Misconduct in the Nordics

Companies can take different approaches to an employee breaching their obligations. Depending on the type of breach, companies can terminate with or without notice.

Termination with notice is possible when the employee breaches the terms and conditions of employment. Summary dismissal can occur when the employee is guilty of a gross breach of the terms and conditions of employment.

Termination with notice can typically be justified in cases of:

• Underperformance
• Breach of company policies
• Breach of duty of loyalty

Summary dismissal can typically be justified in cases of:

• Unexplained absence
• Theft
• Engaging in competitive actions
• Harassment

Depending on the circumstances, a prior written warning may be required. We have previously written about “the good written warning” here.

Consequences of an unjustified termination

When a termination is unjustified, it may give the employee a right to compensation. Depending on where the termination takes place, companies may face compensation claims corresponding to:

• Up to six months of salary in Denmark
• Up to 36 months of salary in Sweden

In Norway, the compensation levels will depend on the circumstances in each individual case. It differs when an employee can receive compensation. Illustratively, in Denmark, employees must usually have been employed for one year, while there is no seniority requirement for Sweden or Norway.

It is also different in the Nordics if the employment continues during a dispute and whether reinstatement is an option. Illustratively, employees can claim reinstatement in Norway but not in Denmark. In Sweden, an unjustified termination is, by default, invalid, but companies may opt to pay compensation instead. Additionally, it varies whether the employee can be entitled to further compensation or damages.

IUNO’s opinion

When an employee has failed to comply with their duties, it is important to focus on the type of breach. The more serious the breach, the more likely it is that the company can terminate without notice. However, companies must always proceed carefully to avoid compensation claims.

IUNO recommends companies to document employee breaches, especially if the same employee breaches their obligations more than once. If the company decides to proceed with termination, it is essential to have sufficient documentation. This will also limit the risk of the employee claiming that the termination is unjustified.

This newsletter is part of a series of newsletters explaining restructuring and dismissals in the Nordics. You can read about underperformance here and changing employment terms here.