Length of service in workforce reductions

Length of service in workforce reductions

On 28 February 2019 the Supreme Court pronounced a judgement regarding the importance of length of service in the employer’s selection in workforce reductions. The question was to what extent the employer in the selection could deviate from the order of length of service based on an assessment of the employees' competence and professional excellence.

Background

Skanska Norge AS carried out a workforce reduction during the spring of 2016. Six of the employees who were dismissed in the process, had a length of service that was longer than many of the employees who retained their job. Skanska justified the selection, with their particular emphasis on competence and professional excellence. The six employees with the longer length of service (as well as two others who later withdraw their case) therefore instituted legal proceedings claiming that the dismissals were invalid and with a claim for compensation.

The Oslo District Court gave judgement in favour of Skanska. However, the Court of Appeal gave judgement in favour of the employees, partly because the competence differences that justified the dismissals were not large enough for the principle of length of service to be waived (cf. the Main Agreement LO-NHO § 8-2 and the Working Environment Act section 15-7). Skanska appealed the decision to the Supreme Court.

The Supreme Court’s decision

The Supreme Court concluded that the Court of Appeal had set the threshold for deviation from the principle of length of service too high. The Supreme Court stated that, according to the circumstances, it is objectively justified to depart from the order of length of service, without the differences in competence and professional excellence being substantial.

However, the Supreme Court found that Skanska's case proceedings were nevertheless suffering from major deficiencies, and that the dismissals for that reason had to be set aside as not reasonably justified. The Supreme Court stated, among other things, that the more discretionary and subjective the selection criteria are, the better the documentation for the selection must be.

Read the judgement in full text here (Norwegian version only).

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