Termination of employment: notice, agreement, immediate termination

Termination of employment is a situation that almost every employer has to deal with. Whether it is the company or the employee who initiates the departure, it is important to choose the right legal method and follow the formal rules. A mistake in the procedure can lead to the termination being invalid, to court disputes and to wage compensation for a period in which the employee did not actually work. In this article, we give a clear explanation of the individual options and what to watch out for so that you avoid unnecessary risks.

What ways of terminating employment exist

The Labour Code recognises several basic ways of terminating employment. Each of them has its own conditions, form and consequences for both parties.

• agreement on termination of employment
• notice given by the employee or the employer
• immediate termination of employment
• termination during the probationary period
• expiry of the agreed term in fixed-term employment

Agreement on termination of employment

An agreement is the simplest and least confrontational method. Employment ends on the day the parties agree on, without any notice period running. It must be in writing, and one copy belongs to the employee. If the agreement states organisational changes or health reasons as the reason, the employee may become entitled to severance pay.

Notice and the notice period

Notice is a unilateral legal act; it must be in writing and delivered to the other party. An employee may give notice for any reason or without giving a reason. An employer, on the other hand, may give notice only on grounds defined by law, for example organisational changes or redundancy. Employment does not end immediately but only when the notice period expires, and the length of that period depends on the reason and the number of years worked. Always check the exact length and the current conditions, as they may change.

Immediate termination of employment

Immediate termination is an exceptional tool that is used only in serious cases. An employer may use it, for example, in the event of a gross breach of work discipline or a conviction for an intentional criminal offence. An employee, in turn, may use it when the employer has not paid their wage or when the work endangers their health. Here too, the strict written form applies, as does the obligation to specify the facts constituting the reason; otherwise the termination risks being invalid.

Practical obligations on termination

Once employment ends, the company faces a series of administrative steps. The employee must be deregistered from the Social Insurance Agency (Sociálna poisťovňa) and the health insurance company, certificates must be issued, and the final wage and untaken annual leave must be settled. We recommend keeping track of these steps so that you do not forget any of them.

• deliver the written document to the other party in a verifiable way
• prepare and hand over the employment certificate
• settle the wage, annual leave and any severance pay
• fulfil your deregistration obligations towards the insurance institutions

Invalid termination and its consequences

If the employer does not comply with the statutory conditions, the termination of employment may be declared invalid. The employee can challenge it in court within the prescribed time limit. If the court rules in the employee’s favour, the employment continues and the company may be obliged to pay wage compensation, even for several months. That is exactly why it does not pay to underestimate even what seem to be mere formalities, such as precisely specifying the reason, delivering the document correctly or observing the notice period. Prevention is always cheaper than a subsequent dispute and its uncertain outcome.

When to consult an expert

Termination of employment is an area where a formal mistake proves costly. If you are not sure about the right reason, the delivery or the calculation of entitlements, a consultation is worthwhile. The payroll specialists in our payroll processing service will help you set up the procedure correctly and avoid disputes.

Related articles: Severance pay and retirement allowance: when you are entitled to them, Employment contract: what it must and may contain, Probationary period: rules and the most common misconceptions.

Frequently asked questions

Does notice always have to be in writing?

Yes, both notice and immediate termination of employment must be in writing and must be demonstrably delivered to the other party. Oral notice is invalid. Likewise, an agreement on termination is concluded in writing.

When is there an entitlement to severance pay on termination?

Entitlement to severance pay can arise mainly on termination for organisational or health reasons, whether by notice or by agreement. The amount depends on how long the employment lasted. Check the current conditions and amounts, as they may change.