Costs are rising and the first companies are starting to lay off, downsize or move production to third countries for operational reasons. However, this entails a number of obligations towards employees for whom the employer no longer has a job due to these reasons.
How should an employer behave when making redundancies due to organisational changes?
There are three grounds on which an employer can give notice to an employee:
"The most common case we encounter with clients is employee redundancy."
With regard to employees, the employer's decision is sufficient. When the decision is taken, a fact arises which gives rise to the possibility of giving notice to the employees.
If you have a union, you also have a duty of information to the union. However, this does not affect the validity of the notices themselves.
The employer can also offer to change the employment contract, but it is not obliged to do so.
The most common reason for termination in the area of organisational changes is redundancy.
There are three basic requirements an employer must meet:
Such notice is invalid. It is assumed that if the employer abolishes a position and then opens a vacancy for a similar position, it is a fictitious change. The employee has the option of going to court on the grounds that the termination is invalid. The court proceedings would then address whether the dismissal was valid or invalid. And perhaps job advertisements for such a position could be used as evidence.
The notice must be in writing. It needs to be in paper form (currently) unless the employee has agreed to be served by data mail (even then they would need to confirm this). However, this may change with the forthcoming amendment to the Labour Code. ↗.
The notice content must contain:
Termination must be timed correctly with the organizational change. It is possible to give notice at the same time as the organisational change decision. However, in this case, the position is abolished and the employer loses the possibility to assign work to the position. And the employee is entitled to full wage compensation for the duration of the termination.
If you want the employee to stay in the position as long as possible, you can set the effective date of the organisational change to the first day following the end of the notice period.
Example: on 21 September, the employer gives notice to the employee. On the last day of November, the employment relationship ends. The effective date of the organisational change can be set to 1 December, i.e. the day after the end of the notice period.
Remember that in the event of termination due to organisational changes, the employee is entitled to severance pay in the amount of:
The entire period, including the notice period, counts towards the duration of the employment relationship. The employee is also entitled to severance pay if the employment relationship was terminated by agreement.
Severance pay is not subject to social security and health insurance contributions.
If you plan to resign due to organizational changes, please do not hesitate to contact us ↗. We will take care of the whole process for you.