Termination Of Unlimited Duration Employment Contracts

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...

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