for the right to protection in cases of termination of employment. All of the above mentioned new Member States, except Cyprus, are bound by Article 29 (the right to information and consultation in collective redundancy procedures) and by Article 4(4) which provides for the right to a reasonable period of notice for termination of employment as well. All above Member States are also bound by Article 8(2) which guarantees the women, during their pregnancy and maternity leave, the right to protection against dismissal and termination of employment. They are all bound by Article 1 on the right to work as well. It is interesting that Romania and Slovenia were, besides Sweden and France, among the first countries which ratified the revised Charter and thus enabling it to enter into force on 1 July 1999. - The remaining new Member States are bound by the original European Social Charter, 1961: the Czech Republic 4 Source: Council of Europe (http://www.coe.int/t/e/human_rights/esc/1_general_pre sentation/Signatures_Ratifications.pdf and http://www.coe.int/t/e/human_rights/esc/1_general_pres entation/Provisions.pdf, 10 February 2007; situation on 15 June 2006). 14 (1999), Hungary (1999), Latvia (2002), Poland (1997), Slovakia (1998). The Czech Republic, Poland and Slovakia are bound by Article 4(4), but not so Hungary and Latvia. All five Member States are bound by Article 8(2). They are all bound by Article 1 on the right to work as well (the Czech Republic not by its par. 4). It is interesting that all new Member States, except Latvia, have already signed the revised Charter as well (the Czech Republic in 2000, Hungary in 2004, Poland in 2005 and Slovakia in 1999), but they have not yet ratified it. All of the new Member States are of course bound by the acquis communautaire, the Charter of Fundamental Rights of the European Union, the Community Charter of the Fundamental Social Rights of Workers and the relevant EC directives (especially Council Directive 98/59/EC of 20 July 1998 on the approximation of the laws of the Member States relating to collective redundancies, which consolidates Directives 75/129/EEC and 92/56/EEC, but in certain questions also others, such as Council Directive 2001/23/EC of 12 March 2001 on the approximation of the laws of the Member States relating to the safeguarding of employees’ rights in the event of transfers of undertakings, businesses or parts of undertakings or businesses, which consolidates Directives 77/187/EEC and 98/50/EC; Council Directive 80/987/EEC of 20 October 1980 on the approximation of the laws of the Member States relating to the protection of employees in the event of the insolvency of their employer and Directive 2002/74/EC of 23 September 2002 amending previous Directive; etc.). 2.3. Sources of law and their hierarchy In all new Member States the laws (statutes) are the most important legal source for the termination of employment relationships. In some new Member States some issues are dealt with by the government regulations as well. Besides, there are collective agreements, internal company rules, work rules and an individual contract of employment. In all new Member States there is a typical hierarchy between these legal sources. The provisions of the laws (statutes) are mandatory. A contract of employment as well as collective agreements may lay down rights which are more favourable for the worker than those provided for by the law. The same principle applies between an individual contract of employment and collective agreements (an individual contract may stipulate more favourable provisions to the employee than collective agreements, but not less favourable). In some new Member States there are certain provisions which do not allow any derogation at all (not even to the favour of an employee), in some new Member States there are few exceptions, where the law exceptionally allows a collective agreement to derogate even to the worse for an employee. It is a common feature for nearly all new Member States that collective bargaining is not very developed and that collective bargaining is concentrated mainly at the enterprise level. This is one of the major reasons for collective agreements not being a very important source of law in the matter of termination of employment relationships. Slovenia is an exception, since collective bargaining is more centralised, the focus being at the industry-level bargaining, which is combined with the national-level tripartite social dialogue; consequently, collective agreements are a rather important legal source, too. In Malta, collective agreements are not considered to be a source of law. 15 It is interesting, that – in the absence of a well developed system of collective bargaining –employment legislation regulates employment relationships, including their termination, in detail. In many new Member States, labour law has been codified, either in the early 1990’s (Estonia, Hungary) or in 2000’s (for example Latvia, Lithuania, Malta, Romania, Slovakia, Slovenia). One important reason for that may also be the need to harmonize legislation with the acquis communautaire. Besides, there is a constant pressure to adapt labour legislation to the changing demands in the world of work also from potential foreign investors. It is interesting that the regulation of termination of employment within the labour legislation is rather comprehensive in nearly all new Member States, thus leaving little room for regulating this issue by collective agreements and individual contracts of employment. Finally, it has to be pointed out, that in Cyprus and Malta, the legal systems and as part of them the regulation of termination of employment relationships, too, are influenced by the common-law tradition. In Bulgaria, the law is the main legal source (Labour Code; OJ, Nos. 26 and 27 of 1986, amended; effective since 1 January 1987; and some others). Civil servants are not covered by the employment legislation; their relationships and their termination are regulated in the respective administrative laws, such as the Civil Servant Act (OJ, No. 67 of 1999, am.) and others. The Labour Code contains essential substantive and procedural provisions regarding the termination of employment relationships. In principle, it consists of imperative legal norms. Therefore collective agreements are not very important in this field. Likewise, also an individual contract of employment may settle only limited matters (e.g. term of notice). In Cyprus, too, termination of employment is primarily regulated by the law. The most important is the Termination of Employment Act (No. 24/67 as amended), which provides a statutory right not to be unfairly dismissed. Different other laws are also relevant in some points, for instance: The Transfer of Undertakings Act (No. 104(I)/2000), the Collective Dismissals Act (No. 28(I)/2001), the Protection of Maternity Act (No. 100(1) of 1997), etc. In addition to these statutory rights, there is a remedy against wrongful dismissal under the common law and ordinary contractual principles. Judge made law has been very important in the development of labour law. Being an ex-colony, Cyprus follows the common law tradition of England and there has been influence by decisions of English courts. The main legal sources in the Czech Republic are the respective laws. The general rules are contained in the Labour Code (Act No. 65/1965 coll., as amended), there are many other laws for different groups of workers. Since the legal regulation of termination of employment in the Labour Code and other laws is of mandatory nature, there is no space for the regulation by collective agreements (the only exceptions are redundancy payments). Similarly, in Estonia the termination of employment relationships is regulated mainly and in detail by the laws (the most important are: the Republic of Estonia Employment Contracts Act, ”Eesti Vabariigi töölepingu seadus” – RT 1992, 15/16; 2006, 10, 64; the Employee Disciplinary Punishment Act, “Töötajate distsiplinaarvastutuse seadus” – RT I 1993, 26, 441; 2000, 102, 674; the Unemployment Insurance Act, “Töötuskindlustuse seadus” – RT I 2001, 59, 359; 2005, 57, 451; the Individual Labour 18 Relationships Act applies to the public sector as well, unless stipulated otherwise by a special act (Public Servants Act, “Zakon o javnih uslužbencih”, Official Gazette of the Republic of Slovenia, Nos. 56/02 et al.; as amended, especially Articles 153-162) or other special acts (Defence Act, Police Act, etc.). In Slovenia, collective bargaining is rather centralised, the emphasis being at the industry level, whereas collective bargaining at the enterprise level is not so important. Collective agreements are an important legal source in the field of labour law and they also contain provisions in relation to the termination of employment (for example detailed provisions regulating the criteria for determining the redundant workers, conciliation procedure with trade unions in case of redundancies, severance payments, periods of notice). The legal rules in the laws and collective agreements are mandatory. A contract of employment as well as a collective agreement may lay down rights which are more favourable for the worker than those laid down in the laws; few exceptions to this fundamental rule of labour law are explicitly allowed, one of them being also the length of the period of notice (collective agreements may lay down shorter periods of notice for smaller employers than those provided by law). Considering that the issue of termination of employment is regulated in detail by the law and collective agreements, the importance of a contract of employment for regulating the termination of employment relationship is rather small in practice for the majority of workers. 2.4. Role of judge-made law and custom In the majority of new Member States – since they follow the tradition of continental legal systems – the ‘judge-made law’ and the custom do not constitute a formal source of law. Nevertheless, in practice the case law of labour courts and/or of Constitutional Courts is rather important for the interpretation of legal rules on the termination of employment in many new Member States (particularly in defining the grounds for dismissal, for example). In Cyprus, judge-made law has been very important in the development of labour law. The role of custom is very limited (or is even of no relevance) in nearly all the new Member States covered by this reports. Only Malta reports that sometimes also custom is considered in the interpretation of laws. 19 3. SCOPE OF THE RULES GOVERNING THE TERMINATION OF AN EMPLOYMENT RELATIONSHIP, SPECIAL ARRANGEMENTS 3.1. Ways of terminating an employment relationship In different new Member States, ways of terminating an employment relationship are as follows: Bulgaria o mutual agreement, o by operation of law (in cases exhaustively laid down by the law, the contract of employment is terminated without giving notice), o at the employer’s initiative by way of dismissal with or without notice, o at the employee’s initiative (resignation) with or without notice. The Bulgarian labour law does not regulate judicial termination of employment relationships. Cyprus o dismissal, o resignation, o constructive dismissal, o redundancy, o frustration (such as war, political riots, physical destructions). In the Czech Republic o mutual agreement, o dismissal and resignation (termination of employment relationship with notice period), o summary dismissal and summary resignation (immediate termination of employment relationship), o termination of employment relationship during the probationary period by the employee or the employer, o due to official decisions (an enforceable decision of a competent authority for the withdrawal of a residence permit, a final decision of court on expulsion), o expiry of a fixed-term contract of employment, o death of the employee. Estonia o mutual agreement, o expiry of a fixed-term contract, o resignation, o dismissal, o at the request of third parties, o due to circumstances which are independent of the parties. In practice, termination at the request of third parties or due to circumstances which are independent of the parties is rare. Hungary o mutual consent of the employer and the employee, o dismissal and resignation (with notice period), o extraordinary dismissal and resignation (without notice period), o termination by immediate effect during the probationary period. Ordinary dismissal and resignation do not apply in the case of a fixed-term contract of employment. Latvia o mutual agreement, o resignation, o dismissal, o at the employer’s initiative during the probationary period, o by a court ruling (upon employer’s request due to an important reason), 20 o by operation of law (expiry of the fixed-term contract of employment, imprisonment for more than 30 days, upon demand by a third party, death of the employer, death of the employee). Termination by a court ruling due to an important reason is not very common, there is no Supreme Court judgement in any such case. Lithuania o by operation of law, o mutual agreement, o dismissal (dismissal for economic and similar reasons, dismissal on the ground of employee’s fault, an initiative to terminate a fixed-term contract at the end of the term of the contract, an initiative to terminate the contract during the probation period), o resignation (resignation on serious grounds, resignation on other grounds, an initiative to terminate a fixed-term contract at the end of the term of the contract, an initiative to terminate the contract during the probationary period), o dissolution of the contract by the court (as an alternative to the reinstatement of the employee in case of unlawful dismissal). Certain age or entitlement to a statutory state pension is not considered as a ground for the termination of employment relationship. Malta o by operation of law (expiry of a fixed- term contract, retirement when reaching the prescribed retirement age), o dismissal (during probationary period for any reason, after probationary period for good and sufficient cause in case of a contract of employment for indefinite period and for any reason in case of a fixed-term contract), o resignation (during or after probationary period), o mutual agreement. Poland o by operation of law, o mutual agreement, o dismissal/resignation with period of notice, o summary dismissal/resignation (without period of notice), o expiry of the period for which the employment relationship was concluded. Romania o by operation of law, o mutual agreement, o dismissal, o resignation. Slovakia o mutual agreement, o dismissal/resignation with notice period, o summary dismissal/resignation, o termination during the probationary period, o by operation of law (expiry of a fixed- term contract, death of the employee, official decision in case of foreigners, upon reaching 65 years of age for university teachers). Slovenia o mutual agreement, o dismissal/resignation (with or without notice period), o expiry of a fixed-term contract, o death of the employee, o death of the employer-natural person, o by a court judgement (as an alternative to the reinstatement of an employee in case of unlawful dismissal), o by operation of law (in case of a permanent disability of an employee, if 23 Assembly, courts, the Constitutional Court, etc.) and in the administration of local communities. Special rules on termination of employment do not apply to public agencies and institutions, public funds and other public law entities, neither do they apply to public-sector companies. There are some special rules for the educational sector (teachers in public and private schools), the cultural sector, etc. 3.3. Exceptions or specific requirements for certain types of contract In most of the new Member States there are special rules for fixed-term contracts. Types of contracts which may also be subject to a special regulation sometimes include temporary work contracts, apprenticeship contracts and some other specific types of contracts, particular for the given Member State. On the other hand, part-time work is usually not subject to special rules. Contracts for home-working are subject to special rules in some new Member States, whereas in others they are not. The labour legislation does not cover ‘economically dependent workers’ in any of the new Member States; if the work is carried out on the basis of a civil law contract, the labour legislation, including the regulation of termination of employment, does not apply. In all new Member States special rules apply during the probationary period (see Section 8.). In Bulgaria, labour legislation regulates the so-called ‘employment contract for extra work’. Besides the basic full-time employment relationship, additional employment relationship is concluded for the working time of maximum 4 hours a day. Such additional part-time contract for extra work may be concluded with the employer of the basic employment relationship or with another employer. The employment relationships for extra work may be terminated according to general rules, as well as ad nutum termination is possible – either party may give notice to termination of 15 days. The contract for extra work may be terminated even before its expiry, and in this case compensation is due for the term that has not been worked off. There are different periods of notice for contracts of employment for indefinite period (30 days, which may be prolonged to three months) and for fixed-term contracts of employment (three months). In Cyprus, employees employed under a fixed-term contract cannot claim unfair dismissal on the expiry of the term. A fixed- term contract terminates automatically at the expiry of the term, no dismissal/resignation is required. However, ordinary rules on unfair dismissal apply to employees dismissed before the expiry of a fixed-term or a fixed-task contract. Apprenticeship is regulated separately; apprentices do not enjoy protection against dismissal at the end of their apprenticeship contract. The ordinary unfair dismissal rules apply to part-time employees. In the Czech Republic, there are special rules for: o fixed-term contracts of employment, o subsidiary employment relationship. A fixed-term contract is an exception, since the law gives the priority to the contracts of employment for indefinite period of time. Labour legislation also determines a maximum duration of such contracts (two years); yet, there are some exceptions to this rule. 24 A fixed-term employment relationship terminates by the expiry of the agreed term, which may be determined in weeks, months or years, or in relation to the duration of certain work or on the basis of other objective facts, which are certain enough to exclude any doubts about when the fixed- term employment relationship ends. It is important that the employer is obliged to notify the employee before the expiry of a fixed-term contract, if the work is supposed to end – as a rule at least three days in advance. Failure to notify an employee does not affect the termination of employment relationship itself (it is an ex lege termination of employment), but if the employee suffered a loss connected to this failure, the employer would be liable for it. A fixed-term contract of employment may be terminated before the expiry of the agreed period of time in any way provided for by the law, including a mutual agreement, a summary dismissal/resignation and an ordinary dismissal/resignation. If a fixed-term contract is concluded contrary to the legal rules, it is considered as being a contract of employment for indefinite period of time. If the employee continues to work for the employer after expiry of the agreed term and the employer is aware of this, a fixed-term employment relationship is changed into an employment relationship for indefinite term. A fixed-term employment relationship may continue after expiry of the agreed term, if, before the expiry of the agreed term, the employee and the employer agree on its prolongation (they may, of course, also agree to change a fixed- term employment relationship to an indefinite-term employment relationship, which continues after the expiry of the first contract). A subsidiary employment relationship is an employment relationship, which is agreed upon in addition to the so called main employment relationship; it may be concluded for a shorter time than the prescribed full weekly working time. In a subsidiary employment relationship, the employee is provided with a substantially weaker protection of stability of employment. All ways of termination of employment are available, but there are some special rules. The regulation of a dismissal and a resignation in this case is the same for both the employer and the employee. The length of notice for both parties is 15 days. Neither party has to show a valid reason for termination of subsidiary employment relationship. The employer does not have to observe any other requirements prior to a dismissal (such as a duty to offer another job to the employee, to help an employee in seeking another job, participation of a trade union in the procedure, etc.). There are no special rules for part-time contracts of employment in general (except for the so-called subsidiary employment relationship which was already described above). In Estonia, a fixed-term contract can be terminated by the employer or by the employee pursuant to ordinary rules which apply to open-ended contracts, thus dismissal, as well as resignation, are possible before the expiry of the agreed time period. There is only one exception: if a fixed-term contract is entered into because the contract provides for a special benefit to the employee (for example training of an employee at the employer’s expense), the employee may resign prematurely only, if he or she is prevented from continuing the work by an illness, incapacity for work or the need to care for a dependant family member. Prior to the expiry of a fixed-term contract, both parties have to notify this to the other 25 party (except a fixed-term contract is concluded for replacing a temporary absent employee). The employer has to give notice to the employee at least two weeks prior to the expiry of the term, if the contract had been concluded for more than one year, and at least five days prior to expiry of the term, if the contract had been concluded for less than one year. Non-compliance with this obligation does not render the termination of a fixed-term contract invalid, but the employer is liable to pay compensation (average daily earnings for each day of delay). The employee has to notify the employer, too, but there is no sanction prescribed for non-compliance. If neither party demands the termination of a fixed-term employment contract by the notification or if a new employment contract is not entered into and the employment continues after the expiry of the term of the contract, the fixed-term employment contract becomes an open-ended employment contract. The same transformation occurs, if a fixed-term contract is concluded unlawfully, i.e. outside the cases determined by the law. Then, the contract may be terminated only in accordance with general rules for open- ended contracts. Further, ordinary rules on termination of employment in labour legislation do not apply to the following cases (since they are not considered as an employment relationship): o work on the basis of a contract of service, o work on the basis of contracts for services or other civil law contracts, o the public works. In Hungary, a fixed-term contract of employment may not be terminated prior to the agreed period of time by ordinary dismissal/resignation. Termination of the contract before the end of the term is possible only in two cases: during a probationary period and in case of extraordinary circumstances. If the employer terminates the fixed-term employment before the end of the term, he or she is liable to pay to the employee the average salary for the remaining period of time, but not more than one year’s average salary. In case of the renewal of a fixed-term contract after the expiry of the previous one, the employer has to prove a lawful interest for doing so, whereby the maximum duration of (all) fixed-term contracts is five years. There are special rules for temporary employments by the temporary work agencies, too. This type of employment has been regulated since 2001. Hungarian provisions do not prescribe a fixed duration of this type of employment relationship, neither do they limit the duration of the contract between the temporary work agency and the user enterprise. The regulation of termination of employment relationship between the temporary work agency and the ‘temporary worker’ is separated from ordinary provisions on termination of employment relationships, whereby different terminology is being used as well. There are four ways of terminating this type of employment relationship: by mutual agreement, by notice, by immediate discharge and by immediate effect. A fixed- term temporary employment can only be terminated by immediate discharge or by mutual agreement, but not so by notice. Although these possibilities are similar to general rules, they are considered to be a separate and different system of termination of employment. Special rules apply if the employer (temporary work agency) unlawfully terminates the employment relationship. In 28 unless a special agreement is made by the parties to this end who concluded such contract for at least a period of six months; in this case the notice period is two weeks. In case of contracts concluded with the purpose to substitute an absent employee, the period of notice is three working days. Summary dismissal/resignation is possible, too, if there is an important ground justifying prior termination of the contract. In general, ordinary rules apply also to part- time employment relationships, probationary contracts and contracts, which are concluded for intermittent work, work on call or seasonal work. For the latter, there are special rules providing for shorter periods of notice, which are determined either in weeks or days. Home workers and apprentices are not considered to be employees under the labour legislation. Their contracts do not constitute contracts of employment and their termination is subject to special rules. In Romania, there are no specific requirements for certain types of contract. The legislation regulates indefinite-term and fixed-term contracts of employment, full- time and part-time contracts, temporary work contracts, home-working and apprenticeship contracts without mentioning any special rules in relation to the termination of these types of employment contracts. In Slovakia, a fixed-term contract of employment is terminated upon the expiry of the agreed period, but such a contract may also be terminated before the expiry of agreed period of time; in this case it is possible to apply any mode of termination that is provided for in the labour legislation. The employers may enter into a chain of fixed-term employment relationships for a period of up to three years without any restrictions. After the lapse of three years, a chain of fixed-term employment relationships is allowed on the basis of substantive reasons, which are defined very broadly. A fixed-term contract of employment has to be concluded in writing. It is transformed into an open-ended contract if concluded contrary to statutory requirements or in case the employee, with the employer’s knowledge, continues to perform the work after the expiry of the agreed period of time (ex lege transformation of a fixed-term contract into an open-ended contract of employment does not apply in case of a part-time contract with less than 20 hours a week). There are special rules for a part-time contract of employment with less than 20 hours a week (for instance, no ex lege transformation of a fixed-term contract into an open-ended contract – see above; shorter periods of notice with a minimum of only 15 days; a written dismissal does not have to state a statutory ground for a dismissal). The question is raised as whether such regulation is appropriate or discriminatory. In Slovenia, labour legislation regulates different types of the so called atypical, flexible contracts of employment: fixed-term employment, temporary work, home work (and tele-work) and part-time work. All of them are considered as employment contracts and labour legislation applies to them wholly. In general, part-time workers, temporary workers, home workers and workers with fixed-term contracts enjoy the same rights as all other workers. A fixed-term contract (according to the law, it is an exception; yet, in practice, more than 70% of all new employments are based on a fixed-term contract of employment) terminates without notice upon the expiry of the time for which it was concluded or upon the completion of the agreed work or upon 29 the cessation of the reason for which the contract was concluded. A fixed-term contract may terminate prior to the expiration of the period for which it was concluded or prior to the completion of the agreed task, if: o so agreed by the contractual parties or o other reasons occur for the termination of employment pursuant to the law. That means that general rules on termination of employment apply, including provisions on ordinary dismissal and resignation. A fixed-term contract may be concluded only in cases, laid down by the law (in general, if the work is of a temporary nature), and the period of time for which it can be concluded, including its continuous prolonging, is limited to a maximum of two years (for smaller employers until 2010, the maximum period is limited to three years). If a fixed-term contract is concluded contrary to the law, or if the employee continues to work even after the expiry of the contract, it is assumed that a contract of employment for an indefinite period of time has been concluded. That means that such contract may be terminated only according to the ordinary rules as an open-ended contract. An employment contract for temporary work may be concluded for a definite or indefinite period of time. According to the law, a premature cessation of the user’s need for a temporary employee does not represent a valid reason for terminating an employment contract of this employee by the temporary work agency. Apprenticeship is considered as a part of an employment relationship (exceptionally, apprenticeship may be carried out on the voluntary basis, without an employment relationship). The employer may not terminate an employment contract during apprenticeship, except if there are reasons for a summary dismissal or in cases of bankruptcy, compulsory composition or liquidation of the employer. There are no special provisions in labour legislation regulating work on call or intermittent work or solidarity contracts. Labour legislation does not cover ‘economically dependent workers’. If the work is carried out on the basis of a civil law contract, labour legislation does not apply. However, labour legislation explicitly states that if the elements of employment relationship exist, work may not be carried out on the basis of civil law contracts, unless stipulated otherwise by the law. 3.4. Exceptions or specific requirements for certain categories of employer In all new Member States there are special provisions for collective dismissals (see Section 6.5.3.), since they are all bound by the acquis communautaire, including the Directive 98/59/EC on collective redundancies. Except for collective dismissals, there are no special provisions for particular categories of employers in Bulgaria, Cyprus, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Romania and Slovakia. In Poland, the labour court may decide not to reinstate an unlawfully dismissed employee, whose contract of employment was terminated by the employer employing a limited number of employees, if such reinstatement may be treated by the court as contrary to social interests. In Slovenia, there are few exceptions for the ‘smaller employers’ (those employing up to ten employees). For them shorter periods of notice may be determined by branch collective agreements than provided for by the law. Apart from that, smaller employers 30 wishing to dismiss for economic reasons or for reason of incapacity do not have to check prior to a dismissal whether it is possible to find another suitable job for the employees concerned. 3.5. Exceptions or specific requirements for certain categories of employees In Bulgaria, the following categories of employees enjoy stronger protection against dismissal: o pregnant women, mothers with a child under three years of age and women whose husbands are serving their compulsory military service; o employees with reduced capacity for work who have been reassigned to a suitable job and persons with disabilities; o employees suffering from certain diseases (the ischemic heart disease, mental disease, diabetes, oncology diseases, tuberculosis and occupational diseases); o employees who are on their granted leave of absence; o trade union representatives. In the above cases, the employer has to follow the preliminary procedure and acquire a prior permission of the regional labour inspectorate. In Cyprus, the ordinary redundancy provisions do not apply to: o employees over the normal retirement age (in general, those who have reached the age of 65 cannot claim unfair dismissal); o domestic servants who are members of the employer’s immediate family; o managers and directors, if they are employed under a contract (if they are members of the Board of Directors, they can be removed from their office by the decision of the shareholders’ general meeting). In the Czech Republic, there are special rules for top managers: they can be removed from their office without stating a reason, but this does not in itself cause the termination of their employment relationship; the employer is obliged to offer them another suitable job and only if the employer does not have such a job or the former manager refuses the offered job, he or she becomes redundant and may be dismissed. In Estonia, the following categories of employees enjoy a stronger protection against dismissal: o pregnant women and persons with a child under three years of age (a dismissal on certain grounds is prohibited, i.e. lay-off, unsuitability of an employee due to the lack of professional skills or due to health reasons, long-term incapacity for work), o minors (persons between 13-17 years of age; for them rules on probationary period do not apply; in case of lay-off or unsuitability of an employee, a dismissal is only possible after the consent of the labour inspector), o employees’ representatives (shop stewards, elected representatives of trade unions, working environment representatives and members of the working environment council; they enjoy special protection during their term of office and one year afterwards – dismissal is possible only in exceptional cases and only after the consent of the labour inspectorate). Notice periods and severance payments depend on the employee’s length of service with the employer. 33 representatives, etc. (special protection does not apply in case of a compulsory composition or bankruptcy). In Slovakia, in case of termination of employment of an employee under 18 years of age, the employer is obliged to request the opinion of the latter’s legal guardian. There are special, more protective rules on termination of employment for certain categories of employees, for example, those with disabilities, pregnant employees, employees on maternity or parental leave, employees during a temporary work incapacity due to an illness or an accident, employees’ representatives, etc. The employer may not dismiss an employee during the ‘protected’ periods, namely: o during a temporary work incapacity of the employee due to an illness or an accident (unless the employee has caused his or her incapacity for work), and during the period between the filing of a proposal for residential treatment or commencement of spa treatment until the completion of that treatment, o during pregnancy or maternity leave of a female employee or during parental leave of a female or male employee, o during the leave granted for the performance of a public office, o during the period when, based on a medical certificate, the employee performing night work is temporarily unable to perform night work. However, prohibition of dismissal does not apply in certain cases (e.g. in case of a disciplinary dismissal most of the special protection does not apply). Dismissal of an employee with disabilities requires a prior consent of the competent Office of Labour, Social Affairs and Family. This is not necessary in the case of the winding-up of the employer or its relocation or in the case of a breach of work discipline by the employee. A dismissal of an employees’ representative requires a prior consent of the respective employees’ representative body. Such protection is granted during the term of office and another six months afterwards. In Slovenia, there are specific (less protective) rules for managers. On the other hand, there are special rules, ensuring stronger protection against dismissal for: o employees’ representatives (an employer may not dismiss an employees’ representative without the consent of the body whose member he or she is (for example works council) or without the consent of the trade union (in case of trade union representative), if an employee acts in accordance with the law, the collective agreement and the employment contract; except if a protected employee rejects the offered appropriate employment in the case of a dismissal for economic reasons or if the procedure for the cessation of the employer is at stake; employees’ representatives enjoy special protection during the entire period of their term of office and another year after its expiry), o older employees, o pregnant employees and parents – workers with family responsibilities (an employer may not dismiss a female worker during her pregnancy and all the time she is breastfeeding; an employer may not dismiss an employee or the employment relationship may not come to an end during the entire period of his or her absence due to the parental leave in the form of a full absence from work; in exceptional cases – summary dismissal, cessation of the employer – an employer may 34 dismiss such employee and the employment relationship may come to an end, but only after the prior consent by the labour inspectorate), o employees with disabilities and o employees absent due to illness. Besides, a dismissal is not possible in the case the employee is temporarily, up to a maximum of 6 months, absent from work due to imprisonment or a similar punishment measure. The Slovenian labour legislation does not make a distinction between white- and blue- collar workers; the same rules apply to all. There are differences in protection against dismissal and the rights resulting there from, depending on the employee’s length of service within the employer (longer periods of notice, higher severance payments, duty to check for other job before a dismissal only for employees with at least six months service within the employer, etc.). 35 4. MUTUAL AGREEMENT In most of the new Member States the mutual agreement is explicitly mentioned as one of the ways of terminating the employment relationship in the labour legislation. Malta is an exception, since its labour legislation does not mention it; nevertheless, it is one of the valid ways of terminating the employment relationship governed entirely by civil law rules. In those new Member States, where labour legislation regulates a mutual agreement to terminate employment relationship, there is either just a short provision allowing it or there are a few more, usually prescribing written form of the agreement and perhaps some other formal requirements, but no labour legislation regulates it in detail and usually there are no substantive requirements either. In all new Member States general rules on contracts apply to mutual agreements. Since an employment relationship is terminated at the will of both parties, it is considered that special protection of an employee by labour legislation is not needed. Of course, the main question in this regard is whether the employee really wishes to terminate the employment relationship or not. In practice, it is not rare that a mutual agreement conceals a dismissal. In some new Member States the conclusion of a mutual agreement is the most frequent way of terminating the employment relationship and/or is considered by the employers as the ‘easiest’, ‘safest’ way of terminating the employment relationship; this is explicitly reported from Bulgaria, the Czech Republic and Latvia. Contrary to that, it is explicitly reported from Slovakia that a dismissal is by far the most frequent way of terminating an employment relationship. 4.1. Substantive conditions In general, there are no substantive conditions for a mutual agreement in labour legislation. There are no specific prohibited clauses either. Such an agreement is valid even if it is concluded during the so-called protected periods or with the employees who enjoy stronger protection against dismissal. If there is a valid mutual agreement on termination of employment, the rules of labour legislation governing dismissals do not apply. Although labour law does not prescribe any substantive conditions, a mutual agreement on termination of employment has to fulfil certain substantive conditions according to general rules on contracts in order to be valid. In all new Member States, it is required that the agreement is genuine, that the mutual agreement between the parties really exists, that the employee’s will to terminate an employment relationship is serious and free, that the agreement was not concluded under force or threat or by fraud of an employer. It is necessary to protect an employee against the misuse of this mode of employment termination by the employer. In Bulgaria, labour law prescribes a special substantive requirement. A distinction is made between an ordinary mutual agreement and a mutual agreement with compensation, which may be concluded at the initiative of the employer. Whereas for the first one there are no special substantive conditions, the later is valid and effective only if it provides for a compensation for the employee of at least four employee’s gross monthly salaries, which has to be paid not later than one month after the termination of employment. If the employer fails to perform this 38 The employment relationship is terminated in consequence of the agreement by the will of both contracting parties. In this case the parties alone determine the date of the termination of employment and also the rights and obligations for each of them. There are no statutory minimum rights for the employee in this case. Rules on dismissal do not apply. There are rather important differences as regards the severance payments in case of the termination of employment by mutual agreement. As a rule, such termination does not affect entitlement to a pension entitlement. Health insurance is terminated by the termination of employment relationship (immediately or after a certain period of time). In the Czech Republic, the employee is entitled to severance payment, if the mutual agreement to terminate an employment relationship was made for reasons on the part of the employer. The employee is also entitled to unemployment benefit (the entitlement to this benefit does not depend on the mode of termination of employment), according to the general rules set out in the law (at least 12 months of paid employment within the last three years; no job available; no entitlement to a retirement pension; application for unemployment benefit). Termination of employment relationship (by mutual agreement or by any other means) does not affect the entitlement to retirement pension. Participation in sickness insurance scheme ends with the termination of employment relationship. In Estonia, the employer does not have to pay the employee any compensation, unless this is agreed upon by the parties or stipulated by the collective agreement. Non- payment of the agreed compensation does not render a termination of the employment contract unlawful. The employee is not entitled to an unemployment benefit in this case. Entitlement to the retirement pension is not affected. The health insurance cover of employees terminates two months after the termination of employment. In Hungary, the labour legislation does not provide for a severance payment in case of termination of employment by mutual agreement, therefore an employee is entitled to it only if so stipulated by the agreement itself. In Latvia, the legislation does not provide for a severance payment; nevertheless, it is quite common to agree on the compensation payable to the employee by the employer. The employer’s failure to pay the agreed compensation does not per se render the mutual agreement void. If compensation is agreed upon, it is considered as an employment related income and is taxed in the same way as the salary. An employee is entitled to an unemployment benefit with no waiting period, from the day when he/she has filed the application with the required documents (waiting period of two months is foreseen in two cases of termination of employment, namely in case of employee’s resignation and in case of a dismissal due to a violation of employee’s duties). Termination of employment by mutual agreement has no special effect on the statutory retirement pension scheme. It has no special effect on the sickness insurance, apart from the general consequences of the termination of the employment as such. In Lithuania, there is no statutory right to a severance payment, nor does such case-law exist. An employee is entitled to a severance payment only if so stipulated by an agreement. The non-payment of the agreed sum does not affect the validity of the 39 mutual agreement on termination of employment. The entitlements already acquired or being acquired under public retirement pension schemes and public sickness insurance schemes are not affected. Private pension schemes and private sickness insurance schemes hardly exist in Lithuania, but there is no legal obstacle to restrict the entitlements under such schemes. In Malta, everything depends on the mutual agreement itself. There are no special impacts of this kind of termination of employment on the pension rights, health insurance or unemployment insurance. In Poland, there is no legal entitlement to severance payments, so they entirely depend on the agreement itself. In case of redundancy, the law provides severance payments to the employees whose contract of employment was terminated either by a mutual agreement, or notice for reasons not related to that particular employee. An employee is not entitled to an unemployment benefit. There is no negative impact on entitlements to public and private pension schemes. There is also no special impact on entitlements under public health insurance schemes (sickness benefits are paid to individuals who became ill within a period of 14 days – in some cases three months – after the termination of employment and are ill for at least a period of 30 days). In Romania, there is no entitlement to severance payments unless agreed upon by the parties. The employee is not entitled to an unemployment benefit. Termination of employment relationship by mutual agreement of the parties does not affect the rights the employees have within the retirement pension systems or sickness insurance systems. In Slovakia, there are no special provisions on the effects of a mutual agreement to terminate an employment contract. An employee is entitled to an unemployment benefit according to the general rules (three years of insurance in the last four years before the unemployment). In Slovenia, there is no statutory right to a severance payment; such a right thus depends entirely on the agreement between the parties. A (former) employee is not entitled to an unemployment benefit. Termination of employment by mutual agreement has no special effect on the retirement pension schemes (the pension insurance relationship ends upon termination of employment relationship; the acquired periods of insurance are safeguarded). The mode of termination of employment does not play a role when acquiring the retirement pension rights. Termination of employment by mutual agreement has no special effect on health insurance and entitlements arising from it either. 4.4. Remedies In all new Member States employees have the right to bring an action before the court (either a specialised labour court or an ordinary civil law court), if they think that a mutual agreement to terminate the employment relationship is unlawful, invalid, void, in the same way as in any other case of termination of employment relationship. In some new Member States an arbitration procedure is also possible. In the Czech Republic, the time limit for filing an action before the court is two months. If the mutual agreement is found to 40 be invalid, the employment relationship continues to exist if requested so by the employee; the employee is reinstated and has the right to the compensation for the entire period of time as well. In Estonia, a dispute over the validity of a mutual agreement may be settled by the labour dispute committees and by the courts. Labour dispute committees are extra-judicial independent individual labour dispute resolution bodies which consist of a chairman, one representative of the employees and one representative of the employers. They are not competent to settle disputes over financial claims exceeding 50.000 kroons (approx. 3200 EUR). An action has to be filed within one month after the termination of employment. The committee has to organise a hearing not later that in one month after the filing a complaint. In labour disputes burden of proof is determined according to the general rules of civil law. If an action is successful, the termination is declared unlawful, an employee is reinstated and paid the salary for the entire period; if the reinstatement is not ordered the employee is paid a compensation of six months’ average salary. If an employee requires so, the court has to order the reinstatement (although in most cases this is rather ineffective, since the employer dismisses the employee immediately after his or her return to work on the grounds of a lay-off). The state legal aid is available to employees who are unable to pay for competent legal assistance due to their financial situation. In Hungary, an employee may bring an action before the court within thirty days. There is a special regulation of labour disputes. In Latvia, the main remedy available is the court proceedings. Labour disputes are dealt with by civil courts of general jurisdiction. An employee may be represented by the duly authorised representative. Trade unions do not have a general competence to act on behalf of their members in individual disputes. The burden of proof is on the plaintiff. A system of state paid legal assistance is available for those with low income. In Lithuania, the employee may contest the termination of employment and bring her or his case before a civil court of general jurisdiction within a period of one month after the termination of the relationship and receipt of the appropriate documents. A claim for unpaid severance payments has to be brought before the court within three years. Employees may be represented by trade unions or their representatives. They are exempt from the stamp-duty. The competent court is also the court where the work is performed or was performed or shall be performed. Labour disputes are dealt with by the civil courts of general jurisdiction. Nevertheless, there are some special rules with regard to the resolution of individual labour cases in a separate chapter of the Civil Procedure Code. In labour disputes the court has very wide discretion to protect the employee’s interests ex officio. In particular, the court may collect evidence on its own initiative, involve a third party in the procedure, decide extra and ultra petitum, apply alternative means for the protection of the infringed rights. The law sets short-time terms for the preparation and hearing of the labour case before the court. In 30 days, the case has to be prepared for hearings and a decision has to be made not later than within 30 days from the beginning of the hearings. However, in practice courts rarely meet these deadlines. There are also mandatory rules on interim relief on the prompt reinstatement of the unlawfully dismissed employee into the previous job and/or on the 43 expected that the employer will also propose a compensation which will not be lower than the severance payment as regulated for dismissal on economic grounds. There is no court practice as regards a mutual agreement to be reached after the contract has already been terminated on another ground (e.g. dismissal). In general, the rules on mutual agreement do not apply if the parties have reached a consensus (a peace treaty) during the legal proceedings concerning the dismissal. In Poland, a combination between a mutual agreement and a dismissal may occur, when the parties to the employment contract which was terminated by dismissal with notice, agree to reduce the notice period. In Slovenia, according to the case law, the fact that the employee concerned agreed to become one of redundant workers does not change a dismissal for economic reasons into something else – it is still a dismissal, not a termination by mutual agreement. Termination of an employment relationship by mutual agreement should not be confused with agreements which the respective parties may conclude in connection with a dismissal. For example, an agreement on compensation instead of the period of notice: such an agreement may be concluded during the notice period, yet it does not change the nature of a dismissal, which has already been carried out, it just shortens the period of notice, whereas the employee is still considered to be dismissed and thus he or she enjoys all other rights provided for by the law and collective agreements. The second agreement, which may be concluded in connection with a dismissal, is a settlement agreement. It does not change the nature of a dismissal. This agreement, too, deals with the consequences of the dismissal or other modes of termination of employment, rather than having an effect on the termination of employment itself. A settlement agreement may be concluded only after a dismissal (and not instead of a dismissal). 44 5. TERMINATION OTHERWISE THAN AT THE WISH OF THE PARTIES This chapter deals with the termination of an employment relationship otherwise than at the wish of the parties. In such cases, the termination of employment occurs by operation of law and no further action is required by the parties. There are rather important differences between the Member States. Only few of them have an exhaustive list of grounds for termination of employment by operation of law in their labour legislation. There are different solutions as regards the question whether reaching certain (retirement) age or fulfilling of the conditions for the retirement cause ex lege termination of an employment contract or not, whether a sentence to imprisonment causes such termination, or whether the death of the employer causes such termination, just to mention some of them. Of course, there are also similarities: for example, in case of expiry of a fixed- term or a fixed-task contract (Lithuania is an exception, see below) or death of the employee. A remark should be made as regards a fixed- term contract. Such a contract terminates by operation of law (with an exception of Lithuania) upon the expiry of the agreed period of time; but this happens in compliance with the wish of both parties, the only difference being that such wish was expressed already at the beginning, when concluding a contract of employment. 5.1. Grounds for a contract to come to an end by operation of law For a detailed overview of legal regulations on fixed-term contracts and their termination see Section 3.3. In Bulgaria, the employment relationship is terminated by operation of law in the following cases: o fixed-term contracts (by the expiry of the agreed period of time; by completing the work specified in the contract; upon the return of the temporary absent employee; see 3.3.), o if the court ruling on wrongful dismissal is not followed by the actual reinstatement of the employee (if the employee either did not request the reinstatement or failed to appear at work within the 14 days’ term after the judgement), o 4 to 10 % of all jobs in the enterprise have to be suitable for pregnant women or persons with reduced capacity for work, who have priority in employment for these jobs; if there are no pregnant women or persons with reduced capacity to work, other people may be employed to these jobs, but when a person with reduced capacity for work or a pregnant women- employee needs another (suitable) job, the employment relationship of the employee occupying such special (suitable) job terminates, o an employee refuses to take an alternative suitable job which is offered to him/her because he/she is not capable to work at the former workplace any more due to his/her health condition or disability, o death of the employer (only if a contract was concluded with the employer in view of his/her personal needs, such as private secretary, etc.), o death of the employee. 45 In Cyprus, frustration of the contract causes the termination of employment relationship by operation of law. In the Czech Republic, the employment relationship is terminated by operation of law: o in case of expiry of a fixed-term contract of employment (see Section 3.3.), o in case of death of the employee, o in case of a decision of a respective authority (expiry or termination of a residence permit for foreigners; on the contrary, expiry or another termination of a work permit does not in itself cause ex lege termination of employment, rather it is a ground for a dismissal; yet, a fixed-term contract may be concluded with a foreigner having a temporary work permit) Cessation of the employer (with or without the liquidation) does not cause ex lege termination of employment, rather it may constitute a valid ground for a dismissal. In Estonia, an employment relationship terminates by operation of law in the following cases: o by the expiry of a fixed-term contract (see Section 3.3.), o at the request of third parties (a statutory representative or a labour inspectorate may request that a contract of employment with a minor terminates; see Section 3.5.), o in circumstances which are independent of the parties, o sentence by a criminal court, which makes it impossible for the employee to continue his or her current work, o non-compliance with the rules for hiring (i.e. restrictions on the work of women), o non-compliance with the rules restricting the employment of close relatives by the same organisation in certain cases, o death of the employee, o death of the employer (in case of the personal nature of services rendered to the employer). In Hungary, ex lege termination of an employment relationship occurs in the following cases: o death of an employee, o dissolution of the employer without a legal successor, o expiry of a fixed-term contract (see Section 3.2.2), o cessation of an employment relationship due to the change in the legal status of the employee (transfer from the personal scope of labour legislation to the personal scope of the legislation regulating civil/public servants). The death of the employer – natural person - does not cause a termination of the employment relationship; this rule has no exception (the employment relationship is transferred to the successor). In Latvia, an employment relationship terminates by operation of law in the following cases: o expiry of a fixed-term contract (see Section 3.3.), o request of third parties (parents, guardians or the labour inspectorate have this right in case of employment of a minor; see Section 3.5.), o imprisonment for 30 days or longer, o death of the employer (if work was closely related to a particular person), o death of the employee. In Lithuania, ex lege termination of an employment relationship occurs in the following cases: o death of the employee, 48 In Latvia, there are certain procedural requirements in case of termination of employment of a minor on grounds of a request of third parties (parents, guardians or labour inspectorate), which are described in Section 3.5. In Romania, there are no specific rules on that, nevertheless it is recommended for the employer to issue a written document ascertaining the occurrence of one of the situations which cause ex lege termination of the contract of employment. In case of the reinstatement of a former employee, who has been unlawfully dismissed, on his or her previous position, which has been occupied by another employee, the employer is obliged to offer to the latter employee, whose contract of employment is terminated, a vacant job in the company, consistent with his/her professional training. Non-observance of this obligation does not have any consequence on the termination of employment. However, the employee may enforce this right before the court. The employee has to reply to the employer’s offer by sending a written consent in three days. If the employer has no other suitable job, she or he is obliged to ask the employment agency for support in finding another job. 5.3. Effects of the existence of a ground An employment relationship is terminated automatically, if one of the grounds for an ex lege termination of employment stipulated in the law comes to an existence. In all new Member States an employee is not entitled to a severance payment in cases of an ex lege termination of employment (for exceptions see below in this Section). As a rule, an employee is entitled to an unemployment benefit in cases of termination of employment by operation of law – except if she or he acquired a pension – according to general rules governing this area of social security (for exceptions see below in this Section). Usually, the termination of employment by operation of law has no special effect on retirement pension schemes and no special effect on health insurance, which would deviate from the ordinary effects taking place irrespective of the mode of termination of employment (see above 4.3.). In Estonia, there is a statutory right to a severance payment (compensation) in certain cases of ex lege termination of employment. For instance, in case of a termination of employment of a minor upon the request of third parties a compensation in the amount of one monthly salary has to be paid by the employer (see Section 3.5.) or in case of a termination of employment due to non- compliance with the rules for hiring (i.e. restrictions on the work of women) a compensation in the amount of three monthly salaries has to be paid by the employer. In Hungary, in case of termination of an employment relationship due to a the transfer into the public sector, there is a detailed procedure with complex obligations in relation to the transfer of businesses (information and consultation procedure, etc.). In relation to this kind of termination of employment, the employee is entitled to a severance payment. In Latvia, there is a right to a severance payment if an employment relationship with a minor is terminated after a request of a third party (see Section 3.5.). In other cases of termination of employment by operation 49 of law there is no right to a severance payment. A person sentenced to imprisonment may be entitled to an unemployment benefit only if the conviction does not exceed three months; then, the person may apply for the status of an unemployed on the basis of terminated employment relations with the former employer. In Lithuania, if the contract of employment is terminated otherwise than at the will of the parties, but without any fault on the part of the employee concerned (e.g. imprisonment, withdrawal of the driving licence due to the breach of traffic regulations, etc.), he or she is entitled to a severance payment in the amount of two monthly average salaries, unless otherwise provided by laws or collective agreements. The law stipulates a waiting period for the unemployment benefit in certain cases. A former employee is entitled to an unemployment benefit, which is paid after eight days from the registration to the unemployment office, in the following cases of termination of employment: inability to fulfil obligations or to perform work due to the employee’s health situation or disability, liquidation of the employer without successor, death of the employer. If a person received a severance payment in case of an ex lege termination, the waiting period for the unemployment compensation is one month. If the ground for the ex lege termination of the contract of employment was directly linked to the fault on the part of the employee, the waiting period for the unemployment benefit is three months. In Romania, there is entitlement to an unemployment benefit in all cases of ex lege termination of employment, listed in the previous Section except in the following cases: retirement, imprisonment, interdiction to exercise a profession or to perform a job, withdrawal of the consent for minors between 15 and 16 years of age. In Slovenia, according to collective agreements, an employee is entitled to a severance payment in the case permanent disability is established by a competent authority and the employee is therefore retired and acquires an invalidity pension. Collective agreements also provide for the so called solidarity benefit in case of death of the employee; entitled to it are the close relatives of the deceased. A person is not entitled to an unemployment benefit in the case a termination of employment is based on a court judgement, if it was reached upon the employee’s request not to order the reinstatement. 5.4. Remedies Disputes arising from the termination of employment by operation of law are settled according to the general rules for the resolution of individual labour disputes as in any other modes of termination of employment (see also Section 4.4.). 5.5. Penalties In most of the new Member States there are no special provisions on penalties. In Lithuania, penalties may be incurred if violations constitute an administrative or criminal liability, such as, for example, discriminatory action. In Slovenia, certain violations of rules governing the fixed-term contract (among them, if an employer does not respect a transformation of illegal fixed-term contract into a contract for indefinite period of time) may be considered as an offence and a fine 50 may be imposed on the employer. Certain acts or omissions by the employer seriously violating the rights of employees are punishable as a criminal offence according to the Penal Code; in practice, these provisions of the Penal Code are used very rarely. 5.6. Collective agreements Since the termination of employment by operation of law is imperatively regulated by law, there is almost no room for collective agreements to intervene. The possible exception is the regulation of severance payments for the employees. In almost all new Member States collective agreements play no role in relation to the ex-lege termination of employment relationships. In the Czech Republic, some collective agreement may contain provisions on severance payments. In Slovakia, collective agreements regulate compensations in case of termination of employment due to illness or medical contraindication. In Slovenia, collective agreements provide for a severance payment to which the employee is entitled in case of termination of employment due to a permanent disability and the so called solidarity benefit in case of death of the employee (see above Section 5.3.). 53 The law does not give an employee the opportunity to defend himself or herself against objections on grounds of his or performance or conduct before the termination of employment. In practice, employees usually do have such an opportunity. In Hungary, a distinction is made between an ordinary dismissal (with notice period) and an ‘extraordinary’ (summary) dismissal (without notice period). Summary dismissal is possible only in the case of the other party’s conduct constituting a grave breach of contract. In Latvia, labour legislation explicitly and exhaustively determines the grounds which can be regarded as valid reasons for a dismissal. The law provides that an employer is entitled to dismiss an employee by a written notice provided it is related to the employee’s conduct or his abilities, or is caused by managerial, organizational, technological or similar activities carried out within the undertaking. In Lithuania, there are two main categories of grounds for a dismissal: o disciplinary grounds (a dismissal without notice): - gross breach of work duties (a qualified breach of labour discipline), - repeated negligence in the performance of the work duties or the violation of the work discipline if the disciplinary sanction has already been imposed on the employee during the last 12 months (repeated breach of labour discipline), o grounds which are not related to any misconduct on the part of the employee (a dismissal with notice): - significant reasons related to economic or technological grounds such as the restructuring of the workplace, as well as for other similar reasons on the side of the employer (this is the most frequent ground for dismissals), - significant reasons related to the qualification, professional skills of an employee, but not related to any misconduct on her or his part (rarely used by employers in practice), - specific grounds for certain categories of employees provided by special norms or special acts (fixed-term contracts, including short fixed-term contracts and seasonal workers, probationary period, managers, teachers, bankruptcy proceedings). There are also numerous procedural requirements as well as statutory guarantees for certain groups of employees. The court declares a dismissal unlawful if an employee has been dismissed without a valid reason or if a gross violation of the procedural requirements occurred. In Malta, an employer has the right to dismiss an employee, no matter whether such an employee is employed under a fixed-term contract or under an indefinite-term contract. Special rules apply during the probationary period (see Section 8.). Employees under a fixed-term contract can be dismissed for any reason. A dismissal before the expiry of the agreed term is possible, too, but in this case the employer has to pay to the employee one-half of the full salary (excluding any remuneration for overtime, any forms of bonus, any allowances, and remuneration in kind and commissions) that would have accrued to the employee in respect of the remainder of the time specifically agreed upon. Special rules apply during the probationary period. 54 In relation to the employment contract for indefinite period of time, the law distinguishes between the following possibilities: o dismissal during the probationary period, o dismissal on the ground of redundancy, o dismissal for a ‘good and sufficient cause’. In Poland, there is a distinction between: o a dismissal with notice and o a summary dismissal. In case of a fixed-term contract, no grounds are required for a dismissal with notice. In case of a contract for indefinite period, a dismissal has to be justified by one of the following reasons: o serious unlawful conduct by the employee, o the employees’ capacities (e.g. failure to adopt to changes arising from new technology or equipment), o structural, technological, economic reasons (collective dismissal), o some other substantial reason. In case of a summary dismissal the employer has to present a substantial ground. A summary dismissal may be justified by a serious violation of the employee’s fundamental duties, an evident offence that renders further employment impossible or lack, through the employee’s own fault, of professional qualifications. Termination of employment is also possible in case of the employee’s prolonged absence from work (one, three or six months, depending on the reason for the absence and seniority of the employee) which may cause difficulties in the organization of work. The employee’s trade union has to be informed about the dismissal. The negative opinion of a trade union (it has to be issued within five days in case of a dismissal with notice and within three days in case of a summary dismissal) does not render the dismissal invalid, yet it enables the dismissed employee to bring an appeal against the dismissal if he/she believes it is unjustified. In case of an unjustified/illegal dismissal the employee may bring an action before the court and demand reinstatement or compensation. In Poland, the law does not make a distinction between a dismissal on disciplinary grounds, a dismissal for reasons related to the employee’s capacities and a dismissal for economic reasons. The same legal rules apply to all forms of dismissal; the basic distinction between dismissals relates to the question whether there is a notice period or not. In Romania, a dismissal has to be justified, well grounded on the reasons, expressly and exhaustively determined by labour legislation. Besides, the dismissal procedure and formal requirements have to be observed. Dismissals on certain grounds are prohibited. Certain categories of employees enjoy stronger protection against dismissal. A distinction is made between two categories of dismissals: o a dismissal for reasons related to the employee - if the employee committed a serious violation of his or her duties (disciplinary dismissal), - if the employee is taken into preventive custody for a period exceeding 30 days, under the rules of criminal procedure, - if, following a decision of the competent medical investigation authorities, physical unfitness and/or mental incapacity of the employee is established, which prevents the latter from accomplishing the duties related to his/her work place, 55 - if the employee is professionally not fit for his/her job, - in case the employee meets retirement conditions and he/she did not apply for retirement. o a dismissal for reasons which are not related to the employee (lay-off due to economic difficulties, technological changes or activity reorganisation; the lay-off has to be effective and have an actual serious cause, a distinction is made between an individual and collective dismissal). A dismissal has to be in writing. The employer has to observe a notice period, unless the reason of dismissal can be imputed to the employee. The employer cannot pay compensation instead of the period of notice. There is no period of notice in case of a dismissal on disciplinary grounds. The employee has a right to be previously informed about the reason for a dismissal and to be heard in cases of a dismissal for disciplinary grounds, for being professionally unfit and in case of collective dismissals. The principle of ultima ratio requires alternatives to a dismissal, less severe disciplinary sanctions, etc. The dismissal is unlawful in case of non-observance of any of the procedural requirements. In Slovakia, the law distinguishes between a dismissal with notice and an immediate (summary) dismissal, which is without notice. Special rules apply during probationary period (see Section 8.). The law exhaustively sets out the grounds for dismissal with notice and no other may be added. Grounds for a dismissal can be divided into: o economic reasons, o reasons related to the individual workers concerned and o disciplinary reasons. In Slovenia, there are two kinds of a dismissal: - ordinary dismissal (with a period of notice) and - extraordinary dismissal (i.e. summary dismissal, without a period of notice). A valid reason justifying a dismissal with notice period has to be demonstrated by the employer. The law distinguishes between three valid reasons: - economic (business) reason, - reason of incapacity, - reason of misconduct. A special mode of an ordinary dismissal is a dismissal by offering a new contract. A summary dismissal without a period of notice is possible only in exceptional cases laid down by the law, when it is not possible to continue the employment relationship until the expiration of the period of notice or until the expiration of the period for which the employment contract was concluded (grave misconduct of an employee and some other reasons). The employer has to present the reason justifying such dismissal. The law also lays down formal, procedural requirements, which the employer has to respect in order for a dismissal to be valid. They differ according to the mode and reason for dismissal. 6.2. Dismissal contrary to certain specified rights or civil liberties There are some common fundamental principles in all new Member States, prohibiting dismissals on certain grounds and discrimination in relation to the termination of employment relationships. A comparison between Member States is sometimes difficult since different Member States have different approaches towards these issues. In all of the new Member States a dismissal is invalid if it is based on sex, race, colour, pregnancy, trade union activity, nationality or other personal 58 o absence from work, as a consequence of compulsory military service or other civil, or political service; o temporary absence from work by reason of illness, accident or other unforeseen circumstances; leave for educational purposes; o leaving the workplace in case of serious and immediate danger for the employee’s life and health. There is also a general prohibition of discrimination, based on the employee’s sex, race, colour, age, disability, religious conviction, political or other conviction, national or social origin, property, marital status or other circumstances of an employee. In Lithuania, the grounds qualified as unlawful include: o membership of and activity in a trade union or performance of the functions of an employees’ representative at present or in the past, o participation in proceedings against the employer, o sex, sexual orientation, race, nationality, language, origin, citizenship and social status, belief, marital and family status, convictions or views, membership in political parties and public organisations, age, o absence from work when an employee is performing military or other citizens’ duties, o pregnancy, absence during maternity or paternity leave. Besides, certain categories of employees enjoy special protection during certain periods (limited possibilities for dismissals), for example during pregnancy, maternity, parental leave, employees with a child under three years of age, during performance of the functions of an employees’ representative, during temporary absence from work due to illness, accident, citizens’ duties, etc. and during disability. In Malta, the following situations are not considered as a good and sufficient cause for dismissal: o membership of a trade union, performance of the functions of an employees’ representative, including candidacy for it and previous performance of functions, o marital status, pregnancy or absence from work during maternity leave, parental leave, o disclosure of information, whether confidential or otherwise, to a designated public regulating body, regarding alleged illegal or corrupt activities, o filing a complaint or participating in proceedings against the employer, There are some special provisions for part- time employees. In Poland, the following are the unlawful grounds for a dismissal: o activity as an employees’ representative (trade union, works' council, board of directors, non professional labour inspector), o participation in a legal strike, o age, race, colour, sex, marital status, sexual orientation, religion, political belief, ideological belief, national or social origin, o pregnancy, maternity leave, child care during paternal leave; o absence from work due to military service, civil or political duties, educational leave, holidays, sickness (illness is not a valid ground for a dismissal; however, illness for a lengthy period, such as 9 or 12 months, or repeated illness may be considered as real and serious grounds as it may cause disruption in the organization of work), o having lodged a complaint against an employer. Moreover, certain employees may only be dismissed on important grounds (summary 59 dismissal) and with the prior consent of a relevant organization (e.g. members of the trade union board, the works council, the special negotiation body of the European Works' Council, the Parliament, the Municipal Council, lay judges, boards of professional organizations, legal councillors, non- professional labour inspectors and war veterans). In Romania, the following could never constitute a valid ground for a dismissal: o sex, sexual orientation, genetic characteristics, age, national origin, race, skin colour, ethnic origin, religion, political option, social origin, disability, family status or responsibility, trade union membership or activity; o exercise, under the terms of the law, of the right to strike and trade union rights. Besides, certain categories of employees are protected against dismissal during certain ‘protected’ periods (during medical leave, during pregnancy, maternity leave, during performance of a trade union representative function, etc.; see also 3.5.). In Slovakia, there is no explicit prohibition of dismissal on discriminatory grounds in labour legislation; nevertheless it is, according to general rules, sanctioned by an absolute invalidity. Besides, the employer may not dismiss an employee during certain ‘protected’ periods. For example, a dismissal is prohibited – subject to certain exceptions – during temporary work incapacity of the employee due to illness or an accident, during pregnancy or maternity or parental leave, during the leave granted for the performance of a public office, etc. In Slovenia, the labour legislation explicitly states that certain grounds are not valid at all and that a dismissal based on these grounds is unlawful and therefore invalid: o temporary absence from work due to health reasons or due to family obligations, including maternity, paternity, parental leave, o claiming employee’s rights against his or her employer before a judicial or an other authority, o trade union membership and activity; exercising employees’ rights by participating in the decision-making within the enterprise; candidacy, performance of the functions of an employees’ representative in the past or present (trade union as well as elected employees’ representatives); participation in a lawful strike, o race, colour, sex, age, disability, marital status, family obligations, pregnancy, religious and political conviction, national or social origin. There is also the general prohibition of discrimination, which applies to termination of employment as well, and which prohibits discrimination on the basis of sex, race, colour, age, health or disability, religious, political or other conviction, membership in a trade union, national and social origin, family status, financial situation, sexual orientation or any other personal circumstances. That does not mean that all other grounds are valid reasons for a dismissal. Grounds, which are not explicitly prohibited by the law, are valid only, if they meet the substantive requirements for one of the valid reasons which are laid down by the law (an economic reason or a reason of incapacity or a reason of misconduct). Certain categories of workers enjoy special protection against dismissal (workers' representatives, older workers, pregnant workers and workers with family responsibilities, workers with disabilities and workers absent due to illness; see also 3.5.). Special rules aim to provide an effective protection against discrimination for these workers. 60 6.3. Dismissal on ‘disciplinary’ grounds 6.3.1. Substantive conditions In all of the new Member States, a dismissal on ‘disciplinary’ grounds may only take place if there is a justifying ground (misconduct of the employee, violation of the employee’s duties, etc.) and if a period of notice is given. In exceptional cases of grave misconduct of an employee, a summary dismissal is possible; in this case a period of notice does not have to be given and the employment relationship terminates immediately. In some new Member States, a disciplinary dismissal is always a summary dismissal, without notice period (for instance in Bulgaria, Hungary, Malta); in some new Member States there is no period of notice either, but, prior to the termination of employment, a complex disciplinary procedure has to be completed (for instance, in Estonia, Lithuania, Romania, for certain violations also in Latvia). In many of the new Member States the ultima ratio rule is implied in legal regulation of this mode of employment termination: for instance, a disciplinary dismissal on grounds related to the employee’s conduct is lawful only in cases of a serious breach of the employee’s duties, gross negligence, grave misconduct, severe violation, etc.; a disciplinary dismissal is only possible if the justifying grounds are serious enough and make the continuation of the employment relationship between the employee and the employer impossible. Especially in those Member States where a disciplinary dismissal is considered to be the most severe disciplinary sanction and where a special disciplinary procedure is foreseen, prior to a dismissal, other means of disciplinary punishment have to be considered and a dismissal is allowed only if severe circumstances of the particular case justify it. In Bulgaria, a disciplinary dismissal is always a summary dismissal, e.g. without notice period, with immediate effect. It is only possible in case of serious disciplinary violations of the employee (gross non- performance of employee’s duties, which considerably injures the interests of the employer). These violations are enumerated in labour legislation: three late arrivals or early leaves from work within one calendar month, each of them being not shorter than one hour; absence from work without a reasonable excuse for two or more consecutive working days; repeated violations of labour discipline; abuse of the employer’s trust; disclosure of confidential information relating to the employer; causing damage to third parties, customers; other serious violations. The seriousness of the violation is assessed by the employer, but subjected to judicial control. Besides a disciplinary ground, there are also some other grounds for a summary dismissal: imprisonment of an employee, which makes it impossible for him or her to carry on the work; an employee loses the right to hold the position or the right to exercise his or her profession; an employee loses the scientific title of degree (university teachers); an employee with reduced capacity to work refuses to accept another suitable job. In Cyprus, a justified reason for disciplinary dismissal is the gross misconduct of an employee, such as a criminal offence in the course of his or her duties, immoral behaviour, repeated disregard of work rules. A justifying reason for a disciplinary dismissal is the employee’s failure to carry out his or her work in a reasonably efficient manner. There has to be a serious breach which shows that the employee violates the duty of faith and trust. The employer has to observe a prescribed period of notice. A dismissal without period of notice is possible in exceptional cases only when the relationship between the employer and the employee cannot continue (for example, in case of a serious 63 o repeated negligence in the performance of the work duties or violation of work discipline if a disciplinary sanction had already been imposed on the employee during the last 12 months (a repeated breach of labour discipline). A gross breach of work duties may involve: improper conduct with the visitors or customers, disclosure of state, professional, commercial or technological secrets, participation in the activities which are incompatible with the functions of work, taking advantage of one’s position to get unlawful income, violation of equal opportunities or sexual harassment, theft, fraud, unlawful accepting of a reward, the employee being under the influence of alcohol, narcotic or toxic substances during the working time, etc. Dismissal is considered as the most severe disciplinary sanction. Although not explicitly prescribed, the principle of ‘ultima ratio’ is implied in other provisions. The employer has to consider other, less severe disciplinary sanctions and when imposing a disciplinary sanction the employer must take into account the gravity of the disciplinary breach and its consequences, the degree of the employee's guilt, circumstances under which the breach occurred and previous work of the employee. Disciplinary dismissals do not require a notice period (with no exceptions), but a dismissal is issued only after a disciplinary procedure. In Malta, no distinction is made between dismissals on disciplinary grounds and dismissals on grounds related to the employee’s capacities. The law requires a ‘good and sufficient cause’ for dismissing the employee, yet it does not further define or specify particular cases of disciplinary grounds, particular employee’s violations, breaches, etc.; therefore, the case-law is more important in this regard (in labour legislation, only unlawful grounds for a dismissal are laid down). According to the case-law, the ultima ratio rule also has to be respected: a dismissal of an employee for a good and sufficient cause has to be a last resort and the employer has to give more than just one warning to the employee and the opportunity to mend him/herself. The employer does not have to observe any period of notice. In Poland, a disciplinary dismissal can only take place if there are justified grounds and if a period of notice is given; in certain cases a summary dismissal is possible (for instance, serious offence against employee’s duties, criminal offence, loss of professional qualification by employee’s fault). If there is no justifying ground, the dismissal is void. There is no legal provision on the ultima ratio rule. Periods of notice are as follows: o two weeks, if the employee is employed by the employer for less than 6 months, o one month, if the employee is employed more than 6 months and less than 3 years, o three months, if the employee is employed for at least three years. In Romania, a disciplinary dismissal is regarded as a disciplinary sanction. It is possible in two cases expressly specified by the labour legislation: o in case of a serious violation of discipline, o in case of repeated violations of discipline. Violation of discipline may occur by breaching the rules of work discipline or those set by the contract of employment, the applicable collective agreement, or the company’s rules and regulations. The violation has to be related to the employee’s 64 work. Serious or repeated violations of discipline, justifying a dismissal, are not defined or enumerated in the law. The employer has to consider the seriousness in each particular case, taking into account the following criteria: the circumstances of the violation, the employee's guilt, the consequences of the violation, the employee’s general behaviour at work and possible previous disciplinary sanctions. The ultima ratio rule has to be observed, since dismissal is considered to be the most severe disciplinary sanction. According to the doctrine and jurisprudence, the disciplinary dismissal has to be an extreme measure, applicable only if by taking into account all circumstances, it is impossible to continue the employment relationship between the employee and the employer. There is no notice period in case of a disciplinary dismissal. In Slovakia, every disciplinary dismissal has to be justified. The law defines the ground for a disciplinary dismissal in form of a general clause, it does not specify in detail different violations, breaches of the employee: o for less serious, but repeated breaches of work discipline the employer may dismiss the employee with notice (a written reminder had to be issued during the last six months), o for serious breaches of discipline the employer may dismiss the employee either with or without notice (a summary dismissal). The employer has to observe the period of notice. Minimum periods of notice are prescribed by the law and are the same irrespective of the grounds for the dismissal. The minimum period of notice amounts to two months; for employees with five years of service with the employer or more, the minimum period of notice amounts to three months. For part-time employees with less than 20 hours a week, a 15-day period of notice has to be observed. In certain cases, a summary dismissal (with immediate effect, without notice) is possible: o if an employee has been convicted for an intentional criminal offence, o if the employee has committed a serious breach of work discipline. In Slovenia, there are two possibilities for an employer to dismiss an employee who does not act or work as expected according to his obligations and duties under the contract of employment: o ordinary dismissal for reason of misconduct (with a period of notice) or o summary dismissal (without a period of notice) in case of serious, grave misconduct. An ordinary dismissal can take place only if there is a justifying ground (misconduct of the employee) and if a period of notice is given. The law does not specify particular violations, only the general clause is used. An employer may dismiss an employee only, if reasons justifying the dismissal are serious enough and make the continuation of the employment relationship between the employee and the employer impossible (the ultima ratio rule). A minimum period of notice is 30 days. Longer periods of notice may be determined by collective agreements or by an individual contract of employment. For a smaller employer (employing ten or less employees) a branch collective agreement may determine an even shorter period of notice. Compensation instead of a period of notice may be agreed upon by a written agreement. During the period of notice, the employee is entitled to paid absence from work in order to find a new employment, for a minimum of two hours per week. 65 In exceptional cases of grave misconduct of an employee, a summary dismissal is possible. In this case a period of notice does not have to be given and the employment relationship is terminated immediately. The law specifies the cases when summary dismissal is possible, for instance: if the violation has all characteristics of a criminal offence, if an employee intentionally or by gross negligence violates the obligations arising from the employment relationship, etc. Summary dismissal is also possible in some other cases, not just when a certain disciplinary ground exists (for instance: if an employee is prohibited by a court judgement to carry out certain work for a period longer than six months, if an employee has to be absent from work for a period longer than six months due to imprisonment, if an employee fails to successfully pass the probationary period, etc.). 6.3.2. Procedural requirements In all of the new Member States a written form is required. In many of them, a complex disciplinary procedure has to be followed prior to the disciplinary dismissal, which is then considered as a disciplinary sanction. The right of an employee to defend him/herself is fundamental. There are also time limits in most of the new Member States, within which the employer may dismiss an employee on the ground of a particular violation. In all of the new Member States, the employers have to observe additional procedural or formal requirements in case they want to terminate the employment of certain categories of employees (for instance, a prior consent of the trade union or of the labour inspectorate, etc.). In some new Member States, trade union representatives have a certain role in the procedure (for instance, they have to be informed, can give their opinion, may represent the employee). In Bulgaria, a preliminary procedure has to be followed: o an employee has to be given the opportunity to defend him/herself (hearing or a written explanation), o the employer has to examine the violation and assess it as a ‘serious’ one, o time limits have to be observed within which a dismissal is possible (two months from the time the employer has been informed; one year from the violation), o the written order of dismissal has to be issued by the employer (containing also the features and the time of the violation and the grounds for a dismissal) and delivered to the employee (at which time the dismissal takes effect). If an employee enjoys a special protection against dismissal (pregnant employees, trade union representatives, etc.; see 3.5.), the employer is obliged to demand and to receive a prior authorization from the competent body (regional labour inspectorate or the relevant trade union body). In Cyprus, there are no statutory procedural requirements. According to the case-law, the principles of natural justice are applicable. This means that the case has to be carefully investigated by the employer and the employee should be given the right to be informed of the charges and to have adequate time to present his case. In the Czech Republic, the participation of trade unions in the dismissal procedure is foreseen, either in case of a dismissal with a period of notice or in case of a summary dismissal. The legislation distinguishes between two forms of trade union participation: o prior consultation (in all cases of dismissal), o prior consent (if the employee to be dismissed is a trade union official and 68 general rule). In case of a summary dismissal, shorter time limits have to be observed. Special protection against dismissal for certain categories of employees have to be observed, for instance, in the case of a dismissal of a trade union representative, the consent of the trade union is necessary, etc. (See above 3.5. and 6.2.) A letter of dismissal has to be in writing. The employer has to state the reason for the dismissal, explain it in writing as well as inform the employee about the legal remedies and her or his unemployment insurance rights. The letter of dismissal has to be delivered to the employee personally; if this is not possible, civil law rules apply. 6.3.3. Effects of the dismissal The employment relationship is terminated by the expiry of the period of notice. In case of a summary dismissal the employment relationship comes to an end immediately. As a rule, the employee dismissed for disciplinary reasons is not entitled to a severance payment in any of the new Member States. However, there are important differences as regards the entitlement to an unemployment benefit (in some new Member States employees are entitled to this benefit regardless of the reason for the termination of employment relationship, in others employees are not entitled to this benefit due to the fact that the reason for termination was a disciplinary ground). From nearly all new Member States it is reported that there is no special effect to the pension and health insurance, distinct from other ways of terminating the employment relationship (see also above in Section 4.3.). In Bulgaria, a dismissed employee is not entitled to a severance payment; yet, she/he is entitled to an unemployment benefit without a waiting period according to the general rules. In Cyprus, a dismissed employee is entitled to compensation only in case the dismissal was unfair. A dismissed employee is entitled to an unemployment benefit, the waiting period being 3 days (benefit payable on the 4th day of the unemployment), according to the general rules; it cannot exceed 156 working days. In the Czech Republic, there is no entitlement to a severance payment; yet, a dismissed employee is entitled to an unemployment benefit (if he/she fulfils the conditions for it, according to the general rules). In Estonia, an employee dismissed on 'disciplinary' grounds is not entitled to a severance payment. Such employee is not entitled to an unemployment benefit either. In Hungary, a dismissed employee does not have the right to a severance payment. In Latvia and in Lithuania, there is no entitlement to a severance payment for dismissed employees, yet they are entitled to an unemployment benefit (if they fulfil the conditions for it, according to the general rules), but the waiting period is longer than in case of other grounds for a dismissal, namely two months in Latvia and three months in Lithuania. In Poland, there is no statutory right to a severance payment in case of a disciplinary dismissal. The right to an unemployment benefit does not depend on the ground of the dismissal, therefore the employees dismissed for disciplinary reasons are entitled to it according to the general rules. In Romania, the dismissed employee is not entitled to a severance payment, unless so agreed by the parties. The employee is not entitled to an unemployment benefit either. 69 In Slovakia, there are no special provisions on the effects of a disciplinary dismissal. An employee is entitled to an unemployment benefit according to the general rules (three years of insurance in the last four years before the unemployment). In Slovenia, the dismissed employee is not entitled to a severance payment or any other compensation for the termination of employment relationship. Employees who are dismissed on 'disciplinary' grounds are not entitled to unemployment benefit either. 6.3.4. Remedies In all new Member States, employees have the right to bring an action before the court (either the specialised labour court or the ordinary civil law court), if they think that the dismissal was unfair, unlawful, void, just as in any other mode of termination of employment relationship. In Cyprus, an employee may bring an action for unfair dismissal before the Industrial Dispute Court. The action must be brought within one year from the date of dismissal. The employee may also/alternatively bring an action for breach of the employment contract before the civil courts within six years (wrongful dismissal). There is no legal aid for proceedings before the Industrial Disputes Court or civil courts. The burden of proof is on the employer unless the cause of action is a constructive dismissal case in which the employee must prove the reason for the dismissal. If a dismissal is found to be unfair, the employee is entitled to compensation. The amount depends on the length of service with the employer: o for 1-4 years of employment, the maximum compensation is 2 weeks’ wages for every year, o 5 up to and including 10 years, 2,5 weeks’ wages for every year, o 11 up to and including 15 years, 3 weeks’ wages for every year, o 16- up to and including 20 years, 3.5 weeks’ wages for every year, o 21- up to and including 25years, 4 weeks’ wages for every year. The Industrial Disputes Court may take into account additional factors. In any event, however, compensation cannot exceed a two year wages in total, wages meaning the last gross wages. Even though the compensation for unfair dismissal awarded by the Industrial Disputes Court may exceed a year wages, the liability of the employer is up to one year. The rest is paid by the Redundancy Fund. In the Czech Republic, the time limit for bringing an action before the court is two years. If the dismissal is found to be invalid, the employment relationship continues to exist if requested so by the employee; the employee is reinstated and has the right to the compensation for the entire period of time as well. In Estonia, the dispute over the validity of a dismissal may be settled by the labour dispute committees and by the courts. Labour dispute committees are extra-judicial independent individual labour dispute resolution bodies which consist of a chairman, one representative of the employees and one representative of the employers. They are not competent to settle disputes over financial claims exceeding 50.000 kroons (approx. 3200 EUR). An action has to be filed within one month after the termination of employment. The committee has to organise a hearing not later than in one month after the filing of a complaint. In labour disputes, the burden of proof is determined according to the general rules of civil law. If the action is successful, the termination is declared unlawful, the employee is reinstated and paid the salary for the entire period; if the reinstatement is not 70 ordered, the employee is paid a compensation of six months’ average salary. If an employee requests so, the court has to order the reinstatement (although in most cases this is rather ineffective, since the employer dismisses the employee immediately after his or her return to work on grounds of a lay-off). The state legal aid is available to employees who are unable to pay for competent legal assistance due to their financial situation. In Hungary, an employee may seek remedy at court, if he/she thinks that the termination of employment on disciplinary grounds was unlawful. In this case, the employment relationship exists further until the final decision of the court, if remedy is granted. If the lawsuit is successful, the court will normally order reintegration of the employee to the former job. If the employee does not request reintegration or if upon the employer's request the court discharges the employer of his/her duty to reinstate the employee, the court will order payment of compensation in the amount of not less than two and not more than twelve months’ average earnings to the employee. In this case, the employment relationship is terminated on the day when the court ruling becomes final. Besides, the employee shall be reimbursed for lost salary (and other emoluments) and compensated for any damages arising from such loss. In Latvia, the employee has a right to bring action to the court within one month. Labour disputes are dealt with by the civil courts of general jurisdiction. In all cases of dismissal the employer always bears the burden of proof, meaning that he/she must prove that the dismissal was legally justified and corresponded to the prescribed procedure. If the dismissal is found unjustified and therefore unlawful or the procedure for issuing the termination notice has been violated, the court shall declare the dismissal null and void and shall reinstate the employee to her or his former position. In cases where an employee does not want to continue his or her former employment relationship, she or he has a right to request the termination of employment relationship by a court decision. The employer is obliged to compensate the employee’s damages caused as a result of unlawful dismissal; it is calculated in the amount of the employee’s average remuneration for the whole period from the dismissal onwards. A state-paid legal assistance is available to those who are unable to ensure protection of their rights, either fully or partially, due to their financial situation and income levels. In Lithuania, the employee may contest the termination of employment and bring his/her case before a civil court of general jurisdiction within a period of one month after the termination of the relationship. Employees may be represented by trade unions or their representatives; a special written or oral authorisation for their representation is not required. They are exempt from the stamp- duty. Labour disputes are dealt with by the civil courts of general jurisdiction. Nevertheless, there are some special rules with regard to the resolution of individual labour cases in a separate chapter of the Civil Procedure Code. In labour disputes, the court has very wide discretion to protect the employee’s interests ex officio. In particular, the court may collect evidence on its own initiative, involve a third party in the procedure, decide extra and ultra petitum, apply alternative means for the protection of the infringed rights. The law sets short-time terms for the preparation and hearing of the labour case before the court. In 30 days, the case has to be prepared for hearings and a decision has to be made not later than 30 days after the beginning of the hearings. However, in practice courts rarely meet these deadlines. There are also 73 assistance. The state legal aid system is available for persons with low income. In disputes concerning the termination of employment, the court is obliged to act rapidly. Nevertheless, such cases are pending before labour courts for quite a long time. If an employee’s action is successful, the court orders the reinstatement of the employee and payment of the salary he or she would have earned had there not been illegal termination of employment. There is also a possibility that the court orders payment of compensation instead of the reinstatement. The burden of proof for the existence of a valid reason for a dismissal rests within the employer. 6.3.5. Suspension of the effects of the dismissal In general, most of the new Member States do not offer the employee a possibility to benefit from the suspension of the effects of the dismissal before the end of judicial proceedings. There are two exceptions. In Poland, there are no specific suspension procedures in labour law matters, but general civil law rules on interim relief may be applied in labour law cases, too. In practice, labour courts are reluctant to issue an interim order which imposes an obligation addressed to the employer to reengage the dismissed employee, as long as the court proceedings are going on. In Slovenia, the employee who brings an action before the court may at the same time request the labour court for an order of interim relief, which requires the employer to continue the employment relationship with the dismissed employee or to reinstate the employee until the court reaches the decision on the matter. In practice, labour courts issue such an order very rarely. Usually, the employment of the dismissed employee is not kept during the judicial procedure. Further to that, the labour legislation provides for a possibility to suspend the effects of a dismissal for the time before the court reaches a decision on the issuing of an order of interim relief. A suspension of the effects of the dismissal is possible also in case of dismissals on disciplinary grounds. The following conditions have to be fulfilled: - the employee's request to suspend the effect of a dismissal, - the trade union which was (on the employee’s request) informed about the intended dismissal and opposed to the dismissal by a written statement. That means that a suspension of the effects of the dismissal until the court’s interim relief is possible only, if the employee is a trade union member, if he/she requests that the trade union must be informed about the intended dismissal and if the trade union, after having been informed, expresses its opinion and opposes to the dismissal in writing within eight days from the day it was informed. 6.3.6. Restoration of employment In most of the new Member States the reintegration of an unlawfully dismissed employee is the main remedy ordered by the court in case of a successful lawsuit contesting the validity of the dismissal. This is the case in Bulgaria, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Slovakia and in Slovenia. In most of these Member States, however, the labour legislation provides for a possibility that, although the employee requested so, the reinstatement is not ordered and the employer is only liable to pay compensation to the employee (the Czech Republic, Hungary, Lithuania, Poland, Slovenia). There are important differences between the Member States as regards the conditions to be met for this possibility to take effect and as regards the time and mode of termination of employment in such cases. See also Section 6.3.4. In Malta and Romania, 74 the main remedy is compensation, but there is also a possibility of reinstatement. Absolutely different principles apply in Cyprus, where the main remedy for unfair dismissal is compensation (see Section 6.3.4.), whereas the theoretical possibility to order reinstatement has yet not been used and there is no reported case so far that reinstatement was ordered by the courts. In Bulgaria and Estonia, the reinstatement is the only possibility and has to be ordered if the employee demanded it. In Hungary, although the reinstatement is the main remedy, there are certain cases, where reinstatement is not possible due to various reasons, for instance, if the previous job does not exist any more, if the trust between the parties has been undermined, etc. In such cases, at the employer’s request, the court does not order reinstatement of the employee in his or her original position, but grants compensation instead. However, there are cases in which reinstatement in the original position is mandatory (if this is requested by the employee) and the employer cannot avoid this remedy: for example, in the case of violation of the principle of equal treatment, in the case of a special protection against dismissal. If the reinstatement is not ordered by the court (because the employee has either not requested it or the employer requested to be exempt from this obligation), it orders the employer to pay a sum of not less than two and no more than twelve months’ average earnings of the employee. In this case the employment relationship terminates on the day the court ruling becomes final. In Latvia, reinstatement is mandatory in case of unlawful dismissal and the employer’s consent is not necessary. The employer may not excuse him/herself by referring to the fact that another employee is employed in the position or that the relevant job does not exist any more. It is interesting that the reinstatement of the former employee to the previous job serves as a sufficient ground to terminate the employment relationship with the new employee performing this job until the reinstatement. In Lithuania, although the reinstatement is the main remedy, the court may – at the request of the employee or employer or on its own initiative – decide to terminate the employment relationship and not to order the reinstatement. The court shall reach such decision if it finds that the reinstatement is not possible due to economic, technological, organisational or similar reasons, or because the employee may be provided with conditions not favourable for work. In this case, the court will pass a decision to recognise the dismissal as unlawful and order to pay severance payment to the employee as well as average salary for the entire period before the court judgement. The employment contract shall be considered terminated from the effective date of the court decision. In Malta, the main remedy is compensation, but if explicitly requested by the employee the reinstatement may be ordered, too, if other conditions required are met. In this regard the decisive question would be, if the reinstatement is practicable and in accordance with equity. The interests of both parties shall be taken into account. If the complainant is employed in managerial or executive jobs, the reinstatement will not be ordered. In Poland, although the reinstatement is the main remedy, the dismissed employee may opt for compensation which cannot be higher than a 3-month salary. Besides, the labour court itself may decide that the reinstatement of the dismissed employee is either impossible or pointless; however, the court does not have this possibility in cases of employees who 75 enjoy special protection. The court is bound by the claim to reinstate the employment relationship brought by any employee with special protection, such as members of a trade union board, members of a works' council, pregnant women, employees on maternity and parental leaves of absence, etc. In Romania, the reinstatement may be ordered by the court only if the employee expressly requested so. In Slovakia, the main remedy is reinstatement. If the employee does not insist on his continued employment, the employment relationship is deemed to have been terminated by mutual agreement and the employee is only entitled to compensation. In Slovenia, reinstatement is the main remedy and is ordered by the courts as a rule. The reintegration can be avoided, if the court establishes that the continuation of the employment relationship would no longer be possible. The court may reach such a decision upon the employee’s request or without it. In such a case the court decides that the employment relationship existed until the first instance judgement and determines the date of the termination of employment relationship. 6.3.7. Penalties In general, the labour legislations in most of the new Member States stipulate different penalties for administrative or criminal offences in relation to the breaches of legal provisions on dismissal. There are some new Member States, where there are no special provisions on penalties for violations in relation to dismissal. In Cyprus, if an employer fails to reinstate an employee when ordered to do so by the court, he or she may face contempt of court order proceedings which may lead to imprisonment or a fine or both. In Latvia, the law stipulates liability for breach of legal provisions governing employment relationships, the fine imposed on the employer being up to 250 LVL for employers – private individuals (approx. 350 EUR) or 500 LVL for employers – legal entities (approx. 700 EUR). There is also criminal liability for an intentional failure to execute a court judgement (e.g. ruling on reintegration of the employee), the monetary penalty being up to 60 minimum wages (around 5400 LVL, e.g. 7.600 EUR). In Lithuania, there are no special provisions on penalties for the violations of the employer in connection with a dismissal. Only the violation of an equal treatment principle can be a ground for administrative or criminal liability. In Malta, there is a general provision imposing on the employers a fine of not less than 100 MTL (approx. 230 EUR) and not exceeding 1000 MTL (approx. 2330 EUR) for any breach of the conditions of employment laid down in the employment legislation. Certain violations, mostly related to the payment of the salary and other remunerations, including bonuses, holiday pay, etc., are taken so seriously that the court may, at the request of the prosecution, besides imposing the punishment stipulated by law, order the offender-employer to refund or pay to the employee(s) concerned the said amount due by the employer. Such order by the court shall be of the same force and effect and executable in the same manner as if it had been given in a civil action duly instituted between the employer and the employee. In Poland, an employer may be fined for offence where he or she ignores the legal regulations concerning either ordinary or special protection rules in relation to job 78 employee. In either case, the rules of dismissal are the same (see Section 6.3.). In the Czech Republic, the grounds for this kind of a dismissal are as follows: o the ‘health reason’, o grounds in relation to qualifications for performing work. The health reason occurs “if the state of the employee’s health is such, according to the opinion of a medical expert or a ruling of the state health administration authority or social security authority, that the employee is no longer able in the long-term to perform his existing work, or the employee is not permitted to do the work because he or she suffers from an occupational disease or faces the danger of such disease, or, according to a ruling of the competent public health protection authority the employee has been subjected at the workplace to the maximum permissible level of exposure”. The ground for dismissal in this case can be found only in the long-term incapacity. Contrary to that, an employee, incapable to work only temporarily, is protected by the prohibition of being given notice of termination. The evaluation of the (in)capacity for work is done according to the regulations relating to health insurance and pension insurance. The Ultima ratio rule applies in this case: an employer has the duty to transfer an employee to other work, or even to work of a different kind from that agreed upon by the employment contract. Only in case that the employer cannot provide such work because it does not exist, the dismissal is lawful. According to the doctrine, the freedom of work should be guaranteed; therefore, an employee can always refuse to perform work not agreed upon and if so, the dismissal follows. Another ground justifying a dismissal occurs “if the employee does not meet the prerequisites laid down in statutory provisions for performance of the agreed work (job), or if, through no fault on the employer’s part, the employee does not meet the requirements for proper performance of such work”. If the employee’s failure to meet these requirements is the result of unsatisfactory work, the employee may be dismissed for this reason only if, during the previous 12 months, the employer called upon him or her in writing to eliminate the defects in the work, and the employee failed to do so within a reasonable period of time. It makes no difference whether non-compliance with the requirements existed already at the time when concluding a contract of employment or it occurred later during the employment (withdrawal of a driving licence). It makes no difference whether an employee fails to meet these prerequisites because of her/his fault or not. This ground justifies a dismissal only if the employer is not responsible for such situation. There is a general ultima ratio rule establishing the employer’s duty to offer another suitable job to the employee. This is a precondition for the validity of a dismissal. A dismissal is lawful only if the employer may prove that she or he does not dispose of such work or if she/he offered such work to an employee and the latter refused it. The ‘suitability’ of the work offered should be considered in a way as to take into account also the state of health, abilities of the employee, as well as the employee’s qualification. The offer of another job may even be connected with preceding training (if not unreasonably costly). The employer may dismiss the employee only if: o the employer does not have the possibility of employing the employee at the place agreed as place for the performance of work, nor at the place of his residence even after the previous training and 79 o the employee is not willing to be transferred to another work suitable for her/him and offered at the place agreed as the place for the performance of work, or in her/his place of residence, or to undergo previous training for such work. The period of notice is two months. In Estonia, an employer may dismiss an employee for reasons pertaining to the employee’s capacities or personal attributes in the following cases: o unsuitability of an employee for his or her job due to lack of the professional skills required or for reasons of health, o unsatisfactory results of a probationary period (see Section 8.), o due to the long-term incapacity of an employee for work. The notice period and the payment of compensation depend on the ground for the dismissal. Unsuitability occurs when the employee’s abilities, skills, knowledge, etc. are inadequate for duly performing his or her duties (e.g. insufficient work skills, insufficient language or communication skills, deterioration of health, lack of documents necessary for performing work, such as a driving licence, a qualification certificate, etc.). Following the equal treatment principle, it is no longer possible (from 4 March 2006) to terminate employment contracts due to an employee’s age (earlier, employers could dismiss persons who reached 65 years of age and were eligible for a state retirement pension). The employer is required to organise at his/her expense vocational training necessary to acquire and to retain professional skills in a changing world. The termination of an employment contract due to an employee’s unsuitability depends on whether the employer had organised training and on the results of the training. The employer has to offer to the employee another position before he/she can dismiss the employee due to unsuitability. These are certainly the aspects of the ultima ratio rule. The employer is required to give the employee at least one month’s notice period or to pay compensation in the amount of the average daily wages to the employee for each working day short of the period for advance notice. Long-term incapacity for work justifies a dismissal if: o the employee has been absent from work due to incapacity for work for more than four consecutive months (eight months in the case of tuberculosis), o the employee has been absent from work due to incapacity for work for more than five months during a calendar year (eight months in the case of tuberculosis). An employer may dismiss an employee due to long-term incapacity for work only during the time of the employee’s incapacity. When an employee started working again, dismissal on this ground is not possible any more. An employer may not dismiss an employee who is temporarily incapable for work due to a work injury; the job has to be maintained until his or her recovery or until the disability is established. In case of long-term incapacity, the period of notice is two weeks. If the employer does not comply with this notice period, he or she is liable to pay compensation in the amount of the average daily wages to the employee for each working day short of the period for advance notice. A failure to give advance notice of a dismissal does not render the dismissal unlawful. In Hungary, an employee may be dismissed with notice based on his/her ability or 80 behaviour in connection with the employment relationship. The law does define this reason for dismissal more precisely without specifying particular cases which could be subjected to it. A distinction is only made between: o the ability of the employee and o the behaviour of the employee. According to the case-law, this reason for dismissal occurs in case of qualitative change, incapability, cessation of confidential relation (loss of confidence), a refusal of change over to a new form of responsibility, breach of duties arising from employment relationship, etc. This kind of dismissal (so-called ordinary dismissal) is a dismissal with a period of notice. Minimum periods are provided for by labour legislation. According to the law, the minimum period of notice is thirty days and the maximum is one year. The thirty-day notice period is extended: o by five days after three years of employment at the employer, o by fifteen days after five years of employment at the employer, o by twenty days after eight years of employment at the employer, o by twenty-five days after ten years of employment at the employer, o by thirty days after fifteen years of employment at the employer, o by forty days after eighteen years of employment at the employer, o by sixty days after twenty years of employment at the employer. During the notice period the employee is entitled to a time-off for finding a new job (an employee is relieved from his or her duties for at least half of the duration of the notice period, by his/her choice). Prior to a dismissal for reasons of the employee’s work performance or conduct the employer is obliged to give to the employee the opportunity to defend him/herself, except such opportunity cannot be expected in view of all circumstances of the particular case. There are special rules for the so-called ‘pensioners’: the employees who are eligible for a pension (old-age pension, invalidity pension and other types of pensions) and other pension benefits of the same character as the old-age pension. In this case the employer is not obliged to give reasons for a dismissal. An ordinary dismissal is valid even if the employer does not justify it; the employer just has to observe the period of notice. In Latvia, the employer may dismiss an employee in the following cases where the reasons are related to the employee’s capacities or personal attributes: o the employee lacks adequate occupational competence for performance of the contracted work; o the employee is unable to perform his/her work due to his/her state of health certified by a doctor’s opinion. Since, it is the employer who has to prove the existence and validity of the ground for the dismissal, which is not a straightforward task in this case, it is not very usual for employers in Latvia to use the first ground for justifying the dismissal. Temporary inability to perform the work does not qualify as a ground for dismissal. It is only the permanent inability to perform the work which justifies the dismissal. The employer has to ensure the possibility of a medical examination for the employee. It might also be the case that the employee him/herself submits a doctor’s statement concerning the inability to perform the work and thus informs the employer about the ground for the termination of employment relationship. Submitting such a statement may not be considered as a resignation by the employee, rather the employer is obliged to proceed with the 83 employee accepts the employer’s offer, the contract of employment is modified and continues to exist between the parties. If the employer has no vacant suitable job in the company, she or he is obliged to ask the employment agency for support in finding another job. If the employer does not observe this obligation, the dismissal decision is null and void. If the employer dismisses the employee because he/she fulfils the conditions for an old-age pension, the dismissal decision may be issued any moment after the date the employee meets such conditions (before the employee alone applies for retirement on her/his own initiative ; then the employment will be terminated automatically when the decision on pension is communicated). In Slovakia, the employer may dismiss the employee in case of long-term loss of the employee’s work capacity. Either a medical opinion or a decision of a public health authority is necessary. The loss of more than 70% of work capacity can be considered as a long-term inability for work. In case of the loss of less than 70% of work capacity, the dismissal is possible, if the continued performance of the employee’s work would require the adaptation to special conditions that the employer is unable to ensure. The employer has to observe special protection of certain categories of employees (prohibition of dismissal during the protected periods; see also 3.5. and 6.2.). According to the ultima ratio rule, the employer is obliged to offer the employee another suitable job. In certain cases, the employer is even obliged to secure the employee a new adequate job (for instance, in case of a risk for an occupational disease; in this case the notice period expires only after a new adequate job is secured). A dismissal of an employee with disabilities requires a prior consent of the Office of Labour, Social Affairs and Family. The law provides for additional reasons for dismissal, which are in relation to the employee’s person: o an employee fails to meet the statutory requirements for the performance of the agreed work, o an employee fails to meet, without the employer’s fault, the requirements for proper performance of work as defined in the employer’s internal rules, or o an employee fails to properly fulfil the work duties and, although the employer has urged him in writing during the last six months to remedy the deficiencies, the employee did not do so in due time, o an employee, elected or appointed to a managerial position, has ceased to meet the necessary requirements. The employer has to observe the period of notice. The minimum periods of notice are prescribed by law and are the same irrespective of the grounds for the dismissal. The minimum period of notice amounts to two months; for the employees with five years of service with the employer or more, the minimum period of notice amounts to three months. For part-time employees with less than 20 hours a week, a 15 days’ period of notice has to be observed. In Slovenia, the law makes a distinction between dismissal for reason of misconduct, incapacity or economic reasons. Many provisions are the same for all kinds of dismissal. A dismissal for reason of incapacity is defined as follows: “…non-achievement of expected work results because the employee failed to carry out the work in due time, professionally and with due quality, or non-fulfilment of conditions for carrying out work as stipulated by laws and other regulations due to which the employee fails to fulfil or cannot fulfil the obligations arising from the employment relationship”. 84 For a valid dismissal in such a case, the employer has to present a justifying reason and observe a period of notice. An employer may dismiss an employee only, if reasons justifying the dismissal are serious enough, so as to make the continuation of the employment relationship between the employee and the employer impossible (ultima ratio rule). An employer must, prior to the dismissal, check whether there are alternatives to the dismissal, i.e. whether it is possible to find another work for the employee. The employer has to check whether it is possible for the employee to work under changed conditions or on another post, and/or whether it is possible to additionally train the employee for the work she or he carries out or to retrain the worker. If such possibility exists, the employer has to offer the employee a new (changed) contract of employment. The obligation to check for alternatives to the dismissal does not apply if the employee has been employed by the employer for less than six months and if the employer is a small employer, employing up to ten employees. There are time limits for a dismissal: an employer may dismiss an employee no later than within 30 days as from having found out the reasons justifying a dismissal and no later than within six months as from the occurrence of that reason. After this time limits the particular ground can no longer be considered as a valid reason and cannot justify a dismissal any more. The minimum period of notice in cases of a dismissal on grounds of incapacity depends on the length of the employee's service with the employer: - 30 days, if the length of service with the employer is less than five years, - 45 days, if the length of service with the employer is at least five years, - 60 days, if the length of service with the employer is at least 15 years, - 120 days, if the length of service with the employer is at least 25 years. Longer periods of notice may be determined by collective agreements or by an individual contract of employment. For a smaller employer (employing ten or less employees) a branch collective agreement may determine an even shorter period of notice. Compensation instead of period of notice may be agreed upon by a written agreement. During the period of notice an employee is entitled to paid absence from work in order to find a new employment, for a minimum of two hours per week. Collective agreements may provide for longer periods of paid absence from work during the period of notice. 6.4.2. Procedural requirements In Bulgaria, for certain categories of employees the law provides for special protection against a dismissal: a prior permission/consent, issued by the labour inspectorate (for a dismissal of a pregnant women, mothers with a child under 3 years of age, employees with reduced capacity for work, etc) or by the trade union (for a dismissal of a trade union representative) has to be acquired. A dismissal without prior permission/consent is unlawful and thus invalid. If challenging such a dismissal before the court, the latter may order the reinstatement of the dismissed employee. The dismissal has to be in writing and delivered to the employee. In Cyprus, no special formal requirements are prescribed by the law. In the Czech Republic, a special protection against dismissal has to be observed in certain cases, for certain categories of vulnerable employees (see 3.5. and 6.2.); besides, all other procedural and formal requirements have to be met, which are, with few 85 exceptions, the same as in the case of a dismissal on disciplinary grounds (see 6.3.2.). Besides the requirements which are the same as in the case of a disciplinary dismissal, the employer has a duty to assist the dismissed employee in seeking other suitable employment. This requirement must not be confused with the duty to offer another suitable job (which is one of the substantive conditions – see Section 6.4.1.). The employer is expected to cooperate with the competent state administrative authority but other ways may be used as well, e.g. personal links with other employers. To comply with this duty, it is not necessary for the employer to find a new employment for the dismissed employee; it is sufficient if the employer takes measures to assist the employee (e.g. establishing contacts, negotiation with the Labour Office, etc.). Performing this duty does not have any influence upon the running of the notice period either. The employment relationship terminates upon the expiry of the notice period irrespective of whether the employer’s assistance resulted in obtaining another job or not. This employer’s duty ceases if the employee refused another suitable job which the employer had offered him before the dismissal. In Estonia, a written notice of dismissal is prescribed. It must also contain the reasons justifying the dismissal. A dismissal due to an employee’s unsuitability is prohibited if the employee is pregnant or raises a child under three years of age. Before dismissing a representative of employees or a minor, an employer has to obtain a labour inspector’s consent. An employer is not allowed to dismiss an employee due to the employee’s long-term incapacity for work, pregnancy or raising a child under three years of age. In Hungary, a dismissal has to be made in writing and it has to include its justification. The reason for the dismissal must be clearly indicated in the written notification; if not, the court declares the termination of employment unlawful. The justification may comprise of the description of the actual facts and circumstances on which the dismissal was based. Since a dismissal is valid only if it is made in writing, the court only takes into consideration the reasons indicated by the employer in the written letter of dismissal. An additional oral justification of the dismissal is relevant only within the framework of the written justification. In Latvia, the involvement of employees’ representatives in the dismissal procedure is foreseen. In case an employee is a member of a trade union, the employer is under obligation to obtain a prior consent from the respective trade union. If the trade union refuses to give its consent, the employment relationship may be terminated by the court; if there is no reply within one week or if the trade union issues its consent, the employer may dismiss an employee within one month. There are some differences as regards protected employees, where a prior consent is necessary. A dismissal has to be in writing and it has to state and substantiate the reasons for the dismissal. In Lithuania, since a dismissal on grounds related to the qualification, professional skills or conduct of an employee without any fault on the part of the employee concerned is formally and practically regarded as an economic dismissal with a notice, the same rules as in the case of redundancy apply (see Section 6.5.). In Poland, a dismissal has to be in writing and delivered to the employee before the period of notice starts. It has to state the grounds for the 88 of the employee. The amount depends on the length of service at the employer: o one month average earnings if the employee has been employed by the employer for less than 5 years, o two months’ average earnings for the employment of 5 to 10 years, o three months’ average earnings for the employment of 10 to 20 years and o four months’ average earnings for the employment of more than 20 years. In Lithuania, the same rules as in the case of redundancy apply (see Section 6.5.4.). In Malta, no severance payment is guaranteed by the law. In Poland, an employee is not entitled to a severance payment in case of a dismissal related to his/her capacities or personal attributes. In Romania, if an employee is dismissed for reasons related to his/her person, there is no entitlement to a severance payment, unless agreed upon by the parties. The law stipulates the employee’s right to compensation only in case of a dismissal due to employee’s physical unfitness and/or mental incapacity. The employee is entitled to an unemployment benefit if he/she was dismissed for being professionally unfit for his/her job or for his/her physical unfitness and/or mental incapacity, but not in the case he/she was dismissed because he/she was taken into preventive custody or in case of a dismissal due to eligibility for a retirement pension. In Slovakia, the employee is entitled to a severance payment in case a dismissal is due to health reasons. In Slovenia, an employee is entitled to a severance payment. The minimum amounts of the severance payments are determined by the law: o 1/5 of the monthly salary for each year of employment with the employer (including the employer’s predecessors), if the worker has been employed with the employer for more than one and up to five years; o 1/4 of the monthly salary for each year of employment with the employer, for employment of five to fifteen years; o 1/3 of the monthly salary for each year of employment with the employer, for employment of the period exceeding fifteen years, but not more than ten monthly salaries, unless otherwise stipulated by the branch collective agreement. If the employee refuses the employer’s offer for another suitable job under an open-ended contract, the employee loses the right to a severance payment. 6.4.4. Remedies In general, in case of a dismissal for reasons related to the capacities and personal attributes of the employee, the same rules apply as in case of a dismissal for disciplinary reasons (see Section 6.3.4.). In Lithuania, the same rules as in case of redundancy apply (see Section 6.5.4.). 6.4.5. Suspension of the effects of the dismissal In general, the legal situation is the same as in case of a dismissal for disciplinary reasons. In most of the new Member States the employees do not have a possibility to benefit from the suspension of the effects of the dismissal before the end of the judicial proceedings (see Section 6.3.5.). 6.4.6. Restoration of employment 89 The legal situation is the same as in case of a dismissal for disciplinary reasons (see Section 6.3.6.). 6.4.7. Penalties The legal situation is the same as in case of a dismissal for disciplinary reasons (see Section 6.3.7.). 6.4.8. Collective agreements In general, the legal situation is the same as in case of a dismissal for disciplinary reasons. In most of the new Member States, collective agreements do not play an important role in this regard or even any role at all (see Section 6.3.8. and also Section 2.3.). In Hungary, collective agreements may stipulate further restrictions and prohibitions of termination, though they cannot exclude the right of termination as such. They may regulate the notice period and severance payments in a more favourable manner for the employees than the legislation. In Romania, the collective agreement concluded at the national level, which has a general effect, covering all the employees employed in this Member State, stipulates that a minimum notice period is 20 working days. It also stipulates that during the notice period the employee has the right to be absent from the job 4 hours a day in order to look for a new job without any loss of salary. This collective agreement also stipulates that in case of a dismissal for reasons that cannot be imputed to him/her, the employer is obliged to pay compensation of 50% of the employee’s monthly salary. In Slovenia, some collective agreements may determine longer periods of notice and higher amounts of severance payments. 6.5. Dismissal for economic reasons The notion ‘a dismissal for economic reasons’ encompasses dismissals for reasons which are not related to an individual employee. Such dismissals often concern a great number of employees and special rules apply in such a case (collective dismissals, collective redundancies), mainly of procedural nature. 6.5.1. Substantive conditions In all new Member States, a valid reason not related to the individual employee must occur and a period of notice has to be given. In Bulgaria, according to the labour legislation, economic reasons justifying a dismissal may be the following: o closure of a part of the enterprise (termination of the activity of a separate unit, such as a workshop, a laboratory, a department, an office, etc.; the reasons that have caused the closure thereof are of no importance), o staff reduction (an expected decrease of a certain number of employees due to different reasons, such as rationalization of work, or introduction of new technology, etc.), o a decrease in the amount of work (a decrease in the production programme, the quantity of the products manufactured and the like, due to various reasons, such as a shortage of raw materials, lower demand for the products and smaller sales on the market, etc., because of which the production staff has to be reduced), o suspension of work for more than 15 working days (temporary cessation of the activity of the enterprise, irrespective of the reasons thereof – shortage of materials, break-down or repair of the machinery, etc.), o relocation of the enterprise (whereby two elements are necessary: the enterprise as a whole or only a part of it is moved to another location; refusal of the employee 90 to work at the new location of the enterprise or unit), o a concluded management contract (such contract is concluded for the management of public and private commercial companies for a term of up to 3 years and specifies the business task of the manager as well as his/her remuneration, it is a mandate contract; the manager also has the right to dismiss employees from the management staff of the enterprise and to appoint new employees in their positions in order to create his/her own team of collaborators; this possibility lasts for the first 9 months following the commencement date of the management contract). The periods of notice are different for contracts of employment for indefinite period and for fixed-term contracts of employment. For the first one, the minimum period of notice is 30 days, the parties may agree upon a longer period of notice; however, it may not exceed three months. For a fixed-term contract the period of notice is three months. The employer is entitled to terminate the contract of employment prior to the expiry of the period of notice; in this case, the employer is liable to pay compensation in the amount of the employee’s gross remuneration for the rest of the notice period. The employee may terminate the contract of employment prior to the expiry of the notice period as well. This is possible in case he/she has found another suitable job; the employee is then liable to pay compensation to the employer in the amount of gross remuneration for the rest of the notice period. The employer has the right to choose which employees are to be dismissed. The employer may decide not to dismiss those employees who hold the positions which are made redundant, and to dismiss other employees instead, the latter working in other parts of the enterprise which are not closed, or holding positions which are not made redundant. The law determines the scope of employees among which this selection is made. The selection is made among the employees whose positions and functions are close or similar to those closed or made redundant. The law lays down the criteria for the selection (qualifications, such as knowledge, skills, and the level of performance, such as the quantity and the quality of the work rendered). The selection of redundant employees is subjected to judicial control. In Cyprus, a dismissal for economic reasons (a redundancy dismissal) is justified: o if the employer has ceased or intends to cease to operate the business where the employee is/was employed. In addition, a redundancy dismissal is justified for the following reasons that are related to the operation of the business: o modernization or any other change in the method of production or organization that necessitates reduction in the number of employees, o change in the products or the method of production or the expertise required by the employees, o closure of a specific department, unit, o credit difficulties, o lack of orders or raw materials, o reduction of the volume of work or the business. In the Czech Republic, a justifying reason as well as a period of notice is required. An economic reason occurs: o if the employer’s enterprise (undertaking) or part of it ceases to exist, o if the employer’s enterprise or part of it is transferred to another location, o if the employee is to be made redundant because of a decision by the employer or a competent body to change the enterprise’s activities or its technology, to reduce the number of employees for the purpose of increasing labour 93 reasonable or not, and it cannot be examined either why the employment of the employee concerned was terminated and not the employment of another employee meeting similar criteria. The change of the employer by legal succession (transfer) does not constitute a valid reason for an economic dismissal (see Section 6.5.10.2.). In Latvia, economic reasons justifying dismissals occur: o if an employee who previously performed the specific work has been reinstated, o if the number of employees is being reduced (redundancy case), o if an employer is being liquidated. The notice period is one month. In case a former employee is reinstated to his or her former position, the new (current) employee may be dismissed. However, the current employee may be dismissed only in case, taking into account her or his skills and qualifications, there is no possibility to offer her/him another position. Redundancy is regarded as termination of an employment agreement due to reasons that are not related to the employee’s conduct or abilities, but which are well-grounded by urgent business, organizational, technological or similar measures carried out within an undertaking. According to the case-law, a dismissal is possible where as a result of these circumstances, it is objectively impossible to maintain the employee’s previous employment terms and conditions. A dismissal may be issued only if there is no possibility to offer the employee an other position within the undertaking. Once established that such activities (business-related, organizational, technological or similar activities carried out within an undertaking) have been carried out, the court does not rule on their necessity or suitability, which rests solely upon the discretion of the employer. If the employer has to choose who will be dismissed, he/she has to observe the priority of certain employees. The priority goes to the employees with better results in work and higher qualifications. If there is no such difference, the priority is given on the basis of other circumstances, for example: o longer period of service with the employer, o work injury or occupational disease, o family responsibilities (children under 14,etc.), o employees with disabilities, etc. In Lithuania, redundancy means the termination of an employment contract at the initiative of the employer (with notice) due to economic, technological grounds or the restructuring of the workplace, as well as other similar significant reasons. The legislation does not specify particular cases which fall under the term ‘redundancy’, rather, it defines this reason only by a general clause. According to the case-law, the following may be classified as economic reasons: economic necessity, changes in technology, performance requiring a smaller number of employees, changes of organisational nature due to the cessation of certain activities. A change of the owner of an enterprise or a transfer of undertaking (also partial) may not be deemed as structural changes constituting a valid reason for redundancy (see Section 6.5.10.2.) In case of a dismissal on economic grounds, the employer has to offer the employee another job available. A dismissal is only allowed if the employee cannot, with her/his consent, be transferred to another job. Certain groups of employees enjoy stronger protection against a dismissal. Employees, 94 who will be entitled to a full old-age pension in not more than five years, employees under 18 years of age, employees with disabilities and employees raising children under 14 years of age may be dismissed for economic reasons in extraordinary cases only, where the retention of the employee would substantially violate the interests of the employer. If the employer has to choose between the employees who are to be dismissed, she or he has to observe certain rules according to which the priority has to be given to those: o with an occupational disease or work injury; o with family responsibilities (raising children, caring for the dependent members with disabilities), o whose continuous length of service at that workplace is at least ten years, with the exception of employees, who are entitled to a full old-age pension or are in receipt thereof; o who will be entitled to the old-age pension in not more than three years, o who are elected to the employees’ representative bodies, etc. The minimum period of notice is two months; yet, it is three months for certain categories of employees (those who will be entitled to a full old-age pension in not more than five years, for employees under 18 years of age, for employees with disabilities and employees raising children under 14 years of age). In Malta, in case of a dismissal for economic reasons (redundancy), the employer has to give the employee due notice. The periods of notice depend on the length of service with the employer and are as follows: o if the length of service with the employer is more than one month but less than six months, the notice period is one week, o if the length of service is more than six months, but less than two years, the notice period is 2 weeks, o if the length of service is more than two years, but less than four years, the notice period is 4 week, o if the length of service is more than four years, but less than seven years, the notice period is 8 week, o if the length of service is more than seven years, the notice period is longer for one additional week for each subsequent year of service up to 12 weeks maximum. The dismissed employee may either continue to perform work until the period of notice expires or, at any time during the period of notice, require from the employer to pay a sum equal to the salary that would be payable in respect of the unexpired period of notice and therefore in the latter case not work during the notice period. Usually, employees in this situation opt for the latter since during such notice period they would start seeking new employment. When deciding who among the employees will be dismissed, the rule ‘last in first out’ applies (with certain exceptions). The dismissed employee has a right to re- employment under certain conditions if the post formerly occupied by him or her is again available within a period of one year from the date of termination of employment. In such a case, an employee is entitled to reemployment at conditions not less favourable than those to which he or she would have been entitled to if the contract had not been terminated. Besides, an employee be deemed to have been continuously employed notwithstanding that the employment had previously been terminated on grounds of redundancy. In Poland, dismissals for economic reasons (redundancy) are regarded as ‘ultima ratio’. Such dismissals are possible only in case of necessity, if there are reasons which are not related to the employees. The law does not 95 specify particular cases; in practice, these grounds are related to economic difficulties, technological changes, production-related or other comparable reasons. An employer has the managerial power to decide how to run the business and whether more or less employees are needed. The labour court does not have the power to check the employer’s decision on which the redundancy is based. However, the labour court is obliged to check whether or not the decision to dismiss employees for economic reasons is sound. According to the case-law, valid grounds for a dismissal do not exist if the dismissal is preceded or followed by the engagement of a new employee entrusted with similar duties as those of the dismissed employee claiming reinstatement. The employer is obliged to do its best to avoid the dismissal. The periods of notice are as follows: o two weeks, if an employee has been employed by the employer for less than 6 months, o one month, if an employee has been employed more than 6 months and less than 3 years, o three months, if an employee has been employed for at least three years. In Romania, a dismissal for economic reasons is the consequence of the suppression of the employee’s position due to economic difficulties, technological changes, or reorganisation of activities. A dismissal on such reasons has to observe the following conditions: o the suppression of the employee’s position can only take place as a consequence of economic difficulties, technological changes, or reorganisation of activities, o the suppression must be effective and have an actual and serious cause (the suppression is not effective if it is followed by the reestablishment of the same position within a short period of time; the modification of the position’s title cannot be held as an effective suppression of that position, either), o an employee’s dismissal has to be a consequence of the suppression of his/her own position. The employer has to observe a period of notice. A minimum period of notice is 15 working days; for employees with disabilities it is 30 working days. In Slovakia, the following may be economic reasons for a dismissal: o winding up of the employer without legal succession, o winding up of a part of the employer’s businesses, o relocation of the employer as a whole or a part of it, o an employee becomes redundant due to a change in his or her work, the use of new technologies, a reduction of the workforce with a view to increasing labour effectiveness, or due to other organisational changes (a relatively wide range of economic reasons connected with rationalisation). Since the winding-up does not automatically lead to the termination of employment relationships, the employer is obliged to dismiss the employees before the dissolution becomes final. In case of winding-up, the employer has no objective possibility to offer the employees other suitable work; besides, there are no protected periods (within which a dismissal is prohibited) and no prior consents are necessary. In case of winding-up of only a part of the business, the employer has to offer another suitable job; a dismissal is possible only, if the employer cannot offer another suitable job or if the employee refuses to accept such job.