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Was the contract terminated or not renewed?

May 2012 - Employment. Legal Developments by Norrbom Vinding Law Firm, member of ius laboris.

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Discrimination - Equal Treatment Act
A fixed-term contract was held in the circumstances to be an open-ended contract. The employer’s ‎decision not to renew was therefore held to constitute termination of employment which, due to the ‎employee’s pregnancy, was in conflict with the Danish Act on Equal Treatment of Men and Women.‎
 
In November 2011, the Danish Supreme Court ruled that an employer’s decision not to offer permanent ‎employment when a fixed-term contract expires is generally not the same as termination of ‎employment. In this case, this nevertheless meant in the circumstances that a pregnant employee on a ‎fixed-term contract which was not renewed was held to have been dismissed by her employer.‎
 
The case concerned a personal assistant working for the Danish division of a major international ‎company. After 3 years’ employment, she resigned because she found it difficult to cooperate with her ‎manager. The day after her notice period expired, however, she was informed that the manager had ‎been dismissed and released from the duty to work. A few days later, she then signed a 3-month ‎contract of re-employment with a new manager.‎
 
But before the 3 months ended, the new manager was replaced by another new manager, and 3 days ‎after the employee had informed the HR department that she was pregnant, she was informed by her ‎newest manager that the contract would not be renewed.‎
 
Employment was in effect resumed
The employee turned to the Danish Board of Equal Treatment, claiming compensation for dismissal due ‎to pregnancy. She believed she had been dismissed because her re-employment was in effect a ‎withdrawal of her own resignation. She further believed that, in connection with her re-employment, ‎her then manager had said that the job was not really a fixed-term job.‎
The company argued that the decision not to renew her fixed-term contract could not be equated with ‎termination of employment and the decision had nothing to do with her pregnancy, as they had only ‎needed the employee for a relatively short period of time.‎
 
The Board decided in favour of the employee, holding that her re-employment was in effect a ‎resumption of the fixed-term contract and that her employment had therefore in fact been terminated ‎while she was pregnant. One of the factors which the Board took into account in its decision was that ‎some of the employee’s duties and responsibilities were more long-term in nature than 3 months.‎
 
The Board also held that the company had not discharged the burden of proving that the decision not to ‎renew the contract was not entirely or partly due to the employee’s pregnancy, among other things ‎because of the close proximity in time between the date when the employee informed the company of ‎her pregnancy and the date when her contract was terminated, and because the tasks carried out by the ‎employee still needed to be carried out. Accordingly, the employee was awarded 9 months’ pay in ‎compensation.‎
 
Norrbom Vinding notes:
  • that the decision illustrates it cannot be ruled out entirely that a decision not to renew a fixed-‎term contract in special circumstances, including if the fixed term cannot be regarded as being ‎genuine, may be held to constitute termination of employment; and‎

  • that the clear-cut point of departure – as established by the Danish Supreme Court – remains ‎that a decision not to offer an employee an open-ended contract after the expiry of a fixed-term ‎contract cannot be regarded as termination of employment, and that any compensation ‎awarded under the Danish Act on Equal Treatment of Men and Women in such a situation will ‎amount to about EUR 3,400.‎

The above does not constitute legal advice and should not be relied upon as such


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