Terminating employment in Europe: The legal complexities explained
In our recent economy, there is an increase in the number of employee terminations as a result of the current market’s economic challenges. Unfortunately, in this increase, we are also seeing more frequent mass layoffs and even bankruptcies. We believe it is crucial at all times that the process of termination is handled in a respectful, compliant, and high-quality manner. As a result, we have summarized the most important information regarding employment terminations under EOR.
It is common knowledge among those who are actively involved in employment arrangements in Europe that terminations, employer- (and thus client-) initiated, can be complex, costly, and time-consuming. Complex because there are so many strict regulations to follow and costly because the regulations have a cost aspect in itself.
Terminating an employment is a complex process that varies depending on the country and the specific circumstances of the case. It’s essential to understand the unique laws and regulations of a country and the specific case, to ensure compliance and minimize the risk of legal action.
To ensure the best outcome, it’s highly recommended to seek professional advice from our experts who have knowledge and experience in these country-specific regulations. Contacting us can help you understand the possibilities and challenges of country-specific regulations, and guide you through the process, ensuring compliance and minimizing costs.
Termination of employment with EOR
Parakar, as the employer of record, provides a very committed service when it comes to employee termination. It is crucial to note that the sooner clients notify Parakar of events that eventually lead to termination of employment, the sooner we can advise and assist in managing the process to an as cost-effective outcome!
Important fact; Please do NOT discuss even the intent to terminate employment with the employees, before discussing the case with Parakar.
Parakar confirms itself to the rules and laws that apply in the country where the employee is employed. This may mean that the client’s wishes will have to be adjusted. We advise you in order to come up with a realistic proposal taking into account the practices in the country and the particular situation of the case.
Costs estimation for employee termination
As a general rule (and regardless of the circumstance, and disregarding benefits, bonuses, and commissions), Parakar advises clients to budget 6 months’ worth of salary as the cost of severance up front. Of course, during the process and negotiations, we’ll make every effort to keep it to a minimum.
We do observe that employees are raising the bar in these processes lately, likely as a result of broader changes in the European labor market. Due to this, Parakar may advise clients to budget even larger sums for settlements, up to and including 6 to 12 months of salary in some circumstances.
Again, the sooner clients notify Parakar of circumstances that could eventually result in plans to terminate employment, the sooner we can advise and help in managing the process to an as cost-effective result!
Regulations and notice period
The last day of employment is determined by local termination policies. Termination requirements vary from country to country. The notice period used also varies by country but is also related to the signing date of a settlement agreement. It is therefore difficult to name this date in advance as a hard date, but obviously good to use as a starting point!
An employee can be summarily dismissed in cases of duly documented gross misconduct. Only the most serious offenses, such as violence or fraud, qualify for such dismissal in most jurisdictions.
An employee cannot usually be dismissed for inadequate performance without reason or prior notice and a personal improvement plan has been jointly drawn up, monitored, and properly documented. The requirements for this may vary by jurisdiction, take time, and require effort from both the employee and the supervisor. Partly for this reason, it may be more interesting to opt for a settlement via a mutual termination agreement.
In most jurisdictions, employees have the right to legally challenge a summary dismissal as unfair or unlawful.
To complete the dismissal process in a high-quality manner, whenever possible it is highly recommended, the dismissals are announced to Parakar at least one calendar month in advance.
Can we help you?
Properly handling an employment termination can not only ease the transition for all parties involved but also enhance your reputation in the labor market, making it easier to attract new employees in the future.
Do you have questions about employee terminations or would you like advice on a specific case? We are more than happy to assist or advise you. We’re specialized in providing international employment services for over 20 years. Our legal experts support cases in Ireland, The Netherlands, Germany, Belgium, France, UK, Italy, Poland, Portugal, and Spain.