Terminating an employment contract due to serious misconduct on the part of the employer

Last updated more than 5 years ago

The resigning employee is, in principle, required to give notice before permanently leaving the job. However, an employee may terminate their employment contract without notice in the event of serious misconduct by the employer. In such cases, the contract may be terminated with immediate effect.

Who is concerned

All employees have the ability to resign with immediate effect in the event of serious misconduct on the part of their employer, regardless of the type of employment contract (fixed/permanent contract) or business sector (public or private sector).

How to proceed

Form and content of termination with immediate effect

As with a resignation with notice, notice of a resignation with immediate effect is given to the employer:

In the letter of resignation with immediate effect, the employee informs the employer that they are terminating the work relationship, effective immediately, due to the latter's serious misconduct. The employee is not required to indicate the specific grounds that led them to resign in their letter of resignation. However, it is advisable that they explain the employer's actions which constitute serious misconduct.

The employee may not cite the employer's actions beyond a period of one month from becoming aware of it.

For example: if the employee has learned of an employer's misconduct on 3 June, they may no longer cite that misconduct as grounds for terminating the contract after 3 July.

Those acts must be real, and the employee must, where applicable, be able to establish them – in other words provide proof in any proceeding before the Labour Tribunal (at each Magistrate's Court).

In fact, the employer may deny having committed serious misconduct, and thus dispute such resignation with immediate effect and request a compensatory benefit for notice from the employee before the Labour Tribunal (corresponding to the notice the employee should have given had they resigned with notice).

The employee may also go before the Labour Court to have the employer's serious misconduct recognised in an attempt to obtain damages and subsequently receive unemployment benefits.

In the event of resignation with immediate effect prompted by an act of sexual harassment, an employee who is a Luxembourg resident may request that the President of the Labour Tribunal provisionally award unemployment benefits pending the Court's decision on the merits of the case (in other words, regarding their request to have the employer's serious misconduct recognised). To do so, the employee must send a written request to the President of the Labour Tribunal (see on this subject 'Disputing dismissal before the Labour tribunal'). In the event that the Court subsequently declares that the resignation with immediate effect was not justified, the employee will then be ordered to repay the unemployment benefits provisionally paid to them by the Employment Fund.

Employer's serious misconduct which justifies the employee’s resignation

Any act or fault which immediately and definitively renders it impossible to maintain a working relationship constitutes serious grounds against the employer which justifies immediate termination of the contract. The acts likely to justify immediate termination of the employment contract and payment of damages include:

  • not having registered the employee for social security;
  • non-payment or repeated late payment of wages;
  • insults, threats, physical violence or sexual harassment by an employee that is not addressed by the employer, or if such acts are committed by the actual employer;
  • repeatedly and systemically denying leave.

Potential compensation of the employee in the event of serious misconduct by the employer

When an employee terminates their employment contract with immediate effect following serious misconduct by their employer, they may obtain damages if they are able to establish:

  • the existence of the harm suffered;
  • the causal link between the employer's misconduct (already proven in case of a justified resignation) and the harm suffered.

However, as the employee's resignation with immediate effect due to their employer's serious misconduct is not equivalent to unfair dismissal, in principle, the employee is not entitled to the compensatory benefit for notice corresponding to the amount of remuneration due during the duration of the notice period, nor to statutory severance pay. Conversely, they may claim unemployment benefits if the Tribunal recognises that the resignation with immediate effect was justified by the employer's serious misconduct (on this subject, see 'Applying for unemployment compensation as a resident' and 'Applying for unemployment benefits as a cross-border worker').

If the employee resigns after having been dismissed with notice – i.e. during the notice of dismissal period – they are entitled to severance pay, provided they have been employed for at least 5 years by the same employer.

Forms / Online services

Modèle de lettre de démission avec effet immédiat

Modèle de lettre de démission avec effet immédiat

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