New termination rules for contracts which start after 1 January 2012
For employment contracts which have entered into force after 1 January 2012 there are new statutory rules stipulating the period of notice that is required to terminate the employment contract. For employees whose annual remuneration exceeds €32.254 (figure for 2013) the required notice is 30 days, reducing to 29 days as of 2014, per commenced year of service, with a minimum of 3 months’ notice per commenced period of 5 years’ service. Thus, an employee who has been with the company for 10 years and one day will be entitled to 11 x 30 = 330 days of notice. An employee who has been with the company for 1 year and one day is entitled to the statutory minimum of 3 months’ notice. These new statutory rules, which are obligatory and from which the parties may not contract out, will replace and ultimately render redundant the Claeys formula, which has been commonly used to calculate notice periods for middle and higher level employees. The new rules apply however only to contracts which have entered into force as of 1 January 2012 and for all contracts which were already in existence on 1 January 2012 but which are terminated after such date the old rules will continue to apply. It is however probable that for such contracts the courts will be influenced by the new rules, even if, strictly speaking, they do not apply. For employees whose annual remuneration is more than €64.508 (figure for 2013) it remains possible to agree a shorter period in the employment contract (see below).
New ceiling figures for 2013
As of January 1 2013 the annual remuneration figure for lower level employees below which the required notice period is limited to 3 months per commenced 5 year period of service and for whom no non-compete clause may be inserted in the contract is € 32.254. Likewise, the 2013 figure above which a trial clause may have a term of 12 rather than 6 months is €38.665. Finally, the 2013 figure above which parties are free to agree in the contract to limit the notice to 3 months per commenced period of 5 years’ service and for which there are no restrictions on the non-compete clause is € 64.508.
Charles Price
