An employment relationship may be terminated based on several different grounds: on a financial and production-related reason, reasons related to the employee or with an agreement between the employer and employee. Moreover, termination during a trial period is a special case in comparison with the other termination grounds, in addition to which, an employment relationship may also be cancelled in certain situations. Careful attention should always be paid to the procedure for terminating an employment contract.
Agreement. The employer and the employee can always agree that the employment relationship has run its course and has come to an end. In such cases, the freedom of contract overrules the employment legislation as the parties have a mutual understanding and will.
Financial and production-related grounds. The employer may terminate the employment contract if the work to be offered has diminished substantially and permanently for financial or production-related reasons or for reasons arising from reorganization of the employer’s operations. The employment contract shall not be terminated, however, if the employee can be placed in or trained for other duties in accordance with the law.
Grounds related to the employee’s person. The employer may terminate the employment in case there is a serious breach or neglect of obligations arising from the employment contract or the law that has a significant impact on the employment relationship. Moreover, the employment relationship may be terminated in case there is a significant change in the conditions that are necessary for working (related to the employee’s person), which would mean that the employee is no longer able to cope with the work duties. Grounds for termination based on the employee’s person need to be evaluated holistically on a case-by-case basis.
Cancellation. The employer is entitled to cancel an employment contract only upon an extremely weighty cause. Such cause may be deemed to exist in case the employee commits such a serious breach against his/her duties that it would be unreasonable to expect that the employer should continue the contractual relationship. Correspondingly, the employee shall also be entitled to cancel the employment relationship with similar grounds. Cancellation has an immediate effect regardless of the applicable notice period or the duration of the employment.
Trial period. The purpose of the trial period is to provide a chance for both parties to consider whether (a) the employee is suitable for the work and/or (b) whether the job is right for the employee. An employment relationship may be terminated during the trial period at the employee’s or employer’s initiative (with immediate effect) without the need for a particular ground for termination. However, the grounds cannot be discriminatory or inappropriate with regard to the purpose of the trial period. The maximum length of the trial period is six (6) months or half of the duration of a fixed-term employment contract (however not more than six (6) months).
Termination by the employee. The employee is always allowed to terminate employment relationship without giving any reasons to the employer. In such cases the employment relationship ends at the expiration of the notice period.
