The Czech Republic ranks among the three countries in Europe with the highest costs when it comes to dismissing employees with short-term practice for organisational reasons. Higher costs in this category were recorded only in Lithuania and Belgium. On the other hand, dismissing employees with long-term practice in the Czech Republic is significantly cheaper compared to the European average. These are the results of a recent study by Deloitte Legal, entitled International Dismissal Survey 2015, which focused on conditions for dismissing employees in 31 European countries.
The study also indicates that dismissal costs in Western Europe are generally higher than in Central Europe. Some countries have recently changed their laws governing the issue of dismissals (e.g. Belgium, the Netherlands and Italy). The study takes into account the average costs to employers of employee dismissals in the event of a final settlement with the dismissed employee.
Main conclusions of the study
- Italy, Sweden and Luxembourg figure among the five most costly countries, irrespective of whether the reason for dismissal is organisational or the responsibility of the employee. Belgium and Greece follow for organisational reasons and Ireland and France for other reasons.
- Legally, the reasons for which employers can dismiss their employees are limited and subject to strict rules in most countries, except for Belgium. However, the possibility in Belgium of dismissing an employee without providing a reason is compensated for by a fairly generous period of notice, which in some cases may even exceed one year.
- In most countries, there is little or no difference between the costs of dismissing an employee for objective individual reasons and for organisational reasons. Only in a few countries, such as Bulgaria, Czech Republic, Estonia, Germany, Ireland, Poland and Russia, is the situation different.
- In almost all the countries that participated in the survey, seniority (i.e. the length of tenure at the company) is the most important factor in determining the costs of dismissal.
- In most countries, employees may obtain continued employment if they were dismissed unlawfully. In some other countries (e.g. Belgium, Finland, Switzerland, United Kingdom, Denmark and Luxembourg), they are entitled only to cash compensation. In more than 50% of all the countries participating in the survey, however, there are limits to compensation in the event of unlawful dismissal.
- With the exception of Italy, Sweden and Spain, statutory representatives of firms are not protected against dismissal. This also applies to Czech managing directors or board members. They are entitled to neither a period of notice nor severance pay if this was not included in the contract covering the performance of their function.
The full study is available for download here.
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