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Employers are often surprised by the fact that an employee who, for example, has stolen an employer’s property or committed another offense, cannot be dismissed if the employer misses the notice deadline by only one day. For the employer not to experience such a scenario, in this article we explain how to observe the deadline for termination of employment contract (i.e., issuance of notice) specified in Section 101, Paragraph three (3) of the Labour Law.

Section 101, Paragraph three (3) of the Labour Law stipulates that in certain cases the employer may terminate the employment contract no later than within one (1) month from the date of discovery of the violation (excluding the employee’s temporary incapacity for work, leave or other justified absence), but no later than within twelve (12) months from the date of the infringement.

This applies to cases of dismissal where the employee has committed a violation, namely:

• has significantly violated the employment contract or the specified working procedures without a justifiable reason;
• when performing work, has acted illegally and therefore has lost the trust of the employer;
• when performing work, has acted contrary to moral principles and such action is incompatible with the continuation of employment;
• when performing work, is under the influence of alcohol, narcotic or toxic substances; and
• has grossly violated labour protection regulations and has jeopardised the safety and health of other persons.

In these cases, the employer must manage to terminate the employment contract within one (1) month from the date of discovery of the violation and make sure that no more than twelve (12) months have passed from the date of the breach. If the deadline is missed, the employer loses the right to dismiss the employee, and this deadline cannot be renewed. In order not to miss the deadline, the employer has to understand: (1) what the date of discovering the violation means; (2) how to calculate the end of the one-month deadline; and (3) how to meet the deadline if the employee to be dismissed is a trade union member.

Determination of the date of discovery of the violation

The date of discovery of the violation has to be determined in each case, taking into account the circumstances of the violation. Namely, if an employee performs work under the influence of alcohol, then it will be relatively easy to determine the date of discovery of the violation – it will be the day of drafting a conclusion (deed) or of obtaining the results of the medical examination. However, if an employee has committed a more serious violation (for example, forged an employer’s document or misappropriated the employer’s property),  the discovery of the violation may take a long time, and it will not be so easy to determine the date of discovery.

In the judgment of 18 June 2020, in case no. SKC-493/2020, the Department of Civil Cases of the Senate of the Republic of Latvia (hereinafter “the Senate”) made several useful conclusions regarding the day of discovery of a violation, which apply to more complex violations. The employer established a shortage of property in the warehouse and the Senate acknowledged that establishing the fact of the shortage does not in itself mean that it has been discovered which persons and what violation caused the shortage. Therefore, the day when the violation was discovered can be considered the moment when not only the fact of the violation was discovered, but the guilty employee was identified. The Senate recognised that in some cases, an employer may need to conduct an internal investigation to properly qualify, investigate, and evaluate a violation, for instance, when the discovery of a violation requires extensive information processing or fact-checking. In such cases, the violation will be deemed to have been discovered on the day on which the internal investigation report is drawn up.

The employer may use these findings in the case of more complex violations, but it must be borne in mind that there must be no undue delay in investigating a violation and making a conclusion; and some cases, there will be no need for any internal investigation. In the event of a dispute, the date on which the violation is discovered will be determined by the court, taking into account all the relevant circumstances of the case, and the court may find the employer’s delay unreasonable. Regardless of the complexity of the violation, the employer needs to record the course of discovery of the violation in writing, for example, by drawing up a deed that will later allow the employer to prove the exact date of discovery of the violation in court.

Calculation of the deadline

The deadlines specified in the Labour Law are calculated differently than usual, therefore, errors are made in practice when determining the first and last day of the deadline. Section 16, Paragraph one (1) of the Labour Law provides that a term shall run from the date or from the day of the occurrence of an event, which determines the beginning of the term. Thus, the term specified in Section 101, Paragraph three (3) of the Labour Law begins to run on the day of discovery of the violation.

In its turn, the Section 16, Paragraph three (3) of the Labour Law provides that the term, which is to be counted in months, expires on the relevant date of the last month of the term. In the judgment of 22 June 2011, in case no. SKC-849/2011, the Senate has defined what is meant by “relevant date” – if, for example, the one-month term starts on 8 December, then the last day of the term is 7 January and not 8 January.

In addition, in accordance with the second sentence of Section 16, Paragraph three (3) of the Labour Law, if a term counted in months expires in a month which does not have a relevant date, the term expires earlier – on the last day of that month. This means that if the employer discovers the violation on 31 January, the last day of the term is 28 or 29 February, depending on the year. There are also several circumstances that may extend the notice period (such as an employee’s incapacity for work or if the last day of the term falls on a public holiday), but it is not advisable for the employer to focus on these circumstances and nonetheless notify the employee as soon as possible.

When calculating the deadline, it must be taken into account that termination of the employment contract is a complicated process. Before issuing a notice, the employer must manage to request written explanations from the employee and assess the seriousness of the violation, the circumstances in which it was committed, as well as the employee’s personal characteristics and previous work. That assessment, together with the precise circumstances on which the notice is based, must be included in the notice and must be accompanied by all the relevant documents, since the employer will not be able to rely in court on circumstances not specified in the notice or its annexes.

Peculiarities of the deadline in relation to an employee – a member of a trade union

If an employee to be dismissed has been a member of a trade union for more than six (6) months, the employer must act particularly quickly. Pursuant to Section 110, Paragraph one (1) of the Labour Law, the employer is in most cases prohibited from dismissing such an employee without a prior consent of the trade union. This also applies to all cases of dismissal due to the employee’s violations, except if the employee has been under the influence of alcohol, narcotic or toxic substances.

In accordance with the judgment of the Senate of 14 June 2018, in case no. SKC 462/2018, the employer must manage to receive a response from the trade union within the period of issuing the notice (one (1) month) and, if the trade union agrees to the notice, then the employer must also manage to terminate the employment contract. Pursuant to Section 110, Paragraph two (2) of the Labour Law, the trade union is given seven (7) working days to inform the employer of its decision, and if the trade union does not do so, the trade union is deemed to agree to the dismissal.

In practice, this means that the employer must, in fact, immediately after discovering the violation, receiving explanations from the employee and making a conceptual decision to dismiss the employee, ask the employee in writing about his membership in the trade union and send the trade union a draft notice of termination, requesting a consent to termination and attaching all relevant documents (the employee’s explanations, draft of the notice with the employer’s assessment and other documents confirming grounds for termination). Thus, if the trade union gives consent to terminate the employment contract or does not respond within seven (7) working days, the employer will manage to terminate the employment contract within one (1) month from the date of discovery of the violation. It should be noted that the trade union’s seven (7) working day period starts to run when the trade union has received the employer’s application, not when the employer has sent it.

If the trade union does not agree to the termination of the employment contract, as is almost always the case, only the court will be able to terminate the employment relationship by a judgment. For the claim to be accepted, the employer must submit the claim within one (1) month from the date of receipt of the negative response of the trade union (Section 110, Paragraph four (4) of the Labour Law). However, if the employer does not timely ask the union for a consent, the court will reject the employer’s claim.

This article addresses only a few of the key aspects of the deadline for issuing a notice, which are in themselves complex enough for the employer. These are only general guidelines, and each employee’s violation requires an individual approach, even regarding the calculation of the deadline. In addition, other aspects of dismissal, such as the correct dismissal procedure and the grounds for dismissal, must not be overlooked, so it is always advisable to consult a competent lawyer as soon as the employer suspects an employee of any misconduct.