What are valid reasons for termination?

For employees

When can the boss terminate me?

As an employee, you can only be terminated for valid reasons, which can be due to lack of work or reasons personally related to you as an employee. The Employment Protection Act (LAS) contains strong regulations against unfair dismissal. If you believe that the termination is incorrect, you can invalidate the termination and have the matter reviewed in the Labour Court. If the court finds that the termination was unfair, you may be entitled to keep your job and receive compensation for financial loss. The employer also has an obligation to follow certain procedures and formal requirements when terminating employment, even when valid reasons are fulfilled, otherwise the employee can claim damages for that reason. Among other things, you as an employee have the right to receive advance notice that a termination may be impending. You also have the opportunity to request negotiations with the employer and request the reasons for the termination in writing from the employer. You can also turn to the union for help in the dispute.

What should you do if you are terminated?

Upon termination, you as an employee are entitled to a notice period depending on your length of employment and what is stated in the employment contract, but at least one month from the date the termination notice was received. During the notice period, the employment relationship and obligations from both parties still apply, and you as an employee are entitled to maintain your salary. You also have the right to receive holiday compensation as an employee if you have remaining accrued leave after the termination. As an employee, you can also apply for unemployment benefits, but if a dispute arises and the employee side wins, any unemployment benefits received during the dispute period must be repaid.

For employers

What is required for an employer to be able to terminate an employee?

According to LAS, an employer's termination must be based on valid reasons, which means it must be based on either lack of work or personal reasons. The exception is if termination occurs during the probationary period, which is usually referred to as premature termination of the probationary period.

Lack of work is the most common reason for termination and can arise due to economic reasons, reorganization, or changes in the business. In such cases, as an employer, you have an obligation to follow the so-called rules of order, which means that the employee who was hired last is the one who must be let go first. In case of equal length of employment, age is the deciding factor. However, as an employer, you have the possibility to exempt three employees who are significantly important for the business from the rules of order. As an employer, you also have the obligation to negotiate with the union before the termination occurs and the obligation to consider the possibility of relocation. In case of termination due to lack of work, the employee may also have a priority right to re-employment within a certain period of time, provided that the employee has worked long enough at the workplace.

Personal reasons may include misconduct or difficulties in cooperation. The employer should try to resolve the problems before termination through LAS warnings or relocation. The termination must not be based solely on circumstances known more than two months before the termination. In the case of gross violation of employment conditions, termination may be applicable.

What must the employer do to be able to terminate an employee?

Before you as an employer can carry out a termination, you must notify the employee and potentially the union in writing at least two weeks in advance. If requested, negotiations must be held and concluded before the termination takes effect. As an employer, you must also provide the reasons for the intended termination in writing if requested.

The termination notice must be given in writing to the employee and include information on how the employee can invalidate or otherwise appeal the decision. In the event of a pending reemployment right, this must also be mentioned. During the notice period, the employment relationship continues as usual, and salary and other benefits are paid out as usual. However, as an employer, you may suspend the employee from work with maintained salary and benefits.

In summary

• The employer must have legitimate reasons for termination before terminating an employee. Legitimate reasons can be lack of work or personal reasons.
• In the case of lack of work, the order of dismissal and negotiation requirements must be fulfilled before termination can take place. In the case of personal reasons, the two-month rule must be observed.
• Before and in connection with termination, the employer must follow formal requirements and processes, including reviewing the possibility of reassignment and notifying the employee and the trade union in writing.
• The termination notice from the employer must be in writing and include information on where the employee can turn for review, as well as, if applicable, information on the right to preferential reemployment.
• The notice period is calculated from the date of termination and is at least one month. During the notice period, the employee is entitled to regular salary and benefits.