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Have you been terminated due to a shortage of work?

Settlement and severance pay negotiations

It is common that parties will agree to terminate the employment through settlement which means that the relevant parties negotiate the terms of termination or similar and agree on settlement and severance pay details. The purpose of the negotiation is to terminate the employment following the employer’s settlement with the employee. It is worthwhile to get a professional assessment of the matter. For example, tax implications can be severe if the settlement and severance pay agreement fail to take certain conditions into consideration. It can be quite difficult for an individual to manage such a negotiation as the counterpart may refer to circumstances or arguments that are incorrect. If you have any questions relating a settlement and/or to severance pay, please feel free to contact us for a free assessment of your case by clicking here.

Have you been terminated due to a shortage of work?

Employers often terminate employees due to a shortage of work. However, this is sometimes done incorrectly, which can lead to significant amounts being paid in damages to the employee.

Employers do not always correctly handle their re-employment obligations or adhere to the order of priority rules. If you are not a union member or otherwise haven’t received the support you need, please contact us for a free assessment of your case. At Arbetsrättsexperten, we will let you know if we believe there are reasons to challenge the termination or the order of priority, as well as if there are opportunities to claim damages against the employer. Contact us for a free assessment by clicking here.

The following rules apply: (Read more about Damages further down on the page)

Rules — Re-employment

Employers must comply with several laws and regulations prior to terminating employees due to a shortage of work. The employer must, together with the employee, investigate possible re-employment opportunities, including other available positions or positions that will become available in the company within a certain time in the future. This is because a notice of termination is deemed to have no objective grounds if it was reasonable to request that the employer should have prepared the employee for other types of work (see the Employee Protection Act, Section 7).

Rules — Order of Priority

When it has been determined that personal reason was not the basis for the notice of termination, and also that there were no other vacant positions or other positions that were recently filled or are about to be filled, then the employer must terminate the right person to ensure the lawful handling of the termination. The right person refers to the person whose turn it is to be terminated. Generally speaking, the seniority principle applies, meaning the employee who was employed most recently shall be terminated first should a shortage of work arise (see the Employment Protection Act, Section 22). This also applies to employees with different duties of work, employees who work during different shifts, as well as to other similar instances.

Damages

The employee can claim both general damages and loss of income if the employer does not comply with all the rules described above!

Example: You have been employed for 2 years when the order of priority breach occurs. Provided certain conditions are fulfilled, it’s common to claim 16 monthly salaries + a general damage claim. You may make claims for damages to an amount corresponding to 32 monthly salaries depending on your length of service (see the Employment Protection Act, Section 38 and 39).

It falls on the employer to prove he has performed all of his duties regarding the re-employment obligation and to prove that the shortage of work actually existed. They must also demonstrate that it was exactly your turn to be laid off. The requirements of evidence are set very high and the burden of proof lies with the employer. Therefore, almost all cases are resolved out-of-court.

We understand many employees are lost as to what do when they have been dismissed or terminated and thus often choose to do nothing. It’s our experience, however, that there often are no objective grounds for termination to a shortage of work since the employer in many cases has not considered their re-employment obligations or has not adhered to the order of priority rules. In these cases, the wrong individual is often laid off.

It is important to be aware of the periods of limitation that apply. These periods usually begin from the date the employment was terminated or when the dismissal occurred (see the Employment Protection Act, Sections 40–41). That’s why it is advisable to act promptly! In our view, it’s worthwhile to let a lawyer perform a free assessment of your case. If you are a union member, you can contact them, but keep in mind that many union representatives typically are laymen in such matters.

Apart from showing that no other vacant positions were created or that other positions were recently filled or are about to be filled, then the employer must terminate the right person to ensure the lawful handling of the termination. The right person refers to the person whose turn it is to be terminated. Generally speaking, the seniority principle applies, meaning the employee who was employed most recently shall be terminated first should a shortage of work arise (see the Employment Protection Act, Section 22). This also applies to employees with different duties of work, employees who work during different shifts, as well as to other similar instances.

 

Do you need help?

If you are not a union member or otherwise have not received the support you need, please contact us for a free assessment of your case. At Arbetsrättsexperten, we will let you know if we believe there are reasons to challenge the termination or if the order of priority rules have been violated; in this way, we can help determine if there exist opportunities to claim damages against the employer. Contact us for a free assessment by clicking here.

Free assessment of your case