The High Court of Eastern Denmark has established that the conditions for terminating an employee on sick leave pursuant to the 120-day rule were not met, as termination, which took place after the 123rd sick day, did not occur "immediately upon expiry" of the 120 sick days.

The case concerned an employee working as an IT consultant. On 11 September 2018, the employee reached 120.17 consecutive sick days. The employee resumed work on 12 September but reported sick again on 1- 2 October, landing the employee at 122.17 sick days. When the employee was absent due to illness again on 29 October, thus reaching 123.17 sick days, the employer decided to terminate the working relationship pursuant to the 120-day rule, 49 days after the 120th sick day.

District court ruling: Termination met the condition concerning termination "immediately upon expiry" of the 120th day
The district court found that an assessment of whether termination in the specific case occurred immediately upon expiry of the 120 sick days must take into consideration that application of s. 5(2) of the Danish Salaried Employees Act (funktionærloven) is conditioned on the salaried employee being sick at the time of termination. The district court found that case law establishes that if the salaried employee returns to work, termination cannot take place until the employee is absent due to illness again.

On this basis, the district court found that the employer's omission to terminate the employment relationship on 11 September 2018, when the employee reached the 120th sick day, before the employee returned to work on 12 September 2018, did not mean that the employer was barred from terminating the working relationship on reduced notice on new absence due to illness.

In the district court's opinion, termination at reduced notice could not take place earlier than 1 and 2 October. As the course of illness was interrupted, and as it may be difficult to determine the number of sick days, the district court also allowed the employer a brief period to re-ascertain whether the conditions for termination under s. 5(2) of the Salaried Employees Act had been met. Due to the employee's brief absence due to illness on 1 and 2 October 2018, the district court found that termination on 29 October 2018 occurred immediately upon expiry. Consequently, the employer was entitled to terminate the employee at a reduced notice of 1 month.

Against this background, the district court found for the employer in the claim for salary paid during the notice period and compensation for wrongful dismissal under s. 2b of the Danish Salaried Employees Act.

High Court ruling: Termination did not occur "immediately upon expiry" of the 120th sick day
The Union of Commercial and Clerical Employees in Denmark ("HK"), which also represented the employee in connection with the district court case, appealed the ruling to the High Court, again claiming salary paid in the notice period and compensation for wrongful dismissal, as the termination had been contrary to s. 5(2) of the Salaried Employees Act.

Unlike the district court, the High Court found that the employer had the option of terminating the working relationship at the 120.17 sick days reached on 11 September 2018. In this respect, the High Court noted that the Salaried Employees Act, including the travaux preparatoires to the Act, took no direct position on how to interpret the condition in a situation such as this, where the salaried employee on expiry of the 120 sick days and prior to termination resumes work and then reports sick again. The condition that termination must take place "immediately upon expiry" of the 120 sick days is to be interpreted so that the employer is allowed the time to ascertain whether the conditions for termination are met and consider whether they want to exercise this option.

The High Court found that the employer could have terminated the employment relationship pursuant to the 120-day rule as early as on 11 September, at the end of the 120th sick day. Nor was the working relationship terminated on 1 or 2 October, when the employee had been absent due to illness for 121.17 days and 122.17 days, respectively. Against this background, the High Court found that termination, which did not occur until 29 October – i.e. over 1½ month after the 120th sick day – did not take place immediately upon expiry of the 120 sick days. Thus the condition for termination of reduced notice of 1 month had not been met, and the High Court agreed with the employee that the condition for termination pursuant to s. 5(2) of the Salaried Employees Act had not been met. The employee was awarded salary for the usual notice period.

The High Court did not find for HK in their claim for compensation for wrongful dismissal pursuant to s. 2b of the Danish Salaried Employees Act, as the absence due to sickness beginning on 29 October was expected to be of some duration, and considering the fact that the employee had been employed for around 3.5 years at the time of termination. As such, the termination was justified.

Comments by Bech-Bruun
This is one of a number of issues concerning the interpretation and scope of the 120-days rule set out in s. 5(2) of the Salaried Employees Act, being brought before the courts.

The case is appealed to be heard by the Supreme Court in the third instance.