Fire someone in Germany because “it’s not working out,” and you’ll likely lose the labor court case. Outside the US, most countries require a legally valid reason to terminate an employee — and vague dissatisfaction doesn’t qualify. Unfair dismissal claims cost employers anywhere from 3 months’ salary to 24 months’ salary in compensation, plus legal fees and management time.
The standards differ by country, but they’re universally stricter than US at-will employment. Germany requires “social justification”: the reason must relate to the employee’s conduct, capability, or urgent operational needs. France requires “real and serious cause” (cause réelle et sérieuse) and a procedural sequence that includes a formal pre-termination meeting. The Netherlands requires either employee consent, a UWV permit for economic dismissals, or court approval. Brazil allows termination without cause but imposes a 40% FGTS penalty (40% of accumulated severance fund deposits) that makes it expensive. The UK protects employees from unfair dismissal after a two-year qualifying period, with tribunal awards reaching £105,707 plus a basic award.
The procedural requirements trip up foreign employers as much as the substantive ones. In France, you must send a registered letter inviting the employee to a preliminary meeting, wait at least 5 working days, hold the meeting (the employee can bring a representative), then wait at least 2 more working days before sending the dismissal letter by registered post. Skip any step and the dismissal is procedurally unfair — even if the underlying reason was valid.
Why It Matters for EOR
When you use an EOR, the EOR is the legal employer on paper. An unfair dismissal claim gets filed against them. But they’ll push the financial exposure back to you through your service agreement, so don’t assume the EOR absorbs the risk.
Good EOR providers guide you through every step: what documentation to collect, what notice period applies, whether a performance improvement plan is required first, and what severance to offer. Deel provides termination workflow tools with country-specific checklists. Other providers assign a local HR advisor for the process.
If your EOR says “just tell us when you want them gone” — find a different provider. Dismissal in most countries is a process, not an event. A provider that doesn’t push back on poorly justified terminations is one that will leave you holding the bill when the tribunal rules against them.
Before terminating anyone through an EOR, choosing the right provider with strong local employment law expertise makes the difference between a clean exit and a six-figure settlement.
For global standards on termination protections, see the ILO Convention C158 on Termination of Employment.
For practical use of this concept, see EOR vs PEO explained and country hiring guides.
Sources
Published list prices, country counts, and entity models link to official provider pages (June 2026). eorHQ scores use our 6-dimension methodology.
Related Decision Pages
- Hiring in the United Kingdom: unfair dismissal protections after two years — UK employees gain unfair dismissal rights after two years, with tribunal awards reaching £105,707 plus basic awards.
- Hiring in France: the termination process and “real and serious cause” standard — France requires a formal pre-termination meeting and documented justification before any dismissal.
- Hiring in Australia: Fair Work Act protections and dismissal procedures — Australia’s unfair dismissal framework applies from day one for companies above the small business threshold.
- EOR comparisons
- Read Deel review
- EOR vs PEO explained
Worked Example
A mid-market company evaluating global hiring encounters Unfair Dismissal when comparing EOR quotes. The practical test: ask any provider to show how unfair dismissal affects total year-one cost in your top hiring country — not just the headline monthly fee.
Use the employee cost calculator and how to choose an EOR to pressure-test provider claims against your hiring plan.
When Unfair Dismissal Matters in EOR Decisions
Unfair Dismissal becomes decisive when you are comparing finalists on compliance risk, not feature checklists. Three triggers: (1) your first hire in a regulated market like Germany or Brazil, (2) a compliance audit or investor diligence request, and (3) scaling past 10 employees in one country where entity economics start competing with EOR fees.
See EOR vs entity, compliance risks, and provider reviews for how this term shows up in real buying decisions.
Common mistakes buyers make with Unfair Dismissal
Teams often treat Unfair Dismissal as a checkbox on a vendor slide deck instead of a contractual and operational reality. The expensive mistakes: assuming your company retains employer liability when the EOR is legal employer, skipping country-specific documentation requirements, and comparing providers on monthly fee without modeling statutory pass-through costs.
Another failure mode is mixing models — using contractors where unfair dismissal employment is required, or opening an entity in one country while using EOR elsewhere without a coherent global employment policy.
How EOR providers handle Unfair Dismissal
Most tier-one providers (Deel, Remote, Multiplier) document unfair dismissal in onboarding workflows and contract packs, but execution quality varies by country. Ask for a sample workflow in your top hiring market, not a global marketing PDF.
A termination that a court or tribunal finds legally unjustified, exposing the employer to reinstatement orders, compensation, or penalties.
Frequently Asked Questions
Does Unfair Dismissal affect total employment cost?
Yes — often more than the platform fee. Model all-in cost with the employee cost calculator and EOR cost guide.
Is Unfair Dismissal the same in every country?
No. Local labor law governs how unfair dismissal works in practice. Pair this definition with the relevant country hiring guide before you sign.
Where does Unfair Dismissal show up in provider reviews?
We score compliance and entity-model execution in every EOR review — the dimensions where unfair dismissal matters most operationally.
Common mistakes buyers make with Unfair Dismissal
Teams often treat Unfair Dismissal as a checkbox on a vendor slide deck instead of a contractual and operational reality. The expensive mistakes: assuming your company retains employer liability when the EOR is legal employer, skipping country-specific documentation requirements, and comparing providers on monthly fee without modeling statutory pass-through costs.
Another failure mode is mixing models — using contractors where unfair dismissal employment is required, or opening an entity in one country while using EOR elsewhere without a coherent global employment policy.
How EOR providers handle Unfair Dismissal
Most tier-one providers (Deel, Remote, Multiplier) document unfair dismissal in onboarding workflows and contract packs, but execution quality varies by country. Ask for a sample workflow in your top hiring market, not a global marketing PDF.
A termination that a court or tribunal finds legally unjustified, exposing the employer to reinstatement orders, compensation, or penalties.
Frequently Asked Questions
Does Unfair Dismissal affect total employment cost?
Yes — often more than the platform fee. Model all-in cost with the employee cost calculator and EOR cost guide.
Is Unfair Dismissal the same in every country?
No. Local labor law governs how unfair dismissal works in practice. Pair this definition with the relevant country hiring guide before you sign.
Where does Unfair Dismissal show up in provider reviews?
We score compliance and entity-model execution in every EOR review — the dimensions where unfair dismissal matters most operationally.
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