Employment law
i Severance termsFair reasons for dismissal
Executives who are exempted from the legislation are not protected against unfair dismissal. They would instead usually have agreed to longer notice periods and maybe even certain severance benefits enhanced compared with those following from the legislation.
Executives subject to the Salaried Employees Act are protected against unfair dismissal after 12 consecutive months of employment, and it is often seen that executives by virtue of agreement apply the Salaried Employees Act to their terms of employment. This agreement will not automatically imply that the remainder of the legislation applies. An employee is treated as dismissed if the employer gives notice of termination or invokes misconduct by the employee as reason for considering the employment relationship as terminated. No third-party consent is required.
In cases of gross misconduct (e.g., theft or acts of disloyalty), the employer may summarily dismiss the executive. Otherwise, the fairness of a termination with notice depends on the materiality of the misconduct of the employee. In many cases, a prior written warning is required to ensure a fair termination procedure, but at executive level warnings are not used.
The entitlement to dismiss for business-related reasons is very broad (e.g., in cases of lack of work or restructurings, it is essentially a management assessment of how many employees and whom to dismiss). An executive is typically employed...
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