Everything you need to know about employer notice

Chapters of the article

• Reasons for termination by the employer
• Termination for organisational reasons
• How to deal with a problematic employee

The Labour Code is primarily employee-friendly. Employers are bound by the law in this respect and also often make mistakes when giving notice. Let’s take a look at this broad topic and find out how you, as an employer, can give notice to an employee to avoid potential complications.

Reasons for termination by the employer

An employer must always give a reason for termination. However, this can only be for the reasons set out in the Labour Code, otherwise the notice is invalid. These reasons must be precisely described; a mere reference to the law is not sufficient. The conduct of the employee that led to the termination must also be clearly defined. The notice must be in writing.

If the employer makes a mistake in terminating the employment relationship and does not use the correct reason for termination, the employee can challenge it in court. Litigation over the invalidity of a termination can be lengthy, and throughout the litigation the employee’s claim for lost wages accrues and can run into hundreds of thousands or even millions of crowns. Thus, inconsistency at the outset of a dispute in the preparation of legal documentation can prove to be disastrous for an employer. This is discussed below.

An employer can only terminate an employee for the following reasons:

• if the employer or part of the employer is being wound up,
• if the employer or part of the employer is relocating,
• if the employee becomes redundant,
• if the employee can no longer perform his or her previous work because of an occupational accident, occupational disease or the risk of such disease,
• if the employee has lost his/her long-term medical capacity,
• if the employee does not meet the requirements laid down by the legislation,
• if the employee has reasons for which the employer could immediately terminate the employment relationship, or for a serious breach of an obligation under the legislation, if the employee has been warned in writing of the possibility of termination within the last six months in connection with a breach of an obligation under the legislation relating to the work performed,
• if the employee breaches another obligation of the employee in a particularly serious manner.

Termination for organisational reasons

If the employer wanted to use this ground validly, he would have to make an organisational change. A typical example of such an organisational change could be the merger of teams or the outsourcing of part of the services.

The decision to make an organisational change must be taken first before giving notice to the employee. It does not necessarily have to take a specific form, for example, the minutes of a management meeting will suffice, but the decision must be demonstrably communicated to the redundant employee.

In addition, there must be a causal link between the organisational change and the redundancy of the employee and the change should actually lead to a more efficient operation of the employer.

Beware, however, of a situation where you give notice to an employee on the date when the organisational change giving rise to his or her redundancy takes effect. In that case, the employee’s notice period starts, but the employee no longer has a job to perform for the employer because his or her position has been abolished or merged with another. However, the employer must pay the employee a wage replacement equal to his average earnings until the end of the employment relationship (i.e. until the expiry of the notice period). Taking into account the possible entitlement to severance pay, the employer will pay the employee between 3 and 6 months’ salary compensation without the employee having done any work, only as a result of the poor timing of the organisational change.

A very simple and elegant solution is to give notice of redundancy to an employee for an organisational change which, although decided, will not occur until a future date. In such a case, the employee concerned will continue to work until the expiry of the notice period and will thus not be a redundant expense for the employer. The above procedure is also envisaged and approved by the courts.

This is best illustrated by a concrete example. On 29 June 2019, the employer decides on an organisational change that will be effective from 1 September 2023. On the same day (29 June 2023), the employer delivers a notice of termination to the employee who has become redundant. The notice period of the employee concerned will therefore expire on 31 August 2023, and he will become redundant on the following day, i.e. in accordance with the case-law of the Supreme Court. However, if he had made the decision of redundancy immediately on 29 June, he would have paid the employee for two months unnecessarily.

The procedure outlined above, although it may seem complicated at first sight, can save the employer quite substantial wage costs and it is nothing more than simple planning.

How to deal with a problematic employee

Breach of duty

The classic reason for termination can be a breach of work discipline, i.e. the employee’s duties. For this reason, it depends on the intensity of the breach. Being 10 minutes late for work is quite different from, for example, a fist fight with a colleague (with a few beers in him). If the breach of discipline is serious or even particularly serious, the employer has the option of terminating the employment relationship outright. All an employee has to do is break the chain once.

A serious violation is, for example, unauthorised prolonged absence from the workplace, or it can be alcohol consumption, violent conflict between employees, etc. However, this is rare and the intensity of the breach may not be sufficient for possible dismissal.

In such a case, the employer may use a termination ground consisting of a consistent, less serious, breach of the employee’s duties. In practice, depending on the circumstances, this may include, for example, repeated late arrivals to work, smoking in the workplace, minor infractions against the set rules, etc. When examining the intensity of the breach of work obligations, it is necessary to take into account, for example, the personality of the employee, the position he or she holds (e.g. an inspector in a nuclear power plant should be much more careful), the degree of fault, the amount of damage, etc.

Such a breach must be systematic. In this case, the law of ‘three times and enough’ applies, i.e. there must be at least three offences, which may be of a different nature. However, there should be a relatively close temporal link between them, which is assessed on an individual basis. For example, in January an employee is late for work twice and then in March is found to be surfing the internet during working hours.

In order for a termination for these less intense offences to be valid, the employee must first be shown to have received a written warning of the possibility of termination of employment (a ‘reprimand’). The employer must have reproached the employee for the breach within the last six months before the termination was given and described the breach precisely in the reprimand. It is therefore not sufficient to simply refer to the paragraph. Ideally, you should write “on the day of so-and-so” you were late for work or disobeyed your manager’s instructions. A dismissal can only follow if the employee breaches his duties again, even if he has already been formally warned in this way.

Last but not least, the employment relationship can be terminated two months from the date on which the employer became aware of the reason for termination and no later than one year from the date on which the reason arose. For example, an employee played computer games consistently during working hours, but the employer did not find out until many months later.

Unsatisfactory work performance

This is a reason affecting the employee’s “incapacity”. In order for an employer to be able to criticise an employee for unsatisfactory performance, let alone terminate his employment for that reason, the cause must not be the employer itself. For example, the employer has not supplied the necessary machinery, has not trained the employee or has objectively determined the task to be impossible.

The Supreme Court has also concluded some time ago that the employer’s subjective assessment of the employee’s performance is not determinative of the court’s decision. It may well happen that the competent court will take a different view than the employer, that it will consider other circumstances (including those that the employer failed or refused to consider) and will find in favour of the employee that the unsatisfactory performance was not due to the employee and that there is no reason for termination. The employee’s incapacity must be repeated, not just exceptional.

Therefore, a dismissal for unsatisfactory performance cannot be used immediately by the employer. Before doing so, it must give the employee whose performance is unsatisfactory a chance and invite him in writing to remedy it.

It follows from the law that an essential part of this written ‘reprimand’ is the setting of a reasonable period of time within which the employee’s unsatisfactory performance must be remedied. Only if the employee fails to improve in the long term can the employer proceed to terminate the employment relationship.

The reprimand should contain a brief description of what the employer considers to be the employee’sunsatisfactory performance and, if not entirely clear from the nature of the work itself, how it should be remedied. A warning against dismissal is then a matter of course.

The employer must give notice to the employee within the last twelve months of receipt of the written reprimand. Thus, there must be no more than one year between the time when the written notice is served on the employee and the time when the notice is served.

A slightly different reason for dismissal is dismissal for failure to meet the employee’s requirements for the work performed. This is, for example, a situation where the employee (driver) loses his driving licence and is therefore of no use to the employer. However, there may also be other requirements, such as language skills. However, the employer must always give the employee the opportunity to complete the requirements.