When is a termination in violation of the rules of the antidiscrimination legislation? New ruling from the Danish Supreme Court on 25 October 2016.

As early as 2002, the Danish Supreme Court ruled that the appraisal of whether a termination is justified according to the rules of the Salaried Employees Act must be based on the conditions at the time of termination – and not on incidents occurring subsequent to the notice period.

In the particular case from 2002, an employee working as a secretary and part-time receptionist was terminated. During her notice period, another employee, a full-time receptionist, likewise handed in her resignation. The terminated employee with the combined position was not offered the full-time receptionist position. Instead, the employer hired another full-time receptionist.

The Supreme Court upheld the High Court’s ruling that as the Salaried Employees Act is worded, it is only the conditions at the time of termination, which are essential for the termination assessment and not subsequent changes.

In 2004, the Supreme Court decided on a similar case, which concerned an auto company that entered into receivership. As the company did not succeed in selling the business, all employees, including a shop steward and a safety representative, were terminated.

Subsequent to the termination of the employees, it was actually possible to sell the company. The sale took place before the expiry of notice periods and all of the employees were rehired, except three, including the shop steward and the safety representative. The shop steward and the safety representative were of the opinion that the termination was unfair.

The Supreme Court stated that the redundancies were justified by the conditions at the time when the redundancies took place. Further, the estate had established that at the time of termination it was not a realistic prospect that the business would be sold. The redundancies were therefore justified by the compelling reason of lack of work.

Neither the wording of the provision nor the preparatory work for the Salaried Employees Act supports that a reasonable assessment must take into account factors arising between the execution of the termination and the expiration of the notice period. Change of facts during the notice period will not make an initial objective termination unfair.

The practice is similar in Industrial Arbitration-cases. An example is a decision made by the Industrial Arbitration, in which a journalist was terminated due to a need to reduce costs. The day after the termination, another journalist resigned. The employer (a newspaper publisher) posted a vacancy, which the terminated journalist applied for, but did not get. The umpire said that although the company had been looking for a journalist during the notice period, the umpire would not set aside the company’s decision to engage another journalist for the position.

The question is now whether a different standard could be applied when it comes to an assessment of whether a termination is in contravention of the Act on the Equal Treatment or other discrimination legislation that implements various directives on non-discrimination.

The Supreme Court established in a judgment from 2012 that, to some extent, information appearing after the day an employee is terminated should be taken into account. The Supreme Court ruled that protection against termination due to pregnancy-related absence also includes the situation where, at the time of the termination, the employer was not or should not be familiar with the pregnancy. In the particular case from 2012, the employee’s sick leave justified the termination, but the absence was due to pregnancy. Since the employer did not reverse the decision of termination after learning about the pregnancy, the employer had acted contrary to the Act on Equal Treatment and the employee was awarded compensation.

The Supreme Court judgment concerned a very special situation since the termination turned out to be related to pregnancy, which the employer was not aware of at the date of the termination. In such a very specific situation, the employer should have reversed its decision when the context became clear.

In a decision from 2014, the High Court went even further than the Supreme Court decision from 2012. The High Court reached the conclusion that the employer had not fulfilled its obligation. The High Court ruled that an obligation to redeploy the employee should be observed all the way to the end of the notice period and not only at the time when the termination was effected. That was also the case in a situation where the employer became aware of the pregnancy after effecting the termination. The High Court awarded the employee compensation on the grounds that the company was aware of the vacancy during the terminated employee’s notice period and should have taken this into consideration. Thus, the employer was obliged to assess whether the position should have been offered to the terminated employee. The fact that the employee had seen the advertisement but chose not to apply for the position did not change the employer’s obligations.

The High Court ruling was appealed to the Supreme Court, which delivered its judgment in the case on 25 October 2016.

The Supreme Court overturned the High Court’s ruling and decided that if the original termination was not in full or in part motivated by the employee’s pregnancy, then there was no obligation to redeploy the employee. Since the employee had not established facts, which would give grounds for suspecting that the termination was fully or partly attributable to pregnancy, the employer was not obliged to rehire the employee.

The Supreme Court stated that it is a common employment law principle to base the question of whether the termination is justified on the conditions at the time of termination. (See also the judgment of 2002 mentioned above). This also applies with respect to violation of the rules of the Equal Treatment Act.

The Supreme Court further stated that in the assessment of whether the employer had discharged its burden of proof that the dismissal was not based on pregnancy, it may be an important factor whether the employer did or did not use its best endeavours to foresee if any positions could become vacant just before or during the notice period.

During the proceedings, the employee referred to four positions, which she could have been offered. The Supreme Court, however, ruled those were not relevant as there were no vacant positions at the time of termination, or that alternatively other candidates had been more qualified.

The company had therefore lifted the burden of proof that the termination was in fact justified by cost reductions and not in any way attributable to the employee’s pregnancy.

In the time between the termination and the expiry of the notice period, a fixed term position became vacant. The employee who was qualified for the position failed to apply for it. In addition, another person was hired for a position, which was posted as vacant.

The Supreme Court stated that there was no basis for considering the employer’s failure to offer the employee the vacancy as a violation of the Equal Treatment Law. The Supreme Court emphasized that the employee had not requested or shown any interest in the position.

The Supreme Court confirmed that the determination of whether discrimination laws have been violated must also be made at the time of termination.

The Supreme Court however left a door open in relation to the scope of the redeployment obligation. If the employer had not considered the options available either prior to the termination date or during the notice period, then the termination may contravene discrimination laws.

Therefore, the time of termination and the knowledge available at that point in time are crucial to making a lawful decision.