The termination was not "proximate" to the expiration of 120 days of sick leave.
Case law has several times previously interpreted the condition that a termination with shortened notice pursuant to section 5(2) of the Danish Salaried Employees Act must take place "in immediate connection" with the 120 days of sick leave. According to the practice of the High Courts, terminations given up to 129.5 sick days have met this condition. In this specific case, however, the Supreme Court had to assess how interrupted periods of sick leave affected the right of termination, including what significance it had for the employer that the employee was reported fit for work shortly after the 120 days of sick leave, but then had to report sick again.
The case in point
On September 11, 2018, an employee employed as an IT consultant had accumulated 120.17 sick days within a 12-month period. The employee returned to work on September 12, 2018, but shortly thereafter - on October 1, 2018 - had to call in sick again. The employee was reported fit for work on October 3 and had at that time received sick pay for 122.17 days.
On October 29, 2018, the employee reported sick with stress, which brought the employee's total number of sick days to 123.17. The employer then chose to terminate the employee with shortened notice under the 120-day rule.
The Supreme Court had to decide whether the termination fulfilled the conditions in section 5(2) of the Danish Salaried Employees Act, including whether the termination was made "in immediate connection" with the expiry of the 120 days of sick leave.
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When can the 120-day rule be brought into play?
According to section 5(2) of the Danish Salaried Employees Act, it is possible to agree that a salaried employee can be terminated with one month's notice to resign at the end of a month.
However, in order to apply the 120-day rule, there are four validity conditions:
- The 120-day rule must be agreed in writing between the parties,
- The salaried employee must have received salary during illness for a total of 120 days,
- The termination must take place immediately after the 120 days of sick leave have expired, and
- The termination must be made while the employee is still sick.
Supreme Court ruling
In this latest ruling on the 120-day rule, the Supreme Court ruled that the termination was not "immediately related" to the 120 days of sick leave.
The Supreme Court emphasized the elapsed period from sick day number 120 until the time of termination. The employee was not terminated until 48 calendar days after the expiry of the 120th day of illness, which, according to the Supreme Court, was too late. Thus, the employer could not apply the 120-day rule for termination, and the IT consultant was therefore entitled to salary for the full notice period.
More generally, the Supreme Court concluded that a termination must generally take place earlier than 10 calendar days after the expiry of the 120 days of illness. If an employee is reported fit for work after the expiry of the 120 days of illness, but is reported sick again within 10 calendar days after the expiry of the 120 days of illness, the right of termination under section 5(2) of the Danish Salaried Employees Act will generally be maintained.
CLEMENS notes
- that the Supreme Court upholds the judgment of the High Court, but with a different reasoning. The Eastern High Court convicted the employer on the grounds that the condition "in immediate connection" was not met because the employer failed to terminate the employee on the 121st and 122nd day of illness. Instead, the Supreme Court chooses to give decisive weight to the total period from the expiry of the 120 sick days to the date of termination.
- that a termination with shortened notice pursuant to section 5(2) of the Danish Salaried Employees Act must take place earlier than 10 calendar days after the expiry of the 120th day of illness.
- Employers need to be careful with the counting of sick leave and generally not wait too long before terminating an employee after 120 days of sick leave. This is because an employee's short-term return to work after the 120th day of sickness can result in the opportunity to use the 120-day rule being lost.
- that the Supreme Court does not consider the circumstances under which the starting point that a termination must normally take place within 10 days after the expiry of 120 days of sick leave can be deviated from. With the wording "in general", the Supreme Court has indicated that there may be specific circumstances that justify a deviation from the starting point.
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