Termination of employment by notice: When can the employer give notice of termination and what must not be overlooked?

Termination of employment by notice can be a sensitive matter, especially when the notice is given by the employer. While an employee may resign at any time without stating a reason, the employer must strictly follow the rules set forth in the Labour Code. The Labour Code explicitly defines the circumstances under which an employer may give a notice of termination and establishes stringent requirements for doing so.

This article first provides a clear overview of the grounds on which an employer may give a notice of termination and then focuses in detail on three grounds that frequently raise practical questions.

Grounds for termination according to the Labour Code (Section 52 of the Labour Code)

An employer may only give a notice of termination to an employee for reasons specified in Section 52 of the Labour Code. These include, in particular:

• Organizational reasons attributable to the employer – closure or relocation of the employer or its part, redundancy of the employee,
• Health reasons on the employee’s side – loss of long-term ability to perform the current work due to an occupational or non-occupational injury, occupational disease, or other reasons,
• Failure to meet statutory prerequisites for work or employer’s requirements, including unsatisfactory work performance,
• Breach of work duties – ranging from minor breaches to particularly serious violations.

Each notice of termination must be in writing, state the factual reason in detail, and must not be given during so-called protective period (e.g., periods of sick leave).

Below, we examine in greater detail three termination grounds most used by employers in unilateral termination and whose precise meanings are not always clear:

1. Employee redundancy (organizational reason)

Employers invoke this ground when an organizational change results in no available work for the employee and therefore a reduction in workforce is necessary. Examples include elimination of a position (e.g., due to automation of the employee’s tasks) or reduction of employees on the same position due to cost-saving measures (fewer employees working because the company has seen a drop in demand for its services/products).

Conditions for valid termination:

• The employer must have made a decision regarding the organizational change (e.g., a decision by a statutory body),
• The employee’s redundancy must be a direct consequence of this organizational change — it is insufficient merely to state that “there is no work for the employee anymore”,
• The employee must be informed of the organizational change, at the latest in the notice of termination.

The notice of termination should be carefully substantiated. It is highly recommended to retain documentation relating to the organizational change, as evidence will be required in case of disputes to prove that the change actually took place. And note, the fact that an employer abolishes a specific position due to redundancy does not mean he is prohibited from recruiting new employees for other roles.

Also, if an employee is dismissed on grounds of redundancy, he/she is entitled to severance pay. The amount is graduated based on the length of employment with the employer.

2. Failure to meet prerequisites or requirements for work performance

This ground covers two categories:

a) Employee fails to meet statutory prerequisites
Legal regulations establish various requirements for performing certain professions. If an employee does not meet or ceases to meet these prerequisites, the employer may terminate employment. Examples include:

• Lack of required qualifications or education (e.g., the company introduces new production technology requiring a special certificate, which the employee does not have and fails to obtain despite retraining offers),
• Loss of authorization to perform activities (e.g., a bus driver losing a driving license or a doctor having his license revoked).

b) Employee fails to meet legitimate employer requirements
An employer may also give a notice of termination if an employee persistently fails to meet justified requirements set by the employer, which must comply with the law. Such failures, typically of a longer duration, may include disregard for work procedures or persistent failure to meet work targets.

If unsatisfactory work performance is the reason, the following conditions must be met:

• A written warning to the employee to remedy the situation,
• The notice of termination may be given within 12 months from the warning if there has been no improvement.

It is advisable that these requirements be incorporated into internal regulations or workplace rules. The termination will only be defensible if the employee was aware of the employer’s expectations and had a chance to rectify the shortcomings.

3. Breach of employee duties

The employer may terminate employment due to breach of work duties. Grounds may include those justifying immediate termination (set out in Section 55 of the Labour Code), which cover especially serious breaches (such as theft or serious intoxication at work), as well as breaches of lesser intensity — serious breaches or less serious but persistent breaches (e.g., repeated tardiness).

In cases of persistent minor breaches, the law requires the employee to have been warned in writing within the last six months that termination may follow. Without such warning, the termination is invalid.

It is always advisable to document breaches of employee duties thoroughly — through records, reprimands, emails, etc. This makes the termination more defensible.

Conclusion: Do not underestimate the reason or the form

Termination of employment by notice given by the employer is a step requiring a careful procedure to prevent further issues and to ensure the validity of the notice. Therefore, strict adherence to the written form and clear definition of the termination reason in accordance with the Labour Code requirements is essential.

Autors: Mgr. Klára Bortlíková and Karolína Wagnerová