Layoff and other absence at the same time

If an employee is laid off and is also absent at the same time for another reason, such as sick leave, a chronological priority principle is generally observed. This means that that the reason for an employee’s absence and its effects are assessed on the basis of the first reason for being absent. If the first reason for being absent ends, but the second continues, then after this the absence is assessed on the basis of the latter reason. In the case of layoffs, these are deemed to take effect when the layoff notice is given.

Layoff can deprive an employee of sick pay 

If for example an employee falls ill and goes on sick leave after a layoff notice or during a layoff, the absence is considered to be due to the layoff. Then the employee is not entitled to sick pay (Supreme Court KKO 1997:121). The principle also works the other way round. The start of a layoff does not release an employer from the obligation to pay sick pay if the employee has gone on sick leave before the layoff notice is given.

In a case brought before the Labour Court (TT 2004:124), an employee had three successive sick leaves with the same diagnosis. The employer announced during the first sick leave period that the employee was to be laid off at the end of the sick leave period. The Labour Court considered, however, that the employee’s entire period of work incapacity was a continuous sick leave and the absence was due to the same illness, which arose before the layoff. Therefore the employee was entitled to sick pay.

Brief work spells do not cancel a layoff

Under the Employment Contracts Act an employer must offer work to laid off employees if short-term work becomes available during the layoff.
An employer had offered an employee two brief work assignments during a layoff. The employee fell ill during the second assignment and went on sick leave. The employee was not entitled to pay for the sick leave following the second assignment, however. The Labour Court (TT 2005:128) found that it was the same layoff that had begun before the illness. So short work assignments during a layoff do not automatically cancel layoffs.