SLOVENIA Law and Practice Contributed by: Jernej Jeraj and Katja Triller Vrtovec, PFP Law
If the employee terminates the contract extraordinar - ily due to reasons attributable to the employer, the employee is entitled to a severance payment in the same amount as if the employee were terminated for business reasons. The employee is also entitled to compensation for the lost income during the notice period, as they would be in the event of termination for business reasons. The severance pay is calculated based on the aver - age monthly salary the employee received or would have received during the last three months prior to termination. The employee is entitled to severance pay calculated as follows: • one-fifth of the above-mentioned basis for each year of completed employment if employed for more than one year and up to ten years with the respective employer; • one quarter of the basis for each year of employ - ment if employed for ten to 20 years; and • one-third of the basis for each year of employment if employed for more than 20 years. The statutory severance payment is capped at ten times the amount of the above-mentioned basis for the severance payment, unless a higher cap is deter - mined in the collective bargaining agreement, employ - er’s regulations or the employment agreement. The statutory amount of the severance payment is not subject to income tax and social contributions, up to the amount of ten times the average gross month - ly salary in Slovenia. Any amounts exceeding this threshold or severance payments that go beyond the statutory rights are subject to income tax and social contributions. 7.3 Dismissal for (Serious) Cause See 7.1 Grounds for Termination and 7.2 Notice Peri- ods . Upon initiation of the extraordinary termination pro - cess, the employer may prevent the employee from performing work (suspension). During the suspension period, the employee is entitled to compensation of 50% of the employee’s average salary for the previous three months.
An employee terminated due to said employee’s fault is not entitled to severance pay, and their employ - ment relationship ends the day after the termination notice is served, without any notice period. In the case of extraordinary termination due to an employee’s continuous absence from work, lasting at least five working days, and if the employee has not notified the employer of the reasons for their absence, the employment relationship is terminated on the first day of such absence. 7.4 Termination Agreements Each employment contract can be terminated by mutual agreement. Such an agreement must be in writing and must contain provisions informing the employee that they will not be able to exercise any social rights from unemployment, as the employee will become unemployed willingly. While failure to provide this notice does not invalidate the termination agree - ment itself, the employer may face fines for this omis - sion. The parties can agree on a voluntary severance pay - ment and the conditions under which it will be paid, but such a severance payment is subject to the same income tax and social contributions as the employee’s regular salary. In practice, mutual termination agreements are pre - ferred by employers as they reduce the risk of the ter - mination of the employment being challenged in court. Such termination agreements are challenged (within one year from signing) only if either party signed it based on a misunderstanding, fraud or coercion, or in similar circumstances that would make the agreement challengeable under the general provisions of civil law. Employees usually consent to such mutual termina - tion agreements if the termination package is more favourable than what they are entitled to under statu- tory provisions or in cases where they would other - wise face a termination for fault reasons. 7.5 Protected Categories of Employee ZDR-1 regulates several categories of employees who enjoy protection against individual (but not all) termination grounds, based on their personal circum - stances. The existence of such special circumstances
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