Can You Be Laid Off with a Permanent Contract?

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Understanding Job Security: The Reality of Permanent Contracts

Many people mistakenly believe that a permanent contract guarantees job security for employees.
However, it’s crucial to recognize that termination is still a possibility even for those with permanent contracts.
In fact, there are instances where it can be even easier to dismiss an employee on a permanent contract compared to one on a fixed-term contract.

Various situations can lead to the dismissal of an employee with a permanent contract.
In contrast, workers on fixed-term contracts usually can only be terminated for just cause.
The perception of “fixed employment” is merely due to the absence of a natural expiration date on the contract, allowing the employment relationship to continue until retirement, assuming no grounds for dismissal arise.
This is why a permanent contract is essential for significant financial undertakings, such as applying for a mortgage, although it does not guarantee job retention under all circumstances.

When Can You Be Dismissed from a Permanent Contract?

A permanent contract, by its definition, does not include a specified end date, but it allows for unilateral termination by either party.
While employees can resign without stating a reason, they must adhere to a notice period, unlike employers who can only terminate employment under specific legal grounds.

Three main categories outline the reasons for dismissal: just cause, justified subjective reasons, and justified objective reasons.
Each category encompasses various types of dismissals, from disciplinary to economic, as well as situations like temporary inability to work.

It’s also vital to note that dismissals based on discriminatory factors, such as religion or sexual orientation, are illegal.
Employees have the right to challenge discriminatory dismissals, often receiving compensation in addition to reinstatement.

Examples of Dismissal in Permanent Contracts

Let’s explore the specific scenarios that may warrant dismissal of an employee under a permanent contract, starting with dismissal for just cause.
This scenario allows for immediate termination without a notice period due to severe breaches of trust, such as theft, workplace violence, harassment, or neglecting safety regulations.

Next, we have justified subjective reasons, which might include poor job performance or repeated tardiness.
While these issues do not meet the severity of just cause, they can still lead to termination, provided the employer can demonstrate the basis for the dismissal.

On the other hand, justified objective reasons involve decisions made by the employer that may necessitate job cuts, such as closing or outsourcing departments.
Economic reasons are also valid, especially during challenging financial periods when layoffs become unavoidable.

In some unfortunate situations, objective reasons may include personal circumstances that prevent an employee from fulfilling their job duties, like losing a driver’s license or suffering from a severe illness that impedes returning to work after a leave of absence.

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