Short answer: An unfair dismissal is based on legitimate and reasonable reasons related to the business, employer or employee. An unfair dismissal lacks such grounds or violates the formal requirements of the Working Environment Act, and can be declared invalid with the right to compensation.
Introduction: Dismissal is one of the most invasive measures an employer can take. The Working Environment Act therefore sets strict requirements for both justification and process. For employees, it is crucial to know what distinguishes a fair dismissal from an unfair dismissal, and what rights they have if the rules are not followed. For employers, it's equally important to understand the rules to avoid legal disputes and financial consequences. In this article, we take a closer look at what constitutes just cause, what characterizes an unfair dismissal, and what legal consequences follow if the law is broken.
What does just cause for dismissal mean?
Section 15-7 of the Working Environment Act states that an employee may not be dismissed without just cause. This means that the dismissal must be based on circumstances that concern either the company, the employer or the employee. Good cause may, for example, be operational restrictions, rationalization measures or circumstances related to the employee's performance or behavior.
It is important to note that if the dismissal is due to operational restrictions, it is not justified if the employer has other suitable work to offer the employee in the company (Section 15-7 (2)). Furthermore, a balance must be struck between the needs of the business and the disadvantages the dismissal causes the employee. This means that the employer must be able to document that the dismissal is necessary and proportionate.
Finally, Section 15-7 (3) emphasizes that if the employer is part of a group, it must also be considered whether there is suitable work in other companies in the group. This extends the employer's obligation to offer alternative positions before a dismissal can be considered unfair.
What characterizes an unfair dismissal?
A dismissal is unfair if it does not meet the requirements of the Working Environment Act. This may be the case if:
An unfair dismissal can be declared invalid by the court, and the employee can also claim compensation under section 15-12. This means that the employer runs the risk of having to reinstate the employee and pay financial compensation.
Formal requirements for dismissal
Section 15-4 of the Working Environment Act lays down clear requirements for how a dismissal must be carried out. The notice of termination must be in writing, and it must be delivered in person or sent by registered mail. It must also contain information about the employee's rights, including
If the dismissal is based on the company's circumstances, it must also contain information about preferential treatment pursuant to section 14-2. If the employer is part of a group of companies, the notice of termination must state which companies are part of the group. Failure to comply with these requirements may result in the termination being declared invalid pursuant to section 15-5.
Rights in the event of unfair dismissal
Section 15-12 of the Working Environment Act regulates the consequences of unfair dismissal. If the court finds that the dismissal is in violation of the law, it can be declared invalid. This means that the employee has the right to continue their employment. In addition, the employee can claim compensation for financial loss, based on an overall assessment of the employer's and employee's circumstances, as well as other circumstances.
In special cases, the court may nevertheless decide that the employment relationship shall be terminated, even if the dismissal is unfair. This can happen if it is considered to be clearly unreasonable for the employment relationship to continue, although the employee will then be entitled to compensation.
The difference between termination and dismissal
It is important to distinguish between termination and dismissal: termination means that the employment relationship ends after a notice period, while dismissal means immediate resignation. Section 15-14 of the Working Environment Act allows for dismissal if the employee is guilty of a gross breach of duty or significant breach of the employment contract.
If the dismissal is unfair, the same rules apply as for unfair dismissal. The court can declare the dismissal invalid, and the employee can claim compensation. This emphasizes how important it is for the employer to have a solid basis before making such a serious decision.
Dismissal in the event of a business transfer
Section 16-4 of the Working Environment Act states that a business transfer in itself is not grounds for termination or dismissal. However, if the employment relationship is terminated as a result of significant changes in working conditions to the detriment of the employee, this is regarded as a termination based on the employer's circumstances. In such cases, the rules on unfair dismissal and compensation apply accordingly.
This protection is important to ensure that employees do not lose their jobs simply because the business has a new owner. Employers must therefore pay particular attention to employees' rights in the event of reorganizations and transfers.
Duty to discuss before dismissal
Before deciding to dismiss an employee, the employer must discuss the matter with the employee and any employee representatives, cf. section 15-1. This applies to both the basis for the dismissal and the selection if several employees are being considered for dismissal. The purpose is to ensure a proper process and give the employee the opportunity to express their views before the decision is made.
A lack of discussion can contribute to the dismissal being considered unfair, and it can weaken the employer's position in any legal dispute, so the duty to discuss is a key part of the employer's responsibility.
FAQ - Frequently asked questions about fair and unfair dismissal
What is a valid reason for dismissal?
A just cause can be circumstances related to the business, the employer or the employee, such as operational restrictions or lack of work performance (section 15-7).
What happens if the dismissal is unfair?
The dismissal can be declared invalid, and the employee can claim compensation for financial loss (section 15-12).
Does a dismissal always have to be in writing?
Yes, the notice of termination must be in writing and meet the formal requirements in section 15-4. Failure to do so may render the notice of termination invalid (section 15-5).
What is the difference between resignation and dismissal?
Dismissal means termination with notice, while dismissal means immediate resignation due to gross breach of duty (Section 15-14).
Can I be dismissed in the event of a business transfer?
No, a business transfer is not in itself grounds for dismissal (section 16-4). Dismissal can only take place if there is just cause.
What is the employer's duty before dismissal?
The employer must discuss the matter with the employee and any employee representatives before making a decision (Section 15-1).
Summary
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