Eurofound's ERM database on restructuring-related legal regulations provides
information on regulations in the Member States of the European Union and Norway
which are explicitly or implicitly linked to anticipating and managing change.
Reemployment obligation after restructuring
Information on this regulation have been collected since November 2022.
For a determined period, usually for at least 6 months after dismissing employees, affected employees may have priority in the event that new jobs become available within the same company. Frequently, priority is given to employees with greater seniority.
This type of legal regulation has been identified in 14 countries.
Labour Code, articles L.1233-45, L.1235-13 and L.1235-14
Ordonnance n° 2017-1387 du 22 septembre 2017 relative à la prévisibilité et la sécurisation des relations de travail
Article 9 of the Act of 13.03.2003 on special principles of termination of employment contracts with employees for reasons not related to employees - 'Collective Dismissals Act';
Article 471 of the Act of 23.04.1964 -Civil Code;
Article 300 of the Act of 26.06.1974 -Labour Code
Article 115 stipulates that an employer can terminate an employment contract for legitimate reasons by giving either the statutory notice or the notice stated in the contract of employment (regular notice of dismissal). Among others, grounds for dismissal include cancellation due to business reasons, where there is no longer the need to perform certain work due to economic, technological or organisational reasons. If dismissals happen for business reasons, the employer cannot employ another employee for the same position for six months after the date of the dismissal notice. In case there is a need for employment in the same position within these six months, the employer must offer an employment contract to the employee dismissed for business reasons.
Accordingly, an employer who has made a regular termination of employment contract cannot employ other employees for these positions for at least six months. The obligation is valid also in cases of collective dismissals with the respective thresholds, pursuant to article 127. If there is a need for employees in the same positions within a period of six months from the redundancies, employers are obliged to offer employment contracts first to the employees dismissed for business reasons.
According to Article 4 the Collective Dismissals Law of 2001, employers intending to proceed with collective dismissals (within 30 days, dismissals of at least 10 workers in companies with 21-99 employees, 10% in firms with 100-299 employees or at least 30 workers in firms with 300 or more staff) are obliged to timely enter into consultations with the employees' representatives aiming at designing social measures with the target of reaching an agreement. The consultations should at least cover the following issues:
Possible ways and means for avoiding collective dismissals or the reduction of number of employees affected, and
ways and means for lessening the impact of collective dismissals, by designing social measures, which should, among others, have the target of reemployment or retraining of dismissed employees.
The Termination of Employment Law of 1967 is more specific as far as reemployment is concerned. According to Article 22, a redundant employee has the right to reemployment if the employer who proceeded with redundancies is planning to increase employment again within 8 months since the redundancies took place. If the employer is looking for the same type of employees with the same skills as those who were made redundant, he/she is obliged to give preference to redundant employees.
If an employee is dismissed on financial or production-related grounds, and the employer needs new employees within four months of termination of the employment contract for the same or similar work as previously performed by the dismissed employee, the employer is obliged to reemploy the employee, provided that the employee is registered as a job seeker with the public employment services. The job must be specifically offered to the dismissed, unemployed employee. If the employment relationship had lasted for 12 years or more prior to its termination, the duration of the reemployment obligation is six months.
The law is generally applicable on all dismissals based on financial or production-related grounds.
Each employee that has been dismissed, either individually or collectively, on economic grounds, can benefit from a reemployment priority if a suitable job becomes available and if the employee has asked the employer to be informed about any upcoming vacancies. This priority lasts for one year from the date of termination of the employment contract. In the framework of a collective agreement on an employment security plan, social partners may extend this length.
The employer is obliged to mention this reemployment priority in the letter of dismissal, as well as the conditions for its implementation. If required by the employee, the employer has to inform them about each position available and compatible with the employee's qualifications. If the employee has acquired new skills and qualifications and has informed the employer about it, they benefit from reemployment priority for suitable positions in line with new skills and qualifications.
Employee representatives must also be informed about the vacancies in writing.
Non-compliance with the reemployment priority is a ground for courts to grant compensation to the employee. The judge may grant indemnification equivalent to at least 1 month of wages. If the employee has less than 2 years of seniority in the company or if the company has fewer than 11 employees, this disposition doe not apply and it is up to the judge to determine the amount of compensation in relation to the loss suffered by the employee.
Following labour court rulings (see sources below), workers hold the right of reemployment if they are covered by the Employment Protection Act (Kündigungsschutzgesetz, KSchG) and if it can be shown that he/she was dismissed on grounds of wrong or outdated projections of future business developments. Workers have to file complaints for reemployment within the statutory time of dismissal protection (up to seven months depending on the tenure). The regulations only apply to employers employing more than 10 workers and to workers who have worked for the establishment for more than six months.
In case of collective dismissals (at least five dismissals in companies with more than 15 staff over a 120 day-period), dismissed employees have a priority right during the six months following the dismissal if the company intends to hire workers.
In the context of either an individual or a collective dismissal, an employee dismissed for economic reasons has the right to apply to return to the company if the firm hires new personnel. If the employee informs the employer that the employee is interested in returning to the company, the employer must inform the employee of any vacant position corresponding to the employee's skills. The reemployment obligation ends one year after the employee has left the company.
The employee whose employment was terminated on grounds of redundancy (collective dismissal or more general) is entitled to reemployment if within a period of one year from the date of termination of employment the post he/she formerly occupied is made available again. The offered conditions shall be as favourable as those to which employee would have been entitled if the contract had not been terminated.
In case of reemployment, the previous period of employment shall still be taken into consideration in terms of length of service and shall be considered as one continuous employment.
Conditions for annulment of dismissal
The court may annul the termination of the employment relationship by the employer if, within a period of 26 weeks after the termination of the employment relationship, the same position is given to someone else, or a new vacancy is created which is almost the same or comparable, and the employee has not had the chance to get this job (either directly by the employer or through a temporary work agency). The employee can choose between reemployment or financial compensation.
Assessing the possibility of reemployment
In assessing whether a collective dismissal permit shall be granted by the public employment service, it has to be checked whether to-be-dismissed employees can be placed in suitable positions elsewhere in the company. These positions include positions that are currently vacant, or are expected to be vacant within 26 weeks, as well as positions that are currently filled by workers with a form of flexible contract that expires within 26 weeks, or workers who will reach the retirement age within that period. If the employer is a subsidiary of other companies, positions in those enterprises will also be considered. A position is considered suitable if it is compatible with the employee's education, experience and competencies. If one of these conditions were present and a permit was granted, an employee can apply for reemployment or financial compensation retroactively.
The maximum number of employees (measured in working hours) that can be dismissed is the number of full-time equivalent positions that is removed. The employer has an obligation to offer one or more redundant employees a continuation of their labour contract for the remaining working time if the working hours of the redundant employees exceeds this maximum. This is only the case when the remaining vacant positions fit employees' competencies.
An employee who has been dismissed owing to circumstances relating to the undertaking (both in cases of individual and collective dismissals) shall have a one year preferential right to a new appointment at the same undertaking, unless the vacant post is one for which the employee is not qualified. Following an amendment in force 1 January 2024, the right is expanded. If the undertaking is part of a group of companies ("konsern") the preferential right will now also apply to vacancies in other undertakings in the same group.
If an offer of appointment is not accepted within 14 days after receiving it, the right lapses.
The preferential right shall also apply to an employee who is on a fixed-term contract (except if the employee is filling in for somebody who is absent) and who, owing to circumstances relating to the undertaking, is not offered continued employment. The preferential right shall also apply to employees who have accepted an offer of reduced employment instead of dismissal.
The preferential right applies to employees who have been employed by the undertaking for a total of at least 12 months during the previous two years. The provisions regarding preferential rights to a new appointment shall apply correspondingly to employees who have been dismissed in connection with the bankruptcy of an undertaking. However, this shall only apply if the undertaking is continued or resumed and, in view of its location, nature, extent and the like, is regarded as a continuation of the original undertaking.
There is an obligation to reemploy a person who has been laid off as a part of a collective dismissal process (within 30 days, dismissals of at least 10 workers in companies with 20-99 employees, at least 10% of workforce in firms with 100-299 employees or at least 30 dismissals in larger companies), if the former employer wants to employ any new persons (because of need for new staff or need to replace a person who has retired) in the same employment category in a period of 15 months following the collective redundancies.
The duration of reemployment obligation is not connected with tenure of the affected employee prior to dismissal. The duration of reemployment obligation can be extended in agreement with the trade union but this is not a common solution. Recruiting does not guarantee the employee the same type of contract, position, working conditions and pay as he/she had before.
Violation of the obligation to reemployment results in the possibility of claiming compensation from the employer on the basis of article 471 of the Civil Code in connection with the article 300 of the Labour Code.
If, within 45 calendar days after a collective dismissal (i.e. dismissal of at least 10 employees in companies with 21-99 workers, at least 10% of staff in companies with 100-299 workers or at least 30 employees in larger firms), the employer resumes operations, he must notify the dismissed employees thereof. Within this time span, the dismissed employees have a priority right to reemployment, without having to undergo an exam, competition or probation. The employee must respond regarding this reemployment offer within five days after receiving the notice. Only if an employee refuses or fails to answer, the employer has the right to hire another person.
In case of an individual dismissal, there is no obligation to reemploy the dismissed employee. However, since the dismissal should always have a serious and real ground, if the employer reinstates the job very soon after the dismissal, the court may not consider the dismissal to have been justified from the outset.
The employer's obligation to reemploy workers after restructuring is laid down in a law covering civil servants (Civil Servants Act). According to article 158, paragraph 7 of the Act, civil servants whose employment contract has been terminated for business reasons have a priority right to reemployment for two years after the termination of his or her employment contract.
If the employer, after a dismissal (both individual and collective), subsequently recruits staff, employment must first be offered to the previously dismissed workers.
This applies to permanently employed workers as well as workers with fixed-term contracts, on the condition that they have been employed for more than 12 months in total over the past three years (or six months over the past two years for seasonal employment) and that the worker meets the required qualifications.
The right of priority applies for up to nine months after dismissal. Employees eligible for possible rehiring must be informed of the details in their written notice.
Reemployment must be done in accordance with seniority. In other words, the rehiring order is determined by length of previous service. If two or more employees have been employed for an equally long time, the elder or the eldest employee is prioritised.
A new prerequisite introduced in the amendment to the law entered into force on 30 June 2022 for re-employment is that the employee has sufficient qualifications for the new position. As previously, the employee also has to have been employed for a sufficient period of employment with the employer. The total period of employment shall be more than twelve months in the last three years, or
* in the case of fixed-term employment, for a total of more than nine months during the last three years, or
* in the case of seasonal employment for a former seasonal worker, for a total of more than six months in the last two years.
The worker is considered sufficiently qualified for the new task if it does not take more than six months to learn the job.
Judicial practice recognises several causes as justified reasons for cancellation due to business reasons, including market downsizing, reduction in the scope of activities and non-profitability of a certain activity and/or an individual job position. There are no legally prescribed control mechanisms to track whether an employer first offers jobs to employees made redundant within six months of the redundancy.
Information on employment flows within the company must be made available to the works council, provided that the number of employees in the company from the date of dismissal to the date of reemployment has not fallen below 20 (as the establishment of a works council is a right in companies with at least 20 employees). Provided that the works council still exists, it can report to the public authorities on the compliance of the employer to these legal provisions. Otherwise, redundant employees can find out informally from former colleagues whether new employees were employed for their positions within six months following their dismissal and check this information with the public employment service which retains an updated register of employment.
The law does not specify the consequences for non-compliance. Under article 228 (23), an employer is fined from €1,320 to €3,980 for serious (major) offences, if before the expiration of a period of six months from the date of delivery of the decision on dismissal, he or she employs another worker in the same jobs, and he or she has not offered to conclude an employment contract with the worker whom he or she dismissed for business-conditioned reasons (Article 115, paragraphs 5 and 6).
The Termination of Employment Law regulates also the operation of the Redundancy Fund and Redundancy Payments. The fund is administered by the Social Security Services. If the Social Security Services take notice of increased employment by an employer who proceeded in the last 8 months to redundancies, he/she is then asked to provide explanations for not re-employing the redundant employee(s).
This provision of the Termination of Employment Law is partly causing delays to redundancy payments since the authorities begin to process the applications after the 8 months period has elapsed in order to make sure the employer has not proceeded with the replacement of the redundant employees thereby violating the reemployment obligation.
Trade unions report that reemployment is in many cases successfully negotiated, however no exact data are available.
The duration of the reemployment obligation was reduced from nine months to four months (six months for employment relationships of 12 years or more) in 2016. Employer organisations supported the reform, while trade unions opposed it, arguing that employment security in Finland is comparably weak as it is and that a reduced reemployment period in no way improves the employment rate.
Some collective agreements contain provisions on longer reemployment periods.
The right of reemployment is only based on case law and not on statutory legislation. A recent ruling by the federal labour court from 2017 endorsed that it only applies to workers covered by the Employment Protection Act.
According to the prevailing interpretation, however, the priority right does only operate in case of recruitments connected to the performance of the same task previously carried out by dismissed workers.
This regulation is sometimes 'by-passed'. The employee is offered some additional lump sum and both sides agree on the termination of employment contract on the basis of mutual consent. It allows the employer to gain some flexibility in the case he/she would be forced to employ a person within a year's time for the same post.
Labour legislation and relating amendments are discussed at policy formulation stage in the tripartite Employment Relations Board (ERB). Members forming this board come from trade unions, employers' associations and the government.
Employer organisations have expressed that it is not always possible for employers to assess whether positions are suitable for current workers, or whether positions are expected to be vacant in the coming 26 weeks, especially in sectors with strongly fluctuating demand. Consequently, according to employer organisations, reemployment obligations are sometimes difficult to execute for some employers in some sectors.
The regulation aims to avoid a situation where the employer downsize for a short time in order to let employees that otherwise could not have been dismissed, go.
The preferential right is only evoked if the employer hires a new employee, and not if existing employees are replaced within the company.
It should be noted that the period during which redundant employees had the right to be reemployed used to be 9 months. This period was significantly reduced to only 45 days by amendments to the Labour Code in 2011.
Article 102 of the old Employment Relationship Act (Official Gazette of RS, No. 42/2002) stipulated a sort of employer's obligation to reemploy workers after restructuring. According to this act, workers whose employment contracts had been terminated for business reasons had a priority right to reemployment (under the condition that they fulfilled requirements for carrying out the work) if the employer hired new employees within a period of one year after the restructuring. This article was left out in the new Employment Relationship Act in 2013, because, as it was explained in the law proposal, it would put workers/candidates in an unequal position. Currently, only civil servants have reemployment priority in the event of a restructuring initiated on the account of business reasons.
Since the introduction of the Employment protection act in the mid-1970s, the Swedish labour market has gone through major transformations. For instance, temporary work agencies have become common. This means that new ways to circumvent the right to reemployment have arisen. One such case where an employer hired staff during the period when previous employees had a right to be reemployed, sparked an intense debate in the early 2000s. In this case (AD 2003 No. 4), the labour court concluded that it was not a matter of circumvention. However, the court pointed out that the circumvention of the Employment protection act is a complicated issue and that there are circumstances where hiring of staff can be considered an unauthorised circumvention of the priority rules.
CodeLabour Act 93/2014, 127/17, 98/19, 151/22, 64/23 Native nameZakon o radu 93/2014, 127/17, 98/19, 151/22, 64/23 TypeReemployment obligation after restructuringAdded to database08 May 2015
CodeCollective Dismissals Law of 2001 (Law 28 (I)/2001); Te...Native nameΝ. 28(I)/2001 - Ο περί Ομαδικών Απολύσεων Νόμος του 200...TypeReemployment obligation after restructuringAdded to database08 May 2015
CodeThe Employment Contracts Act (55/2001)Native nameTyösopimuslaki (55/2001)TypeReemployment obligation after restructuringAdded to database08 May 2015
CodeLaw 29 April 1949, no. 264, Provisions concerning acces...Native nameLegge 29 aprile 1949, n. 264, Provvedimenti in materia...TypeReemployment obligation after restructuringAdded to database08 May 2015
CodeCap. 452 Employment and Industrial Relations Act, 2002Native nameKap. 452 - Att dwar l-Impiegi u r-Relazzjonijiet Indus...TypeReemployment obligation after restructuringAdded to database08 May 2015
CodeCivil code, Royal decree on dismissals of 1 January 202...Native nameBurgerlijk Wetboek, Ontslagregeling UWV van 1 januari 2...TypeReemployment obligation after restructuringAdded to database06 August 2015
CodeAct of 13.03.2003 on special principles of termination...Native nameUstawa z dnia 13.03.2003 r. o szczególnych zasadach roz...TypeReemployment obligation after restructuringAdded to database08 May 2015
CodeLabour Code, Law no. 53/2003, republished in the Offici...Native nameCodul muncii, Legea nr. 53/2003, republicată în Monitor...TypeReemployment obligation after restructuringAdded to database08 May 2015
CodeEmployment protection act (1982:80)Native nameLag (1982:80) om AnställningsskyddTypeReemployment obligation after restructuringAdded to database08 May 2015
Between the end of 2022 and the first half of 2023, almost 300,000 employees working for ‘big tech’ companies were laid off across the world, making headlines for months in global media. This development has been a shock, considering the high numbers of jobs in well-known tech corporations with a reputation for offering good working conditions and well-paid positions.
The retail banking sector is fertile ground for studying the impacts of digitalisation on work and employment. Financial services are increasingly provided online, without the intermediary of customer-facing institutions. Many banks in the sector have been undergoing serial restructuring since the global financial crisis, and it is one of the few service sectors with stagnant or declining employment.
Since 2011, the Restructuring support instruments database of the EU PolicyWatch has been collecting information on measures that assist companies and workers to anticipate and manage restructuring. This article looks at measures in the database aimed at supporting employees and employers during the COVID-19 pandemic (2020–2022).
Eurofound’s European Restructuring Monitor database reveals the impact of the energy crisis on employment in the EU. Following Russia’s invasion of Ukraine in February 2022, energy prices have hit record highs. The European Commission imposed sanctions and limitations on the import of oil and gas from Russia, which has reacted by reneging on supply commitments to many Member States.
Comments
Comments
Comments
Comments
Comments
Comments
Comments
Comments
Comments
Comments
Comments
Comments
Comments
Comments