Termination of salaried employee holding sideline job with supplier was lawful

Recently, the High Court of Eastern Denmark decided a case on whether termination of an employee was reasonably justified. The reason given for the termination was partly that, during her employment, the employee performed work for another business, and partly that the employee's performance was inadequate. Following specific assessment, the High Court found that the termination was reasonably justified by the employee's actions.

The case in brief

On 1 May 2018, the employee in question was employed part-time as HR partner for 30 hours a week. It was agreed that the employee's seniority was to be calculated as from 1 April 2017. It was evident from the employment contract that the employer fully knew that the employee carried on a small commercial business, but that the contract was subject to the condition that such commercial business could be operated without any inconvenience to the employer and "…without any uncertainty whatsoever as to the overall lack of affiliation."

In November 2018, the employee drafted an addendum to her employment contract, enabling her to take on a further defined sideline job in addition to her job with the employer. The employer never signed the said addendum.

At a meeting on 6 December 2018, the employer pointed out, among other things, that the employee did not fulfil her work duties in due time. The employee was not given any written warning.

On 8 December 2018, the employee started performing work for a recruitment agency, which she failed to disclose to or apply for permission for with the employer's management. Before then, the employee had recommended her employer to use the said recruitment agency as the sole supplier of recruitment services, and she also handled contact with the recruitment agency until the business between the employer and the recruitment agency ceased in August 2018.

Immediately after that, in January 2019, the employee was terminated. The reason given for the termination was in part that the employee's performance was inadequate and that, during her employment, she performed work for another business.

Decision of the High Court of Eastern Denmark

Initially, the High Court held that the employee did not receive any actual warning at the meeting held in December 2018 and, accordingly, the High Court upheld the decision made by the District Court that termination of the employee was not justified by referring to the fact that her performance was inadequate.

Thus, the High Court was to assess whether the termination was reasonably justified on the ground that the employee performed work for the recruitment agency during her employment.

Considering i) that, at the time of employment, the employee knew that the recruitment agency could be a potential future employer, ii) that the employee made efforts to ensure that the employer was to continue using the recruitment agency as the sole supplier of recruitment services, iii) that the employee had drafted an addendum to her employment contract, enabling her to take on a further defined sideline job in addition to her job with the employer, iv) that the employer had never signed the addendum, and v) that the employee asked another employee not to disclose to the employer that she worked for the recruitment agency, the High Court found that the termination was reasonably justified by the employee's actions.

Consequently, the High Court reached the decision that the employer was not to pay any compensation to the employee.

For more information

If you have any questions, please do not hesitate to contact Lise Lauridsen, Morten Ulrich or Sandro Ratkovic. You may also get in touch with your usual Bech-Bruun contact.