Victory in Employment Law Dispute 

Our colleagues the Head of Employment practice group Irina Rozenšteina and Sworn Attorney Ints Skaldis successfully represented an employer – a company operating in the financial services and debt management sector – in a complex dispute concerning the legality of an employment termination and a claim for moral damages.

The employee, a senior-level manager, challenged the liquidation of his position during a corporate reorganisation and sought reinstatement, compensation for average earnings, and moral damages. During the proceedings, several witnesses were heard, and the reorganisation process – both within the company and at the wider group level – underwent extensive examination.

Both the first-instance and appellate courts upheld the employer’s actions as lawful and justified, and the Supreme Court refused to initiate cassation proceedings. As a result, the appellate court judgment has entered into force.

The courts confirmed several important principles regarding employers’ rights and obligations in the context of reorganisations:

• Business organisation is within the employer’s autonomous competence, not a matter of employee interpretation. The employer has the exclusive right to determine the optimal organisational structure, its scope, implementation model, and timing.
• Reorganisation may be implemented gradually, including at the group level. At the time of giving notice, the employer is not required to present all future structural changes or planned units – only to provide a justified explanation for the liquidation of the specific position. 
• An employer must offer only those vacant positions that the employee is actually qualified and competent to perform. A clear and objective justification is sufficient as to why other positions are not suitable for that employee.