June 06, 2024

How to properly terminate an employment contract: tips for employers and workers


An employment contract can be terminated in several ways, including by the expiry of the period for which it was concluded, by agreement between the employee and the employer, by a decision of the competent court or by dismissal. According to the Croatian Labor Act, dismissal can be regular or extraordinary, and can be given by the employer or employee. Below we will explain in detail the different types of cancellations, their conditions and consequences.

Business-related dismissal

Definition and types: Business-related dismissal is a type of regular dismissal given by an employer to an employee for economic, technical, or organizational reasons. This may include a reduction in workload, the introduction of new technologies, restructuring, or other changes that affect the need for certain jobs.


  1. Notice to the employee: The employer is obliged to notify the employee of the business-related dismissal in writing.
  2. Severance pay: An employee is entitled to severance pay, depending on the length of service with the employer, unless otherwise agreed in a collective agreement.
  3. Consultation: If an employer is planning collective redundancies, it must consult with the works council and trade unions.

Dismissal conditioned by the employee’s misconduct

Definition: This dismissal is given by the employer due to the employee’s misconduct, i.e. due to violation of work obligations.

Rules and consequences:

  1. Written warning: Before terminating the contract, the employer must issue a written warning to the employee about the breach of work obligation and give him the opportunity to make amends.
  2. Evidence: The employer must have evidence of the employee’s misconduct.
  3. No severance pay: In the event of dismissal due to misconduct, the employee is not entitled to severance pay.
  4. Remedy: An employee has the right to file a lawsuit against the employer if he believes that the dismissal is unfounded.

Extraordinary dismissal

Definition: Extraordinary dismissal is a dismissal that may be given without a notice period due to an extremely serious breach of work obligation or other particularly important reasons that prevent the continuation of the employment relationship.


  1. Serious Injury: Serious injuries include theft, workplace violence, abuse of office, and similar serious offenses.
  2. No Prior Warning: No prior warning is required for extraordinary cancellation.
  3. Evidence: The employer must have clear evidence of serious misconduct.
  4. Remedy: An employee has the right to judicial protection if he or she believes that the dismissal was unjustified.

Regular dismissal of the worker.

Definition: Regular dismissal is a dismissal given by an employee to an employer for personal reasons.


  1. Notice period: The notice period is a maximum of one month, but it can be shorter, depending on the duration of the employment relationship.
  2. Written form: The employee must resign in writing and deliver it to the employer.
  3. Obligations during the notice period: The employee is obliged to continue working during the notice period, unless the employer and the employee agree otherwise.


Termination of an employment contract is a serious legal action with legal consequences and requires careful adherence to legal provisions. Employers and workers must be aware of their rights and obligations in order to ensure the legality and fairness of the dismissal process. It is always advisable to consult with an employment lawyer before taking any steps regarding the termination of the employment contract.

This article is for informational purposes only and does not constitute legal advice. For specific legal advice in the field of labour law, please contact us at:


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