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Termination of employment

What is shortage of work?

Shortage of work (and personal grounds) is a legitimate reason for termination of employment according to the Employment Act (LAS). Shortage of work may be due to lack of money, for example a shortage of undergraduate or research grants. It may also be a result of an employer’s decision to reorganise or reallocate resources, for example by closing down a certain part of the operations. Such reorganisation or reallocation of operations may occur for reasons other than a lack of financial resources.

Shortage of work does not necessarily have to a result of there not being enough work to do, but can also arise because the employer wants to organise operations in a different way. The important thing is that the reason for the termination is not directly related to the employee personally.

Priority rules for employees during redundancy due to shortage of work

State sector

If it becomes necessary to make employees redundant due to a shortage of work, the agency/higher education institution must establish a priority or seniority list. This means that the employer must set up a group subject to order of priority rules of those employees at risk of redundancy. According to the TurA-S central collective agreement, each of these groups must include employees at the institution who have working tasks which are “essentially comparable” with the tasks to which the shortage of work refers. The concept of “essentially comparable tasks” is to be interpreted broadly. The decisive factor for the division into these priority groupings is the actual tasks performed by the employee, not the employee’s job title. The employee’s total employment time with state employers, including employment with other state agencies, then determines the employee’s place on the seniority list. Employees with longer periods of employment have priority access to continued employment over those with shorter periods of employment. Where employees have equal periods of employment, higher age gives priority to continued employment.

Private sector

In the private sector, the rules regarding priority or seniority lists specified in Section 22 of the Employment Act (LAS) apply. There may also be additional rules governing priority in central collective agreements, such as those in the Arbetsgivaralliansen (Employers’ Alliance) Sector and Salary Agreement for Higher Education. The legislation states that priority lists are to be drawn up according to operational unit, collective agreement area and location.

Redeployment requirement

It is not defined as a shortage of work situation if it is reasonable to require the employer to offer the employee another position within the organisation. This means that the employer must investigate thoroughly the possibility of redeploying the employee before redundancy is permitted. At state higher education institutions, the redeployment requirement applies throughout the institution’s ​​operational area, even if it has more than one location. In the private sector, the redeployment requirement applies throughout the employer’s operations.

A prerequisite for redeployment is that the employee has sufficient qualifications for the position they are to be redeployed to. The starting point for assessing whether someone has sufficient qualifications is the eligibility requirements set out in the Higher Education Ordinance and other relevant regulations, e.g. the collective agreement. Being sufficiently qualified does not mean that you need to be the most qualified candidate for the position in question; it is enough to have sufficient qualifications. An employee is considered to be sufficiently qualified even if they need a normal learning period of up to around 6 months to be able to perform the new tasks.

The redeployment requirement covers any position that the employer knows at the time of termination will be available up to the time when the proposed termination becomes effective. The termination takes effect when the period of notice expires. If an employee refuses a reasonable offer of redeployment, the employer has a valid reason for redundancy.

As a general rule, notice of termination commences when the employee receives notice of the termination (redundancy notice). The redundancy notice must be given in writing. Find out more about the notice periods that apply when redundancy notice is given due to a shortage of work.

If you are made redundant due to a shortage of work, you may be entitled to transition support:

Preferential right to re-employment

An employee who has been made redundant due to a shortage of work has a preferential right to re-employment under certain conditions.

In order to be entitled to re-employment, you must have been employed by the employer for a total of more than twelve months during the past three years. State sector employees may count all employment in the state sector in the past three years. Another requirement is that the employee is sufficiently qualified for the new position, (see above under the Redeployment requirement). The employee must also have notified the employer that they wish to exercise their preferential right to re-employment. The right of re-employment applies from the date that notice of termination was given, (normally when the employee received the redundancy notice), and continues for nine months from the date of termination, i.e. from the date the notice period expired.

If an employee who has been made redundant claims their preferential right to re-employment and the other conditions are met, (see above), the institution must take this into account when making decisions on positions covered by the employee’s claim.

Preferential right to re-employment in the state sector

The preferential right to re-employment is not defined in the same way in the state sector as in other parts of the labour market. In the state sector, the person with a preferential right to re-employment has no absolute precedent over other candidates.  The right to re-employment constitutes valid grounds that can be taken into account alongside formal qualifications and competence.

Trade union influence in processes of redundancy due to shortage of work

Section 11 of the Co-determination Act (MBL) states that the employer is required to negotiate with the local trade unions if it necessary to take measures that may lead to staff reductions. The requirement to negotiate applies before the employer can make decisions through the entire redundancy process, i.e. before decisions regarding operational change and staff reduction, decisions on the formation of  groups subject to order of priority rules, decisions on redeployment and decisions on redundancy of individual employees. Through this negotiation requirement, the trade union is able to influence the decisions that are made. However, it is the employer who has the final right of decision if there are areas of disagreement.

What happens if someone thinks that the redundancy decision is wrong?

If a redundancy is handled incorrectly, SULF may call for a dispute resolution negotiation with the employer and claim damages for members of the Association. In some cases, SULF can request that the termination of a SULF member be declared invalid. If you suspect that you have been made redundant incorrectly, you should contact your local trade union representative, who in turn will contact the SULF Central Office for a full assessment and possible commencement of a dispute resolution negotiation. 

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