This article is also available in Finnish here.
The employment relationship does not always end with dismissal. If the situation changes and a new employee is needed to fill the former employee’s role, the employer may have an obligation to rehire the former employee.
If you recreate the role, the employee must return
The employer has an obligation to rehire the employee only when the employee’s employment was terminated due to production and financial reasons. If the employee was summarily dismissed or the employment relationship was terminated for reasons attributable to the employee, the employee does not have the right to be rehired for their former position. Not even if the dismissal was later deemed unjustified.
The employer may be obliged to rehire the employee if the employer requires employees for the same or similar tasks as those performed by the employee before their dismissal. The obligation is much more limited than the employer’s obligation to try to assign an employee to a different role if one is available before terminating the employee’s employment.
If the employee has held several different positions during his career, the re-employment obligation applies only in respect to the last position the employee held before the end of the employment. However, if the employee was temporarily transferred to a different role during the notice period, the employee’s original role still determines when the employee may have to be re-employed.
Agreement to no avail
The obligation to rehire an employee is a fundamental part of the mandatory norms that protect employees. An employee cannot effectively waive the right to be rehired if a suitable role becomes available in the future while the employment relationship is ongoing. In its ruling 2007:69, the Supreme Court stated that an employee cannot waive the right for the employer to offer the opportunity to return, even if both parties agree that the termination was justified. The Supreme Court held that since such an agreement would pertain to any potential role that might become available in the future, the agreement was void under the mandatory provisions of the Employment Contracts Act.
The Supreme Court’s ruling changed the landscape, and thereafter, most termination agreements state that the employment relationship is terminated by mutual agreement. Agreements where employment is terminated on collective grounds, and the parties acknowledge that the employer had valid reasons for the termination, have become rare. When the employment relationship ends by mutual agreement and not by unilateral termination by the company due to production and financial reasons, the employee’s right to be rehired is never triggered. The employee does not have the right to return to his former position, even if the employer decides to start additional recruitment soon after the employee’s employment relationship has ended.
The clock starts when the employment relationship ends
The obligation to rehire the employee arises if the employer needs to fill the employee’s previous position within four months of the termination of the employment relationship. For those who have been employed for more than 12 years, the period is longer and covers the six months following the end of the employment relationship.
The deadline is calculated from the date the employment relationship ends, regardless of when the employee stopped working. Even if the employee is released from work obligations during the notice period, the obligation to rehire the employee only commences after the notice period concludes. During the notice period, the employer has a much broader obligation to assign the employee to any open position as long as the employee meets the minimum qualifications for the role.
In order to determine whether a role has to be offered to a former employee or not, one has to consider when the employer decides to fill the role again. The employer can, therefore, breach the re-employment obligation even if the new employee is hired only after the re-employment period has expired if the recruitment process was started before the rehire obligation ended. However, the Supreme Court confirmed in its decision 2021:47 that the mere fact that a job becomes vacant before the end of the re-employment obligation does not necessarily mean that the employer would be obliged to rehire the former employee. The obligation to rehire a former employee only arises once the employer decides to fill the role. In the event of a dispute, the employer must, of course, be able to demonstrate that the decision on recruitment was genuinely made after the end of the re-employment period and that the employer did not artificially delay the decision.
Only job seekers benefit
On a practical level, efforts have been made to simplify the fulfillment of the re-employment obligation for the employer. The employer is not required to keep the employee’s contact information on file or speculate on whether the employee would still respond to communications. The employer simply needs to contact the local employment office. The employer is obligated to offer a job only to former employees who are registered as job seekers. The former employee does not need to be unemployed, but if the employee has found a job, he must have maintained his status as a job seeker.
But the employer has to be proactive. It is not enough for the employer to advertise the open position and give priority to the former employee if they apply. When the employer initiates a recruitment process, they must actively inquire with the employment office to determine if former employees who are entitled to be rehired are registered as job seekers. If the employer receives an affirmative answer, they must offer the role to the employee without the employee having to express interest in the position.
First among external applicants
The employer has to actively offer the position to the former employee who has the right to be re-employed, and the former employee must be given priority over other applicants when filling the position. However, the beneficial treatment guaranteed by the right to be re-employed is only applicable once the employer has decided to hire a new employee for the position.
If the employer ends up filling the vacancy by transferring a current employee to the vacant role, the former employee who was hoping to be rehired is left in the dust. If the employer has conducted successive rounds of layoffs or if employees have different notice periods, it can easily happen that the notice periods of some employees are still ongoing while another employee’s employment has already ended. The employer must then consider whether the vacant role should be offered first to the employee facing potential termination or to the one whose employment has already ended. In this situation, the rights of the former employee have to step aside, and the employer must offer work first to those employees who are still under contract.
Same role, new employment
When rehiring an employee after termination, the employer is not obligated to reinstate the employee’s previous employment relationship as if the dismissal had not occurred.
The employer must offer the employee work under the same conditions as the employer would offer to new recruits. The salary and other terms of employment can change to reflect the new situation. Of course, the employer may not offer the former employee worse terms than those offered to other external candidates.
Since reinstatement only comes into question after the termination of the employee’s employment, the work history prior to dismissal is reset, even though the employee is back with the same employer. In terms of employment benefits determined based on the length of the employment relationship, such as the notice period, the employee’s employment relationship is considered to have started when the employee was rehired.
Easier times ahead?
Currently, the obligation to take rehire former employees applies equally to all employers, whether it is a micro-enterprise with a few employees or a group employing thousands. The government has proposed that companies that regularly employ less than 50 people would be exempted from the obligation. However, the proposal has not been included in the action plan for 2024, which means that we have to wait at least some time before the government proceeds with the proposal.
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