Court upholds termination based on reduced working capacity - International Law Office

Background
Facts
Decision
Comment

The Labour Court recently issued a judgment(1) concerning the right to terminate an employee as a result of repeated sickness-related absences from work. The employee's working capacity was considered to be substantially and permanently reduced, to the extent that he would be unable to manage the new assignments offered to him following production changes in the company. Consequently, the employer had a legally proper and substantial reason to terminate his employment.

Background

According to the Employment Contracts Act, the employer may not terminate an open-ended employment contract without a proper and substantial reason. Illness or disability does not constitute such a reason unless the employee's working capacity is substantially reduced for such a long period as to render it unreasonable to require the employer to continue the employment relationship.

In this case, the parties applied an agreement on protection against dismissal as part of the applicable collective agreement, making reference to the legal provisions.

Facts

The employee had been employed by the company as a dairyman for 34 years. During the last 10 years of his employment he had frequently been absent from work for various health-related reasons. Between 2001 and 2009 the employee's sickness absence over the course of the year ranged from 21% to 98% of his working hours.

In light of medical recommendations based on the employee's reduced working capacity, in 2005 he was offered exclusively single-shift morning work at the company's containerisation department. In late 2009 the work at the department diminished substantially and the employee was offered two-shift work in other departments. In December 2009 the employer planned for the employee to become acquainted with the new job. However, he began a period of long-term sickness absence before could happened, due to stress caused by the job offer.

During his sickness absence, in March 2010, the employee's employment was terminated with six months' notice and he was released from the obligation to work during the notice period.

The employee's union claimed for damages from the employer for illegal termination of employment, based on a breach of the agreement on protection against dismissal. The claim for damages corresponded to 24 months of the employee's salary. The union found that the employer could reasonably have offered the employee exclusively morning shifts in future. Moreover, the employer's loyalty obligation was greater in view of the length of the employment relationship, while the employee's relatively advanced age was also considered as a factor, raising the amount of compensation. The union found that the employer did not have a proper and substantial reason for terminating the employee's employment.

The defendant's industry federation denied the charges, referring to the employee's high rate of sickness absence during the past 10 years of employment. The employer had made efforts to support the employee's working needs by specifically offering him only morning-orientated work in one shift, but this had yielded poor results. Following the production changes, the employer had no longer been able to offer the employee full-time or even part-time work in the containerisation department, but only two-shift work in other departments. This was also the understanding of the company's chief shop steward, according to whom there had been no work other than two-shift work available to the employee after the changes.

As two-shift work was not recommended by medical experts due to the employee's state of health, and since the employee had been absent at the time when it was intended that he should try out the new work, the employer had had reasonable grounds to assume that the employee would not, based on his physical, mental and social capacities, be able to perform the work offered to him, and that this incapacity was likely to be permanent. Thus, the employer had had a proper and substantial reason to terminate the employment.

Decision

The court noted that it should be assessed whether the employee's working capacity had reduced substantiallydue to his repeated illnesses for a sufficiently long period to entitle the employer to terminate the employment relationship on grounds laid down in law and in the agreement on protection against dismissal.

According to the company physician who was consulted on the matter, the employee had been in contact with the occupational healthcare services almost 500 times regarding various health problems during the past 10 years of his employment. Due to the health issues, the employee had usually been incapable of working, and the physician found that the repeated illnesses had reduced his working capacity to an extent that made it difficult for him to adapt to the working conditions at the company.

The number of absences had risen steadily in context with changes at the workplace, and the company physician estimated that the situation was likely to remain the same in future. However, an outside physician consulted by the employee found that there were no medical grounds to exclude the possibility that the employee's working capacity might be restored in future.

Regarding the offer of other work to the employee, the court found that the employer had shown that it had been unable to offer the employee anything other than two-shift work, which based on the medical assessment concerning the employee's state of health was not recommended.

Taking into account the employee's high yearly sickness absences and the medical assessment of his working capacity, the court found that the employer had had reasonable grounds to assume that the employee's working capacity was substantially and permanently reduced with respect to the new work offered to him. As the employer was unable to offer the employee any single-shift work, it could not reasonably be required to continue the employment, whereas it had a proper and substantial reason to terminate it. The court rejected the claim of the worker's union.

Comment

The ruling seems to indicate that although the starting point is that the employer may not terminate an employee due to illness or disability, termination may be acceptable if the frequency of sickness-related absences is unusually high and indicates that the employee will no longer be able to perform his regular tasks. Moreover, this condition must be regarded as permanent. If these criteria are met, and the employer has no other work to offer to the employee, the employer may have grounds for termination.

For further information on this topic please contact Seppo Havia at Dittmar & Indrenius by telephone (+358 9 68 1700), fax (+358 9 65 2406) or email (seppo.havia@dittmar.fi).

Endnotes

(1) TT:2012-64.