Employees could lawfully leave their position during court proceedings

Two graphic designers were terminated from a newspaper company due to the company’s decision to outsource that part of the business. The employees instigated court proceedings for wrongful termination and remained in their position during the proceedings at the Norwegian District Court. The court ruled in favor of the company and the employees thereafter appealed the case. They wished to remain in their position during the appeal proceedings, whilst the company requested for the employees to leave their positions.   

The company argued that, due to the outsourcing, there was no work left for the employees to do. They stated that two years had passed since the termination, and cost cuttings in relation to the coronavirus could lead to the temporary layoff of other employees. The employees argued that other employment would be difficult for them to find due to their older age and the current coronavirus.

The main question for the Court of Appeals was whether the company’s request for the employees to leave their position should be granted.

Generally, employees are to remain in their positions

Based on case law and preparatory works to the law, the Court of Appeals found that generally, employees have the right to remain in their position when the termination is due to “company circumstances” as evident in this case. The court nevertheless found that the general rule could be set aside if the company could document compelling reasons to do so.

There were a number of factors that supported that the employees should leave their positions: 1) the likely outcome of the wrongful termination case, 2) the lack of job tasks over a long period of time, 3) the fact that the company had followed proper case handling during the terminations and 4) the economic position of the company.

However, due to the lack of conclusive evidence, the court decided to reject the company’s request since: 1) the outcome of the wrongful termination case was uncertain, 2) even though the court found that two years was an unreasonably long time to stay in a position without work, the lack of work was caused by the company’s own decision to outsource, and 3) the company was a large company who, prior to the coronavirus, had operated with profit. Therefore, the court did not find it proven that the company was in a significant negative, economic situation due to the coronavirus. It was also not documented that other employees were in danger of temporary layoffs.

The court further emphasized the employees’ high ages and long seniorities. Based on this, the Court of Appeals rejected the company’s request for the employees to leave their position.

IUNO’s opinion

The judgement confirms that the general rule stands; employees should remain in their positions during court proceedings in wrongful termination disputes. It also demonstrates that the employees’ seniority and future job opportunities will have significant importance in the balancing of interests. During wrongful termination disputes, the same balancing of interests will be used on the basis of the company’s circumstances. Nonetheless, the judgement illustrates a possibility to set aside the general rule when the company can provide compelling reasons and examples to do so. Companies must therefore be able to document why their interests should outweigh the interests of the terminated employee.

IUNO recommends that companies carefully consider the balancing of interests before making a final decision of termination. This is especially important when the potential termination concerns employees with long seniority and where other social circumstances will give poor prospects for the employee in question.

[Norwegian Court of Appeal’s judgement LB-2019-85179 of 15 May 2020]