Employee's rights in case of termination
Under which circumstances may the employee who has been dismissed file a law suit? What can be the target of such lawsuit?
England
An employee with 1 year's service can make a claim to the Employment Tribunal if they have been dismissed unfairly (not for a fair reason or a fair procedure not followed). This must be within 3 months of the effective date of termination. If the employee wins, the Tribunal has the right to order reinstatement or re-engagement, but this is very rare in practice, and an award of compensation will be made. A dismissal cannot be declared invalid.
France
Employees who are unfairly dismissed can challenge their dismissals before the Employment Tribunal, within 30 years of their termination (or within 1 year, when an employee is made redundant on economic grounds and the 1-year statute of limitations is mentioned in the redundancy notice). If the judges find the dismissals to be unfair, they may grant compensation. Compensation is usually financial, but in some cases employees have a right of reinstatement. This is where dismissals are not unfair, but null and void, including: discriminatory dismissals; dismissal of employee representatives without the Labour Administration's prior authorization; redundancies implemented in the context of a "job preservation plan" which is held null and void; terminations in breach of the rules on transfer of undertakings.
Belgium
With the exception of additional compensation in lieu of notice, employees can claim damages for abusive dismissal. However, the chances of obtaining damages are limited since the employee must prove a wrongdoing by the employer and harm which is not covered by the compensation in lieu of notice. Please note that Supreme Court considers compensation in lieu of notice to cover both materiel and moral damage arising from the dismissal.
Portugal
If an employee objects to a dismissal for cause he must file a complaint with the Labour Court within 1 year from the day subsequent to the date of termination. In case of collective redundancy, the complaint to the Labour court has to be filed within 6 months. In case of a ruling of unfair dismissal, the employee will be entitled
- to receive all the payments he/she should normally have earned (salary, holidays, legal subsidies, etc.), from the month immediately before the legal action has been brought until the final ruling of the court, deducting any of the amounts the employee has received during this period and
- to choose between a severance compensation for unlawful dismissal or to be re-instated in his/her former position.
Germany
If an employee objects to a dismissal he must file a complaint with the Labour Court within 3 weeks of receipt of a notice of termination. In court proceedings for unfair dismissal the burden of proof is with the employer, and in practice it is difficult to establish the existence of a social justification for dismissal. If the employee wins, the termination is deemed invalid, and the employee returns to his workplace.
Ireland
Employees whose employment contracts are terminated can either bring a claim for wrongful dismissal in the civil courts or bring a claim for unfair dismissal before the Employment Appeals Tribunal (EAT) or the rights commissioner service. An employee must initiate an unfair dismissal claim within 6 months of termination or in exceptional circumstances within 12 months. In an unfair In an unfair dismissal claim the onus of proof is on the employer to prove that the dismissal was fair. The employer must show that it had reasonable grounds for the dismissal and applied fair procedures before dismissing the employee. The EAT/rights commissioner can either award compensation of up to two years' remuneration to the employee or order the employee to be re-instated in the previous job or re-engaged by the employer in a different job. Each party to an unfair dismissal claim is liable for its own legal costs irrespective of the outcome.
Spain
If the employee does not agree with his/her termination, prior to challenging his/her dismissal in the Courts, he/she must file a claim against the company with the Mediation, Arbitration and Conciliation services ("Servicios de Mediación, Arbitraje y Conciliación", hereinafter, MACS). The MACS will summon both parties to a meeting in order to try to settle the dispute. If no agreement is reached before the MACS, the employee can then file a claim before the Labour Courts. The employee must file its claim within the following 20 working days from the date of his/her dismissal. The reason for the dismissal must be serious and, eventually, be proven by the employer. Otherwise, the termination of an employment contract would be considered an unfair dismissal.
Finally, also note that, if :
- the employer has breached the employee's constitutional rights,
- the dismissal is considered discriminatory; or
- it affects individuals who are covered by specific protection (pregnant women, women on maternity leave, etc.) and the dismissal has not been justified as being fair,
it will be declared void by the Labour Courts.
Italy
Action before the labour court must be preceded by an out-of-court challenge to the dismissal (within 60 days of the dismissal) and by a mandatory attempt to reach a settlement before the local Labour Office. In case of unjustified dismissal: (a) employers who employ more than 15 employees in a self-sufficient department, in which the dismissed employee was employed (or within the territory of the same Municipality) or more than 60 employees as a whole, can be ordered to reinstate the employee in his/her previous position and to pay him/her damages amounting to the salary accrued between the date of dismissal and the date of reinstatement (such indemnity must not be lower than 5 months salary). Without prejudice to the right to the aforesaid indemnity, employees can elect to waive the reinstatement and ask for payment of 15 additional months' salary; (b) in other cases, employers can be ordered to reinstate the employee or, as an alternative and at the discretion of the employer, to pay the employee an indemnity ranging from a minimum of 2.5 up to a maximum of 6 months salary.
The Netherlands
If a contract of employment is terminated unilaterally by the employer, the employee may file a legal action alleging that the termination was 'obviously unreasonable', even in cases where the employer has obtained permission to give notice and observed the proper notice period. Termination will be deemed obviously unreasonable if either no reason, a mere pretext, or a false reason is given, or if the hardship endured by the employee is disproportionate to the employer's interests. In such an event, the employee may claim reinstatement or compensation in an amount to be determined by the court.
Is there any legal claim for a severance payment in case of a termination?
England
Employees are entitled to paid notice in the case of termination. Some employment contracts contain a payment in lieu of notice clause, which allow employers to pay employees instead of giving them notice. An employee who wins a claim for unfair dismissal is entitled to compensation up to a maximum of £72,900. This maximum sum is reviewed every year. Average awards are much lower than the maximum, and, for 2006/07, the median award for unfair dismissal was £3,800.
France
Severance pay is only awarded if the employer terminates an indefinite-term contract, and the employee has the minimum length of service required by the Labor Code or the applicable CBA (usually two years). The amount of severance pay depends on the employee's length of service and relevant CBA's provisions. It is generally calculated on the basis of the employee's average salary (often including bonuses as well as base salary) during his/her last year of employment. Employees receive statutory severance pay if no CBA applies or if the CBA provides for lower severance pay.
Belgium
Additional compensation in lieu of notice is often claimed by employees. With the exception of certain protected employees who have been dismissed without following a specific procedure, employees cannot claim reinstatement.
Portugal
In case of termination deriving from collective redundancy, lay-off due to extinction of the work position or for unsuitability, the employer is entitled to a severance payment equal to one month of base salary and seniority bonus (if any) for each full year of service, in cases of fractions of the year, the reference value is pro-rated. In the event that a lay-off is considered illegal by a court ruling, then the employee has the right to an indemnity, established by the court of between 15 to 45 days per year of service. This severance compensation can not be less than three months of base salary and seniority bonus. As explained above the employee may chose between this indemnity or reinstatement.
Germany
Severance payments are often paid in the context of a legal action for wrongful dismissal. In a lawsuit, however, the employee can only claim continued employment, as there is generally no statutory entitlement for severance payments in Germany. There are some exceptions, such as e.g. in the context of a business reorganisation and a Social Plan, where a claim for a severance payment may nevertheless exist. In practice, most employment protection proceedings are settled by paying severance payments instead of continued employment. There is no strict rule for the amount of the payment. These amounts are in practice often calculated on the basis of half or one month's salary per year of employment.
Ireland
In the event of termination of employment by reason of redundancy, provided the employee meets the eligibility criteria including the requirement to have at least two years' continuous service, the employee is entitled to a statutory redundancy payment which is calculated as follows: two weeks' pay for each year of service plus an extra week's pay with a ceiling of € 600 in respect of a week's pay. The employer can claim back a rebate of 60% of the statutory redundancy payment from the Irish Government. In addition to statutory redundancy entitlements, employers in Ireland frequently pay enhanced or ex gratia termination payments depending on a number of factors including the length of an employee's service, the industry or sector concerned and whether there is any custom and practice or precedent with regard to severance payments either in the employment concerned or the industry concerned.
Spain
If the employee claims his/her dismissal before the Courts and it is declared unfair by the Courts, the employer (unless the dismissed employee is a legal representative of employees, in which case it would be the employees' option) may choose between:
- reinstating the employee in his/her previous position, or
- paying a severance equivalent to 45 days' salary per year of employment with a maximum limit of 42 months' salary, unless a higher severance payment had been agreed in the employment contract of the relevant employee.
In both cases, the employer would have to pay the employee the salary which accrued from the date of dismissal to the date of notification of the ruling (procedural salary).
Italy
Upon dismissal an employee is entitled to receive (a) severance compensation, if dismissed for just cause ("giusta causa"), or (b) severance compensation and advance notice, if dismissed for justified reason ("giustificato motivo"). Severance compensation is a statutory form of deferred remuneration and amounts approximately to one month's salary for each year of service of the employee within the company. Severance compensation is calculated on the basis of the employee's salary, computing not only his/her base salary, but also any other compensation paid to him/her on a continuous basis – e.g. commissions, regular bonuses, thirteen months salary, etc..., but excluding any amounts paid by way of reimbursement of expenses and extraordinary ("una tantum") compensation. The salary also includes compensation in kind and, therefore, the equivalent amount of all fringe benefits granted to employee (e.g. a company car). It is progressively accrued (no actual funding is required) in the employer's financial statements during the term of employment.
The Netherlands
If rescission of the employment contract is granted on the basis of serious cause due to a change in circumstances, the court may award one of the parties, generally the employee, compensation in an amount which it deems reasonable in the circumstances. Compensation is generally calculated according to a formula referred to as "Cantonal Court Formula" (A×B×C). This formula roughly takes into account the employee's years of service, employee's salary and a correction factor that may be adjusted upwards and downwards depending on the circumstances (i.e. who is at fault and to what degree).
These pages may contain information of general interest about current legal issues, but do not give legal advice.
