In the first half of 2014, we experienced an increasing number of cases and participated in many tenders concerning legal services. Further, we conducted and are conducting a number of interesting cases. For example, we are assisting in a major case concerning executive liability, which branches out to India, we have assisted a number of companies negotiating attractive bargaining agreements and, in the most discussed case before the Court of Glostrup, we succeeded in maintaining a summary dismissal of an employee who appeared late at work on several occasions.

Below, we will give you an overview of the legislative measures and recent case law within employment law during the first half of 2014. Finally, we will give you our assessment of what will happen within employment law during the second half of 2014.

LEGISLATION

The first half of 2014 was quiet with only a few new legislative measures within employment law.

An amendment of the Sickness Benefits Act was adopted according to which employees who are reported sick and cannot obtain an extension of their sickness benefits according to the existing rules from 1 July 2014 are to enter a job clarification procedure and receive benefits with no time restriction. This benefit almost equals the level of cash benefits and is independent of fortune and income.

The amendment ensures that employees reported sick can provide for themselves during the sickness.

The bill contained the following items:

-    After five months, the sickness benefits will either be extended, or the employee will have to enter a job clarification procedure with reduced benefits.
-    Persons with life-threatening diseases, e.g. cancer, may continue to receive sickness benefits indefinitely.
-    It will be possible to turn down medical treatment without losing the ability to provide for your family.
-    A new visitation model will be introduced according to which efforts and follow-up are to take place at an earlier stage.
-    The possibility of initiating an extraordinary early effort.
-    Resources are primarily to be used on employees who risk having a long course of disease.
-    Simplification of the administrative procedures.

Based on the government's growth plan from May 2014, it also seems as if the next six months may introduce some interesting - seen from an employment law perspective - changes in the rules on non-competition, no-solicitation and job clauses. The growth plan i.a. suggests that the current rules on non-competition and non-solicitation clauses must apply to all employees in the future and not only to salaried employees, and the government further suggests that the term of the clauses is maximised to 12 months. The plan also suggests that the compensation rules are amended with the result that employees are compensated more the longer the clauses apply. It is further suggested to prohibit the so-called job clauses. Such clauses are on certain conditions entered into between two companies for the purpose of preventing employment of each other's staff.

It is also a part of the growth plan to strengthen the recruitment of international labour.

Horten will, of course, keep you updated on the new legislative measures.

CASE LAW

Many interesting employment law rulings were delivered during the first half of 2014 - and the absence of a particular ruling is almost equally interesting.

Giving up a professional career - section 2a of the Salaried Employees Act
A Supreme Court ruling delivered in January 2014 established that an employee still wishing to pursue a professional career must be paid compensation under section 2 a of the Salaried Employees Act irrespective of whether the employee is entitled to receive retirement pension.

The Supreme Court establishes that, until more detailed guidelines have been laid down as to the situations in which an employee may be considered having temporarily waived retirement pension for the purpose of pursuing a professional career, a specific assessment must be made in each situation.

Read more

On 16 June 2014, the main trial concerning entitlement to severance pay and compensation for age discrimination was heard by the Supreme Court. It was the first case since the Ole Andersen case concerning entitlement to compensation under section 2a of the Salaried Employees Act to an employee having been employed with a private employer. The interesting aspect of this case is that we are still waiting for the Supreme Court's ruling. Whether this is due to the fact that the Supreme Court finds that it is not able to construe section 2a consistent with EU law and is going to present the case to the European Court of Justice, or whether it is due to summer inactivity, time will tell. In any case, we are keenly awaiting the ruling.

Employment of competitor's staff - the Marketing Practices Act
In January, the Maritime and Commercial High Court also delivered an interesting ruling as to whether it was contrary to the Marketing Practices Act that a smaller service company employed a significant number of employees from a large competitor over a short period of time. 

The court found that the Marketing Practices Act had been violated as the director of the small company and the former director of the competitor had crossed a line by exploiting and encouraging the employees' disloyal conduct for the purpose of gaining a market advantage by way of customers.

Read more

Tax treatment of compensation
In February, the Tax Assessment Committee decided in a fundamental case that compensation according to the Non-Discrimination Act is exempted from tax liability although paid in connection with resignation.

The Committee has, however, re-evaluated the question concerning the tax treatment of compensation under section 7 of the Non-Discrimination Act and concluded that, in terms of tax, compensation must be treated as compensation paid in connection with resignation, which is taxable under section 7U of the Tax Assessment Act. The Committee further states that previous decisions where compensation under the Non-Discrimination Act has been exempted from tax liability cannot be considered to constitute the correct legal position.

Loss of earnings to an apprentice upon termination of a training agreement
On 10 March 2014, the Supreme Court awarded compensation for loss of earnings and compensation under the Vocational Training Act to an apprentice, whose training agreement had been unilaterally terminated by the employer. 

Read more

Can you count to 120 days?
Later that month, the Western High Court delivered a ruling stating that it could cost a lot of money for a company to make a miscalculation under the 120 days' rule. A salaried employee was dismissed on the 120th day of the sickness absence. The court found that an employee cannot be dismissed until after the expiry of the 120th day, and that the company could therefore not dismiss the employee on the 120th day under the rule.  

Read more

Municipality was not considered the employer of a disabled citizen's assistant
On 24 May 20014, the Western High Court delivered a fundamental ruling concerning who is the correct employer of a disabled citizen's assistant covered by the BPA scheme (user-controlled personal assistance). The court found that the disabled citizen and not the municipality is the correct employer. This specifically meant that the assistant was prevented from claiming repayment of salary, holiday allowance, pension and compensation under the Equal Treatment Act.

Read more

Dismissed summarily for being seven minutes late
On 27 May 2014, Horten conducted a case for an employer as to whether it was justified to dismiss a salesperson summarily for being seven minutes late. Taking the actual circumstances into consideration and the fact that the employee had been warned in advance about the consequences of being late, the district court found that the summary dismissal was justified despite the fact that the employee was only a few minutes late.

Read more

Disablement - once again
In June 2014, the Board of Equal Treatment heard a complaint stating that a disabled person's cohabitee is also protected by the Non-Discrimination Act. Specifically, the case concerned a service employee, who had been absent for eight days in connection with his cohabitee's admission to hospital due to an infection in the spinal cord in February 2013.  Subsequently, the employee was dismissed due to restructuring of his department.

Even though the Board found that the employee had not been discriminated against, the Board stated that the cohabitee of a disabled person is also considered covered by the Non-Discrimination Act. The Board thereby extended the scope of the present protection with the result that a parent and primary breadwinner of a disabled child is protected against discrimination due to the child's disablement.

Read more

The employer is not subject to criminal liability for everything - there are limits
On 6 June 2014, the Eastern High Court ruled in a peculiar matter where the Court established that an employer had not violated the Working Environment Act although the employee's behaviour specifically violated the Act. The ruling shows that a criminal action concerning working environment is not simply a formality without any possibility of acquittal for the employer as an employer having ensured proper training of an employee is, of course, not subject to criminal liability if the employee makes an abnormal or inappropriate act in bad faith.

Read more

TENDENCIES

The Supreme Court has now had the opportunity to consider the most obvious issues concerning section 2a of the Salaried Employees Act. However, a few aspects are still missing, but we hope they will be considered soon!  

If not, all types of disablement will be on the agenda.

contacts

Jonas Enkegaard

Partner

Erik Wendelboe Christiansen

Partner

Finn Schwarz

Managing Partner

Marianne Lage

Partner