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02.07.2019

Employer’s notice of termination due to changes in the company

The July 2019 issue of magazine iTiesības published an article by PRIMUS DERLING Partner Sintija Radionova and Attorney at Law Dace Driče on the circumstances, when a notice of termination is based on economic, organisational, technological measures or measures of a similar nature in the company.

The legislator has prescribed in the Labour Law that an employer has the right to give a notice of termination of an employment contract to the employee on the basis of circumstances related to economic, organisational, technological measures or measures of a similar nature in the company only in the following cases:

  • an employee, who previously performed the relevant work, has been reinstated at work (Article 101.1(8));
  • the number of employees is being reduced (Article 101.1(9));
  • the employer – legal person or partnership – is being liquidated (Article 101.1(10)).
    If the employer intends to give a notice of termination of an employment contract because an employee, who previously performed the relevant work, has been reinstated at work, or the number of employees is being reduced, it should be borne in mind that an employer is prohibited from giving a notice of termination of an employment contract:
  • to a pregnant woman;
  • to a woman following the period after birth up to one year, but if a woman is breastfeeding – during the whole period of breastfeeding, but no longer than until two years of age of the child;
  • to an employee if he or she has been declared to be a disabled person;
  • during a period of temporary incapacity of an employee;
  • during a period when an employee is on leave or is not performing the work due to other justifiable reasons.

In order to start reduction in the number of employees, an employer shall first adopt a decision foreseeing which positions will be eliminated and the manner of reduction in the number of employees. The employee, who has been served a notice of termination of employment contract, shall be acquainted with the decision on the liquidation of positions. The reasons given in the decision for the need to liquidate a particular position will also help the employee understand why it has been liquidated and he or she has been dismissed. Sometimes the grounds contained in the decision will protect the employer from litigation or help to prove that the number of employees has been actually reduced and to justify its cause during the proceedings.

For an employer to be able to terminate an employment contract on the grounds that the employer is liquidated, a decision on the liquidation of the employer (a legal person or a partnership) shall first be taken. The decision on the liquidation of the employer shall be entered in the commercial register.

If an employee considers that the employment contract has been terminated unjustifiably, he or she shall, within one month from the date of receipt of the notice, have the right to bring a claim to the court, requesting to declare it invalid. The term of the claim must be counted from the moment the employee receives the notice of termination, rather than from the time when the employment relationship was terminated.

If the court finds that the notice of termination has not been justified, the court shall reinstate the dismissed employee at work and recover the work remuneration from the employer for the duration of the involuntary absence from work, as well as determine the obligation of the employer to pay all the litigation costs of the employee.

 

Full article in latvian available here.

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LT-09308, Vilnius

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