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Termination was unjustified because LIFO list was set aside

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calendar 19 June 2022
globus Sweden

During a restructuring process, a LIFO list must be drafted and followed. Otherwise, it may lead to unjustified terminations. Exactly that was the case in a dispute before the Swedish Labour Court. Although an employee had been offered several fixed-term positions as an alternative to termination, a colleague lower on the LIFO list had been offered permanent employment.

A pastorate in Avesta began a restructuring process which led to redundancy. In this connection, an employee’s position as an informant became redundant. He was therefore offered three alternative positions, all of which were of a fixed term duration. Seeing that the employee was currently working part-time and was permanently employed, he rejected all three offers.

Concurrently, a full-time permanent position was also available. However, the employee was not offered the position as he was not considered qualified because he was working part-time. That decision was taken without involving the employee. Instead, a colleague who had been employed for two years less was offered the position.

After having rejected all three offers of employment, the employee was terminated. He then challenged the termination before the court, arguing that the LIFO list rules had been set aside.

Permanent position should have been offered to the employee highest on LIFO list

Initially, the Swedish Labour Court found that the three alternative position offers were not reasonable, since they were fixed term, not permanent.

The court also concluded that it had not been shown that the employee was not qualified for the vacant, permanent position. Oppositely, the court considered that he could have been able to fulfil the working tasks in that position after just a short training period. The court also noted that the employee had the ability and willingness to work full-time instead of part-time.

Consequently, the employee with longer seniority should have been offered the full-time permanent position before his colleague, irrespective of whether he was working part-time. By not having offered the permanent position to the employee highest on the LIFO list first, the termination was unjustified.

IUNO’s opinion

When companies undergo a restructuring process which leads to redundancy, it is important to have all the rules and procedures in place from day one. This includes making the right assessments regarding the LIFO list, and not to make assumptions without the involvement of the affected employees.

IUNO recommends that companies ensure that when employees are offered another position, prior assessments are carried out thoroughly to keep track of each employee’s qualifications. At the same time, it is important to make sure that communication channels are established and that dialogues are scheduled with the employees before any decisions are made.

[The Swedish Labour Court of 26 January 2022 in case 7/2022]

A pastorate in Avesta began a restructuring process which led to redundancy. In this connection, an employee’s position as an informant became redundant. He was therefore offered three alternative positions, all of which were of a fixed term duration. Seeing that the employee was currently working part-time and was permanently employed, he rejected all three offers.

Concurrently, a full-time permanent position was also available. However, the employee was not offered the position as he was not considered qualified because he was working part-time. That decision was taken without involving the employee. Instead, a colleague who had been employed for two years less was offered the position.

After having rejected all three offers of employment, the employee was terminated. He then challenged the termination before the court, arguing that the LIFO list rules had been set aside.

Permanent position should have been offered to the employee highest on LIFO list

Initially, the Swedish Labour Court found that the three alternative position offers were not reasonable, since they were fixed term, not permanent.

The court also concluded that it had not been shown that the employee was not qualified for the vacant, permanent position. Oppositely, the court considered that he could have been able to fulfil the working tasks in that position after just a short training period. The court also noted that the employee had the ability and willingness to work full-time instead of part-time.

Consequently, the employee with longer seniority should have been offered the full-time permanent position before his colleague, irrespective of whether he was working part-time. By not having offered the permanent position to the employee highest on the LIFO list first, the termination was unjustified.

IUNO’s opinion

When companies undergo a restructuring process which leads to redundancy, it is important to have all the rules and procedures in place from day one. This includes making the right assessments regarding the LIFO list, and not to make assumptions without the involvement of the affected employees.

IUNO recommends that companies ensure that when employees are offered another position, prior assessments are carried out thoroughly to keep track of each employee’s qualifications. At the same time, it is important to make sure that communication channels are established and that dialogues are scheduled with the employees before any decisions are made.

[The Swedish Labour Court of 26 January 2022 in case 7/2022]

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Etgen Reitz

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