Severance in Albania: notice, seniority pay and dismissal claims

Once probation is over, both sides of an indefinite contract must give notice, and its length depends only on how long the employee has worked. Article 143 of the Labour Code sets these minimums:

• During probation: 5 days (Article 142).
• Up to 6 months’ service: 2 weeks.
• Six months to two years: 1 month.
• Past two years and up to five: 2 months.
• More than 5 years: 3 months.

Notice runs to the end of a week or a month, so it rarely ends mid-week. It is also suspended by illness, pregnancy or leave the employer has granted, which means an exit date can move if the employee falls sick after receiving notice. If an employer ends the relationship without giving notice at all, the law treats that as an immediate termination, with all the consequences described further down.

Article 143(5) also lets an employee who is serving out notice given by the employer spend 20 hours or more of each week job-hunting, on full pay. For a full-time role that is half the week, which many foreign managers do not expect. Plan handovers accordingly.

The same scale binds the employee. Someone with four years’ service who resigns owes you two months’ notice, and a resignation does not trigger seniority pay, since that payment depends on the employer ending the contract. Fixed-term contracts end on their expiry date without notice, but be careful: Article 149(2) converts it into an open-ended contract if the person carries on working once the term has run out, and the full notice and dismissal rules apply from then on.

Probation is the one stage with a light touch. In the first three months, either side may end the contract on five days’ notice, and the Article 144 meeting is not part of that exit. The probation period cannot be repeated for the same job where the parties already had a contract for it, so a rehire does not reopen the window.

An employer who wants to end a contract must follow a fixed sequence, and skipping a step costs money even when the reason is sound. Article 144 requires:

• A written invitation to a meeting, delivered at least 72 hours before it takes place.
• At the meeting, the employer explains the reasons for the proposed termination and hears what the employee has to say.
• A reasoned decision in writing, sent between two days and a week after the meeting has taken place.
• Reasons that fall within the Code: the employee’s capability, their conduct, or the operational needs of the business.

If the procedure is not followed, the employee is owed two months’ pay as compensation, and that sits on top of anything else a court awards. Proving the reasons is the employer’s job, so the paper trail matters: the invitation, notes of the meeting and a decision that names a specific ground are the evidence you will need.

This procedure applies to ordinary dismissals. Summary dismissal for serious misconduct follows its own rules, covered in the next section, and collective dismissals add consultation duties on top.

Three years of service is the threshold, and the payment arises only if it is the employer who ends the job. Article 145 fixes the floor at 15 days’ wages multiplied by the number of completed years, settled in the final pay run. An employee with two years and eleven months gets nothing under this heading; at three full years the entitlement jumps to 45 days’ wages.

The amount scales in whole years. Six full years of service gives at least 90 days’ wages; ten years gives 150. Part years are not counted, which can make the timing of a decision around an anniversary expensive in either direction. A contract or collective agreement can be more generous than the statutory floor.

Take a Tirana developer on ALL 200,000 a month who joined six and a half years ago and whose role is being cut. The exit includes three months’ notice (or pay for it), seniority pay of at least 90 days’ wages for six full years, and any accrued leave. Nothing extra is owed if the procedure is clean and the reason genuine. If the procedure is skipped, add two months’ pay; if a court finds no reasonable cause, add up to twelve more.

Two points are often misunderstood. First, seniority pay is lost only where the employee is dismissed summarily for a justified cause; an ordinary dismissal for performance or restructuring still triggers it. Second, it is not a substitute for compensation. If a court later finds the dismissal unjustified, seniority pay is added to the award, not deducted from it.

Unused annual leave is the other line on a final payslip. The Labour Code bans payment in lieu of leave during employment but requires it on termination, so any balance of the 22-day minimum, plus carried-over days, is paid out with the last salary.

An employer can end a contract with immediate effect only for a justified cause: serious misconduct, or repeated minor misconduct after a written warning (Article 153). Poor results, a clash of personalities or a cost-cutting plan do not qualify. Those go through the ordinary procedure with notice.

Article 146 lists dismissals that are treated as lacking a reasonable cause whatever the employer says. They include ending a contract because the employee raised claims under it, carried out legal duties, exercised constitutional rights or joined a union, dismissals tainted by discrimination, and any dismissal whose stated grounds do not match the reasons allowed by Article 144(3).

Some periods are protected outright. An employee may not be dismissed while on paid incapacity for illness, for up to a year, or while on leave (Article 147). Mothers have a right to return to the same or an equivalent job after maternity leave. If you are thinking about a dismissal while someone is off sick, read our guide to sick pay and ISSH benefit first.

A dismissal without a reasonable cause exposes the employer to compensation of up to one year’s pay, plus pay for the notice period (Article 146(3)). An unjustified immediate dismissal attracts the same scale: notice pay plus up to a year’s pay (Article 155(3)). The court sets the figure within that ceiling.

These awards stack. For a long-serving employee dismissed badly, the bill can include seniority pay, notice pay, up to twelve months’ pay as compensation and a further two months’ pay if the Article 144 procedure was skipped. That is why the meeting and the written decision are worth getting right, even for a single employee.

The employee has 180 days to sue. The clock starts at the end of the notice period, or at termination for an immediate dismissal. If the real motive only comes to light later, for example evidence that the dismissal was a reprisal, the employee has 30 days from discovering it. The consolidated text of the Code is published by the Official Publications Centre at qbz.gov.al.

Larger reductions trigger extra steps. A dismissal counts as collective when, within 90 days, it affects 10 or more workers where the headcount is 100 or less, 15 where it is 101 to 200, or 20 in a firm of more than 200 (Article 148). The employer must give written notice to the unions or staff representatives and to the ministry, and consult for at least 30 days.

When a business or part of one changes hands, contracts pass to the new owner. A dismissal because of the transfer itself is void unless it rests on economic, technical or organisational reasons (Article 138). Restructuring after an acquisition therefore needs its own justification for each role.

For a foreign firm with a small Albanian team, the collective thresholds rarely bite. They matter when a larger operation closes or shrinks a site in Tirana, Durrës or Shkodër. The 90-day window counts every dismissal in the period, so a series of individual exits spread over a few weeks can add up to a collective one. Build the 30 days of consultation into the timetable before any notices go out, and expect the ministry to receive a copy of the written notice.

With Employer of Record Albania holding the employment contract, the formal Article 144 steps (the meeting, the written decision and the final payroll) are handled on the employer’s side rather than by your managers. You decide that the role should end and give us the business reasons; we turn them into a procedure that follows the Code and calculate notice, accrued leave and any seniority pay.

• Agree the business reason and gather the evidence behind it before anyone is told.
• Check for protected status: sick leave, maternity, any other leave in progress.
• Count full years of service to see whether seniority pay applies.
• Send the written meeting invitation with at least 72 hours’ lead time.
• Hold the meeting, listen and keep notes.
• Issue the reasoned decision within the two-day to one-week window.
• Run the final payroll and declare the leaver to the tax administration.

The cost of an exit is therefore the same statutory cost an Albanian company would carry. What changes is that you are not drafting termination letters in Albanian or working out notice weeks yourself. The monthly fee, from €599 per employee, is a separate service charge and adds nothing to the statutory exit bill.

Good exits start with good contracts. The probation clause, the job description and the notice terms all shape what happens later; our guide to Labour Code contracts covers them. For how a hire is set up in the first place, see the EOR onboarding timeline.