The most common problems currently facing employers in Albania relate to termination of individual employment contracts entered into for an unlimited duration. Although the country's Labor Code (law no. 7961, 12 July 1995) sets out clear provisions regarding the procedures, timing and grounds for termination of such contracts, it is essential for employers to strictly follow provisions regarding the relevant procedure and subsequent notification periods.
For additional guidance, employers can look to the judgment of the Albanian Supreme Court in Kloboshtica vs. Italian Institute of Foreign Trade (decision no.19, nr reg. 12/5, 15 November 2007). The court ruled that compliance with the procedure and notification period entitles the employer to terminate the employment contract for unlimited duration without adducing any grounds to its decision. An exception however, is cases where the termination is based on abusive grounds such as nationality, social conditions, religious belief, race, color, age, familiar obligations, political views, pregnancy, civil status, social status or sex of the employee (the 'negative list' cited in the Labor Code). Termination by the employer based on the exercise by the employee of a constitutional right that does not violate any obligations deriving from the employment contract or on grounds relating to an employee's membership, or non-membership of a trade union established in accordance with the law, or due to participation in a union activity in accordance with the law, will also be held invalid and may lead the court to award the employee damage relief of up to one year's salary.
Any employer intending to terminate a contract for unlimited duration should ensure they provide written notice, to be delivered to the employee at least 72 hours before the explanatory meeting is due to take place. They must also provide written notice on termination, delivered to the employee not before 48 hours has elapsed following the meeting, and up to one week after the meeting. The termination shall be effective with the elapse of the notice period (which based on duration of employment may vary from one to three months).
Non compliance with the procedure and notification period term opens the employer up to payment of two months salary (in case of non compliance with the procedure); payment of a month's salary to the employee for the notice period; and eventual payment of the accrued leave and seniority bonus.
To avoid eventual legal consequences, employers should: set out clear provisions regarding the termination procedure and term of notification for termination in the employment contract; avoid the application of grounds for terminations that would fall under the 'negative list' and that might be considered as abusive; respect the obligatory procedure of termination and notification terms provided by the Labor Code; and maintain copies of the notification in writing delivered to the employee, as well as copies of the confirmation and evidence that the employee received the notification, plus minutes of the meeting, which must be signed by both parties.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
