The rescission of an employment contract was justified because the employee had not informed her new employer prior to her new employment commencing that she had been dismissed from her previous job on the grounds of long-term sickness absence caused by stress. The Danish Supreme Court has confirmed this in a judgment dated 9 June 2015. 

A recent case heard by the Supreme Court has established that the rescission of an employment contract was justified because the employee had not declared that she had been dismissed from her previous job as a consequence of long-term sickness absence on the grounds of stress.

The case in brief

An HR consultant, who was employed by a regional hospital, was dismissed after she had been signed off sick for a period of seven months on the grounds of stress (alternating between being signed off on a fulltime and part-time basis). She was fully signed off sick during the entire notice period.

Towards the end of her notice period, the HR consultant applied for a new job as a payroll consultant at the head office of the Danish Regional Health Authority in Mid-Jutland. She went to several job interviews. At no point during the recruitment process did the HR consultant inform her new employer, however, that she had been dismissed or that she was signed off sick on the grounds of stress. On the contrary, she gave the impression that she was in active employment (not working her notice) and that she would need to resign.

She got the job, but when the Regional Health Authority contacted her previous employer and was informed that she had been dismissed as a result of long-term sickness absence – and was also signed off sick during the recruitment process – the Health Authority chose to rescind the employment contract. In so doing, the Regional Health Authority referred to the fact that the HR consultant had submitted incorrect information during the recruitment process.

The HR consultant did not believe that this was justified. She brought a claim submitting that the Regional Health Authority should pay compensation equivalent to a 14-day notice period, and also compensation under the Danish Act on the Use of Health Data etc. on the Labour Market (helbredsoplysningsloven) and as a result of the failure to comply with the Danish Public Administration Act’s (forvaltningsloven) rules granting interested parties the right to be informed of the intended decision, the underlying facts and opportunity to submit comments before a decision is made.

The HR consultant considered herself in good health when she received her offer of employment and that her stress was due to the conditions at her previous workplace.

Supreme Court judgment

Technically, the HR consultant’s previous employer, the Regional Hospital, also came within the auspices of the Regional Health Authority, but the Supreme Court and the parties agreed to treat the case as if the regional hospital and the head office were two different employers.

The Supreme Court held that an applicant’s duty of disclosure under the Act on the Use of Health Data etc. includes providing information about work-related stress which results in sickness absence, and this is irrespective of whether the applicant’s circumstances may be considered an illness medically speaking.

The Supreme Court further made it clear that an employee is not only subject to the duty of disclosure when he or she is aware of the fact that they suffer from an illness which will have a significant impact on their ability to work, but also if there is an obvious risk that the illness could have a significant impact on their ability to work.

Against this background, the Supreme Court held that the HR consultant had breached her duty of disclosure under the Act on the Use of Health Data etc. as she must have realised that there was an obvious risk that she would continue to suffer from stress which would have a significant impact on her ability to work. The Supreme Court further had regard to the fact that the HR consultant had deliberately given the Regional Health Authority the false impression that she remained in active employment (not having been given notice of dismissal). She had therefore acted fraudulently and in breach of her ordinary duty to loyally disclose all relevant information. Against this background, the Supreme Court found that the Regional Health Authority’s rescission of the employment contract was justified and the HR consultant was not, therefore, entitled to any compensation.

The Regional Health Authority had furthermore not wrongfully used the information about her health in breach of the Act on the Use of Health Data etc. because the HR consultant had been under an obligation to inform the Regional Health Authority that she was signed off sick on the grounds of stress. The HR consultant was therefore not entitled to compensation under the Act on the Use of Health Data etc.

With regard to the failure to allow the HR consultant to submit her comments and be consulted before a decision was made (in Danish: partshøring) the Supreme Court concluded that a supplementary consultation process with the HR consultant would not have resulted in a different outcome in the decision to rescind the employment contract. The HR consultant was not, therefore, entitled to compensation for the failure to consult her.

The Supreme Court referred in this connection to previous case law which had established that failure to administer the consultation process properly does not in itself result in an entitlement to compensation, if the public authority’s decision is materially impartial and fair.

Bech-Bruun’s comments

This case is interesting because the Supreme Court has made it clear that an employee with stress-related sickness absence in their current job may be obliged to inform a new employer about this during the recruitment process. This duty of disclosure applies if there is an obvious risk that the illness may have a significant impact on the employee’s ability to perform his/her duties in the new job.

As a starting point, it is the job applicant who must make the assessment of whether there might be an obvious risk that the illness may have a significant impact. The Supreme Court judgment does, however, show that this starting point can be departed from.

The HR consultant’s assessment that her sick leave was only caused by the working conditions at her old place of work was therefore disregarded by the Supreme Court. Instead, the Supreme Court placed emphasis on the fact that the duties of the new job were of the same ilk as the HR consultant’s previous job and the new job could be expected to be of the same character. Against this background, the Supreme Court concluded that there was an obvious risk that the HR consultant’s stress could have a significant impact on her ability to work for the Regional Health Authority.

The Supreme Court further established that employees will be in breach of their duty to loyally disclose all relevant information if they deliberately give a new employer the impression that they remain employed and are not working their period of notice, when they have, in fact, been dismissed.

As regards the question of compensation for failure to grant a party the opportunity to submit comments and be consulted (partshøring), it is not surprising that the Supreme Court concluded that the failure to administer the consultation process properly did not give rise to compensation as it did not have any impact on the fairness/impartiality of the public authority’s decision which is in accordance with previous case law.