When employees are on sick leave – can you legally terminate their employment? How to avoid mistakes

Introduction

Uncertainty often arises among employers when an employee has been on sick leave for a long period of time and the question of termination comes up. When employees are on sick leave, can you legally terminate their employment? What is actually permitted under the Working Environment Act? Where is the line between the employer's need to continue operating the business and the employee's right to protection during illness? This is an area with many pitfalls and great potential for disputes. Avoid mistakes. Seeking legal assistance early on is therefore crucial.

Strong protection against dismissal in the event of illness

The Working Environment Act provides employees on sick leave with particularly strong protection against dismissal. According to Section 15-8, an employee cannot be dismissed on the grounds of illness during the first 12 months after becoming fully or partially incapacitated for work. This applies regardless of how demanding the absence may be for the employer to manage.

Even after the expiry of this twelve-month period, the law requires objective grounds for dismissal. This means that the employer must be able to document that the employee's absence is of a permanent nature. Furthermore, it must be documented that adjustments have been attempted and that further absence would have an unreasonable impact on the business.

Duty to facilitate and dialogue meetings when on sick leave

Before considering termination, the employer has a duty to make individual adjustments. This involves investigating whether the employee can return to work—either full-time or part-time—with adjusted tasks, reduced working hours, or technical aids. NAV and the employee's regular doctor are often involved in this process through dialogue meetings.

Failure to make the necessary arrangements may result in a dismissal being declared invalid at a later date, which can be very costly for the company. Employers should therefore document all measures and assessments made during the process.

When can termination be considered?

If you have been on sick leave for one year, this may in some cases be grounds for dismissal, but only if there is no prospect of recovery and the employer can document that the absence creates significant challenges. There must be a specific, individual assessment—standardized assessments or "automatic" dismissals due to absence are not legally valid. It is important to ensure that the dismissal is lawful.

If the illness is the employer's responsibility (for example, as a result of the working environment), even stricter requirements apply when terminating an employee's contract.

What can a lawyer assist with?

Employers considering dismissal after long-term illness should always seek legal advice before initiating the process. A lawyer can assist with:

• Assessment of objective grounds for termination
• Review of accommodation measures and dialogue meetings
• Preparation of a correct termination letter
• Negotiations with the employee regarding possible termination or severance agreement
• Representation in disputes before the courts

By involving a lawyer early on, the company can avoid costly mistakes and ensure that the process is conducted in accordance with the law.

Our law firm has extensive experience in advising employers on challenging personnel matters. We offer a thorough assessment of your case and can assist you throughout the entire process—from internal assessment to a possible final agreement. Contact us today for a no-obligation consultation.

The author of this article is a partner in the Employment Law Department and assists both employers and employees with advice and litigation.