Section 5 (2) of the Salaried Employees Act prescribes that it may be agreed in writing that a salaried employee can be dismissed at one month's notice if he/she has received salary during sickness for a total of 120 days. Further, the notice must be given in close connection with the 120 days and while the employee is still sick.
Even though the rule seems very favourable to the employer, the consideration behind the rule is to take away the employer's incentive to dismiss the employee at an early stage, and the purpose of the rule is actually to protect the employee.
The Western High Court ruling of 30 January 2014
The case concerned an employee, who was reported sick in July 2010. On 5 November 2010, he was dismissed with reference to the 120-days' rule. The dismissal took place on the 120th day of absence. The employee then brought action against the employer claiming salary in the notice period, holiday allowance, compensation for wrongful dismissal and compensation for an insufficient contract of employment.
Based on a construction of section 5 (2) of the Salaried Employees Act and the legislative history behind the Act, the High Court found that a dismissal may take place at the earliest after the expiry of the 120 days, and the employer is therefore not entitled to dismiss the employee on the 120th day.
The employee therefore succeeded in his claim for DKK 314,000.
By this ruling, the High Court establishes that the expiry of the 120 days is an absolute condition for applying the 120-days' rule, and that it is not taken into account whether the employer has made a mistake when counting the sickness days.
At the same time, however, the employer must note that the dismissal cannot be made too long after the expiry of the 120 days. In such situation, the courts have also been strict in their assessment, and they have at the most approved dismissals made eight days after the expiry of the 120 days.
The window for applying the 120-days' rule is therefore narrow. Consequently, it is important to count the sickness days correctly, as even small mistakes may be a costly affair.
The content of this Newsletter is not, and should not replace, legal advice.