Denmark: Supreme Court judgement regarding salary during suspension in connection with the summary dismissal of a municipal employee

The case in brief 

Employee A was employed as a care assistant at a day and residential centre in Municipality X. During a shift on 18 March 2021, he grabbed the neck of a colleague and held on for about 30 seconds. The municipality became aware of the incident on 23 March 2021, and an official interview was held on 25 March 2021. In a letter dated 26 March 2021, Employee A was informed that, as a result of the incident, the municipality intended to summarily dismiss the employee with effect from that date, but that he was exempt from duty (suspended) until further notice. Employee A was then given the opportunity to comment on the case (hearing) within a set deadline, which was postponed to 8 April 2021 at the request of Employee A's representative. 

On 15 April 2021, the Municipality decided to summarily dismiss the employee and at the same time announced that his employment relationship was considered terminated with effect from 26 March 2021 as stated in the party consultation letter.

The outcome of the District Court and the High Court and the issue before the Supreme Court

Both the District Court and the High Court found that the summary dismissal was justified, and that the Municipality (employer) had acted immediately and dismissed the employee and subsequently carried out the necessary investigations, among other things as a consequence of employee A contesting the matter and the course of action in his consultation response submitted on 8 April 2021. 

On this basis, the District Court found that the employer had not lost the opportunity to summarily dismiss the employee due to passivity, even though the employee did not receive a dismissal until almost four weeks after the incident. In addition, the district court gave the summary dismissal effect from the time the employee received the consultation letter on 26 March 2021, and the summary dismissal thus had legal effect in terms of pay earlier than the actual date of dismissal. With the same reasoning, the High Court upheld the result of the District Court. 

For the Supreme Court, the case (only) concerned whether the municipality was entitled to give the summary dismissal on 15 April 2021 salary effect from the consultation letter of 26 March, or whether A was entitled to salary in the period from 27 March to 15 April 2021.

The Supreme Court's premises and result

The Supreme Court states that employee A was not formally dismissed until 15 April 2021, and that the employment relationship thus only ended on this date. The municipality was therefore obliged to pay salary to A until this date, unless there were circumstances that could lead to a different result.

In the consultation letter of 26 March 2021, it was stated that the intended summary dismissal would take effect from that date and that employee A was exempt from duty until further notice. These circumstances could not lead to the municipality unilaterally depriving A of his right to salary in the period from 27 March to 15 April 2021, when his employment relationship continued. According to the Supreme Court, there were also no other circumstances that could lead to A's claim to salary until 15 April 2021 having lapsed.

On this basis, the Supreme Court found that the municipality could not give the summary dismissal salary effect from 26 March 2021. A was therefore entitled to salary until the summary dismissal decision was made and notified to him on 15 April 2021.

The Supreme Court thus changes the High Court's (as well as the District Court's) judgement. 

Bird & Bird's comments 

The Supreme Court's decision means that a summary dismissal cannot take effect from the date of a party consultation letter but only from the date when the final (administrative law) decision on dismissal is made and notified to the employee. This is regardless of the fact that a reservation has been made in the consultation letter. Consequently, (at least) public employers cannot avoid the obligation to pay before the formal decision to summarily dismiss is made. This is even if the employee is suspended during the period.

Bird & Bird believes that it is unclear to what extent the decision will affect private employers who are not similarly bound by administrative law rules, including in relation to consultation with the parties and issuing a formal decision on summary dismissal. However, the decision should have a limited impact on private employers, regardless of the fact that the decision seems to clash with the view that an employee can normally be summarily dismissed retroactively to the later of the time of the material breach justifying the summary dismissal and the time when the employee was released from performing his/her labour (e.g. in case of being released from work, cf. ØLD of 7/6 of 2010 or illness, cf. U.2006.1046H). 

Since public and private employees in a summary dismissal situation should hold the same legal position, the judgement means that there will probably now be uncertainty about the possibility of retroactive summary dismissals. However, the difference is that the employer in this case was aware of the breach when the employee was suspended - which was not the case in the two previous cases - and the Supreme Court's result and reasoning can therefore probably be explained by the fact that the employer has accepted with open eyes that it will take the time required to complete the hearing of the parties.

In that case, there will be a difference between whether an employer suspends in connection with an investigation of the grounds for summary dismissal, where retroactive dismissal is not possible - which will probably also apply to private employers - and the situations where the employer in connection with the summary dismissal establishes that the conditions for retroactive summary dismissal, see above, are met, and where retroactive summary dismissal can (still) occur.