Lower threshold for dismissing employees on grounds relating to their person

The amendments to the Employment Contract Act concerning the grounds for dismissal based on the employee’s person took effect on 1 January 2026.

Until that date, a legitimate and weighty reason was required to terminate an employment contract. Now, it is sufficient for the employer to have a legitimate reason for terminating employment on the grounds of the employee’s person.

Following the legislative amendment, a legitimate reason for dismissal may be a breach or negligence by the employee of their obligations under the employment contract or the law in a manner that affects the employment relationship.

The conditions describing the severity and weight of the grounds for dismissal have been removed from the provision. Prior to the amendment, grounds for dismissal required a severe breach or negligence in fulfilling obligations that materially affect the employee’s employment relationship.

An illustrative list of permitted grounds for dismissal was also introduced into the text of the act. Examples of breaches or negligence that can constitute grounds for dismissal include failure to comply with the employer’s orders, provided that such orders are within the scope of the employer’s right of direction, negligence in work, unauthorised absence, inappropriate behaviour, and carelessness at work.

The purpose of the list is to make the provision more informative, rather than to change the current legal state regarding the types of activities that may constitute grounds for dismissal.

The amendment altered the employer’s obligation to determine whether dismissal on grounds related to the employee’s person could be avoided by reassigning the employee. Now, the obligation only covers situations in which an employee faces dismissal due to a change in their ability to perform their work. Previously, this obligation covered all dismissals on the grounds of the employee’s person.

No changes were made to the procedure for issuing warnings. As a rule, employees must be given a warning and an opportunity to rectify their actions before being dismissed on grounds related to their person.

Legitimate reason and overall assessment

Although the act no longer requires a weighty reason and the materiality and severity criteria as grounds for dismissal, employment contracts cannot be terminated for minor violations, omissions or errors. There must still be legitimate grounds for dismissal, and both the nature of the grounds and their severity must be assessed appropriately.

As it is impossible to give an exhaustive list of grounds for terminating an employment contract at a legislative level, the assessment of whether the employer has grounds for dismissal will continue to be based on a case-by-case overall assessment, in which the nature of the breached obligation and the severity of the breach are key considerations.

The amendment provided further details on the matters to be considered in the overall assessment of the grounds for dismissal. The key factors in the assessment are the severity of the employee’s actions in question and other relevant issues, such as 1) the employee’s position and the nature of their duties; 2) the employee’s other breaches of their obligations affecting the employment relationship; 3) the employer’s fulfilment of their obligations, such as providing sufficient instructions to the employee, and the employer’s other actions related to the matter; 4) the number of employees working for the employer; 5) the conditions of the employer and employee as a whole.

The overall assessment should consider the relevant issues that can be deemed objective grounds for meeting the threshold for dismissal. The overall assessment may be influenced only by real reasons relevant to the fulfilment of obligations under the employment contract and the preconditions for continuing the employment contract.

The grounds for dismissal must be such that, under the circumstances, the termination of the employment relationship can be considered a reasonable and understandable consequence of the employee’s violation. Examples of such violations include reprehensible behaviour that constitutes a clear breach of the employee’s obligations or is materially inappropriate in light of the employee’s position.

The requirement for the legitimacy of the grounds for dismissal also means that the grounds must not be arbitrary or contrary to good practice, nor may they be influenced by discrimination. Discriminatory grounds refer to the provisions of the Equality Act and the Non-discrimination Act.

Employers must continue to treat their employees equally when dismissing them.

However, the impacts of the amendment on the threshold for dismissal and the degree of severity required to constitute grounds for dismissal will ultimately be clarified through case law.