Substantiated reasons

What does valid reasons mean and when is the requirement for valid reasons fulfilled?

The change in the term does not entail any changes in situations of lack of work, but in the assessment of whether the employee's breach of contract constitutes grounds for termination for personal reasons.

In order for the requirement of valid reasons to be considered fulfilled in cases of termination for personal reasons, it is required that the employee has neglected their obligations under the employment contract. The employer's decision to terminate for personal reasons should be based on an overall assessment, but certain concessions are intended to be made for the employer.

The employer no longer needs to make any predictions about how the employee may be expected to act in the future. The focus should be on the employee's breach of contract and is now assessed more independently. Thus, the circumstances at the time of termination should form the basis for the assessment. Factors such as age, illness, disability, and the employer's actions regarding the work environment can be taken into account, as well as the background of the employee's behavior. Factors such as long employment, previous good conduct, significant financial burden, or difficulties in finding new employment should not be considered.

The employer has a duty to offer relocation. There are no valid reasons for termination if the employer can reasonably provide the employee with other work. The duty to offer relocation applies to both lack of work and personal reasons. In cases of serious breaches of the employment contract, it is not reasonable to offer relocation. The employer's duty to offer relocation is considered fulfilled when an offer of relocation has been made.

If an employee has been relocated due to personal reasons and continues to neglect their obligations, the employee is not entitled to a new relocation, regardless of whether it is the same or a new type of misconduct on the part of the employee. However, there are exceptions in special circumstances for additional relocation, which occur if a long time has passed since the last relocation. It is the employee who has the burden of invoking and proving the existence of special circumstances and a vacant position. The employer has the burden of proving that a previous relocation has been made. An employer should emphasize to the employee that the first relocation is made to avoid termination for personal reasons.

If an employer has given notice, issued a warning, or initiated negotiations on termination before October 1, 2022, the older provisions apply.

An employment agreement is formally concluded when two parties agree to an employment. This agreement is of an individual nature, as only the parties directly involved can decide on its conclusion. The main rule is that an employment agreement is valid until further notice, unless otherwise agreed upon.

The employee does not remain in employment during the dispute period

Another important change in the new employment protection concerns that the employment no longer continues during a dispute. The previous order meant that the employment continued during the dispute period, i.e., even after the notice period with the right to pay and benefits. The change in this matter means that the employment ceases at the end of the notice period upon termination, and the employer is not obliged to pay any salary for the dispute period. The employee is therefore not entitled to remain in employment, but has the right to unemployment benefits during the entire dispute period. In order for the employee to be entitled to unemployment benefits during the dispute period, the employee must actively seek new employment. This only applies in the case of a dispute about the invalidation of termination and not dismissal. If the court were to find that the termination was invalid, retroactive pay for the dispute period must be paid, and the unemployment benefits must be repaid. The general damages for unjustified terminations are increased.

The new employment protection also provides opportunities for the labor market parties to agree on what constitutes valid reasons. This means that the assessment of the type of action on the part of the employee will differ between the different collective agreement areas.

In summary

• Know the process: An employment contract establishes the working relationship between the employer and employee, and it is important to understand how and when this agreement is entered into.
• Introduction of the new employment protection: Starting from 1st October 2022, the new employment protection came into effect, which included the transition from the concept of "reasonable grounds for dismissal" to the requirement of "justifiable reasons".
• Definition of justifiable reasons: Dismissals must now be based on justifiable reasons, which means that the employer must have clear reasons for terminating an employee. Thus, the breach of contract is the focus.
• Obligation to offer redeployment: The employer has an obligation to offer redeployment if it is possible to provide the employee with another job.
• Changes in the employment relationship during dispute: In case of a dispute, the employment ends at the end of the notice period, and the employee no longer has the right to salary during the dispute period. However, the employee is entitled to unemployment benefits during the dispute period.
• Possibility of agreement on justifiable reasons: The new employment protection allows the parties in the labor market to agree on what constitutes justifiable reasons, which means that the assessment may vary between different collective bargaining areas.