- The purpose of the warning is to draw attention to the violation and to provide an opportunity to improve the subject’s behaviour.
- Prior warning is not needed, if one can not expect this due to the severity of the breach or due to the principle of good faith.
- The warning cannot be contested separately in the labour dispute resolution body.
Warnings in employment relationships
In an employment relationship, both the employee and the employer can issue warnings to each other in the event of a breach.
The Employment Contracts Act does not expressly oblige employees to give their employer an additional period for proper performance of the employment contract before extraordinary cancellation of the employment contract. At the same time, the fact of the employee having drawn the employer’s attention to the fact that, in their opinion, the employer is in breach of obligations agreed in the employment contract or provided by law, or of having given the employer an additional period for proper performance, may justify deeming the employer’s breaches as material. In addition, taking into account the provisions of § 2 of the Employment Contracts Act, the parties may also come to an agreement on which breaches of the employment contract are to be regarded as material breaches within the meaning of § 91 (2) of the Employment Contracts Act (judgments of the Supreme Court No. 2-19-9129, paragraph 28, and No. 2-19-2497, paragraph 20).
The employer has the right to extraordinary cancellation of the employment contract if the employee has disregarded the employer’s reasonable instructions or breached their duties, and the employer has warned the employee that such behaviour is not permitted and may result in cancellation of the employment contract (Employment Contracts Act clause 88 (1) 3), Law of Obligations Act subsection 196 (2)).
Prior warning is also required upon cancellation of an employment contract due to a decrease in the employee’s capacity for work (Employment Contracts Act subsection 88 (3)) and due to being at work in a state of intoxication (Employment Contracts Act clause 88 (1) 4)).
According to the principles of employment contract cancellation protection, cancellation of an employment contract must be avoided if possible. It should be used as a last resort in situations where the continuation of the employment relationship is no longer possible. Due to the above, and based on the principle of loyalty, the employer must therefore to some extent tolerate the employee’s behaviour which is considered somewhat unpleasant for the employer. If the employee continues the breach, the employer has the right to cancel the contract.
The purpose of the warning is therefore to draw the employee’s attention to the breach and to give the employee an opportunity to improve their behaviour. An employee may not be aware of the lack of skills to perform their duties without feedback and therefore may not be able to take into account that their behaviour may have serious consequences.
The law does not prescribe the mandatory form, content or number of warnings. The warning may be oral, in a format which can be reproduced in writing (e.g. e-mail) or in writing. The employer must be able to prove issuing the warning at a later stage.
It is necessary to provide the employee with a description of the circumstances, the facts that explain the incident and a warning that the employer has the right to extraordinary cancellation of the employment contract if the incident occurs again or continues. Receipt of a written warning is usually confirmed by the employee's signature, which is accompanied by the date of receipt of the warning.
Prior warning is not required if the employee cannot expect it from the employer due to particular severity of the breach or for another reason pursuant to the principle of good faith.
A warning is not required in the case of a fundamental breach (clauses 116 (2) 2) to 4) of the Law of Obligations Act), especially if:
- the employee breached an obligation, the strict observance of which was a precondition for the employer's interest in the performance of the contract pursuant to the contract;
- the employee breached the obligation intentionally or due to gross negligence;
- breach of an obligation gives the employer reason to believe that the employee shall not perform their duties hereafter;
The employer must be able to give detailed reasons for cancellation of the employment contract without prior notice if the law requires the employee to be warned.
Contesting a warning
The warning cannot be contested separately in the labour dispute resolution body. Upon receipt of the warning, the employee may submit their objections to the employer, including in writing, and repeat them in the event of a subsequent dispute.
In the event of a dispute, the warning is of particular importance in assessing the cancellation of the employment contract and its voidness. If the employer cancels the employment contract for reasons attributable to the employee and cites previous warnings and their consequences in order to prove a good reason for cancellation of the employment contract, the labour dispute resolution body (court or labour dispute committee) gives a separate assessment in each case as to whether the cancellation was lawful. Both the content and consequences of warnings and the employee’s explanations upon receiving warnings are important in assessing legality.
The importance of a warning in judicial practice
- The purpose of warning the employee is to give them an opportunity to improve their behaviour so that the employment relationship can continue. The employer’s warning must clearly state the intention to have a legal consequence, i.e. to cancel the employment contract if the employee does not improve their behaviour. The second sentence of subsection 88 (3) of the Employment Contracts Act allows an employee not to be warned if the employee is unable to correct their behaviour (Judgment of the Supreme Court No. 3-2-1-65-17 ).
- The warning given to the employee prior to the extraordinary cancellation of the employment contract (subsection 88 (3) of the Employment Contracts Act) as the employer’s declaration of intention must clearly state the intention to cancel the employment contract if the employee does not improve their behaviour. A warning can only be expressed as a direct declaration of intention, in which the intention to bring about a legal consequence is explicitly expressed (subsections 68 (1) and (2) of the General Part of the Civil Code Act). As subsection 88 (3) of the Employment Contracts Act does not provide for a formal requirement for a warning, an employer may issue a warning to the employee in any form (Judgment of the Supreme Court No. 3-2-1-70-16 ).
- The employer issued a warning to the employee criticising the quality of the employee’s work. On the same date of issuing the warning, the employer decided for the extraordinary cancellation of the employment contract on the basis of clause 88 (1) 3) of the Employment Contracts Act. In the present case the court found that the employer had drawn the employee’s attention to the breaches committed in their performance of duties, but had not issued a respective warning; a reasonable time limit for the breaches had passed; moreover, the employer cannot issue a warning and then cancel the employment contract on the same day; therefore, the cancellation of the employment contract on the basis of clause 88 (1) 3) of the Employment Contracts Act is considered void for lack of legal grounds (Judgment of Tallinn Circuit Court No. 2-16-17962/22).
- The court held that the mere fact that the employee had behaved in a manner which cannot normally be approved does not yet lead to the conclusion that it provides grounds for terminating the employment contract without warning pursuant to clause 88 (1) 5) of the Employment Contracts Act. It is necessary to assess the gravity of the breach, i.e. the employee’s purpose, motives and the consequences of the breach of the employment contract for the employer. The employer was not entitled to terminate the employment contract without prior notice, as the employee had not committed a particularly serious breach of duty and the employer had no other reason not to warn the employee on the principle of good faith (Judgment of Tallinn Circuit Court No. 2-16-14101/26).