No matter how successful your company is, there may come a time when you need to end your working relationship with employees. Employee termination in Europe is not as simple as letting a worker go. There are labor laws, local regulations, and potential risks that could damage the company.
Here, we take you through the process of terminating an employment contract. We also suggest some measures you can take to avoid legal pitfalls or lawsuits. Finally, this article also summarizes termination laws and workers compensation in nearly a dozen European countries.
Four Steps Necessary for Correctly and Safely Terminating an Employee’s Contract
Here are four steps to consider before beginning the termination process:
Identify the Cause for Ending the Relationship
Sometimes an employee termination is due to the company downsizing or relocating. At other times, it could be an issue directly concerning the employee’s performance.
Whether the fault is with the company or the employee is important here. Fault may determine the employment laws to follow or how you the employer offers severance pay.
Make sure you clearly explain and document the reason for the employee termination. This first step means that you have the evidence on hand in case of a wrongful termination lawsuit.
Communicate with the Employee About What Is Going to Happen
Address the upcoming contract termination with your employee in a direct conversation, or online meeting for remote employees. It’s good to personalize this process, but also make sure to have a termination letter template on hand for official purposes.
Direct communication shows respect and appreciation for the employee’s time with the company.
Allow the Employee to Express Their Departure Needs
Ask the departing employee how they want to celebrate their time at the company when ending on good terms. This may involve making concessions to allow an employee time to arrange things. This could mean health insurance, unemployment benefits, using vacation time, or a final paycheck.
A farewell party, a company dinner, or a special event can be a fun way to part ways positively. It also shows the remaining employees how you value every staff member.
Ensure the Process is Compliant in Every Way
Every country’s laws surrounding termination are different. Overlooking any details or failing to follow the proper employment termination law procedures can result in having to pay expensive fines or giving payouts in wrongful termination lawsuits.
Once employees receive severance pay, you and you now-ex-employee can part ways and move on positively.
Termination Laws in Europe
This is by no means a comprehensive list. However, we hope that these summaries will help when you’re looking for the requirements around employee termination in various European countries.
Spain
Employers must provide written notice with valid reason and a minimum of 15 days notice period.
Severance pay is 20 days of wages per year of service up to the equivalent of 12 months. Employee termination due to disciplinary reasons does not automatically mean severance pay.
Netherlands
Notice periods in the Netherlands vary according to the length of time the employee has been with the company. For those with less than five years of service, the minimum is one month.
Written notice periods are not necessary but are highly advisable. Severance pay is one-third of monthly wages for each year of service paid as a lump sum.
Germany
Notice periods for ordinary termination range from 4 weeks to 7 months, depending on the years of service.
Severance pay is not mandatory but is typically equivalent to half a month’s wages for every year of service.
France
Employee termination without a notice period is only permissible in cases of severe misconduct or breach of company regulations. Regardless of circumstance employers are required to hold a preliminary meeting with the employee and then give them a certified written notice that clearly states the grounds for termination.
Notice periods start at one month, minimum. Severance pay is required and calculated at 25% of monthly wages for every year of service.
Portugal
Notice periods in Portugal range from 15 to 60 days, depending on seniority. Except for just cause dismissals, employers are required to issue a written notice of termination and a certificate of employment.
Severance pay is calculated at 18 days’ wages for every year of service for the first three years, and then 12 days’ wages for each year of service after that.
Switzerland
In Switzerland, both employer and employee can decide to end the employment contract without cause (within reason).
Notice periods range from 7 days to 3 months.
Severance pay is only mandated if the employee is over 50 years old and has spent more than 20 years of service with the company. All other severance pay considerations should be specified by contract.
Austria
Employee termination can only occur at the end of each calendar quarter unless otherwise specified in the employment contract.
Notice periods range from 2 days to 5 months depending on the employee’s time with the company. If the employer initiates the termination, severance pay is 1.53% of monthly wages for every year of service.
Belgium
As of April 2014, all employees who have worked for more than six months can request the reason behind their termination.
Termination notices must be in writing. Notice periods range from 2 weeks to three months.
Severance pay is calculated at 1-3 months per year of service.
United Kingdom
The minimum notice period in the UK ranges from 1-12 weeks, depending on seniority.
Severance pay differs according to the employee’s age. For those 21 years old and younger, severance pay is half a week’s wages for every year of service. Employees over the age of 22 receive a full week’s pay for each year with the company.
Conclusions: Guide Your Employee Termination Procedures with Expert Support
Safely terminating employment in Europe means knowing your legal responsibilities as an employer in every way. You may need to provide legal documents, make arrangements with Human Resources, calculate the correct amount of severance pay, and more.
Instead of risking legal difficulties, let INS Global help you handle your employees with speed and professionalism. Finally, our PEO and EOR services can ensure safe and secure payroll and HR services in more than 100 countries worldwide.
So, contact us here today to learn more.
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