EN
HR Legal

The heir and the spare, a family affair

logo
Legal news
calendar 30 October 2022
globus Norway

Managing a company can be challenging, but even more so when management consists of family members that have to terminate each other. In a recent case, the court found a termination between brothers in a family-owned company justified. This was because the employee avoided cooperation and made the working environment unbearable.

An administration manager worked for his father in a family-owned fishing company that his father had created. His brother was the CEO, and his father was the company's technical manager. As their father grew older and the company expanded, the transfer of ownership became an issue. To the employee's distress, his father decided that his brother would take over the majority shares in the company. However, both brothers would be part of management.

As a direct consequence of his father's decision, the employee went on sick leave. At the same time, he issued a lawsuit to stop the brother from receiving the majority share. During the legal dispute, the employee's sick leave level increased and decreased several times and relocation was attempted. Although the brothers still worked together, they hardly spoke and would not even say “hello” to one another. Eventually, things got so bad that the brother terminated the employee based on his sick leave and cooperation issues.

Cooperation did not run in the family

The court found that the termination was justified. The conflict between the brothers made the management's cooperation impossible, and the work environment was negatively affected.

His sick leave alone could not justify the termination, but the crucial factor was the employee's cooperation issues. The employee had not only criticized the brother, but also members of the board. By having actively avoided coming to the office when his brother was there and refusing to speak to him, the employee had made cooperation between management impossible.

The conflict negatively affected the working environment as well, and there was no indication that the conflict would end. When at work, the employee questioned the management's decisions and took on managerial tasks that were not part of his job description. The other employees found the situation challenging, and several said they wanted to resign.

IUNO’s opinion

Distrust towards the management and management's decisions can seriously affect the company's operations. That is especially the case when the cooperation issues also affect the working environment in the company. Companies are responsible for ensuring the employees' physical and psychosocial work environment. This case shows that cooperation issues can be sufficient for a justified termination.

It is however important to note that the threshold for justified terminations is lower when the employee is part of management. IUNO recommends that companies look to other alternatives before a decision of termination due to cooperation issues is made. In this case, the company had already tried relocation, and it was an essential point for the court that the employee was a manager and that a conflict resolution seemed unlikely.

[The Norwegian Court of Appeal's judgement in case LH-2022-4815-2 of 4 October 2022]

An administration manager worked for his father in a family-owned fishing company that his father had created. His brother was the CEO, and his father was the company's technical manager. As their father grew older and the company expanded, the transfer of ownership became an issue. To the employee's distress, his father decided that his brother would take over the majority shares in the company. However, both brothers would be part of management.

As a direct consequence of his father's decision, the employee went on sick leave. At the same time, he issued a lawsuit to stop the brother from receiving the majority share. During the legal dispute, the employee's sick leave level increased and decreased several times and relocation was attempted. Although the brothers still worked together, they hardly spoke and would not even say “hello” to one another. Eventually, things got so bad that the brother terminated the employee based on his sick leave and cooperation issues.

Cooperation did not run in the family

The court found that the termination was justified. The conflict between the brothers made the management's cooperation impossible, and the work environment was negatively affected.

His sick leave alone could not justify the termination, but the crucial factor was the employee's cooperation issues. The employee had not only criticized the brother, but also members of the board. By having actively avoided coming to the office when his brother was there and refusing to speak to him, the employee had made cooperation between management impossible.

The conflict negatively affected the working environment as well, and there was no indication that the conflict would end. When at work, the employee questioned the management's decisions and took on managerial tasks that were not part of his job description. The other employees found the situation challenging, and several said they wanted to resign.

IUNO’s opinion

Distrust towards the management and management's decisions can seriously affect the company's operations. That is especially the case when the cooperation issues also affect the working environment in the company. Companies are responsible for ensuring the employees' physical and psychosocial work environment. This case shows that cooperation issues can be sufficient for a justified termination.

It is however important to note that the threshold for justified terminations is lower when the employee is part of management. IUNO recommends that companies look to other alternatives before a decision of termination due to cooperation issues is made. In this case, the company had already tried relocation, and it was an essential point for the court that the employee was a manager and that a conflict resolution seemed unlikely.

[The Norwegian Court of Appeal's judgement in case LH-2022-4815-2 of 4 October 2022]

Receive our newsletter

Anders

Etgen Reitz

Partner

Sofie

Aurora Braut Bache

Senior associate

Similar

logo
HR Legal

13 November 2022

He said, she said, and the company said no

logo
HR Legal

30 October 2022

Is an unequal parental leave policy equal treatment?

logo
HR Legal

30 October 2022

Balancing work and family

logo
HR Legal

16 October 2022

Same, same, but different

logo
HR Legal

2 October 2022

Firefighters’ dream to work more got extinguished

logo
HR Legal

25 September 2022

Festivities, fireworks, and a firing

The team

Akina

Ørum Masaki

Legal Advisor

Alexandra

Jensen

Legal Advisor

Amalie

Starup Poulsen

Legal Advisor

Anders

Etgen Reitz

Partner

Cecillie

Groth Henriksen

Associate

Emma

Sandner

Junior legal assistant

Johan

Gustav Dein

Associate

Julie

Meyer

Legal assistant

Kirsten

Astrup

Senior associate

Sofie

Aurora Braut Bache

Senior associate

Søren

Hessellund Klausen

Partner