Multilateral termination

-       An employment relationship may terminate on the ground ofagreement, in writing, between the employer and the employee.

-       Before signing the agreement, the employer is bound to notifythe employee, in writing, on consequences that may ensue in the procedure foracquiring the unemployment benefits.

-       In case of some issue with an employee, the best practice isto offer to the employee some benefits to sign the multilateral agreement (e.g.notice period or severance).

Terminationof the employment agreement by the expiration

-       If the employment agreement is on definite time, theemployment agreement is terminated if it is not extended by the new employmentagreement.

-       Employer shall issue the decision on the termination to theemployee.

Unilateral termination of theemployment by the employer:

1)     If an employee is in the probationperiod (up to the first six months of the employment)

-       Before the expiration of the time for which the probationwork was contracted, the employer may terminate the employment contract with anotice period that may not be shorter than five working days.

-       Employer shall be obliged to give reasons for termination ofthe employment contract.

2)     Non-performance

-       First, the employer shall give to employee the written noticeregarding the deficiencies in work of the employee, guidance, and anappropriate deadline to enhance work performance,

-       What is the given (appropriate) time is not defined by theLaw. The best practice should be at least one month.

-       If the employee does not enhance the work performance withinthe given deadline, the employer may terminate the employment agreement with anotice period from minimum 8 to maximum 30 days.

3)     A breach of a work duty oremployee does not respect the work discipline

-       First, the employer shall give the employee the writtenWarning, where an employee is given 8 days to answer to this Warning.

-       Based on the answer, the employer may terminate theemployment agreement.

Important rules regarding thedelivery of the Decision on termination

-       An employment contract is terminated by a decree in writingwhich must include an explanation of reasons and legal recourse instruction.

-       The decree is served on the employee in person, in thepremises of the employer, or the permanent or temporary residence of theemployee.

-       Should the employer be unable to deliver to the employee thedecree as described above, he is obliged to make an official note in writingabout that.

-       In the event specified in the previous bullet, the decree isposted on the billboard of employer, and upon expiry of eight days followingsuch posting, it shall be considered as delivered.

Consequences of the possible unfairdismissal

·       The following consequences may occur in case of unfair dismissal(several options):

-       Each employee which employment agreement is terminated, except formultilateral termination, may initiate court proceedings against the Decisionof the employer within 60 days after the termination.

-       If the unfair dismissal is only because of procedure not followed by theemployer, the court shall reject request of the employee to be reinstated andshall order the employer to compensate the damages in the amount of up to sixsalaries.

-       If a court determines during the proceedings that the employmentrelationship is terminated unlawfully, the court shall, at the request of theemployee, decide that the employee shall be reinstated, compensated for thedamage and that his contributions for compulsory social insurance shall be paidfor the period in which the employee has not been working. Taking into accountthat litigation procedure last more than 3 years, this means that for the wholeperiod, the salaries must be paid. That is the reason why indefinite employmentis riskier. In case the employment is on definite time, e.g., 6 months, themax. 6 months can be paid to the employee, and no request to return to work canbe applied if the decision of the court is brought after 6 months.

-       If the court, during proceedings, establishesthat the employment relationship ceased unlawfully, and the employee does notseek reinstatement, the court shall, at the request of the employee, bind theemployer to compensate the employee for damages in the amount of up to 18salaries of the employee, at most, depending on time spent in an employmentrelationship with the employer, the age of the employee and a number ofdependent family members.

-       If the court, during proceedings, determinesthat the employment relationship is ceased unlawfully, but during theproceedings, the employer proves that the circumstances exist which reasonablyindicate that the continued employment, taking into account all thecircumstances and interests of both sides in the dispute, is not possible, thecourt shall deny the request of the employee to be reinstated and order theemployer to compensate the employee for damages in the amount up to 36salaries.

Besideslitigation, in case of labor law inspection, the following sanction may applyto the employer:

-       A fine of 800,000 to 2,000,000 dinars (from ca. 7,500 –16,800 EUR) shall be imposed on the employer who has a status of a legal personif they terminate the employment contract of the employee contrary to theprovisions of Law. A fine ranging from 50,000 to 150,000 dinars (from ca. 420 –1,200 EUR) shall be imposed on a director.

-       Also, a fine ranging from 150,000 to 300,000 dinars (from ca.1,200 – 2,400 EUR) shall be imposed for a misdemeanour on an employer who hasthe status of a legal person in the following case - If they deny the right ofthe employee to notice period i.e., compensation of salary. A fine ranging from10,000 to 20,000 dinars (from ca. 80 – 160 EUR) shall be imposed on a director.

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