Terminating employment

An employment contract may be terminated because of the expiry of a temporary contract, dismissal or termination.

An employer may dismiss an employee on grounds of redundancy, but a formal codetermination procedure4 must be followed when such dismissals occur in enterprises with 20 employees or more.

These statutory periods apply unless some other period of notice has been specified in the individual employment contract or applicable collective agreement. The period of notice may never exceed 6 months and may never be longer on resignation than on dismissal of the employee.

An employee may also be dismissed for neglect of duty, for example through persistent tardiness. The employer must give the employee a hearing before terminating the employment, and must generally also give the employee at least one warning and an opportunity to reform before doing so.

Employment may be terminated with immediate effect in cases of gross misconduct. Termination of this kind means that all work and wage earning ends immediately.

An employee who resigns from regular employment must formally notify the employer’s representative of this resignation. There is no need to give reasons for resigning. The employee must continue to work normally during the period of notice and will be paid normally for this work.

Neither the employer nor the employee may terminate a temporary employment contract prematurely by giving notice unless both parties have explicitly agreed to such a termination procedure. The employer may terminate a temporary employment contract without notice for provable gross misconduct or irresponsibility on the part of the employee, and the employee may similarly cancel the arrangement if the employer behaves in a grossly unreasonable or improper manner.

Statutory periods of notice unless otherwise agreed

Notice periods when an employee resigns

  • 14 days if the employment has continued for no longer than five years, and
  • 1 month if the employment has continued for longer than 5 years.

Notice periods when the employer dismisses the employee

  • 14 days if the employment has continued for no longer than one year,
  • 1 month if the employment has continued for between 1 and 4 years,
  • 2 months if the employment has continued for between 4 and 8 years,
  • 4 months if the employment has continued for between 8 and 12 years, and
  • 6 months if the employment has continued for longer than 12 years.

Certificate of employment

An employee is entitled to a certificate after the employment ends, specifying the duration of employment and the duties that were performed. When the employee so requests, the employer must also state the reasons why the employment ended and provide a testimonial to the employee’s working ability.

The employer’s duty to issue a certificate continues for 10 years after the employment ends.

Layoff

A layoff is a temporary suspension of work and wage payment for reasons of business economy. A layoff may be time-limited or in force until further notice. The employee must be formally notified of a layoff at least 14 days before it is due to begin. Employees are entitled to unemployment benefit during a layoff.

A temporary employee may only be laid off when serving as a substitute for an employee who could have been laid off.

Employer bankruptcy

The pay guarantee scheme compensates employees for outstanding wage claims when the employer is unable to pay them due to bankruptcy. The claim must be lodged within three months of the date when the wages fell due for payment. Claim forms are available at employment and economic development offices.