" /> Termination of the employment contract - Invest Croatia

Termination of the employment contract

Both the employer and employee may terminate the employment contract.
There are two basic types of employment contract termination:
1. Regular termination
2. Exceptional termination
1. Employer may terminate the employment contract subsequent to a prescribed or agreed termination notice period (regular dismissal), if there is a valid reason, i.e.:
• If there is no longer the need for a certain type of work due to economic, technical or organizational reasons (notice due to business reasons)
• If the employee is not capable of fulfilling his duties established by the contract regularly due to certain permanent characteristic or capabilities (notice due to personal reasons), or
• If the employee breaches the obligations from the work contract (notice due to employee’s misconduct)
• If the employee does not meet obligations from the trial work (notice due to inadequacy on trial work).
Notices due to business and personal reasons are allowed only if the employer cannot engage the employee to do some other job. In case of notice due to business reasons, the employer is not allowed to hire another worker to do the same job for at least six months.
Before the regular notice due to employee’s misconduct, the employer is obliged to warn the employee in writing about the obligations steaming from the employment contract and to present him/her with the possibility of the termination of the employment contract in case of continuing breach of those obligations, unless there are circumstances because of which it is not reasonable to expect that the employer should do this. Prior to regular or exceptional termination due to the employee’s misconduct, the employer must allow the employee to present his/hers defense, unless there are circumstances because of which it is not reasonable to expect the employer to do so.
Employee can terminate the employment contract within the prescribed or agreed notice period, without specifying a reason for it.
2. Employers and employees have just cause to terminate the employment contract concluded for an indefinite or definite period of time, without obligation to comply with the prescribed or agreed notice period (exceptional termination), if due to a serious breach of an employment relationship or other highly important fact, and taking into account all circumstances and interests of both parties, continuation of an employment relationship is not possible. Employment contract can be extraordinarily terminated only within fifteen days period from the date of learning of the fact on which the exceptional termination is based.
Termination of an employment, as a unilateral statement of employer´s intent, must be given to the employee in writing. The employee has the right to apply for protection of his/her rights within 15 days of the delivery. If the employer does not comply with the employee’s request within fifteen days of the receipt of the request, the employee may, within next fifteen days seek protection of his/her rights before the court.
Notice period is determined by the length of employment and it is defined by law (it varies between two weeks for employees who were employed for less than one year to three months for employees whose employment has lasted for 20 consecutive years). Notice period starts on the date of delivery of notice of the termination of employment.
In the event of a regular termination of the employment contract, the employee has the right to a severance which is determined in accordance with the length of the employment from the same employer. The severance amount must not be determined as one third of the average salary paid in the last three months and for every year of employment by the same employer. If law, collective agreement, work regulations or employment contract do not specify otherwise, the total amount of severance compensation shall not exceed six average monthly salaries earned by the employee during the three months prior to the termination of the employment contract. Employee working for the same employer for less than a year does not have the right to severance.