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The Employment Contracts Act sets forth the grounds for termination – that is, the grounds on which an employer may terminate an employee’s employment. The grounds for termination are divided into so-called collective grounds – that is, economic and operational reasons – and personal grounds – that is, reasons related to the employee.
An employer may terminate an employment contract that is valid until further notice for an objective reason related to the employee’s person. This means, among other things, that discriminatory reasons must not influence the termination.
What constitutes just cause?
According to the Employment Contracts Act, just cause may include, at a minimum, a breach or neglect of obligations arising from the employee’s employment contract or from the law that affect the employment relationship. Under the law, such violations may include, for example, failure to comply with instructions given by the employer within the scope of the employer’s right to supervise work, neglect of duties, unjustified absence, inappropriate conduct, and negligence at work.
An employer may not terminate an employee who has failed to fulfill or has violated their obligations arising from the employment relationship until the employee has been given the opportunity to correct their conduct by means of a warning. Only in cases where the violation related to the employment relationship is so serious that the employer cannot reasonably be expected to continue the employment relationship is it not necessary to issue a warning.
In addition, a material change in the employee’s personal circumstances that renders the employee unable to perform their job duties is considered a valid reason. If an employee’s ability to perform their job changes, the employer must determine, prior to termination, whether the termination could be avoided by reassigning the employee to other duties.
The overall assessment is decisive
The existence of grounds for termination is always assessed on the basis of an overall evaluation. This assessment must take into account the seriousness of the employee’s conduct or changes in the conditions of employment, as well as other relevant factors, such as:
The employee’s position and the nature of their duties
The employee’s conduct in violation of other obligations related to the employment relationship
The employer’s actions to fulfill its own obligations, such as providing the employee with adequate guidance, as well as the employer’s other relevant conduct
The number of employees in the employer’s service
The overall circumstances of both the employer and the employee.
Prohibited grounds for termination
The Employment Contracts Act also sets forth prohibited grounds for termination. Prohibited grounds include, at a minimum:
An employee’s illness, disability, or accident, unless the employee’s ability to work has been substantially and permanently reduced to such an extent that the employer cannot reasonably be expected to continue the employment relationship.
An employee’s participation in industrial action.
An employee’s political, religious, or other opinions, or an employee’s participation in social or associational activities.
An employee’s current or past role as an employee representative or an attempt to become one.
An employee’s recourse to the legal remedies available to them.
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