We continue our series of articles that explore the responsibilities an employer has when employing staff in Slovakia.  This time we focus on the steps an employer has to follow when they end a relationship with an employee.

Termination of an employment relationship

According to the Labour Code, an employment relationship can be terminated in one of the following ways:

• On the basis of an agreement,
• On the basis of a notice from an employer or an employee,
• On the basis of an immediate termination,
• On the basis of termination during the trial period.

The employment relationship agreed upon a definite time period terminates after expiration of this period.

In case of termination of the employment relationship, we recommend the employer to act according to the Labour Code provisions in order to eliminate the risk that the employee will apply his/her right of nullity of the employment relationship at the court. The employee, as well as the employer, can exercise this right at the court within 2 month from a date of potential termination of the employment relationship. If the court decides on the invalidity of the termination of the employment relationship by the employer, it will instruct the employer to provide the employee with wage compensation, thereby increasing the employer's costs. Wage compensation can be awarded for a maximum of 36 months.

The employer should settle all claims with the employee on the day of the termination of the employment at the latest (e.g. take over the entrusted items and work aids).

At the end of the employment relationship, the employer shall pay the employee the salary due for the monthly period on the day of termination of employment, unless otherwise agreed, but no later than the earliest payment period following the termination of the employment relationship.

The employer shall issue a Proof of Employment for the employee on the day of employment termination.

The employer, who is a payer of an employment tax, is obliged to issue a natural person taxable income statement for a period, during which he has paid the taxable income to the employee, and he shall send it to the employee by:

a) March 10 of the tax period, in which the employee submits his/her declaration of taxes, or

b) February 10 after expiration of the tax period, in which or for which the employer has paid an income from dependent activity to the employee, who asks another employer to do the annual settlement, if he/she asks for the issuance of the document no later than February 5 after the end of the tax period.

If the employer was the last employer of the employee in the given calendar year, the employee fulfils the stipulated conditions and asks the employer to elaborate the annual tax settlement on the prescribed application including all annexes within the set deadline; the employer is obliged to make the calculation of the annual tax settlement for the employee.

Social insurance

The employer must deregister the employee from the Social Insurance Agency no later than 8 days after termination of the employment. After accounting the last salary, the employer is obliged to send the Retirement insurance personal file to Social Insurance Agency. With the termination of the employment of the last employee, the employer must deregister the company from the Social Insurance Agency as an employer. If he does not do so, the Social Insurance Agency will continue to expect submission of monthly statements and premium payments and thus the company will have to spend time communicating with the employees of the Social Insurance Agency and taking the necessary steps to deregister the employer.

Health insurance

The employer must deregister the employee from the health insurance company no later than 8 days after termination of the employment. With the termination of the employment of the last employee, the employer must deregister the company from the health insurance company as an employer. If he does not do so, the health insurance company will continue to expect submission of monthly statements and premium payments, and thus the company will have to spend time communicating with the employees of the health insurance company and taking the necessary steps to deregister the employer.

Tax bureau

Immediately after termination of the employment of the last employee, the employer shall deregister itself from the tax bureau as a payer of the employment tax within 30 days. If an electronic form of communication has been created for communication with the tax office, it shall retain it. Until April 30 of the following year, the employer has to elaborate and submit the employment tax annual report to the tax bureau.

Employment Agency

If the employer has terminated his employment relationship with an employee who is a citizen of another EU member state, the employer has delivered an Information card to the competent employment agency at the establishment of the employment relationship. After ending of the employment relationship, the employer must then report this to the competent employment agency.

Our Payroll and HR specialised have guided many clients in this process and are available to provide you with the right advice and standard templates.