The 120-day rule means that, as an employer, you can terminate an employee’s contract with a notice period of one month if they have been absent due to illness for a total of 120 days over 12 months.
The 120-day rule applies regardless of the employee’s seniority, but there are conditions for when the rule can be invoked for dismissal.
The rules on dismissal due to high levels of sick leave can be a real jungle to navigate – particularly because sick leave generally qualifies as legal absence. The 120-day rule must be used with caution to justify a termination of contract during illness. Therefore, we have in this article gathered information and facts about the 120-day rule so that you can learn more about your rights and options as an employer.
Conditions for compliance with the 120-day rule
There are five general conditions that must be met before the 120-day rule applies:
- It must be stated in writing that the 120-day rule can be used. It is often included in the employment contract. If it is not noted in writing, the regular notice of termination must apply.
- The employee must have received pay for all 120 days over the total period of illness.
- All 120 days must be consecutive over a period of 12 months. However, the sick days do not have to be a single period, and the 12 months do not have to follow the calendar year.
- You must terminate the employee’s contract immediately after the 120 days have passed. This means that you can only dismiss the employee on the 121st day of illness. If you wait too long after this point, you may lose the right to use the rule. Read more about this later in the text.
- The dismissal must happen while the employee is on sick leave. If the employee resumes work after 120 days of sick leave, you can only terminate their contract the next time they are off sick – but the total number of days must still be within the 12-month period.
Although the 120-day rule must be in writing to be valid, there is no requirement that it must be stated in an employment contract. The 120-day rule gives an employer the opportunity to dismiss an employee at shorter notice, relative to the general rules on termination in the Employers’ and Salaried Employees’ Act. In addition, the 120-day rule only applies to private employees. Therefore, if you employ a public employee, you may not use this rule.
How to count the number of sick days
Certain Supreme Court rulings have highlighted how difficult it can be to count 120 days of sick leave. There are a number of factors that you must take into account when calculating the total number of sick days:
- Weekends and public holidays are included if the employee was on sick leave the day before the weekend or holiday and the day following the weekend or holiday. This applies, for example, if the employee is on sick leave on Friday and Monday.
- Partial sick leave must be counted as hours and converted to days. Partial sick leave includes situations where an employee goes home from work due to illness.
- Part-time sick leave only includes absences that the employee would otherwise have worked.
- Sick leave due to an occupational injury can also count towards the 120 days of the 120-day rule.
- Sickness during holidays does not automatically count towards sick days unless you, as the employer, cancel the holidays that the employee was off sick.
- Disability-related sick leave can be counted if the employer was not aware of the disability prior to hiring the employee.
Counting incorrectly can be expensive
Incorrect counting of sick leave can be really expensive for you as an employer, if the employee in question chooses to file a lawsuit that is upheld. In such cases, the court may order employers to pay compensation for pay during the notice period, holiday pay, unfair dismissal and even for inadequate employment contracts.
When should you terminate the contract?
A dismissal must happen while the employee is still off sick, but after 120 days of sick leave have passed. An employee may in some cases be considered sick, even if they have partly resumed their work. Therefore, an employee can be dismissed when they are on either full or partial sick leave.
A number of decisions have resulted in a rule of thumb that the 120-day rule must be applied between days 121 and 129½ of sick leave. A dismissal within this period will often be considered timely, but the decision always depends on the individual case. So as an employer, your window for action is narrow.
It is also especially important that your calculation is correct if you make a decision to dismiss an employee on sick leave, as even small mistakes can contribute to your use of the 120-day rule not being considered well-founded.
What if I cannot use the 120-day rule?
If these conditions are not met, and you cannot use the 120-day rule, you can still dismiss an employee who has a high level of sick leave. In such cases, the dismissal will involve the normal notice period and the general requirements for objectivity.
Need advice?
Are you unsure as to whether you can use the 120-day rule? You can always contact our consultants in HR Legal. They deal with all legal matters relating to employment law, personnel law and employee relations on a daily basis, and they have many years of experience in handling legal HR challenges, including sick leave and terminations.
