Dismissals in the time of COVID-19: what employers need to know

What are valid reasons for termination of employment?

Normal dismissal process

You may terminate a contract of employment at any time as long as you follow the ‘normal’ dismissal process, even if your employee is currently on furlough due to the coronavirus. Termination of a contract of employment is always subject to a notice period or redundancy pay.

Force majeure

A force majeure dismissal requires the force majeure to make continuing the contract of employment definitively

impossible. As the coronavirus pandemic is a temporary force majeure event and not permanent, the contract of employment cannot be terminated due to force majeure and the employee remains entitled to a notice period or redundancy pay.

Urgent cause

A contract of employment can also be terminated immediately for urgent cause. In such cases no redundancy pay or notice will be required. However, there must be serious misconduct involved, making any further professional collaboration between the parties immediately and definitively impossible. Additionally, dismissals for urgent cause must always obey a strict procedure. Be sure to engage an expert who can guide you through this process.

Justification remains necessary

The coronavirus pandemic does not suffice as a reason for dismissal in and of itself. As the employer, you must still be able to justify your reasons for the dismissal. In some cases, you may also be obliged to provide outplacement counselling. If you do lay off employees due to the coronavirus, they may claim compensation for discrimination due to illness or for unfair or wrongful dismissal. Under the current circumstances this could be disastrous to your business.

Collective redundancy

As an employer, under certain conditions you may be forced to resort to restructuring and collective redundancy. The regulations concerning collective redundancy are strict. A collective redundancy situation arises when you propose to dismiss a certain number of employees within a period of sixty days due to circumstances outside their control. Closure of your business can be grounds for collective redundancy as well. This is the case if you are definitively closing down either your company’s main business activity or a specific department and thereby reducing the number of employees to under 25 percent. In that event you will also be obliged to pay closure compensation.