Labour Court's reasoning
The Labour Court recently issued a judgment on cancellation of notice and observance of the re-employment obligation (TT:2012-29). The court found that the employer had not undertaken the necessary measures to contact the employees made redundant in order to offer them work during their notice periods. However, the employer had fulfilled its re-employment obligation regarding a redundant employee whose notice period had expired.
Finnish law includes a provision on the employer's re-employment obligation following redundancies on financial and production-related grounds. If an employee is given notice on such grounds and the employer needs new employees within nine months of termination of the employment relationship for identical or similar work to that performed by the employee given notice, the employer must offer work to this former employee. The employer shall also ask the employment office whether the employee in question is still seeking work.
In the case at hand, following cooperation negotiations in the company, the employer had terminated a number of employment relationships on financial and production-related grounds. The employer released the employees from their duty to work immediately after giving notice.
As a consequence of an unexpected improvement in the company's work situation, the employer was subsequently able to offer the redundant employees work. The employer tried to contact the employees by telephone, without successfully reaching any of them. Since the company was in urgent need of workers, the employer decided to recruit new employees during the course of the notice periods of two of the redundant employees. The new employees were employed for fixed terms and for the same or similar duties as those performed by the redundant employees. The employer also recruited leased workers and one intern during the course of the notice periods, as well as re-employed employees who had been laid off as a result of the redundancies.
The redundant employees were represented by their trade union, Sähköalojen ammattiliitto ry. The trade union argued that the employer had groundlessly terminated the employment relationships of the employees by recruiting both fixed-term employees and leased workers during their notice periods. The trade union also claimed that the employer had violated its statutory obligation to re-employ the employees during their notice periods.
The employer argued that it had fulfilled its statutory obligations since it had tried to contact the employees by telephone. Moreover, although the employees were released from the duty to work during their notice periods, they were under an obligation to be available to the employer during such periods. The employer was in urgent need of workers and therefore had to employ new personnel at short notice. Before employing the new employees, the employer had tried to contact both the redundant employees and the local employment office in order to find out whether the redundant employees were still seeking work. The redundant employees could not be reached through the employment office either.
The Labour Court stated that the relevant issues to be addressed were:
- whether the grounds for termination of employment and the prerequisites for re-employment of the redundant employees existed, both during the notice periods and thereafter; and
- whether the employer had undertaken appropriate measures in order to inform the redundant employees of the work on offer.
The court noted that the grounds for termination of employment existed when the employees' employment contracts were terminated. However, an employer's obligation to ensure that the grounds for termination of employment remain valid continues throughout the notice period. If the grounds for termination cease to exist during the notice period, the employer shall ensure that the employee may continue his or her employment relationship. In its reasoning, the court also referred to the employer's re-employment obligation.
Fulfilment of re-employment obligation
Regarding the employer's obligation to re-employ the redundant employee whose notice period had ended by the time the employer had recruited new workers, the court found that the employer had undertaken reasonable measures in order to reach that employee. The employer had both contacted the employment office and tried to contact the employee personally by telephone. Moreover, the employer had acted in good faith. The fact that the employer had recruited a fixed-term intern during the employee's notice period did not alter the grounds for termination to the extent that the employer would have been obligated to cancel the termination. Nor did the use of leased workers constitute a breach of the employer's obligations.
Since the notice periods of the other two redundant employees were still running when the new personnel were recruited, the re-employment obligation did not apply to them.
Cancellation of termination
The court noted that no specific rules govern the delivery of job offers in situations where the employee is released from the duty to work during the notice period. Therefore, the matter was to be assessed based on the employer's loyalty obligation towards the redundant employees. The court stated that the employer has a special obligation to safeguard the continuation of employment relationships that are still in force (ie, the notice periods of which are still running). This obligation is even stronger when the employment relationship has lasted for a long time.
The fact that the employer, having tried to obtain the redundant employees' contact information from a directory inquiry, also tried to contact the employees by telephone was insufficient. The employer could, with little inconvenience and within a reasonable time, have contacted the employees, for example, by mail. However, this reasoning did not apply to the employee whose notice period had expired.
The court rejected the claim for failure to re-employ the redundant employees. However, the court found that the employer had groundlessly terminated the employment of those employees whose employment relationships were still in force at the time of recruitment of new personnel. Therefore, the employer was sentenced for groundless termination of the said employees' employment and ordered to pay them compensation.
For further information on this topic please contact Seppo Havia at Dittmar & Indrenius by telephone (+358 9 68 1700), fax (+358 9 65 2406) or email ([email protected]).