According to a new judgment by the Danish Supreme Court, the 120-day rule is not in breach of EU law prohibiting disability discrimination. The Supreme Court has also ruled that an employer’s duty to make reasonable adjustments will apply only if the employer knows, or ought to have known, that the employee has a disability under the Danish Employment Non-Discrimination Act (forskelsbehandlingsloven).

A new judgment by the Supreme Court considers a number of questions concerning employees with a disability subject to the Danish Employment Non-Discrimination Act.

In its judgment, the Supreme Court concludes that:

  • Sickness absence on the grounds of a disability may be included in the calculation of sick days under the 120-day rule pursuant to the Danish Salaried Employees Act (funktionærloven)
  • The 120-day rule does not violate the Employment Equality Framework Directive
  • It is for the employee to prove that his or her illness constitutes a disability under the Danish Employment Non-Discrimination Act
  • The employer’s duty to make reasonable adjustments arises only when the employer knows, or ought to have known, that the employee has a disability.

The case in brief

An employee was signed off sick due to a whiplash injury caused by a traffic accident in 2003. The employee was signed off sick for three weeks following the traffic accident but then worked full time for ten months following her return to work. 

Towards the end of 2004 the employee still suffered from whiplash symptoms and she was signed off sick again in January 2005.

A number of medical reports, including expert medical reports, were submitted, the most recent medical report being submitted on 4 April 2005. The employer did not, however, receive the expert medical report dated 4 April 2005.

The employee subsequently lodged a claim against her employer. She submitted that her whiplash injury constituted a disability and that the employer had subjected her to unlawful disability discrimination by failing to make reasonable adjustments, including offering her reduced hours, to allow her to remain in employment. The employee further considered that the dismissal on reduced notice under the 120-day rule was unlawful discrimination on the grounds of her disability.

Rulings from the Maritime and Commercial High Court and the ECJ 

The Maritime and Commercial High Court heard the case in the first instance and submitted a number of preliminary questions to the ECJ.

The questions concerned the interpretation of the disability concept set out in the Employment Equality Framework Directive and whether it would be a breach of EU law and the prohibition against discriminatory treatment to apply the 120-day rule if the sickness absence was wholly or partially due to a disability. 

In its judgment, the ECJ interpreted the concept of disability to include a condition caused by an illness medically diagnosed as curable or incurable where such illness entails a limitation which results in particular from physical, mental or psychological impairments which in interaction with various barriers may hinder the full and effective participation of the person concerned in professional life on an equal basis with other workers, and such limitation is long-term.

Against this background, the ECJ ruled that it would be a breach of the prohibition against discriminatory treatment on the grounds of disability to include sickness absence in the calculation of the 120 days (under the 120-day rule) if the sickness absence was due to the fact that the employer had not complied with its duty to make reasonable adjustments. 

The ECJ further ruled that the 120- day rule is potentially a breach of the prohibition against discriminatory treatment on the grounds of disability because disabled employees run a greater risk of accumulating 120 days of sickness absence compared to non-disabled employees. It would, however, be permissible to keep the 120-day rule if it pursues a legitimate aim, and the measures taken to achieve this aim do not go beyond what is necessary. The ECJ left this issue for the Danish courts to assess.

In light of the ECJ’s decision and the medical advice submitted before the court, the Maritime and Commercial High Court found that the employee had a disability and that the employer had breached its duty to make reasonable adjustments.

The Maritime and Commercial High Court further found that the employer’s dismissal of the employee under the 120-day rule constituted direct discrimination. This was because the employer had included disability-related sick days in its calculation of the 120 days. Against this background the Maritime and Commercial High Court awarded the employee compensation equivalent to 12 months’ salary under the Danish Employment Non-Discrimination Act. 

Supreme Court judgment

The employer appealed the case to the Supreme Court. By way of introduction the Supreme Court found that the employee had the burden of proving that she had a disability. The Supreme Court further ruled that the employee’s whiplash injury resulted in an impairment which hindered the employee from participating in professional life on an equal basis with other workers.

The Supreme Court held that the medical report of 4 April 2005 constituted a prognosis for the employee’s illness, following which the physical impairment could be considered to have a long-term effect. In light of this the Supreme Court found that the employee had a disability in accordance with the Danish Employment Non-Discrimination Act at the time of her dismissal, namely on 21 April 2005.

However, the Supreme Court also ruled that an employer’s obligation to make reasonable adjustments is subject to the employer “having knowledge or constructive knowledge” of the employee’s disability.

Applying these principles, the Supreme Court found that the employer did not know, and did not ought to know, at the time of the dismissal (21 April 2005) that the employee’s whiplash injury was a disability. The employer had therefore not breached its duty to make reasonable adjustments and the employee had not been subjected to any unlawful discriminatory treatment. Against this background, the claim against the employer was dismissed.

The Supreme Court further held that the 120-day rule pursues a legitimate aim seeing that it seeks to prevent a situation, in which employers feel impelled to immediately dismiss any employees as soon as they fall ill. Taking the Danish social security system and the organisation of the Danish labour market into consideration, the Supreme Court held that the means of achieving this aim are legitimate, and they do not go beyond what is necessary (even with respect to disabled employees).

Bech-Bruun’s comments

The Supreme Court decision has finally clarified that the 120-day rule is not a breach of EU law prohibiting discriminatory treatment on the grounds of disability. Therefore, there is no need to make amendments to the Salaried Employees Act to bring it into line with EU law.

The Supreme Court further held that disability-related sickness absence may be included in the calculation of the 120 days sickness absence under the 120-day rule. However, if the employer does not comply with the duty to make reasonable adjustments, it will still constitute unlawful discriminatory treatment if a disabled employee is dismissed by reference to either the employee’s sickness absence (of 120-days) or the employee’s failure to be flexible. 

However, the Supreme Court made it clear that the obligation to make reasonable adjustments is conditional upon the employer having knowledge or constructive knowledge of the employee suffering from an illness comprised by the concept of disability in the Danish Employment Non-Discrimination Act. This is a new requirement under the Act, although the concept of actual or constructive knowledge (the “ought to have known” principle) is a familiar concept from the Danish Equal Treatment Act (ligebehandlingsloven) as regards pregnant women. 

It is now up to the courts to determine the limits of how much is required before an employer “knows or ought to have known” that an employee has a disability under the Danish Employment Non-Discrimination Act.

Even though the Supreme Court sets the scene for employers claiming that they did not know, or ought to have known, that a dismissed employee had a disability, we continue to recommend that employers consider whether an employee’s illness could be considered to fall within the concept of disability as set out in the Danish Employment Non-Discrimination Act. 

This is because the extent to which an employer acts in good faith has yet to be determined by case law. If it subsequently turns out that the employer ought to have known that the employee was disabled, the employer may be liable to pay compensation.