Right of Preference in Working Life – Rules, Conditions, and Employer's Obligations

The right of priority rules in the Working Environment Act grant certain groups of employees the right to be prioritized during company recruitments. The purpose of these rules is to enhance job security and promote full-time employment. The right of priority limits the employer's freedom of choice in recruitment, but not the actual freedom to decide whether to hire at all. This article provides a systematic review of who has the right of priority, under what circumstances it applies, and what consequences violations of the rules can have.

Categories with Right of Priority and Ranking

The Working Environment Act establishes several groups of employees who may have the right of priority, and the legislator has established a clear order of precedence among them:

1. Permanent Employees Dismissed Due to Company Reasons

Permanent employees who are dismissed due to company reasons have the highest priority. This also applies to employees who have accepted reduced positions instead of dismissal.

2. Part-time Employees

The right of priority for part-time employees applies to the expansion of positions and gives them priority over new hires, but after dismissed permanent employees.

3. Temporary Employees

Temporary employees who do not continue their employment due to company reasons have third priority. This does not apply to temporary replacements.

4. Employees with Reduced Working Hours

Employees who have been granted reduced working hours for welfare reasons under § 10-2 (4) of the Working Environment Act have the right of priority to increase their working hours if a position with the same tasks becomes available.

5. Employees Who Have Reserved Themselves During Business Transfer

Employees who have exercised the right of reservation during a business transfer have the lowest priority, as they have already rejected the opportunity to continue the employment relationship with the new employer.

Conditions for Right of Priority in Cases of Surplus Labor

To assert the right of priority under § 14-2 (in cases of surplus labor), the following conditions must be met:

Seniority Requirement

The employee must have been employed in the company for a total of at least 12 months within the last two years. Continuous employment is not required, and the notice period is counted.

Qualification Requirement

The employee must be qualified for the position. This means having the necessary professional and personal qualifications to fill the position. In Rt. 2003 p. 1754 (Researcher), the Supreme Court established that personal attributes that affect the working environment can also be considered. However, it is not required that the employee is the best qualified - it is sufficient that the individual has qualifications at a level that is normal for the position.

New Employment in the Same Company

The right of priority applies only to "new employment" in the "same company". This includes both permanent and temporary employment, but not internal relocations. What constitutes the "same company" follows the concept of business in the Working Environment Act, which is initially linked to the legal entity, but in special cases may encompass multiple legal entities in a group.

Time Limitation

The right of priority applies from the point of dismissal and for one year from the expiry of the notice period. For temporary employees, the right of priority applies from the time of written notice of resignation and for one year after resignation.

Special Rules for Part-time Employees

The right of priority for part-time employees has some specific conditions and limitations:

No Seniority Requirement

Unlike in cases of surplus labor, there is no requirement for a minimum period of employment for a part-time employee to have the right of priority.

Positions of the Same Nature

The right of priority primarily applies to positions with "approximately the same tasks" as those the part-time employee is already performing, even if the qualification requirement itself would make the employee suitable for other tasks.

Part of a Position

According to a clarification in the law (§ 14-3 first paragraph second sentence), the right of priority may also be asserted for part of an advertised position. This followed HR-2016-867-A (Specialized Nurse), where the Supreme Court majority initially reached the opposite result.

Significant Disadvantage Exception

The right of priority for part-time employees cannot be asserted if it would involve a "significant disadvantage" for the company. This is to be interpreted strictly and is intended as a safety valve. Examples of significant disadvantages may include:

• The need for more employees to cover weekend work without breaking rest period rules

• Difficulties in recruiting for a remaining partial position

• That the division of the position results in more, not fewer, part-time employees

Duty to Discuss

The employer shall discuss the right of priority issue with the part-time employee before making a decision, "as far as practicable". This duty is to be interpreted strictly, primarily based on circumstances on the employee's side that may justify exceptions.

Right of Priority in Case of Bankruptcy and Business Transfer

In Case of Bankruptcy

The right of priority rules also apply when employees are dismissed in connection with bankruptcy, but only when the business continues or resumes, and considering location, nature, and scope, it can be seen as a continuation of the original business. Relevant factors in the assessment are:

• Whether it is the same real management

• Whether the same employees are offered positions

• Similarities in company names

• Similarity in production methods

• Whether the inventory has been taken over

The reorganization must take place within the one-year timeframe, and the business cannot have been stopped for more than one year.

In Case of Business Transfer

Employees who have exercised the right of reservation during a business transfer have the right of priority for new employment in the transferring business for one year from the date of transfer. The same conditions regarding seniority and qualifications as in cases of surplus labor apply.

Legal Consequences of Violating the Right of Priority

If a person entitled to priority has not been hired in violation of the rules, the consequences can be extensive:

Court Order for Employment

The main rule is that the court, at the request of the person entitled to priority, shall issue a judgment for employment in the position. This does not apply if it would be "unreasonable". The fact that another person is already employed in the position is not sufficient in itself to make it unreasonable, but can be a factor in the consideration along with:

• How much time has passed since the hiring

• The current situation of the employee

• Whether a situation of surplus labor will arise

Compensation

The employee can claim compensation for both economic and non-economic loss (redress). The compensation is determined according to the same principles as for unjust termination of the employment relationship.

Practical Recommendations for Employers

To avoid disputes and potential liability, employers should establish good procedures for handling the right of priority rules:

Identify Those Entitled to Priority

• Keep track of former employees with the right of priority and when it expires

• Identify part-time employees who may want to extend their positions

• Always check those entitled to priority before advertising positions

Assessment of Qualifications

• Document the assessment of whether those entitled to priority are qualified for the position

• If refusing due to lack of qualifications, ensure this is factually justified

• For part-time positions, assess and document whether the right of priority would cause "significant disadvantage"

Communication

• Inform those entitled to priority about vacant positions

• Conduct legally required discussions with part-time employees before making a decision

• Provide clear information about the acceptance deadline (14 days) when offering a position

When Priorities Clash

• Follow the statutory order of precedence between different categories

• When there are multiple persons entitled to priority within the same category, ensure fair selection

• Document the assessments made

Conclusion

The right of priority rules constitute an important limitation on the employer's freedom of choice in recruitment. The rules are intended to ensure that certain groups of employees are prioritized in new recruitments, and violations can lead to both court orders for employment and liability for compensation. By having good routines for identifying those entitled to priority, assessing qualifications on a factual basis, and ensuring good communication, employers can both safeguard the rights of those entitled to priority and reduce the risk of costly disputes.