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Advice and Tips
Can you work somewhere else during a layoff?
Written by Tekna’s Legal Department
Modified: May 3 2021
Can you work somewhere else during a layoff? This is a question a lot of people ask.
What kind of rules apply if you start working for a different employer after you’ve been laid off?
Employment contract no longer valid
The general rule is that when you’re laid off, your employment contract is suspended. This means that your employer’s obligations and rights are ‘frozen’; at the same time, your own obligations and rights as an employee are also ‘frozen’ during the layoff period.
It’s easy to point out two conflicting interests that arise when you’ve been laid off and started working for a different employer:
- Firstly: When laid off, you have the right to apply for unemployment benefits in accordance with the National Insurance Act. While receiving these benefits, you’re also required to accept all other work that’s offered to you; you alone are responsible for applying for available jobs and accepting any kind of job that NAV offers you. If you refuse to do so, your unemployment benefits may be stopped. In other words, you should be prepared to accept all kinds of work once you’ve been laid off.
- Secondly: As a laid-off employee, the non-legal duty of loyalty may still apply, even if your employment contract has been suspended. The extent to which this obligation applies during a layoff is still somewhat unclear. Yet what is certain is that the duty of loyalty might limit the kind of work you can perform when laid off and for whom.
Non-competition clause ends
Generally speaking, it’s not problematic if you start working for a different employer during a layoff provided they’re not in direct competition with your own employer’s interests. In this way you won’t get into any conflict with either the non-competition clause or duty of loyalty. Yet most people will be offered work where the tasks are similar to the ones they were performing for their first employer. Based on unemployment benefit rules, you have the right to perform competitive work when you’re laid off because any non-competition clause in your employment contract is no longer valid. Both unemployment benefit rules and your employment contract state unequivocally that you may work without being hampered by the non-competition clause and can accept work from a competing company after you’ve been laid off.
Duty of loyalty – inform your employer
At the same time, it’s uncertain exactly how far the non-legal duty of loyalty stretches if you’ve been laid off. So we recommend that if you’re offered work from a competitor and/or are bound by your non-competition clause, you should notify your employer in advance that you want to accept this work during the layoff period. Doing so might give your employer an incentive to call you back to work as soon as possible to prevent you from accepting this work. You also have the possibility of resigning from your position during the layoff period and giving short notice (14 days) if you want to accept a new job offer.
Dispute with your employer? – Contact us
Your employer might think there’s a good reason for you to turn down other work. In this situation it’s unclear how far your employer’s management rights stretch during the layoff period. Due to uncertainty about the duty of loyalty’s limitations, you should carefully consider your options before you start working for a competitor. Because once the layoff period is over, you’ll almost certainly be called back to work by your first employer. So any dispute over taking a different job in the meantime can have consequences for your future cooperation with them. If you’re in this situation, we strongly advise you to contact Tekna’s Legal Department for guidance.
Read about what you should know if you been laid off.
