How is an employment agreement legally terminated? This question is crucial for both employers seeking to avoid financial liability and employees striving to protect their rights. In Georgia, more than 70% of labor disputes are attributed to improperly conducted dismissal processes.

In this article, we will discuss in detail the termination procedures under the Labor Code of Georgia, rules for calculating severance pay, and the essential steps required to prevent litigation.

(If you have not yet entered into an employment relationship, we recommend you first read our article: [The Employment Agreement - Link]).

 

1. Legal Grounds for Termination

 

An employer does not have the right to dismiss an employee "at their own discretion." The law requires specific, substantiated grounds. Let us review each of them in detail:

 

a) Economic and Organizational Reasons

 

This includes economic circumstances, technological or organizational changes that necessitate a reduction of the workforce (Redundancy).

• Important: The reorganization must not be fictitious. The court frequently examines whether the staff position was genuinely abolished.

 

b) Incompatibility with the Position Held

 

This applies if the employee’s qualifications or professional skills do not correspond to the position held.

• Evidence: This cannot be assessed merely verbally. It requires attestation results or documented evidence of failure to perform specific tasks.

 

c) Disciplinary Misconduct

 

A gross violation of the employment agreement or Internal Regulations (Bylaws).

• Examples: Failure to appear at work (absenteeism), alcohol intoxication, theft, or breach of confidentiality.

 

2. Procedural Rules: How to Avoid Errors?

 

The existence of a valid reason is not sufficient. If the procedure is violated, the dismissal will be deemed unlawful.

 

Step 1: Notice (Warning)

 

The law provides for two regimes of notification:

• 30 Calendar Days Prior: This is the standard rule when terminating due to economic reasons or incompatibility of qualifications.

• 3 Calendar Days Prior: The employer may reduce the notice period, but in exchange, they are obliged to pay increased compensation.

 

Step 2: Written Explanation (Mandatory!)

 

In the case of disciplinary misconduct, before the termination order is issued, the employer is obliged to request a written explanation from the employee.

 

Step 3: Issuance of the Order

 

The order must be in writing and must clearly state the grounds for termination and the legal basis (Article and Clause). The order must be mandatorily served to (handed over to) the employee.

 

3. Compensation and Final Settlement

 

Financial matters often become the subject of disputes. What is the dismissed employee entitled to?

Severance Pay:

• In case of a 30-day notice: At least 1 month's salary.

• In case of a 3-day notice: At least 2 months' salary.

• Exception: In cases of disciplinary misconduct, voluntary resignation, or expiration of the contract term, severance pay is not mandatory (unless otherwise provided by the contract).

 

Unused Leave:

 

Many forget that the employer is obliged to compensate for all accrued but unused leave days.

 

Payment for Days Worked:

 

The final settlement must be made no later than 7 days after the termination of the employment relationship.

 

4. When is Dismissal Prohibited?

 

The law grants special protection to certain categories of employees. Termination is prohibited:

• During pregnancy and maternity leave.

• During the period of temporary incapacity for work (sick leave): Except when the incapacity continues for more than 40 consecutive calendar days, or for more than 60 days in total within 6 months.

• Due to conscription into compulsory military service.

• During the period of jury duty.

 

5. Limitation Period for Appeal: Attention!

 

This is critically important information. If an employee believes their rights have been violated, they have a strictly defined deadline to file a lawsuit.

• 30 Calendar Days from the date of service of the termination order.

• If this deadline is missed, the court will no longer consider the claim, regardless of how justified the employee’s case may be.

 

Frequently Asked Questions (FAQ)

 

Below are the questions our clients ask most frequently regarding labor disputes:

 

Q: Can I dismiss an employee during the probationary period?

 

A: Yes. During the probationary period (maximum 6 months), the employer has the right to terminate the contract under a simplified rule. However, remember: termination still requires objective grounds (e.g., incompatibility with the work to be performed). "I just don't like them" is not sufficient.

 

Q: What happens if the employee refuses to sign/receive the termination order?

 

A: This is a common occurrence. In such cases, you must confirm the fact of familiarization with the order via a specific act (Report), which is signed by two witnesses (other employees). In court, this document is equivalent to the service of the order.

 

Q: Is an employee entitled to severance pay if they resign voluntarily?

 

A: No. If the employment relationship is terminated at the initiative of the employee (resignation letter), the employer is only obliged to pay for the days worked and unused leave. Additional compensation (1 or 2 months' salary) is not mandatory in this case.

 

Q: Can I immediately dismiss an employee who failed to appear at work?

 

A: Immediate dismissal is risky. First, you must ascertain the reason for the absence (was it excusable?). If the reason is inexcusable, you must request a written explanation, impose a disciplinary sanction (e.g., a warning), and only dismiss in the case of systematic violations or an extremely gross violation.

 

Summary and Recommendation

 

Losing labor disputes means the employer must pay compensation for forced downtime (back pay), which often equates to years of salary, and must reinstate the employee. Therefore, before any dismissal:

1. Review the terms of the contract.

2. Gather evidence (protocols, letters).

3. Adhere to the deadlines.