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Do executive directors and board of directors have to decide on redundancy?

  • Slovakia
  • Employment law

20-12-2021

The most common reason for dismissal is redundancy. If the employer wants to fire an employee for redundancy, it must first make a so-called decision on organisational change. It will revoke a certain job position, or even multiple positions. Subsequently, the company will terminate the employee due to organisational changes.

In practice, these decisions on organisational changes are made by HR managers or other authorised management employees. They will then sign the notice of termination and ensure its delivery to the employees.

However, this practice was challenged by the courts, including the Supreme Court of the Slovak Republic, which considered it incorrect. In their opinion, the decision to revoke the job position should be made within the company's business management. This is provided by the executive directors of a limited liability company, i.e. their majority, or the board of directors of a joint-stock company. Other people do not have the authority to make decisions about organisational changes.

This issue eventually came before the Constitutional Court, which confirmed in two recent decisions that a majority of executive directors or the board of directors do not have to decide on the revocation of a job position. The decision on organisational change is therefore not a decision that would require the consent of the business management (e.g. a majority of executive directors or the board of directors).

If the employer wants to revoke the employee's job position due to redundancy, the decision on the organisational change can be made by the responsible manager and the consent of the business management is not required.