In the wake of the Covid-19 pandemic, many companies are currently forced to make short-term cost savings. This may also affect business abroad, for which often only one or two employees are working locally. Meanwhile similar legal standards apply in most industrialized countries if an employment relationship shall be terminated; however, in every jurisdiction some specifics still need to be considered. In order to avoid unnecessary costs, an initial overview for a step by step planning is often essential. The following ten aspects may be a first general guideline for the termination of an employment contract, in particular regarding its timing. Our legal experts provide you with a first landing platform for the particularities of their country, being at your service for additional specific advice for your individual case hereafter.
Is “employment at will” the general principle in the respective country or do you usually need grounds for a termination of an employment contract?
Regardless of company size and seniority (with the exception of termination during the probationary period) you always need a ground for termination of an employment contract, and this ground (e.g. personal incapacity, gross misconduct, economic reason), shall be mentioned and sufficiently detailed in the notification of termination.
If there is a general concept of “dismissal protection”, is it limited to certain requirements (e.g. size of company/workplace, length of service)?
Whereas grounds are always required to dismiss an employee, moreover there are specific rules for employees with a special status, to protect them against dismissal for economic reasons.
There are different kind of dismissal protection:
One is related to the status of “protected employees” granted to staff representatives, but also former staff representatives (during 12 months after the end of representation). This protection is not an absolute one but means that an employer cannot dismiss such employees without the prior information to the Trade Unions.
Another kind of dismissal protection concerns pregnant women and it’s extended during 12 months after the birth of the baby. Also a father on paternity leave cannot be dismissed for the duration of the leave and until the child is one-year-old. Any dismissal during this period shall be null and void, except in case of serious misconduct of the employee or in case of cessation of the activity of the Company.
Dismissal of a female employee for cause of marriage is null and void (during a period between the day on which the publications are requested and the year following the celebration of the marriage).
In additional, employees who are ill are also protected against dismissal during their illness for a period settled by the collective agreement applied by the Company.
Finally, special procedures have to be followed for the employees unsuitable for mental or physic reasons or handicapped, in order to verify the possibility to adopt different solutions.
If a termination is deemed to be invalid, is “reinstatement (including backpay)” or “payment of damages and/or a severance payment” the general remedy?
Reinstatement, including back pay, would be the typical remedy in the event a court establishes the termination to be null and void (e.g. if the dismissal is seen as being discriminatory).
If a termination is deemed to be “without due cause” (insufficiently grounded or demonstrated in court), reinstatement will be granted only in few cases (e.g. when in case of dismissal for serious misconduct the “fact” is non-existent); in all other cases damages will be awarded.
The employee may request, in lieu of reinstatement, the payment of an indemnity equal to 15 months’ salary.
If “payment of damages” is the general concept, what is the basis of its calculation/the maximum amount the employee may receive?
A “damages scale” is set by the law, with a minimum and a maximum depending on seniority of the employee upon termination, behaviors of the parties and the size of the company.
For employees hired before 7th March 2015 the minimum is 12 and the maximum 24 month’s salary, while for the others the minimum is 6 and the maximum is 36 month’s salary.
For Companies with less than 16 employees the maximum amount the employee may receive is 6 month’s salary (except in case the termination is null and void).
May the right to terminate in some cases forfeit, (e.g. right to terminate forthwith) if not executed timely? If so, what is the respective timeframe?
Disciplinary measures in general shall be executed within a reasonable period of discovery of the misconduct depending by the complexity of the case and the time the company needs to carefully collect and review evidence: the employer shall launch the process (which means give the employee a formal letter of disciplinary objection). Then, they shall deliver the dismissal within a reasonable period or within the deadline set by the collective agreement, after receiving the justifications of the employee.
Has a termination to be delivered in writing or may the delivery of an oral/email/facsimile termination without an original signature be sufficient as well?
Notice of termination must be given in writing, but it can be delivered by any means and there’s no need of original signature (a territorial Court considered a notice given by WhatsApp message to be valid). Anyway, it is strongly recommended to confirm it in writing with proof of receipt; registered mail or registered electronic mail are the generally used means. Now in Italy any company must have an e-mail address registered with the PEC standard; it is slightly different form the one set out by ETSI based on eIDAS Regulation and is expected to reach that standard in a short time.
May a termination be successfully rejected due to the lack of a formal proxy of the managing director or may internal authorization generally be sufficient?
Notice of termination cannot be rejected because of the formality used, but it’s advisable to have it signed by the person duly representing the entity of the employer as registered in the public registry.
Is the are any general formal procedure with regard to the employee (e.g. obligatory meeting with the employee) before a valid termination may be issued?
It depends on the reason for dismissal.
For dismissal based on the employee's misbehaviour, the facts considered unfair must be notified to the employee in writing, he has 5 days to submit his justifications and, if he wants, to request a formal hearing with the assistance of a trade union representative.
In the case of economic dismissal in companies with more than 15 workers, a formal consultation procedure before the local labour authority is prescribed, but this requirement only applies to employees hired before March 2015.
A detailed procedure is also provided for mass redundancies and for special situations such as in the case of pregnancy of the employee or in the case of serious disability.
Is there any statutory body that needs to be dealt with before a valid termination may be issued? If so, what is the usual timeframe?
As set out above, a prior attempt at conciliation before the labour authority is required in some cases of economic dismissal and it should be concluded in no more than 27 days. Public intervention is also envisaged for collective redundancies, together with a complex procedure of trade union consultation.
Is there -usually- an employee representative body that needs to be dealt with before a termination may be issued? If so, what is the usual timeframe?
No need to consulting the employee representative in case of individual termination.
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