Remember the rights of employees: up to a year and a half salary can be awarded in case of illegal dismissal

What mistakes do employers often make when laying off an employee and how can they be avoided? The comment is presented by Jurgita Karvelė, a senior attorney at the Sorainen Law Firm.

As the global pandemic continues and the state begins to limit some business activity, employers are talking again about downtime and the need to lay off workers. It is well known in society that it is costly to fire an employee, but not everyone knows what the cost of wrongful termination is.

In the case of unilateral dismissal, the employer must pay severance pay, but if the dismissal is declared illegal, it may be necessary to pay up to 18 months. compensation for average salary and additional non-pecuniary damage. Thus, when making the decision to fire an employee, the employer decides whether to fire the employee and take the potential risk, or to continue the employment relationship with the unwanted person.

Before firing an employee who potentially contests the layoff, employers are also considering whether, if the layoff is found to be illegal, the unwanted employee will no longer report for work. At this point, the answer is clear, according to the 2017 July 1 new Labor Code, which has come into force, if the employer does not want it, said employee will not return to work, so the main risk remains the responsibility financial company, then what is it?

What is the cost of wrongful termination?

The employer can order an illegally fired employee to pay up to 18 times his median monthly salary. This maximum quantity consists of two components. The forced absence litigation receives an average salary for the entire period of the litigation, but not more than one year. The second part of the benefit is compensation for time worked, which consists of an average salary for two years of employment. It cannot exceed 6 months. employees who have worked for the company for 12 years or more receive the maximum compensation for median salary. If the employee returns to work after the court decision, he is only entitled to the forced absence allowance.

Sometimes the court can award additional non-pecuniary damages. Often times, when dismissal is declared illegal, it is also established that the dismissed employee has suffered from stress, strain, or health disorder. This compensation usually ranges from a few hundred to several thousand euros, but if the employee proves that there were intentional acts (such as harassment or discrimination) in the workplace, the amount can increase significantly.

If the court determines that the dismissal is illegal, the employers question whether the severance pay (if any) paid for the dismissal of the employee for two months can be deducted from the amount awarded. Unfortunately, there is no single answer and different courts may make a different decision. Part of the compensation for time lost and time worked is awarded additionally; in this case, the employer will be obliged to pay the dismissed employee a maximum of 20 months instead of 18 months. an amount equal to the average salary.

Don’t follow emotions, find a legal basis

One of the most common mistakes employers make when deciding to fire an employee is rushing. Without properly assessing the situation, they choose the wrong legal basis to terminate the employment contract. This generally gives the employee a pretext to go to a labor dispute commission and then to court. Although there is no way to insure against a possible complaint of wrongful termination of an employee, the employer will be better prepared to sue if the reasons for dismissal are properly chosen. It is important to emphasize that any non-judicial agreement between the employer and the fired employee (if any) is void; the employee always has the right to challenge the dismissal decision.

A common misconception is that employers confuse misconduct with lack of employee skills. It is mistakenly believed that an employee who does not perform tasks on time, makes mistakes and performs poorly, is in breach of duty. However, legally this is considered a lack of qualification, which means that the employment contract can be terminated on the basis that it provides for the termination of the employment contract through no fault of the employee. Therefore, if an employer fires such an employee without notice and without compensation, that is, for breach of duty, he will probably have to sue him and, worst of all, he will lose the case.

If the employer is convinced that the employee is working ineffectively or improperly, the Labor Code requires the employer to develop a performance improvement plan with the employee for at least two months. Only if the results of this plan are not satisfactory, the employer has the right to fire the employee. It is true that the obligation to give advance notice remains (the standard notice period is 1 month, but for certain categories of employees it can be 2 or even 3 months) and to pay severance pay. By the way, it is the employer who will have to prove that this plan was followed and followed. Therefore, if possible, the employer should consider whether, with the employee’s consent, it is not possible to change the employee’s job functions or transfer the employee to another position.

Does it guarantee “voluntarily” and “by agreement of the parties” peace?

For the dismissal to proceed smoothly, employers must follow the dismissal procedure provided for in the Labor Code, as non-compliance may also be grounds for declaring dismissal illegal if the employee objects to the dismissal. For example, employers often forget that an employee must have the opportunity to explain in writing before firing an employee for breach of duty (that is, the employee’s fault). There are also cases where an explanation is requested for one offense and dismissal is granted for another, which should also be considered a fundamental irregularity in the dismissal procedure.

Another rare situation is that employers sometimes imitate an employee voluntarily resigning or requesting termination of employment by agreement between the parties, when in fact the initiative is taken by the employer. This behavior is not only unethical, it can have legal consequences and be very costly for the employer. If an employee proves in court that he or she was not the initiator of the termination of the employment relationship and did not want to terminate the employment contract, the dismissal is often declared illegal. In most cases, an employee manages to do so, even if they have signed an agreement to terminate the employment contract, because recognizing that there was no actual will to terminate the employment relationship makes dismissal illegal. In practice, there are many disputes of this type: if an employee feels unfairly fired, he may decide to go to court and defend his rights after consulting with lawyers. Therefore, an ethical and fair employer-employee relationship or its termination is clearly beneficial to both parties.

On the other hand, sometimes conflict situations are unavoidable, but a good knowledge of labor laws helps employers resolve situations or disputes responsibly and fairly.