Terminating Employment Relationships by Mutual Agreement

As mentioned in earlier posts, managing a global workforce can be very rewarding, but it can also bring many challenges including how best to handle terminating employment relationships. Terminating a worker can be a difficult process for employers, as each country has different procedures and regulations to follow when ending an employment relationship. It’s important for international employers to always seek the right advice, know the process and what’s involved before deciding to take action.

In some European countries, terminations cannot be undertaken unilaterally by the employer without the permission from a public authority or labour court. This process can be very costly in both time and money for the business and doesn’t always guarantee the intended outcome of termination. Therefore, in these countries, the best and most reliable method to end an employment relationship is termination by mutual agreement.

Termination by mutual agreement occurs when employers and workers can come to an agreement to terminate the employment relationship mutually.

Below we have a summary of how termination by mutual agreement occurs in two European countries and have provided some information that may help international employers.

France

In France, an employer cannot dismiss a worker unilaterally unless they have a very serious reason for wanting to terminate, such as gross misconduct, theft or violent behaviour. Outside of this if they do decide to terminate, the most reliable method to end an employment relationship is by mutual agreement. The process in France is known as ‘rupture conventionnelle’. To achieve this both parties must come to an agreement of the terms of the mutual agreement including but not limited to the severance payment amount and the timeframe are discussed. Once agreed the contract is processed through the state online platform and then signed by the worker and employer.

Employees have the right to change their mind and pull out of the agreement during a cooling period. If the employee does not raise an objection, the employer submits the rupture conventionnelle to the labour inspectorate office. The office reviews the terms and accredits the rupture (if the legal requirements are met and they judge the terms are fair). Upon receiving this accreditation, the process is complete and the employment relationship is brought to an end in line with the agreed terms.

Netherlands

In the Netherlands, employers need approval from the authorities in order to terminate an employee. The administrative body will assess the requirements for the dismissal to authorise or reject the termination. A negotiated agreement with the employee is possible provided the parties negotiate the terms and conditions in a written settlement agreement.  The settlement agreement should clearly state all elements of remuneration that will be paid to the worker. The employee has a two-week period to reconsider their consent or approval to the settlement agreement.

Using a Global Employer of Record (EOR) provider for international terminations

When it comes to terminating workers in certain countries, many companies can struggle with how to effectively end an employment relationship. Termination procedures may be complex and involve a number of steps. By using a global professional employer of record, like Capital GES, you do not have the burden of understanding the local labour laws and regulations of each country. Our EOR service ensures compliance from the on boarding of a worker right through to minimising the complexities associated with international terminations.

Capital GES offers an in–country employment solution, that guarantees a compliant and swift solution to employ workers in a location where you do not have an entity. Our team of in-country specialists are on-hand to provide the round-the-clock support whenever you need them.

For more information on terminations or how to employ someone in Europe or South Africa, contact us at: sales@capital-ges.com or via phone: +41 32 732 97 00.

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