In this FAQ we provide a simple and easily accessible guide to the most relevant topics in Danish employment law by asking key questions and providing the answers.
This part 1 of the FAQ covers topics such as the legal framework for Danish employment law, employee categories and employment contracts.
Part 2 of the FAQ dives into various topics relating to absence from work such as sickness and pay, maternity and paternity leave and holiday. Subsequently, the FAQ also asks the key questions relating to termination of employment.
Which rules govern the employment relationship?
The employment relationship is governed by legislation, collective agreements as applicable and agreements between the employer and the employee such as the employment contract and staff policies.
Parts of the employment legislation apply to all categories of employees, such as the statutes on holiday entitlements, maternity leave, working environment and GDPR whereas other parts of the employment legislation only apply to specific categories, such as the Danish Salaried Employees Act governing, inter alia, termination of salaried employees and sickness.
To a large extent, the Danish labour market is regulated by collective agreements governing matters such as pay levels, working hours and other terms and conditions applying to the employment.
Many employers belong to an employers' association, typically an employers' association under the Danish Employers' Confederation (in Danish: "Dansk Arbejdsgiverforening") or alternatively one of the special employers' associations relevant for the specific sector. Employees are typically members of the trade union relevant for their line of work, and many of these trade unions are members of the umbrella confederation, the Danish Confederation of Trade Unions (in Danish: "Landsorganisationen" or "LO"), which negotiates and coordinates various matters for all trade unions. It is important to note that an employer is only covered by a collective agreement if the employer is a member of an employers' association or has acceded to a collective agreement.
If mandatory legislation and the rules of collective agreements as applicable are observed, the employer and employee enjoy a high degree of freedom of contract. The individual agreements are typically set out in the employment contract as well as in staff policies. Please see below for an elaboration on the requirements to the employment contract.
What are the main categories of employees?
Employees can be divided into three major categories; (i) blue-collar workers, (ii) salaried employees and (iii) executive officers.
Blue-collar workers are characterised by performing work which is typically of a physical or manual nature. There is no general act (such as the Danish Salaried Employees Act for salaried employees, see below) governing blue-collar workers' employment terms and conditions, instead they are set out in collective agreements. In the event that no collective agreement applies, the parties enjoy a larger degree of freedom of contract on matters such as salary, working time and notices of termination.
Salaried employees are defined as:
- commercial and office assistants engaged in selling or buying or carrying out office work or equivalent warehousing work;
- persons whose work consists in providing technical or clinical assistance of a non-craftsmanlike or non-manufacturing nature, and other assistants carrying out comparable work;
- persons whose work consists exclusively or essentially in managing or supervising the work of others on behalf of the employer;
- persons whose work is primarily of the nature specified in a) and b) above.
In order to be covered by the Danish Salaried Employees Act, it is a further requirement that the employee is subject to the instructions of the employer and that the employee is employed for at least 8 hours a week on average.
The Danish Salaried Employees Act governs several matters of importance to the employment, including termination notices, protection against unfair dismissal and severance pay. The Danish Salaried Employees Act cannot be derogated from to the detriment of the employee.
The third major category of "employees" is the executive officers registered with the Central Business Register (in Danish: "CVR-registeret") who are responsible for the day-to-day management of the business. Generally speaking, these employments have freedom of contract.
A latter part of this FAQ deals with questions relating to executive officers, but the majority of the FAQ deals with topics applying to blue-collar workers and salaried employees.
Employers are required to comply with the Danish Act on Employment Contracts (in Danish: "Ansættelsesbevisloven") applying to employees who are employed for at least 1 month and who are working at least 8 hours a week on average.
The Danish Act on Employment Contracts stipulates that the employer must inform the employee in writing of:
- the names and addresses of the employer and the employee;
- the location of the place of work or, if there is no fixed or principal place of work, the fact that the employee's place of work is various addresses, including information on the registered office or the employer's address;
- a description of the work or a specification of the employee's title, rank, position or job category;
- the date of commencement of the employment;
- in case of a fixed-term employment, the expected term of the employment;
- the employee's right to paid holiday, including whether salary is paid during holidays;
- the length of the employee's and the employer's notice periods or information on the rules governing notice periods;
- the current or agreed salary to which the employee is entitled at the beginning of the employment, including information on any allowances and other pay elements not included in the pay, for example pension contributions and any board and lodging. Further, information on the dates of payment of salary must be provided;
- the length of the normal working day or week;
- information on which collective agreement or other agreements that govern the employment. In case of a collective agreement or other agreements concluded by third parties, the names of such parties must also be stated.
The employer is also required to inform the employee of any additional material terms and conditions of employment.
The employer must provide the written information to the employee no later than 1 month following the commencement of the employment. In addition, the employer is required to inform the employee of any change in the material terms and conditions of employment no later than 1 month following the date from which the changed employment term applies.
What happens in case of non-compliance with the Danish Act on Employment Contracts?
If an employer fails to comply with the Danish Act on Employment Contracts, the employee may be entitled to compensation. The Act sets out a general maximum compensation level of 13 weeks' salary and up to 20 weeks' salary in case of aggravating circumstances. According to case law, however, the compensation usually amounts to between DKK 2,500 and 10,000 (EUR 336 – 1,344) and the compensation amounts to up to DKK 25,000 (EUR 3,359) in case of aggravating circumstances.
Do you still have questions? Please do not hesitate to contact us.
This FAQ has been provided as a service and for information purposes only. The FAQ does not constitute legal advice and does not create any form of attorney-client relationship.