Act relating to the working environment, working hours and employment protection, etc. (Working Environment Act)

Chapter 15. Termination of employment relationships

Section 15-1.Consultations before decisions regarding dismissal with notice

Before deciding on dismissal with notice, the employer shall, to the extent that it is practically possible, discuss the matter with the employee and the employee's elected representatives unless the employee himself does not desire this. Such discussions shall concern both the grounds for dismissal and any selection between two or more employees regarding who is to be dismissed.

Section 15-2.Information and consultation in connection with collective redundancies

(1) For the purposes of this Act, «collective redundancies» shall mean notice of dismissal given to at least 10 employees within 30 days without being warranted by reasons related to the individual employees. Other forms of termination of contracts of employment that are not warranted by reasons related to the individual employee shall be included in the calculation, provided that at least five persons are made redundant.
(2) An employer contemplating collective redundancies shall at the earliest opportunity enter into consultations with the employees' elected representatives to reach an agreement to avoid collective redundancies or to reduce the number of persons made redundant. If the employer is considering closing down its activities or an independent part of them and this will involve collective redundancies, the possibility of further operations shall be discussed, including the possibility of the activities being taken over by the employees. If redundancies cannot be avoided, efforts shall be made to mitigate their adverse effects. The consultations shall cover possible social welfare measures aimed, inter alia, at providing support for redeploying or retraining workers made redundant. The employee representatives shall have the right to receive expert assistance. The employer shall be obliged to enter into consultations even if the projected redundancies are caused by someone other than the employer who has superior authority over the employer, such as the management of a group of companies.
(3) Employers shall be obliged to give the employees' elected representatives all relevant information, including written notification concerning:
a.the grounds for any redundancies,
b.the number of employees who may be made redundant,
c.the categories of workers to which they belong,
d.the number of employees normally employed,
e.the groups of employees normally employed,
f.the period during which such redundancies may be affected,
g.proposed criteria for the selection of those who may be made redundant,
h.proposed criteria for the calculation of extraordinary severance pay, if applicable.

Such notification shall be given at the earliest opportunity and, at the latest, at the same time as the employer calls a consultation meeting. Corresponding notification shall also be given to the Labour and Welfare Service, cf. section 8 of the Labour Market Act.

(4) The employees' elected representatives may comment on the notification directly to the Labour and Welfare Service.
(5) Projected collective redundancies shall not come into effect earlier than 30 days after the Labour and Welfare Service has been notified. The Labour and Welfare Service may extend the period of notice pursuant to section 8, third paragraph of the Labour Market Act.

Section 15-3.Periods of notice

(1) Unless otherwise agreed in writing or laid down in a collective pay agreement, a period of one month's notice shall apply to either party. Before notice has been given, an agreement on a shorter period of notice may only be concluded between the employer and the employee's elected representatives at undertakings bound by a collective pay agreement. The Ministry may issue regulations providing for a shorter period of notice for participants in labour market schemes.
(2) In the case of employees who, when notice is given, have been in the employ of the same undertaking for at least five consecutive years, at least two months' notice shall be given by either party. If the employee has been in the employ of the same undertaking for at least ten consecutive years, at least three months' notice shall be given by either party.
(3) If an employee is dismissed after at least ten consecutive years' employment with the same undertaking, the period of notice shall be at least four months when given after the employee is 50 years of age, at least five months after the age of 55, and at least six months after the age of 60. The employee for his part may terminate his contract of employment with not less than three months' notice.
(4) Periods of notice laid down in the first to the third paragraph run from and including the first day of the month following that in which notice is given.
(5) The continuous employment required by the second and third paragraphs is not interrupted by a temporary interruption of employment owing to a lawful labour conflict. However, the period during which the employee is absent shall not be included unless otherwise agreed on settlement of the labour conflict.
(6) Calculation of the length of consecutive employment pursuant to this section shall take into account periods of employment by other undertakings within a corporate group to which the employer belongs or within any other group of undertakings affiliated through ownership interests or joint management in such a way that it is natural to regard the employment as being consecutive. If the undertaking or part of it has been assigned to or leased by a new employer, the period of consecutive employment shall include any periods in which the employee was in the employ of the previous employer or of any undertaking within a group of undertakings or activities to which the previous employer belonged.
(7) In the case of written contracts of employment under which the employee is engaged for a given trial period, 14 days' notice shall be given by either party unless otherwise agreed in writing or a collective pay agreement.
(8) The periods of notice required under the second or third paragraph may not legally be set aside by the parties in collective pay agreements or other agreements concluded before notice is given, nor may the parties decide that the notice to be given by an employee shall be longer than that to be given by an employer.
(9) An employee who has been laid off without pay in connection with a reduction or suspension of operations may resign by giving 14 days' notice calculated from the date on which the notice is received by the employer. This shall apply regardless of the periods of notice ensuing from this Act or any agreement.
(10) If operations must wholly or partly be suspended owing to accidents, natural disasters or other unforeseeable events and employees are laid off for that reason, the period of notice for laying off employees engaged in the work suspended may be reduced to 14 days counted from the date of the event. If the period of notice in force is less than 14 days, the shorter period shall apply. The period of notice may not be reduced pursuant to this paragraph because of the employer's death or bankruptcy nor on suspension of operations owing to the impossibility of using working premises, machinery, tools, materials or other aids furnished by the employer unless the employee himself is responsible for the suspension of operations.

Section 15-4.Formal requirements regarding notice of dismissal

(1) Notice shall be given in writing.
(2) Notice given by an employer shall be delivered to the employee in person or be forwarded by registered mail to the address given by the employee. The notice shall be deemed to have been given when it is received by the employee. The notice shall inform of
a.the employee's right to demand negotiations and to institute legal proceedings,
b.the employee's right to remain in his post pursuant to the provisions of sections 17-3, 17-4 and 15-11,
c.the time limits applicable for requesting negotiations, instituting legal proceedings and remaining in a post, and
d.the name of the employer and the appropriate defendant in the event of legal proceedings.

If notice of dismissal is due to circumstances relating to the undertaking, the notice must contain information about preferential rights pursuant to section 14-2. If the employer belongs to a corporate group, the notice must also state which companies are part of the group at the time of dismissal.

(3) If the employee so demands, the employer shall state the circumstances claimed as grounds for dismissal. The employee may demand that such information be given in writing.

Section 15-5.Consequences of formal errors in connection with a notice of dismissal

(1) If the employer's notice is not given in writing or does not include information as referred to in section 15-4 and the employee institutes legal proceedings within 4 months from the date that notice is given, the notice shall be ruled invalid unless special circumstances make this clearly unreasonable.
(2) If the notice is invalid, the employee may claim compensation. The same shall apply if the notice provides inadequate information, but the employee does not demand that it be ruled invalid or it is not ruled invalid because special circumstances make this clearly unreasonable, cf. the first paragraph. Compensation shall be decided in accordance with section 15-12, second paragraph.

Section 15-6.Protection against dismissal in contracts of employment specifying a trial period

(1) If an employee engaged by written contract for a given trial period is dismissed, such dismissal must be on the grounds of the employee's lack of suitability for the work, or lack of proficiency or reliability.
(2) The provisions of this section do not restrict the employer's right to dismiss an employee pursuant to section 15-7.
(3) The provisions of this section only apply if notice is given before the end of the trial period. The trial period can be agreed for a period of up to six months. For a temporary appointment, the trial period may not exceed half the duration of the employment relationship. The trial period pursuant to this paragraph may nevertheless be extended in accordance with the fourth paragraph.
(4) If an employee has been absent from work during the trial period, the employer may extend the agreed trial period by a period corresponding to the period of absence. Such extension may only take place when the employee has been informed of this possibility in writing at the time of his appointment, and when the employer has informed the employee of the extension in writing before the expiry of the trial period. The right to extend the trial period shall not apply to absences caused by the employer.
(5) A new trial period cannot be agreed if the employee shall continue in the same post or in a post that is essentially the same post the employee has had in the same undertaking. For a permanent appointment, a new trial period may nevertheless be agreed if the employee's previous length of consecutive employment and new trial period do not collectively exceed six months.
(6) The Ministry may issue regulations permitting agreement on a trial period longer than six months in the case of certain groups of employees.

Section 15-7.Protection against unfair dismissal

(1) Employees may not be dismissed unless this is objectively justified based on circumstances relating to the undertaking, the employer or the employee.
(2) Dismissal due to curtailed operations or rationalisation measures is not objectively justified if the employer has other suitable work in the undertaking to offer the employee. When deciding whether a dismissal is objectively justified by curtailed operations or rationalisation measures, the needs of the undertaking shall be weighed against the disadvantage caused by the dismissal of the individual employee.
(3) If the employer belongs to a corporate group, cf. section 8-4, fourth paragraph, the dismissal is not objectively justified if there is other suitable work in other undertakings in the group to offer the employee.
(4) Dismissal owing to an employer's actual or planned contracting out of the undertaking's ordinary operations to a third party is not objectively justified unless it is essential to maintain the continued operation of the undertaking.

Section 15-8.Protection against dismissal in the event of sickness

(1) An employee who is wholly or partly absent from work owing to accident or illness may not be dismissed for that reason during the first 12 months after becoming unable to work.
(2) Unless other grounds are shown to be highly probable, absence from work owing to accident or illness shall be deemed to be the reason for dismissal during the period when the employee is protected against dismissal pursuant to this section.
(3) An employee who claims protection against dismissal pursuant to this section must produce a medical certificate or by other means notify the employer in due time of the reason for his absence. When so required by the employer, a medical certificate shall be produced certifying the total length of the sick leave.

Section 15-9.Protection against dismissal during pregnancy or following the birth or adoption of a child

(1) An employee who is pregnant may not be dismissed on grounds of pregnancy. Pregnancy shall be deemed to be the reason for the dismissal of a pregnant employee unless other grounds are shown to be highly probable. If so required by the employer, a medical certificate of pregnancy shall be produced.
(2) An employee who has leave of absence pursuant to sections 12-2, 12-3, 12-4 or 12- 5, first paragraph, for up to one year, shall not be given notice of dismissal that becomes effective during the period of absence if the employer is aware that the absence is due to such reasons or the employee notifies without undue delay that the absence is due to such reasons. If the employee is lawfully dismissed at a time falling within this period, the notice is valid but shall be extended by a corresponding period.
(3) In the case of an employee who has leave of absence pursuant to section 12-5, second paragraph, or section 12-6 in excess of one year, the first paragraph, first and second sentence, shall apply correspondingly.

Section 15-10.Protection against dismissal in connection with military service, etc.

(1) An employee may not be dismissed owing to a leave of absence pursuant to section 12-12. In connection with leave of absence pursuant to section 12-12, first paragraph, second sentence, protection against dismissal shall also apply to periods when an employee is not absent from work.
(2) Unless other grounds are shown to be highly probable, such service shall be deemed to be the reason for dismissal immediately before or during the period during which the employee is absent from work owing to leave pursuant to section 12-12.

Section 15-11.The employee's right to remain in his post

(1) In the event of a dispute concerning whether an employment relationship has been legally terminated pursuant to the provisions of section 15-7, an employee may remain in the post as long as negotiations are in progress pursuant to section 17-3.
(2) If legal proceedings are instituted within the time limits laid down in section 17-4, an employee may remain in the post. If so demanded by the employer, the court may nevertheless decide that the employee shall leave his post while the case is in progress if the court finds it unreasonable that employment should continue while the case is in progress. This shall also apply in connection with full or partial closing down of activities. At the same time, the court shall set the time limit for termination of the employee's post.
(3) The employee's right to remain in his post shall not apply to disputes concerning summary dismissal, dismissal during a trial period, or workers hired from temporary-work agencies or other companies or other temporary employees. If so demanded by an employee, the court may nevertheless decide that the employment shall continue until the matter has been legally decided if legal proceedings are instituted within the time limits provided in section 17-4.
(4) The employee's right to remain in his post shall not apply to participants in labour market schemes under the auspices of or in cooperation with the Labour and Welfare Service who are dismissed because they are offered ordinary employment or transferred to another scheme or because the scheme is terminated.
(5) The court may decide that an employee who has been unlawfully locked out of his place of work after the period of notice or term of the contract of employment has expired shall be entitled to resume the post if the employee so requests within four weeks of such a lockout.

Section 15-12.Consequences of unfair dismissal, etc.

(1) If a dismissal is in contravention of sections 15-6 to 15-10, the court shall, if so demanded by the employee, rule the dismissal invalid. In special cases, if so demanded by the employer, the court may decide that the employment shall be terminated if, after weighing the interests of the parties, the court finds it clearly unreasonable that employment should continue.
(2) An employee may claim compensation if a dismissal is in contravention of sections 15-6 to 15-11. Compensation shall be fixed at the amount the court deems reasonable given the financial loss, circumstances relating to the employer and employee and other facts of the case.

Section 15-13.Suspension

(1) If there is reason to assume that an employee is guilty of an offence that may involve summary dismissal pursuant to section 15-14 and the needs of the undertaking so indicate, the employer may suspend the employee while the matter is investigated.
(2) Continuous assessment shall be made as to whether the conditions laid down in the first paragraph have been fulfilled. If this is not the case, the suspension shall immediately be revoked. Suspension in excess of three months must be justified by the special nature of the offence.
(3) An employee shall retain the salary he or she received on the date of the suspension until termination of the suspension.
(4) In the event of a suspension, the provisions of sections 15-1, 15-4 and 15-12 shall apply correspondingly in so far as they are appropriate.

Section 15-13 a.Termination of employment on account of age

(1) Employment may be terminated when an employee reaches the age of 72.
(2) A lower age limit may be decided where necessary out of regard for health or safety. The lower age limit must be objectively justified and not disproportionately restrictive, cf. Section 13-3, second paragraph.
(3) An employee is entitled to written notification of the date on which he is to leave his post. Termination of the employment may, at the earliest, be demanded six months after the first day in the month after such notification is received by the employee.
(4) Before issuing such notification, the employer shall as far as possible invite the employee to an interview unless this is not desired by the employee himself.
(5) Employees who wish to terminate their employment shall be subject to a corresponding notification time limit of one month, with the exception that this need not be given in writing.

Section 15-14.Summary dismissal

(1) The employer may summarily dismiss an employee if he or she is guilty of a gross breach of duty or other serious breach of the contract of employment.
(2) The provisions of sections 15-1 and 15-4 shall apply correspondingly to summary dismissal.
(3) If summary dismissal is unlawful, the court shall rule it invalid if so demanded by the employee. In special cases, the court may nevertheless, if so demanded by the employer, decide that the employment shall be terminated if, after weighing the interests of the parties, the court finds it clearly unreasonable that employment should continue. The court may also decide that the employment shall be terminated when it finds that dismissal is objectively justified.
(4) An employee may claim compensation if the summary dismissal is unlawful. Compensation shall be decided in accordance with section 15-12, second paragraph.

Section 15-15.References

(1) An employee who leaves after lawful dismissal is entitled to a written reference from the employer. The reference shall state the employee's name, date of birth, the nature of the work and the duration of employment.
(2) This provision does not restrict the employee's right to request a more detailed reference in relation to employment where this is customary and not otherwise provided in a collective pay agreement.
(3) An employee who is summarily dismissed is also entitled to a reference, but the employer may state that the employee was summarily dismissed without giving the reasons for the dismissal.

Section 15-16.The chief executive of the undertaking

(1) The employer may enter into a written agreement with the chief executive of the undertaking to the effect that disputes in connection with the termination of the employment relationship shall be settled through arbitration.
(2) The provisions of this chapter concerning dismissal shall not apply to the chief executive of the undertaking if this person has in a prior agreement relinquished such rights in exchange for compensation on termination of employment.

Section 15-17.Dismissal in connection with labour disputes

The provisions laid down in this chapter shall not apply in connection with dismissal pursuant to section 15 of the Labour Disputes Act or section 22 of the Civil Service Disputes Act.