How does an employment relationship end?

End of a fixed-term employment contract 

A fixed-term employment contract ends when the fixed-term period expires or the agreed work is completed. Neither party may terminate a fixed-term employment contract unless the possibility of termination is expressly agreed on in the contract. 

A fixed-term agreement can also end if the employment contract is cancelled with immediate effect. The employer may cancel an employment contract only for a extremely weighty cause. An employee can terminate the employment contract with immediate effect if the employer breaches or neglects its duties in such a serious manner as to render it unreasonable to expect that the employee should continue the employment relationship even for the period of notice.

End of a permanent employment contract 

A permanent employment contract is in force until the employee or the employer terminates it. The notice periods specified in collective agreements must be followed.  

The employer may terminate a permanent employment contract only for a reason stated in the Employment Contracts Act. Such as a reason can be related to the employee, or financial or production-related grounds associated with business operations. 

Before termination on economic or production-related grounds, the employer is required to determine whether the worker can be employed in another position in the company or within the group of companies. If this is possible, the employer must offer the job vacancy to the employee to avoid termination. 

If the employer terminates the employment contract without a justified reason, the employer must pay compensation to the employee for illegal termination. The amount of compensation is equal to the employee’s wages for 3–24 months. 

The employee is not required to justify the termination of the employment contract, but the employee must also comply with the notice period. 

Read more:  

• Termination of employment 
• Notice periods in employment relationships 
• Remember these when your employment relationship ends