One of the ways in which an employment contract may come to an end is the dismissal of the employee by the employer. The main method to achieve this is by giving notice. This is also called a regular dismissal. A regular dismissal is where an employer unilaterally terminates the employment contract of a permanent employee, i.e. an employee who has been hired for an indefinite (as opposed to fixed) period, by giving notice of termination.

It is, as a rule, unlawful to dismiss an employee in the absence of a dismissal permit. An employee who has been dismissed by an employer who lacked permission to do so may, and usually does, claim the dismissal was ineffective (annullable). The result is that the dismissal is deemed not to have taken place. This in turn results in his status as an employee, and his entitlement to all terms of employment including salary, continuing (provided the employee offers to continue, and is capable of continuing, to perform his contractual duties).

The dismissal prohibition was originally designed as an economic measure, allowing the government to regulate the labor market. However, over time, its purpose has changed, becoming a social measure aimed at protecting employees against unfair dismissal by their employer. There are certain categories of employees who are excluded from the dismissal prohibition. They may be dismissed without a permit. The most relevant categories are managing directors of local company or a similar foreign entity, and civil servants. These individuals may be dismissed freely.

The employer may obtain a dismissal permit by filing a written application with the directorate of labor affairs. The application sets out the reason for the proposed dismissal. The directorate does not deliver its decision until it has heard the employee’s view. Once it has heard both sides of the story, the directorate decides whether to grant a permit. Briefly, a permit application can be based on either (i) redundancy or (ii) reasons having to do with the employee, such as underperformance or medical issues. Permit rejections are not uncommon, for example, where the reason for the application is underperformance, given that the directorate requires strong documentation about the underperformance and evidence that the employer has done all it reasonably could to improve performance. There is no appeal.

When a dismissal permit has been granted, and assuming there is no “dismissal obstacle” (see hereafter), the employer is free to give notice of termination, observing a notice period usually varying between one and three months. During the notice period, the employee continues to be eligible for all terms of employment. Even if the employer has managed to obtain a dismissal permit, it may not be possible to make use of it. This is because, besides there being a general dismissal prohibition, there are, additionally, what are known as dismissal obstacles. The law prohibits giving notice of termination in certain situations. The most common of these is where the employee is unable to perform his work (fully) for medical reasons.