Resignation and changing of workplace

An employee need not give a reason for terminating his or her employment contract. When resigning, an employee must comply with the period of notice specified in the employment contract or, if no period of notice has been agreed upon, the aforementioned periods of notice according to the Employment Contracts Act or applicable collective agreement.

It is advisable to prepare two copies in writing of a notice of termination, one for the employer and one for the employee as evidence. While the notice can be drawn up in free form, it does need to indicate the names of the parties, the date when the employment relationship is terminated and the date on which it ends. If an employee resigns to move to a new job, she or he should not submit the notice of termination before signing the new employment contract.

An employee can also terminate an employment contract himself or herself after the employer has terminated it. In this case, the parties comply with the employee’s period of notice, if it is shorter than the time remaining of the employer’s period of notice.

Before resigning it is advisable to check if you have a non-competition agreement in your present employment contract.

A fixed-term employment contract cannot, primarily, be terminated. However, it can be terminated to end in the middle of the employment contract, if the right to terminate has been expressly agreed upon.

The parties to the employment contract may also agree on the termination of a fixed-term employment contract, even if the right to terminate has not been agreed upon in advance.

A fixed-term employment contract made for a period that lasts for more than five years, can be terminated according to the same grounds and procedures as an employment contract valid until further notice after five years have passed since the contract was made.

Before resignation the employment contract should be check for an non-competition clause. An employment contract may include a non-competition clause that remains valid even after the employment relationship ends. The non-competition clause may limit the employee’s right to engage in competing activity or take up employment in a company that competes with the employer.

A non-competition agreement can be made only for a particularly weighty reason related to the employer’s operations or the employment relationship. The assessment of a particularly weighty reason of this kind includes, among other things, the quality of the employer’s operations and the need for protection arising from the retention of a trade secret or special training organized by the employer for the employee. The assessment also considers the employee’s position and tasks. The assessment of the weighty reason is always case-specific.

A non-competition agreement is usually permissible if the employee’s tasks relate to product development, research or other equivalent operations and the employer possesses knowledge and know-how not in the general use of competitors. An interest in retaining customer accounts may also constitute grounds for a non-competition agreement in companies where customers are strongly committed to a company through an employee engaged in sales work, for example.

The maximum period of such prohibitions is six months as of the end of the employment relationship in question. The period begins only after the employment relationship has ended, i.e. not as of the moment that notice of termination is given. The period may be extended to a year if a reasonable compensation is paid for the period during which the prohibition is binding. The period may be longer in the case of a person working in a managerial position. In practice, this means a company’s executive management.

An employment contract may include an agreement on a contractual penalty to be paid if an employee breaches the non-competition obligation. The contractual penalty becomes payable regardless of whether damage has been caused to the employer. The law provides that the maximum contractual penalty for a breach of a non-competition clause is a sum equal to six months’ salary.

An employment contract can be terminated even before the employment relationship (the performance of work) begins. In the event that the period of notice to be complied with in this situation is longer than the period remaining until the employment relationship begins, the employee will have an obligation to work for the excess period. If the employee fails to fulfill his or her obligation to work, he or she is in breach of the employment contract made and will be liable for the damage thus caused to the employer. In practice, however, the parties often agree on the termination of the employment contract without an obligation to work.