Cases on Section 2a of the Salaried Employees Act

Salaried employees must prove specifically that they have sought continuous employment in order not to be cut off from receiving severance allowance. This was established by two judgments of 17 January 2014 of the Danish Supreme Court.

The Supreme Court has delivered judgments in the large group action concerning Section 2a of the Danish Salaried Employees Act where a number of employers - based on the Ole Andersen case from 2010 - argued that they were entitled to receive severance allowance and where some of them further argued that the employers - a number of municipalities and regions - had discriminated against them based on age by not paying out the allowance immediately following the EU judgment.

In the 14 cases in which the Danish Eastern High Court had delivered judgments, the core issue was whether the judgment in the Ole Andersen case would imply a setting aside of the current practice, pursuant to which an employee was to be prevented from receiving severance allowance if he was to receive retirement pension from the employer upon termination of employment and if he had entered the pension scheme prior to having reached the age of 50. Moreover, there was a claim for compensation for age discrimination under Section 7 of the Danish Anti-Discrimination Act as a consequence of the employers not immediately having paid out the allowance after having been requested thereto. The two cases before the Danish Western High Court primarily concerned the discrimination issue.

The European Court of Justice stated, inter alia, in the Ole Andersen judgment that the cut-off of the severance allowance was too excessive a measure in a situation where the employee intended to "temporarily waive his pension for the purpose of pursuing his vocational career".

Against this background, the employers argued that the employees had to have been seeking employment for six months prior to actually being able to claim that they had been pursuing their vocational career. The Eastern High Court did not agree. However, they found that the employees ought to be able to prove that they had actually been seeking continuous employment, and against this background, the Eastern High Court had to a considerable degree acquitted the employers. Only in three of the cases, the High Court found that the employees had lifted the burden of proof: (i) An employee's 4 ½ months of job search prior to early retirement pension was accepted as continuous search for employment, (ii) an employee who went on early retirement pension after having been unsuccessful in finding a job, but who later got a job as a substitute, and (iii) and employee who after rehabilitation got a flexible job.

The majority of the Supreme Court found that no general, fixed guidelines for establishing when an employee is to be considered as temporarily having waived his age pension for the purpose of pursuing his vocational career could be deduced from, inter alia, the Ole Andersen case, and they pointed to the fact that such decision should be made by the legislative power. As such, the Supreme Court found that this should be based on a specific evidential assessment. The majority did not find grounds for setting aside the assessment of the High Court.

In all 16 cases - in line with the Eastern High Court, but contrary to the judgment of the Western High Court - the Supreme Court acquitted the employers of the claim for compensation based on age discrimination in that the employers' lack of payment of the allowance immediately after having been requested thereto was not of a sufficiently aggravated nature.

The judgments show that employees must be able to prove that they have been seeking other employment and thus pursuing their vocational careers, and that each case must be assessed separately. In this connection, it does not matter whether the employees take early retirement, as long as the employees continue to seek other employment. At the same time, the judgments show that it is not sufficient if the employees only seek a few jobs after the expiry of the employment. The judgments will not form the basis for more general guidelines to this effect as the Supreme Court refuses to fix any such guidelines by referring to the fact that such decision should be made by the legislative power.

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