Closing a working contract
Basically, there are three main possibilities to dismiss an employee working on indefinite period:
1. Bay having an agreement with the employee
In this case the employee asks the cancelling of the contract, and as a consequence the company will not have any further (possible) legal problems because the employee will not have anymore any legal ground to contest this closing of the contract.
From case to case, an additional indemnity is granted in such cases – from my experience, the maximum amount was equal to 3 gross salaries.
This indemnity is optional, it is not required or guaranteed by any law. The only exception is for the companies having Collective Work Contract (compulsory to be concluded for more than 20 employees), or which are member of one of national economy branch federations and obliged therefore to enforce the CWC at branch level (this CWCs could include possible paragraphs regarding this indemnity).
There is no notice period in this case, the employment contract can be closed even next day.
As paperwork – the employee files a written request to stop the contract, and as a consequence of it, the employer issues a Decision in two original, signed and stamped by the company’s manager and the employee (to prove that he received the second copy of it).
2. As a disciplinary action
In this case the company must proof with documents that the employee did not act like as the work contract and job description required. Also, a preliminary action (few steps like letter of warning, decreasing the salary for a period etc) must be performed prior the closing of the contract.
The procedure is stipulated by the Work Code and it must be followed carefully, otherwise the employee can suit the company and the risk of having a bad decision from the Judge is high.
After fulfilling the preliminary steps (letter of warning, decreasing the salary for a period), the dismissing procedure is:
- the Work Code compulsory requires the company to have a “preliminary disciplinary research”, e.g. a meeting between the company manager and the employee, scheduled few days before by paper letter to the employee, in which the manager have to explain to the employee which are the problems and which are the chapters from the work contract or other internal rules broken by him/her. He/she has the right to defend providing documents, proves, etc.
A written minutes regarding this meeting must be drawn and signed by both parties. They have to contain also the explanation of the facts, provided by the employee.
- only after having this step done, the company have the right to issue the firing decision, stipulating again which are the problems and which are the chapters from the work contract or other internal rules broken by the employee. The Decision should be issued by the employer in two original, signed and stamped by the company’s manager and the employee (to prove that he received the second copy of it).
In case this procedure is not carefully respected, the employee has the right to suit the company and usually in this kind of cases the employees win (the penalty is to rehire him and to pay all the salaries for the period between dismissal and rehiring date, even if he/she stayed home).
There is a 20 working days-notice in this case.
3. As a cancelling of the position.
The cancelling must be real and serious and for at least one year – in case the employee is for instance Accountant, the company is not allowed to hire another accountant for one year, or someone else on a similar position.
From my experience, it is not an issue of names of positions but of the job description of these positions.
E.g. – not only the names of the positions, but also the job description and the activity really run, must be different.
There is a 20 working days-notice in this case. On the period of the notice, the employee has the right to work only 4 hours/day, in order to have time to find another job.
As paperwork – the employer issues and give to the employee a “pre-notice letter”, informing the employee that the contract will be stopped and he/she has the right in the notice period to work only 4 hours/day in order to find another job; at the end of notice period, the employer issues a Decision in two original, signed and stamped by the company’s manager and the employee (to prove that he received the second copy of it)
Important: From our experience, I advise all my clients to try to use option 1 – maybe it looks be more expensive in present, but it is cost effective on long term (the company does not have further risks and costs).