Taking Counsel: Terminations: Proceed with Caution

  • 2009-01-21
  • By Zane Veidemane [Kronbergs & Cukste]
The current economic downturn figures prominently in the minds of many employers and employees in today's Latvia. Employee terminations often come hand in hand with necessary cost cutting. The Latvian Labor Law, however, provides strict rules regarding employee termination, placing some restrictions on employer's discretionary power.

Unilateral termination of the employment relationship by the employer is allowed only in the following cases:
1) Where the employee has committed a serious breach of the employment agreement or internal working regulations and there is no reasonable excuse for such breach;
2) Where while performing his job the employee has acted against the law and has lost the trust of an employer;
3) Where while performing his job the employee has acted offensively and his behavior precludes continuation of the employment relationship;
4) Where the employee is under the influence of alcohol, narcotics or other toxic substances on the job;
5) Where the employee has committed a serious breach of labor safety instructions, creating a serious risk for the health and safety of other employees;
6) Where the employee does not have the necessary professional skills to perform his work;
7) Where a doctor has confirmed that the employee is not able to perform his work because of health related issues;
8) Where another on-leave employee who has previously performed the work of the employee returns to work;  
9) Where the number of employees is being reduced, or;
10) Where the employer is undergoing liquidation.

In most cases, termination must be triggered by the non-performance of an employee and cannot be used to dismiss an employee at will. Therefore, the reduction of the number of employees becomes, apart from liquidation of the company, the only legal grounds for unilateral termination of employment relationship without cause.

Whenever the employment relationship is terminated because of the need to reduce the number of employees in the company, certain factual and procedural requirements must be followed. First of all, the law specifies that the reduction of the number of employees must be caused by an urgent need to apply in the company certain measures of an organizational, technological or economic nature. Furthermore, the employer has to give notice of employee reduction terminations to the State Employment Agency at least one month before the termination, setting out the grounds for the necessity to reduce the number of employees.

Once the decision is made to reduce the number of employees, the employer must assess which employees are going to be dismissed. Thus, the law provides that there are certain categories of employees which can not be laid off to reduce the number of employees: pregnant women, women who have given birth less than a year ago, women who are breastfeeding, as well as disabled persons.

The law also provides that in case of employees doing similar kinds of work, employees with better results and greater qualifications have a preference in ranking to keep their job. If qualification and results are almost similar, the following employees have a priority to remain employed: long service employees, employees who have suffered work related trauma while being employed by the employer; employees who have a child of 14 years of age or less, or a disabled child of 16 or less; employees who have two or more dependents; employees who have family members with no regular income; employees who have participated in the Chernobyl clean-up; employees who have less than five years before retirement, employees who are studying along with working; and employees who have been politically repressed (during the Soviet interregnum).
Employers must give one month's notice, but there is potential complexity to this, as the notice period is deemed not to accrue during employee illness.

In conclusion, it is best to consult a legal professional prior to termination, for whatever cause.

Zane Veidemane is an associate at Kronbergs & Cukste.  Kronbergs & Cukste is the Latvian member of Baltic Legal Solutions, which includes Jurevicius, Balciunas & Bartkus of Lithuanian and Glikman & Partnerid of Estonia. Baltic Legal Solutions is a founder PMLG, a pan European network of law firms.