Subjective dismissal cost a company DKK 250,000

Date 12 feb. 2010

Subjective dismissal cost a company DKK 250,000

An employee was dismissed after 32 years of employment and the Board of Dismissals rewarded him a compensation of DKK 250, 000 which corresponded to 32 weeks pay.

 

The case in brief

The case concerned an employee (the “Employee”) who was dismissed after 32 years of employment as a crane driver with odd jobs at the same factory.

 

Furthermore, the Employee had been the shop steward at the factory for 16 years. Five days before the dismissal his function as shop steward expired.

 

The management of the factory decided to dismiss the Employee with reference to lack of work at the factory. Already, 40% of the employees of the company had been dismissed with reference to lack of work. Up to his dismissal, the Employee had been employed closing down an old factory with another employee.

 

The Employee appealed against the dismissal to the Board of Dismissal, because he felt that the dismissal was subjective.

 

Legal background

The Employee worked in the area of DA (The Confederation of Danish Employers)/LO (The Danish Confederation of Trade Unions). According to Section 4(3) of the main agreement (“Hovedaftalen”), arbitrary dismissals are not allowed.

 

 

 

The Board’s decision

The Board of Dismissal attached importance to the fact that there was an actual lack of work at the factory. The Board found that the employer had raised this burden of proof. It is clearly the Board’s vantage point that if a situation exists in which there is a lack of work, it is up to the employer alone to decide who to dismiss.

 

However, a modification to the abovementioned vantage point exists in the Board of Dismissal.. If the employee has been employed with the company for more than 25 years without interruption, the company must give weighty reasons for why this particular employee should be dismissed.

 

It rests upon the company to prove that deciding considerations have caused the dismissal of the Employee.

 

The employer stated that the Employee had problems collaborating with the management and that this was the deciding reason why this particular Employee was dismissed. But the employer did not succeed in convincing the Board of Dismissal that the problems with cooperation were so severe that a dismissal of the Employee was reasonable. The discussions between the Employee and the management were mainly based on the Employee’s position as shop steward and, therefore, could not be attached any importance in relation to his general performance.

 

The Board decided that there were no weighty arguments justifying the dismissal of this particular employee. The Board emphasised that the company should have chosen between all the remaining 90 employees and not only between the two employees working on closing down the old factory.

 

At the calculation of the reimbursement, the Board attached importance to the fact that the dismissal in question was subjective, that the Employee was 54 years old, that he had been working at the factory for 32 years and that he had been shop steward for 16 years. The reimbursement was determined at DKK 250,000 corresponding to 32 weeks pay.

 

It is worth highlighting the following considerations which the Board of Dismissal emphasized:

 

-          That there was lack of work. Because of this, the employer can freely decide which employees are dispensable.

-          That the Employee had been employed for more than 25 years. Because of this, the employer must give weighted reasons for why precisely this employee should be dismissed. This is also called the 25-year-rule.

-          That the employer could not prove that there were sufficient weighty reasons.

-          That all of the employees in the same working class should be considered when an employee is to be dismissed.

 

The Board of Dismissal’s decision shows that the 25-year-rule still applies and that special circumstances justify that an employee is granted a substantially higher reimbursement according to the DA/LO main agreement than according to Section 2b of the Salaried Employees Act.

 

Companies should be continuously aware that the dismissal of an employee with a long period of continuous employment must be based on weighty reasons, in order for this employee not to be able to demand for a large reimbursement later.

 

If you have questions regarding the above or require additional information on the dismissal of employees, please contact attorney Dan Moalem (dmo@mwblaw.dk), assistant attorney Lotte Witt (lwi@mwblaw.dk) or Pinar Gökcen (pno@mwblaw.dk).

 

The above does not constitute legal counseling and Moalem Weitemeyer Bendtsen does not warrant the accuracy of the information. With the above text, Moalem Weitemeyer Bendtsen has not assumed responsibility of any kind as a consequence of a reader’s use of the above as a basis of decisions of considerations.