Lack of Work

“Lack of work” is the legal umbrella term for all terminations that are not based on personal grounds. It does not necessarily mean that there is a lack of work, but rather refers to business-related reasons—such as reorganization, downsizing, closure, or a change in business focus. Redundancy is a so-called objective ground for termination, but the process is strictly regulated, and a single misstep can be costly.

What is required for a proper redundancy process?

A termination due to a shortage of work must follow a clear procedure to be valid:

  • Factual basis: There must be a genuine operational reason for the cutback.
  • Obligation to Negotiate: The employer must negotiate with the union in accordance with the MBL before a decision is made.
  • Reassignment Investigation: Before terminating an employee, the employer must determine whether there are other available positions to which the employee can be reassigned.
  • Order of precedence: In the event of termination, the general rule is ”last in, first out,” with certain exceptions provided for by law.

Common Pitfalls When There Is a Shortage of Work

  • Disguised termination for personal reasons: To label a termination as a layoff when it actually concerns a specific individual is a serious and risky misjudgment.
  • Inadequate reassignment investigation: A sloppy or non-existent investigation is one of the most common grounds for a termination to be rejected.
  • Incorrect order: Errors in seniority lists and the calculation of length of service may result in damages.
  • Unclear handling of remaining staff: Anyone who overlooks the transition for those who remain risks a loss of productivity and trust.

Here's How an Interim HR Manager Can Lead the Process

Downsizing is one of the most common reasons for temporarily strengthening the HR function. The process is both legally sensitive and emotionally demanding.

  • Reliable legal handling: One interim HR manager ensures that MBL negotiations, reassignments, and seniority are handled in a formally correct manner.
  • Relief in a difficult situation: An external leader can manage a sensitive process without having any personal ties to those involved.
  • Respectful treatment: Experience in combining dismissal with a respectful approach that protects the employer brand.
  • Rapid reinforcement: Interim Search's process ensures that you have the right HR expertise in place within 48 hours.

Frequently Asked Questions About Layoffs

Is a lack of work always a valid reason for termination?

A shortage of work constitutes an objective ground in itself, but a termination is still not valid if the employer has not fulfilled its obligation to reassign the employee or has violated the rules regarding the order of priority. The court does not review the business decision itself, but it does review whether the process surrounding it was conducted correctly.

What do the seniority rules mean?

Seniority means that, within a seniority group, the employee with the shortest length of service is normally the first to be laid off—the ”last in, first out” principle. However, there are exceptions, including the option to exempt a number of key employees. Furthermore, the rules have been changed as a result of the reform of the Employment Protection Act (LAS).

Do we have to negotiate with the union even if we don't have a collective bargaining agreement?

Yes. Under the MBL, employers are required to negotiate before making decisions regarding major changes that affect employees, even with labor unions with which they do not have a collective bargaining agreement, if any affected employee is a member of that union.

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