1. The collective dismissal in the IT sector continues in 2024…

The collective dismissal in the IT sector continues in 2024. Although perhaps at a lower intensity (according to the chart below) than the previous year, termination of employment contracts for business reasons is present. On the world stage, from January 2024 until today (in about 5 months), 302 IT companies laid off about 89,000 workers (source https://layoffs.fyi/).

2. Decrease in the number of job advertisements in the IT sector in our country as well

Another indicator that there is stagnation for new employment in our country is the fact that the number of job advertisements in the IT sector is decreasing.

*Excerpt from the presentation given at the Women in Tech Macedonia conference, by Damjan Dano founder of Aqtos.

3. Grounds for dismissal in Macedonia

According to the Law on Labor Relations in Macedonia, there are the following valid reasons for termination of an employment contract:

• The employer can cancel the employee’s employment contract, when it is not possible to continue the employment relationship, if:
  the employee, due to his behavior, lack of knowledge or opportunities or due to failure to meet the special conditions defined by law, is not able to perform the contractual or other obligations of the employment relationship (personal reason) or
• the employee violates contractual obligations or other obligations from the employment relationship (cause of fault) and
• the need to perform certain work under the conditions specified in the employment contract ceases due to economic, organizational, technological, structural or similar reasons on the part of the employer (business reasons).

In this text, we will address the basis under number 3 – business reasons, the procedure as well as the potential mistakes that employers can make.

4. Top #5 Potential Employer Mistakes in Collective Redundancies for Business Reasons

Potential Mistake #1 (Not Following Legal Procedure)
Given the growth this sector has had, the experience of collective redundancies among employers in our IT sector is small.
Thus, improvisations can happen in the procedure when implementing collective dismissals.

Potential Mistake #2 (Not Knowing the Basis)
In the improvisation of the procedure, there is a lack of knowledge about the basis.
So, one basis is tried to be replaced by another basis, amicably, so if the agreement fails, it is moved to business or personal reasons, etc.

Potential Mistake #3 (Lack of Internal Rules)
Absence of internal regulations related to the grounds for dismissal and the procedures related to dismissals, which the employees implementing the dismissals can follow step by step.

Potential Mistake #4 (Not Meeting Deadlines)
Disregarding or neglecting notice deadlines or other deadlines related to the procedure.

Potential Mistake #5 (Requesting Professional Support Too Late)
Instead of preliminary consultations and requests for expert opinions, employers seek expert support after they have already made decisions and started the procedure against the law.

With any employer, as is the case with the IT sector, economic, organizational, technological, structural or similar reasons may arise for collective redundancies.
In this case, there is a strictly prescribed procedure in the Law on Labor Relations, with strictly prescribed deadlines that, if not followed, can expose the company to potential fines and litigation.

Every company has to comply with the applicable laws. Through 21 questions from different areas, test yourself and identify areas where your company may not be following the law. Finally, this test will immediately generate a summary amount – an estimate of potential fines – for responses where you are not compliant.

5. Procedure in case of dismissal for business reasons

If the employer intends to make a decision to terminate the employment of a larger number of workers for business reasons, i.e. at least 20 workers for a period of 90 days with each termination of employment regardless of the total number of workers at the employer, it is considered collective dismissal for business reasons.

5.1 Minimum notice periods

If the employer cancels the employment contract for an individual worker or a smaller number of workers, the notice period is one month, and two months in case of termination of employment of more than 150 workers or 5% of the total number of workers at the employer before the termination of the employment relationship .

5.2 Informing and consulting during collective dismissals for business reasons

When the employer intends to carry out collective layoffs, he is obliged to start a consultation procedure with the workers’ representatives, at least one month before the start of the collective layoffs, and to provide them with all relevant information before the start of the consultations, in order to reach an agreement. The employer is obliged to notify the service responsible for employment mediation in writing after the consultations have been completed, for the purpose of assistance and services from employment mediation.
This notification contains all relevant information regarding the planned collective redundancies and the consultation with the workers’ representatives, in particular the reasons for the redundancies, the number of workers being redundancies, the total number of workers at the employer and the period for which the redundancies are to take place. The employer is obliged to submit the notice of the planned collective dismissals to the service responsible for employment mediation, no later than 30 days before the decision to terminate the employment of the workers is made.

5.3 Severance payment

In case of cancellation of the employment contract for business reasons, the employer is obliged to pay the employee a severance pay, namely:

• up to five years spent in employment – in the amount of one net salary,
• from five to ten years spent in employment – in the amount of two and a half net salaries,
• from ten to 15 years spent in employment – in the amount of three and a half net salaries,
• from 15 to 20 years spent in employment – in the amount of four and a half net salaries,
• from 20 to 25 years spent in employment – in the amount of six net salaries and
  over 25 years spent in employment – in the amount of seven net salaries.

6. Use of monetary compensation from the state in case of unemployment

According to the Law on employment and insurance in case of unemployment, the employee whose contract was canceled by the employer for business reasons has the right to monetary compensation from the state.

An unemployed person who has been in an employment relationship for at least 9 months without interruption, or 12 months with an interruption in the last 18 months, before the termination of the employment relationship, has the right to monetary compensation.

At the following link, you can find more information in order to exercise this right.

WHO CANNOT EXERCISE THE RIGHT TO MONETARY COMPENSATION

The unemployed person whose employment has ended due to:

• giving a written statement about the termination of the employment relationship (unless such a statement is given due to a change in the spouse’s place of residence or marriage);
• amicable termination of employment;
• exercises rights from an employment relationship against the law;
• termination of employment by force of law (except in case of termination of the legal entity due to bankruptcy);
• dismissal by the employer due to violation of work order and discipline;
• refusal to work on jobs to which he is assigned in accordance with the law;
• refusal to be hired by agreement with another employer;
• refusal of training, retraining or retraining;
• loss of working ability, according to the regulations on pension and disability insurance and
• fulfilling the conditions for exercising the right to a pension.

The unemployed person will not be able to exercise the right to monetary compensation, and if he is a beneficiary of monetary compensation, this right will cease if:

• establishes a trading company, enterprise or other legal entity;
• performs a craft, that is, a professional activity.

7. Reducing the probability of a labor dispute

In any case of dismissals given by employers, regardless of the basis, the legal procedure and legal (or contractual) notice periods should be observed.
Adherence to the procedure represents a fair relationship between the employer and the employee that will reduce exposure to potential disputes or fines, as well as reputational risk.

Note: This text represents informative content, transferred from the current laws in Macedonia with the personal opinion of the author. The content in no way and in no part should be considered professional advice.

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