A Legal Analysis Of The Six-Work-Day And One-Year Limitation Periods In The Termination Of An Employment Contract By The Employer For Just Cause

INTRODUCTION

The employer’s right to terminate an employment contract for just cause and with immediate effect is subject to certain substantive conditions as well as time limits set out in the Labour Code No. 4857 (“the Code”). Pursuant to Article 26 of the Labour Code, in cases of termination for just cause based on circumstances constituting a breach of the rules of morality and good faith as set out in Article 25 of the Code, the right to terminate must be exercised within six working days of the employer becoming aware of the incident and, in any event, within one year of the act taking place. These time limits are recognised in legal doctrine and Supreme Court case law as limitation periods.

The key issue regarding the commencement of the six-working-day period is determining the date on which the employer became aware of the incident giving rise to the termination. Particularly in the case of employers that are legal entities, it is important to establish to which person or body within the legal entity the concept of ‘the employer’s knowledge’ relates. Under the Supreme Court’s established practice, it is accepted that the six-working-day period commences from the date on which the authority authorised to terminate the employment contract becomes aware of the incident; this allows for the investigation and disciplinary process to be conducted within a reasonable timeframe. However, this approach cannot be interpreted in such a way as to allow the employer to circumvent the limitation period by artificially delaying the date on which the authority authorised to terminate the contract becomes aware of the incident.

The one-year period, as a general rule, runs from the date on which the act took place and constitutes a second limitation period, independent of the six-working-day period. The sole exception to this is where the employee has derived a material benefit from the incident. In such cases, the Act waives the one-year limitation period; however, it maintains the application of the six-working-day period.

This study examines the legal nature of the aforementioned time limits, their starting point, the concept of ‘becoming aware’ where the employer is a legal entity, the effect of disciplinary investigations on the time limits, the nature of the one-year time limit, and the consequences of non-compliance with the time limits in relation to termination.

I. THE CONCEPT OF TERMINATION FOR JUST CAUSE AND ARTICLE 26 OF THE LABOUR CODE

Termination for just cause is an exceptional form of termination that enables one of the parties to terminate the employment contract immediately and without giving notice. In certain situations where the continuation of the employment relationship has become intolerable or the very basis of the contract has been undermined, it cannot be expected that one of the parties should wait for the notice period to elapse; consequently, the legislator has granted the right to immediate termination subject to the existence of specific conditions.

From the employer’s perspective, valid grounds for termination are primarily set out in Article 25 of the Labour Code. Among these, the area giving rise to the most disputes in practice is that covered by paragraph II of Article 25, which concerns breaches of the rules of morality and good faith and similar circumstances.

Examples of conduct falling within this scope include an employee’s harassment of the employer or a member of the employer’s family; the utterance of words that undermine the honour or reputation of the employer or a member of the employer’s family; the abuse of the employer’s trust; theft; the disclosure of the employer’s trade secrets; or similar conduct.

Article 26 of the Act, meanwhile, sets out the time limits for exercising the right to terminate the contract on these grounds.

Legal doctrine and Supreme Court rulings acknowledge that the employer’s or employee’s right to terminate the contract for just cause is not unlimited; they hold that if the time limits set out in Article 26 are exceeded, the right to terminate loses its character as a termination for just cause.

It is important to note here that, from the employer’s perspective, the time limits set out in Article 26 apply not to all grounds for just cause termination, but specifically to those provisions in Article 25 that constitute a breach of the rules of morality and good faith. Indeed, in cases of termination for valid cause, the six-working-day and one-year time limits set out in Article 26 shall not apply; in such cases, the criterion of a ‘reasonable period’ must be taken into account for termination for valid cause.

II. THE LEGAL NATURE OF THE SIX-WORK-DAY PERIOD

The six-working-day period provided for in Article 26 of the Labour Code is a period of limitation. The most significant consequence of a period of limitation is that the right itself ceases to exist once the period has elapsed. In this respect, a period of limitation differs from a limitation period.

As the six-working-day period is of a preclusive nature, it must be taken into account by the court of its own motion, even if not raised by the parties. The expiry of even one of these periods removes the employer’s right to immediate termination for just cause based on the same incident.

This situation gives rise to a highly significant practical consequence for the employer. For example, if an act committed by the employee on 1 June 2026 is brought to the employer’s full knowledge on 2 June 2026, the employer cannot retain the right to terminate the contract for just cause indefinitely. The right to terminate for just cause must be exercised within six working days of the date on which the employer becomes aware of the facts.

Consequently, the fact that a conduct constitutes grounds for termination for cause is a distinct matter from the ability to carry out termination for cause on the basis of that conduct. The existence of a material cause does not revive a right of termination that has not been exercised within the prescribed time limit.

1. THE START OF THE SIX-WORK-DAY PERIOD: THE CONCEPT OF ‘BECOMING AWARE’

Under Article 26 of the Act, the start of the six-working-day period is determined not by the date on which the act took place, but by the date on which the employer became aware of the conduct in question. Consequently, one of the most significant points of dispute in practice is determining the date on which the employer became aware of the incident. Here, it is important to clarify whether the concept of ‘becoming aware’ refers merely to being informed of the existence of the incident, or to having full knowledge of all the elements of the conduct giving rise to the termination.

In the case law of the Court of Cassation, the calculation of the six-working-day period is based on the employer becoming aware of the incident in question in its entirety, and, particularly in the case of corporate employers, on the competent authority authorised to terminate the contract becoming aware of it.

This approach is particularly important in the context of large enterprises. This is because, within a company, the first person to become aware of an employee’s conduct is not necessarily the person authorised to terminate the employment contract.

1. DATE OF BECOMING AWARE IN THE CASE OF LEGAL ENTITY EMPLOYERS

In the case of corporate employers, the concept of ‘the employer’s knowledge’ presents a more complex picture.

According to the established approach of the Court of Cassation, in the case of corporate employers, the six-working-day period generally begins to run from the date on which the authority authorised to terminate the contract becomes aware of the incident.

Consequently, the date on which an incident occurring at the workplace is learnt of by a department manager, a human resources officer or another employer’s representative is not, in all cases, deemed to be the same as the date on which the authority authorised to terminate the employment contract becomes aware of it.

The Court of Cassation has adopted an approach based on the date on which the authority authorised to terminate the employment contract is informed of the incident and the date on which the incident is referred to that authority. Accordingly, the conduct of an inspector’s investigation or a disciplinary procedure does not, in itself, constitute the starting point of the six-working-day period.

However, this approach does not mean that the employer can indefinitely delay the authority competent to decide on the termination from becoming aware of the matter by citing the company’s internal organisation as a justification. To accept the contrary would significantly undermine the purpose of the limitation period.

2. DISCIPLINARY INVESTIGATION AND THE SIX-WORK-DAY PERIOD

In practice, it is quite common for employers to conduct a disciplinary investigation prior to termination for just cause, to gather records relating to the incident, to take statements from witnesses and to request a defence from the employee. The fundamental issue here is whether these procedures prevent the six-working-day period from commencing

According to the Supreme Court’s approach, an investigation conducted to ensure the employer is fully informed of all elements of the incident giving rise to the termination may continue for a reasonable period. Consequently, necessary investigations carried out between the moment the incident first comes to light and the moment the authority authorised to terminate the contract has sufficient information to assess all aspects of the incident may be taken into account.

However, the distinction between an ‘investigation’ and ‘dragging out the process’ is of great importance here. Indeed, the Court of Cassation has accepted that, in a workplace with a disciplinary committee, an investigation designed to establish all the elements of the incident may continue for a reasonable period. In the present case, the period elapsing between the employee’s defence being heard and the disciplinary committee’s consideration of the file was deemed reasonable, taking into account the disciplinary structure of the workplace and the nature of the investigation; consequently, it was considered to fall within the notice period. (Supreme Court of Appeals, 9th Civil Chamber, dated 24 October 2024, Case No. 2024/10547 and Decision No. 2024/14444)

This decision highlights an important point regarding current practice: when determining the start of the six-working-day period, it is not only the date on which the incident was first learnt of that is relevant, but also the date on which the authority authorised to terminate the employment contract became aware of all the facts of the incident.

Furthermore, the dissenting opinion in the same decision contains important assessments to the effect that delays arising from the employer’s own internal organisation should not result in adverse consequences for the employee, and that extending the investigation beyond a reasonable period would be inconsistent with the purpose of Article 26 of the Act. (Supreme Court of Appeals, 9th Civil Chamber, dated 24 October 2024, Case No. 2024/10547 and Decision No. 2024/14444)

The key point here is that the disciplinary and investigation process must be assessed in conjunction with the principles of good faith and the prohibition of the abuse of rights.

3. THE LIMITS OF THE CONCEPT OF ‘REASONABLE TIME’

The employer has the right to conduct an investigation and to enable the competent authority responsible for termination to assess the incident in all its aspects. However, the existence of an investigation must not be used as a means of indefinitely postponing the limitation period.

Therefore, in the specific case at hand, criteria such as the nature of the incident, its complexity, whether the collection of evidence is necessary, whether the hearing of witnesses is mandatory, the taking of the employee’s defence, the existence of a disciplinary committee, the procedure for convening the disciplinary committee, the identification of the authority authorised to terminate the employment contract, and whether the investigation is being conducted in a genuinely active manner must be assessed collectively.

In particular, in the case of a simple and clear-cut incident, a prolonged delay justified solely by the employer’s internal procedures should not be legally protected.

Conversely, in complex cases requiring the examination of a large number of employees or documents, a reasonable period for the investigation must be allowed to enable the authority authorised to terminate the employment to reach a sound decision.

Consequently, a ‘reasonable period’ is not a fixed duration that can be applied uniformly to every case. It is a legal assessment criterion that must be determined according to the specific characteristics of the case in question.

III. THE ONE-YEAR LIMITATION PERIOD AND THE EXCEPTION TO THE ONE-YEAR PERIOD: THE EMPLOYEE’S ACQUISITION OF MATERIAL BENEFIT

The second time limit provided for in Article 26 of the Labour Code is one year from the date the act took place.

Unlike the six-working-day period, the start of the one-year period is linked to the date on which the act took place, rather than to when the employer became aware of the incident.

Consequently, the employer’s belated discovery of the incident does not, as a rule, affect the one-year period.

For example, assuming that an act committed by an employee on 1 January 2025 is brought to the employer’s attention on 1 December 2025, the employer’s right to terminate the contract on valid grounds could theoretically arise if the employer takes action within six working days of becoming aware of the matter ; however, the one-year period will expire on 1 January 2026.

Consequently, the one-year period constitutes an objective upper limit with regard to the employer’s right to terminate the contract for just cause. The Court of Cassation also recognises that the six-working-day and one-year periods are independent limitation periods. Accordingly, failure to comply with either of these periods eliminates the possibility of termination for just cause.

Article 26 of the Act introduces a significant exception regarding the one-year period. Accordingly, the one-year period does not apply if the employee has derived a financial benefit from the incident.

The underlying rationale for this provision is to prevent the employee’s fraudulent conduct or conduct constituting a serious breach of the relationship of trust, carried out for their own financial gain, from becoming entirely ineffective for the purposes of termination for just cause merely on the grounds that one year has elapsed since the act was committed. The Court of Cassation has also explicitly accepted that, where the employee has derived a financial benefit from the incident, the one-year period does not apply; however, the six-working-day period must still be taken into account.

Consequently, the exception does not grant the employer unlimited authority to terminate the contract. In other words: if there is a financial gain, the one-year period ceases to apply; however, the six-working-day period remains in force. This distinction is of particular importance in practice.

IV. LEGAL CONSEQUENCES OF THE EXPIRY OF STATUTORY LIMITATION PERIODS

If the employer fails to exercise the right to terminate for just cause within the prescribed period, the nature of the conduct in question as a materially just cause for termination does not cease to exist entirely. What ceases to exist is the employer’s authority to terminate the contract immediately and for just cause on the basis of that conduct.

In other words, even if the employee’s conduct constitutes just cause under Article 25(II) of the Act at the time it occurs, if the employer does not exercise this right within the time limits set out in Article 26, they cannot subsequently terminate the contract on just cause on the basis of the same incident.

According to the Court of Cassation, termination carried out after the expiry of these time limits does not give rise to the consequences of termination for just cause. In such a case, should the relevant conditions be met, the employer may be liable for notice pay and severance pay.

For this reason, from the employer’s perspective, monitoring these time limits is not merely a procedural detail but a fundamental legal obligation that directly affects the financial consequences of the termination.

V. ASSESSMENT AND CONCLUSION

The six working days and one-year time limits set out in Article 26 of the Act establish the temporal limits of the employer’s authority to terminate the contract for just cause.

The primary purpose of this provision is to prevent an employer from citing the same conduct as grounds for termination years later, after having tolerated that conduct for an extended period. In this way, legal certainty and stability between the parties regarding the continuation of the employment contract are safeguarded.

With regard to the six-working-day period, the decisive factor is the employer’s becoming aware of the incident giving rise to the termination. In the case of corporate employers, the Supreme Court’s case law generally takes the date on which the authority authorised to terminate the contract became aware of the incident as the starting point. However, this approach must not be applied in a manner that would allow the employer to arbitrarily postpone the start of the period by utilising its own internal organisation.

In this regard, the disciplinary investigation is of particular importance. The conduct of a genuinely necessary and reasonable investigation may be taken into account in terms of the authority authorised to terminate the employment contract becoming aware of all the elements of the incident. However, the unnecessary prolongation of the investigation or delays arising from the employer’s own internal procedures, which leave the employee under the threat of dismissal for an extended period, may give rise to outcomes contrary to the protective purpose of Article 26 of the Act.

The one-year period, on the other hand, constitutes an objective limitation period commencing from the date on which the incident occurred. Whilst this period does not apply if the employee has derived material benefit from the incident, it should not be forgotten that the six-working-day period will continue to apply.

Consequently, the existence of a valid ground for termination is not the same as the ability to carry out a termination on that ground. Just as the material existence of the valid ground is essential, so too is the exercise of the power to terminate within the time limits prescribed by the Act.

In this respect, Article 26 of the Act constitutes a supplementary provision that safeguards not only the substantive conditions of termination for just cause but also the principles of legal certainty, predictability and the stability of the employment relationship.

Ultimately, whilst the exercise of the employer’s power to terminate the contract for just cause falls within the employer’s discretion, it must not be forgotten that this power is subject to statutory time limits.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.