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“High standards of professional work.” (IFLR1000, 2017)

23.07.2020

The Supreme Court of Lithuania explained the possible reasons for the termination of the employment under Article 59 (1) of the Labour Code for the first time

The legal basis for termination of the employment contract – the termination at the will of the employer (Article 59 (1) of the Labour Code) by notifying the employee 3 working days in advance and paying the severance pay the amount of which is not less than 6 months of the employee’s average salary is established in the Labour Code. And although the Labour Code of the Republic of Lithuania has been valid for more than 3 years, there are a number of issues on application and interpretation of the law regarding this new basis for termination of the employment in practise, in particular, whether shall any reason for the termination of the employment at the will of the employer exists.

After examining the case in June 2020, the Supreme Court of Lithuania clarified that the reason must exist, and also explained the possible reasons for the termination of the employment under Article 59 (1) of the Labour Code for the first time. The Court stated that the reason for termination of the employment contract under Article 59 (1) of the Labour Code might be related to the person of the employee, the employee’s conduct at work, the employee’s qualification, the employer’s situation, etc. The choice of such reason in a particular case is at the discretion of the employer, but it must be actually existing, legitimate, sufficient to justify the termination of the employment contract, and not among those referred to in other articles of the Labour Code (Article 57 (1) and Article 59 (2) of the Labour Code).

The Supreme Court of Lithuania also emphasized the importance of procedural requirements for the termination of the employment in the present case, i. e. the fact that the requirements of the Labour Code of the Republic of Lithuania governing the notice of termination of the employment contract and the formalisation of termination of the employment contract shall be complied with.

More detailed information is provided in the ruling of the Supreme Court of Lithuania in civil case No. e3K-3-199-701 / 2020.

PRIMUS DERLING employment practice group, – led by Giedrė Dailidėnaitė, together with senior associate Vilma Raklevičienė and associate Greta Vozbutaitė – is on the list with the best-ranked law firms in the Baltics.