CMS Expert Guide to Dismissals

Global comparison

1. Dismissal of employees

1.1 Reasons for dismissal

An employee may give notice of termination without providing cause. An employer, on the other hand, is only permitted to give notice of termination for one of the reasons explicitly stated in the Labour Code, which are as follows:

  1. organisational reasons – the employer’s enterprise shuts down or relocates, or the employee is made redundant; or
  2. health reasons − the employee no longer has the capacity to carry out his present work in a satisfactory manner; this must be confirmed with a medical certificate issued by the occupational medical services provider or under a ruling of the competent administrative agency having duly reviewed the medical certificate; or
  3. an employee no longer meets the requirements outlined for the work they are carrying out; or
  4. there are reasons for immediate termination of the employment relationship − the employee has committed a gross breach of duty or has been lawfully sentenced to prison for a crime; or
  5. the employee has seriously, or less seriously but repeatedly, breached a statutory duty relating to their work performance; or
  6. the employee breaches their obligation to observe the prescribed regime of an insured person being temporarily unfit for work in the first 14 calendar days of temporary incapacity for work due to sickness in an especially gross manner.

An employer may terminate an employment only under conditions and events stipulated in the Labour Law. The grounds for an employer to terminate employment include the following:

  1. An employer may terminate an employment contract for reasons relating to employee’s work ability and conduct, as follows:
    1. if he does not achieve the work results or does not have the necessary knowledge and skills to perform his duties;
    2. if he is convicted of a crime at work or related to work (through a final and binding court decision);
    3. if he does not return to work within 15 days of the expiry of a period of stay of employment or an unpaid absence.
  2. The employer may terminate the employment contract if the employee through his own fault commits a breach of a work duty, as follows:
    1. if he is negligent or reckless in performing the work duty;
    2. if he abuses his position or exceeds his authority;
    3. if he unreasonably and irresponsibly uses work-related instruments;
    4. if he does not use or uses inappropriately allocated resources and personal protective work equipment;
    5. if he commits another breach of work duty as determined by the collective agreement, employment rulebook or employment contract.
  3. The employer may terminate the employment contract if the employee does not comply with work discipline requirements, as follows:
    1. if he refuses without reason to perform work and execute the orders of the employer in accordance with the law;
    2. if he does not submit a certificate of temporary incapacity for work as required by the Labour Law;
    3. if he abuses the right to leave due to temporary incapacity to work;
    4. if he comes to work under the influence of alcohol or other intoxicating substances, or uses alcohol or other intoxicating substances during working hours, which has had or may have an impact on work performance;
    5. if he gives incorrect information that is critical for concluding the employment contract;
    6. if the employee working in a high risk job refuses to undergo a health check, even though specific health requirements must be met to work at such a job;
    7. if he does not respect labour discipline prescribed by an act of the employer, or if his conduct is such that he cannot continue to work for the employer.
  4. The employment may also be terminated if there is a valid reason relating to the employer’s needs, as follows:
    1. if as a result of technological, economic or organisational changes, the need to perform a specific job ceases, or there is a decrease in workload (i.e. a redundancy);
    2. if he refuses to conclude the annex to the employment contract pursuant to the Labour Law.

1.2 Form

Written form is necessary; must be delivered to the other party (both employer and employee may terminate the employment relationship by notice of termination). Under certain circumstances a fiction of delivery applies (e.g. if the employee refuses to accept the notice when it is delivered personally to them or when delivered by a postal worker). Under specific and strict conditions, it is also possible to deliver the termination documents electronically.

Termination must be in written form, and given to the employee in person. It must contain the reasons for termination, and set out the employee’s right of appeal. In certain cases, the employer must give written notice of the reasons for termination to the employee, the facts supporting the decision to terminate, and the time limit for submitting the employee’s response prior to terminating the employment.

1.3 Notice period

The statutory minimum notice period is set at two months, the period starting on the first day of the month after the month in which the notice of termination was delivered. 

It is possible to agree upon a probationary period of a maximum of three months (six months for managerial employees) with no statutory notice period. There is no notice period in cases of immediate termination of the employment relationship (i.e. in particular if an employee has committed a gross breach of duty or has been lawfully sentenced to prison for a crime).

If the employee is dismissed for failing to fulfil his duties or not having the qualifications and abilities to perform his duties, he has the right to continue working for a notice period of between eight and 30 days. This notice period, determined by the employer, depends on the period for which he has paid pension insurance.

In all other cases, the notice period may be defined in the individual employment contract.

1.4 Involvement of works council

No involvement in termination process except in collective redundancies.

There are no works councils in Serbia.

1.5 Involvement of a union

Employer must discuss in advance any notices of termination and any immediate termination of the employment relationship with the trade union. Trade union approval is only required where the employee is a trade union officer. Such approval can be substituted by a court decision if the approval was withheld and the employer cannot be justifiably required to continue employing the trade union officer.

A trade union may answer a warning letter issued to an employee during the procedure of employment termination resulting from a breach of work duty or work discipline. Also, the representative trade union must be invited to give its opinion on the draft redundancy programme when there is an obligation to pass a redundancy programme.

1.6 Approval of state authorities necessary

Approval of the state authorities is not required. The Labour Office need only be notified of a collective redundancy or the dismissal of a disabled person or of an employee who is not a Czech citizen.

Not applicable.

1.7 Collective redundancies

Collective redundancies are defined as dismissals within a 30-day period of:

  1. more than ten employees in an establishment of 20 − 100 employees; or
  2. 10% or more of the employees in an establishment of 101 − 300 employees; or
  3. at least 30 employees in an establishment of 300 or more employees. The total number of employees also includes those employees whose employment relationship was terminated by agreement between the employee and the employer based on the same grounds for which other employees are being dismissed, if at least 5 employees were dismissed by notice of termination.

The employer must inform the works council and trade union (or directly affected employees if there is no works council or trade union) of its intentions at least 30 days prior to giving notice of termination, and must enter into negotiations to reach a compromise or reduce the number of affected employees, etc.

The employer must simultaneously inform the Labour Office in writing:

  1. that it has discussed the collective redundancies and its implications (i.e. the later results of these discussions) with the trade union, works council or affected employees; and
  2. of the actions it has taken in cooperation with the trade union / works council in relation to the collective redundancies; and
  3. of the number, characteristics, professional qualification, etc. of the employees to be made redundant.

An employer must undertake a redundancy programme if it proposes dismissing the following numbers of employees employed on contracts of unfixed duration by reason of redundancy:

  1. within a 30-day period:
    1. ten employees where the employer employs more than 20 and less than 100 employees with contracts of unfixed duration; or
    2. 10% of employees where the employer employs 100 to 300 employees with contracts of unfixed duration; or
  2. 30 employees where the employer employs more than 300 employees with contracts of unfixed duration; or
  3. 20 employees within a 90-day period, regardless of the total number of employees employed.

The board of directors or the company director issues the redundancy programme.

1.8 Summary dismissals

Immediate termination (without notice period) of employment by the employer is possible only if the employee has breached a statutory duty in an especially gross manner or for a lawful conviction of the employee, following the employee intentionally committing a crime which leads to unconditional imprisonment for a duration longer than one year (or six months in the case of crimes committed in connection with exercising their job).

The employer may immediately (with effect upon delivery to the employee) terminate the employment within a period of two months of learning the reason for immediate termination, but not later than one year from the date of occurrence of the respective reason for termination.

An employer cannot dismiss with immediate effect any employee who is pregnant or during the employee's maternity or parental leave.

An immediate termination must be made in writing and be delivered to the employee in accordance with the Labour Code, with the reasons for immediate termination being specified in such a way that prevents confusion with any other reason(s) for termination.

Serbian Labour Law does not permit dismissal without notice.

1.9 Consequences if requirements are not met

Termination may be held invalid by the court and the employment relationship reinstated if the employee files a claim to the court no later than two months after the date of the purported termination of the employment relationship, and the court finds the termination to be invalid.

If a court finds that employment has been wrongfully terminated, the employee has a right to request reinstatement. The court decides whether the employee will be reinstated. The employer must also pay damages to the employee equivalent to lost salary and other entitlements under Labour Law, the collective agreement or employment contract, and mandatory social insurance. Damages will be reduced by the amount of any income earned from any other source following termination of the employment agreement.

1.10 Severance pay

Minimum statutory severance pay depends on the reason for dismissal and  /  or the length of employment, and ranges from one average monthly salary for any dismissals for organisational reasons (including collective redundancies) of employees whose employment lasted less than one year, to 12 times the average monthly salary for dismissals for health reasons. The parties may negotiate a larger severance payment, or the payment of severance pay in the case of dismissal for other reasons.

If the employee is dismissed for failing to fulfil or not having the necessary qualifications and ability to perform his duties, he has the right to continue working for a notice period of between eight and 30 days. The employee may agree to stop working prior to expiry of the notice period on payment of compensation for salary, the amount being determined by the General Act and the employment contract.

Regarding redundancy, the employee is entitled to a severance payment for an amount determined by the company’s internal acts and employment agreement. Where an employee exercises the right to severance pay, it cannot be lower than the sum of one-third of the employee’s average gross salary paid over the previous three months of employment preceding the month in which severance pay has been issued for each full year of employment with the employer.

1.11 Non-competition clauses

A post-contractual non-competition clause may be agreed upon between the employer and the employee and, if agreed, it must be in written form and must not last for more than one year. The agreement may be included in the employment agreement. Monetary compensation from the employer must, as a minimum, equal half the employee’s average monthly salary (i.e. of the wage / salary that the employee had prior to termination of the employment relationship) for each month during which the employee met the obligation not to compete stated in the clause. If the agreement sets out a financial penalty for breach of the clause by the employee, the employee’s obligation not to compete is discharged upon the payment of the penalty sum. The agreement is automatically terminated if the employer fails to pay the monetary compensation to the employee when it falls due. An employer may only withdraw from the non-competition clause during the term of employment. As far as case law is concerned, the withdrawal is only effective if it has been explicitly agreed upon, and such a provision is only enforceable if it contains reasons for the withdrawal, provided, in addition, such reasons are legitimate.

Post-contractual non-competition restrictions may last for a maximum of two years after the termination of employment. However, such restrictions are only valid if the employer undertakes to pay monetary compensation to the employee in the employment agreement.

1.12 Miscellaneous

The employer may not give notice of termination during a ‘protection period’ (i.e. where an employee is temporarily unfit for work, a night-shift employee is temporarily unfit to perform night work, an employee is conscripted or released from work to exercise a public office, or during pregnancy, maternity or parental leave), unless the termination is for organisational reasons due to the closure or relocation of the enterprise. There are several exceptions to this rule.

The employer may not terminate employment, or in any other way put an employee in a disadvantageous position because of his status or activities as an employees’ representative, trade union member, or because of his participation in trade union activities.

The employer may not terminate a contract of unfixed duration under any circumstances if the employee is pregnant, on maternity leave, or on leave nursing or taking special care of a child.

2. Dismissal of managing directors

Serbian Labour Law stipulates that a director may enter into two types of agreement:

  1. an employment contract; or
  2. a management contract without the establishment of employment. When a managing director enters into an employment contract, the general rules for employment termination also apply.

2.1 Reasons for dismissal

In the Czech Republic managing directors are not considered employees, therefore labour law protection does not apply to them. The relationship between the managing director and the company is of a commercial nature, not an employment one. An appointment as managing director (as a statutory body or a member of a statutory body of an entity, i.e. not as an employee) may be revoked without stating any reason.

Employment contract:

An employer may terminate an employment only under conditions and events stipulated in the Labour Law. The grounds for an employer to terminate employment include the following:

  1. An employer may terminate an employment contract for reasons relating to an employee’s work ability and his conduct, as follows:
    1. if he does not achieve the work results or does not have the necessary knowledge and skills to perform his duties;
    2. if he is convicted of a crime at work or related to work (through a final and binding court decision);
    3. if he does not return to work for the employer within 15 days of the expiry of a period of stay of employment or an unpaid absence.
  2. The employer may terminate the employment contract if the employee through his own fault commits a breach of a work duty, as follows:
    1. if he is negligent or reckless in performing work duties;
    2. if he abuses his position or exceeds his authority;
    3. if he unreasonably and irresponsibly uses work-related instruments;
    4. if he does not use or uses inappropriately allocated resources and personal protective work equipment;
    5. if he commits another breach of work duty as determined by the collective agreement, employment rulebook or employment contract.
  3. The employer may terminate the employment contract if the employee does not comply with work discipline requirements, as follows:
    1. if he refuses without reason to perform work and execute the orders of the employer in accordance with the law;
    2. if he does not submit a certificate of temporary incapacity for work as required by the Labour Law;
    3. if he abuses the right to leave due to temporary incapacity for work;
    4. if he comes to work under the influence of alcohol or other intoxicating substances, or uses alcohol or other intoxicating substances during working hours, which has or may have an impact on the work performance;
    5. if he gives incorrect information that is critical for concluding the employment contract;
    6. if the employee working in a high-risk job refuses to undergo a health check, even though specific health requirements must be met to work on such a job;
    7. if he does not respect labour discipline prescribed by an act of the employer, or his conduct is such that he cannot continue to work for the employer.
  4. The employment may also be terminated if there is a valid reason relating to the employer’s needs, as follows:
    1. if as a result of technological, economic or organisational changes, the need to perform a specific job ceases, or there is a decrease in workload (i.e. a redundancy);
    2. if he refuses to conclude the annex to the employment contract pursuant to the Labour Law.

Management contract: There is no statutory procedure for dismissing a director of a company. When a director signs a management contract, it may be terminated in accordance with the rules stipulated in the management contract or general contract rules.

2.2 Form

A valid shareholder resolution at a general meeting is required. There must be a simple majority of shareholders present, unless stated otherwise in the relevant company’s statutory documents. Apart from cases when entities have a sole shareholder, revocation of an appointment as managing director must be on the programme of the invitation to the general meeting. If not, the appointment may only be revoked, if all shareholders are present and agree to change the programme to include the revocation.

Employment contract – Written form delivered in person detailing reasons for termination.

Management contract – The law does not require a specific form. The form may be set out by the management contract, but it is advisable that termination be done in a written form. 

2.3 Notice period

Not applicable.

Employment contract - If the Director is dismissed for failing to fulfil his duties or for other similar circumstances, a notice period of between eight and 30 days depending on length of pension insurance will be given and has to be determined by the employer. In other cases, this notice will be determined by the employment contract, company by-law or collective bargaining agreement.

Management contract – The law does not stipulate a notice period, but in case of an indefinite term-management contract the reasonable notice period should be applied unless the management contract sets out a specific notice period or does not require a notice period at all.

2.4 Involvement of works council

No involvement.

There are no works councils in Serbia.

2.5 Involvement of a union

No involvement.

Employment contract – A trade union may provide its answer to a warning letter issued to an employee during the procedure of employment termination due to a breach of work duties or discipline. Also, the representative trade union must be invited to give its opinion on the draft redundancy programme when there is an obligation to pass a redundancy programme.

Management contract – not applicable

2.6 Approval of state authorities necessary

Not required.

However, revocation of a managing director from his/her office must be filed in the Commercial Register without undue delay. The appropriate court managing the Commercial Register may review the revocation in order to verify whether the revocation was done in accordance with applicable laws and the relevant entity’s statutory documents.

Not applicable.

2.7 Collective redundancies

Not applicable.

Employment contract – An employer must undertake a redundancy programme if it proposes dismissing the following numbers of employees on contracts of unfixed duration by reason of redundancy:

  1. within a 30-day period:
    1. ten employees where where there are more than 20 and less than 100 employees with contracts of unfixed duration; or
    2. 10% of employees where there are 100 to 300 employees with contracts of unfixed duration; or
  2. 30 employees where there are more than 300 employees with contracts of unfixed duration; or
  3. 20 employees within a 90-day period, regardless of the total number of employees employed.

The redundancy programme is issued by the board of directors or the company director.

Management contract – A managing director who has a management contract cannot be deemed redundant.

2.8 Summary dismissals

Not applicable.

Employment contract – Serbian Labour Law does not permit dismissal without notice. 

Management contract – It is possible, if so agreed in the management contract.

2.9 Consequences if requirements are not met

Invalidity of revocation.

Employment contract – If the court finds that employment has been wrongfully terminated, the employee has a right to request reinstatement. The court decides whether this employee will be reinstated. The employer must also pay damages to the employee equivalent to lost salary and other entitlements under the Labour Law. 

Management contract – Depends on the provisions of the management contract.

2.10 Severance pay

No statutory severance pay.

Employment contract – If the employee is dismissed for failing to fulfil or not having the necessary qualifications and ability to perform his duties, he has the right to continue working for a notice period of between eight and 30 days. The employee may agree to stop working prior to expiry of the notice period on payment of compensation for salary, the amount being determined by the General Act and the employment contract.

Regarding redundancy, the employee is entitled to a severance payment for an amount determined by the company’s internal acts and employment agreement. Where an employee exercises the right to severance pay, it cannot be lower than the sum of one-third of the employee’s average gross salary paid over the previous three months of employment preceding the month in which severance pay is issued, for each full year of employment with the employer.

Management contract – No statutory requirement, but it may be agreed upon in the management contract.

2.11 Non-competition clauses

May be agreed in a performance agreement usually concluded with a member of a statutory body. The requirements set out in the Labour Code do not apply to managing directors unless explicitly agreed.

Employment contract – Post-contractual non-competition restrictions may last for a maximum of two years after the termination of employment. However, such restrictions are only valid if the employer undertakes to pay monetary compensation to the employee in the employment agreement.

Management contract – Not regulated by the law. It may be agreed in the management contract.

2.12 Miscellaneous

Managing directors shall not enter into employment contracts with companies, unless the type of work performed under the employment contract is materially different from the role of managing director. Instead, they should conclude an agreement on the performance of the office of the managing director. Such an agreement will not be governed by Czech Labour Code. 

Not applicable.