Dismissals and Termination of Employment in North Macedonia

Legal information about notice periods, severance pay, summary dismissals, grounds for termination and more.

1. Dismissal of employees

1.1 Reasons for dismissal

Generally, an employment contract of an employee may be terminated by the employer if:

  1. due to his/her conduct, the employee's lack of needed knowledge or capabilities, or due to non-achievement of special conditions the employee is incapable of carrying out obligations (“personal reasons”); or
  2. the employee violates contractual or other obligations (“misconduct reasons”); and
  3. the need for carrying out certain work ceases due to economic, organisational, technological, structural or similar reasons on the employer’s side (“business reasons”). 

Unfounded reasons for termination of an employment contract are:

  1. membership or participation in trade union activities;
  2. bringing charges or participating in proceedings against the employer due to allegation of having violated the obligations arising from the labour relatinoship before the arbitration, court or administrative authorities;
  3. approved absence from work due to an inability to work because of disease or injury, pregnancy, childbirth and parenthood, care for a family member and unpaid parenthood leave;
  4. using an approved absence from work and annual leave;
  5. serving military obligation or military exercises; and
  6. other cases stipulated by the Labour Law.

1.2 Form

The termination of the employment contract should be made in a written form, which should contain the main ground for the termination and proof that the reason justifies the termination.

The employer is also obliged to call the employee’s attention to the legal remedies and his/her rights arising from the insurance in case of unemployment.

1.3 Notice period

The employer may terminate the employment contract within a legally or contractually stipulated notice period. The minimum duration for the notice period is one month (and two months in case of termination of more than 150 employees or 5% of the total number of employees). The notice period starts on the day following the day of handing over the decision on termination. 

The notice of termination must be handed over to the employee (i.e. the employer is obliged to hand the notice to the employee in person) in the employer’s premises or at the residence address of the employee. If the employee cannot be reached at such address or the individual has no permanent or temporary residence in North Macedonia or refuses to receive the notice, the termination of the employment contract shall be made public on the notice board in the employer’s registered office. After the expiration of eight working days from making the termination public on the notice board, the handing-over process shall be considered implemented.

Separate rules apply for trial, probationary and seasonal work.

1.4 Involvement of employee representatives

In cases of collective redundancies for business reasons (termination of employment due to business reasons of at least 20 employees in a period of 90 days), the employer is obliged to:

  1. initiate consultation procedure with employee representatives, at least a month prior to the commencement of the collective redundancy. 
  2. provide all relevant information prior to the commencement of the consultations to achieve agreement. These consultations should at least cover the manners and means for avoidance of collective redundancy, decreasing the number of terminated employees or mitigation of the consequences through associated social measures with the purpose of aiding the terminated employees to find another employment or training. 

See answers on Approval of state authorities necessary and Collective redundancies below.

1.5 Involvement of a union

The employee is entitled to lodge a complaint to the employer for each dismissal decision. At an employee’s request, the trade union may represent the employee in the complaint proceedings.

1.6 Approval of state authorities necessary

In cases of collective redundancies due to business reasons, the employer is obliged:

  1. After the completion of the consultations, to notify the competent service for employment mediation in writing. This notification shall contain all relevant information regarding the planned collective redundancy and the consultations made with the employees’ representatives. 
  2. To submit a copy of the notification issued to the competent service for employment mediation to the representatives of the employees, after which the employees' representatives may submit their propositions to the service competent for employment mediation. This should be made at latest 30 days prior to the adoption of the decision for termination of the employees' labour relationship. If this term is less than 60 days, and if the problems emerging from the planned collective terminations cannot be solved within the initial period, the employment mediation service may ask for an extension of the deadline of up to 60 days following the notification.

1.7 Collective redundancies

If the employer intends to adopt a decision for collective redundancies for business reasons, the employer should involve employee representatives (see the answer for Involvement of employee representatives above). To enable the representatives of the employees to prepare constructive propositions, during the consultations the employers shall provide them with all relevant information in a timely manner. 

Prior to termination of the employment contract due to business reasons, the employer may offer the employee: employment with another employer by transfer and conclusion of the employment contract for carrying out works corresponding to his/her professional training and/or qualifications; professional training (training, retraining or additional training for work with the same or with another employer); or a new employment contract. 

If the employer cancels the employment agreement due to business reasons, it cannot employ another employee for the same assignments, with the same professional training and occupation, within a two-year period after the day of termination of the labour relationship. If a need emerges for the performance of the same assignment prior to the expiry of this period, the employee whose labour relationship was terminated shall have the seniority to conclude an employment agreement.

See answers on the Involvement of employee representatives and Approval of state authorities necessary above.

1.8 Summary dismissals

The employer may terminate the employment contract of the employee without a notice period (summary dismissal) in cases of violation of the working order and discipline or non-fulfilment of the working obligations, especially if the employee:

  1. is unjustifiably absent from work three consecutive working days or five working days during one year;
  2. misuses sick leave;
  3. does not observe the regulations for health protection, safety at work, protection from fire, explosion, harmful effect of poisons and other dangerous materials and violates the regulations for environment protection;
  4. uses or is under influence of alcohol and narcotics;
  5. commits theft, or intentionally or by extreme carelessness causes damage to the employer; and
  6. discloses a business, official or state secret.

Other cases of violation of a working order and discipline for which the employer may initiate summary dismissal may be determined by law and collective agreement.

1.9 Consequences if requirements are not met

A competent court can declare the dismissal null and void. Additionally, compensation of damages can be decided.

A fine can be imposed of between EUR 200 and EUR 1,000 (per offence) to the legal entity, and an additional fine can be imposed of between EUR 150 and EUR 400 (per offence) to the authorised person.

1.10 Severance pay

The employer who terminates the employment contract due to business reasons shall be obliged to pay the employee the following severance pay:

  1. up to 5 years of employment – 1 net salary.
  2. from 5 to 10 years of employment – 2.5 net salaries.
  3. from 10 to 15 years of employment – 3.5 net salaries.
  4. from 15 to 20 years of employment – 4.5 net salaries.
  5. from 20 to 25 years of employment – 6 net salaries.
  6. over 25 years of employment – 7 net salaries.

The basis for calculation of the severance pay shall be the average monthly salary, which was received by the employee in the last six months before the termination. The amount, however, cannot to be lower than 50% of the net salary paid per employee in North Macedonia within the last month prior to the termination. 

The severance pay shall be paid as of the day of termination of employment. Requesting and/or giving consent for abandoning the right to severance pay by the employer and/or the employee is null and void. 

1.11 Non-competition clauses

Generally, during the labour relationship, the employee must not carry out work for a third party or conclude business that is covered by the activity carried out by the employer without employer’s consent. 

If in carrying out work or in relation to work, the employee gains technical, production or business knowledge and business relations, the employee and the employer may lay down a “non-competition clause” in the employment contract. This clause may apply for a period not longer than two years after termination of the employment contract and must not exclude the possibility of employment for the employee. If the non-competition clause is not laid down in writing, it is assumed that it is not agreed upon.

Additional rules apply.

1.12 Miscellaneous

Not applicable.

2. Dismissal of managing directors

2.1 Reasons for dismissal

The rules for dismissal of managing directors provided below are limited only to managers of LLC/DOO companies.

In the case of concluding a contract with managers, such contracts may regulate rights, obligations and responsibilities differently than employee contracts, including the termination (dismissal) clause of such a contract.

A manager may be dismissed at any time by a resolution of the shareholders in a manner identical to the decision making for his election with or without an explanation. Any other provision (in the agreement) shall be deemed null and void. Upon a request from a shareholder, the court may order the dismissal of a manager, who is also a shareholder.

2.2 Form

A shareholders resolution, which should be submitted to the Central Registry for registration.

2.3 Notice period

Not regulated by law. Articles of Association provision and/or a contract provision (if any) would be applicable.

2.4 Involvement of employee representatives

Not applicable.

2.5 Involvement of a union

Not applicable.

2.6 Approval of state authorities necessary

The dismissal should be registered at the Central Registry.

2.7 Collective redundancies

Not applicable.

2.8 Summary dismissals

In cases of a violation of the prohibitions regarding non-competition clauses (see the answer Non-competition clauses below), the manager may be dismissed without prior notice and without the right to compensation of damages (unless otherwise stipulated by the agreement between the manager and the company/employer).

2.9 Consequences if requirements are not met

If it is stipulated in the agreement between the manager and the company/employer, the dismissed manager is entitled to compensation of damages.

If the relevant procedure is not met, compensation of damages can also be applicable. Additionally, the Central registry can deny the registration of the dismissal of the manager.

2.10 Severance pay

Applicable only if specified in the agreement.

2.11 Non-competition clauses

Without prior consent of the shareholders’ meeting, the manager may not:

  1. conduct actions within the company/employer’s scope of activity on his/her behalf and/or on behalf of a third party.
  2. be a member with unlimited liability in another company having the same or similar scope of activity as the company/employer.
  3. be a member of a management body and/or a supervisory board, or controller in another company having the same and/or similar scope of activity as the concerned company/employer.
  4. undertake any activity within the premises of the company on his/her behalf and/or on behalf of a third party.

If the manager acts contrary to the prohibitions provided above, the company/employer may request that the manager pay compensation for  damages and/or the manager assign to the company the concluded legal business and transfer to the company the proceeds arising from the legal business concluded on his/her behalf and/or on the behalf of a third party. If the manager fails to fulfil these obligations, the other managers, the members of the supervisory board, the controller or any shareholder may file a complaint for exercising such rights. The deadline for making such claims is 90 days as of the date of learning of such an action (and in any case five years after the date the violation of the prohibition occurred). 

See the answer for Summary dismissals above.

2.12 Miscellaneous

Not applicable.