An individual employment contract is the source of a working relationship, and constitutes an agreement between an employee and an employer. There are several variants for the termination of an employment contract. The main bases of employment termination are the following: expiry of an employment contract; liquidation of an employer without a legal successor; death of an employee. An employment contract shall expire upon the termination thereof, on the grounds established by the Labor Code:
- by agreement between the parties;
- upon the notice by an employee;
- upon the notice by an employer;
- on the initiative of an employer without any fault on the part of an employee;
- other cases provided by the law.
Usually employment contracts are terminated by the employer or employee through giving the other party due notice, or wages in lieu of notice. However in such a case each party must keep the length of advance notice, and neither party can be sure that the unsatisfied party will not try to protect its interests in court.
Generally, the fastest and most agreeable way to terminate the working relationship is the expiry of an employment contract by agreement between the parties. In such a case the parties may agree to terminate the contract, even on the next day, and they must not keep to the terms stipulated in other cases by the Labor Code. The procedure of termination of the contract in such cases is simple enough. One party to an employment contract shall offer, in writing to the other party, to terminate the employment contract by agreement between the parties. If the latter accepts the offer, it must, within seven days, notify (best also in written form) thereof the party which has put forward the offer to terminate the employment contract.
It shall be mentioned that if the other party fails, within the time period established above, to inform that it agrees to terminate the contract, the offer to terminate the employment contract by agreement between the parties shall be considered rejected. Having agreed to terminate the contract, the parties shall conclude a written agreement on the termination of the contract. This agreement shall indicate the date when the contract shall be terminated as well as other conditions of the termination of the contract. The employment will terminate on the date specified by the parties.
The items and amount of payments that are payable to an employee on termination of employment contract, by agreement between the parties, depend on the will of the parties. Often, employers offer attractive compensation to the employee in order to stimulate him to terminate the employment contract peacefully. However, it is strictly forbidden by law to press or even threaten an employee in order to compel him to conclude such an agreement. For quick reference, termination payments by such agreement between the parties usually include: outstanding wages; payment in lieu of any unused annual leave, and any pro rata annual leave pay for the current leave year; any outstanding sum of end-of-year payment, and pro rata end-of-year payment for the current payment period.
