In an ever-changing and challenging world, multinational companies will forever strive for the most effective and competitive business operation, which by nature will mean that jobs will be placed where the cost is lowest, and the talent pool is highest. At the same time, companies will often wish to streamline the business and centralize functions to avoid duplicate roles to limit inefficiency and unnecessary operational costs.
For most companies, ongoing adjustments will mean restructuring the organization, even in situations where there is no overall reduction in cost, just a need to change focus with respect to territories, products, skills, etc. When carrying out restructurings across the Nordics, companies are usually met with a series of employment-related questions that often need to be aligned across jurisdictions. However, even though Denmark, Sweden, and Norway share common foundations, the employment rules normally vary to some extent.
One question that we see increasingly being raised as part of cross-border restructurings in the Nordics is whether companies are required to offer affected employees open positions in other jurisdictions.
The short answer is maybe. Companies do not have statutory cross-border redeployment obligations in Denmark, Norway, or Sweden. However, the conclusion is often challenged by the affected employees (and unions) and relevant case law suggests that the answer could be clarified further in practice, especially considering recent developments under Norwegian employment law. Also, different circumstances can affect the answer in practice, including that it is a requirement within all three countries that a termination must be justified to not trigger claims for compensation. Although that should usually be the case in the scenario of a restructuring, it does not prevent employees from mixing redeployment considerations into business decisions to challenge if there is in fact a real redundancy resulting from the restructuring or not.
For that reason, it is necessary to consider the national redeployment obligations to consider how far the rights can be stretched in practice:
Limited redeployment rights in Denmark
There is no statutory rule requiring companies to offer redeployment during a restructuring process in Denmark.
Companies can generally choose which employees to terminate without first considering and offering an alternative position. That said, there may be an indirect redeployment obligation in practice, depending on the circumstances. The reason is that it plays a role if the company considered – or should have considered – alternative, suitable positions when determining whether a termination was justified or not.
More specifically, under the Salaried Employees Act (funktionærloven), employees are protected against an unjustified termination after one year of employment. Terminations arising from a restructuring process are generally justified, and the underlying business decisions are rarely challenged in practice. However, although companies are granted a broad level of discretion to decide whom to terminate, terminations will likely be challenged as unjustified if suitable positions are available at the time of termination. In that scenario, it can be difficult to argue that the termination was justified in the restructuring process if no redeployment considerations were made.
In a case from the Danish Western High Court from 2015, an employee claimed that his termination due to a restructuring was unjustified as there were suitable positions available within the company, among other things. The Court concluded that the termination was justified as the positions he referred to were not available or not suitable.
In another example from 2002, the Danish Eastern High Court concluded that the termination of a seller due to a restructuring was unjustified. The reason was that the company had suitable positions available at the time of termination that the employee could have been offered.
While established case law confirms an indirect obligation to consider the possibility of redeployment as an alternative to termination, there are direct redeployment rights for employees with protected status. When applicable, redeployment is required as an alternative to termination. Otherwise, termination will result in discrimination claims and compensation.
Employees may have a protected status due to disability, pregnancy, parental leave, the position as employee representative, or, within the area covered by DA and LO, seniority exceeding 25 years. For employees with a disability, redeployment is only required when the employee is competent, capable, and available to fulfill the relevant position and presumes that redeployment does not result in a disproportionate burden for the company.
In a 2007 case, the Danish Western High Court awarded an employee compensation equal to nine months’ salary after she was terminated due to a restructuring while on parental leave. The court concluded that although her role was made redundant in one city, her work tasks were still needed elsewhere in the company. On that basis, it concluded that it had been possible to redeploy her as an alternative to termination.
Redeployment rights across legal entities in Denmark?
It is unlikely that there are grounds for arguing that any redeployment rights can be stretched across legal entities, but the question does come up from time to time.
One of the most relevant examples is a 2018-case from the Danish Dismissal Tribunal that confirmed that a company had satisfied its redeployment obligation as several positions were relocated outside of Denmark. The redeployment obligation was triggered as the affected employees – two technical assistants - had more than 25 years of seniority. As part of a restructuring, their positions were relocated from Denmark to Serbia and, as a result, they were terminated. However, they did not consider that the company had satisfied its redeployment obligations towards them. The Dismissal Tribunal disagreed. Instead, the Dismissal Tribunal found that the company had conducted there was no basis for stretching the redeployment obligation across legal entities within the same group under the relevant collective agreement or employment laws. For that reason, it was lawful to terminate the employee representative as the employing entity closed its activities.
In another example from 2012, the Danish Dismissal Tribunal also considered whether the redeployment obligation could be stretched to external business units for an employee with protected status. Due to redundancy, a company terminated an employee with 27 years of seniority. It was undisputed that there was a labour shortage, but the employee challenged the termination as unreasonable due to his seniority and age. The Dismissal Tribunal confirmed that the company, as a main rule, can determine who to terminate as part of a restructuring. However, with reference to the special protection for employees with 25 years of seniority, it considered whether the company had satisfied its redeployment obligation. It confirmed that the company had satisfied its redeployment obligation within the place of work. Nonetheless, it found that the company had other workplaces within a close geographic distance and that it had previously redeployed employees to these workplaces. As the employee had not been offered redeployment within one of the other business units, the termination of the employee was unjustified.
Oppositely, in another example from 2012, the Danish Eastern High Court concluded that the redeployment obligation could not be stretched to another city. Again, the case concerned an employee with 25 years of seniority. She was terminated due to a restructuring but claimed that the termination was unfair as it had been possible to redeploy her. The Danish Eastern High Court found that the company had not been required to offer an available position in another city or to move the position to her existing place of work. In the assessment, it was emphasized that it was not proven that the employee would have accepted the position or that it was reasonable for the company to move the position to her place of work.
In a 2016 case, the Danish Dismissal Tribunal took a different stance by suggesting that the redeployment obligation applied across two legal entities, as it considered them closely linked. The affected employee had been employed for 18 years when he was terminated in March 2016 as part of a restructuring. Based on a detailed assessment, the Tribunal found that the company had not sufficiently demonstrated that the position needed to be made redundant. In addition, the Tribunal noted that the company had outsourced several orders to another legal entity, which it had plans to merge with within the following year. Consequently, it noted that the company should have considered redeploying the employee to that separate legal entity, as it had a suitable available position.
The question was raised again recently in a 2024 case, when the Danish Supreme Court had to decide on the extent of the redeployment obligation within the public sector. The question was whether the Capital Region of Denmark needed to seek redeployment options for an employee with a disability broadly across all independent employing entities within the Region or could limit its search to the employing entity. The Neuroscience Centre, where the employee worked, had 1700 employees at the time, while the Region had more than 40,000 employees. The Supreme Court found that there were no grounds for limiting the organizational scope of the redeployment obligation. The Capital Region of Denmark could not prove that it would trigger a disproportionate burden to consider redeployment obligations throughout all its employing entities. Consequently, the Capital Region of Denmark had not satisfied its redeployment obligation, and the employee was entitled to compensation corresponding to nine months’ salary.
The different examples from case law confirm the default that any redeployment obligation cannot be stretched across legal entities but that it may be stretched across different workplaces, depending on the circumstances. The 2024 decision from the Danish Supreme Court suggests a broader redeployment obligation, but it is difficult to see how it can be applied 1:1 within the private sector.
Clear rights under the Swedish LAS
Contrary to Denmark, the Swedish Employment Protection Act (lagen om anställningsskydd) includes a statutory redeployment obligation. Accordingly, companies must consider whether it is possible to offer redeployment as an alternative to termination as part of a restructuring process.
More specifically, it follows from the Employment Protection Act that terminations due to the company’s circumstances must be based on objective grounds. By default, a restructuring is usually an objective ground for termination. However, the objective ground disappears if the company could have offered the affected employees different work.
Companies are required to offer available positions that the affected employees have sufficient skills for, or can acquire sufficient skills for, within a brief period of training.
A case from 2018 shows just how strict the redeployment obligation is. In the case, the Labour Court found that a company had not fulfilled the redeployment obligation for a baker at the company. The company had decided to close the bakery part of their business and terminated the employee. The employee was offered redeployment, as he had expressed that he did not want to work as anything else than as a baker. Six months after the termination the company hired a new baker. The Labour Court found that at the time of the termination, it was necessary to terminate due to redundancy. Nonetheless, the company was wrong not to have offered the employee redeployment, although the employee had expressed that he was not interested. The breach of the redeployment obligation resulted in SEK 80,000 in compensation for the employee.
The redeployment obligation includes several specific obligations for companies:
If an employee accepts a redeployment offer resulting in reduced working time, there is a statutory adjustment period corresponding to the individual notice period but with a three-month cap. During the adjustment period, employees are entitled to retain their working time and benefits.
When a restructuring process involves more than one employee (which is usually the case), the Employment Protection Act requires employees to follow the LIFO list (“last in, first out list”) to determine which employee will be offered redeployment first.
If the restructuring only means reduced working hours for one employee, the LIFO list should not be followed to determine which employee. Instead, the employee with the least seniority will be offered redeployment to employment with fewer working hours. Similarly to the LIFO list, that order of priority ensures that the employee with the longest seniority is safest in the restructuring process.
Redeployment righs across legal entities in Sweden?
Under Swedish law, there is no requirement to offer redeployment across legal entities. However, if a company has more operating units within the same legal entity, redeployment must, as a main rule, be considered across those different operating units, subject to certain delimitations in practice.
Accordingly, if no positions are available within the affected employee’s workplace, companies will need to broaden the investigation to include its other operating units, within the same legal entity. Established case law confirms that it is only possible to carve out units from the investigation when the relevant operating unit can be considered separate so that redeployment would be disproportionate.
Operating units may be considered separate and exempt for different reasons. A unit may, for example, be considered separate when the operational unit has its own HR department and manages its workforce independently. Another example may be geographical reasons, if the operating unit is in another region.
In 2013, the Labour Court limited the redeployment obligation for that reason and determined that there was no obligation to look across several operating units in other regions. The question was whether a company had to consider redeployment across operating units within three other regions in connection with a termination. Each of the operating units within the three regions had independent HR departments, so the Labour Court concluded that it was unreasonable for the company to consider redeployment options there. As there were no redeployment options within the region where the employee was working already, the company had satisfied its redeployment obligation.
However, it is a case-by-case assessment and in 2009, the Labour Court maintained the main rule as it found that there was an obligation to seek redeployment across operating units across different regions. In the case, two employees who worked for a local operating unit in Uppsala were offered redeployment to two other operating units since the Uppsala office would no longer offer the business the employees worked with. One question was if the offers to other operating units were reasonable. The Labour Court confirmed that companies must consider redeployment across operational units.
In 1984, the Labour Court defined how far the redeployment obligation is stretched for public authorities. In this case, a doctor was terminated due to redundancy. The Labour Court concluded that the region had to consider redeployment options within all hospitals within the region. The Labour Court, therefore, found that the doctor should have been redeployed to another hospital in the region even though it was a part of a different hospital district and, to some extent, had its own management.
Broad redeployment rights under the Norwegian work environment act
Similarly to Sweden, Norway also has a statutory redeployment obligation. Just like Swedish companies, Norwegian companies must consider whether it is possible to redeploy affected employees as part of a restructuring process before a termination can be justified. However, the Norwegian redeployment obligation goes even further by requiring redeployment broadly within the group.
Pursuant to the Work Environment Act (arbeidsmiljøloven), affected employees must be offered available positions for which they have sufficient skills or can acquire within a brief training period. It does not require companies to establish or maintain unnecessary positions, but companies may be required to look forward and consider positions that may become available, such as due to retirement, if it does not result in a disproportionate burden.
While Norwegian companies generally have some discretion when selecting employees for termination during a restructuring, this discretion is not unlimited. Companies are required to establish selection criteria. Seniority is often a relevant criterion, but performance and qualifications are often added to address real business needs.
Redeployment rights across legal entities in Norway?
Since 1 January 2024, the Norwegian rules include an extended redeployment obligation across the group. As a result, a termination as part of a restructuring cannot be justified if relevant vacant positions exist in another legal entity within the group. The expanded redeployment obligation is only relevant when the company does not have suitable work and is part of a group. This new requirement interplays with the requirement for companies that are part of a group to include a list of the relevant entities within the group as part of a termination notice, which allows employees to have an easily accessible overview.
Accordingly, companies are responsible for the practical implementation and procedure. This means that the company that intends to issue the termination must initiate the process and inform the group of the restructuring process. At the same time, it must transmit the necessary information on the affected employees’ qualifications across the group. Then, the relevant companies within the group must conduct a thorough assessment of whether suitable positions are available.
The rules allow companies some flexibility to limit the scope of application within the group. Although the requirement by default includes all entities within the group, other legal entities can be carved out depending on the circumstances and subject to discussions with the employee representatives, as applicable. Limitations could include elements such as geographic, industry, or job-specific considerations. However, carving out the redeployment obligation will be subject to transparency conditions and must not be used to circumvent the obligation in practice.
In a recent case from last year, the Norwegian Court of Appeal emphasized that the broader redeployment obligation still does not mean companies need to create new positions if none are available. If no suitable alternative roles are available within the group, then termination is – as a main rule – justified. That was also the conclusion in that case where an HR manager was terminated due to a restructuring. The Court of Appeal assessed whether the company was required to redeploy the employee before proceeding with a termination and found that the restructuring had removed the need for an internal HR position. The company had explored whether tasks could be reassigned internally or outsourced at a lower cost. As no suitable roles were available, the termination was justified.
Similarly, the Norwegian Supreme Court accepted that a municipality had met its obligations without offering redeployment. It involved a 55-year-old healthcare worker who lost their authorization after 17 years. The Supreme Court recognized that companies may have a duty to consider redeployment even when termination is based on the employee’s own circumstances. However, this duty is not absolute. The municipality explored alternatives and took reasonable steps to support the employee before termination. Given these efforts and no suitable unskilled positions, the court ruled that it fulfilled its obligations.
Another example from the Norwegian Supreme Court can be found in a case from 2018. The company had hired new employees in one department while reducing positions in another. As part of the assessment of whether suitable alternative positions were available, the Supreme Court emphasized that the assessment needed to cover the entire group. As a result, the company should have considered whether a position in the expanding department could be offered before proceeding with the termination.
The Norwegian Court of Appeal has also looked at what is required for a redeployment offer to be genuine in a judgment from 2016. The question was whether the company had properly informed the employee about the redeployment options. The Court of Appeal stressed that the redeployment obligation means that the affected employee must have a real chance to make an informed decision. In this case, the company gave the employee one month to accept a redeployment offer in another city while the company was exploring local alternatives. That was not enough to satisfy the redeployment obligation. Instead, it should clearly have explained that the choice, in reality, was between taking the new job and termination, as there were no local alternatives. It also failed to document that a proper assessment of local opportunities had been done. Because of this, the employee did not get a real chance to consider the redeployment offer.
The various examples from case law suggest that, despite a broadened redeployment obligation, there remains some flexibility to set reasonable limits for the redeployment assessments. Furthermore, the duty to redeploy is not merely about extending a formal offer but also about ensuring that the offer is communicated to enable the employee to make a fully informed decision.
Tackling genuine redundancy challenges in Denmark, Sweden and Norway
Terminations must be justified to not trigger claims for compensation within the Nordics. Typically, termination due to redundancy resulting from a restructuring is justified, irrespective of whether the intention is to reduce deficits or increase profits. However, within all three countries, companies must be prepared to show and explain the business reasons that are triggering the redundancy.
In Denmark, business reasons are rarely challenged substantially by employees, unions or the courts. The opposite applies in Sweden and Norway, where the business reasons often are questioned and discussed in detail. Consequently, companies should be prepared – by default – to go through the reasoning that results in the redundancy to demonstrate that it is real. In addition, the explanation will usually include more layers with the parties going through the LIFO-list in Sweden, and the application of relevant selection criteria and a discussion of relevant social considerations in Norway.
However, in the scenario where the restructuring results in the position becoming redundant within one country, let’s say the position of a Nordic HR manager in Oslo, while being established 1:1 elsewhere, let’s say Stockholm, it can be challenging to demonstrate that the redundancy is genuinely due to the restructuring. Often, centralization and effectivization are valid points, but that does not prevent employees from challenging the justification in practice, especially in situations, where the company do not offer the employee to relocate with the job to another country.
One example from Denmark shows how a termination due to redundancy quickly can be unjustified when the position is created 1:1 as part of a restructuring. In the case from 1999 from the Danish Western High Court terminated an executive secretary after 11 years of employment due to a restructuring. As part of the process, a new role as executive secretary was created. The new role had some added tasks compared to before but had not otherwise been subject to any material changes. On its side, the company could not concretely demonstrate that the employee did not have sufficient qualifications and experience to take on the new position. For that reason, the termination was unjustified, as the redundancy was not genuine.
It is unclear if the same reasoning can be applied across legal entities within the same group. That is something that will need to be tried in practice by the courts.
Conclusion: No direct cross-border redeployment obligations
Neither statutory rules nor case law supports an argument that there should be a cross-border redeployment obligation in Denmark, Sweden, or Norway.
The recent legal developments in Norway that have introduced a group-wide redeployment obligation only confirm its geographical limitations. The preparatory works clearly confirm that the obligation only applies broadly within the Norwegian entities in the group and cannot be extended to other jurisdictions. Consequently, there appears to be no doubt from the legislator's side that the redeployment obligation does not and should not have a cross-border element.
In Sweden and Denmark, there is also no support for the idea that the redeployment obligation can be stretched to other jurisdictions. In Sweden, only sparse examples in case law appear to support the contrary, including a 1987 case from the Swedish Labour Court. In the case, the Labour Court established that there is an obligation to offer redeployment options across the organization and noted that the obligation may be extended across jurisdictions by emphasizing that it could be considered reasonable to consider deployment options outside of Sweden for employees who worked on projects outside of Sweden. Nonetheless, we are seeing an increase in the number of arguments challenging that conclusion, especially as more functions can be done remotely. But, as there is little support within the redeployment obligation, the argumentation is that the termination itself is not justified when a position becomes redundant within one country but appears within another because of restructuring.
Employees (and their unions) are increasingly arguing that the termination is unjustified in this scenario as the redundancy is not “genuine”. That is especially the case in Sweden and Norway, where the business reasons and economic considerations behind the restructuring are often challenged in detail, and especially in situations where identical positions are opened in other countries, and the employee is not offered the chance to relocate with the position.
Despite that, there is an increase in the argumentation that a cross-border obligation exists, especially as many functions can be done remotely. As a result, employees (and their unions) increasingly attempt to argue that termination is unjustified in the scenario where suitable positions are open in another country by, for example, referring to the fact that the position can be done remotely by the employee or that the redundancy was not real. One scenario may be that the position of “Nordic HR manager” in Copenhagen is made redundant as part of a restructuring but concurrently is established in Oslo by another legal entity within the same group. Ultimately, the question will need to be tried by the courts to get clarity.
Denne artikel er udgivet i HR JURA MAGASINET 20. NUMMER / SOMMER 2025, som du kan downloade her.