How do I terminate a fixed-term employment contract?
A fixed-term employment contract or contract for clearly defined work may not be terminated before the agreed expiry date or before the termination of the agreed work, unless there is a mutual agreement or it is terminated for an urgent reason.
If such an employment contract is nevertheless terminated before the agreed expiry date or before the termination of the agreed work, the initiator shall be obliged to pay the other party compensation equal to the salary that would still be due. This compensation may not exceed twice the compensation that should have been paid if the employment contract had been of indefinite duration.
What is the term of notice?
A distinction must be made between employment contracts for a definite period of time or for clearly defined work concluded before 1 January 2014 and employment contracts concluded after 1 January 2014 (as a result of the unified status).
Employment contracts concluded before 1 January 2014
The employer and the employee had the possibility to include a probationary clause in employment contracts concluded and started before 1 January 2014.
During this probationary period, an employment contract for a fixed period or for clearly defined work can be unilaterally terminated according to the termination rules specific to the probationary period.
At the end of the probationary period, the party who terminates the employment contract early has to pay compensation to the other party.
The latter also applies to fixed-term employment contracts or employment contracts for clearly defined work without a trial period which are terminated prematurely.
For employment contracts of at least three months, there is also a special termination rule in case of illness or accident.
Employment contracts concluded after 1 January 2014
In case of termination of an employment contract for a definite period of time or for clearly defined work which has been concluded as from 1 January 2014, a distinction should be made between two periods:
The first period of the employment contract corresponds to the first half of the contract with a maximum of six months.
During this first period, each of the parties can terminate the contract early and without urgent cause by serving a notice period.
- This option to terminate was prompted by the abolition of the probationary clause as of 1 January 2014.
- The first half of the contract (during which the contract can be terminated) may not exceed six months.
- This first period of the contract starts from the execution date agreed by the parties. Therefore, the date on which the employment contract was concluded does not have to be taken into account.
- Moreover, this first period of the contract always ends at the expiration of the first half of the contract.
It is a fixed term: causes for the suspension of the execution of the employment contract (for example, illness or annual leave, etc.) do not extend the term. Consequently, the last day of the notice period must be at the latest on the last day of the period during which notice is possible.
Note: If the period of notice expires after the end of this first period of the contract, the termination by notice is irregular. In that case, the party who terminates the contract irregularly must pay the other party compensation corresponding to the compensation in the event of termination during the second period of the contract. The period of notice provided for in the new provisions on contracts of indefinite duration must be taken into account.
The notice of termination must be given in the same way as for an open-ended employment contract: the notice period starts on the Monday following the notice.
If one of the parties terminates the employment contract for a definite period or for clearly defined work during the first period (during which the contract can be terminated) without observing the applicable notice period, this party must pay compensation to the other party.
This compensation will be equal to the remuneration that corresponds to either the duration of the notice period or the remaining part of that period.
Note: Restriction of the possibility of giving notice in the case of successive employment contracts for a fixed period or for clearly defined work.
- The possibility of termination applies only to the first contract in the series.
- If one of the parties terminates a contract other than the first in the series of successive fixed-term employment contracts or for a clearly defined work, it must pay compensation to the other party.
The second period of the employment contract corresponds to the remaining second half of the employment contract and runs until the end date originally foreseen by the parties.
During this second period, the employment contract can no longer be terminated prematurely and without urgent cause with a period of notice: the party terminating the employment contract anyway will have to pay compensation to the other party.
The second period starts at the end of the (first) period of the employment contract during which this contract can be terminated and lasts until the end date initially foreseen by the parties.
During this second period, the party terminating the contract early and without urgent cause must pay compensation to the other party. This compensation is equal to the salary that would have been due until the end date of the contract.
In the case of an employment contract for a clearly defined job, the salary due until the end date will be determined by means of an estimate of the time still needed to complete the assigned job.
The amount of the indemnity is limited: it cannot exceed twice the salary corresponding to the duration of the notice period, which should have been observed if the contract had not been concluded for a definite period, but for an indefinite period.
Special rules for termination are also provided in case of illness or accident.
Special rules in case of incapacity for work (due to illness or accident)
Employment contract of less than 3 months (fixed term or clearly defined work)
In the event of incapacity to work of more than 7 days, the employer can terminate the employment contract without notice or compensation, after the period during which the fixed-term employment contract can be terminated has expired. The dismissal can therefore take place at the earliest as of the 8th day of incapacity.
Employment contract for more than 3 months (fixed term or clearly defined work)
In the event of incapacity for work of more than 6 months, the employer may terminate the employment contract subject to the payment of compensation that is equal to the salary that still had to be paid until the agreed period, with a maximum of 3 months. The employer may deduct from this indemnity the amount that the employee had already received as guaranteed salary before his illness.
Axis Advice is based on up-to-date data and reliable sources. However, the articles are provided for information purposes and do not constitute binding legal advice. Although Axis makes every effort to keep the content of this article correct and up-to-date, no rights can be derived from it.
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