For the first time since the introduction of Article 59 of the Labour Code, the Supreme Court is dealing with this type of dismissal.
Termination of an employment contract at the employer’s initiative under Article 59 of the Labour Code (DK) – one of the grounds for dismissal of an employee provided for by the DK ‒ was introduced in 2017 when a new DK entered into force.
So far, cases involving workers made redundant on this basis have only been heard in the lower courts. Now, for the first time, the Supreme Court, Lithuania’s highest instance, has dealt with the conditions for this type of employment contract termination at the initiative of the employer.
In principle, Article 59 DK enables employers to terminate an employment contract more flexibly: short notice (three working days) and relatively high severance pay (6 average monthly salaries); at the same time the reasons may be different from those for ordinary termination, as long as not discriminatory.
The Supreme Court confirmed that the employer’s notice must state the reason for termination of the employment contract. This may be related to the employee’s personality, conduct at work, qualifications, employer’s reputation, and so on. Although at the employer’s discretion, the reason must be real. In the event of a dispute about the legality of the dismissal, the burden of proof as to the existence of the reason lies with the employer. For example, if an employment contract is terminated due to the employee’s unlawfulness or inappropriate behaviour, the employer must prove the employee’s previous behaviour by means of the standard bonus pater familias.
Judgment of the Lithuanian Supreme Court of 25 June 2020 in civil case No e3K-3-199-701/2020