New Supreme Court judgement regarding the possibility of salary deductions for missing sick pay reimbursement

By Pia Skovgaard Hansen, Mia Boesen, Søren Narv Pedersen

11-2019

According to the Danish Supreme Court, the employer could not in this specific case deduct the missing sick pay reimbursement from the employee's salary, because the employees' actions were not actionable (enough).

Briefly on sick pay reimbursement

According to the Danish Act on Sick Pay, the employee's entitlement to receive sick pay lapses, if the employee refrains from participating the follow-up meeting with the local authority without having any reasonable grounds. 

It is, however, the employer who pays salary to the employee who is entitled to receive the amount of sick pay as a reimbursement, if the employee is entitled to full salary during sickness. If the employee refrains from participating in the follow-up meeting with the local authority, the employee's entitlement to receive sick pay will lapse, which entails that the employer's entitlement to reimbursement will also lapse.

The new Danish Supreme Court judgment regards to which extent an employer is entitled to deduct the missing sick pay reimbursement from the relevant employee's salary. 

The circumstances of the case

A was employed in the local authority, X, from 1 October 2018, where she as a part of her employment terms was entitled to salary during sickness. On 24 November 2015, the employee reported a long-term sick leave from work.

In this connection, A did not submit all required information to the local authority, although A was formally asked to provide the documentation and although A had filled in other information on the same homepage as where the required information should be submitted. This implied that A's employer loss its entitlement to sick pay reimbursement during the specific period. 

On 21 January 2016, A was informed by her employer that the employer intended to deduct the missing sick pay reimbursement form A's salary. Consequently, A objected to the information from the employer and stated that she did not file the required information because she – due to directions received from her doctor – has abstained from checking emails and 'E-boks' (an online inbox where citizens receive letters from e.g. authorities).

Despite A's objections, on 4 February 2016 A's employer decided to deduct the missing sick pay reimbursement from A's salary, corresponding to an amount of DKK 22,536.

The Danish Supreme Court judgement:

Primarily, the Danish Supreme Court stated that A's employer's compensation claim was covered by the Danish Liability for Damages Act section 23. This means that an employer can raise a claim against an employee, if the employee as part of his/hers duty causes any damage to the employer and if the claim is reasonably due to the employee's actions, the employee's position and the circumstances in general. 

The Danish Supreme Court also stated that A has violated her duty of loyalty by not participating in the local authority's follow-up meetings regarding her long-term sick leave and in this connection ensuring that her employer received the sick pay reimbursement. 

However, the Danish Supreme Court ruled, that A's actions were not actionable enough, because she did not disregarded her duty to participate in the local authority's follow-up meetings intentionally. Furthermore, the Danish Supreme Court ruled that A's actions – although she submitted other information on the same homepage and received documents in 'E-boks' – was not negligent enough, because A had thought that she filed the correct information and because A reacted immediately after she became aware that she did not attend the local authority's follow-up meetings.

Furthermore, the Supreme Court stated that A's employer did not provide A with the necessary instructions regarding the process. 

In the specific case, the Supreme Court stated that A's employer was not entitled to deduct the missing sick pay reimbursement from A's salary. 

Bird & Bird's comments:

From the judgement, we conclude that the Danish Supreme Court acknowledges that the employer is allowed to raise a compensation claim, if the requirements in section 23 of the Danish Liability for Damages Act are met. This requires that the employee's actions are either intentional or negligent enough and most likely also that the employer has provided the employee with the necessary instructions. 

The Western High Court has earlier this year acknowledged that an employer is entitled to withhold salary, if an employee fails to appear from (multiple) fit-for-work meetings, without having any reasonable grounds thereto. The judgement is appealed to the Danish Supreme Court and Bird & Bird will follow up on the matter.