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Employee could not have the cake and eat it too

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Legal news
calendar 3 January 2023
globus Denmark

An unskilled operator worked for a company that offered paid leave in connection with childbirth under the Industrial Agreement. However, at about the same time as the employee notified the company that she was pregnant, the entitlement changed to statutory benefits. Because the employee had continued working after being notified of the change, the court found she had accepted the change. As a result, she was not entitled to compensation.

An unskilled operator was working for a company subject to a collective agreement. According to the collective agreement, she was entitled to paid leave in connection with childbirth under the Industrial Agreement. Nonetheless, the Industrial Agreement allowed the company to change this entitlement without notice if the change was not material.

Around two months after informing the company that she was pregnant, the company announced that employees were no longer entitled to paid leave in connection with childbirth under the Industrial Agreement. Now, employees were entitled to the statutory benefit, as amended from time to time. The company justified the change as there had "been some confusion about how to interpret that section; therefore, the management is amending the section (…)".

Consequently, the employee would receive about DKK 400 less per month than if she had received paid leave under the Industrial Agreement. Throughout the last five years, this matched the approach with other employees, who had also received statutory benefits from the company or the municipality instead of their normal salary during leave in connection with childbirth.

Despite the introduction of the change, the employee continued to work until she started her leave three months later. On that same day she began her leave, she notified the company that she considered herself terminated with an offer of employment on new terms. After her leave, she returned to work for the same company.

Even small changes can be material

It was clear that the employee was originally entitled to paid leave in connection with childbirth. The fact that other employees had received statutory benefits instead of paid leave did not change that. However, because the employee had kept working before and after her leave period, the court considered she accepted the new terms of employment. Therefore, she was not entitled to compensation.

The change to the terms was material, although it only reduced the employee's income slightly. The change was material because of the short period between the employee telling the company that she was pregnant and the introduction of the change. Therefore, she could have considered herself terminated with an offer of employment on changed terms.

IUNO’s opinion

How companies can introduce changes to the terms and conditions of employment depends on whether the change is material or not. Usually, changes are material when the employees' remuneration or working time is affected. If that is the case, the main rule is that the employee must receive notice following the individual notice period. Then, if the employee cannot accept the changes, it constitutes a termination. Oppositely, if the employee accepts, the changes can enter into force at the end of the notice period.

IUNO recommends that companies carefully consider whether a change is material before introducing it. This case shows that although it is not always clear, even small changes to the remuneration package can be material. Changes that are not material can usually be introduced with reasonable notice.

[The Danish Western High Court in case BS-41517/2021-VLR of 9 September 2022]

An unskilled operator was working for a company subject to a collective agreement. According to the collective agreement, she was entitled to paid leave in connection with childbirth under the Industrial Agreement. Nonetheless, the Industrial Agreement allowed the company to change this entitlement without notice if the change was not material.

Around two months after informing the company that she was pregnant, the company announced that employees were no longer entitled to paid leave in connection with childbirth under the Industrial Agreement. Now, employees were entitled to the statutory benefit, as amended from time to time. The company justified the change as there had "been some confusion about how to interpret that section; therefore, the management is amending the section (…)".

Consequently, the employee would receive about DKK 400 less per month than if she had received paid leave under the Industrial Agreement. Throughout the last five years, this matched the approach with other employees, who had also received statutory benefits from the company or the municipality instead of their normal salary during leave in connection with childbirth.

Despite the introduction of the change, the employee continued to work until she started her leave three months later. On that same day she began her leave, she notified the company that she considered herself terminated with an offer of employment on new terms. After her leave, she returned to work for the same company.

Even small changes can be material

It was clear that the employee was originally entitled to paid leave in connection with childbirth. The fact that other employees had received statutory benefits instead of paid leave did not change that. However, because the employee had kept working before and after her leave period, the court considered she accepted the new terms of employment. Therefore, she was not entitled to compensation.

The change to the terms was material, although it only reduced the employee's income slightly. The change was material because of the short period between the employee telling the company that she was pregnant and the introduction of the change. Therefore, she could have considered herself terminated with an offer of employment on changed terms.

IUNO’s opinion

How companies can introduce changes to the terms and conditions of employment depends on whether the change is material or not. Usually, changes are material when the employees' remuneration or working time is affected. If that is the case, the main rule is that the employee must receive notice following the individual notice period. Then, if the employee cannot accept the changes, it constitutes a termination. Oppositely, if the employee accepts, the changes can enter into force at the end of the notice period.

IUNO recommends that companies carefully consider whether a change is material before introducing it. This case shows that although it is not always clear, even small changes to the remuneration package can be material. Changes that are not material can usually be introduced with reasonable notice.

[The Danish Western High Court in case BS-41517/2021-VLR of 9 September 2022]

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Hessellund Klausen

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Astrup

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Groth Henriksen

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Johan

Gustav Dein

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