A Guide To Employment Law In Denmark

1. Introduction

   In Denmark - as in most European countries - the relationship between an employer and an employee is regulated on the one hand by what is agreed in individual employment contracts, and on the other hand by a statutory framework with the overriding objective of protecting the employee.

   The objective of this guide is to provide an overview of the most relevant provisions in Danish employment law; the guide's main focus is on the limitations to what can be agreed between employers and employees in Denmark in relation to remuneration, holiday entitlement, termination and restrictive covenants.

   Our Danish Desk - ebl miller rosenfalck in London have one of the largest Danish desks outside of Denmark, with two partners who are dual qualified as Advokat's in Denmark and also Solicitors in England and Wales. We also have a Legal Director and COO who speak native Danish, and we work closely with the Danish-UK Association. We also have office facilities in Copenhagen.

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   Steen Rosenfalck - Our Senior Partner, Steen Rosenfalck is a commercial partner, and is a Co-Editor of and Contributor to International Corporate Procedures (Jordan Publishing) and a Contributor to International Agency and Distribution Law (Juris Publishing). Pia Dalziel - is a corporate partner and is an editor and author of Workforce Restructuring in 1st edition, Bloomsbury Professional, 2015) 2. Regulation

   There is generally freedom of contract on the Danish labour market. Pay and working conditions are generally regulated through individual contracts and collective trade union agreements as opposed to statute. Particularly relevant are the so-called 'main agreements' between the Danish Employers' Confederation and various trade unions.

   There are, however, a number of statutes in place which are designed to protect employees. Some statutes apply to all employees whereas others are limited to 'salaried' employees. Where relevant, this guide will distinguish between salaried and non-salaried employees. Salaried and non-salaried employees can be distinguished broadly by those in higher skilled jobs who are paid on a monthly basis or and those in lower skilled jobs who are paid on an hourly basis. Statutes and collective trade union agreements do not, as a general rule, apply to senior executives such as directors.

3. Working hours

   The maximum weekly working hours are stipulated to 37 hours in the collective labour market agreements for full-time workers, but parties are free to agree a variation of working hours up to a maximum of 48 hours a week including overtime.

   Employees will usually expect to be compensated for any time worked in excess of 37 hours per week. The circumstances in which payment for overtime is paid should be detailed in the employment contract.

   Please note that for any material change in the working hours to take effect the employer is legally required to give the employee notice. The required notice period is the equivalent of the termination period under the relevant employment contract subject to statutory minimum requirements.

4. Remuneration

   Danish employees would normally expect to receive the main part of their remuneration as a fixed monthly or weekly payment possibly with the addition of variable remuneration such as commission, bonus or payment for overtime. There are no statutory mandatory minimum pay provisions but minimum wages are often agreed in the collective labour market agreements.

   The majority of employees are encouraged to participate in voluntary pension schemes; pension schemes are typically linked to the employee's monthly salary where an employee contribution of say 5% of the salary will be matched by an employer contribution of a say 10% of the salary. In addition, many collective labour market agreements prescribe mandatory pension schemes.

   Senior employees will often expect to receive benefits such as mobile phone, PC/laptop, internet, health insurance, gym membership, extra holidays, newspapers and company car.

   Under the Danish equal pay regulations employers are under an obligation to pay the same remuneration to men and women who do equal work or work of equal value. If an employer discriminates without a valid reason, the employee can bring a claim for the balance and also claim compensation from the employer.

5. Holidays

   The Holiday Act regulates employees' entitlement to annual leave and the extent to which such leave is paid. The current Holiday Act (ferieloven) stipulates a statutory entitlement to 5 weeks' annual leave. However, that is merely an entitlement to take time off. An employee's statutory entitlement to pay during annual leave depends on how the employee is paid (salaried or hourly rates). Up to 1 week's additional holiday entitlement is often contractually agreed for salaried employees.

   Currently the holiday year runs from 1 May to 30 April (but this is due to change to 1 September to 31 August from 2019 - see below). An employee's entitlement to holiday pay is currently accumulated in the calendar year prior to the holiday year. If the employee has only worked part of the calendar year, the entitlement to paid holidays with the current employer will be apportioned. If the employee has not accumulated any holiday entitlement in the calendar year prior to the holiday year, the employee will, unless...