Agreements on Non-Competition for Employees (No-Poach Agreements)
What are “No-Poach Agreements”? Why are they considered unfair competition? What penalties can result from entering into such agreements?
The defining feature of a fixed-term employment contract is its term nature. Thus, already in the contract the parties specify the date of both the beginning and end of the employment relationship. After a certain period of time, the contract is self-terminating, without the need for either party to terminate it. As a rule, therefore, the intention of the parties should be to engage the employee for a strictly defined period of time, without the possibility of early termination.
Nonetheless, the Labor Code provisions allow for the termination of an employment contract, including those concluded for a fixed period.
A fixed-term employment contract may be terminated:
1) by mutual agreement of the parties
2) by one of the parties with a notice period
3) by one of the parties without a notice period
Termination of a fixed-term employment contract by mutual agreement
Termination of a fixed-term employment contract by mutual agreement is usually carried out by both parties signing a document (agreement), in which both parties agree to terminate the contract on X date (i.e., earlier than the date until which the contract was to be in force). An important element of the agreement is also the regulation of financial issues – the parties must clearly agree on what amount, if any, is due to the employee. Often, the agreement also includes a statement that its provisions exhaust the claims of the parties (especially the financial ones) related to the early termination of the contract.
In practice, an agreement to terminate a fixed-term employment contract is usually used when the parties, for some reason, no longer want to work together, but at the same time want to part amicably.
Termination of a fixed-term employment contract by mutual agreement may have immediate effect (as of the date of signing the agreement) or provide that the contract will be terminated in some time (but before the date until which it was to be in force).
Termination of a fixed-term employment contract
According to the Labor Code, both the employee and the employer may terminate a fixed-term employment contract. The notice period is, depending on the length of time the employee has worked for the employer:
Termination of an employment contract is a unilateral statement, so there is no obligation to obtain any consent from the other party to the termination. During the notice period, the employee retains all employment rights and is obliged to perform work (unless the employer releases him from this obligation).
It should be borne in mind that in the event that a fixed-term employment contract is terminated by the employer, he is obliged to justify such termination in writing.
Termination of a fixed-term employment contract without notice
This type of termination of a fixed-term employment contract occurs primarily in the case of various types of violations – whether by the employee or the employer.
The employer may terminate the employment contract without notice through the fault of the employee in the event of:
1) grave violation by the employee of the employee’s basic duties;
2) the employee commits a crime during the term of the employment contract that makes it impossible to continue to employ the employee in the position held, if the crime is obvious or has been established by a final judgment;
3) the employee’s culpable loss of the authorizations necessary to perform work in the position held.
The employer may also terminate the contract without the employee’s fault in the cases specified in Article 53 of the Labor Code, i.e. in situations of prolonged absence of the employee from the workplace.
The employee, on the other hand, may terminate the employment contract without notice if a medical certificate is issued stating the harmful effect of the work performed on the employee’s health, and the employer does not transfer the employee within the period specified in the medical certificate to another job, suitable in view of the employee’s state of health and professional qualifications
An employee may also terminate the employment contract without notice if the employer has committed a grave breach of fundamental duties towards the employee;
Employee’s claims in the case of termination of a fixed-term employment contract
When an employer has terminated a fixed-term employment contract with an employee unlawfully (e.g., by failing to indicate the reason for termination or by terminating the contract with discipline despite the lack of grounds for doing so), the Labor Code equips the employee with two separate claims: compensation or reinstatement to work on the previous terms and conditions.
Significantly, compensation is payable in the amount of the salary for the time until which the contract was to last, but no more than the notice period. On the other hand, an employee who has resumed work as a result of reinstatement is entitled to remuneration for the period of unemployment, but not more than 3 months and not less than 1 month.
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