News

Employer bears burden of lack of clarity regarding dismissal        

June 15, 2021

In a judgment in case AD 2021 no. 14, the Swedish Labour Court has clarified that, if an employer has had a justifiable reason to believe that an employee considers himself or herself to be terminated or summarily dismissed notwithstanding that the employer does not believe such to be the case, the employer must make it clear that the employment relationship persists. Passivity in such a situation will cause the employee to be regarded as being terminated or summarily dismissed, which may constitute a violation of the Swedish Employment Protection Act.

Vinge’s comments

This case clearly illustrates the obligations of an employer in a situation in which it is unclear to any degree whether termination or summary dismissal has occurred and which may be interpreted differently by the employer and employee. Responsibility for clarifying the situation always rests with the employer, and ambiguity may never be exploited so as to allow the employment relationship to terminate. This case confirms earlier case law regarding doubtful situations that are considered to be the responsibility of the employer.

Accordingly, as an employer, it is important to be aware of situations in which an act or an event may be perceived to constitute a termination or summary dismissal of the employee notwithstanding that it was not the intention of the employer. Where there is any suspicion that this is the case, the employer should always contact the employee and make it clear that the employment relationship persists.              

Background

An employee ceased performing work following a meeting with the employer’s managing director. It was unclear what was said during the meeting. The employee believed that she had been summarily dismissed, while the managing director was of the opinion that she had requested permission to take a leave of absence and accordingly did not perform any work during the period thereafter. In addition, following the meeting, there was an exchange of e-mails. Among other things, the employee wrote the following on the day after the meeting:

“Yesterday you told me that, starting today, I no longer need to return to work. I still want you to know that I’m available to work.”                            

Subsequently, there was some additional communication between the employer and the employee, but the employer did not clarify whether she had lost her job at the meeting or not. Negotiations between the employee’s union organisation and the employer subsequently got underway, but the parties could not agree on what had occurred.                            

The assessment by the Labour Court 

The Labour Court began by observing that an employer is deemed to have dismissed an employee if the employer, by virtue of its actions, has given the employee reason to believe that the employment relationship has ceased.                              

There are situations in which it is unclear how the employer’s actions are to be perceived. In such situations, it is the employer’s obligation to clarify whether or not the employment relationship persists. However, the employer has such an obligation only where the employer should have understood that the employee understands that they have been summarily dismissed or terminated. In the event the employer does not clarify the situation, it is to be treated as a termination or summary dismissal irrespective of what the employer actually intended by virtue of its actions. Thus, the employer may not exploit any uncertainty in order to cause the employment to cease.                                        

In this case, the Labour Court was of the opinion that the employer should have understood that the employee was under the impression that she had been dismissed, at least in conjunction with the e-mail she sent following the meeting and when she involved her union organisation. The employer should have acted and made it clear that the employment relationship persisted. The employee has not committed any gross breach of contract, and dismissal was thus not permissible. The employer was ordered to pay outstanding wages, economic and general damages and all costs of litigation.

Vinge presents the Swedish chapter for the 2022 version of The Legal 500: Private Equity Country Comparative Guide

The guide provides an overview of the Swedish Private Equity market and the salient legislation in connection with PE transactions in Sweden.
January 11, 2022

The prohibition imposed by EU law on complying with secondary sanctions laid down by the United States against Iran may be relied on in civil proceedings

On Tuesday 21 December, the EU Court of Justice delivered its long-awaited judgment in the Bank Melli Iran case (Case C-124/20) on the interpretation of the EU Blocking Statute regarding compliance with third country sanctions. According to the Court, the prohibition imposed by EU law on complying with secondary sanctions laid down by the United States against Iran may be relied on in civil proceedings. Following the Court’s judgment, anyone seeking to terminate a contract with a person or business subject to US sanctions must thoroughly consider if the termination is motivated by other reasons than the existing sanctions and reflect on whether to apply to the Commission for a derogation from the Blocking Statute.
December 23, 2021

The EU Commission proposes a new tool to counter the use of economic coercion by third countries

The European Commission has proposed a new regulation that will provide it with tools to counteract economic coercion from third countries with measures such as tariffs and imports restrictions.
December 13, 2021