A dismissal by the employer is not only an HR decision but also a legal risk. Below we summarise what a company must consider if it wants to terminate an employee’s employment lawfully.<\/p>\n\n\n\n
Dismissing an employee is a sensitive decision in the life of many companies. An employee’s performance may be inadequate, a position may cease to exist, a reorganisation may take place, or the employee’s conduct may make terminating the employment necessary.<\/p>\n\n\n\n
A dismissal by the employer, however, is not merely a business or management decision. From a legal perspective it is one of the most frequently disputed employer measures. A poorly worded, insufficiently substantiated or hasty dismissal can lead to employment litigation, payment of lost income, claims for damages for non-pecuniary loss and significant costs for the employer.<\/p>\n\n\n\n
As an employer, it is therefore especially important to consider before the dismissal not only whether the company “wants to terminate” the employment, but also on what grounds, on the basis of what evidence, with what timing and with what documents it will do so.<\/p>\n\n\n\n
A dismissal by the employer must be made in writing. An oral statement, a message thrown off in an email, a “don’t come in any more” type of instruction from a manager, or blocking the employee’s access in advance are not in themselves an appropriate way of terminating employment.<\/p>\n\n\n\n
The dismissal must clearly state that the employer is terminating the employment by notice. It is important that the document sets out clearly the grounds for the dismissal, the start and end of the notice period, the rules on exemption from work, and any severance pay due and other settlement issues.<\/p>\n\n\n\n
Once the dismissal has been communicated, the employer’s room for manoeuvre is limited. As a rule, the reasoning of a dismissal cannot later be “corrected”, extended or replaced with an entirely new ground. Before drafting the text of the dismissal, it is therefore worth carefully considering exactly what the company is relying on.<\/p>\n\n\n\n
One of the most important issues in an employer’s dismissal is the reasoning. The employer may not give notice on arbitrary, general or vague grounds. The grounds for dismissal must meet three basic requirements:<\/p>\n\n\n\n
They must be true.This means that the facts stated in the dismissal must actually correspond to reality. If the employer relies on performance problems, for example, there should be a record of them: appraisals, warnings, missed deadlines, client complaints, management notes or other documents.<\/p>\n\n\n\n
They must be clear.From the dismissal, the employee must understand exactly why their employment is being terminated. General phrases such as “did not live up to expectations”, “their attitude is inadequate”, “the company’s interests require it” or “there has been a loss of trust” can be risky in themselves if they are not supported by specific facts.<\/p>\n\n\n\n
They must be reasonable.It must follow from the grounds for dismissal why maintaining the employment relationship is not justified for the employer. It is therefore not enough to rely on some minor shortcoming if the termination of employment does not reasonably follow from it.<\/p>\n\n\n\n
The grounds for an employer’s dismissal fall essentially into three broad categories.<\/p>\n\n\n\n
The first is a reason connected with the employee’s conduct. This may include, for example, breach of work discipline, repeated lateness, breach of the duty to cooperate, workplace conflicts escalating to an unmanageable level, refusal to follow instructions, or jeopardising the employer’s legitimate economic interests.<\/p>\n\n\n\n
The second is a reason connected with the employee’s ability. This may include, for example, the employee being unable to perform their job over a longer period, lacking the skills required for the position, or their performance falling documented and repeatedly below the expected level.<\/p>\n\n\n\n
The third is a reason connected with the employer’s operations. This may include, for example, reorganisation, workforce reduction, the cessation of a position, restructuring of a business line, closure of a site, or rationalisation for economic reasons.<\/p>\n\n\n\n
In practice, the biggest mistakes arise where the employer makes a genuine business decision but fails to document it properly. For example, it relies on reorganisation while hiring another person for essentially the same tasks shortly afterwards. This can be a serious point of attack in employment litigation.<\/p>\n\n\n\n
If the employer relies on the employee’s inadequate performance, it is advisable that this has a track record. A dismissal in which the employer suddenly claims, without any prior indication, that the employee has been underperforming for a long time can be risky in employment litigation.<\/p>\n\n\n\n
Companies are therefore advised to develop an internal practice for documenting performance problems. This may take the form of written feedback, performance appraisals, an email from a manager, a warning or a development plan.<\/p>\n\n\n\n
A prior warning is not required in every case, but the employer’s position is considerably strengthened if it can prove that the employee was aware of the problem, was given an opportunity to improve, and that no meaningful change nevertheless occurred.<\/p>\n\n\n\n
One of the most common grounds for dismissals connected with the employer’s operations is reorganisation. This may in itself be a lawful ground, but how it appears in the dismissal matters.<\/p>\n\n\n\n
It is not advisable to write in the dismissal merely that “the employer carried out a reorganisation”. More specific reasoning is needed. It is worth setting out what organisational change took place, which position it affects, why that position ceases to exist, and how the employee’s job fits into the restructuring.<\/p>\n\n\n\n
The employer must also ensure that the reorganisation is genuine. If the position ceases on paper but the tasks are performed unchanged, with identical content, by another employee, this may render the lawfulness of the dismissal disputable.<\/p>\n\n\n\n
Before any dismissal it must be checked whether the employee is under dismissal protection. Particular attention must be paid, for example, to pregnancy, maternity leave, unpaid leave taken for the purpose of caring for a child, actual reservist military service, and other situations protected by law.<\/p>\n\n\n\n
In such cases, communicating an employer’s dismissal may run into a prohibition, or may be lawful only to a limited extent and under strict conditions. Whether protection applies must always be examined on the basis of the individual employee’s situation.<\/p>\n\n\n\n
Pregnancy and the position of employees with small children are a particularly sensitive area. In such cases it is advisable to carry out a separate legal review before the dismissal, because an unlawful dismissal can carry significant risk for the employer.<\/p>\n\n\n\n
In the case of an employer’s dismissal, the notice period is at least 30 days. Based on the time spent in employment with the employer, it may be longer. The employment contract or a collective agreement may also provide for a different, longer notice period than the statutory rules.<\/p>\n\n\n\n
An important rule is that in the case of an employer’s dismissal the employee must be exempted from work for at least half of the notice period. The employer may also decide to exempt the employee from work for the entire notice period.<\/p>\n\n\n\n
It is advisable to set out the provisions on the exemption period precisely in the dismissal. To avoid later disputes, it is worth clearly specifying until when the employee must work, from when they are exempted from work, how equipment is to be returned, and when the final settlement will take place.<\/p>\n\n\n\n
In the case of an employer’s dismissal, the employee may be entitled to severance pay where certain conditions are met. Its amount depends primarily on how long the employee has been employed by that employer.<\/p>\n\n\n\n
The question of severance pay must not be handled automatically. The duration of the employment, the legal grounds for termination, any pensioner status of the employee, and whether there is any circumstance excluding or modifying entitlement to severance pay must all be examined.<\/p>\n\n\n\n
An incorrect severance calculation or the failure to pay severance that is due can lead to a later employment dispute. When preparing a dismissal, coordinated work between HR, payroll and legal representation is therefore particularly important.<\/p>\n\n\n\n
Many employers consider summary dismissal even where ordinary dismissal would legally be more appropriate. This can be risky.<\/p>\n\n\n\n
Summary dismissal is a more severe legal consequence and may be applied only under strict conditions. It generally arises where the employee wilfully or by gross negligence commits a substantial breach of a material obligation, or engages in conduct that makes maintaining the employment relationship impossible.<\/p>\n\n\n\n
If the employer cannot adequately prove the serious breach of obligation underlying the summary dismissal, the dismissal may become unlawful. In every case it must therefore be assessed separately whether the situation really justifies summary dismissal, or whether ordinary dismissal by the employer is safer and better founded in law.<\/p>\n\n\n\n
Employers often wish to close the employment relationship by mutual agreement. In many cases this can indeed be a practical solution, as it can reduce the risk of a later dispute and the parties can agree flexibly on the settlement, exemption from work, benefits and the return of equipment.<\/p>\n\n\n\n
A mutual agreement is only safe, however, if it is genuinely voluntary. It is unfortunate if the employee signs the agreement under pressure, under immediate pressure to decide, and without properly understanding the consequences.<\/p>\n\n\n\n
It is advisable to give the employee adequate time to consider the offer and to word the text of the mutual agreement precisely and unambiguously. Overly general, boilerplate agreements may later become disputable.<\/p>\n\n\n\n
These questions are not mere formalities. In employment litigation it often turns out precisely that the employer made a commercially understandable decision but that the legal preparation was incomplete.<\/p>\n\n\n\n
If the employee disputes the dismissal, they may turn to the courts. In employment litigation it is for the employer to prove that the grounds for dismissal were true, clear and reasonable.<\/p>\n\n\n\n
In the case of an unlawful dismissal by the employer, the company may face significant financial consequences. Lost income, other employee claims, litigation costs, interest and, in certain cases, claims for damages for non-pecuniary loss may arise. In addition, a protracted employment dispute can place a reputational and managerial burden on the business.<\/p>\n\n\n\n
An employer’s dismissal should therefore not be treated purely as an administrative HR task. Particularly in the case of senior employees, long-serving employees, employees in a protected position or where there is a history of conflict, it is worth reviewing the dismissal from a legal perspective in advance.<\/p>\n\n\n\n
In 2026, too, an employer’s dismissal remains a decision that should be prepared carefully. For a lawful dismissal it is not enough that the employer is dissatisfied with the employee or considers the termination commercially justified. The dismissal must stand up in terms of form, content and evidence.<\/p>\n\n\n\n
A well-prepared employer’s dismissal reduces the risk of employment litigation, protects the company’s interests and makes the closing of the employment relationship more orderly.<\/p>\n\n\n\n