Termination of Employment Law

This Law was passed in 1967 and its aim is to regulate all matters related to the dismissal of an employee at the initiative of the employer. The basic provisions of the Law regard the reasons for which a dismissal may be considered justified, the period of warning the employer must give, the reasons for which an employee is considered redundant and the amount of compensation and redundancy an employee is entitled to.

JUSTIFIED DISMISSAL FOR WHICH THE DISMISSED DOES NOT RECEIVE COMPENSATION

a) When the employee does not carry out his duties satisfactorily, unless this is due to temporary disability due to illness or childbirth.
b) When the employee was made redundant.
c) When the dismissal is due to higher violence, warfare action, political uprising, act of God or fire that is not due to negligence or voluntary actions of the employer.
d) When the dismissal is effected with the expiration of a contract of fixed time or due to retirement of the employee
e) Due to bad conduct of the employee.
f) Due to a serious error on behalf of the employee in carrying out his duties, due to committing a penal crime while carrying out his duties, due to improper conduct and due to serious and repeated violation or diregard of the work regulations.

WARNING

The warning an employee is entitled to when he is to be dismissed is relative to the time he has been in the service of his employer:
a) From 6 months to 1 year - 1 week
b) From 1 year to 2 years - 2 weeks
c) From 2 years to 3 years - 4 weeks
d) From 3 years to 4 years - 5 weeks
e) From 4 years to 5 years - 6 weeks
f) from 5 years to 6 years - 7 weeks
g) From 6 years onwards - 8 weeks

REDUNDANCY

The employee is considered to have been made redundant for the following reasons:
a) When the business which employs him closes down.
b) When the business which employs him closes down in the area the employee was working, unless it is considered to be reasonable that the employee will work in the new area in which the business carries out its work.
c) For the following special reasons:
i) modernisation, mechanisation or change of the production methods or the organisation of the business resulting in reducing its staff,
ii) changing the products or the methods of production or the necessary specialisation of the employees,
iii) closing down departments,
iv) difficulties in placing products in the market or credit difficulties,
v) lack of orders or raw materials,
vi) lack of production means, and
vii) restriction of the bulk of work or business.

AMOUNT TO BE PAID FOR REDUNDANCY TO THE ENTITLED PERSON DISMISSED

In case an employee is made redundant, he is entitled to compensation as follows:
a) For the first 4 years - 2 weeks for every year (4X2=8)
b) From the 4th to the10th year - 2,5 weeks for every year (6X2,5=15)
c) From the 10th to the 15th year - 3 weeks for every year (5X3=15)
d) From the 15th to the 20th year - 3,5 weeks for every year (5X3,5=17,5)
e) From the 20th to the 25th year - 4 weeks for every year (5X4=20)

To estimate the weekly salary, the last gross salary is taken into consideration with the upper limit being four times the weekly amount of basic insured income.

COMPENSATION DUE FOR THE DISMISSED EMPLOYEE

In case of an illegal dismissal, the employer pays compensation which is estimated in exactly the same way as the redundancy compensation. The only difference is that in this case there is no upper limit of weekly income.

The Labour Dispute Tribunal is able to decide further compensation from the above-mentioned amount of up to 2 years' wages, taking into consideration the facts of each case, e.g. long-term employment, loss of career, the conditions and reasons of the dismissal etc.