While employers obviously set out to hire honest employees, what the future holds is not always readily apparent from the outset. In the unfortunate situation where an employee has committed, for example, an act of theft or unauthorized moonlighting on company resources, the employer is likely to wish to part ways with the employee.
On discovering the employee's transgression, if the employer wishes to terminate the employee, the employee has a number of options. The employer may be amenable to and capable of reaching agreement with the employee over the terms of a mutual termination of the employment contract. The employer might instead wish to unilaterally terminate the employee, in reliance upon subsection 101 (1) 2 of the Labor Law, which sets out the right of termination where an employee has committed an unlawful act resulting in a loss of trust by the employer in the employee.
Recent judicial consideration supports the proposition that the quantum of the theft may be relatively minor and still trigger justified grounds for dismissal. In a recent case the court found that instead of the quantum being a factor, it was the dishonesty per se resulting in the loss of confidence that triggered the right to terminate.
In such cases, the burden of proof rests upon the employer to prove that the employee (a) committed the unlawful act and (b) the employer consequently has lost trust in the employee. The employer will need to demonstrate why it is reasonable for it to have lost trust in the employee. An employer having sufficient grounds for the termination may serve the employee with a notice of termination, but before issuing such notice, the employer is required to request in writing an explanation from the employee as to the reasons for the impugned conduct, and the employer, after reasonable consideration of the employee response, has to have come to a decision that the employee's conduct cannot be excused.
While the employer's decision may be challenged in any case, in the case of a unionized employee the employee termination is likely to be challenged. If the union refuses to consent to the termination, then the employer initiated termination cannot be affected by mere notice alone and will instead require a court hearing into the lawfulness of the dismissal. In such circumstances, if the employer does not take certain steps, the employee may be entitled to continue to work pending judgment as to the lawfulness of the dismissal.
The employer may be able to invoke section 58 of the Labor Law, which grants them the right to suspend an employee without pay for a period of not more than three months, if the employee is considered a threat to the reasonable interests of the employer. If there is not yet any court judgment as to the unjust dismissal claim, then it may be possible to roll over the suspension period into subsequent three month suspensions. If the employee ultimately prevails in the unjust dismissal claim, then the pay for the period of suspension will be due and payable.
The recent court case finding a low threshold requirement of materiality for grounds for dismissal is only a court of first instance judgment, so the jurisprudence on this question may still be in a state of flux. Time will tell if such a first instance judgment is ultimately upheld.
Kronbergs & Cukste is a founding member of Baltic Legal Solutions together with Jurevicius, Balciunas & Bartkus in Lithuania and Glikman & Partnerid in Estonia. Baltic Legal Solutions is a member of the Pinsent Masons Luther Group, a network of quality law firms throughout Europe.
