Appeal court upholds 2.4 million króna award to former employee

Iceland’s Court of Appeal has upheld a ruling ordering a company to pay a former employee nearly 2.4 million krónur in unpaid wages and other payments related to her departure, mbl.is reported. The company must also pay late-payment interest and 850,000 krónur in legal costs at each court level.

The company ended the woman’s employment contract after she reported being ill following her dismissal. It argued, among other things, that a LinkedIn post showing she was open to work indicated she was fit to work. The Court of Appeal found that she had provided sufficient evidence that she was unable to work.

The woman began working for the company in August 2021, selling and teaching customers to use software. She was dismissed on August 7, 2024, with three months’ notice from the following month. The company expected her to work through her notice period.

Two days after her dismissal, she consulted a doctor, who issued a certificate stating that she was unable to work because of illness from that day until November 29. She notified the company on August 12 and sent in the certificate.

The company said the certificate was insufficient and asked her to attend a meeting and return to work. She did not return, and on August 28 the company terminated her contract, alleging a serious breach. It also reserved the right to seek compensation for what it called her abandonment of the job.

The Reykjavík District Court rejected the argument that the LinkedIn post amounted to a declaration that she was fit to work. It said an employee facing dismissal and the end of a job should be given some latitude to improve her position. The post did not outweigh the evidence that she was unable to work.

The certificate did not say that the doctor had examined the woman or that the assessment took account of her earlier medical history. The Court of Appeal found that the doctor’s testimony in the district court had adequately addressed those shortcomings. The doctor had examined her, considered her medical history, held a valid medical licence and was in specialist training.

A later certificate extending the woman’s sick leave was also submitted to the Court of Appeal. Although it covered a period after the one for which she was claiming wages, the court said it supported the earlier certificate.

The Reykjavík District Court had also noted that the company did not use the options set out in the employment and collective agreements to obtain a certificate from an occupational physician or a doctor appointed by the company. The Court of Appeal’s ruling, issued on November 5, upheld the district court’s decision of October 14, 2025. The company must pay the woman 2,376,645 krónur, plus interest, and 850,000 krónur in legal costs at each court level.