Exceptions to Ordinary Rules on Dismissal in Greece and the UK, Lecture notes of Law

Download Exceptions to Ordinary Rules on Dismissal in Greece and the UK and more Lecture notes Law in PDF only on Docsity! European Commission Termination of employment relationships Legal situation in the Member States of the European Union - 3 - EXECUTIVE SUMMARY 1. This synthesis report aims at providing an overview of the legal situation as regards termination of employment relationships in the 15 Member States of the pre- enlargement European Union1. The report updates the original 1997 Report which was the fruit of co-operation between the Commission and the Member States; the information set out in the original report was assembled on the basis of contributions from the Member States and they subsequently checked its accuracy. This updated report adheres to the format and structures of the original report and is based on the information provided by the national experts named in the introduction. 2. Labour law across the EU-15 has gradually introduced limits to ad nutum dismissal that is summary, unjustified dismissal in the context of a contract of indefinite duration. Sources of law on dismissal 3. The main source of rules on individual dismissals in most Member States is the law in the broad sense. Collective agreements are most frequently used to adjust the statutory provisions on periods of notice or dismissal on disciplinary grounds, for example. The role of judge-made law, especially in the interpretation of laws, is also important. The role of custom is, on the whole, relatively limited. The Notice Period 4. A first limit on freedom to dismiss is the period of notice which applies in all the Member States. There are major differences in notice periods in the Member States as shown in table 3 of the report. The employer is 1 Studies on the legal situation in the Member States that joined the EU in 2004, as well as Bulgaria and Romania are on-going. A synthesis report will be published in the beginning of 2007. usually dispensed from giving notice in the event of dismissal on grounds attributable to the worker, summary dismissal or in the event of force majeure and during the probationary period. The legal arrangements governing complete or partial failure to comply with the notice period also vary from one Member State to another: the tendency in most Member States is to provide for payment of a sum equal to the remuneration the worker would have received during his or her notice period. Verification of grounds 5. In all the Member States the wish of the employer is no longer sufficient in itself to justify dismissal. All the legal systems provide, through various means, for checks on the grounds underlying the decision to dismiss. 6. First, dismissal on certain grounds is prohibited. These grounds are set out in tables 1(a) to 1(c) in Appendix II to the report. Another means of preventing arbitrary dismissal used by certain Member States is the so-called technique of abuse of law which the worker may invoke; consideration is then given to whether the grounds for the decision to dismiss were well founded. In practical terms this technique is really no different from the requirement to give notice or to justify dismissal. 7. In principle, the rule that any unjustified dismissal is unlawful is to be found in all Member States. The Member States provide for exceptions to the need for grounds for certain groups of workers or during the probationary period. Some Member States have lists of - 3 - reasons which can justify dismissal, but there are big differences in the scope for determining them. Most legal systems have opted for a general clause. A distinction is usually made between the types of grounds on the basis of the three types of dismissal outlined in the report1. The formal requirements 8. The need to justify and provide grounds for dismissal is often linked to formal requirements in many Member States. Written notice of dismissal is provided for in most Member States. Similarly, provision is frequently made for the requirement to notify the grounds for dismissal in writing. The trend is to allow workers to know why they have been dismissed and to give them the right to be heard and express their views. Ultima ratio 9. The ultima ratio rule plays a role in several Member States; dismissal becomes the employer’s final solution. This presumes that alternatives to dismissal have been envisaged. Legal redress 10. All the Member States have rules on the right to take action against dismissal. Some Member States encourage conciliation and arbitration. In most Member States, trade unions may provide assistance to their members or act on behalf and in place of their members. Deadlines for challenging dismissal or for taking legal proceedings vary considerably from one Member State to another. 1 They are: dismissal based on misconduct by the worker (disciplinary dismissal), dismissal based on the worker’s incapacity and dismissal based on objective grounds (economic dismissal). The burden of proof 11. In most Member States the burden of proof is incumbent on the employer, which is in line with the reasoning behind the arrangements for justification or grounds for the employer’s decision to dismiss. The effects of unlawful dismissal 12. As for the effects of unlawful dismissal, the report illustrates the major disparities between the Member States. Reference should be made to tables 5(a), 5(b) and 5(c) for payments and benefits and also to table 6 on restoration of employment. In most Member States, violation of fundamental rights renders the dismissal null and void; the worker is then reinstated or the contract pursued. Although some legal systems do provide for possible compensation, the Member States appear to agree that prohibited dismissal should not be translated directly into pecuniary terms. “Contrived resignation” 13. Some legal orders recognise the concept of “contrived resignation” or constructive dismissal that is indirect dismissal based in particular on fraudulent moves by the employer obliging the worker to resign; by covering up the dismissal the employer evades the legal arrangements which should have applied. This concept is unknown in a number of national systems and where it does exist the related legal arrangements are also somewhat disparate. It gives rise to major difficulties in relation to the burden or proof. - 4 - TABLE OF CONTENTS 1. INTRODUCTION............................................................................................................................. 6 2. SOURCES OF LAW......................................................................................................................... 7 (1) Constitutional status of the rules on the right to work.................................................................. 7 (2) International Agreements and Conventions.................................................................................. 7 (3) Sources of law and their hierarchy ............................................................................................... 8 (4) Role of Judge-made law and custom.......................................................................................... 13 3. SCOPE OF THE RULES GOVERNING THE TERMINATION OF AN EMPLOYMENT RELATIONSHIP, SPECIAL ARRANGEMENTS ..................................................................... 14 (1) Ways of terminating an employment relationship...................................................................... 14 (2) Exceptions or specific requirements for certain employers or sectors ....................................... 16 (3) Exceptions or specific requirements for certain types of contract.............................................. 19 (4) Exceptions or specific requirements for certain categories of employer.................................... 22 (5) Exceptions or specific requirements for certain categories of employees.................................. 24 3.1 MUTUAL AGREEMENT.............................................................................................................. 28 (1) Substantive conditions................................................................................................................ 28 (2) Procedural requirements ............................................................................................................. 28 (3) Effects of the agreement ............................................................................................................. 29 (4) Remedies .................................................................................................................................... 31 (5) Vitiating factors .......................................................................................................................... 33 (6) Penalties...................................................................................................................................... 33 (7) Collective agreements................................................................................................................. 33 (8) Relations to other forms of termination...................................................................................... 33 3.2 TERMINATION OTHERWISE THAN AT THE WISH OF THE PARTIES......................... 35 (1) Grounds for a contract to come to an end by operation of law................................................... 35 (2) Procedural requirements ............................................................................................................. 37 (3) Effects of the existence of a ground ........................................................................................... 37 (4) Remedies .................................................................................................................................... 38 (5) Penalties...................................................................................................................................... 40 (6) Collective agreements................................................................................................................. 40 3.3 DISMISSALS IN THE MEMBER STATES: OVERVIEW ....................................................... 41 3.3.1 Dismissal contrary to certain specified rights or civil liberties ................................................... 47 3.3.2 DISMISSAL ON ‘DISCIPLINARY’ GROUNDS........................................................................ 56 (1) Substantive conditions................................................................................................................ 56 (2) Procedural requirements ............................................................................................................. 61 (3) Effects of the dismissal............................................................................................................... 65 (4) Remedies .................................................................................................................................... 67 (6) Restoration of employment ........................................................................................................ 71 - 7 - 2. SOURCES OF LAW (1) Constitutional status of the rules on the right to work In Belgium the right to work is guaranteed by Article 23 of the Constitution. In Denmark the Constitution states that “all restrictions in the free and equal access to work which do not have their reason in the common good shall be abolished by law”. The provision is interpreted as a declaration of intent. The declaration does not provide basis for legal claims. In Greece the right to work is acknowledged by Article 22(1) of the Constitution as a social right which concerns exclusively the dependent salary workers. In Spain the right to work is acknowledged by Article 35.1 of the Constitution. In Finland the right to work is guaranteed by section 18 of the Finnish Constitution which also specifically provides that no-one shall be dismissed from employment without a lawful reason. In France the preamble of the Constitution 1946 acknowledges the right to work. In Ireland the State is required to direct its policy toward ensuring that the citizens may through their occupations find the means of making reasonable provision for their domestic needs (Article 45.2.i of the Constitution). Moreover, the Irish Courts have held that one of the “personal rights” latent in the guarantee of Article 40.3 is the right to work or the right to earn a livelihood. The Courts have further held that the right to earn a livelihood carries with it the entitlement to be protected against any unlawful activity on the part of any other person which materially impairs or infringes that right. The right to work has constitutional status in Italy. Under Italian law, the rules governing employment relationships are set out in Part 1 (Rights and obligations of citizens), Title III (Economic relations), Articles 35 et seq. of the Italian Constitution. In Luxembourg Article II of the Constitution guarantees the right to work and gives an assurance that each citizen may exercise this right. In the Netherlands stimulation of employment is a responsibility of the government. There is free choice of employment (Article 19 of the Constitution). In Portugal the Constitution guarantees security of employment and prohibits dismissals without justified ground (Article 53) and the right to work (Article 58). In Sweden the right to work is acknowledged by the Constitution (Chapter 1 Article 2) of the Instrument of Government (“Regeringsformen”). The provision is interpreted as a declaration of intent, which does not provide basis for legal claims. In the other Member States the right to work has no constitutional status. (2) International Agreements and Conventions ILO Convention 158 on the termination of employment relationships at the employer’s initiative has been ratified by Finland (1982), Spain (1985), France, Portugal (1994), Sweden (1983) and Luxembourg (2000). ILO Convention 135 concerning protection and facilities to be afforded to workers’ representatives in the undertaking has been ratified by Denmark (1978), Germany (1973), Greece (1988), Spain (1972), France (1972), Italy (1981), Luxembourg (1979), the - 8 - Netherlands (1975), Austria (1973), Portugal (1976), Finland (1976), Sweden (1972) and the United Kingdom (1973). ILO Convention 145 on the continuity of employment of seafarers has been ratified by Spain (1978), France (1978), Italy (1981), the Netherlands (1979), Portugal (1983) and Sweden (1981). ILO Convention 151 concerning protection of the right to organise and procedures for determining conditions of employment in the public service has been ratified by Belgium (1991), Denmark (1981), Greece (1996), Spain (1984), Italy (1985), Luxembourg (2000), the Netherlands (1988), Portugal (1981), Finland (1980), Sweden (1979) and the United Kingdom (1980). The original European Social Charter has been ratified in all Member States. The revised Charter had been ratified in Finland, France, Ireland, Italy and Portugal. It has also been ratified in Belgium and Sweden but in both Article 24 concerning termination of employment was excluded from the ratification. Austria, Denmark (with a reservation as to Article 24), Greece, Luxembourg, the Netherlands, Spain and the United Kingdom have signed the revised Charter but have not ratified it. (3) Sources of law and their hierarchy Sources of law regarding the termination of employment relationships can be laws (in a broad sense), collective agreements, individual employment contracts, case law and custom. Listed below are the main sources.3 In principle, departure from laws and collective agreements when this is to the advantage of employees is permitted. 3 The laws marked by (*) are published in English in: Blanpain, Roger (editor), International Encyclopaedia for Labour Law and Industrial Relations, Kluwer, Deventer, Netherlands. Austria: - Special statutes for specific occupations (actors, state employees, journalists, household employees); - Civil Code (“Allgemeines Bürgerliches Gesetzbuch”); - Collective agreements (especially regarding period and date of notice); - Works agreements; - Individual employment contracts. Departure from the legal rules and collective agreements by the individual contract is in general allowed if it is to the employee’s advantage. The legal period of notice for manual workers (2 weeks) does not have binding effect. Belgium - Civil Code; - (*) Act of 3 July 1978 on contracts of employment (“loi relative aux contrats de travail”); - Law of 19 March 1991 (on the dismissal of workers’ representatives on Works Councils and on Health and Safety Committees); - Law of 23 April 1998 (concerning the measures accompanying the establishment of a European Works Council); - Collective agreements; - Individual contracts. Germany - (*) Civil Code (“Bürgerliches Gesetzbuch”); - (*) Protection against Dismissal Act – 1969 (“Kündigungsschutzgesetz”); - 9 - - (*) Employee Representation Act – 1972 (“Betriebsverfassungsgesetz”); - Act to simplify and expedite the procedure before the Labour Court – 2000 (“Gesetz zur Vereinfachung und Beschleunigung des Arbeitsgerichtsverfahrens”); - Act relative to the reforms of the labour market – 2003 (“Gesetz zu Reformen am Arbeitsmarkt”); - Collective agreements (especially regarding the period of notice). With regard to periods of notice, collective agreements may fix a shorter period than is provided by law. Denmark: - Main Agreement (“Hovedaftalen”) between the Danish Confederation of Trade Unions (“Landsorganisationen i Danmark”, LO) and the Danish Employers’ Confederation (“Dansk Arbejdsgiverforening”, DA). Collective agreements may depart from statutes to the extent that due provision has been made for this in the statutes. Statutes are imperative concerning, for instance, dismissal on grounds of pregnancy, childbirth, demanding equal pay or being called up for military service, dismissal contrary to the Freedom of Association Act or as a result of a corporate takeover; - Act of Public Servants (“Tjenestemandsloven”); - Salaried Employees Act (“Funktionærloven”); - Act on certain employment relations in agriculture and in private households (“lov om visse arbejdsforhold i landbruget m.v.”); - Merchant Shipping Act (“Sømandsloven”); - Individual contracts; - Labour market practice. The order of sources is presented from a practical point of view. From a general legal point of view statutory law is superior to collective agreements as a source of law. Greece: - Civil Code (“Aστικός Κώδικας”) and other laws (including ordinances, law-decrees, presidential decrees); - Court decisions. They are very important because the legislation on dismissals is somewhat fragmentary; - Enterprise regulations. There are two kinds of such regulations; • Regulations of public law (based on a law, made by a public authority, containing rules on important aspects of dismissal, applicable to employees of public enterprises). The ordinary legal rules do not apply if there is an enterprise regulation approved by the State on the same subject; • Regulation of private law (internal rules of a contractual nature which may contain some rules on dismissals). They exclude the application of the law if they provide for at least the same level of protection as the law does; - Individual employment contracts. Departure from the legal rules is in general allowed if it is to the employee’s advantage, with some exceptions, e.g. compensation for dismissal cannot be higher than admitted by law. In some cases departure from the rules to the employee’s disadvantage is even allowed, e.g. the law allows the termination of a fixed- term contract only on important grounds, but the parties may determine other grounds. - 12 - may also contravene legislation prohibiting discrimination on grounds of sex, race, disability, religion or belief and sexual orientation, and legislation making it unlawful to dismiss for reasons relating to trade union membership and non-membership. There are also several legislative provisions dealing with specific areas that stipulate that it is automatically unfair to dismiss employees for seeking to exercise their rights guaranteed by those provisions (for example legislation dealing with maximum working time; the national minimum wage; the rights of part-time employees). A complete list of those provisions is given in paragraphs 3.3.1 (dismissals that are regarded as automatically unfair): The main sources of law are: - Employment Rights Act 1996, as amended: this contains the general provisions governing the law of unfair dismissal. - Trade Union and Labour Relations (Consolidation) Act 1992, as amended: this covers collective labour relations but also contains safeguards against dismissal in specific contexts (grounds relating to trade union membership and activities or non- membership or attempts to move workers from collectively-agreed terms of employment; industrial action; the statutory recognition and derecognition procedures). - Employment Act 2002: this Act specifies minimum procedures that must be followed in relation to dismissals. - Employment Act 2002 (Dispute Resolution) Regulations 2004, SI 2004, No 752: these Regulations, made under the authority of the Employment Act 2002 specify the circumstances where the procedures in the 2002 Act apply and do not apply. The general discrimination statutes: - Sex Discrimination Act 1975, as amended; - Race Relations Act 1976, as amended; - Disability Discrimination Act 1995, as amended; - Employment Equality (Religion or Belief) Regulations 2003, SI 2003 No. 1660; - Employment Equality (Sexual Orientation) Regulations 2003, SI 2003 No. 1661. In addition to these statutory rights, there is a remedy against wrongful dismissal (that is, dismissal in breach of contract) under the common law (although employees cannot recover twice in respect of the same loss). Employees may wish to seek damages at common law if they lack the 1-year period of continuous employment generally required to claim unfair dismissal or if their loss exceeds the statutory maximum that can (generally) be awarded for an unfair dismissal claim. In addition, there are circumstances where the common law courts will grant an order to restrain a dismissal taking effect pending completion of a contractual procedure relating to dismissal (usually a contractual disciplinary procedure), although such cases are generally confined to the public sector and this remedy is relatively rare. Statute law overrides the common law. There is provision for the Secretary of State to exempt from the unfair dismissal legislation employees covered by a collective ‘dismissal procedure agreement’ provided by the legislation, but this power has been exercised on only one occasion (in relation to the Joint Industry Board for the Electrical Contracting Industry) and that exemption was withdrawn in 2001. Minimum notice periods to terminate the contract of employment are laid down by statute. There is nothing to prevent the parties to the employment contract agreeing longer notice periods. The Employment Act 2002 lays down minimum procedures that must generally be followed in order for a dismissal not to be regarded as automatically unfair. There is - 13 - nothing to prevent the parties agreeing a contractual procedure, whilst it may give the employee a common law right of action for breach of contract, will not make the dismissal automatically unfair. It may be relevant when the employment tribunal is assessing whether the employer has acted reasonably or unreasonably in the circumstances as treating its reason for dismissal as sufficient, but the legislation now provides that failure to follow a procedure beyond the statutory minimum is not of itself to make an employer’s action unreasonable if it shows that it would have decided to dismiss the employee if it had followed that procedure. (4) Role of Judge-made law and custom Judge-made law plays a role in the interpretation of laws in Germany, Spain, France, Italy, Luxembourg, the Netherlands, Portugal, Finland and Sweden, particularly in defining grounds for dismissal. In Belgium judge-made law is also important for the termination of employment relationships of employees earning more than €26,418 per year. In Greece judge-made law is very important because legislation on dismissals is very fragmentary. Moreover the Greek legislation has not imposed substantial restrictions on dismissals. This means that in principle the validity of the dismissal is not connected to specific grounds. Case law has covered this vacuum by defining the restrictions on the exercise of the right to dismiss. In Ireland and the United Kingdom case law is characteristic of the legal system. The role of custom is limited. In Denmark it plays a role as a source of law. It means that the employer has to give notice if he wants to change custom. Also case law plays a role. This is especially relevant in the case of dismissals. The Courts have ruled that every worker can demand a fair period of notice irrespective of whether this is stated in a law or a collective agreement. In Spain it is only applicable in terms of local and professional custom and serves to verify, in its field of use, whether a particular type of conduct deserves to be regarded as constituting sufficient grounds for termination. In the United Kingdom a custom may play a role if it is “reasonable, certain and notorious”; i.e. not arbitrary or capricious, clear, and widely known and observed. It is necessary to show, however that the parties implicitly contracted on the basis that norms derived from custom and practice would apply. The importance of custom and practice has diminished due to the formalisation of the employment relationship imposed by legislation, in particular the requirement on the employer to issue a written statement of employment terms which although not contractually binding, is strong evidence of what the parties have agreed. - 14 - 3. SCOPE OF THE RULES GOVERNING THE TERMINATION OF AN EMPLOYMENT RELATIONSHIP, SPECIAL ARRANGEMENTS (1) Ways of terminating an employment relationship An employment relationship may come to an end by operation of law without further action of the parties (see below 3.2(1)). Other ways of terminating a contract are in Austria: - mutual agreement; - dismissal (with notice/premature dismissal for an important reason): - resignation (with notice/premature resignation for an important reason); - withdrawal from the contract (“Rücktritt”) in the case of insolvency of the employer, if the employee has not yet started work; - request during a probationary period; - conditions fixed in the contract (expiry of time in the case of fixed-term contracts). Belgium: - mutual agreement; - termination with notice (dismissal and resignation); - dismissal with proper cause. Germany: - dismissal (with notice, or without notice for cause); - resignation (with notice, or without notice for cause); - lapse of an employment contract entered into for a fixed term or to achieve a specific aim; occurrence of a dissolving condition; - a contractually agreed age limit is reached; - termination by mutual consent; - rescission of the contract. Denmark - mutual agreement; - dismissal (factors related to employee’s performance –such as illness, poor quality of work, cooperation difficulties, etc.); - summary dismissal; - resignation; - condition fixed in the individual contract; - redundancy, employer’s bankruptcy/liquidation; - age limit according to law or collective agreement (in the Act of public servants the age limit is 70, in collective agreements limits are rare); - request during a probationary period; - constructive dismissal; - retirement of the employee (67 years of age for old age pension, 59 years of age for early retirement allowance or part-time pension). Greece: - mutual agreement; - dismissal; - resignation. Spain - common will of the parties (mutual agreement or specific grounds fixed in the contract in as far as there is no abuse of rights by the employer); - unilateral termination (employer: dismissal, legally admissible objective grounds, employee, resignation, wish of the worker based on a breach of contract by the employer, by wish of a female employee - 17 - dismissals. The groups in question, are however, like all other workers, generally protected against dismissal on the basis of pregnancy, childbirth, equal treatment and equal pay on the basis of sex, race, colour, religion, political opinion, sexual orientation, age, handicap or national, social and ethnical origin, freedom of association and compulsory military service. In Greece the ordinary rules on dismissal do not apply to: - civil servants, officials of public authorities and members of the armed forces and police, who are not qualified employees; - those employed for government, or public authorities or local collectivities under ordinary contracts of employment (specific legislation); - teachers in private schools (specific legislation); - medical doctors who are employed with a dependant employment relationship (specific legislation); - employees in hotel industry (specific legislation); - domestic servants (in part – only 1920 law applies); - employees in agriculture cooperatives enterprises (specific legislation); - employees on board ship; - farm labourers; - employees of public sector corporations when there is an internal company regulation which, in case of dismissals provides for a level of protection at least equal or higher than ordinary rules. In Greece the size of the undertaking only plays a role in connection with collective dismissals. In Spain the ordinary rules do not apply to civil servants and members of the armed forces and police. There are special rules for domestic servants, disabled people, managers, artists in public shows, professional sportsmen and persons who take part in trading operations on behalf of one or more employers, without assuming the risk and chance associated with such operations. In Finland the ordinary rules do not apply to managers and directors if they are not in an employment relationship. According to the prevailing opinion at least, top managers are usually not regarded to be in an employment relationship. The period of notice is connected to the length of continuous service. Unless otherwise agreed the period to be observed by the employer varies from 14 days to 6 months. The corresponding periods to be observed by the employees are from 14 days to 1 month. The ordinary rules do not apply to probationary employees. The employer and the employee may agreed on a probationary (trial) period of a maximum of 4 months starting from the beginning of the work. If the employer provides specific, work-related training for the employee, lasting for a continuous period for over 4 months, a trial period of no more than 6 months may be agreed upon. The probationary period can be used both when the employment contract is for an indefinite period as well as when it is for a fixed-term. If a fixed-term employment relationship is shorter than 8 months, the trial period must not exceed 50 per cent of the duration of the employment period. Termination during a probationary period is possible without ordinary grounds. Both parties can cancel (summary dismissal) the contract during the probationary period. The employment contract may not, however, be terminated on discriminatory or on grounds which are otherwise inappropriate with regard to the purpose of the probationary period. If a collective agreement applicable to the employer - 18 - contains a provision on a probationary period, the employer must inform the employee of the application of this provision at the time the contract is concluded. When the employer has neglected the obligation to inform the employee about the existence of this provision, the probationary period cannot justify a termination of the contract. In France the ordinary rules do not apply to: - civil servants and members of the armed forces and police; - persons working on board ship. In Ireland there is no general scope of application for ordinary rules. Each relevant law has its specific scope of application. The Redundancy Payments Acts only apply to employees employed in employment which is insurable for all benefits under the Social Welfare legislation: The Minimum Notice Act does not apply to: - senior civil servants, members of the permanent defence forces and members of the gardai (police); - seamen signing under the Merchant Shipping Act; - the immediate family of the employer provided they live with him/her and are employed in the same private house or farm. The Unfair Dismissals Act does not apply to: - officers of health boards and vocational education committees, members of the permanent defence forces and the gardai; - senior civil servants. In Italy there is no legal system for the termination of employment relationships in general, but different concepts of dismissals. The following should be mentioned: - for public servants and members of the armed forces and police there are specific rules (public servants’ scheme, “regime pubblistico”); - for domestic servants the rules on discriminatory dismissals apply (discriminatory dismissal is always null and void irrespective of the size of the undertaking); - seamen, in accordance with the ruling of the Constitutional Court of 3 April 1987, are subject to the Workers’ Rights Statute; - for teachers in public schools there are specific rules. In private schools the ordinary rules apply, unless the school is a “tendency organisation” (“organizzazione di tendenza”). Tendency organisations are subject to Article 4 of Act No 108/90 and are therefore not covered by Article 18 of the Workers’ Rights Statute; - for professional sportsmen there are specific rules. In Luxembourg the ordinary rules do not apply to state employees. With regard to employees in public-sector corporations, there are no special categories of employees. In the Netherlands the ordinary rules do not apply to: - civil servants; - teachers; - members of the clergy; - domestic servants working less than 3 days in the household of a natural person; - company directors; - disabled persons employed in specifically protected workplaces; - employees during their probationary period. - 19 - The Commercial Code (“Wetboek van Koophandel” contains special provisions on the termination of an employment contract between a maritime employer and a member of the crew. In Portugal the ordinary rules do not apply to: - civil servants and members of the armed forces and police; - domestic servants; - persons working on board ship (special legal rules for the merchant navy and collective agreements for fishermen and others). In Sweden the ordinary rules do not apply to - civil servants with a special appointment (“fullmakt”); - domestic servants; - employees who are members of the employer’s family; - employees who are employed with a job creation subsidy or in “sheltered employment”. In the United Kingdom the ordinary unfair dismissal law does not apply to members of the armed forces, the police and share fisherman (where the employee is remunerated only by a share in the profits or gross earnings of the vessel). The ordinary redundancy provisions do not apply to: - persons in Crown employment and holders of public office; - the armed forces; - the police; - share fishermen (where the employee is remunerated only by a share in the profits or gross earnings of the vessel); - domestic servants who are members of the employer’s immediate family; - employees of the government of an overseas territory; - staff of the House of Commons and House of Lords; - apprentices whose service ends at the end of the apprenticeship contract. (3) Exceptions or specific requirements for certain types of contract In most Member States premature termination of fixed-term and fixed-task contracts is limited to some extent. Job training contracts and apprentices’ contracts are often not considered to be working contracts. Certain forms of contracts do not exist in some of the Member States (e.g. intermittent work, work on call, solidarity contracts). In Austria there are the following special features: - in a fixed-term employment relationship the employer cannot give notice unless special allowance has been made by contract. The employee can always give 6 months’ notice on completion of a 5 year period. Premature termination for important reasons is possible for limited and unlimited employment relationship alike. However, this does not apply to fixed-task contracts. A fixed-task contract in the sense of a “Werkvertrag” (contract for work and services) is not an employment contract; - the ordinary rules apply to part-time work. The ordinary rules are also applicable to white-collar workers working less than 8 hours a week (in this case the special provisions pursuant to the Salaried Employees Act do not apply); - temporary work; special rules; - homework: special rules; - 22 - - “le stage d’insertion” which period comes to an end after an agreed period (maximum 12 months) or when the trainee finds appropriate employment. In the Netherlands the ordinary rules do not apply to contracts concluded for a specified period or a specified task, unless the appointment has been renewed three times or is extended for more than 3 years with intervals of less than 3 months. Departure from this rule is only possible by means of a collective bargaining agreement or a regulation of a competent administrative authority. In Portugal homeworkers are in general self- employed. Contracts for job training and apprentices’ contracts are not employment contracts. Therefore the ordinary rules do not apply. Intermittent work, work on call and solidarity contracts do not exist. In Sweden, as a rule, fixed-term, fixed-task and seasonal contracts run for the whole of the agreed period. With regard to job training, solidarity contracts and apprentices, persons are covered in so far as they can be regarded as employees. In the United Kingdom the normal rules on unfair dismissal and redundancy apply to employees employed under a contract of employment concluded for a specified period or for a specified task. Where such a contract terminates by virtue of one of the events without being renewed, the employee is regarded as ‘dismissed’ for the purposes of an unfair dismissal complaint and entitlements to a statutory redundancy payment (although there is not dismissal at common law). It is no longer possible to contract out of the rights to claim unfair dismissal or redundancy on expiry of the term. Special reasons apart (see 3.3.1), an employee generally requires 1 year’s continuous employment with an employer in order to complain of unfair dismissal. For that reason temporary workers are often excluded from the right. 2 year’s continuous employment is required to claim a redundancy payment. Where a contract of employment exists, the ordinary rules apply, including where the employee is disabled. Solidarity contracts do not exist, nor is there a separate category of contracts for the social integration of handicapped workers. A contract of apprenticeship is normally for a fixed-term and cannot be terminated by either party before the term has expired. However once the agreed training period ends there is no obligation on the employer to continue employing the apprenticeship and failure to renew the contract will not fall within the statutory definition of ‘redundancy’. (4) Exceptions or specific requirements for certain categories of employer The size of the enterprise plays a role in connection with collective dismissals (see below 3.3.4 (3)). In addition, the following special features apply: In Austria the general provisions concerning the protection against dismissal apply only in undertakings with no more than 5 employees. For domestic workers there is no protection against dismissal. However, according to case law a dismissal can also be challenged for being contra bonos mores. In Germany the law on protection against dismissal for those employed after 31 December 2003 is applicable only in enterprises with more than 10 employees. For those employed before 31 December 2003 it applies where there are more than 5 employees. Nor does it apply to seasonal employees. In Denmark a collective agreement is defined as follows: an agreement between on the one side, a workers’ organisation (a group of workers) and on the other side, an employers’ organisation of a single employer/enterprise on the wage and working conditions that shall apply for the type of work in question and in the relationship between the individual worker and his employer as well as in all other - 23 - relations between workers and employers including their organisations. There is no lower limit as to how many workers in the single enterprise must be covered by the agreement. Small undertakings are often no members of an employers’ organisation. This does not mean that such undertakings are not covered by collective agreements. Many small enterprises conclude so-called accession agreements. This means that they accede to an agreement concluded by an employers’ organisation. In that case they are bound by the agreement in the same way as the original parties to the agreement. In Greece the size of the undertaking only plays a role in connection with collective dismissals. In France the size of the undertaking is important in two respects. The first ordinance under the law of 25 July 2005 introduces a specific employment contract for new recruits (“contrat de travail – nouvelles embauches”) to be used by small companies that employ up to 20 workers. The first 2 years of such employment is seen as a period of job consolidation and, during this time either the employer or the employee can terminate the contract in writing by means of a registered letter without having to state any reasons for this. Notice must be given calculated according to length of service. In the first 6 months it is 2 weeks, thereafter rising to 1 month. If the employer terminates the contract the employee is entitled to compensation of up to 8% of gross pay received since the employment began. This sum is not taxable and is not subject to social security contributions. Employers are also required to pay up to 2% of the gross pay to the unemployment agency ASSEDIL which sum is designed to finance activities by the public unemployment service to help employees return to work. Employees are entitled to appeal against their dismissal within 12 months in line with the normal Labour Code provisions and they must be informed of this right. For enterprises with fewer than 1,000 employees the agreement on job reclassification (“convention de reclasssement personnalisé” – CRP) applies. Employees with 2 years’ service who are made redundant will be eligible for 8 months support receiving up to 80% of their previous pay during the first 3 months and up to 70% for the next 5 months while they are retraining. After this they will be eligible for normal unemployment benefit. Employees with shorter service and who are eligible to claim unemployment benefit are entitled to an alternative programme of assistance but will not receive any specific financial benefit. The agreement also sets out the procedure for informing such employees who are likely to be made redundant. They must be informed of the opportunity to participate in the job reclassification scheme both at a meeting and in writing, and they will have 14 days to decide whether to go ahead. If they do, their contract of employment will be terminated and they will enter into a new contract. The employer is obliged to pay to the unemployment fund the amount of notice the employees would have received (equivalent to 2 months pay) as well as a sum covering the hours the employee had accumulated through their individual right to training (“droit individual de formation”). In Greece the size of the undertaking only plays a role in connection with collective dismissals. In Italy the protection of employees against dismissal depends on the number of employees in the undertaking. For larger enterprises (those having more than 15 employees or 5 in the case of a farm enterprise) “stabilità reale” applies; for smaller firms a softer discipline (“stabilità obbligatoria”) applies: see 3.3.2(6). In Luxembourg an employer with at least 150 employees must consult the employee concerned before the dismissal. An employer with no more than 20 employees can opt either for payment of compensation or for extension of the period of notice. In Portugal the Labour Code classifies employers according to the number of - 24 - employees. Article 91 distinguishes between micro-enterprises (less than 10), small enterprises (between 10 and 50), medium sized enterprises (51-200) and large enterprises (more than 200). For micro enterprises the dismissal procedure is simplified and reinstatement is not mandatory. In Sweden employers are obliged to follow a strict seniority principle in case of redundancies (see 3.3.4.2). Employers with a maximum of 10 employees are allowed to exclude 2 of those from the priority order in case of redundancies. In the United Kingdom employers with fewer than 6 employees are relieved of the obligation to take a woman back at the end of the full 40- week maternity absence period if it is not reasonably practicable for them to do so. No exceptions are to be found in Belgium, Spain, Finland, France, Ireland and the Netherlands. (5) Exceptions or specific requirements for certain categories of employees With regard to legislation on probationary periods, see also Appendix II. In Austria there are the following special features; - the ordinary rules do not apply to managers and directors; - there are different rules concerning periods of notice for manual and white collar workers; - the period of notice increases with the period of activity; - in a probationary period either party can terminate the employment relationship without grounds and without notice; - specific rules apply to teachers and actors and journalists, specific protection rules apply to employees’ representatives. In Belgium there are in general no exceptions. Periods of notice and severance payments may vary between manual (“ouvrier”) and white collar (“employé”) workers according to the time worked or the amount of salary. There is a shorter period of notice during the probationary period. In Germany there are the following special features: - directors, managers and employees in similar positions in the private sector who are empowered to take on and dismiss employees enjoy a limited degree of protection against dismissal. If these employees are dismissed in a socially unjustified way, they do not have any right of continued employment, but are merely entitled to compensation; - longer periods of notice to be observed by employers apply to older employees who have worked for them for a long time; - employment protection provisions only apply to employees who have been working for a firm or company for more than 6 months; - shorter periods of notice apply during probationary periods, which may last for no longer than the first 6 months of employment. In Denmark there are the following special features: - managers are not covered by the ordinary rules; - white collar workers are generally entitled to a longer period of notice; - frequently, the rules on protection against dismissal only apply to employees who have been employed by that employed for a particular length of time, often 9 or 12 months. This applies to both legislation and collective agreements; - 27 - - the general right to claim unfair dismissal is subject to a qualifying period of 1 years’ continuous service. - 28 - 3.1 MUTUAL AGREEMENT In Ireland the definition of dismissal focuses on the termination by either the employer or the employee. For instance, if the selection of workers to be made redundant is mutually agreed, the Redundancy Payments Acts apply. In case of a genuine agreement between the employer and the employee this is not regarded as dismissal. In Italy the term mutual agreement may be misleading. Instead the term “dissolution of the employment relationship by mutual assent” (“risoluzione consensuale del rapporto di lavoro”) should be used. (1) Substantive conditions In all Member States the general rules on contracts apply also to a mutual agreement on termination of an employment relationship. There are no specific substantive conditions or clauses which are prohibited. However, there are the following exceptions: In Finland the Employment Contracts Act must be respected. No agreement may be contrary to the legislation on job security or to collective agreements. But an employment relationship ends always after the end of the notice period. There is no automatic reinstatement without the employer’s consent. Therefore the invalidity of a termination agreement has no direct effects. If in France a court establishes that a termination agreement is inadmissible, termination of employment is deemed to be a dismissal and the legislation on dismissal will apply. In Italy judicial bodies recognise “mutual assent” only if there is an explicit declaration of the employees’ wishes. If not, the agreement is considered void. In Sweden a termination by mutual agreement can be considered by the courts to be a concealed dismissal (contrived resignation), if the agreement has been instigated by the employer whose behaviour was thus at odds with good labour market practice (see below 3.4.(7)). In the Netherlands the employer has to investigate whether the employee has the will to conclude such an agreement, especially when one of the following categories of employees is involved: old, sick, over-strained or illiterate employees or employees with a foreign background who are not fluent in Dutch. (2) Procedural requirements In Austria no form is generally required. Exceptions: - an agreement with a pregnant employee must be in writing; - an agreement with a person called up for military or civil services must be in writing. An acknowledgement by the court for labour and social affairs or by an employees’ representative body must be attached; - for an agreement with a trainee an attestation by the court that the trainee has been informed about the rules of the law on vocational training (“Berufsausbildungsgesetz”) is required Otherwise the agreement is void. The employee has the right to discuss his case with employees’ representatives. If he or she has expressed such a wish, an agreement concluded within the 2 following days is void. In Germany an agreement must be in writing and be signed by both parties otherwise it is void. The works council can under certain circumstances ask for a social plan. In Denmark many unions have entered into special job security agreements whereby an - 29 - employer and an employee may agree special (favourable) terms in relation to the voluntary termination of employment. These agreements are used in connection with the restructuring or rationalisation etc. of firms and institutions with the aim of preventing an employee from being dismissed against his or her wishes. In such situations the employer may well have an obligation to notify the employee’s union of such concrete agreements. In a given case it will often be the local union representative who is to be notified. If the employer fails to notify, the agreement is valid but it could receive a fine for breach of the collective agreement. In Greece the agreement must be in writing if the conclusion of the employment contract had to be in writing. This is the case if the contract is with a public-law legal entity. Otherwise the agreement is void. The works council should be informed in advance of any decision to reduce staff. However, so far there are only very few works councils in Greece. If such information is not supplied, there are no practical consequences. In Spain there are no legal requirements but the parties may lay down formal requirements in their contract. If such requirements are not fulfilled the agreement is deemed not to exist. There is no obligation to involve employees’ representatives, although a degree of control is exercised indirectly. Employees’ representatives must know how many documents of final settlement for the end of an employment relationship are drawn up in their company, if the request such information. In France the employees’ representatives must be consulted if a termination by mutual agreement is in connection with redundancy. In Italy there are no legal requirements, but the judicial bodies stipulate that an agreement to terminate the contract must take the same form as for the conclusion of the contract. Example: an agreement for premature termination of a fixed-term contract must be in writing because the conclusion of the fixed-term contract by law has to be in writing. In Luxembourg a mutual agreement must be in writing and in duplicate, signed by employer and employee. Otherwise it is void. In Portugal a written document signed by both parties and specifying the date the agreement is entered into and the effective date of termination is required. An agreement which does not comply with these requirements is void. Article 396 of the Labour Code gives the employee the right to unilaterally revoke the agreement within 7 days of its conclusion save where the agreement is signed in the presence of a notary with certification of the date and the signatures. In other Member States there are no procedural requirements. (3) Effects of the agreement The employment relationship is terminated in consequence of the agreement. Severance Payments: In Austria there are severance payments (“Abfertigung”) ranging from 2 months salary (after 3 years’ work) to 12 months’ salary (after 25 years’ work); no severance payments if the period of activity is less than 3 years. An employee is not entitled to severance pay if he or she resigns, if he or she leaves prematurely without good cause, or when he or she is justifiably dismissed. In Germany in undertakings with more than 20 employees the works council can ask for a social plan to alleviate the effects of changes in the undertaking (which include the termination by mutual agreement of a certain number of jobs as a result of changes in the undertaking). The social plan can provide for severance payments. In Greece no severance payments are required by law in the case of mutual agreement. In effect, however, the agreement will be considered void if the employer does not pay at least the compensation it would have to pay in the event of dismissal (no circumvention of - 32 - to act rapidly. The burden of proof is on the plaintiff, except in cases of discrimination. In Finland an infringement of the Employment Contracts Act may be contested in the District Court. Infringements of collective agreements may be contested in the Labour Court, after a mediation procedure if the agreement provides for it. The time limit is 2 years from the date the employment ended in both cases. There are shorter specific time limits in the legislation on public servants. At the Labour Court the employee is represented by his or her union. If the union refuses to bring an action, the right to do so rests with the employee himself or herself. If an action is brought within 6 months of termination it must be treated as urgent in all instances. With regard to the burden of proof, the general rules of civil law apply. The burden of proof is on the employer to demonstrate the existence of grounds for terminating the employment relationship. In France an action in the Labour Court may be brought without any specific time limit. Trade unions may not act on behalf of their members. In Italy a court action may be brought within 5 years in the case of annulment of the agreement. In the event of nullity there is no time limit. If the mutual agreement is in effect a concealed dismissal, the employee must contest it in writing within 60 days of notification of the dismissal. Once the contestation is made, the time limit for the action itself is 5 years. Trade unions may not act on behalf of their members. In Luxembourg an employee may, without any specific time limit, approach the Labour Inspectorate (“Inspection du Travail et des Mines”), whose job it is to supervise the application of the relevant legislation. Proceedings before the Labour Court (“Tribunal du Travail”) are possible within 3 months of notification of the termination except where the application alleges improper dismissal (“licenciement abusive”). Trade unions can only act in court if they have a special legal status (“association sans but lucratif” or “établissement d'utilité publique”). The purpose of any application to court would be to secure the nullification of the agreement for failure to observe the procedural requirements or where true consent was absent. In the Netherlands the agreement may be contested on the grounds of mental disturbance, error, deceit and abuse of circumstances. If one of these grounds has been sufficiently substantiated, the Court will nullify the agreement or award compensation. The nullification has retrospective effect unless that would lead to unreasonable consequences. The time limit is 3 years. There is legal assistance for persons with a low income. Trade unions may act on behalf of their members. There are no special rules on speed or priority. In conformity with the general rules on the burden of proof, the employee contesting the validity of the agreement has to prove the existence of an employment relationship, its termination and the reason for contestation. The employer has to prove that the contract was terminated by mutual agreement. In Portugal the employee has the right to unilaterally revoke the agreement within 7 days of its conclusion. Other legal action is possible within 1 year of termination. Trade unions may help the parties. They have the right to bring an action when the employer has taken measures against employees because they are shop stewards or hold any other trade union positions. In Sweden an employee who seeks to have an agreement declared void can bring a case before the courts without any specific time limit. An employees’ organisation has the statutory entitlement to institute and conduct cases before the Labour Court on behalf of its members - irrespective of whether this is sitting as a court of first instance or as the final court of appeal. This is the case where the employer has concluded a collective agreement and the employee involved in the dispute is carrying out duties covered by the collective agreement. If the union is not conducting the case, the employee has to initiate proceedings personally. Normally legal assistance is available through - 33 - the trade unions and there is legal assistance for persons on low income. In Sweden there is a priority for remedy proceedings since according to section 43 of the Employment Protection Act reinstatement issues should be conducted speedily. Procedures specific to the termination of employment by mutual agreement do not apply in the United Kingdom context. Where an employee is pressurised into resigning this would be treated as a dismissal. (5) Vitiating factors In this regard the general principles on contracts are applicable in all Member States. (6) Penalties In Denmark a fine for breach of a collective agreement is possible if the employer does not involve the employees’ representatives according to the agreement. In Spain certain acts or omissions by the employer may be considered as administrative violations which may lead to a fine. In addition, according to Articles 311 and 312 of the Penal Code certain acts by the employer, violating the rights of workers enshrined by law, collective agreement or individual employment contracts, are criminalised. (7) Collective agreements As far as mutually agreed terms are concerned, collective agreements play almost no role in the Member States. (8) Relations to other forms of termination The question arises of whether termination by mutual agreement is possible in connection with a dismissal and, if so, under what conditions. In Austria, Germany, Greece, Italy and Sweden the rules on mutual agreement apply also in the context of a dismissal. In Belgium a termination process is regarded either as a mutual agreement or as a dismissal. It follows that mutual agreement in connection with a dismissal cannot occur. In Spain during a trial the parties can conclude an agreement. The Courts often consider such agreements as a mutual agreement on the termination of the employment relationship, sometimes as resignation. In France a mutual agreement concluded in connection with a dismissal is a settlement (“transaction”) which is subject to the following conditions: - the procedures for dismissal must be respected; - the parties must have different opinions about the ground for the dismissal; - the parties must make concessions to one another. The termination of an employment relationship by conversion agreement. (“convention de conversion”) is considered as termination by mutual agreement (not as dismissal). In the Netherlands termination by mutual agreement is possible during dismissal or rescission proceedings. Often payment of financial compensation by the employer leads to the end of the contract. In Portugal a settlement is possible during the conciliation procedure according to conciliation procedure rules. It should also be noted that in redundancy cases employees are not normally dismissed but their contract is terminated by mutual agreement (with compensation). In the United Kingdom where the employer has given notice to the employee to terminate the contract, the courts are reluctant to find that any subsequent agreement to end the - 34 - employment before the notice expires amounts to termination by consent. Categorising the termination as termination by consent or resignation means that an employee cannot complain of unfair dismissal. - 37 - - (in certain circumstances) dissolution of a partnership. - in Scotland bankruptcy is referred to as sequestration. If it comes out (in court for example) that there is not such ground, the contact continues. In Denmark and Finland the employer may also be ordered to pay compensation. In Sweden the severance payment systems laid down by collective agreements apply even to insolvencies/bankruptcies if the employees affected are dismissed for redundancy. (2) Procedural requirements Procedural requirements are very rare in this context. In general there are no specific rules on the involvement of employees’ representatives. In Denmark collective agreements may impose such a duty on the employer. If it fails to comply with this duty, it could receive a fine for breach of the collective agreement. In the United Kingdom the employer must consult appropriate representatives of affected employees if the insolvency results in redundancies covered by the collective redundancies provisions (see 3.3.4(3); In the case of insolvency public authorities are involved in the United Kingdom and in Spain (labour authorities). (3) Effects of the existence of a ground If there is one of the grounds mentioned above (1) the employment relationship is terminated. Severance Payments: In Austria in the case of death of the employee there is only half of the normal severance payment (“Abfertigung”) for the successors. In Germany employees are entitled to a severance payment if, despite a court ruling to the effect that dismissal by the employer is legally invalid, the employment relationship is dissolved by the court at the employer’s or employee’s request on the grounds that the parties cannot be reasonably expected to continue with their employment relationship because the basis of mutual trust has been destroyed. The severance payment is equivalent to up to 18 months’ salary depending on the employees’ age and length of employment. In Finland there are no severance payments in the case of individual dismissals. In some situation there are severance payments in the case of collective dismissals. In Spain there are severance payment by law if retirement, death or disablement of the employer lead to the end of the contract ( 1 month’s salary). There are also severance payments by law in the case of the closure of the employer’s business for reasons of insolvency, force majeure or dissolution of the legal personality of the employer (20 days’ salary). In Italy in each case of termination of a contract a payment has to be made (“trattamento di fine rapporto”): 1 year’s salary divided by 13.5 + 1.5% for each year of activity + compensation for inflation. In Luxembourg the employee is entitled to compensation in the case of the closure of the employer’s business: Salary for the month in which the closure occurs and for the following month + 50% of the salary he or she would have received during the period of notice to which her or she is entitled. The two may not exceed the compensation for dismissal with notice. In the case of the death of the employee, the employer is required to pay the balance of the month’s salary and a further 3 month’s salary to the surviving spouse or other dependants. In Portugal the employee is entitled to severance payments in the following situations: - death or winding up of the employer, in which case the employee is entitled to 1 - 38 - month’s basic remuneration for each year or part year of service; - expiry of the time limit, in which case the employee is entitled to 2 days’ basic remuneration for each completed month of the contract; - termination of the contract due to the permanent closure of establishments or to destruction by natural causes or as a result of a decision by public authorities. In the United Kingdom in case of insolvency there is a right to statutory redundancy pay if the employee has 2 years’ continuous employment. In Sweden there are no severance payments by statute. Severance pay is provided for by collective agreements and apply to insolvencies/bankruptcies if the employees are dismissed for lack of work. In Denmark the spouse and children under the age of 18 are entitled to up to 3 months pay if a salaried employee dies. In the other Member Sates there are no severance payments. If the sum due is not paid by the employer, this has no effect on the validity of the agreement. But the employer may be ordered to pay. Unemployment Benefits: Employees are entitled to unemployment benefits in the Member States subject to the following special features: In Spain the benefits are limited to death, retirement or disablement and insolvency of the employer, force majeure and dissolution of the employer’s legal personality. In the Netherlands on the termination of a contract entered into for a specific term, unemployment benefit may be claimed if the normal requirements are fulfilled. In Portugal employees who are involuntarily unemployed are entitled to benefits provided they have worked at least 540 days in the previous 2 years. In the United Kingdom an employee who is unemployed as a result of the employer’s insolvency is entitled to jobseeker’s allowance. Retirement Pensions: Termination normally has no effect on entitlements under public and private retirement pension schemes. Special features: In Denmark pension rights based on a collective agreement are maintained. Company pension rights are often lost but there are many cases where they are maintained. In the Netherlands there are no effects on public pension schemes. Participation in a private pension scheme will be discontinued on termination of the contract of employment. The employee is given a proportionate pension entitlement. Sickness Insurance: Termination has no effect on entitlements under public and private sickness insurance schemes. (4) Remedies In all Member States there are, if necessary, judicial remedies or arbitration procedures for the employees to pursue their claims. Unless indicated otherwise below: - there is legal assistance for persons on a low income; - there is no priority for remedy proceedings; - the burden of proof is in general on the plaintiff; - the court must be satisfied that there is a sufficient ground for the termination. - 39 - In Austria an action before the court for labour and social affairs may be brought without any specific time limit. The works council has a right to claim if at least 3 employees are concerned by a question. In Belgium an action may be brought before the Labour Court within 1 year of the termination of the contract. Trade Unions or employees’ representatives may act on behalf of the employees. In Germany an action may be brought before the Labour Court without any specific time limit. Trade unions may help their members. Low paid employees who are not trade union members may request the assistance of a lawyer if the employer is so represented. The employee’s lawyer’s fees will be paid by the Land. In Denmark the employee has access to the general courts (if the case concerns the interpretation of law) or to industrial arbitration systems (if the employee is covered by a collective agreement). There is a general deadline of 5 years. Trade unions represent their members in such cases. A conciliation meeting should be held within 1 month. The burden of proof is on the employer if the dismissal is during pregnancy, childbirth or parental leave. In Greece an action can be brought before the general courts within 5 (2 years for employees of the State and of public undertakings). Trade unions may help their members. Labour cases have to be processed rapidly. The burden of proof is on the employee (as far as the existence of the employment relationship is concerned) and on the employer (as far as termination other than at the wish of the parties is concerned). In Spain employees have recourse to the courts after a prior attempt to reach a settlement before the Mediation, Arbitration and Conciliation Services. This period is interrupted by the lodging of a conciliation paper. Trade unions may act on behalf of their members with authorisation of the member concerned. The Labour Courts have to act swiftly. The burden of proof is on the plaintiff, except in cases of discrimination. In those situations where the labour authorities intervene, i.e. insolvency of the employer, force majeure and the dissolution of the legal personality of the employer, the decision of the labour authorities can be contested through administrative court procedure. In Finland, an infringement of the Employment Contracts Act may be contested in the District Court. Infringement of collective agreements may be contested in the Labour Court, after a mediation procedure if the agreement provides for it. The time limit is 2 years in both cases. Before the Labour Court the employee is represented by his or her trade union. If the union refuses to bring an action, the right to do so rests with the employee himself or herself. If an action is brought within 6 months of termination it must be treated as urgent in all instances. With regard to the burden of proof, the general rules of civil law apply. More especially, the burden of proof is on the employer to demonstrate the existence of grounds for terminating the employment relationship. In France an action before the Labour Court may be brought without any specific time limit. Trade unions may not act on behalf of their members. In Italy the employee must contest the dismissal in writing within 60 days of notification. Once the contestation has been made, the time limit for the action itself is 5 years. Trade unions may not act on behalf of their members with the exceptions of Article 28 of the Workers’ Rights Statute which provides for the possibility of separate appeal by a trade union representative and Article 18(7) which provides for the possibility of joint appeal in the event of dismissal of a trade union representative. In Luxembourg an action may be brought before the Labour Court within 3 months of the notification of dismissal or of its motivation. - 42 - There is protection in the main agreement (“Hovedaftalen”) between the Danish Confederation of Trade Unions (“Landsorganisationen i Danmark”, LO) and the Danish Employers’ Confederation (“Dansk Arbejdsgiverforening”. DA): Dismissal must be fair and notice must be given. In a case of serious misconduct the employer can dismiss without notice. The employer is obliged to justify the dismissal before the employee. However, this is not a condition for the validity of the dismissal. The main remedy against a dismissal is the conciliation procedure. An employee covered by a collective agreement may afterwards apply to the Board of Dismissal (“Afskedigelsesnævnet”). The Board may declare the dismissal unlawful and order the reinstatement of the employee. This applies if the employer is covered by the agreement, irrespective of whether or not the employees are actually members of the union. For salaried employees (office clerks, shop assistants and similar employees) there is equivalent protection in the Salaried Employees’ Act. However, for workers who are neither salaried employees nor covered by a collective agreement the main rule is no protection against unfair dismissal. There are however a number of laws that protect all workers against dismissal for specific reasons. There is a ban on dismissal on the grounds of race, colour, religion, political opinion, sexual orientation, age, handicap or national, social or ethnic origin, pregnancy, childbirth, demand for equal pay and treatment, compulsory military service, membership of an association and as a result or a corporate takeover. In Greece there are two kinds of dismissal: - ordinary dismissal. No ground is required. But the court can declare a dismissal void if it is improper (to be proved by the employee). A period of notice applies only to white collar workers, but instead of giving notice the employer may pay compensation. In effect notice is hardly ever given. The dismissed employee is entitled to compensation, except in certain exceptional cases; - summary dismissal. For the premature termination of a fixed-term or fixed-task employment relationship, an important ground is necessary which makes it intolerable for the relationship to run until its end. In general the employee is not entitled to compensation. Only if the important ground is based on a change in the personal situation of the employer the court can order that an equitable compensation be paid. In Spain three kinds of dismissal must be distinguished: - dismissal on disciplinary grounds (“despido disciplinario”); - dismissal on objective grounds (“despido objetivo”); - collective dismissal on economic, technical, organisational or production-related grounds. In the first and second cases the law provides an exhaustive list of grounds for dismissal. For collective dismissals there is only a general rule but it must be authorised by a State authority if no agreement is reached between the employer and the employees’ representatives. There is a period of notice only for dismissal on objective grounds. In the case of collective dismissal for economic, technical, organisational or production reasons in Spain, there is a specified period from the moment the employer gives notice of its intention to go ahead with a collective dismissal to the moment it actually takes place, due to the existence of a period of consultation with worker’s representatives and the need for the collective dismissal to be authorised by the public labour authorities (see section 3.3.4.3). In Finland the employer can only give notice if it has a proper and weighty reason. The ground for dismissal may derive from the employee (individual ground) or the economic situation of the firm (economic ground). The specific - 43 - notice period must be observed. An employer which terminates an employment contract without observing the notice period shall pay the employee full pay for the period equivalent to the notice period as compensation. If the notice period has been observed in part only, the liability is limited to what is equivalent to the pay due for the non-observed part of the notice period. Furthermore the employer is, upon an extremely weighty cause, entitled to cancel an employment contract with an immediate effect regardless of the applicable period of notice or the duration of the employment contract. Such a cause may be deemed to exist in case the employee commits a breach against or neglects duties based on the employment contract or the law and having an essential impact on the employment relationship in such a serious manner as to render it unreasonable to expect that the employer should continue the contractual relationship even for the period of notice. In France for any dismissal a real and serious ground (“cause réelle et sérieuse”) is required. The employer may dismiss an employee either on economic grounds or on grounds related to the employee. The employer must respect a specified period of notice. But it may also terminate the contract before the end of the notice period if it pays compensation equal to the salary the employee would have received until the end of the notice period. In Ireland to justify a dismissal an employer must show that it either resulted from one or more of the following causes or that there were other substantial grounds for the dismissal: - the capability, competence or qualifications of the employee for the work he or she was employed to do; - the employee’s conduct; - redundancy; - the fact that continuation of the employment would contravene another statutory requirement. In Italy there are the following kinds of dismissal: - dismissal “ad nutum” (i.e free from restrictions): the employer must respect a specified period of notice. A ground is not required. The scope of application of this kind of dismissal is limited to: • dismissal during a trial period, • dismissal of domestic servants, • dismissal of an employee who is entitled to retire, • dismissal of directors; - dismissal on important grounds: the employer must respect a period of notice depending on the job classification and the length of the employee’s service. To be eligible, the grounds must be related to the employee’s behaviour (except serious misconduct) or to the undertaking’s production or organisation; - justified dismissal because of serious misconduct or because of other reasons which render the continuation of the employment relationship impossible. There is no period of notice. In all cases the employer has to make a payment (“trattamento di fine rapporto”). In Luxembourg a real and serious ground (“motif réel et sérieux”) is required. Notice must be given, except in the case of summary dismissal for an important ground (“motif grave”), which renders the maintenance of the employment relationship impossible. In case of improper (“abusif”) dismissal the employee is entitled to compensation. The court may also recommend the employer to reinstate the employee. If the employer does not agree it - 44 - may be ordered to pay supplementary compensation. In undertakings with more than 150 employees there is a preliminary meeting between the employer and the employee which an employees’ representative or trade union representative may attend if the employees so wish. The employee is entitled to severance payments in all cases of termination of employment relationship except summary dismissal. In undertakings with more than 20 employees the employer can opt for a longer period of notice instead of severance payments. In the Netherlands the employer can terminate the contract of employment: - by requesting permission to do so from the Centre for Work and Income (“Centrum voor werk en inkomen” – CWI). The CWI will examine whether there is a reasonable ground. Once permission has been given the employer may dismiss by giving notice; - by applying to a court in urgent cases or circumstances requiring a rapid termination of employment; A particular feature of the Dutch labour law system is that in the case of termination of an open-ended employment contract the employer needs the prior consent of the CWI. An exception is made for particular categories of employees, such as civil servants, teachers, members of the clergy, domestic servants, company directors, etc. (Extraordinary Decree on Labour Relations). Furthermore, prior consent is not needed in the case of: - dismissal during a probationary period; - termination by mutual agreement; - summary dismissal; - bankruptcy; - fixed term contracts; - rescission by the court. Before giving notice, the employer must address a written application to the local office of the CWI. The application must contain all the relevant information on the reason and circumstances of the case. A Dismissals Committee, consisting of employers’ and union representatives, will consider whether there is a reasonable ground for dismissal. A permit is usually granted when the employer substantiates one of the following reasons: - the employee’s incompetence or misconduct; - economic reasons (if the reason is not contested by the employee, accelerated proceedings are available); - severe and prolonged disturbance of the labour relationship. If the permit is granted, the employer can dismiss the employee within a period of 2 months. If not, the employer can try again or ask the court to rescind the employment contract. There is no appeal against a decision by the CWI. Termination of the employment contract without prior CWI consent is void. Instead of following the CWI application procedure, either party may request the court to rescind the contract for substantial reasons. Substantial reasons are circumstances that would have constituted an urgent reason if the employment relationship had been immediately terminated and changes in circumstances that justify the termination of the employment relationship. Judicial rescission is considered to be faster but costlier than the CWI application procedure, as only the court can decide on severance pay and no appeal is possible against the court’s decision to rescind the employment contract. The court also decides when the employment contract will end, as there is no period of notice. The amount of the severance pay is calculated on the basis of a judicial formula, which is generally accepted by the judges of the cantonal - 47 - 3.3.1 Dismissal contrary to certain specified rights or civil liberties A dismissal may be contrary to certain specified rights of the employee, for example if it is based on trade union activities, race or pregnancy. Member States prohibit such dismissals by law to a certain extent and/or establish specific dismissal procedures (e.g regarding employee’s representatives). Dismissal because of the employee’s gender is prohibited in all Member States. Grounds which are not prohibited by law are often taken into consideration when a court is asked to declare a dismissal unlawful. In Austria dismissal cannot be based on unlawful motives such as : - activity as an employees’ representative, participation in a strike; - race, colour, sex, marital status, sexual orientation, religion, political opinion, ideological conviction, nationality or social origin; - absence as a consequence of military or civil service, - activity as a member of a mediation board; - activity as an employees’ representatives responsible for occupational safety; - leaving the workplace in case of serious and immediate danger for the employee’s life or health. Such dismissals will be declared void by the court. If this declaration is made before the end of the period of notice, the employment relationship continues. If the declaration is made after the end of the period of notice, the employee will be reinstated. Dismissal of member of works councils, pregnant women, employees on maternity leave and persons called up for military service is allowed only with the consent of the court for labour and social affairs. The Court will give its consent only in certain cases specified by law, for example, if the undertaking is closed down or if the employee agrees. In Belgium dismissals, the reasons for which are the following, is forbidden: - activity as employees’ representatives (or as a candidate therefore); - having lodged a complaint concerning equal treatment of men and women with regard to working conditions; - gender, race, colour, ancestry, national or ethnic origin, sexual orientation, religious or philosophical conviction, age, disability; - pregnancy and maternity (from the time when the employer is informed until 1 month after the end of the maternity leave); - absence as a consequence of military, civil or political service; - activity as a company physician; - absence for educational leave; - introduction of new technologies without having complied with the information obligations. The employment relationship comes to an end, even if the dismissal is based on a prohibited ground. However, the termination is irregular and the employer has to pay compensation (“inndemnité compensatoire de préavis”) and specific protection compensation (“indemnité forfaitaire de protection”). Members of the works council and of the safety council are entitled to be reinstated. If they are not reinstated they are entitled to compensation of 2 to 8 years’ salary. - 48 - If a member of the works council, of the safety council or of the trade union delegation is to be dismissed, there are specific proceedings: - dismissal on economic grounds can only take place after it has been duly noted by the joint committee; - where there is an important ground to do with the employee’s person (“motif grave”) a conciliation meeting will be held before the president of the labour court. Afterwards the employer may ask the labour court to recognise the important ground. The employer cannot be dismissed before the court has recognised the ground. In Germany a dismissal cannot be based on: - participation in (legal) trade union activities, participation in a strike; - having lodged a complaint against the employer or having exercised one’s right in a legal way; - race, colour, sex, sexual orientation, religion, political opinion, etc. Moreover, - a member of the works council can only be dismissed on important grounds (summary dismissal) and with the consent of the works council; - pregnant women, handicapped employees and persons on parental leave can only be dismissed with the consent of the competent authority; - an employee doing military service can only be dismissed on an important ground. Dismissals contrary to these requirements are void. The employment relationship continues. In Denmark a dismissal cannot be based on: - activity as an employees’ representative, membership of a trade union, participation in trade union activities. The courts have ruled that these cases do not constitute objective ground for dismissal; - race, sex, colour, religion, political opinion etc.; - pregnancy, parental leave; - military or civil service; - leave for educational purposes; - demand for equal pay and treatment. If the dismissal is wrongful, damages of a non- economic loss are awarded. The maximum damages vary according to the law in question. If e.g. the law on freedom of association is violated damages can go up to 104 weeks’ pay. Protection against dismissal on grounds of industrial action derives from collective agreements. The dismissal terminates the employment relationship. However, a Board of Dismissal or Industrial Court may rule that the employee has to be reinstated provided that he or she has lodged a formal request. Otherwise, dismissal will result in financial compensation fixed by the Board or Court. In Greece a dismissal is prohibited by law when it is based on: - activity as an employees’ representative. This includes special protection for the founders of the first union within the undertaking. Employees’ representatives can only be dismissed on specific grounds listed in the law. The dismissal has to be approved by an administrative committee; - having lodged a complaint against the employer; - sex; - pregnancy and absence during maternity leave. Such persons may only be dismissed - 49 - on grounds that have nothing to do with maternity; - absence as a consequence of military service. Within 1 year of the resumption of work with the same employer as before, the employee can only be dismissed on a justified ground which has to be accepted by a special committee. For the dismissal of handicapped employees the authorisation of an administrative committee is required. Dismissals contrary to these requirements are void. The employment relationship continues. Exception: a dismissal within 1 year of completion of military service is valid, but the employer has to pay compensation of 6 months’ salary. The employer can be imprisoned (very rare) or sentenced to pay a penalty if it illegally dismisses an employees’ representative or if it refuses to reinstate an employee whose dismissal had been declared void. In Spain: - dismissal may not be based on discrimination prohibited in the Constitution or by law on such grounds as origin, race, sex, religion, opinion, marital status, age, social condition, sexual orientation, language, being a member of a trade union or disablement; - dismissal may not be based on grounds contrary to the employee’s fundamental rights or public liberties (e.g. trade union freedom, right to strike); - it is prohibited to dismiss: • employees during temporary absence from work on account of maternity, risks during pregnancy, adoption or fostering, • pregnant employees, • employees who have the right to time off or to reduction of the working day for breast-feeding a child, or because of the legal care of a child or disabled person, • employees who have the right to time off for taking care of a child or relative, • female employees who are victims of gender violence exercising their employment rights. The dismissal may be declared void by the court. Nullity requires immediate reinstatement. An administrative penalty of between €3,005 and €90,152 may be fixed. The burden of proof is on the employer. Reasons such as “temporary absence from work on account of sickness or accident” or “the fact that having contracted a particularly serious form of communicable disease” are not fair or legitimate reasons for dismissal. Dismissal for such reasons would be either unfair (if it involved discrimination or violated basic rights) or unjustified (because it is not included in the breaches of the employee’s contract justifying the employer’s decision to dismiss an employee). In Finland a dismissal cannot be based on: - trade union membership; - nationality, ethnic origin and race, religion or belief, disability, age, sexual orientation and gender and related grounds such as pregnancy and parental leave which are specifically regulated as prohibited grounds for dismissals which make the burden of proof especially heavy for the employer in these cases. Furthermore the Employment Contracts Act contains a general prohibition on discrimination that includes additional grounds such as political activities and opinions, language, state of health, etc; - military and civil service. There is a specific Act dating back to 1961 - 52 - In addition, a dismissal which results from the exercise or contemplated exercise of the right to adoptive leave will generally be regarded as an automatically unfair dismissal (see Adoptive Leave Act 1995). With regard to care of dependants, illness or accident and serious disease the burden of proof that the dismissal was fair rests on the employer. The Employment Equality Act 1998 prohibits dismissals in circumstances amounting to “discrimination”, which term is defined as treating one person less favourably than another on the following nine grounds: gender, marital status, family status, sexual orientation, religion, age, disability, race (including colour, nationality, ethnic or national origin) and membership of the Traveller community. In a discriminatory dismissal case, regard will be had, in measuring the appropriate quantum of compensation, to all the effects which flowed from the discrimination. This will include not only the financial loss suffered but also the distress and indignity suffered in consequence of the discrimination. So compensation over and above financial loss will be awarded to claimants who are deprived of their “fundamental right to equal treatment”. As in the case of Adoptive Leave Act 1995, a dismissal which results from the exercise or contemplated exercise of the right to parental leave under the Parental Leave Act 1998 or the right to carer’s leave under the Carer’s Leave Act 2001 will be regarded as an unfair dismissal. Similarly section 26 of the National Minimum Wage Act 2000 provides that the dismissal of an employee for exercising his or her rights under that Act is deemed to be an unfair dismissal. In Italy a dismissal is considered to be discriminatory if it is based on: - activity as an employees’ representative; - political opinion, sex, religion, national origin; - pregnancy; - military service; - absence as a consequence of illness; - marriage. Discriminatory dismissal is null and void irrespective of the size of the undertaking. The employee has to be reinstated. This also applies to managers and domestic servants. Moreover, under the general rules, any dismissal based on illegitimate motives is void. In the case of pregnancy and marriage the dismissal will be considered void if the employer does not prove its justification. In other cases of discriminatory dismissal the burden of proof is on the employee. However, if in the case of discrimination based on sex the employee proved prima facie that there may be discrimination, it is up to the employer to prove the contrary. There is an administrative sanction (max €1,000) if an employer dismisses a pregnant employee within the period in which such dismissal is prohibited (from the beginning of the pregnancy to the child’s first birthday). The declaration of the nullity (for which there is no time limit) must be made by the judge. For the dismissal of pregnant women, see Article 4(5) of Act No. 125. In Luxembourg the situation is as follows: - employees’ representatives, their deputies, equality officers (“délégué à l’égalité”) and safety officers (“délégué àla sécurité”) cannot be dismissed, except in the case of serious misconduct (“faute grave”). For employees’ representatives this protection is extended to 6 months after the termination of their office. Applicants for the office of an employees’ representative cannot be dismissed for a period of 3 months after their application. A dismissed employee can, within 15 days, ask the - 53 - President of the Labour Court to declare that the employment relationship must continue; - pregnant women and women who have recently given birth or who are breastfeeding cannot be dismissed if the pregnancy is medically confirmed and for a period of 12 weeks after the birth. A woman who has been dismissed may, within 15 days, ask the President of the Labour Court to declare that the employment relationship continues. The law of 1 August 2001 (“concernant la protection des travailleuses enceintes, accouchées et allaitantes”) allows the employer to lay off such workers who have seriously misconducted themselves pending a decision of the Labour Court; - employees who are unable to work because of illness or accident cannot be dismissed within 26 weeks of the first appearance of the incapacity. Such a dismissal is considered to be improper (“abusif”); - employees who have received an internal replacement decision pursuant to the law of 25 July 2002 cannot be: - dismissed during the first year of their placement. Any such dismissal is void and the dismissed employee can ask the President of the Labour Court to decide that the employment relationship must continue; - employees on parental or family leave; - dismissals based on the employee’s gender, race, sexual orientation, disability, religion, trade union activity, etc. Such dismissals are void and employers are also subject to criminal sanctions (8 days to 2 years imprisonment and/or fines of between €251-€25,000; - by Law of 26 May 2000, similar provisions apply to employers who have applied sexual harassment. Any employer who dismisses an employee contrary to these provisions is liable to pay damages. In the Netherlands a dismissal cannot be based on: - activity as an employees’ representative; - membership of and activities performed on behalf of a trade union, unless these activities are performed during working hours without the employer’s consent; - religion, race, sex, ethnic origin, sexual orientation or marital status; - pregnancy or parental leave; - the employee having lodged an equal treatment complaint; - military or alternative compulsory service; - transfer of the enterprise; - refusal to work on Sundays within the scope of the Working Hours Act (“Arbeidstijdenwet”); - absence as a consequence of illness (maximum 2 years and only if the employee co-operates in resuming his or her own or other suitable work as soon as possible). Nullity has to be invoked within 2 months and legal action has to be taken within 6 months. As the employment contract is supposed to continue, the employee cannot ask for compensation in addition to wages or salary. The employer needs the prior consent of the court in the case of dismissal of an employee who is: - a candidate for election to the Works Council; - 54 - - a former member of the Works Council of any of its committees who has served as such over the last 2 years; - a member of a preparatory commission of the Works Council; - a safety expert. The court will only give its approval if the employer substantiates that the termination has nothing to do with any of the circumstances mentioned above. In Portugal dismissals for political of ideological reasons of those founded on the employee having exercised his or her rights are forbidden (Articles 382 and 122 of the Labour Code). Dismissals for trade union membership or non affiliation or for exercising rights to participate in the collective representation structures are forbidden and considered void (Article 453). There is a presumption of absence of just cause where the dismissed employee was a candidate for trade union office or had been such within the last 3 years (Article 456). Dismissals for reasons of ancestry, age, gender, sexual orientation, family situation, disability, nationality, ethnic origin, religion and political opinion are expressly forbidden and are punishable by a fine of between €7,500 and €16,900 as are dismissals for participating in a strike. Pregnancy and maternity can never provide the reason for a dismissal. A dismissal based on a prohibited ground is unlawful. The employee is entitled to reinstatement in the firm with the same category and seniority. The employee will not be reinstated where he or she opts to receive compensation instead. In Sweden a dismissal cannot be based on: - activity as an employees’ representative, membership of a trade union, participation in trade union activities; - race, sex, ethnic origin, religion or belief, disability or sexual orientation; - pregnancy, parental leave; - care for dependants (an employee is legally entitled to leave for this purpose to a certain extent and may not be dismissed simply because such leave has been requested); - military or civilian service; - leave for educational purposes. Dismissal on these grounds can be declared void by the courts. In the case of a dispute the employment relationship continues to be in force until the dispute is finally settled by a court of last instance. The court may, however, at the request of the employer issue an interlocutory injunction to the opposite effect. And in cases where there has been a summary dismissal, the main rule is that the employment relationship does not continue to be in force (in these cases there is a possibility for the court to issue an interlocutory injunction to the opposite effect at the request of the employee). If the dismissal is wrongful, damages of a non- economic loss are awarded. Even compensatory damages may be awarded, but usually the employee remains in employment and is then entitled to regular wages while the dispute is being adjudicated. In the United Kingdom some dismissals are regarded as automatically unfair. They are as follows: - reasons related to the employee’s membership or non-membership of an independent trade union, participation in the activities, or use of services, of such a union at the appropriate time or failure to accept an employer’s offer that is designed to move workers away form collectively- agreed terms of employment; - reasons related to leave for family reasons (maternity, paternity, adoption, parental leave, leave to care for dependants) or flexible working; - the employee’s assertion of certain statutory rights against the employer; European Commission Termination of employment relationships Legal situation in the Member States of the European Union - 3 - EXECUTIVE SUMMARY 1. This synthesis report aims at providing an overview of the legal situation as regards termination of employment relationships in the 15 Member States of the pre- enlargement European Union1. The report updates the original 1997 Report which was the fruit of co-operation between the Commission and the Member States; the information set out in the original report was assembled on the basis of contributions from the Member States and they subsequently checked its accuracy. This updated report adheres to the format and structures of the original report and is based on the information provided by the national experts named in the introduction. 2. Labour law across the EU-15 has gradually introduced limits to ad nutum dismissal that is summary, unjustified dismissal in the context of a contract of indefinite duration. Sources of law on dismissal 3. The main source of rules on individual dismissals in most Member States is the law in the broad sense. Collective agreements are most frequently used to adjust the statutory provisions on periods of notice or dismissal on disciplinary grounds, for example. The role of judge-made law, especially in the interpretation of laws, is also important. The role of custom is, on the whole, relatively limited. The Notice Period 4. A first limit on freedom to dismiss is the period of notice which applies in all the Member States. There are major differences in notice periods in the Member States as shown in table 3 of the report. The employer is 1 Studies on the legal situation in the Member States that joined the EU in 2004, as well as Bulgaria and Romania are on-going. A synthesis report will be published in the beginning of 2007. usually dispensed from giving notice in the event of dismissal on grounds attributable to the worker, summary dismissal or in the event of force majeure and during the probationary period. The legal arrangements governing complete or partial failure to comply with the notice period also vary from one Member State to another: the tendency in most Member States is to provide for payment of a sum equal to the remuneration the worker would have received during his or her notice period. Verification of grounds 5. In all the Member States the wish of the employer is no longer sufficient in itself to justify dismissal. All the legal systems provide, through various means, for checks on the grounds underlying the decision to dismiss. 6. First, dismissal on certain grounds is prohibited. These grounds are set out in tables 1(a) to 1(c) in Appendix II to the report. Another means of preventing arbitrary dismissal used by certain Member States is the so-called technique of abuse of law which the worker may invoke; consideration is then given to whether the grounds for the decision to dismiss were well founded. In practical terms this technique is really no different from the requirement to give notice or to justify dismissal. 7. In principle, the rule that any unjustified dismissal is unlawful is to be found in all Member States. The Member States provide for exceptions to the need for grounds for certain groups of workers or during the probationary period. Some Member States have lists of - 3 - reasons which can justify dismissal, but there are big differences in the scope for determining them. Most legal systems have opted for a general clause. A distinction is usually made between the types of grounds on the basis of the three types of dismissal outlined in the report1. The formal requirements 8. The need to justify and provide grounds for dismissal is often linked to formal requirements in many Member States. Written notice of dismissal is provided for in most Member States. Similarly, provision is frequently made for the requirement to notify the grounds for dismissal in writing. The trend is to allow workers to know why they have been dismissed and to give them the right to be heard and express their views. Ultima ratio 9. The ultima ratio rule plays a role in several Member States; dismissal becomes the employer’s final solution. This presumes that alternatives to dismissal have been envisaged. Legal redress 10. All the Member States have rules on the right to take action against dismissal. Some Member States encourage conciliation and arbitration. In most Member States, trade unions may provide assistance to their members or act on behalf and in place of their members. Deadlines for challenging dismissal or for taking legal proceedings vary considerably from one Member State to another. 1 They are: dismissal based on misconduct by the worker (disciplinary dismissal), dismissal based on the worker’s incapacity and dismissal based on objective grounds (economic dismissal). The burden of proof 11. In most Member States the burden of proof is incumbent on the employer, which is in line with the reasoning behind the arrangements for justification or grounds for the employer’s decision to dismiss. The effects of unlawful dismissal 12. As for the effects of unlawful dismissal, the report illustrates the major disparities between the Member States. Reference should be made to tables 5(a), 5(b) and 5(c) for payments and benefits and also to table 6 on restoration of employment. In most Member States, violation of fundamental rights renders the dismissal null and void; the worker is then reinstated or the contract pursued. Although some legal systems do provide for possible compensation, the Member States appear to agree that prohibited dismissal should not be translated directly into pecuniary terms. “Contrived resignation” 13. Some legal orders recognise the concept of “contrived resignation” or constructive dismissal that is indirect dismissal based in particular on fraudulent moves by the employer obliging the worker to resign; by covering up the dismissal the employer evades the legal arrangements which should have applied. This concept is unknown in a number of national systems and where it does exist the related legal arrangements are also somewhat disparate. It gives rise to major difficulties in relation to the burden or proof. - 4 - TABLE OF CONTENTS 1. INTRODUCTION............................................................................................................................. 6 2. SOURCES OF LAW......................................................................................................................... 7 (1) Constitutional status of the rules on the right to work.................................................................. 7 (2) International Agreements and Conventions.................................................................................. 7 (3) Sources of law and their hierarchy ............................................................................................... 8 (4) Role of Judge-made law and custom.......................................................................................... 13 3. SCOPE OF THE RULES GOVERNING THE TERMINATION OF AN EMPLOYMENT RELATIONSHIP, SPECIAL ARRANGEMENTS ..................................................................... 14 (1) Ways of terminating an employment relationship...................................................................... 14 (2) Exceptions or specific requirements for certain employers or sectors ....................................... 16 (3) Exceptions or specific requirements for certain types of contract.............................................. 19 (4) Exceptions or specific requirements for certain categories of employer.................................... 22 (5) Exceptions or specific requirements for certain categories of employees.................................. 24 3.1 MUTUAL AGREEMENT.............................................................................................................. 28 (1) Substantive conditions................................................................................................................ 28 (2) Procedural requirements ............................................................................................................. 28 (3) Effects of the agreement ............................................................................................................. 29 (4) Remedies .................................................................................................................................... 31 (5) Vitiating factors .......................................................................................................................... 33 (6) Penalties...................................................................................................................................... 33 (7) Collective agreements................................................................................................................. 33 (8) Relations to other forms of termination...................................................................................... 33 3.2 TERMINATION OTHERWISE THAN AT THE WISH OF THE PARTIES......................... 35 (1) Grounds for a contract to come to an end by operation of law................................................... 35 (2) Procedural requirements ............................................................................................................. 37 (3) Effects of the existence of a ground ........................................................................................... 37 (4) Remedies .................................................................................................................................... 38 (5) Penalties...................................................................................................................................... 40 (6) Collective agreements................................................................................................................. 40 3.3 DISMISSALS IN THE MEMBER STATES: OVERVIEW ....................................................... 41 3.3.1 Dismissal contrary to certain specified rights or civil liberties ................................................... 47 3.3.2 DISMISSAL ON ‘DISCIPLINARY’ GROUNDS........................................................................ 56 (1) Substantive conditions................................................................................................................ 56 (2) Procedural requirements ............................................................................................................. 61 (3) Effects of the dismissal............................................................................................................... 65 (4) Remedies .................................................................................................................................... 67 (6) Restoration of employment ........................................................................................................ 71 - 7 - 2. SOURCES OF LAW (1) Constitutional status of the rules on the right to work In Belgium the right to work is guaranteed by Article 23 of the Constitution. In Denmark the Constitution states that “all restrictions in the free and equal access to work which do not have their reason in the common good shall be abolished by law”. The provision is interpreted as a declaration of intent. The declaration does not provide basis for legal claims. In Greece the right to work is acknowledged by Article 22(1) of the Constitution as a social right which concerns exclusively the dependent salary workers. In Spain the right to work is acknowledged by Article 35.1 of the Constitution. In Finland the right to work is guaranteed by section 18 of the Finnish Constitution which also specifically provides that no-one shall be dismissed from employment without a lawful reason. In France the preamble of the Constitution 1946 acknowledges the right to work. In Ireland the State is required to direct its policy toward ensuring that the citizens may through their occupations find the means of making reasonable provision for their domestic needs (Article 45.2.i of the Constitution). Moreover, the Irish Courts have held that one of the “personal rights” latent in the guarantee of Article 40.3 is the right to work or the right to earn a livelihood. The Courts have further held that the right to earn a livelihood carries with it the entitlement to be protected against any unlawful activity on the part of any other person which materially impairs or infringes that right. The right to work has constitutional status in Italy. Under Italian law, the rules governing employment relationships are set out in Part 1 (Rights and obligations of citizens), Title III (Economic relations), Articles 35 et seq. of the Italian Constitution. In Luxembourg Article II of the Constitution guarantees the right to work and gives an assurance that each citizen may exercise this right. In the Netherlands stimulation of employment is a responsibility of the government. There is free choice of employment (Article 19 of the Constitution). In Portugal the Constitution guarantees security of employment and prohibits dismissals without justified ground (Article 53) and the right to work (Article 58). In Sweden the right to work is acknowledged by the Constitution (Chapter 1 Article 2) of the Instrument of Government (“Regeringsformen”). The provision is interpreted as a declaration of intent, which does not provide basis for legal claims. In the other Member States the right to work has no constitutional status. (2) International Agreements and Conventions ILO Convention 158 on the termination of employment relationships at the employer’s initiative has been ratified by Finland (1982), Spain (1985), France, Portugal (1994), Sweden (1983) and Luxembourg (2000). ILO Convention 135 concerning protection and facilities to be afforded to workers’ representatives in the undertaking has been ratified by Denmark (1978), Germany (1973), Greece (1988), Spain (1972), France (1972), Italy (1981), Luxembourg (1979), the - 8 - Netherlands (1975), Austria (1973), Portugal (1976), Finland (1976), Sweden (1972) and the United Kingdom (1973). ILO Convention 145 on the continuity of employment of seafarers has been ratified by Spain (1978), France (1978), Italy (1981), the Netherlands (1979), Portugal (1983) and Sweden (1981). ILO Convention 151 concerning protection of the right to organise and procedures for determining conditions of employment in the public service has been ratified by Belgium (1991), Denmark (1981), Greece (1996), Spain (1984), Italy (1985), Luxembourg (2000), the Netherlands (1988), Portugal (1981), Finland (1980), Sweden (1979) and the United Kingdom (1980). The original European Social Charter has been ratified in all Member States. The revised Charter had been ratified in Finland, France, Ireland, Italy and Portugal. It has also been ratified in Belgium and Sweden but in both Article 24 concerning termination of employment was excluded from the ratification. Austria, Denmark (with a reservation as to Article 24), Greece, Luxembourg, the Netherlands, Spain and the United Kingdom have signed the revised Charter but have not ratified it. (3) Sources of law and their hierarchy Sources of law regarding the termination of employment relationships can be laws (in a broad sense), collective agreements, individual employment contracts, case law and custom. Listed below are the main sources.3 In principle, departure from laws and collective agreements when this is to the advantage of employees is permitted. 3 The laws marked by (*) are published in English in: Blanpain, Roger (editor), International Encyclopaedia for Labour Law and Industrial Relations, Kluwer, Deventer, Netherlands. Austria: - Special statutes for specific occupations (actors, state employees, journalists, household employees); - Civil Code (“Allgemeines Bürgerliches Gesetzbuch”); - Collective agreements (especially regarding period and date of notice); - Works agreements; - Individual employment contracts. Departure from the legal rules and collective agreements by the individual contract is in general allowed if it is to the employee’s advantage. The legal period of notice for manual workers (2 weeks) does not have binding effect. Belgium - Civil Code; - (*) Act of 3 July 1978 on contracts of employment (“loi relative aux contrats de travail”); - Law of 19 March 1991 (on the dismissal of workers’ representatives on Works Councils and on Health and Safety Committees); - Law of 23 April 1998 (concerning the measures accompanying the establishment of a European Works Council); - Collective agreements; - Individual contracts. Germany - (*) Civil Code (“Bürgerliches Gesetzbuch”); - (*) Protection against Dismissal Act – 1969 (“Kündigungsschutzgesetz”); - 9 - - (*) Employee Representation Act – 1972 (“Betriebsverfassungsgesetz”); - Act to simplify and expedite the procedure before the Labour Court – 2000 (“Gesetz zur Vereinfachung und Beschleunigung des Arbeitsgerichtsverfahrens”); - Act relative to the reforms of the labour market – 2003 (“Gesetz zu Reformen am Arbeitsmarkt”); - Collective agreements (especially regarding the period of notice). With regard to periods of notice, collective agreements may fix a shorter period than is provided by law. Denmark: - Main Agreement (“Hovedaftalen”) between the Danish Confederation of Trade Unions (“Landsorganisationen i Danmark”, LO) and the Danish Employers’ Confederation (“Dansk Arbejdsgiverforening”, DA). Collective agreements may depart from statutes to the extent that due provision has been made for this in the statutes. Statutes are imperative concerning, for instance, dismissal on grounds of pregnancy, childbirth, demanding equal pay or being called up for military service, dismissal contrary to the Freedom of Association Act or as a result of a corporate takeover; - Act of Public Servants (“Tjenestemandsloven”); - Salaried Employees Act (“Funktionærloven”); - Act on certain employment relations in agriculture and in private households (“lov om visse arbejdsforhold i landbruget m.v.”); - Merchant Shipping Act (“Sømandsloven”); - Individual contracts; - Labour market practice. The order of sources is presented from a practical point of view. From a general legal point of view statutory law is superior to collective agreements as a source of law. Greece: - Civil Code (“Aστικός Κώδικας”) and other laws (including ordinances, law-decrees, presidential decrees); - Court decisions. They are very important because the legislation on dismissals is somewhat fragmentary; - Enterprise regulations. There are two kinds of such regulations; • Regulations of public law (based on a law, made by a public authority, containing rules on important aspects of dismissal, applicable to employees of public enterprises). The ordinary legal rules do not apply if there is an enterprise regulation approved by the State on the same subject; • Regulation of private law (internal rules of a contractual nature which may contain some rules on dismissals). They exclude the application of the law if they provide for at least the same level of protection as the law does; - Individual employment contracts. Departure from the legal rules is in general allowed if it is to the employee’s advantage, with some exceptions, e.g. compensation for dismissal cannot be higher than admitted by law. In some cases departure from the rules to the employee’s disadvantage is even allowed, e.g. the law allows the termination of a fixed- term contract only on important grounds, but the parties may determine other grounds. - 12 - may also contravene legislation prohibiting discrimination on grounds of sex, race, disability, religion or belief and sexual orientation, and legislation making it unlawful to dismiss for reasons relating to trade union membership and non-membership. There are also several legislative provisions dealing with specific areas that stipulate that it is automatically unfair to dismiss employees for seeking to exercise their rights guaranteed by those provisions (for example legislation dealing with maximum working time; the national minimum wage; the rights of part-time employees). A complete list of those provisions is given in paragraphs 3.3.1 (dismissals that are regarded as automatically unfair): The main sources of law are: - Employment Rights Act 1996, as amended: this contains the general provisions governing the law of unfair dismissal. - Trade Union and Labour Relations (Consolidation) Act 1992, as amended: this covers collective labour relations but also contains safeguards against dismissal in specific contexts (grounds relating to trade union membership and activities or non- membership or attempts to move workers from collectively-agreed terms of employment; industrial action; the statutory recognition and derecognition procedures). - Employment Act 2002: this Act specifies minimum procedures that must be followed in relation to dismissals. - Employment Act 2002 (Dispute Resolution) Regulations 2004, SI 2004, No 752: these Regulations, made under the authority of the Employment Act 2002 specify the circumstances where the procedures in the 2002 Act apply and do not apply. The general discrimination statutes: - Sex Discrimination Act 1975, as amended; - Race Relations Act 1976, as amended; - Disability Discrimination Act 1995, as amended; - Employment Equality (Religion or Belief) Regulations 2003, SI 2003 No. 1660; - Employment Equality (Sexual Orientation) Regulations 2003, SI 2003 No. 1661. In addition to these statutory rights, there is a remedy against wrongful dismissal (that is, dismissal in breach of contract) under the common law (although employees cannot recover twice in respect of the same loss). Employees may wish to seek damages at common law if they lack the 1-year period of continuous employment generally required to claim unfair dismissal or if their loss exceeds the statutory maximum that can (generally) be awarded for an unfair dismissal claim. In addition, there are circumstances where the common law courts will grant an order to restrain a dismissal taking effect pending completion of a contractual procedure relating to dismissal (usually a contractual disciplinary procedure), although such cases are generally confined to the public sector and this remedy is relatively rare. Statute law overrides the common law. There is provision for the Secretary of State to exempt from the unfair dismissal legislation employees covered by a collective ‘dismissal procedure agreement’ provided by the legislation, but this power has been exercised on only one occasion (in relation to the Joint Industry Board for the Electrical Contracting Industry) and that exemption was withdrawn in 2001. Minimum notice periods to terminate the contract of employment are laid down by statute. There is nothing to prevent the parties to the employment contract agreeing longer notice periods. The Employment Act 2002 lays down minimum procedures that must generally be followed in order for a dismissal not to be regarded as automatically unfair. There is - 13 - nothing to prevent the parties agreeing a contractual procedure, whilst it may give the employee a common law right of action for breach of contract, will not make the dismissal automatically unfair. It may be relevant when the employment tribunal is assessing whether the employer has acted reasonably or unreasonably in the circumstances as treating its reason for dismissal as sufficient, but the legislation now provides that failure to follow a procedure beyond the statutory minimum is not of itself to make an employer’s action unreasonable if it shows that it would have decided to dismiss the employee if it had followed that procedure. (4) Role of Judge-made law and custom Judge-made law plays a role in the interpretation of laws in Germany, Spain, France, Italy, Luxembourg, the Netherlands, Portugal, Finland and Sweden, particularly in defining grounds for dismissal. In Belgium judge-made law is also important for the termination of employment relationships of employees earning more than €26,418 per year. In Greece judge-made law is very important because legislation on dismissals is very fragmentary. Moreover the Greek legislation has not imposed substantial restrictions on dismissals. This means that in principle the validity of the dismissal is not connected to specific grounds. Case law has covered this vacuum by defining the restrictions on the exercise of the right to dismiss. In Ireland and the United Kingdom case law is characteristic of the legal system. The role of custom is limited. In Denmark it plays a role as a source of law. It means that the employer has to give notice if he wants to change custom. Also case law plays a role. This is especially relevant in the case of dismissals. The Courts have ruled that every worker can demand a fair period of notice irrespective of whether this is stated in a law or a collective agreement. In Spain it is only applicable in terms of local and professional custom and serves to verify, in its field of use, whether a particular type of conduct deserves to be regarded as constituting sufficient grounds for termination. In the United Kingdom a custom may play a role if it is “reasonable, certain and notorious”; i.e. not arbitrary or capricious, clear, and widely known and observed. It is necessary to show, however that the parties implicitly contracted on the basis that norms derived from custom and practice would apply. The importance of custom and practice has diminished due to the formalisation of the employment relationship imposed by legislation, in particular the requirement on the employer to issue a written statement of employment terms which although not contractually binding, is strong evidence of what the parties have agreed. - 14 - 3. SCOPE OF THE RULES GOVERNING THE TERMINATION OF AN EMPLOYMENT RELATIONSHIP, SPECIAL ARRANGEMENTS (1) Ways of terminating an employment relationship An employment relationship may come to an end by operation of law without further action of the parties (see below 3.2(1)). Other ways of terminating a contract are in Austria: - mutual agreement; - dismissal (with notice/premature dismissal for an important reason): - resignation (with notice/premature resignation for an important reason); - withdrawal from the contract (“Rücktritt”) in the case of insolvency of the employer, if the employee has not yet started work; - request during a probationary period; - conditions fixed in the contract (expiry of time in the case of fixed-term contracts). Belgium: - mutual agreement; - termination with notice (dismissal and resignation); - dismissal with proper cause. Germany: - dismissal (with notice, or without notice for cause); - resignation (with notice, or without notice for cause); - lapse of an employment contract entered into for a fixed term or to achieve a specific aim; occurrence of a dissolving condition; - a contractually agreed age limit is reached; - termination by mutual consent; - rescission of the contract. Denmark - mutual agreement; - dismissal (factors related to employee’s performance –such as illness, poor quality of work, cooperation difficulties, etc.); - summary dismissal; - resignation; - condition fixed in the individual contract; - redundancy, employer’s bankruptcy/liquidation; - age limit according to law or collective agreement (in the Act of public servants the age limit is 70, in collective agreements limits are rare); - request during a probationary period; - constructive dismissal; - retirement of the employee (67 years of age for old age pension, 59 years of age for early retirement allowance or part-time pension). Greece: - mutual agreement; - dismissal; - resignation. Spain - common will of the parties (mutual agreement or specific grounds fixed in the contract in as far as there is no abuse of rights by the employer); - unilateral termination (employer: dismissal, legally admissible objective grounds, employee, resignation, wish of the worker based on a breach of contract by the employer, by wish of a female employee - 17 - dismissals. The groups in question, are however, like all other workers, generally protected against dismissal on the basis of pregnancy, childbirth, equal treatment and equal pay on the basis of sex, race, colour, religion, political opinion, sexual orientation, age, handicap or national, social and ethnical origin, freedom of association and compulsory military service. In Greece the ordinary rules on dismissal do not apply to: - civil servants, officials of public authorities and members of the armed forces and police, who are not qualified employees; - those employed for government, or public authorities or local collectivities under ordinary contracts of employment (specific legislation); - teachers in private schools (specific legislation); - medical doctors who are employed with a dependant employment relationship (specific legislation); - employees in hotel industry (specific legislation); - domestic servants (in part – only 1920 law applies); - employees in agriculture cooperatives enterprises (specific legislation); - employees on board ship; - farm labourers; - employees of public sector corporations when there is an internal company regulation which, in case of dismissals provides for a level of protection at least equal or higher than ordinary rules. In Greece the size of the undertaking only plays a role in connection with collective dismissals. In Spain the ordinary rules do not apply to civil servants and members of the armed forces and police. There are special rules for domestic servants, disabled people, managers, artists in public shows, professional sportsmen and persons who take part in trading operations on behalf of one or more employers, without assuming the risk and chance associated with such operations. In Finland the ordinary rules do not apply to managers and directors if they are not in an employment relationship. According to the prevailing opinion at least, top managers are usually not regarded to be in an employment relationship. The period of notice is connected to the length of continuous service. Unless otherwise agreed the period to be observed by the employer varies from 14 days to 6 months. The corresponding periods to be observed by the employees are from 14 days to 1 month. The ordinary rules do not apply to probationary employees. The employer and the employee may agreed on a probationary (trial) period of a maximum of 4 months starting from the beginning of the work. If the employer provides specific, work-related training for the employee, lasting for a continuous period for over 4 months, a trial period of no more than 6 months may be agreed upon. The probationary period can be used both when the employment contract is for an indefinite period as well as when it is for a fixed-term. If a fixed-term employment relationship is shorter than 8 months, the trial period must not exceed 50 per cent of the duration of the employment period. Termination during a probationary period is possible without ordinary grounds. Both parties can cancel (summary dismissal) the contract during the probationary period. The employment contract may not, however, be terminated on discriminatory or on grounds which are otherwise inappropriate with regard to the purpose of the probationary period. If a collective agreement applicable to the employer - 18 - contains a provision on a probationary period, the employer must inform the employee of the application of this provision at the time the contract is concluded. When the employer has neglected the obligation to inform the employee about the existence of this provision, the probationary period cannot justify a termination of the contract. In France the ordinary rules do not apply to: - civil servants and members of the armed forces and police; - persons working on board ship. In Ireland there is no general scope of application for ordinary rules. Each relevant law has its specific scope of application. The Redundancy Payments Acts only apply to employees employed in employment which is insurable for all benefits under the Social Welfare legislation: The Minimum Notice Act does not apply to: - senior civil servants, members of the permanent defence forces and members of the gardai (police); - seamen signing under the Merchant Shipping Act; - the immediate family of the employer provided they live with him/her and are employed in the same private house or farm. The Unfair Dismissals Act does not apply to: - officers of health boards and vocational education committees, members of the permanent defence forces and the gardai; - senior civil servants. In Italy there is no legal system for the termination of employment relationships in general, but different concepts of dismissals. The following should be mentioned: - for public servants and members of the armed forces and police there are specific rules (public servants’ scheme, “regime pubblistico”); - for domestic servants the rules on discriminatory dismissals apply (discriminatory dismissal is always null and void irrespective of the size of the undertaking); - seamen, in accordance with the ruling of the Constitutional Court of 3 April 1987, are subject to the Workers’ Rights Statute; - for teachers in public schools there are specific rules. In private schools the ordinary rules apply, unless the school is a “tendency organisation” (“organizzazione di tendenza”). Tendency organisations are subject to Article 4 of Act No 108/90 and are therefore not covered by Article 18 of the Workers’ Rights Statute; - for professional sportsmen there are specific rules. In Luxembourg the ordinary rules do not apply to state employees. With regard to employees in public-sector corporations, there are no special categories of employees. In the Netherlands the ordinary rules do not apply to: - civil servants; - teachers; - members of the clergy; - domestic servants working less than 3 days in the household of a natural person; - company directors; - disabled persons employed in specifically protected workplaces; - employees during their probationary period. - 19 - The Commercial Code (“Wetboek van Koophandel” contains special provisions on the termination of an employment contract between a maritime employer and a member of the crew. In Portugal the ordinary rules do not apply to: - civil servants and members of the armed forces and police; - domestic servants; - persons working on board ship (special legal rules for the merchant navy and collective agreements for fishermen and others). In Sweden the ordinary rules do not apply to - civil servants with a special appointment (“fullmakt”); - domestic servants; - employees who are members of the employer’s family; - employees who are employed with a job creation subsidy or in “sheltered employment”. In the United Kingdom the ordinary unfair dismissal law does not apply to members of the armed forces, the police and share fisherman (where the employee is remunerated only by a share in the profits or gross earnings of the vessel). The ordinary redundancy provisions do not apply to: - persons in Crown employment and holders of public office; - the armed forces; - the police; - share fishermen (where the employee is remunerated only by a share in the profits or gross earnings of the vessel); - domestic servants who are members of the employer’s immediate family; - employees of the government of an overseas territory; - staff of the House of Commons and House of Lords; - apprentices whose service ends at the end of the apprenticeship contract. (3) Exceptions or specific requirements for certain types of contract In most Member States premature termination of fixed-term and fixed-task contracts is limited to some extent. Job training contracts and apprentices’ contracts are often not considered to be working contracts. Certain forms of contracts do not exist in some of the Member States (e.g. intermittent work, work on call, solidarity contracts). In Austria there are the following special features: - in a fixed-term employment relationship the employer cannot give notice unless special allowance has been made by contract. The employee can always give 6 months’ notice on completion of a 5 year period. Premature termination for important reasons is possible for limited and unlimited employment relationship alike. However, this does not apply to fixed-task contracts. A fixed-task contract in the sense of a “Werkvertrag” (contract for work and services) is not an employment contract; - the ordinary rules apply to part-time work. The ordinary rules are also applicable to white-collar workers working less than 8 hours a week (in this case the special provisions pursuant to the Salaried Employees Act do not apply); - temporary work; special rules; - homework: special rules; - 22 - - “le stage d’insertion” which period comes to an end after an agreed period (maximum 12 months) or when the trainee finds appropriate employment. In the Netherlands the ordinary rules do not apply to contracts concluded for a specified period or a specified task, unless the appointment has been renewed three times or is extended for more than 3 years with intervals of less than 3 months. Departure from this rule is only possible by means of a collective bargaining agreement or a regulation of a competent administrative authority. In Portugal homeworkers are in general self- employed. Contracts for job training and apprentices’ contracts are not employment contracts. Therefore the ordinary rules do not apply. Intermittent work, work on call and solidarity contracts do not exist. In Sweden, as a rule, fixed-term, fixed-task and seasonal contracts run for the whole of the agreed period. With regard to job training, solidarity contracts and apprentices, persons are covered in so far as they can be regarded as employees. In the United Kingdom the normal rules on unfair dismissal and redundancy apply to employees employed under a contract of employment concluded for a specified period or for a specified task. Where such a contract terminates by virtue of one of the events without being renewed, the employee is regarded as ‘dismissed’ for the purposes of an unfair dismissal complaint and entitlements to a statutory redundancy payment (although there is not dismissal at common law). It is no longer possible to contract out of the rights to claim unfair dismissal or redundancy on expiry of the term. Special reasons apart (see 3.3.1), an employee generally requires 1 year’s continuous employment with an employer in order to complain of unfair dismissal. For that reason temporary workers are often excluded from the right. 2 year’s continuous employment is required to claim a redundancy payment. Where a contract of employment exists, the ordinary rules apply, including where the employee is disabled. Solidarity contracts do not exist, nor is there a separate category of contracts for the social integration of handicapped workers. A contract of apprenticeship is normally for a fixed-term and cannot be terminated by either party before the term has expired. However once the agreed training period ends there is no obligation on the employer to continue employing the apprenticeship and failure to renew the contract will not fall within the statutory definition of ‘redundancy’. (4) Exceptions or specific requirements for certain categories of employer The size of the enterprise plays a role in connection with collective dismissals (see below 3.3.4 (3)). In addition, the following special features apply: In Austria the general provisions concerning the protection against dismissal apply only in undertakings with no more than 5 employees. For domestic workers there is no protection against dismissal. However, according to case law a dismissal can also be challenged for being contra bonos mores. In Germany the law on protection against dismissal for those employed after 31 December 2003 is applicable only in enterprises with more than 10 employees. For those employed before 31 December 2003 it applies where there are more than 5 employees. Nor does it apply to seasonal employees. In Denmark a collective agreement is defined as follows: an agreement between on the one side, a workers’ organisation (a group of workers) and on the other side, an employers’ organisation of a single employer/enterprise on the wage and working conditions that shall apply for the type of work in question and in the relationship between the individual worker and his employer as well as in all other - 23 - relations between workers and employers including their organisations. There is no lower limit as to how many workers in the single enterprise must be covered by the agreement. Small undertakings are often no members of an employers’ organisation. This does not mean that such undertakings are not covered by collective agreements. Many small enterprises conclude so-called accession agreements. This means that they accede to an agreement concluded by an employers’ organisation. In that case they are bound by the agreement in the same way as the original parties to the agreement. In Greece the size of the undertaking only plays a role in connection with collective dismissals. In France the size of the undertaking is important in two respects. The first ordinance under the law of 25 July 2005 introduces a specific employment contract for new recruits (“contrat de travail – nouvelles embauches”) to be used by small companies that employ up to 20 workers. The first 2 years of such employment is seen as a period of job consolidation and, during this time either the employer or the employee can terminate the contract in writing by means of a registered letter without having to state any reasons for this. Notice must be given calculated according to length of service. In the first 6 months it is 2 weeks, thereafter rising to 1 month. If the employer terminates the contract the employee is entitled to compensation of up to 8% of gross pay received since the employment began. This sum is not taxable and is not subject to social security contributions. Employers are also required to pay up to 2% of the gross pay to the unemployment agency ASSEDIL which sum is designed to finance activities by the public unemployment service to help employees return to work. Employees are entitled to appeal against their dismissal within 12 months in line with the normal Labour Code provisions and they must be informed of this right. For enterprises with fewer than 1,000 employees the agreement on job reclassification (“convention de reclasssement personnalisé” – CRP) applies. Employees with 2 years’ service who are made redundant will be eligible for 8 months support receiving up to 80% of their previous pay during the first 3 months and up to 70% for the next 5 months while they are retraining. After this they will be eligible for normal unemployment benefit. Employees with shorter service and who are eligible to claim unemployment benefit are entitled to an alternative programme of assistance but will not receive any specific financial benefit. The agreement also sets out the procedure for informing such employees who are likely to be made redundant. They must be informed of the opportunity to participate in the job reclassification scheme both at a meeting and in writing, and they will have 14 days to decide whether to go ahead. If they do, their contract of employment will be terminated and they will enter into a new contract. The employer is obliged to pay to the unemployment fund the amount of notice the employees would have received (equivalent to 2 months pay) as well as a sum covering the hours the employee had accumulated through their individual right to training (“droit individual de formation”). In Greece the size of the undertaking only plays a role in connection with collective dismissals. In Italy the protection of employees against dismissal depends on the number of employees in the undertaking. For larger enterprises (those having more than 15 employees or 5 in the case of a farm enterprise) “stabilità reale” applies; for smaller firms a softer discipline (“stabilità obbligatoria”) applies: see 3.3.2(6). In Luxembourg an employer with at least 150 employees must consult the employee concerned before the dismissal. An employer with no more than 20 employees can opt either for payment of compensation or for extension of the period of notice. In Portugal the Labour Code classifies employers according to the number of - 24 - employees. Article 91 distinguishes between micro-enterprises (less than 10), small enterprises (between 10 and 50), medium sized enterprises (51-200) and large enterprises (more than 200). For micro enterprises the dismissal procedure is simplified and reinstatement is not mandatory. In Sweden employers are obliged to follow a strict seniority principle in case of redundancies (see 3.3.4.2). Employers with a maximum of 10 employees are allowed to exclude 2 of those from the priority order in case of redundancies. In the United Kingdom employers with fewer than 6 employees are relieved of the obligation to take a woman back at the end of the full 40- week maternity absence period if it is not reasonably practicable for them to do so. No exceptions are to be found in Belgium, Spain, Finland, France, Ireland and the Netherlands. (5) Exceptions or specific requirements for certain categories of employees With regard to legislation on probationary periods, see also Appendix II. In Austria there are the following special features; - the ordinary rules do not apply to managers and directors; - there are different rules concerning periods of notice for manual and white collar workers; - the period of notice increases with the period of activity; - in a probationary period either party can terminate the employment relationship without grounds and without notice; - specific rules apply to teachers and actors and journalists, specific protection rules apply to employees’ representatives. In Belgium there are in general no exceptions. Periods of notice and severance payments may vary between manual (“ouvrier”) and white collar (“employé”) workers according to the time worked or the amount of salary. There is a shorter period of notice during the probationary period. In Germany there are the following special features: - directors, managers and employees in similar positions in the private sector who are empowered to take on and dismiss employees enjoy a limited degree of protection against dismissal. If these employees are dismissed in a socially unjustified way, they do not have any right of continued employment, but are merely entitled to compensation; - longer periods of notice to be observed by employers apply to older employees who have worked for them for a long time; - employment protection provisions only apply to employees who have been working for a firm or company for more than 6 months; - shorter periods of notice apply during probationary periods, which may last for no longer than the first 6 months of employment. In Denmark there are the following special features: - managers are not covered by the ordinary rules; - white collar workers are generally entitled to a longer period of notice; - frequently, the rules on protection against dismissal only apply to employees who have been employed by that employed for a particular length of time, often 9 or 12 months. This applies to both legislation and collective agreements; - 27 - - the general right to claim unfair dismissal is subject to a qualifying period of 1 years’ continuous service. - 28 - 3.1 MUTUAL AGREEMENT In Ireland the definition of dismissal focuses on the termination by either the employer or the employee. For instance, if the selection of workers to be made redundant is mutually agreed, the Redundancy Payments Acts apply. In case of a genuine agreement between the employer and the employee this is not regarded as dismissal. In Italy the term mutual agreement may be misleading. Instead the term “dissolution of the employment relationship by mutual assent” (“risoluzione consensuale del rapporto di lavoro”) should be used. (1) Substantive conditions In all Member States the general rules on contracts apply also to a mutual agreement on termination of an employment relationship. There are no specific substantive conditions or clauses which are prohibited. However, there are the following exceptions: In Finland the Employment Contracts Act must be respected. No agreement may be contrary to the legislation on job security or to collective agreements. But an employment relationship ends always after the end of the notice period. There is no automatic reinstatement without the employer’s consent. Therefore the invalidity of a termination agreement has no direct effects. If in France a court establishes that a termination agreement is inadmissible, termination of employment is deemed to be a dismissal and the legislation on dismissal will apply. In Italy judicial bodies recognise “mutual assent” only if there is an explicit declaration of the employees’ wishes. If not, the agreement is considered void. In Sweden a termination by mutual agreement can be considered by the courts to be a concealed dismissal (contrived resignation), if the agreement has been instigated by the employer whose behaviour was thus at odds with good labour market practice (see below 3.4.(7)). In the Netherlands the employer has to investigate whether the employee has the will to conclude such an agreement, especially when one of the following categories of employees is involved: old, sick, over-strained or illiterate employees or employees with a foreign background who are not fluent in Dutch. (2) Procedural requirements In Austria no form is generally required. Exceptions: - an agreement with a pregnant employee must be in writing; - an agreement with a person called up for military or civil services must be in writing. An acknowledgement by the court for labour and social affairs or by an employees’ representative body must be attached; - for an agreement with a trainee an attestation by the court that the trainee has been informed about the rules of the law on vocational training (“Berufsausbildungsgesetz”) is required Otherwise the agreement is void. The employee has the right to discuss his case with employees’ representatives. If he or she has expressed such a wish, an agreement concluded within the 2 following days is void. In Germany an agreement must be in writing and be signed by both parties otherwise it is void. The works council can under certain circumstances ask for a social plan. In Denmark many unions have entered into special job security agreements whereby an - 29 - employer and an employee may agree special (favourable) terms in relation to the voluntary termination of employment. These agreements are used in connection with the restructuring or rationalisation etc. of firms and institutions with the aim of preventing an employee from being dismissed against his or her wishes. In such situations the employer may well have an obligation to notify the employee’s union of such concrete agreements. In a given case it will often be the local union representative who is to be notified. If the employer fails to notify, the agreement is valid but it could receive a fine for breach of the collective agreement. In Greece the agreement must be in writing if the conclusion of the employment contract had to be in writing. This is the case if the contract is with a public-law legal entity. Otherwise the agreement is void. The works council should be informed in advance of any decision to reduce staff. However, so far there are only very few works councils in Greece. If such information is not supplied, there are no practical consequences. In Spain there are no legal requirements but the parties may lay down formal requirements in their contract. If such requirements are not fulfilled the agreement is deemed not to exist. There is no obligation to involve employees’ representatives, although a degree of control is exercised indirectly. Employees’ representatives must know how many documents of final settlement for the end of an employment relationship are drawn up in their company, if the request such information. In France the employees’ representatives must be consulted if a termination by mutual agreement is in connection with redundancy. In Italy there are no legal requirements, but the judicial bodies stipulate that an agreement to terminate the contract must take the same form as for the conclusion of the contract. Example: an agreement for premature termination of a fixed-term contract must be in writing because the conclusion of the fixed-term contract by law has to be in writing. In Luxembourg a mutual agreement must be in writing and in duplicate, signed by employer and employee. Otherwise it is void. In Portugal a written document signed by both parties and specifying the date the agreement is entered into and the effective date of termination is required. An agreement which does not comply with these requirements is void. Article 396 of the Labour Code gives the employee the right to unilaterally revoke the agreement within 7 days of its conclusion save where the agreement is signed in the presence of a notary with certification of the date and the signatures. In other Member States there are no procedural requirements. (3) Effects of the agreement The employment relationship is terminated in consequence of the agreement. Severance Payments: In Austria there are severance payments (“Abfertigung”) ranging from 2 months salary (after 3 years’ work) to 12 months’ salary (after 25 years’ work); no severance payments if the period of activity is less than 3 years. An employee is not entitled to severance pay if he or she resigns, if he or she leaves prematurely without good cause, or when he or she is justifiably dismissed. In Germany in undertakings with more than 20 employees the works council can ask for a social plan to alleviate the effects of changes in the undertaking (which include the termination by mutual agreement of a certain number of jobs as a result of changes in the undertaking). The social plan can provide for severance payments. In Greece no severance payments are required by law in the case of mutual agreement. In effect, however, the agreement will be considered void if the employer does not pay at least the compensation it would have to pay in the event of dismissal (no circumvention of - 32 - to act rapidly. The burden of proof is on the plaintiff, except in cases of discrimination. In Finland an infringement of the Employment Contracts Act may be contested in the District Court. Infringements of collective agreements may be contested in the Labour Court, after a mediation procedure if the agreement provides for it. The time limit is 2 years from the date the employment ended in both cases. There are shorter specific time limits in the legislation on public servants. At the Labour Court the employee is represented by his or her union. If the union refuses to bring an action, the right to do so rests with the employee himself or herself. If an action is brought within 6 months of termination it must be treated as urgent in all instances. With regard to the burden of proof, the general rules of civil law apply. The burden of proof is on the employer to demonstrate the existence of grounds for terminating the employment relationship. In France an action in the Labour Court may be brought without any specific time limit. Trade unions may not act on behalf of their members. In Italy a court action may be brought within 5 years in the case of annulment of the agreement. In the event of nullity there is no time limit. If the mutual agreement is in effect a concealed dismissal, the employee must contest it in writing within 60 days of notification of the dismissal. Once the contestation is made, the time limit for the action itself is 5 years. Trade unions may not act on behalf of their members. In Luxembourg an employee may, without any specific time limit, approach the Labour Inspectorate (“Inspection du Travail et des Mines”), whose job it is to supervise the application of the relevant legislation. Proceedings before the Labour Court (“Tribunal du Travail”) are possible within 3 months of notification of the termination except where the application alleges improper dismissal (“licenciement abusive”). Trade unions can only act in court if they have a special legal status (“association sans but lucratif” or “établissement d'utilité publique”). The purpose of any application to court would be to secure the nullification of the agreement for failure to observe the procedural requirements or where true consent was absent. In the Netherlands the agreement may be contested on the grounds of mental disturbance, error, deceit and abuse of circumstances. If one of these grounds has been sufficiently substantiated, the Court will nullify the agreement or award compensation. The nullification has retrospective effect unless that would lead to unreasonable consequences. The time limit is 3 years. There is legal assistance for persons with a low income. Trade unions may act on behalf of their members. There are no special rules on speed or priority. In conformity with the general rules on the burden of proof, the employee contesting the validity of the agreement has to prove the existence of an employment relationship, its termination and the reason for contestation. The employer has to prove that the contract was terminated by mutual agreement. In Portugal the employee has the right to unilaterally revoke the agreement within 7 days of its conclusion. Other legal action is possible within 1 year of termination. Trade unions may help the parties. They have the right to bring an action when the employer has taken measures against employees because they are shop stewards or hold any other trade union positions. In Sweden an employee who seeks to have an agreement declared void can bring a case before the courts without any specific time limit. An employees’ organisation has the statutory entitlement to institute and conduct cases before the Labour Court on behalf of its members - irrespective of whether this is sitting as a court of first instance or as the final court of appeal. This is the case where the employer has concluded a collective agreement and the employee involved in the dispute is carrying out duties covered by the collective agreement. If the union is not conducting the case, the employee has to initiate proceedings personally. Normally legal assistance is available through - 33 - the trade unions and there is legal assistance for persons on low income. In Sweden there is a priority for remedy proceedings since according to section 43 of the Employment Protection Act reinstatement issues should be conducted speedily. Procedures specific to the termination of employment by mutual agreement do not apply in the United Kingdom context. Where an employee is pressurised into resigning this would be treated as a dismissal. (5) Vitiating factors In this regard the general principles on contracts are applicable in all Member States. (6) Penalties In Denmark a fine for breach of a collective agreement is possible if the employer does not involve the employees’ representatives according to the agreement. In Spain certain acts or omissions by the employer may be considered as administrative violations which may lead to a fine. In addition, according to Articles 311 and 312 of the Penal Code certain acts by the employer, violating the rights of workers enshrined by law, collective agreement or individual employment contracts, are criminalised. (7) Collective agreements As far as mutually agreed terms are concerned, collective agreements play almost no role in the Member States. (8) Relations to other forms of termination The question arises of whether termination by mutual agreement is possible in connection with a dismissal and, if so, under what conditions. In Austria, Germany, Greece, Italy and Sweden the rules on mutual agreement apply also in the context of a dismissal. In Belgium a termination process is regarded either as a mutual agreement or as a dismissal. It follows that mutual agreement in connection with a dismissal cannot occur. In Spain during a trial the parties can conclude an agreement. The Courts often consider such agreements as a mutual agreement on the termination of the employment relationship, sometimes as resignation. In France a mutual agreement concluded in connection with a dismissal is a settlement (“transaction”) which is subject to the following conditions: - the procedures for dismissal must be respected; - the parties must have different opinions about the ground for the dismissal; - the parties must make concessions to one another. The termination of an employment relationship by conversion agreement. (“convention de conversion”) is considered as termination by mutual agreement (not as dismissal). In the Netherlands termination by mutual agreement is possible during dismissal or rescission proceedings. Often payment of financial compensation by the employer leads to the end of the contract. In Portugal a settlement is possible during the conciliation procedure according to conciliation procedure rules. It should also be noted that in redundancy cases employees are not normally dismissed but their contract is terminated by mutual agreement (with compensation). In the United Kingdom where the employer has given notice to the employee to terminate the contract, the courts are reluctant to find that any subsequent agreement to end the - 34 - employment before the notice expires amounts to termination by consent. Categorising the termination as termination by consent or resignation means that an employee cannot complain of unfair dismissal. - 37 - - (in certain circumstances) dissolution of a partnership. - in Scotland bankruptcy is referred to as sequestration. If it comes out (in court for example) that there is not such ground, the contact continues. In Denmark and Finland the employer may also be ordered to pay compensation. In Sweden the severance payment systems laid down by collective agreements apply even to insolvencies/bankruptcies if the employees affected are dismissed for redundancy. (2) Procedural requirements Procedural requirements are very rare in this context. In general there are no specific rules on the involvement of employees’ representatives. In Denmark collective agreements may impose such a duty on the employer. If it fails to comply with this duty, it could receive a fine for breach of the collective agreement. In the United Kingdom the employer must consult appropriate representatives of affected employees if the insolvency results in redundancies covered by the collective redundancies provisions (see 3.3.4(3); In the case of insolvency public authorities are involved in the United Kingdom and in Spain (labour authorities). (3) Effects of the existence of a ground If there is one of the grounds mentioned above (1) the employment relationship is terminated. Severance Payments: In Austria in the case of death of the employee there is only half of the normal severance payment (“Abfertigung”) for the successors. In Germany employees are entitled to a severance payment if, despite a court ruling to the effect that dismissal by the employer is legally invalid, the employment relationship is dissolved by the court at the employer’s or employee’s request on the grounds that the parties cannot be reasonably expected to continue with their employment relationship because the basis of mutual trust has been destroyed. The severance payment is equivalent to up to 18 months’ salary depending on the employees’ age and length of employment. In Finland there are no severance payments in the case of individual dismissals. In some situation there are severance payments in the case of collective dismissals. In Spain there are severance payment by law if retirement, death or disablement of the employer lead to the end of the contract ( 1 month’s salary). There are also severance payments by law in the case of the closure of the employer’s business for reasons of insolvency, force majeure or dissolution of the legal personality of the employer (20 days’ salary). In Italy in each case of termination of a contract a payment has to be made (“trattamento di fine rapporto”): 1 year’s salary divided by 13.5 + 1.5% for each year of activity + compensation for inflation. In Luxembourg the employee is entitled to compensation in the case of the closure of the employer’s business: Salary for the month in which the closure occurs and for the following month + 50% of the salary he or she would have received during the period of notice to which her or she is entitled. The two may not exceed the compensation for dismissal with notice. In the case of the death of the employee, the employer is required to pay the balance of the month’s salary and a further 3 month’s salary to the surviving spouse or other dependants. In Portugal the employee is entitled to severance payments in the following situations: - death or winding up of the employer, in which case the employee is entitled to 1 - 38 - month’s basic remuneration for each year or part year of service; - expiry of the time limit, in which case the employee is entitled to 2 days’ basic remuneration for each completed month of the contract; - termination of the contract due to the permanent closure of establishments or to destruction by natural causes or as a result of a decision by public authorities. In the United Kingdom in case of insolvency there is a right to statutory redundancy pay if the employee has 2 years’ continuous employment. In Sweden there are no severance payments by statute. Severance pay is provided for by collective agreements and apply to insolvencies/bankruptcies if the employees are dismissed for lack of work. In Denmark the spouse and children under the age of 18 are entitled to up to 3 months pay if a salaried employee dies. In the other Member Sates there are no severance payments. If the sum due is not paid by the employer, this has no effect on the validity of the agreement. But the employer may be ordered to pay. Unemployment Benefits: Employees are entitled to unemployment benefits in the Member States subject to the following special features: In Spain the benefits are limited to death, retirement or disablement and insolvency of the employer, force majeure and dissolution of the employer’s legal personality. In the Netherlands on the termination of a contract entered into for a specific term, unemployment benefit may be claimed if the normal requirements are fulfilled. In Portugal employees who are involuntarily unemployed are entitled to benefits provided they have worked at least 540 days in the previous 2 years. In the United Kingdom an employee who is unemployed as a result of the employer’s insolvency is entitled to jobseeker’s allowance. Retirement Pensions: Termination normally has no effect on entitlements under public and private retirement pension schemes. Special features: In Denmark pension rights based on a collective agreement are maintained. Company pension rights are often lost but there are many cases where they are maintained. In the Netherlands there are no effects on public pension schemes. Participation in a private pension scheme will be discontinued on termination of the contract of employment. The employee is given a proportionate pension entitlement. Sickness Insurance: Termination has no effect on entitlements under public and private sickness insurance schemes. (4) Remedies In all Member States there are, if necessary, judicial remedies or arbitration procedures for the employees to pursue their claims. Unless indicated otherwise below: - there is legal assistance for persons on a low income; - there is no priority for remedy proceedings; - the burden of proof is in general on the plaintiff; - the court must be satisfied that there is a sufficient ground for the termination. - 39 - In Austria an action before the court for labour and social affairs may be brought without any specific time limit. The works council has a right to claim if at least 3 employees are concerned by a question. In Belgium an action may be brought before the Labour Court within 1 year of the termination of the contract. Trade Unions or employees’ representatives may act on behalf of the employees. In Germany an action may be brought before the Labour Court without any specific time limit. Trade unions may help their members. Low paid employees who are not trade union members may request the assistance of a lawyer if the employer is so represented. The employee’s lawyer’s fees will be paid by the Land. In Denmark the employee has access to the general courts (if the case concerns the interpretation of law) or to industrial arbitration systems (if the employee is covered by a collective agreement). There is a general deadline of 5 years. Trade unions represent their members in such cases. A conciliation meeting should be held within 1 month. The burden of proof is on the employer if the dismissal is during pregnancy, childbirth or parental leave. In Greece an action can be brought before the general courts within 5 (2 years for employees of the State and of public undertakings). Trade unions may help their members. Labour cases have to be processed rapidly. The burden of proof is on the employee (as far as the existence of the employment relationship is concerned) and on the employer (as far as termination other than at the wish of the parties is concerned). In Spain employees have recourse to the courts after a prior attempt to reach a settlement before the Mediation, Arbitration and Conciliation Services. This period is interrupted by the lodging of a conciliation paper. Trade unions may act on behalf of their members with authorisation of the member concerned. The Labour Courts have to act swiftly. The burden of proof is on the plaintiff, except in cases of discrimination. In those situations where the labour authorities intervene, i.e. insolvency of the employer, force majeure and the dissolution of the legal personality of the employer, the decision of the labour authorities can be contested through administrative court procedure. In Finland, an infringement of the Employment Contracts Act may be contested in the District Court. Infringement of collective agreements may be contested in the Labour Court, after a mediation procedure if the agreement provides for it. The time limit is 2 years in both cases. Before the Labour Court the employee is represented by his or her trade union. If the union refuses to bring an action, the right to do so rests with the employee himself or herself. If an action is brought within 6 months of termination it must be treated as urgent in all instances. With regard to the burden of proof, the general rules of civil law apply. More especially, the burden of proof is on the employer to demonstrate the existence of grounds for terminating the employment relationship. In France an action before the Labour Court may be brought without any specific time limit. Trade unions may not act on behalf of their members. In Italy the employee must contest the dismissal in writing within 60 days of notification. Once the contestation has been made, the time limit for the action itself is 5 years. Trade unions may not act on behalf of their members with the exceptions of Article 28 of the Workers’ Rights Statute which provides for the possibility of separate appeal by a trade union representative and Article 18(7) which provides for the possibility of joint appeal in the event of dismissal of a trade union representative. In Luxembourg an action may be brought before the Labour Court within 3 months of the notification of dismissal or of its motivation. - 42 - There is protection in the main agreement (“Hovedaftalen”) between the Danish Confederation of Trade Unions (“Landsorganisationen i Danmark”, LO) and the Danish Employers’ Confederation (“Dansk Arbejdsgiverforening”. DA): Dismissal must be fair and notice must be given. In a case of serious misconduct the employer can dismiss without notice. The employer is obliged to justify the dismissal before the employee. However, this is not a condition for the validity of the dismissal. The main remedy against a dismissal is the conciliation procedure. An employee covered by a collective agreement may afterwards apply to the Board of Dismissal (“Afskedigelsesnævnet”). The Board may declare the dismissal unlawful and order the reinstatement of the employee. This applies if the employer is covered by the agreement, irrespective of whether or not the employees are actually members of the union. For salaried employees (office clerks, shop assistants and similar employees) there is equivalent protection in the Salaried Employees’ Act. However, for workers who are neither salaried employees nor covered by a collective agreement the main rule is no protection against unfair dismissal. There are however a number of laws that protect all workers against dismissal for specific reasons. There is a ban on dismissal on the grounds of race, colour, religion, political opinion, sexual orientation, age, handicap or national, social or ethnic origin, pregnancy, childbirth, demand for equal pay and treatment, compulsory military service, membership of an association and as a result or a corporate takeover. In Greece there are two kinds of dismissal: - ordinary dismissal. No ground is required. But the court can declare a dismissal void if it is improper (to be proved by the employee). A period of notice applies only to white collar workers, but instead of giving notice the employer may pay compensation. In effect notice is hardly ever given. The dismissed employee is entitled to compensation, except in certain exceptional cases; - summary dismissal. For the premature termination of a fixed-term or fixed-task employment relationship, an important ground is necessary which makes it intolerable for the relationship to run until its end. In general the employee is not entitled to compensation. Only if the important ground is based on a change in the personal situation of the employer the court can order that an equitable compensation be paid. In Spain three kinds of dismissal must be distinguished: - dismissal on disciplinary grounds (“despido disciplinario”); - dismissal on objective grounds (“despido objetivo”); - collective dismissal on economic, technical, organisational or production-related grounds. In the first and second cases the law provides an exhaustive list of grounds for dismissal. For collective dismissals there is only a general rule but it must be authorised by a State authority if no agreement is reached between the employer and the employees’ representatives. There is a period of notice only for dismissal on objective grounds. In the case of collective dismissal for economic, technical, organisational or production reasons in Spain, there is a specified period from the moment the employer gives notice of its intention to go ahead with a collective dismissal to the moment it actually takes place, due to the existence of a period of consultation with worker’s representatives and the need for the collective dismissal to be authorised by the public labour authorities (see section 3.3.4.3). In Finland the employer can only give notice if it has a proper and weighty reason. The ground for dismissal may derive from the employee (individual ground) or the economic situation of the firm (economic ground). The specific - 43 - notice period must be observed. An employer which terminates an employment contract without observing the notice period shall pay the employee full pay for the period equivalent to the notice period as compensation. If the notice period has been observed in part only, the liability is limited to what is equivalent to the pay due for the non-observed part of the notice period. Furthermore the employer is, upon an extremely weighty cause, entitled to cancel an employment contract with an immediate effect regardless of the applicable period of notice or the duration of the employment contract. Such a cause may be deemed to exist in case the employee commits a breach against or neglects duties based on the employment contract or the law and having an essential impact on the employment relationship in such a serious manner as to render it unreasonable to expect that the employer should continue the contractual relationship even for the period of notice. In France for any dismissal a real and serious ground (“cause réelle et sérieuse”) is required. The employer may dismiss an employee either on economic grounds or on grounds related to the employee. The employer must respect a specified period of notice. But it may also terminate the contract before the end of the notice period if it pays compensation equal to the salary the employee would have received until the end of the notice period. In Ireland to justify a dismissal an employer must show that it either resulted from one or more of the following causes or that there were other substantial grounds for the dismissal: - the capability, competence or qualifications of the employee for the work he or she was employed to do; - the employee’s conduct; - redundancy; - the fact that continuation of the employment would contravene another statutory requirement. In Italy there are the following kinds of dismissal: - dismissal “ad nutum” (i.e free from restrictions): the employer must respect a specified period of notice. A ground is not required. The scope of application of this kind of dismissal is limited to: • dismissal during a trial period, • dismissal of domestic servants, • dismissal of an employee who is entitled to retire, • dismissal of directors; - dismissal on important grounds: the employer must respect a period of notice depending on the job classification and the length of the employee’s service. To be eligible, the grounds must be related to the employee’s behaviour (except serious misconduct) or to the undertaking’s production or organisation; - justified dismissal because of serious misconduct or because of other reasons which render the continuation of the employment relationship impossible. There is no period of notice. In all cases the employer has to make a payment (“trattamento di fine rapporto”). In Luxembourg a real and serious ground (“motif réel et sérieux”) is required. Notice must be given, except in the case of summary dismissal for an important ground (“motif grave”), which renders the maintenance of the employment relationship impossible. In case of improper (“abusif”) dismissal the employee is entitled to compensation. The court may also recommend the employer to reinstate the employee. If the employer does not agree it - 44 - may be ordered to pay supplementary compensation. In undertakings with more than 150 employees there is a preliminary meeting between the employer and the employee which an employees’ representative or trade union representative may attend if the employees so wish. The employee is entitled to severance payments in all cases of termination of employment relationship except summary dismissal. In undertakings with more than 20 employees the employer can opt for a longer period of notice instead of severance payments. In the Netherlands the employer can terminate the contract of employment: - by requesting permission to do so from the Centre for Work and Income (“Centrum voor werk en inkomen” – CWI). The CWI will examine whether there is a reasonable ground. Once permission has been given the employer may dismiss by giving notice; - by applying to a court in urgent cases or circumstances requiring a rapid termination of employment; A particular feature of the Dutch labour law system is that in the case of termination of an open-ended employment contract the employer needs the prior consent of the CWI. An exception is made for particular categories of employees, such as civil servants, teachers, members of the clergy, domestic servants, company directors, etc. (Extraordinary Decree on Labour Relations). Furthermore, prior consent is not needed in the case of: - dismissal during a probationary period; - termination by mutual agreement; - summary dismissal; - bankruptcy; - fixed term contracts; - rescission by the court. Before giving notice, the employer must address a written application to the local office of the CWI. The application must contain all the relevant information on the reason and circumstances of the case. A Dismissals Committee, consisting of employers’ and union representatives, will consider whether there is a reasonable ground for dismissal. A permit is usually granted when the employer substantiates one of the following reasons: - the employee’s incompetence or misconduct; - economic reasons (if the reason is not contested by the employee, accelerated proceedings are available); - severe and prolonged disturbance of the labour relationship. If the permit is granted, the employer can dismiss the employee within a period of 2 months. If not, the employer can try again or ask the court to rescind the employment contract. There is no appeal against a decision by the CWI. Termination of the employment contract without prior CWI consent is void. Instead of following the CWI application procedure, either party may request the court to rescind the contract for substantial reasons. Substantial reasons are circumstances that would have constituted an urgent reason if the employment relationship had been immediately terminated and changes in circumstances that justify the termination of the employment relationship. Judicial rescission is considered to be faster but costlier than the CWI application procedure, as only the court can decide on severance pay and no appeal is possible against the court’s decision to rescind the employment contract. The court also decides when the employment contract will end, as there is no period of notice. The amount of the severance pay is calculated on the basis of a judicial formula, which is generally accepted by the judges of the cantonal - 47 - 3.3.1 Dismissal contrary to certain specified rights or civil liberties A dismissal may be contrary to certain specified rights of the employee, for example if it is based on trade union activities, race or pregnancy. Member States prohibit such dismissals by law to a certain extent and/or establish specific dismissal procedures (e.g regarding employee’s representatives). Dismissal because of the employee’s gender is prohibited in all Member States. Grounds which are not prohibited by law are often taken into consideration when a court is asked to declare a dismissal unlawful. In Austria dismissal cannot be based on unlawful motives such as : - activity as an employees’ representative, participation in a strike; - race, colour, sex, marital status, sexual orientation, religion, political opinion, ideological conviction, nationality or social origin; - absence as a consequence of military or civil service, - activity as a member of a mediation board; - activity as an employees’ representatives responsible for occupational safety; - leaving the workplace in case of serious and immediate danger for the employee’s life or health. Such dismissals will be declared void by the court. If this declaration is made before the end of the period of notice, the employment relationship continues. If the declaration is made after the end of the period of notice, the employee will be reinstated. Dismissal of member of works councils, pregnant women, employees on maternity leave and persons called up for military service is allowed only with the consent of the court for labour and social affairs. The Court will give its consent only in certain cases specified by law, for example, if the undertaking is closed down or if the employee agrees. In Belgium dismissals, the reasons for which are the following, is forbidden: - activity as employees’ representatives (or as a candidate therefore); - having lodged a complaint concerning equal treatment of men and women with regard to working conditions; - gender, race, colour, ancestry, national or ethnic origin, sexual orientation, religious or philosophical conviction, age, disability; - pregnancy and maternity (from the time when the employer is informed until 1 month after the end of the maternity leave); - absence as a consequence of military, civil or political service; - activity as a company physician; - absence for educational leave; - introduction of new technologies without having complied with the information obligations. The employment relationship comes to an end, even if the dismissal is based on a prohibited ground. However, the termination is irregular and the employer has to pay compensation (“inndemnité compensatoire de préavis”) and specific protection compensation (“indemnité forfaitaire de protection”). Members of the works council and of the safety council are entitled to be reinstated. If they are not reinstated they are entitled to compensation of 2 to 8 years’ salary. - 48 - If a member of the works council, of the safety council or of the trade union delegation is to be dismissed, there are specific proceedings: - dismissal on economic grounds can only take place after it has been duly noted by the joint committee; - where there is an important ground to do with the employee’s person (“motif grave”) a conciliation meeting will be held before the president of the labour court. Afterwards the employer may ask the labour court to recognise the important ground. The employer cannot be dismissed before the court has recognised the ground. In Germany a dismissal cannot be based on: - participation in (legal) trade union activities, participation in a strike; - having lodged a complaint against the employer or having exercised one’s right in a legal way; - race, colour, sex, sexual orientation, religion, political opinion, etc. Moreover, - a member of the works council can only be dismissed on important grounds (summary dismissal) and with the consent of the works council; - pregnant women, handicapped employees and persons on parental leave can only be dismissed with the consent of the competent authority; - an employee doing military service can only be dismissed on an important ground. Dismissals contrary to these requirements are void. The employment relationship continues. In Denmark a dismissal cannot be based on: - activity as an employees’ representative, membership of a trade union, participation in trade union activities. The courts have ruled that these cases do not constitute objective ground for dismissal; - race, sex, colour, religion, political opinion etc.; - pregnancy, parental leave; - military or civil service; - leave for educational purposes; - demand for equal pay and treatment. If the dismissal is wrongful, damages of a non- economic loss are awarded. The maximum damages vary according to the law in question. If e.g. the law on freedom of association is violated damages can go up to 104 weeks’ pay. Protection against dismissal on grounds of industrial action derives from collective agreements. The dismissal terminates the employment relationship. However, a Board of Dismissal or Industrial Court may rule that the employee has to be reinstated provided that he or she has lodged a formal request. Otherwise, dismissal will result in financial compensation fixed by the Board or Court. In Greece a dismissal is prohibited by law when it is based on: - activity as an employees’ representative. This includes special protection for the founders of the first union within the undertaking. Employees’ representatives can only be dismissed on specific grounds listed in the law. The dismissal has to be approved by an administrative committee; - having lodged a complaint against the employer; - sex; - pregnancy and absence during maternity leave. Such persons may only be dismissed - 49 - on grounds that have nothing to do with maternity; - absence as a consequence of military service. Within 1 year of the resumption of work with the same employer as before, the employee can only be dismissed on a justified ground which has to be accepted by a special committee. For the dismissal of handicapped employees the authorisation of an administrative committee is required. Dismissals contrary to these requirements are void. The employment relationship continues. Exception: a dismissal within 1 year of completion of military service is valid, but the employer has to pay compensation of 6 months’ salary. The employer can be imprisoned (very rare) or sentenced to pay a penalty if it illegally dismisses an employees’ representative or if it refuses to reinstate an employee whose dismissal had been declared void. In Spain: - dismissal may not be based on discrimination prohibited in the Constitution or by law on such grounds as origin, race, sex, religion, opinion, marital status, age, social condition, sexual orientation, language, being a member of a trade union or disablement; - dismissal may not be based on grounds contrary to the employee’s fundamental rights or public liberties (e.g. trade union freedom, right to strike); - it is prohibited to dismiss: • employees during temporary absence from work on account of maternity, risks during pregnancy, adoption or fostering, • pregnant employees, • employees who have the right to time off or to reduction of the working day for breast-feeding a child, or because of the legal care of a child or disabled person, • employees who have the right to time off for taking care of a child or relative, • female employees who are victims of gender violence exercising their employment rights. The dismissal may be declared void by the court. Nullity requires immediate reinstatement. An administrative penalty of between €3,005 and €90,152 may be fixed. The burden of proof is on the employer. Reasons such as “temporary absence from work on account of sickness or accident” or “the fact that having contracted a particularly serious form of communicable disease” are not fair or legitimate reasons for dismissal. Dismissal for such reasons would be either unfair (if it involved discrimination or violated basic rights) or unjustified (because it is not included in the breaches of the employee’s contract justifying the employer’s decision to dismiss an employee). In Finland a dismissal cannot be based on: - trade union membership; - nationality, ethnic origin and race, religion or belief, disability, age, sexual orientation and gender and related grounds such as pregnancy and parental leave which are specifically regulated as prohibited grounds for dismissals which make the burden of proof especially heavy for the employer in these cases. Furthermore the Employment Contracts Act contains a general prohibition on discrimination that includes additional grounds such as political activities and opinions, language, state of health, etc; - military and civil service. There is a specific Act dating back to 1961 - 52 - In addition, a dismissal which results from the exercise or contemplated exercise of the right to adoptive leave will generally be regarded as an automatically unfair dismissal (see Adoptive Leave Act 1995). With regard to care of dependants, illness or accident and serious disease the burden of proof that the dismissal was fair rests on the employer. The Employment Equality Act 1998 prohibits dismissals in circumstances amounting to “discrimination”, which term is defined as treating one person less favourably than another on the following nine grounds: gender, marital status, family status, sexual orientation, religion, age, disability, race (including colour, nationality, ethnic or national origin) and membership of the Traveller community. In a discriminatory dismissal case, regard will be had, in measuring the appropriate quantum of compensation, to all the effects which flowed from the discrimination. This will include not only the financial loss suffered but also the distress and indignity suffered in consequence of the discrimination. So compensation over and above financial loss will be awarded to claimants who are deprived of their “fundamental right to equal treatment”. As in the case of Adoptive Leave Act 1995, a dismissal which results from the exercise or contemplated exercise of the right to parental leave under the Parental Leave Act 1998 or the right to carer’s leave under the Carer’s Leave Act 2001 will be regarded as an unfair dismissal. Similarly section 26 of the National Minimum Wage Act 2000 provides that the dismissal of an employee for exercising his or her rights under that Act is deemed to be an unfair dismissal. In Italy a dismissal is considered to be discriminatory if it is based on: - activity as an employees’ representative; - political opinion, sex, religion, national origin; - pregnancy; - military service; - absence as a consequence of illness; - marriage. Discriminatory dismissal is null and void irrespective of the size of the undertaking. The employee has to be reinstated. This also applies to managers and domestic servants. Moreover, under the general rules, any dismissal based on illegitimate motives is void. In the case of pregnancy and marriage the dismissal will be considered void if the employer does not prove its justification. In other cases of discriminatory dismissal the burden of proof is on the employee. However, if in the case of discrimination based on sex the employee proved prima facie that there may be discrimination, it is up to the employer to prove the contrary. There is an administrative sanction (max €1,000) if an employer dismisses a pregnant employee within the period in which such dismissal is prohibited (from the beginning of the pregnancy to the child’s first birthday). The declaration of the nullity (for which there is no time limit) must be made by the judge. For the dismissal of pregnant women, see Article 4(5) of Act No. 125. In Luxembourg the situation is as follows: - employees’ representatives, their deputies, equality officers (“délégué à l’égalité”) and safety officers (“délégué àla sécurité”) cannot be dismissed, except in the case of serious misconduct (“faute grave”). For employees’ representatives this protection is extended to 6 months after the termination of their office. Applicants for the office of an employees’ representative cannot be dismissed for a period of 3 months after their application. A dismissed employee can, within 15 days, ask the - 53 - President of the Labour Court to declare that the employment relationship must continue; - pregnant women and women who have recently given birth or who are breastfeeding cannot be dismissed if the pregnancy is medically confirmed and for a period of 12 weeks after the birth. A woman who has been dismissed may, within 15 days, ask the President of the Labour Court to declare that the employment relationship continues. The law of 1 August 2001 (“concernant la protection des travailleuses enceintes, accouchées et allaitantes”) allows the employer to lay off such workers who have seriously misconducted themselves pending a decision of the Labour Court; - employees who are unable to work because of illness or accident cannot be dismissed within 26 weeks of the first appearance of the incapacity. Such a dismissal is considered to be improper (“abusif”); - employees who have received an internal replacement decision pursuant to the law of 25 July 2002 cannot be: - dismissed during the first year of their placement. Any such dismissal is void and the dismissed employee can ask the President of the Labour Court to decide that the employment relationship must continue; - employees on parental or family leave; - dismissals based on the employee’s gender, race, sexual orientation, disability, religion, trade union activity, etc. Such dismissals are void and employers are also subject to criminal sanctions (8 days to 2 years imprisonment and/or fines of between €251-€25,000; - by Law of 26 May 2000, similar provisions apply to employers who have applied sexual harassment. Any employer who dismisses an employee contrary to these provisions is liable to pay damages. In the Netherlands a dismissal cannot be based on: - activity as an employees’ representative; - membership of and activities performed on behalf of a trade union, unless these activities are performed during working hours without the employer’s consent; - religion, race, sex, ethnic origin, sexual orientation or marital status; - pregnancy or parental leave; - the employee having lodged an equal treatment complaint; - military or alternative compulsory service; - transfer of the enterprise; - refusal to work on Sundays within the scope of the Working Hours Act (“Arbeidstijdenwet”); - absence as a consequence of illness (maximum 2 years and only if the employee co-operates in resuming his or her own or other suitable work as soon as possible). Nullity has to be invoked within 2 months and legal action has to be taken within 6 months. As the employment contract is supposed to continue, the employee cannot ask for compensation in addition to wages or salary. The employer needs the prior consent of the court in the case of dismissal of an employee who is: - a candidate for election to the Works Council; - 54 - - a former member of the Works Council of any of its committees who has served as such over the last 2 years; - a member of a preparatory commission of the Works Council; - a safety expert. The court will only give its approval if the employer substantiates that the termination has nothing to do with any of the circumstances mentioned above. In Portugal dismissals for political of ideological reasons of those founded on the employee having exercised his or her rights are forbidden (Articles 382 and 122 of the Labour Code). Dismissals for trade union membership or non affiliation or for exercising rights to participate in the collective representation structures are forbidden and considered void (Article 453). There is a presumption of absence of just cause where the dismissed employee was a candidate for trade union office or had been such within the last 3 years (Article 456). Dismissals for reasons of ancestry, age, gender, sexual orientation, family situation, disability, nationality, ethnic origin, religion and political opinion are expressly forbidden and are punishable by a fine of between €7,500 and €16,900 as are dismissals for participating in a strike. Pregnancy and maternity can never provide the reason for a dismissal. A dismissal based on a prohibited ground is unlawful. The employee is entitled to reinstatement in the firm with the same category and seniority. The employee will not be reinstated where he or she opts to receive compensation instead. In Sweden a dismissal cannot be based on: - activity as an employees’ representative, membership of a trade union, participation in trade union activities; - race, sex, ethnic origin, religion or belief, disability or sexual orientation; - pregnancy, parental leave; - care for dependants (an employee is legally entitled to leave for this purpose to a certain extent and may not be dismissed simply because such leave has been requested); - military or civilian service; - leave for educational purposes. Dismissal on these grounds can be declared void by the courts. In the case of a dispute the employment relationship continues to be in force until the dispute is finally settled by a court of last instance. The court may, however, at the request of the employer issue an interlocutory injunction to the opposite effect. And in cases where there has been a summary dismissal, the main rule is that the employment relationship does not continue to be in force (in these cases there is a possibility for the court to issue an interlocutory injunction to the opposite effect at the request of the employee). If the dismissal is wrongful, damages of a non- economic loss are awarded. Even compensatory damages may be awarded, but usually the employee remains in employment and is then entitled to regular wages while the dispute is being adjudicated. In the United Kingdom some dismissals are regarded as automatically unfair. They are as follows: - reasons related to the employee’s membership or non-membership of an independent trade union, participation in the activities, or use of services, of such a union at the appropriate time or failure to accept an employer’s offer that is designed to move workers away form collectively- agreed terms of employment; - reasons related to leave for family reasons (maternity, paternity, adoption, parental leave, leave to care for dependants) or flexible working; - the employee’s assertion of certain statutory rights against the employer; - 57 - - Salaried employees: 14 days (both the employer and the employee) in a probation period which can be no longer than 3 months). After the end of the probation period the notice is extended from 3 to 6 months according to the length of service (employer). The notice is 1 month for the employee after the probation period; - Civil servants: 3 months (both the employer and the employee); - Employees in agriculture and in private households: 1 month (both the employer and the employee), after 12 months’ employment the employer’s notice is 3 months. - Seafarers: The Merchant Shipping Act lays down rules applying to persons recruited to serve on board a sea-going vessel. With regard to ordinary seamen, the seaman as well as the ship-owner may terminate the employment relationship by giving 7 day’s notice, unless otherwise agreed between the parties. In the absence of any agreement to the contrary, the employment relationship may only be terminated for retirement in a Danish port. With regard to officers (the master of the ship, chief-stewards, engine officers, radio operators and chief officers and others with executive functions) the notice of dismissal is 3 months for both parties, unless otherwise agreed. The duration of the notice of dismissal varies greatly in the sectors covered by collective agreements. Generally, there is no notice of dismissal during the initial period of the employment relationship. The notice of dismissal to be given by both the employee and the employer is increased in line with the duration of the employment relationship. Typically, the notice to be given by the employer is considerably longer than that of the employee. The main rule is that notice of dismissal may also be given during periods of sickness and holiday. Some collective agreements prohibit this. Only few collective agreements provide that the notice of dismissal should be given in writing. In Greece the list of grounds for dismissal applies only to employees’ representatives and handicapped workers. For the dismissal of other persons no ground is required. But the court can declare a dismissal void if it is improper (to be proved by the employee). With regard to the period of notice, a distinction has to be made between: - manual workers: no period of notice, but compensation has to be paid (5-160 days’ pay according to the length of service); - white collar workers: 1-24 months’ notice must be given, according to the length of service. If the employer does not give notice, it has to pay 1-24 months’ salary compensation. If it gives notice, he has to pay half of this compensation at the end of the notice period. In effect, then, notice is hardly ever given. In Spain the law provides for a list of grounds for dismissal: - repeated and unjustified failure to attend for work and to arrive punctually at the workplace; - insubordination and disobedience at work; - verbal or physical abuse directed at the employer or the persons working in the company or the members of their families; - breach of contractual good faith and abuse of trust in carrying out the work; - continued and voluntary deterioration in the performance of the normal and agreed work; - continued and voluntary deterioration in the performance of the normal and agreed work; - 58 - - habitual use of alcohol or narcotics if this has negative effects on work; - harassment for racial or ethnic reasons or because of religion or convictions, disability, age or sexual orientation directed at the employer or at persons working at the company. If there is no such ground the judge may declare the dismissal wrongful (“improcedente”). There is no period of notice. In the private sector in Finland there are no formal disciplinary procedures in cases of misconduct on behalf of the employee. In the public sector there still are rules on the possibility to issue “warnings” to public servants and also to withhold them from performing their duties in certain situations. The summary dismissal or rescission of the employment contract that terminates the contract immediately on notice can be seen as a “dismissal on disciplinary grounds”. According to the Employments Contracts Act both an employment contract for a fixed-term and a contract for an indefinite period can be rescinded (or terminated) to take effect immediately if it is justified by “an especially weighty reason”. In this case summary dismissal can take place regardless of the applicable period of notice or the duration of the employment contract. The grounds for summary dismissal must always be weightier than for ordinary dismissal. Rescission requires especially weighty reasons. Such reasons have generally been defined in laws as the kind of neglect or behaviour of one of the parties or the kind of change in the conditions belonging to the risks of that party on account of which the employment relationship cannot reasonably be expected to continue on behalf of the other party, even for a period of notice. Such a reason may be deemed to exist in cases where the employee commits a breach against, or neglects duties based on, the employment contract or the law and having an essential impact on the employment relationship in such a serious manner as to render it unreasonable to expect that the employer should continue the contractual relationship even for the period of notice. Also the employee might undertake a summary dismissal for example if the working conditions endanger health and safety or violence and harassment occur at the work place. The Employment Contracts Act does not – unlike the previous Act – contain any descriptions of examples of the most typical situations where one of the parties may rescind the contract. The starting point is that the normal first solution on the employer’s side is to use the mechanism for dismissals on individual grounds. Before an employment contract is rescinded by an employer or an employee, the other party must be given the opportunity to respond to the reasons for summary dismissal. The ‘penalty’ for illegal termination of the contract is the liability to pay damages. The right to summary dismissal lapses if the employment contract is not rescinded within 14 days of the date on which the contracting party is informed of the reasons for rescission. In France a real and serious ground (“motif réel et sérieux”) is required. The behaviour of the employee can be such a ground. If the court considers the dismissal to be without real and serious ground the employer has to pay compensation of minimum 6 months’ salary. There is an obligatory period of notice depending on the length of service (fixed by the Labour Code or by collective agreement). The employer can terminate the employment relationship before the end of the notice period in case of serious misconduct or if it pays a compensation equivalent to the salary the employee would have received during the period of notice. In Ireland to justify a dismissal under the Unfair Dismissals Acts an employer must show that it either resulted from one or more of the - 59 - following causes or that there were other substantial grounds for dismissal: - the capability, competence or qualifications of the employee for the work he or she was employed to do; - the employee’s conduct; - redundancy; - the fact that continuation of the employment would contravene another statutory requirement. If a dismissal is found to be unfair the appropriate adjudicative body may at its discretion award reinstatement, reengagement or financial compensation (maximum 4 weeks’ pay where no financial loss has been sustained; where loss is sustained, maximum 104 weeks’ pay). The employer must give an employee a minimum period of notice of 1 week (if the length of service is at least 13 weeks). The period increases with the length of service: 2 weeks (2-5 years’ service), 4 weeks (5-10 years), 6 weeks (10-15 years), 8 weeks (15 years and more). The employee may waive his or her right to notice or accept payment in lieu of notice. The employer may, however, terminate the employment relationship without notice due to the employee’s misconduct. Where it is found that an employee was dismissed without his or her entitlement to notice, the employee may be awarded his or her statutory entitlement, provided that financial loss has been sustained. In Italy an employee can be dismissed on: - a justified ground (“giusta causa” such as non-performance of his or her duties which is so important that it results in a loss of confidence), or - a justified subjective ground (non- performance of duties which does not justify a “justified ground”, but which is nevertheless important enough for the employer to lose the interest to continue the employment relationship). Collective agreements may list specific failures as grounds for dismissal. If a dismissal does not meet these requirements, the consequences depend on which regime is applicable (see (6)). To dismiss managers, domestic servants, and employees during a probationary period or persons who are entitled to retire, no ground is required (dismissal “ad nutum”). Notice must be given only in the second case (subjective ground). The period of notice depends on the classification and the length of service. If the employer does not give sufficient notice the employment relationship will not come to an end before the end of the notice period. The employee is entitled to damages, at least equivalent to the salary he or she would have received until the end of the notice period. In Luxembourg the employer may terminate an employment relationship without notice or compensation if there is an important ground (“motif grave”). An important ground is every failure which renders the maintenance of the employment relationship suddenly and definitely impossible. If there is no such ground the employer has to pay compensation. Notice must be given where the employer has a real and serious ground not amounting to motif grave. In the case of improper dismissal the judge may award compensation or recommend reinstatement. In the Netherlands the employer can ask the Centre for Work and Income (“Centrum voor werk en inkomen” – CWI) for permission to terminate the contract. The CWI will give its permission if the dismissal is reasonable (“redelijk”). Grounds for the dismissal can be incapability of the worker, redundancy or other substantial reasons. Once permission has been granted the employer can give notice. The period of notice depends on the duration of the employee’s service: - 1 month: the first 5 years of service; - 62 - prior consent of the works council or the labour court. The prior consent of the relevant public authority is required for the dismissal of pregnant women, employees on parental leave or disabled employees. The dismissal is invalid if the necessary consent is not given. In Denmark there must normally be a warning before any dismissal. If an employer intends to dismiss the local trade union representative, his or her union has to be informed before notice is given and then has the right to initiate negotiations. Such negotiations must be held within 8 days. If these procedures are not respected the dismissal can be annulled by the court and the procedures will be repeated. In Greece dismissal must be communicated in writing. There is no involvement of employees’ representatives. The dismissal of employees’ representatives, handicapped persons and apprentices has to be authorised by a State authority. The law does not provide for any internal procedure. However, enterprise regulations often fix procedures. - Regulations under public law (based on a law, made by a public authority, containing rules on important aspects of dismissal, applicable to employees of public enterprises): They often establish a committee which either gives advice or decides the question. Often there is a second instance within the undertaking. The ordinary legal rules do not apply if there is an enterprise regulation approved by the State on the same subject; - Regulations under private law (internal rules of a contractual nature which may contain some rules on dismissals): They exclude the application of the law, if they provide for at least the same level of protection as the law does. They may fix procedural requirements. If these requirements are not met, the dismissal is void. In Spain a grave fault of the employee which may give rise to a disciplinary dismissal ceases to have effect unless the dismissal procedure has been initiated within 60 days of the date on which the employer became aware of the fault, and, in all circumstances, 6 months from when it occurred. Otherwise the dismissal is wrongful (“improcedente”). This announcement (“carta del despido”) must be made in writing. The grounds for the dismissal and the date when it shall take effect must be stated. Otherwise the dismissal may be declared wrongful. In the case of a member of an employees’ representatives body (“representantes unitarios o sindicales”) before the employer gives notice of a dismissal, it has to explain the grounds to the employee and to the other members of the body concerned (“expediente contradictorio”). The final decision of the employer and the “carta del despido” have to be notified to the employees’ representatives concerned. If a member of a trade union is to be dismissed, this trade union has to be heard beforehand. If these procedures are not obeyed the dismissal is wrongful. In Finland the employee must have the opportunity to be heard on the matter. He or she may also turn to the shop steward who may ask for negotiations with the employer under collective agreement rules. Often there are specific company procedures. At the employee’s request, the employer has to state in writing the main grounds for the dismissal and the date of termination. If the employer fails to follow these procedures, this may have an effect on the amount of compensation for unlawful dismissal. In France the employer has to speak with the employee before any dismissal. The invitation to this meeting has to be made by registered letter or must be handed to the employee personally. The employee has to be informed about the dismissal by registered letter. The letter must not be sent earlier than 1 day after the meeting between employer and employee. Otherwise the employee can be awarded - 63 - compensation of 1 month’s salary minimum. The judge can also order the employer to comply with the procedure. The employee may bring to the meeting with the employer an employees’ representative or, if there is no representative body within the undertaking, an adviser from the Prefet’s list (“conseiller du salarié”). Public authorities (Labour Inspectorate) have to agree before one of the following persons is dismissed: - union representatives; - employees’ representatives (“délégué du personnel”); - member of the works council; - employees’ adviser (“conseiller du salarié”); - lay member of the Labour Court (“conseiller prud’homme”); - company physician; - social security administrator. In Ireland an employee has the right: - to know the reasons for the proposed dismissal; - to reply to those reasons and have that reply and any other arguments or submissions listened to and evaluated before the decision to dismiss is taken; - to be represented by an appropriate person, e.g. a trade union if he or she is represented; - to an impartial hearing. There must normally be a warning before the dismissal. Failure to comply with these prerequisites would be taken into account by the adjudicative bodies when determining whether the dismissal was fair in all the circumstances. In Italy the employer has to send the employee a written explanation of the facts on which the dismissal will be based. The employee must have the right to defend himself or herself He or she may be assisted by his or her or her trade union. The employer has to wait for 5 days after the explanation before it dismisses the employee. If this procedure is not obeyed the dismissal is void. In Luxembourg the notification of a dismissal for important grounds (without notice) must be by registered letter explaining exactly the facts on which the important ground is based. Without explanation of the grounds the dismissal will be considered improper (“abusif”). If the employer has at least 150 employees it must invite the employee concerned by registered letter to discuss the proposed dismissal. It must send a copy of the invitation to the main employees’ representatives’ body of the undertaking. If there is no such body, it has to be sent to the Labour Inspectorate. The employee may be assisted in the meeting by another employee, by an employee’s representative or by a trade union representative. The meeting must take place at the latest on the second day after the dispatch of the invitation. If the employer does not respect these rules the judge may award compensation to the employee. In the Netherlands there is no internal procedure or formal requirements. The CWI application for a permit to give notice must be in writing stating all relevant information such as a clear justification of the ground for dismissal. The employee then responds in writing and the matter is submitted to a dismissals committee. The CWI usually decides within 6 weeks. An accelerated procedure is possible in the case of economic reasons. In Portugal the employer must ensure the following procedures: - 64 - - (*) In the 60 days following the detection, by the employer, of evidence of a breach: the dispatch to the workers of a reprimand detailing the imputed misdeed accompanied by a declaration of intent to proceed with dismissal for proper cause. - copies of this declaration and the written statement must be sent to the workers’ committee (“comissão de trabalhadores”, a structure representing a firm’s employees); if the employee is a trade union representative (“representante sindical”) these copies must be sent to the respective trade union; - within 10 working days the employee may reply to the written statement, add further evidence and demand other measures with a view to gathering evidence; - the employer must take the measures to gather the evidence as demanded by the employee; - the employer must send a copy of the procedure to the workers’ committee, if the employee is a trade union representative a copy must be sent to the relevant trade union; - the workers’ committee and the trade union, if applicable, may issue a report within 5 working days; - (*) In the 30 days subsequent to the time limit referred to in the previous paragraph the employer may effect the dismissal, explaining this in writing. The dismissal may not be based on facts not referred to in the written statement; - (*) a written copy of the decision must be sent to the employee, the workers’ committee and, if applicable, the trade union. In firms with up to the 10 employees the procedure is simplified. If the procedures marked with (*) are not obeyed the dismissal is unlawful. As can be seen, if the employer does not involve the workers’ committee or the trade union, then such irregularities do not render the proceedings void. The employer, however, may be fined. In Sweden at least 2 weeks before the proposed serving of notice, the employer should inform the employee of its intention to serve notice. If the employee is a member of a trade union the employer should at the same time advise the local union to which the employee belongs regardless of whether the employer is bound by a collective agreement or not. After notification and notice the employer is required to initiate talks within 1 week, if the trade union or the person concerned so requests. The notice cannot be served before an opportunity is given for talks. Where the notification relates to summary dismissal, it must be given at least 1 week in advance. If these rules are not respected, the employer can be ordered to pay damages. In general, no action can be taken by the employer if the ground referred to for the notice has occurred more than 2 months prior to the notification. A dismissal should be in writing, but the dismissal is not void if it is not. The notice should also state what action the employee may take according to the statute in cases the employee wishes to challenge the dismissal. If the employee so request, the employer’s grounds for the dismissal should also be made in writing. In the United Kingdom since 1 October 2004 employers have generally been required to follow a statutory dismissal and disciplinary procedure. The three-step ‘standard’ procedure requires the employer to set out in writing the employee’s alleged conduct or characteristics or other circumstances which lead the employer to contemplate dismissing or taking disciplinary action against the employee. The employer must send the statement or a copy of it to the employee and invite the employee to attend a meeting to discuss the matter. The employee must take all reasonable steps to attend the meeting (the second step), following which the employer must inform the employee of its - 67 - Disqualification for unemployment benefit can be imposed in Belgium, the Netherlands, Ireland (up to 9 weeks), in the United Kingdom (up to 26 weeks where misconduct or voluntary leaving without just cause) and in Sweden (up to 60 days if the employee lost his or her job because of his or her own fault). Retirement Pensions: In Austria there is no effect on public pension schemes. Company pension schemes: entitlements to direct payment (employer to the employee) lapse if the employee resigns, if he or she leaves prematurely without good cause or when he or she is justifiably dismissed. No lapse if the employee pays contributions to a private insurance company. Then the company will pay the benefits later. In Germany company pension rights are maintained if: - the employee has completed the 30th year of his or her life; and - the pension commitment has been in existence for at least 5 years. In Denmark dismissal does not affect state pensions. Pension rights based on a collective agreement are maintained. Where pension rights are company-related, they are sometimes lost but there are many cases where they are maintained. In the United Kingdom dismissal does not affect public pension schemes. With regard to occupational pension schemes the rights already acquired are preserved or transferred to another scheme. In the other Member States dismissal has no effect on under public and private retirement pension schemes. Sickness Insurance: In Luxembourg there is no more entitlement under public and private sickness insurance schemes following the first 3 months after dismissal. In the other Member States there are no effects. (4) Remedies In all Member States there are judicial remedies and/or arbitration procedures for employees to pursue their claims. Unless indicated otherwise below: - there is legal assistance for persons on a low income; - there is no priority for remedy proceedings; - the burden of proof rests with the employer; - the judge must be satisfied that the grounds are sufficient reason for termination. In Austria, if the works council lodged a protest within 5 working days of the first notification, the works council or the employee who has been given notice can lodge an appeal against the dismissal on the grounds that the dismissal is socially unacceptable. The appeal will succeed if the employee’s substantial interests are impaired by the notice and the notice is not due to facts about the employee’s person which are detrimental to the establishment’s interests, or by the establishment’s economic requirements conflicting with the continued employment of the employee concerned. An appeal to the court for labour and social affairs may be brought either by the employee without any specific time limit or by the works council within 1 week. If the works council has not protested against the dismissal, the employee may appeal if he or she protested against the dismissal. The employee may appeal if he or she alleges an unlawful motive, e.g. dismissal because of activity as an employees’ representative or for a trade union. In undertakings with more than 5 employees the dismissed employee has to establish facts from which it can be presumed that there has been an unlawful motive. The judge has to dismiss the appeal if there is a higher probability that the dismissal is not based on an unlawful ground. - 68 - In Belgium an action may be brought before the Labour Court within 1 year of termination of the contract. Trade unions or employees’ representatives may act on behalf of the employee. In Germany an action may be brought before the Labour Court within 3 weeks of receiving the dismissal. Trade unions may help their members. The case must be given priority treatment. Low paid employees who are not trade union members may request the assistance of a lawyer if the employer is so represented. The employee’s lawyer’s fees will be paid by the Land. In Denmark the employee has access to the general courts (if the case concerns the interpretation of law) or to industrial arbitration systems (if the employee is covered by a collective agreement). There is a general deadline of 5 years. Trade unions represent their members in such cases. A conciliation meeting should be held within 1 month. In Greece an action may be brought before the general courts. If the employee claims nullity of the dismissal the time limit is 3 months from termination. If he or she claims compensation, the time limit is 6 months for the date on which the compensation is due. The courts do not apply these limits to compensation based on enterprise regulations. The 3 month time limit applies also to fixed term contracts when the employee claims nullity of the dismissal. Trade unions may help their members. Labour cases have to be processed rapidly. The burden of proof is on the employee with regard to the existence of a valid employment contract. The employer has to prove that the dismissal had been in writing and that the compensation had been paid. If enterprise regulations list grounds for dismissal, their existence had to be proved by the employer. Enterprise regulations often provide for internal appeal procedures. The judgments of internal committees can be verified by ordinary courts as follows: If the procedure is fixed by an enterprise regulation under public law, only the formal legality can be vetted. If the procedure is fixed by an enterprise agreement under private law, the substance too can be vetted. In Spain employees have recourse to the courts after a prior attempt to reach a settlement before the Mediation, Arbitration and Conciliation Services. A claim must be brought within 20 working days of termination. This period is interrupted by the lodging of a conciliation paper. Trade unions may act on behalf of their members with the authorization of the member concerned. The Labour Courts have to act with rapidity. The judge can analyse the importance of the grounds. In Finland an infringement of the Employment Contracts Act may be contested in the District Court. Infringement of collective agreements may be contested in the Labour Court, after a mediation procedure if the agreement provides for it. The time limit is 2 years in both cases. Before the Labour Court the employee is represented by his or her trade union. If the union refuses to bring an action, the right to do so rests with the employee himself or herself if an action is brought within 6 months of termination it must be treated as urgent in all instances. Civil servants might also contest dismissals undertaken by the employer. These cases would be heard in the administrative courts with the Supreme Administrative Court as the last instance. In France an action before the Labour Court may be brought without any specific time limit. Trade unions may help their members. With regard to the burden of proof, the judge forms his or her opinion according to the facts presented by the parties and after whatever investigation measures he or she considers necessary. If there is still some doubt, the employee has the advantage. In Ireland a dismissed employee may appeal to a Rights Commissioner or the Employment Appeals Tribunal within 6 months of the date of dismissal. This limit may, however, be extended to up to 12 months in cases where exceptional circumstances have prevented the lodgment of the claim within the initial 6 months. An employee who is dismissed on one - 69 - of the nine discriminatory grounds under the Employment Equality Act 1998 can appeal to the Equality Tribunal within 6 months of the date of dismissal. This limit, however, may be extended to up to 12 months in cases where reasonable cause to do so exists. Although there is no legal aid in discriminatory dismissal cases, a claimant may seek the advice of, and assistance (including representation) from, the Equality Authority, a body established under the 1998 Act, whose general function is to work towards the elimination of discrimination in relation to employment. Occasionally claims may be made to the Labour Court (usually where the employee has less than 1 year’s service) under the Industrial Relations Acts (decision not legally binding). The employee may alternatively bring an action for breach of the employment contract before the Civil Courts within 6 years (“wrongful dismissal”). There is no legal aid in unfair dismissal cases. It is common that trade unions initiate and maintain unfair dismissal cases on behalf of the employee. In Italy the employee must contest the dismissal in writing within 60 days of the notification. Once the contestation is made, the time limit for the action itself is 5 years. Trade unions may not act on behalf of their members. In the Netherlands an action may be brought before the court (“kantonrechter”) within 6 months of the termination of the employment relationship if the employee pleads that the dismissal is manifestly unreasonable. If the plea is that the dismissal is void (only in case of prohibited dismissal) the period is 2 months. Trade unions may not act on behalf of their members. The burden of proof is on the employee, but the employer is required to offer as much information as possible. In Luxembourg an action may be brought before the Labour Court within 3 months of notification of the dismissal or of its motivation. In Portugal legal action is possible within 1 year of the dismissal. Trade unions may help the parties. They have the right to bring actions (only) when the employer has taken measures against employee because they are shop stewards or hold any other trade union position. If an employees’ representative has been dismissed, the matter must be given priority. In Sweden an employee who intends to request that a notice of termination of employment or an immediate dismissal be declared void must advise the employer of his or her intention no later than 2 weeks after the date on which notice was served or dismissal notified. If the employer has not received the explanatory notes on appeals the time limit is extended to 1 month and is calculated with effect from the day on which the employment was terminated. If talks in connection with the dispute are requested under the Co-determination at Work Act (MBL) or with the support of a procedural collective agreement, the action must be initiated within 2 weeks of the date on which the talks ended. Otherwise the action must be initiated within 2 weeks of the final date for notification. An employee who intends to seek compensation or lodge other claims based on the rules set out in the Employment Protection Act must advise the other party of this intention within 4 months of the date on which the injury was suffered, failing which no claim for settlement can be submitted. If the employee has not received the explanatory notes on claims describing procedures for compensation, the period is calculated with effect from the day on which the employment ceases. If talks in connection with the dispute are requested in accordance with MBL or with the support of a procedural collective agreement, the action must be initiated within 4 months of the date on which the talks ended. Otherwise the action must be initiated within 4 months of the final date for notification. If negotiations are not conducted or an action brought within the prescribed time periods the employee loses his or her action. An employee organization has a statutory entitlement to institute and conduct cases before the Labour Court on behalf of its members – - 72 - lawful strike), racial discrimination; in these cases the dismissal is void). If he holds that the employment relationship cannot be continued, he may fix a compensation sum instead of reinstatement. In Ireland the Rights Commissioner or the Employment Appeals Tribunal may at their discretion award reinstatement, reengagement or financial compensation (maximum 4 weeks’ pay where no financial loss has been sustained where loss is sustained, maximum 104 week’s pay). The employer’s agreement is not required for reinstatement. In case of reinstatement there is no compensation. However, all rights, benefits, and other privileges arising out of the employment are preserved by the order. Consequently a reinstated employee would be entitled to be paid for the period between dismissal and reinstatement. The Equality Tribunal, in a case of discriminatory dismissal, is empowered to order re-instatement or re- engagement with or without an order for compensation. In Italy there is the following situation: - undertakings with more than 15 employees; in agriculture more than 5 in the establishment or within the city or local authority area; in every case undertakings with more than 60 employees (“stabilità reale”): If the judge declares a dismissal void he or she orders reinstatement and payment of compensation (salary from the day of dismissal to the day of reinstatement, but not less than 5 months’ salary). - Other undertakings (“stabilità obbligatoria”): the employer can opt either for reinstatement or to pay compensation (2,5 to 6 months salary, depending on the number of employees and the period of activity). In Luxembourg the court can, at the employee’s request, propose that the employer reinstate the employee who has been unlawfully dismissed. Reinstatement depends always on the employer’s consent. If the employer reinstates the employee respecting all his or her acquired rights, it longer liable to any compensation for unlawful dismissal. If he does not agree with the proposed reinstatement, the court can award a supplementary compensation of 1 month’s salary. In the Netherlands in the case of manifestly unreasonable (“kennelijk onredelijk”) dismissal the employee may demand reinstatement. But this claim can always be replaced by a lump sum compensation payment fixed by the judge. If the employer refuses to reinstate, the compensation may be increased. In Portugal the employee is entitled to be reinstated (unless the employer is a micro enterprise in which case reinstatement is discretionary) and to receive compensation equal to the pay he stopped receiving from the date of dismissal until the court’s finding. Instead of reinstatement the employee may opt for compensation corresponding to between 15 and 45 days remuneration for each year of service. In the case of a micro-enterprise, if reinstatement is refused, compensation of between 30 and 60 days remuneration for each year of service will be awarded. In Sweden reinstatement is not an issue since the employment relationship does not come to an end if the employee is dismissed. The employee remains in the employer’s employ until the dispute is finally settled by the court. The court may, however, at the request of the employer issue an interlocutory injunction to the opposite effect. If the employee is summarily dismissed, the employee can ask the court to be reinstated while the dispute is pending. If the employee loses the dismissal case in court, he or she does not have to repay the wages which the employer has paid while the dispute has been pending. If the court finds that the dismissal has been unlawful the employer may still opt to end the employment relationship. In this case it remains liable to pay additional damages, calculated on the basis of the employee’s aggregate period of employment for the employer when the employment relationship is terminated and fixed at an amount corresponding to: - 73 - - 16 months’ wages for periods of employment less than 5 years, - 24 months’ wages for periods of employment of at least 5 but less than 10 years, - 32 months’ wages for periods of employment of at least 10 years. If the employee is 60 years of age the amount is increased to correspond to 24, 36 or 48 months’ respectively. If the employee has been employed for less than 6 months the amount corresponds to 6 months. These rules are mandatory. In the United Kingdom employment tribunals may order an unfairly dismissed individual to be reinstated in his or her original job or re- engaged in comparable or otherwise suitable employment. In practice, this is done in only a minority of cases. If no order is made for reinstatement or re-engagement, the tribunal will award the employee compensation (basic award up to £8,400 and compensatory award, to reflect the employee’s loss, up to a maximum £56,800, although the compensatory award may be increased by up to 50% if the employer fails to complete an applicable statutory dismissal and disciplinary procedure. If reinstatement or re-engagement is ordered but the employer refused to comply with the order, the tribunal can award the employee an additional award of 26-52 weeks’ pay (subject to a maximum of £280 per week), in addition to the basic and compensatory awards. (7) Penalties In Portugal the employer may be fined in the event of: - failure to send copies of the proposal to dismiss and the written statement to the workers’ committee and, if the employee is a trade union representative, to the trade union, - failure to send a copy of the proceedings to the workers’ committee and, if the employee is a trade union representative, to the trade union. In Greece the employer can be imprisoned (very rare) or sentenced to pay a penalty if it refuses to reinstate an employee whose dismissal had been declared void. (8) Collective agreements In Austria collective agreements have a wide scope of application because they apply to all workers employed by an employer who is a member of the industry union, even if not all workers are members of the trade union. Collective agreements often provide for rules on periods of notice which differ from the letter of the law. In Belgium there are no collective agreements specifically on the subject except those which concern employees’ representatives. In certain sectors, agreements provide for an enhanced period of notice based on service. In Germany most collective agreements provide for more favourable provisions on the period of notice. 90% of all workers in Germany are covered by such collective agreements. In Demark collective agreements are important for most employees. This is due to the fact that employers bound by a collective agreement must treat equally the organized and non- organised employees working in the same enterprise. In addition, many non-organised employers often concluded the so-called “adhesion contracts” under which they commit themselves to follow the appropriate collective agreement. Finally collective agreements set a norm within the fields covered by each of them. This means that the collective agreements are of importance to a much greater number of persons than those directly covered by them. Most of the employees who are not covered by a collective agreement are covered by provisions in laws e.g. Salaried Employees Act. - 74 - In Greece there are very few collective agreements on the subject but a number of enterprise regulations, which are of great importance. They normally set somewhat more advantageous terms, e.g. regarding compensation. In Spain collective agreements contain rules specifying the legal grounds for dismissal. In Finland collective agreements have in general the same substance as legal provisions. In France most collective agreements provide for compensation arrangements which are very similar to the ones foreseen by law. In Ireland there are no collective agreements specifically regarding dismissals but many would contain provisions setting out the procedure the employer will observe before and for the purpose of dismissing an employee. In Italy collective agreements may specify justified grounds and the period of notice, provide for conciliation procedure or state that the notification of a dismissal must be accompanied by reasons. In the Netherlands the statutory period of notice may be adjusted by a collective agreement. Some establish a procedure prior to a dismissal or provide specific requirements on the issue of suspension. In Portugal collective agreements can depart from the law in favour of the employee only with regard to the amount of compensation and time limits for the disciplinary procedure. In Sweden legislation can often be derogated from or supplemented by collective agreements, and such agreements can usually also be applied to employees who are not members of the organizations concluding the agreements. Some 85% of all employees are members of some employee organization and many employers are also members of employer organizations. The periods of notice are quite often set forth by means of collective agreements. Such statutory provisions are semi- mandatory in Sweden and may, therefore, be derogated from by means of collective agreements. - 77 - dismissal which does not comply with these requirements is unlawful and void. United Kingdom: see 3.3 for general principles. (2) Procedural requirements In Belgium the employer must notify the dismissal to the employee by registered letter before the period of notice starts. If the employer pays compensation instead of giving notice, there is no form required for the notification. If these requirements are not met the dismissal is void. There is no involvement of public authorities or employees’ representatives. However, trade unions may help their members. With regard to specific procedures for the dismissal of employees’ representatives and members of the safety council, see 3.3.1. In Spain the employer must notify to the employee the grounds for the dismissal and the date for the end of the contract in writing. In the case of dismissal on objective grounds (“despido objetivo”), the severance payment has to be paid at the same time as the written notification is given (exception: economic grounds for dismissal). If these requirements are not fulfilled, the dismissal may be declared void. In Germany the employer must inform the employee in writing. In Italy there is a compulsory procedure prior to referral to the court (which is a condition for bringing a lawsuit). Before beginning to examine the merits of the case, the court must attempt to bring about a conciliation. In Luxembourg the employee can, by registered letter within 1 month after the notification of the dismissal, ask the employer to communicate the grounds. In this case the employer has to give an exact explanation of the grounds by registered letter within 1 month of receipt of the request. Otherwise the dismissal will be considered improper (“abusif”). With regard to undertakings with more than 150 employees: see 3.3.2. In Portugal the law requires special procedures for dismissal of an employee on grounds related to the employee’s capacities: - the employer must inform the employee and employees’ representatives in writing of the need to dismiss, the changes made in the place of work, the results in training and the adaptation period the employee is allowed, and the lack of another compatible place of work; - employees’ representatives may issue a report and the employee may contest the dismissal within 10 days; - when 5 days have elapsed the employer may determine the dismissal. In such cases it must be explained in writing, specifying the date on which it will take place, the grounds, the changes made in the place of work, the vocational training and adaptation period granted to the employee, the lack of another compatible place of work, the amount of compensation payable to the employee and the place and means of payment; - the employer must send a copy of the decision to the employee, the employees’ representatives and the Inspecção do Trabalho. If the first procedure is not complied with the dismissal is unlawful. Other Member States: see 3.3.2 (3) Effects of the dismissal The employment relationship is terminated as a consequence of the dismissal. - 78 - Severance Payments: There are no severance payments in Belgium, Finland, Sweden, Ireland and the United Kingdom. In Spain, where the “objective” dismissal is justified, i.e. where the employer is able to prove the reasons for the dismissal, the employee is entitled to compensation of 20 days’ pay for each year of service, up to a maximum of 12 months’ salary. Where the dismissal is unjustified, i.e. where the employer cannot provide sufficient evidence or the reasons for dismissal, the employer may choose to reinstate the employee (the employee must pay back any compensation received) or to pay compensation of 45 days’ pay for each year of service, up to a maximum of 42 months’ salary (with deduction of the amount of compensation already received). In France the employee is entitled to compensation if he or she has been working in the undertaking for at least 2 years, except in case of serious misconduct. In the case of occupational disease or accident there is double compensation. In Portugal the employee is entitled to compensation of 1 month’s basic remuneration for each complete year of service, with a minimum of 3 months. In Luxembourg there are severance payments (“indemnité de départ), except in the case of dismissal on important grounds. If the employee has completed at least 5 years’ service and if he or she is not yet entitled to a retirement pension the minimum sums are 1 months’ salary (after 10 years), 3 months’ salary (after 15 years). A private-sector white- collar employee is entitled to 6 months salary (after 20 years), 9 months’ salary (after 25 years), 12 months’ salary (after 30 years). An employer with at least 20 employees may opt for a prolonged period of notice instead of severance payments. In this case the periods of notice are 5 months (after 5 year’ uninterrupted service), 8 months (after 10 years), 9 months (after 15 years), 12 months (after 20 years), 15 months (after 25 years) and 18 months (after 30 years). With regard to Austria, Germany, Denmark, Greece, the Netherlands and Luxembourg see 3.3.2. With regard to Italy see 3.3.2 and Article 2120 of the Civil Code. If a sum is not paid by the employer, this has no effect on the validity of the dismissal. But the employer may be ordered to pay, exception, in Greece the payment of compensation is a condition for the validity of the dismissal. Unemployment Benefits: There is an entitlement to unemployment benefits in all Member states. In Ireland the dismissal may result in a disqualification from unemployment payments for up to 9 weeks. Retirement Pensions: see 3.3.2 Sickness Insurance: In all Member States there are no effects. (4) Remedies In Belgium an action may be brought before the Labour Court within 1 year of the termination of the contract. Trade unions or employees’ representatives may act on behalf of the employees. The burden of proof is on the employee. For Greece see 3.3.2. In addition, enterprise regulations often provide for a special committee. In this case the dismissal is suspended. In Italy a court action may be brought within 60 days. A previous conciliation procedure is obligatory in the case of “stabilità obbligatoria” (fewer than 15 employees, in agriculture fewer than 5 in the establishment or within the city or local authority area). The justification for the dismissal has to be proved by the employer. Trade unions may not act on behalf of their members except in the case of - 79 - trade union representatives pursuant to Article 18 of the Workers’ Rights Statute. Other Member States see 3.3.2. (5) Suspension of the effects of the dismissal If, in Greece, the employee appeals to the internal medical committee, the dismissal is supended. For Portugal see 3.3.2. The dismissal will be suspended if: - the employer does not justify its absence from the conciliation procedure; - the rules of the procedure are not respected; - the courts conclude that there is probably no proper cause. Other Member States: see 3.3.2. (6) Restoration of employment In Spain, in the case of nullity (“despido nulo”, that is when the employer fails to comply with procedural requirements and when the dismissal is based on discrimination, prohibited by the Constitution or by law, dismissal, violating the fundamental rights of the employee or dismissal in cases considered by law) the employer must reinstate. In cases of wrongful dismissal (“despido improcedente”) the employer may opt either for reinstatement or compensation (45 days salary for each year’s work with a maximum of 42 months salary). If the dismissed employee is a trade union or employees’ representatives, it is up to him or her to choose. (7) Penalties There are administrative sanctions only in Portugal. The employer may be fined if: - it does not inform the workers’ committee (and, if the employee is a trade union representative, the trade union) of the proposal to dismiss; - the decision is not explained in writing; - it does not send a copy of the decision to the Inspeccao do Trabalho. (8) Collective agreements In the Netherlands collective agreements sometimes contain provisions to establish whether insufficient competence or unfitness or unlawful absence constitute valid reasons for dismissal. In Luxembourg collective agreements sometimes set out certain actions as amounting to a real and serious ground for dismissal. Other Member States: see 3.3.2. - 82 - There is an obligatory period of notice depending on the length of service (fixed by the Labour Code or by collective agreements). The employer can terminate the employment relationship before the end of the notice period if it pays compensation equivalent to the salary the employee would have received during the period of notice. The courts have established that the employer has an obligation to adapt employees to changes in their jobs. An employer who has failed to train an employee to cope with new technology cannot dismiss him or her on the grounds that he or she is no longer fit for the job. The employer also has to seek alternative solutions (“obligation de reclassement”). There are also accompanying measures such as: - a social plan (if the employer fails to establish a social plan, the dismissal is void); - agreements on pre-retirement; - conversion agreements (“conventions de conversion”) on reinstatement and benefits. Where the dismissal is void the judge can order the employee to be reinstated unless this is impossible (such as where site has closed). In Ireland an employee is taken to be dismissed by reason of redundancy if the dismissal is attributable wholly or mainly to: - the fact that the employer has ceased, or intends to cease, to carry on the business for the purpose of which the employee was employed, or has ceased, or intends to cease, to carry on that business in the place where the employee was employed, or - the fact that the requirements of that business for employees to carry out work of a particular kind in the place where he or she was so employed have ceased or diminished or are expected to cease or diminish, or - the fact that the employer has decided to carry on the business with fewer or no employees, whether by requiring the work for which the employee has been employed (or had been doing before the dismissal) to be done by other employees or otherwise, or - the fact that the employer has decided that the work for which the employee had been employed (or had been doing before the dismissal) should henceforward be done in a different manner for which the employee is not sufficiently qualified or trained, or - the fact that the employer has decided that the work for which the employee had been employed (or had been doing before the dismissal) should henceforward be done by a person who is capable of doing other work for which the employee is not sufficiently qualified or trained. If the tribunal finds that the employee was not dismissed by reason of redundancy the purported redundancy would be invalid as would any purported redundancy compensation paid. If the tribunal finds (under the Unfair Dismissals Acts) that an employee was unfairly selected for redundancy or was not made redundant but dismissed unfairly it could order re-engagement or re-instatement of the employee and consequently re-payment to the employer by the employee of any redundancy compensation received. In the event of an award of monetary compensation under the Unfair Dismissal Acts for unfair selection for redundancy (maximum 4 weeks’ pay where no financial loss has been sustained; where loss is sustained, maximum 104 weeks’s pay), the employee would be entitled to retain any redundancy payment received. However, in the event of a award of monetary compensation to the employee for unfair dismissal other than unfair selection for redundancy, any redundancy payment received by the employee would have to be offset against the unfair dismissal award. - 83 - The employer must give an employee a minimum period of notice of 2 weeks. The period increases with the length of service (up to 8 weeks after 15 years’ service). Notice must be given in writing. The redundancy is valid even if the employer fails to give notice. However, it is guilty of an offence (see “penalties”). In Italy collective redundancies must be on justifiable objective grounds. Multiple individual dismissals are a collective dismissal for undertakings with fewer than 15 employees. The employer’s economic or organisational decision cannot be reviewed by the court. The judge is restricted to checking whether there is causality between the economic grounds and the dismissal. A dismissal must be ultima ratio. With regard to notice and non- compliance with the requirements, see 3.3.3. In Luxembourg: the courts have established that the worker must advise the worker of the economic reasons justifying his or her redundancy and a description of any rationalisation measures and their impact on the employee. In determining who is to be made redundant account should be taken of the employee’s seniority, qualifications and social/family situation. In the Netherlands a permit must be applied far from the Centre for Work and Income (see 3.3.2). Under the reasonableness test, the CWI checks whether the employer has sought alternative solutions. The following rules are applicable: - workers taken on last must be dismissed first, at least in jobs which are comparable (last in, first out); - exceptions only for workers with special knowledge or skills; - if an employee with a weaker labour market position is to be dismissed under the first rule, as an exception another one in a stronger position must be chosen; - the employer has to demonstrate its attempts to find alternative jobs for workers who are party unable to work as a consequence of illness (if longer than 6 months); - following a reduction of 10 or more employees, the work force must reflect the average age distribution in the company; - special attention is paid to the prevention of discrimination; - the Dismissals Decree provides special rules for dismissal in the temporary employment sector and in cleaning services. In Portugal the conditions for such a dismissal (“despedimento por extinção do posto de trabalho”) are as follows: - the reason must not be related to the fault of the employer; - continuation of the employment relationship is impossible from the employer’s perspective; - there are no employees in the enterprise on fixed-term contracts for positions similar to those being abolished; - it concerns a single employee, or a number less than the threshold for collective dismissals; - compensation is paid to the employee. The dismissal also depends on the redundancy rendering continuation of the employment relationship impossible. The alternatives enabling collective dismissal to be reduced or avoided may be: - temporary suspension of work for all or some employees; - temporary reduction in working hours for all or some employees; - 84 - - retraining of employees for other functions; - early and pre-retirement; - termination of the contract by mutual agreement with payment of compensation to employees of an agreed amount. A dismissal which does not meet these requirements is unlawful and void. The employee is entitled to a minimum of 60 days’ notice. If the employer does not give this notice, it must pay the employee the sum equal to the amount of pay for the period of notice not given. For Sweden see 3.3.2. An objective ground does not exist where it is reasonable to require the employer to provide other work for the employee. The employer ought also to consider other means available to achieve structural change without redundancies but, in the final analysis, the employer’s assessment of the need to cut back and the effects of this measure on the labour force must be the deciding factor in terms of redundancy. Thus, it is not normally appropriate for a court to investigate whether structural changes are economically justified or whether they should take the form intended by the firm. The employer is not free to choose which employees are to be made redundant. The legislation requires the employees involved to be assigned to various so-called “seniority units” (“turordningskretsar”) one feature being that manual and white-collar workers normally belong to different seniority units. Within each “seniority unit” the principle is then that the first to be made redundant are the most recently appointed employees, in line with a strict seniority rule. The employer’s interest in ensuring that the firm can be run effectively after downsizing is taken account of only to the extent that the remaining employees must be “sufficiently qualified” to deal with the required tasks, which means that the employees must be able to learn to cope with the tasks after a reasonable training period. An employer with at most 10 employees may exempt from the priority order 2 employees who, in the employer’s opinion, are of particular importance for future activities. It is usual for the employer and the organisations concerned to conclude a collective agreement defining which employees are to be made redundant. The employer may apply such a seniority collective agreement to employees who are not members of the organisations concluding the seniority agreements, if such employees perform work of the same kind as those employees who are members of the organisations. Such seniority agreements may not be applied in a discriminatory manner. If the employer is in breach of the seniority rules, the dismissal cannot be declared invalid. However, an employee may be awarded compensation. The United Kingdom: See 3.3 and 3.3.2. In order for a dismissal for an economic reason to be ‘fair’ the employer must show either that the employee was redundant according to the narrow statutory definition or that the dismissal was for some other substantial reason of a kind such as to justify the dismissal of an employee holding the position which the employee held. The courts have held that this requires the employer to show a sound good business reason for dismissal. (2) Procedural requirements Some Member States have specific procedural rules if a dismissal on economic grounds is a collective dismissal. For such specific requirements on collective dismissal see below (3). Austria, Denmark, Greece, Italy: see 3.3.2., Luxembourg: see 3.3.3. In Belgium the employer must notify the dismissal to the employee by registered letter before the period of notice starts. If the employer pays compensation instead of giving notice, there is no form required for the - 87 - - notice must be given by the employer in writing. In the communication giving notice of dismissal, the employer must state the procedure to be followed by the employee should the employee wish to allege that the dismissal is invalid or claim damages occasioned by the dismissal. It must also state whether the employee has priority concerning the re-employment. If the employee has priority and notification is required for the employee to asset this right, this too must be stated. The communication giving notice must be delivered to the employee in person. If this cannot reasonably be required, the communication may instead be sent by registered letter to the employee’s last known address. The employer must, at the employee’s request, state the circumstances on which the dismissal with notice is based. This statement must be in writing if the employee so requests. - These provisions are, in the private sector, formal requirements and non-compliance simply entitles the employee to damages. In the state sector, on the other hand, notice must be given in writing in order to be valid. In the United Kingdom the employee must be given a written explanation of the way in which his or her statutory redundancy payment was calculated. (3) Specific requirements for collective dismissals In the case of collective redundancies, Council Directive 98/59/EC of 20 July 1998 provides for employees’ representatives to be informed and consulted in good time with a view to reaching an agreement. These consultations must, at least, cover ways and means of avoiding collective redundancies or reducing the number of workers affected, and or mitigating the consequences by recourse to accompanying social measures. The employer has to notify the competent public authority in writing of any projected collective redundancies. Such redundancies may take effect not earlier than 30 days after the notification. These procedures do not apply to: - state authorities and public institutions; - employees with a fixed-term contract; - persons working on ships. With regard to the definition of ‘collective redundancy’ Member States have a certain discretion. Set out below are the definitions applicable in Member States and specific requirements going beyond the Directives. Austria: within 30 days: - at least 5 employees in undertakings with 20-99 employees; - at least 5% of the employees in undertakings with 100-599 employees; - at least 30 employees in undertakings with more than 600 employees; - at least 5 employees older than 50 years. Belgium: within 60 days: - more than 10 employees in enterprises with 20-99 employees; - more than 10% in enterprises with 100-300 employees; - more than 30 in enterprises with more than 300 employees. Germany: within 30 days: - more than 5 employees in enterprises with 21-59 employees; - 10% or more than 25 employees in enterprises with 60-499 employees; - at least 30 employees in enterprise with at least 500 employees. - 88 - Denmark: within 30 days: - at last 10 employees in undertakings with 21-100 employees; - at least 10% of the total number of employees in undertakings with 101-299 employees; - at least 30 employees in undertakings with 300 or more employees. Finland: - at least 10 employees in undertakings with at least 20 employees. Greece: - more than 5 employees per month in undertakings with 20-50 employees; - 2-3% of the total number of employees per 6-month period of undertakings with more than 50 employees (maximum 30). The exact percentage is fixed by the Ministry of Labour every 6 months. It is not possible to dismiss more than 30 employees per month. In case of a collective dismissal a collective agreement has to be concluded to solve problems arising from the dismissal. Collective dismissals must be authorised by the State authority. Authorisation can be refused if no collective agreement has been reached. Spain: within 90 days: - at least 10 employees in enterprises with fewer than 100 employees; - at least 10% of the employees in enterprises with 100-299 employees; - at least 30 employees in enterprises with 300 or more employees. The rules also apply to enterprises with more than 5 employees if the business is closed. Dismissals not covered by this definition are considered as objective dismissal (see above 3.3.3). The employer must give all necessary information to the employees’ representatives and to consult them. The beginning of this period (“periodo de consulta”) must be notified to the Employment Administration. In enterprises with more than 50 employees, the employer attaches a plan concerning the measures to be adopted. If the parties reach an agreement within 30 days (15 days in an enterprise with fewer than 50 employees), the Employment Administration must authorise the termination; except when it considers the agreement is void, when the Administration remits it to a judge. If the parties do not reach an agreement by the deadline, the Employment Authority has to decide (within 15 days) whether the dismissals are to be authorised. The termination of the contracts must be authorised by the Employment Administration, but it is determined by the employer’s decision. In the case of force majeure, whatever the size of the company or the number of employees affected, the Employment Authority must decide (within 5 days) whether the dismissals are to be authorised. It is not necessary to consult employees’ representatives, but they should be notified at the start of the procedure. The termination takes effect from when the force majeure occurred. If a business is bankrupt the Commercial Court Judge may exceptionally agree the cessation or total or partial suspension of the business’s activity, when the bankruptcy administrators so request, after consulting the representatives of the workers at the business. If the termination, suspension or modification of individual employment contracts is involved, the procedure established under employment law will continue. If the termination, suspension or modification of collective contracts is involved bankruptcy procedures will continue before the Commercial Court Judge. In France there are two kinds of collective dismissal: - 89 - - 2 to 9 employees within 30 days. The dismissal must be notified to the regional Labour office (“directeur départemental du travail et de l’emploi”); - 10 or more employees within 30 days. The Labour Office has to verify whether law and collective agreements are respected with regard to the information and consultation of employees’ representatives and to the establishment of social plans. In both cases the employer has to speak with the employee. The invitation to this meeting has to be made by registered letter or must be given to the employee personally. Employees’ representatives must be consulted. The dismissal has to be notified to the employer by registered letter. The letter must not be sent earlier than: - 7 days after the meeting between employer and employee (dismissal of an individual or collective dismissal of less than 10 employees); - 30-60 days, depending on the number of people dismissed, after the notification to the Labour Office (collective dismissal of 10 persons or more). If this is not obeyed, the employee can be awarded compensation of 1 month’s salary minimum. The judge can also order the employer to fulfil the procedure. Ireland: within 30 days: - 5 employees in establishments with 21-49 employees; - 10 employees in establishments with 50-99 employees; - 10% of the number of employees in establishments with 100-299 employees; - 30 employees in establishments with 300 or more employees. The employer must initiate consultations with employees’ representatives at least 30 days before the first dismissal takes effect. For the purpose of these consultations the employer must supply the employees’ representatives with certain information in writing. Italy: The rules on collective dismissal apply in undertakings with at least 15 employees if more than 5 employees are dismissed within 120 days in one establishment or in several establishments in the same province by reason of a reduction in, or transformation of, the undertaking’s activity or by the end of the undertaking’s activity. Conciliation may take place with trade union representatives and the provincial labour authority at the request of the trade union representative within 7 days. If there is no agreement within 45 days, the President of the Provincial Labour Authority (“ULPMO”) makes proposals to the parties. This procedure has to be terminated within 30 days. The employer can dismiss after he has signed an agreement or after an administrative decision has been taken. Criteria for dismissal are the number of children, the length of activity and the firm’s production needs. Luxembourg: Collective dismissals are dismissals which have nothing to do with the employee’s person and which affect: - at least 7 employees within 30 days or; - at least 15 employees within 90 days. The employer must enter into negotiations with employees’ representatives in order to avoid to reduce the number of dismissals or to establish a social plan to mitigate the adverse effects of the dismissals. If there is not agreement within 15 days, the National Conciliation Board (“Office National de Conciliation”) and the parity commission becomes involved. Collective dismissal takes effect only after a period of 90 days. In the Netherlands, under the Collective Redundancy (Notification) Act, the employer - 92 - - has been continuously employed by the same employer for a least 104 weeks; and - was in employment which is fully insurable under the Social Welfare Acts at any time in the 4 years prior to redundancy. The statutory redundancy lump sum is calculated as follows: - 2 weeks’ pay for each year of employment; - in addition, the equivalent of 1 week’s normal pay. There is a ceiling of €600 per week. The employee may lose this entitlement if the employer makes an offer of suitable alternative employment which the employee unreasonably refuses. An employer is entitled to be paid from the Social Insurance Fund a rebate of 60% of the statutory lump sum paid to a qualified employee. Luxembourg: see 3.3.3. In the Netherlands compensation may play a role in the CWI application procedure, in considering the reasonableness of the application. In rescission proceedings, the court may pay compensation but only if changes in circumstances are sufficiently substantiated by the regulating party. The amount of the severance pay is calculated on the basis of a judicial formula (see 3.3). In Portugal the employee is entitled to compensation of 1 month’s basic remuneration for each complete year of service, with a minimum of 3 months. If the employer does not make available this compensation to the employee before the end of the notice period, the redundancy is unlawful. In Sweden there are no statutory severance payments. On the other hand, almost all sectors of the Swedish labour market are covered by severance payment schemes laid down by collective agreements. Such schemes vary both in scope and content. They are all administered by joint bodies of the social partners. In the United Kingdom an employee who is redundant is entitled to a statutory lump sum redundancy payment calculated by reference to the employee’s age, earnings and length of service: 1, 5 week’s pay for each year’s service in which the employee was 41 or above; 1 week’s pay for each year between 22 and below 41; a half week’s pay 18 and over and below 22; subject to a maximum of £280 per week and 20 year’s service. No payment is made where the employee is 65 or over at the date of dismissal and there is a reduction of 1/12th for each month over the age of 64. The employee may lose this entitlement if the employment makes an offer of suitable alternative employment which the employee unreasonably refuses. For other Member States see 3.3.2. If the sum due is not paid by the employer, this has no effect on the validity of the dismissal. But the employer may be ordered to pay. Exception: The payment of compensation is a condition for the validity of the dismissal in Greece and in Spain (for objective dismissal). Unemployment Benefits: Dismissed employees are entitled to unemployment benefits if they meet the conditions. Retirement Pensions: see 3.3.2 Sickness Insurance: There are no effects on entitlements under public or private sickness insurance schemes. (5) Remedies In all Member States there are judicial remedies and/or arbitration procedures for employees to pursue their claims. Unless indicated otherwise below: - 93 - - there is legal assistance for persons on a low income; - there is no priority for remedy proceedings; - the burden of proof is on the plaintiff; - the judge must be satisfied that the ground is sufficient reason for termination. In Belgium an action must be brought before the Labour Court within 1 year of the termination of the contract. Trade unions or employees’ representatives may act on behalf of the employees. The burden of proof is on the employee. In Denmark those employed under collective agreements will often have the option of having a special Board of Dismissal assess whether dismissal on the grounds of redundancy is sufficiently justified (fair). Salaried employees may alternatively have the option of being awarded compensation if the courts find that the dismissal is not sufficiently justified (fair). There is a general deadline of 5 years. Trade unions represent their members in such cases. A conciliation meeting should be held within 1 month. In Germany, actions for unfair dismissal must be given priority. In Spain: - non-collective dismissal for economic reasons (“despido objetivo”): see 3.3.3; - collective dismissal and dismissal for reasons of force majeure require approval from the Employment Administration. The Employment Administration’s decision can be contested through Administrative Court proceedings. In the event of a dispute between the employer and employee concerning the payment or the amount of the severance payment, the employee may proceed in the Employment Court. In Finland, an infringement of the Employment Contracts Act may be contested in the District Court. Infringement of collective agreements may be contested in the Labour Court following a mediation procedure if the agreement provides for it. The time limit is 2 years in both cases. Before the Labour Court the employee is represented by his or her trade union. If the union refuses to bring an action, the right to do so rests with the employee himself or herself. If an action is brought within 2 months of termination it must be treated as urgent in all instances. The economic sanction that can follow if the employer terminates the employment contract contrary to the grounds laid down in the Employment Contracts Act is economic compensation up to a maximum equivalent to 24 months pay. Contrary to what is the case in individual dismissals there is no minimum compensation prescribed in these cases. The similar deductions for paid unemployment benefits to the employee from the amount compensating daily earnings shall be made. These deductions are then paid to the social insurance institutions. In addition to the sanctions regulated in the Employment Contracts Act there are additional sanctions regulated in the Act on Co-operation within Undertakings. Where a matter deliberately or by gross negligence has been resolved without observing the co-operation procedure prescribed in the Act and the employee’s contract has been reduced into a part-time one, or terminated, or he or she has been laid off, for reasons related to that matter, he or she shall be entitled to receive the pay for maximum of 20 months as indemnification from the employer. The right to an employee to indemnification shall expire if no action is brought within 1 year of the right’s coming into existence. These sanction systems can both be applied in the same case. If there is no reason for the termination of the employment contract and the employer does not follow the co-operation procedure the employee is entitled to two kinds of economic compensation. A breach of the co- operation procedure in general does not bring - 94 - about this kind of sanction. It is only when the position of the employee has been seriously changed as a consequence of a decision taken without proper co-operation procedure that this sanction can be used. The ordinary sanction for a violation of the Act on Co-operation within undertakings is a criminal fine. In France an individual action before the Labour Court may be brought without any specific time limit. The trade unions can act in a action concerning dismissal on economic grounds more freely than in other dismissal actions (a mandate from the person concerned is not required). But the unions have to notify their plans to the person concerned, who may forbid them to take action or decide to take action himself or herself. Trade unions can also ask the civil courts (the Labour Court is only competent for individual actions) to check whether the employer is complying with the social plan. In Ireland a dismissed employee may appeal to a Rights Commissioner or the Employment Appeals Tribunal within 6 months of the date of dismissal. The limit may, however, be extended to up to 12 months in cases where exceptional circumstances have prevented the lodgement of the claim within 6 months. It is common that trade unions initiate and maintain unfair dismissal cases on behalf of the employee. In Italy the employee must contest the dismissal in writing within 60 days of its notification. Once the contestation is made, the time limit for the action itself is 5 years. A previous conciliation procedure is obligatory in the case of “stabilità obbligatoria”) (fewer than 15 employees, in agriculture fewer than 5 in the establishment or within the city or local authority area). Trade Unions may not act on behalf of their members. The employer has to prove that he was not able to employ the employee at another workplace. In Luxembourg dismissals affected in the context of a collective redundancy are void if they take place before the date of signing the social plan or the involvement of the National Conciliation Board. In Portugal with respect to collective dismissal (“definitive closure of the firm, closure of one or more sections or a reduction in personnel for structural, technical or other reasons”) the time limit for requesting judicial declaration of unlawful dismissal is 6 months from the dismissal. In the case of dismissal by reason of redundancy the time limit for requesting judicial declaration of unlawful dismissal is 1 year. Trade unions can intervene on behalf of their members in a representative capacity or directly if the case concerns the generic violation of the individual rights of an identical nature of their members (as would be the case with a collective dismissal). Sweden: where a dismissal is challenged solely on the grounds that it is in breach of the seniority rules, the dismissal cannot be declared invalid solely on the ground that it is in breach of the regulations on the choice of employees to be laid off. However, the employee can be awarded compensation for non-compliance with the seniority rules. In the United Kingdom the employee may make a complaint to an employment tribunal within 6 months of the date of dismissal but the tribunal may extend the limit to 12 months if it is just and equitable to do so. A redundant employee may also bring an action claiming that this dismissal was “unfair” because the employer acted unreasonably in the way in which the redundancy was handled, e.g. no prior consultation (but failure to follow a procedure beyond the statutory minimum will not of itself make the dismissal unfair if the employer can show that it would have decided to dismiss even if it had followed the procedure). An employee may appoint a representative, including someone from a trade union. In considering claims for redundancy payment there is a statutory presumption that the dismissal was by reason of redundancy. If the employer contests payment it will therefore be for it to show that the reason was not redundancy.