Termination of employment - what should employers consider?

Termination is a declaration that ends an employment relationship at a specific point in time. It generally requires no justification. Termination is only possible for fixed-term employment relationships if the term is long and has been agreed upon. Termination can generally be issued without a specific form, although written form may be stipulated (e.g. for contractual employees).

Notice periods and termination dates

Notice periods are not regulated generally, but depend essentially on the type (e.g., blue-collar worker or white-collar worker) and the length of employment. They are usually regulated by collective bargaining agreements. For white-collar workers, the statutory notice period is at least six weeks. This cannot be shortened by contractual agreement. In principle, notice can also be given during the employee's sick leave. During a holiday, particular care must be taken to ensure that the notice of termination actually reaches the employee. Notice can also be given “at an inopportune time”.

Legal consequences of termination out of time

If the labour market policy, works constitution law, or judicial approval of the dismissal has not been complied with, the dismissal is legally ineffective. If only the notice period has not been complied with, the employee is entitled to dismissal compensation; however, the dismissal itself remains effective.

General protection against dismissal

This only applies to businesses that are required to have a works council. It does not apply to small businesses. In businesses where a works council would have to be established, but none actually exists, employees have no means of challenging termination on grounds of social hardship. Furthermore, general protection against dismissal only applies to employees as defined by Section 36 of the Labour Constitution Act (ArbVG). Therefore, senior employees, as well as, for example, authorized representatives of a legal entity, are also excluded.

Procedure involving the works council

The employer must first inform the works council of the intention to dismiss a specific employee. The works council may inform the employee concerned, but is not obliged to do so. Subsequently, the works council is to submit a statement of opinion. Only then – or after the expiry of five working days without a statement of opinion – may the employer issue the dismissal. The works council can:

agree The dismissal can only be challenged by the employee on grounds of immorality (veto right of the works council).

disagree The works council or the employee can legally challenge the termination on grounds of immorality or social unfairness.

Silence The employee can contest the dismissal within one week at the court, with the exception of the social settlement.

Immorality

In the case of a challenge due to immorality, the employee must credibly explain to the court that they were dismissed for a motive disapproved of by the legal order. The burden of proof lies with the employee, but it is sufficient that the dismissal was likely based on a disapproved motive. § 105 para 3 item 1 ArbVG lists some exemplary immoral dismissal motives, such as trade union activity or the assertion of claims arising from the employment relationship.

- Outside the scope of the Works Constitution Act (ArbVG) – i.e. in very small businesses – terminations contrary to good morals are invalid.

What is social disutility?

At this point, only the statutory text will be reproduced; the assessment of social inadmissibility in individual cases can be complex:

A dismissal is socially unjustified if it adversely affects the essential interests of an employee who has been employed in the company for at least six months, unless the employer can prove that the dismissal

- due to circumstances attributable to the employee that adversely affect the business interests, or

- due to operational requirements that preclude continued employment,

is justified (§ 105 para 3 s 2 ArbVG).

Social comparison - dismissal of the “wrong” employee

If a dismissal is made due to operational requirements, the dismissed employee can apply for a social comparison at court. This will be successful if the dismissal represents a greater social hardship for them than for employees of the same company and the same sector, whose work the dismissed person is capable of and willing to perform.

Special protection against dismissal

Firstly, the special protection against dismissal means that the employer must obtain the consent of the court/disability committee and, secondly, must provide a reason for the dismissal. This protection against dismissal applies, for example, to employee representatives, parents on parental leave, those doing compulsory or alternative civilian service, and people with disabilities.

The early warning system according to § 45a of the Austrian Employment Market Promotion Act (AMFG)

If five or more employment relationships are to be terminated within a 30-day period in a company, § 45a AMFG must be observed. This may require a written notification to the AMS.

Image: © Frank Merfort - Fotolia