Cancellation of an employment contract

Cancellation is an extremely exceptional way to end an employment contract. The cancellation of an employment contract mainly comes into play only when the case involves an exceptionally serious breach of contract by one contracting party. The cancellation of an employment contract requires a particularly weighty reason. If an employment contract is cancelled, it ends without a period of notice. The employment relationship nevertheless continues until the end of the shift or day in question.

The particularly weighty reasons that entitle an employer to cancel an employee’s employment contract include such a serious breach or neglect of the employee’s duties with material effect on the employment relationship and based on the employment contract or the law that the employer cannot reasonably be expected to continue the contractual relationship even for the duration of a period of notice. Correspondingly, an employee has the right to cancel an employment contract with immediate effect if the employer breaches or neglects its duties with material effect on the employment relationship and based on the employment contract or the law to such a serious extent that the employee cannot reasonably be expected to continue the contractual relationship even for the duration of a period of notice.

In terms of time, a cancellation right is fairly limited. A cancellation right expires if the employment contract has not been cancelled within 14 days of when a party to the employment contract became aware of the fulfillment of the grounds for cancellation.

An employer has the right to consider an employment contract cancelled if the employee is absent from the workplace for at least seven days without notifying the employer of a valid reason for his or her absence during this time. In such cases, the employment contract is considered cancelled as of the start of the absence. If the employer has not been notified of the absence due to an acceptable reason such as the employee being hospitalized, the cancellation of the employment contract is rescinded. The employee is entitled to an equivalent right if the employer is similarly absent for a week and has no substitute at the workplace.

The employer may cancel an employment contract in, for example, the following cases:

  • the employee has materially misled the employer when entering into the employment contract,
  • the employee’s negligence risks health and safety at the workplace, or the employee is present while intoxicated or uses intoxicating substances on the premises contrary to workplace regulations,
  • the employee grossly slanders the character of the employer or the employer’s family member, substitute or a co-worker or is violent towards them,
  • the employee exploits to his or her own advantage or discloses to a third party the employer’s business or trade secrets in an aggravated manner or enters into a competing employment contract,
  • the employee is unable to work for a continuous reason, or
  • the employee wilfully or negligently fails to carry out his or her duties and continues to do so despite a warning.

The employee may cancel an employment contract in, for example, the following cases:

  • the employer has materially misled the employee when entering into the employment contract,
  • the employee’s reputation or morality is endangered due to the employment relationship,
  • the employer or the employer’s substitute grossly slanders the character of the employee or the employee’s family member or is violent towards them,
  • the employer or the employer’s substitute risks health and safety at the workplace with their negligence,
  • the employee is not given enough work, or
  • the salary is not paid according to agreement.

The lists above serve as mere examples and are applicable only when the circumstances do not give reasons for other considerations. When assessing the grounds for cancellation, one must always remember to review each case separately, taking into account the big picture.