Reinstatement Claims — Conditions, Procedure and Outcomes

What are the conditions, the procedure and the outcomes of a reinstatement claim? A detailed guide to job security compensation, pay for the idle period and mediation.

What Is a Reinstatement Claim and Where Is It Regulated?

A reinstatement claim is the action brought by an employee within the scope of job security, where they have been dismissed without a valid reason, seeking a declaration that the termination is invalid and an order for their reinstatement. It is regulated in articles 18 to 21 of Labour Law no. 4857 and is the most important legal instrument of the job security system.

Reinstatement claims underwent significant changes with Labour Courts Law no. 7036, which entered into force in 2017. That law made a compulsory application for mediation a precondition for a reinstatement claim. If no settlement is reached in the mediation process, the right to bring proceedings arises.

The purpose of a reinstatement claim is to limit the employer's arbitrary power of dismissal and to protect the employee's job security. The legislature has provided that the employment contracts of employees meeting certain conditions may be terminated only on a valid reason.

What Conditions Must Be Met to Bring a Reinstatement Claim?

Under Labour Law art. 18 the contract must be of indefinite duration, the employer must have thirty or more employees at its workplaces in the same branch of activity, and the employee must have at least six months' service. The six-month service requirement does not apply to employees working underground. In calculating the thirty employees, the employer's workplaces in the same branch of activity are taken together.

Employer's representatives who manage the whole undertaking and their assistants, together with employer's representatives who manage the whole workplace and have the power to hire and dismiss employees, fall outside the scope of job security. Job title alone is not sufficient; the actual powers are investigated.

The employer must give notice of termination in writing and state the reason clearly and precisely. In a termination relating to the employee's conduct or performance, the employee's defence must be taken, save in the cases in Labour Law art. 25/II. The taking of a defence does not of itself make the reason valid.

An employee working under a fixed-term employment contract cannot as a rule benefit from the job security provisions. However, if the contract was made for a fixed term without any substantive reason, its true legal character may be treated as indefinite and, if the other conditions are met, job security may come into play.

In calculating the thirty employees, the employer's workplaces in the same branch of activity are taken together; part-time and fixed-term staff may also count as employees. Sub-contractor employees are as a rule counted for their own employer; where there is an allegation of collusion or of an arrangement designed to defeat job security, the true employment relationship is investigated separately.

What Is a Valid Reason and Which Situations Count as One?

A valid reason is a situation that is not serious enough to justify termination for just cause but that adversely affects the normal running of the work or the workplace and makes it difficult to continue the employment relationship. Under Labour Law art. 18, valid reasons may arise from the employee's capability, their conduct, or the requirements of the undertaking.

Valid reasons arising from the employee's capability include poor performance, failure to adapt to the work, frequent illness, and inadequate professional knowledge and skills. However, the employer must document poor performance by objective criteria and give the employee a reasonable period to improve.

Valid reasons arising from the employee's conduct include lateness, failure to observe workplace rules, inability to get on with colleagues, and conduct undermining the employer's trust. Such conduct must not be serious enough for just-cause termination but must adversely affect the employment relationship.

Valid reasons arising from the requirements of the undertaking, the workplace or the work cover situations such as economic difficulties, technological change, structural reorganisation and the abolition of a post. In terminations based on these reasons the employer must prove that dismissal was the last resort.

The principle that dismissal is the last resort requires the employer, particularly where it relies on operational reasons, to consider reasonable and workable lesser measures in the circumstances of the case. If there is a suitable vacancy, the possibility of redeployment with training, or a proportionate change in working arrangements, the court examines why these were not sufficient; the employer is not expected to create an option that is operationally impossible.

How Does the Mediation Process Work in a Reinstatement Claim?

The employee must apply to a mediator seeking reinstatement within one month of service of the notice of termination. If no settlement is reached, proceedings must be brought in the labour court within two weeks of the date of the final record. Both periods are forfeiture periods.

If the parties agree on reinstatement, the record must state the date of return to work, the pay for the idle period and the monetary amount of the other entitlements, together with the monetary amount of the compensation payable if the employee is not taken back. If these are not stated, no settlement is deemed to have been reached. If the employee does not start on the agreed date, the termination becomes valid.

The one-month period for applying to a mediator runs from service of the notice of termination, and the two-week period for bringing proceedings from the drawing up of the final record. An application made to the office at the wrong courthouse, or a defect in the information about the parties, is assessed within the special rules of Law no. 7036. The final record and the notice of termination should be attached to the statement of claim; the date of termination and the date of service must not be confused.

How Does a Reinstatement Claim Proceed?

The claim is brought in the labour court and is heard expeditiously. The former target periods in the statute of two months at first instance and one month on appeal have been repealed; the current text guarantees no particular completion date. The decision of the regional court of appeal is final and cannot be taken to cassation.

The employer proves the existence of a valid reason. If the employee alleges that the termination was based on a reason other than the one stated, they must prove that allegation. In an operational dismissal, whether the decision was genuinely and consistently implemented, the availability of suitable vacancies and whether dismissal was the last resort are reviewed according to the particular file.

The employer proves the valid reason; if the employee alleges that the termination was based on a reason other than the one notified, they must prove it. In the case of an operational decision, the review focuses less on the merits of the business choice than on whether the decision was genuinely and consistently implemented, on the link between the surplus workforce and the dismissal, and on whether lesser measures were available. In a performance dismissal it is important that the criteria were determined in advance and were attainable and objective.

What Are the Consequences of a Reinstatement Decision?

If the termination is found to be invalid, the employee must apply to the employer to return to work within ten working days of service of the final decision on them. If they do not apply in time, the termination is deemed valid. The employer must take back an employee who applies in time within one month.

If the employee is not taken back, compensation for failure to reinstate, in an amount of four to eight months' wages as determined by the court, together with pay for the idle period of up to four months until the decision becomes final and the other entitlements, come into play. The court determines these amounts in money on the basis laid down in the statute. Whether the employee's application was genuine, and whether they started work despite a proper invitation to return, are examined concretely.

The return or set-off of payment in lieu of notice and severance pay previously made depends on whether the employee is taken back and on the heads of claim involved. The idle period of up to four months may be added to service in calculating certain length-of-service and employment entitlements.

How Is Job Security Compensation Determined?

Where the employer, upon a final reinstatement decision, does not take back within one month an employee who applied in time, it pays compensation for failure to reinstate in an amount of four to eight months' wages as determined by the court. The statute contains no automatic scale of four, five, six or eight months by length of service; the court fixes the amount within the statutory range in the light of the reason for termination and the particular circumstances.

Compensation for failure to reinstate is based on the gross basic wage, while pay for the idle period of up to four months until the decision becomes final is based on wages and other entitlements. The court determines these two heads in money on the wage basis at the date of the claim; in enforcement and payment, the operative part of the judgment and the current deduction regime are taken into account.

Whether severance pay and payment in lieu of notice have arisen, whether payment has previously been made, and whether the employee has been taken back are assessed separately. Return or set-off may arise for amounts previously paid; it should not be said that all heads are in every case paid together and without set-off.

What Are the Most Common Mistakes in Reinstatement Claims?

The most common mistakes in reinstatement claims are missing the time limits, failing to apply for mediation, not reading the notice of termination carefully, and not following the application procedure. Each of these can lead to the loss of the right to bring a claim.

Failing to apply for mediation within 1 month of service of the notice of termination is one of the most frequent mistakes. This is a forfeiture period and is taken into account by the court of its own motion. An employee who misses it definitively loses the right to bring proceedings.

Failing to bring proceedings within 2 weeks of the drawing up of the final mediation record is another frequent mistake. Employees sometimes hesitate about bringing proceedings after the mediation process; but this period is also a forfeiture period. Failing to apply to the employer within 10 working days of the reinstatement decision becoming final is likewise a critical mistake. Within that period the employee must notify the employer, through a notary or by registered post with acknowledgment of receipt, that they wish to return to work.

Making the application orally can also cause difficulties of proof. It is very important that the application be made in writing and in a way that can be proved.

This content is for general information and does not constitute legal advice. For specific legal problems you are strongly advised to obtain professional support from a lawyer.

Official sources: Labour Law no. 4857, Labour Courts Law no. 7036, Law no. 6325 on Mediation in Civil Disputes