Termination of Employment

According to the Labor Law (further as the “Law”) employment is established by concluding employment contracts between employers and employees. The Law defines two kinds of employees: those employed for unspecified period of time and those who are employed for a certain period. Therefore, there are two types of Employment Agreements: for unspecified and specified period of time.

The Law provides that the Employment agreement shall be terminated in following cases: by employee’s death; by agreement between employer and an employee; when an employee has 65 years of age and 20 years of service, or 40 years of insurance; if an employer and an employee reach another arrangement; as of the day of delivery of the decision on work capacity loss; by completion of the period stipulated in the temporary employment agreement; in case that an employee is convicted to imprisonment in excess of three months  – as of the day when the employee starts to serve the sentence; in case a security, correction or protection measure exceeding three months is pronounced to an employee – as of the day such measure starts to apply; and by a competent court’s decision on termination of the labor relation.

An employer may cancel the employment agreement to an employee with mandatory notice if such cancellation is justified due to economic, technical or organizational reasons, or if the employee is unable to comply with his/her obligations under the labor relation; however, only in the event that, due to the size, capacities and economic situation of the employer, and the abilities of the employee, there is no reasonable option of distributing such employee to a different position, or of educating and training him/her for a different position.

The employer may cancel the employment agreement, without mandatory notice period, in the event that an employee has committed a serious offense or a serious violation of work obligations under employment agreement, being these of such nature that it would not be reasonable to expect the employer to continue the labor relation. In case of minor offenses, or minor violations of work obligations under the employment agreement, the employment agreement may not be cancelled without previous notice to the employee. An employee may cancel the employment agreement without previous notice in case that the employer is liable for an infraction or violation of the obligations under the employment agreement, having these such nature that it would not be reasonable to expect the employee to continue the labor relation.

The employer passes the dismissal in writing, in form of a resolution. Such resolution must comprise an introduction, recital and grounds. The introduction refers to relevant Articles of the Law, employer’s own by-laws, collective agreement and similar. The recital states that the employment agreement concluded on a certain date is being cancelled to a determined employee. The grounds should state the reasons of such cancellation.

Huskić Law Office

August 2013