Termination due to shortage of work – process, redeployment and order of priority

Short answer: Redundancy is a collective term for terminations that are not due to the employee personally. Before termination, the employer must, among other things, analyze redeployment opportunities, follow negotiation rules, and correctly manage order of seniority and preferential rights.

What counts as redundancy?

Redundancy may be due to financial problems, reorganization, streamlining, outsourcing, reduced personnel requirements, or the removal of a specific function. Therefore, there does not need to be a literal lack of work throughout the entire company.

Step 1: Document the operational decision

The employer should be able to explain what change is being made and why it affects staffing. Document the organization before and after the change, and which tasks are being eliminated, moved, or altered.

Step 2: Investigate redeployment

According to the Employment Protection Act (LAS), a termination is not based on objective grounds if it is reasonable for the employer to provide the employee with other work within the company. Therefore, the redeployment investigation should take place before a termination is decided and cover vacant positions for which the employee has sufficient qualifications.

Step 3: Negotiation and order of seniority

The Co-Determination Act (MBL) and collective agreements may require negotiation before a decision is made. Thereafter, the employer needs to handle the order of seniority according to LAS or the applicable collective agreement. The rules can be complex when there are multiple operational units, contract areas, or exemptions.

Step 4: Written notice of termination

Termination by the employer must be in writing. The notice must, among other things, include information on how the employee should proceed to challenge the termination and whether there is a preferential right to re-employment.

Notice period and salary

LAS contains notice periods that increase with the length of employment. Collective or individual agreements may provide different or better terms. During the notice period, the employee is generally entitled to salary and other employment benefits.

Preferential right to re-employment

Employees who have been terminated due to redundancy may, under certain conditions, have a preferential right to re-employment. The notice of termination must state whether such a right exists and if the employee needs to file a claim.

Common mistakes

• The redeployment investigation is conducted only after the termination
• Redundancy is used to manage problems that are actually personal
• Order of seniority is assessed without checking collective agreements
• MBL negotiation is missed
• Notice of termination lacks mandatory information

See the Template Store's template for termination due to redundancy.

This article provides general information. Terminations due to redundancy can have significant legal consequences and should be quality-assured on a case-by-case basis.