Terminating employment by mutual agreement: the risks in Russia and beyond
Two recent successful challenges to dismissals by mutual agreement in Russia mean employers may need to exercise caution in how they use this popular method of terminating employment. The rules vary in other jurisdictions.
Introduction
Mutual consent has always been a popular ground for employee termination, as an option with minimum risks for both parties. Previously, according to judicial practice, it was extremely rare to succeed in challenging dismissals by mutual agreement. In most cases, only pregnant employees managed to do so. However, new court practice shows there are more exceptions. In this article, we will consider two recent court rulings that took a different approach, potentially leading to the creation of a negative precedent for employers.
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Greek labour legislation does not explicitly regulate the situation of employment contract termination by mutual agreement. However, since freedom of transactions applies in every private law contract, the parties can agree on the mutual termination of an employment contract. In this context, it has been judged by the Supreme Court of Greece that mutual agreement by the parties to employment contract termination is lawful and the consequences of the termination of the employment contract by the employer (eg severance pay, etc.) do not arise. Nevertheless, whether the mutual termination of the contract is ‘abusive’ or not depends on the court’s assessment, which will be issued based on the facts and the evidence in the case.
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