Termination carries the heaviest consequences in employment law. The distinction between termination for just cause and termination for valid reason determines both entitlement to compensation and the availability of reinstatement.
Termination for Just Cause
Articles 24 and 25 of the Labour Code list the situations in which either party may terminate the employment contract immediately. These cover health grounds, conduct contrary to morality and good faith, and compelling circumstances.
Where conduct contrary to morality and good faith is relied on, the right of termination must be exercised within six working days of learning of the event, and in any event within one year of the act. These are forfeiture periods.
Termination for Valid Reason and Job Security
The contract of an employee within the scope of job security may be terminated only for a valid reason arising from the employee's capability or conduct, or from the requirements of the business. The termination notice must be in writing and must state the reason clearly.
To benefit from job security, the workplace must have at least thirty employees, the employee must have at least six months' service, and the contract must be of indefinite term.
Severance Pay
- At least one year of service is required
- It is calculated at thirty days' gross remuneration, including benefits, for each full year
- It may not exceed the statutory ceiling
- Military service, retirement, and termination by a female employee within one year of marriage are among the qualifying grounds
Notice Pay
Notice pay arises where an indefinite-term contract is terminated without observing the notice periods. Notice periods range from two to eight weeks depending on length of service and may be extended by contract.
Where there is immediate termination for just cause, no notice period applies and no notice pay arises.
Mediation and Court Proceedings
For a reinstatement claim, application to a mediator within one month of service of the termination notice is mandatory. If no agreement is reached, the action must be filed within two weeks of the date of the final minutes.
Mediation is also a procedural condition for employee receivable claims. Damages claims arising from workplace accidents and occupational disease fall outside this requirement.