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On what grounds is an employer entitled to temporarily lay off an employee?

An employer is entitled to lay off an employee if

  • the employer has a financial or production-related reason for terminating the employment contract referred to in chapter 7, section 3 of the Employment Contracts Act.
  • the work or the employer’s potential for offering work has diminished temporarily and the employer cannot reasonably provide the employee with other suitable work or training corresponding to its needs. The work or the potential for offering work is considered to have diminished temporarily if it can be estimated to last a maximum of 90 days.

Notwithstanding what is provided in subsection 1 and in section 4 of this chapter, the employer and the employee may, during the employment relationship, agree on a lay-off for a fixed period if this is needed in view of the employer’s operations or financial standing.

The employer is entitled to lay off an employee in a fixed-term employment relationship only if the employee is working as a substitute for a permanent employee and if the employer would be entitled to lay off the permanent employee if the permanent employee were working.

The employer is not entitled to lay off a shop steward elected on the basis of a collective agreement or an elected representative referred to in chapter 13, section 3, except on the grounds laid down in chapter 7, section 10, subsection 2.

The laying off of an employee is based on the stipulations of the valid employment contract act, acts on co-operation within undertakings (municipalities, state and private sectors), the Church’s co-operation agreement and collective agreements.

Check the collective agreement that your workplace follows and the Act on Co-operation within Undertakings or the Church’s co-operation agreement to see what they say about the matter (only partially available in English).