Termination of Employment: When Is It Lawful and When Is It Not?

Termination is one of the most frequently disputed labor law issues — both employees and employers need to know where the boundary of lawfulness lies.

Among the ways of ending an employment relationship, termination is the one that generates the most legal disputes. The reason is simple: the lawfulness of a termination depends on numerous formal and substantive conditions, and their breach entitles the employee to seek a remedy.

Formal requirements of termination

A termination must be put in writing and delivered to the other party. In the case of employer termination, the reasoning must also be stated — except for termination during the probationary period and a few exceptional cases. The justification must be clear, genuine and rational, meaning the stated reason must actually exist and must be capable of supporting the termination.

What reasons can justify an employer's termination?

The law essentially groups the possible grounds for employer termination into three categories: the employee's conduct related to the employment relationship, the employee's abilities, and reasons connected to the employer's operations (e.g. reorganization, downsizing). It is important that the reason be specific and verifiable — a general, vague formulation can in itself establish the unlawfulness of the termination.

Protection and prohibition against termination

The law grants employees specific protection in certain life situations. These typically include pregnancy, maternity leave, parental leave, or a period of incapacity for work due to illness. In these cases, the employer may not terminate the employment for a period defined by law, or may only do so under limited conditions.

Notice period and severance pay

The length of the notice period increases depending on the duration of employment, and during this time the employee may also be entitled to release from work obligations to the extent defined by law. If certain conditions are met — typically employer termination combined with a specified length of employment — the employee may also be entitled to severance pay.

What can an employee do if they consider the termination unlawful?

If an employee believes the termination was unlawful — whether due to a formal defect or unfounded justification — they can seek a remedy through a labor dispute, within a specific, relatively short deadline. It is therefore crucial to seek expert help as soon as possible after receiving the termination.

A few practical tips

• Every termination (whether from the employer or employee side) must be communicated in writing, dated, and in a verifiable manner.
• It is worth keeping the exact wording of the termination's justification and having it legally assessed.
• Deadlines in labor law matters are typically short — delay can result in loss of rights.

Whether you face a termination situation as an employer or an employee, it is worth seeking expert advice in time, before taking any steps, to avoid mistakes that are difficult to remedy later.