Can a fixed-term employment contract be terminated early?
Actually, a fixed-term contract has a fixed start and end date. However, there are exceptions. What are they? And how about ordinary and extraordinary termination?
Usually, with a fixed-term employment contract, you know exactly when you will be active in a company. Although time-limited contracts can be extended if both parties agree, can they also be terminated prematurely? For example, if the position is not what the employee expected, or if the employer is not satisfied with the employee's performance?
In principle, the ordinary termination of a fixed-term employment contract is not possible, says employment law specialist Kathrin Schulze Zumkley. At least not if nothing is regulated in the contract or applicable collective agreement. This follows from the Part-Time and Fixed-Term Employment Act.
"However, most fixed-term employment contracts contain provisions that allow for ordinary termination even during the term," says Schulze Zumkley. Employees should carefully examine these provisions on notice periods before signing the contract to avoid legal disputes with the employer.
What about extraordinary termination?
The right to extraordinary termination for important reasons cannot be excluded by contractual clauses and is always possible - regardless of whether the contract is fixed-term or not. According to Schulze Zumkley, this even applies if the parties have explicitly agreed that extraordinary termination is excluded: The right to extraordinary termination cannot be fundamentally abolished.
However, an important reason is always required for extraordinary termination. This is the case, for example, if an employee steals, insults, or falsifies working hours. Also, violations of duty in connection with expense accounts or feigned incapacity for work often lead to extraordinary terminations, says Schulze Zumkley. If such a violation occurs, an important reason may be given in itself. However, whether this also entitles the employer to terminate the employment relationship under the specific circumstances must always be examined on a case-by-case basis.
In certain circumstances, an employer might seek advice from legal experts before considering extraordinary termination. Advising on the specific circumstances and whether the violation constitutes an important reason for termination can help prevent potential legal disputes.
If an employee is not meeting the performance expectations, it might be advisable to first discuss the situation with them, providing advising and guidance to improve their performance, before considering extraordinary termination.
