Lay-off and right to family leave of an employee on family leave (TAS 310/2020, issued on 3 February 2021)

Mr. A asked the Ombudsman for Equality to determine whether he had been discriminated against in a manner prohibited in the Act on Equality between Women and Men (609/1986, “Equality Act”) when his employer had begun treating him worse after he spoke of his wish to take family leave. A was finally laid off upon his return from family leave. The employer gave a reduced amount of work and financial and production-related reasons as grounds for the lay-off. A was the only employee laid off by the company. 

Provisions on discrimination in the Equality Ac

The Equality Act prohibits treating someone differently on the basis of parenthood or family responsibilities as indirect gender-based discrimination (section 7, subsection 3, paragraph 2). Such conduct does not constitute discrimination, however, if it is aimed at achieving an acceptable objective and if the chosen means must be deemed appropriate and necessary in view of this objective (section 7, subsection 4).

According to the Equality Act, the employer may not manage the work, distribute tasks or otherwise arrange the working conditions in such a way that one or more employees find themselves in a less favourable position than other employees on the basis of gender (section 8, subsection 1, paragraph 4). In principle, the provision gives the employee the right to return to their former position or a similar position after the end of family leave.  The employer's conduct must also be deemed to constitute discrimination prohibited by the Equality Act if the employer dismisses or lays off one or more employees on the basis of gender (section 8, subsection 1, paragraph 5). The employer’s conduct does not constitute discrimination, however, in the situations provided for in section 7, subsection 4 and for acceptable reasons as provided for in the Act (section 8, subsection 4).

Assessment of the case

As a rule, the employer's powers of management give the employer the right to choose which employees to dismiss or lay off from among the group of employees under the threat of lay-off or dismissal. Legal practice has also taken the view that employers can prioritise employees who are important to business operations even if the order of reduction has not been agreed on in the collective agreement followed by the employer. The employer may not make the choice on inappropriate or discriminatory grounds, however. Whether the employer intended to discriminate or not is irrelevant when assessing the matter in light of the prohibition of discrimination. 

The Ombudsman for Equality found that, if the reduction in work was real and met the definitions laid down in the Employment Contracts Act, the employer had acceptable grounds for the conduct alleged to constitute discrimination. On the other hand, even if there were acceptable grounds for the conduct, the targets and implementation method of the lay-offs must still be assessed.
The employing company did not state that it follows a specific workforce reduction order. In its report to the Ombudsman for Equality, the company stated that, in addition to a consideration of the reduction in available work, lay-offs are based on the individual's expertise, professional skill and importance to the company’s business. 

In the Ombudsman for Equality’s view, the decisive factor in assessing the lay-off’s acceptability is whether the employer can justifiably have considered the other employees more important to the company’s business than A when deciding on the lay-off. The Ombudsman for Equality pointed out that, in this case, the employer had not compared the length of the employees’ employment at the company or their expertise, abilities, know-how or suitability.

Due to the conflicting views and lack of comparison, the Ombudsman for Equality was unable to assess A's professional skills or the importance of his competence to the employer in relation to other employees. On the other hand, the Ombudsman for Equality found that A had extensive professional skills and competence useful to the employer. A had a long career at the company, he had been the only employee responsible for sales for several years, and he had an executive employment contract. 

A presumption of discrimination can arise in cases of indirect discrimination based on parenthood or family responsibilities such as this one even when no comparison has been made between women and men. The comparison can be made to a person without family responsibilities, or even to the individual themselves. In such cases, the point of comparison is the situation in which the individual would have been in, had they not taken family leave.

A presumption of discrimination arose in the case, requiring the employer to demonstrate that A was chosen to be laid off for another, acceptable reason than their use of family leave in order to disprove the presumption. 

The Ombudsman for Equality paid particular attention to the fact that the employer did not take any other options into consideration in the implementation of the lay-off, such as choosing other employees to be laid off instead of or in addition to A. Neither did the employer indicate that it would have considered other ways of implementing the lay-off, such as by reducing daily or weekly working hours.

The Ombudsman for Equality cannot give a final assessment on whether or not the employer could have implemented the lay-off in some other manner within the scope of the written inquiry procedure. Nevertheless, taking the provisions of sections 7 and 8 of the Equality Act and established legal practice into account, it is not sufficient for the employer to merely invoke the existence of an acceptable reason, i.e. a reduction of work as referred to in the Employment Contracts Act. The employer must present reasons justifying the necessity and appropriateness of targeting the lay-offs at a single employee. 

In its report, the employer did not present any reasons why the lay-off could not have been, at least in part, targeted and implemented in another, less discriminatory manner. In this case, the employer did not disprove the presumption of discrimination with regard to the necessity and justification of the conduct or the proportionality of the means employed. 

The Ombudsman for Equality additionally drew attention to the fact that, according to section 6 of the Equality Act, every employer must promote equality between women and men within working life in a purposeful and systematic manner. In order to promote gender equality in working life, the employer must, for example, facilitate the reconciliation of working life and family life for women and men by paying attention especially to working arrangements, and act to prevent the occurrence of discrimination based on gender.

The Ombudsman for Equality primarily comments on legal questions concerning the interpretation of the Equality Act. Evaluation of proof, comparison of merits and the final decision on the matter of discrimination are ultimately made by the district court hearing the possible compensation action brought against the employer.

06.04.2021