1. SOURCES OF EMPLOYMENT LAW
The principal sources of regulation in the labour market for employment relationships in Denmark are legislation and collective agreements concluded between the social partners. There is a long tradition of letting working conditions and pay be regulated by the social partners through collective agreements, thereby substituting legislative regulation.
This implies that there is almost no legislation covering the fundamental issues in employment.
Existing legislation can be divided into different categories.
Some acts set the legal framework for a selected group of employees. One of the main acts in this category is the Salaried Employees Act (Funktionærloven) which regulates most white-collar work.
The Act lays down rules concerning important questions, such as the respective lengths of the employer’s and employee’s terms of notice, the employer’s obligation to pay to the employee compensation if the contract is terminated for reasons not justified by the conduct of the employee or the circumstances of the enterprise, and the use of non-competition and non-solicitation clauses.
Another category of acts governs particular issues of interest to every group of workers, such as the Holiday Act, which safeguards the employee’s right to a minimum period of (paid) holiday per holiday year (May-April) in proportion to the duration of their employment relationship during the previous calendar year.
Collective agreements are traditionally defined as agreements between a trade union and either a single employer or an employers’ association. Further, it is a requirement that collective agreements regulate key issues in employment relationships, such as pay and working conditions. Hence, rules which for instance concern minimum wages are not codified in legislation but in various collective agreements.
There are several levels or types of collective agreements.
The principal agreements (hovedaftalerne) usually govern basic questions, such as the employer’s right to manage the workforce, the employee’s right to be a member of a trade union and the framework for the use of strikes and lockouts. These agreements usually cover multiple subject areas and are entered into between the central or main organisations (hovedorganisationerne) of which the various sub-organisations are members. The most important principal agreement is probably the Basic Agreement entered into between the Confederation of Danish Employers (DA) and the Danish Confederation of Trade Unions (LO).
The next level of collective agreements deals with the central questions, such as working conditions and minimum pay. The scope of such collective agreements is usually a single profession, trade or industry on a national basis. These collective agreements (fagoverenskomster) are most often entered into between the various sub-organisations. The agreements must respect any mandatory (legal) rules, but are often used as an alternative to legislation.
Finally, a number of agreements are made locally between the individual employers and the shop stewards (lokalaftaler). In these customised agreements, the parties settle questions which are best solved in a local forum, such as the scheduling of working time, lunch breaks, smoking policy etc.
It is essential to understand that all three levels of collective agreements are entered into between the trade unions and either a single employer or an employers’ association. Therefore, the starting point is that, should an employee feel his or her rights according to the agreements have been violated, it is not the individual employee but his or her organisation which is entitled to take legal action.
Should one of the parties to a collective agreement wish to commence legal proceedings, a court of special jurisdiction has been founded – the Industrial Court (Arbejdsretten) – in order to settle legal disputes concerning breaches of collective agreements. Cases concerning interpretation of the collective agreements are dealt with in industrial arbitration, which is mandatory in the event that collective agreements apply.
The theoretical background to Danish contract law is the basic freedom of contract, which implies the partners’ right to negotiate various issues in an employment relationship either in an individual contract or in a collective agreement.
However, in various employment acts, such as the Salaried Employees Act, several rules are mandatory from which the parties cannot derogate to the detriment of the employee. It is thus of vital importance to scrutinise each individual section to establish which sections are, or are not, mandatory when drafting any individual employment contracts or a collective agreement. Departure from a mandatory provision – such as the provision in the Salaried Employees Act which sets a minimum notice of termination for the employee – cannot be legitimised by, for instance, paying the employee a higher salary.
In some cases the parties may (partially) derogate from rules which are normally mandatory if it is negotiated into a collective agreement eg, the above-mentioned sections in the Salaried Employees Act concerning the use of non-competition and non-solicitation clauses.
An individual employment contract which violates a mandatory statutory rule will in general be void and does not create any legal rights or duties for any of the parties concerned.
Denmark’s membership of international organisations has been and continues to be the source of several legislative measures.
The EU is of particular importance. So far it has, however, been accepted that EU Directives concerning pay and employment conditions should, as a principal rule, be implemented through collective agreements between the social partners. The agreements entered into between the social partners are, however, (by means of supplementary legislation) extended to cover areas which are not covered by the collective agreements.
An example of the influence of the EU is the Act on Equal Pay for Men and Women. This particular act is the result of the implementation of Directive 75/117/EEC on the approximation of the laws of the member states relating to the application of the principle of equal pay for men and women.
Generally, these acts authorise the parties to enter into collective agreements with at least a similar content. In that case the provisions of these acts will not apply to the extent that a similar obligation is found in the collective agreement. An example is found in section 1(9) of the Act on Equal Treatment of Men and Women with regard to Access to Employment, which states that ‘the provisions of this Act shall not apply to the extent that a similar obligation to equal treatment follows from a collective agreement’.
Under the International Labour Organization (ILO) Denmark has ratified several Conventions, such as C-87, on Freedom of Association and Protection of Right to Organise, and C-100, the Equal Remuneration Convention.
In 1992, Denmark incorporated the European Convention on Human Rights (EHRC) into Danish law. But the EHRC also had an impact on Danish legislation before 1992. An example is the Act on Protection against Dismissal related to Trade Union Membership. This particular Act was the result of the British Rail judgments of 13 August 1981. The statute did not ban the use of closed shop clauses in a collective agreement, but set up provisions which limited the employers’ right to terminate an employment contract should the employee not wish to be a member of a union.
Today, as a result of the Sørensen and Rasmussen v Denmark judgment of 11 January 2006, the Act on Protection against Dismissal related to Trade Union Membership lays down a total ban on the use of closed shop clauses.
2. PRINCIPAL INSTITUTIONS
As mentioned in section 1.1 above, there is a long tradition in Denmark of regulating pay and working conditions through the collective bargaining system. Thus, it is of vital importance for the functioning of the labour market that the social partners enter into collective agreements within reasonable time and without turning to the use of industrial action.
In support of the social partners in this process, an act has been passed on conciliation in industrial disputes. The task of the official conciliator is to help the two sides reach a compromise. The conciliator may for instance draw up a draft compromise, which the social partners are obliged to send out for a ballot among their respective members. Should notice have been given on the use of industrial action, the conciliator may order the partners to postpone the actions for as long as the negotiations continue, though only to a maximum of two postponements each of 14 days.
Once settled, the collective agreements may also be the source of various conflicts. These disputes are not settled within the framework of official conciliation or the national courts, but either through the Industrial Court or the Industrial Arbitration Tribunals.
The role of the Industrial Court is to settle disputes concerning: (1) the violation and interpretation of the basic agreements; (2) breaches of ordinary collective agreements concerning pay and work; (3) the lawfulness of noticed collective industrial action or notice given; (4) questions concerning the existence of a collective agreement; (5) the lawfulness of using industrial action in support of claims of agreements in areas where collective agreements have not been entered into; and, finally, (6) disputes about the competence of the official conciliators.
As mentioned above, it is the parties to a collective agreement, ie the social partners, who are entitled to commence proceedings before the Court and not the individual employee. The Industrial Court will only accept a case if it concerns a specific conflict. The decision of the Court is final and cannot be appealed.
However, should the parties wish to do so, they may also choose to settle their dispute by industrial arbitration.
The Industrial Arbitration Tribunals are usually formed on an ad hoc basis, although standing arbitration tribunals have been formed within some areas of trade. The members of the tribunal are both legal judges and lay judges and are appointed by the parties involved. The decisions of the arbitral tribunals are final and enforceable. Thus, should the parties not comply with the decision it would constitute a breach of the collective agreement.
The task of the tribunals is to settle specific disputes concerning the interpretation and use of the collective agreements, ie provisions concerning working hours and payment of wages. For these types of questions, industrial arbitration is mandatory.
The Industrial Conciliation, Industrial Arbitration Tribunals and the Industrial Court are all significant institutions in the Danish labour market. However, there are other dispute settlement bodies as well. These arbitrational bodies each have their own scope. An example is the Gender Equality Board (Ligestillingsnævnet), which is an impartial and independent institution. The purpose is to provide individual citizens with free and easy access to resolving issues concerning sex discrimination both in the labour market and in other contexts. The Board may not take a case if it has already been brought before one of the ordinary national courts. Should the Gender Discrimination Act have been violated, the Board may award the violated party compensation, or in the case of a wrongful dismissal, impose a reinstatement of the employee.
3. ROLE OF THE NATIONAL COURTS
Generally speaking, the cases concerning collective agreements will be settled by the various industrial bodies mentioned in section 2, above, whereas claims relating to legislation or individual employment contracts must be brought before one of the national courts (ie the county courts, the High Court, the Supreme Court and the Maritime and Commercial Court in Copenhagen). Hence, the national courts provide important case law when interpreting the various acts dealing with employment.
It is a condition that the lawsuit concerns a specific conflict. The courts will not provide general interpretations of the legislation.
Under the Danish Administration of Justice Act, a case concerning an employment relationship should be brought before one of the county courts. If special expertise is required concerning either maritime or commercial issues, then the county courts may assign the case to the Maritime and Commercial Court in Copenhagen through a judgment. Likewise, the county courts may assign the case to the High Court if the case concerns questions of a principle and fundamental nature.
If the case is brought before either the High Court or the Maritime and Commercial Court in Copenhagen as the first instance, the judgment may subsequently be appealed to the Supreme Court.
Judgments from the county courts may be appealed to the High Courts. However, if the value of the claim is DKK10,000 or less, then the judgment may only be appealed if special permission is given from the Leave of Appeal Commission.
4. EMPLOYMENT STATUS AND CATEGORIES OF WORKER
Legislation does not include a universal distinction between when a person is to be considered employed or self-employed. Thus, when applying each employment act one must consider if the position of the worker in question falls within the scope of the particular act. Although the different acts contain different definitions of an employee, it is possible to deduce some general principles as to when a person is to be considered an employee:
employee to fulfil the employment contract in person.
When applying these guidelines to establish whether an individual person is covered by the scope of a particular employment act, it is, however, important to remember that the object of each employment act may be different. In other words, an employee who is covered by the Holiday Act may not necessarily be considered an employee under the Salaried Employees Act. Even so, in most cases the two acts will cover the same people.
As mentioned in paragraph 1, above, a number of acts relate to specific categories of worker:
The conditions for fixed-term employees are found in the Fixed-term Workers Act. The Act is based on Directive 99/70/EC concerning the framework agreement on fixed-term work. This Act lays down equal rights for fixed-term workers and indefinite-term workers. Like the Part-time Workers Act, the Fixed-term Workers Act only applies as a supplement in areas which are not covered by any collective agreements.
Like part-time workers, fixed-term workers who work eight hours per week on average will also be covered by the Salaried Employees Act provided that the additional criteria are met.
Fixed-term employment may either be explicitly negotiated into the employment contract or be customary in certain trades, such as the building and construction sectors. A fixed-term employment contract may not be terminated prematurely unless specifically agreed upon in the contract. However, through interpretation it is at times assumed that the fixed-term contract only stipulates the maximum length of the engagement. In these cases the contract may be terminated prematurely, but only if the relevant rules concerning termination are observed. Hence, should the worker be a salaried employee, the employer must respect the rules concerning notice of termination in the Salaried Employees Act.
• The Civil Servants Act sets up a special legal framework for workers in central administration and in the Danish National Evangelical Lutheran Church governing various questions concerning, for instance, the appointment and duties of civil servants and suspension and disciplinary procedures which must be followed.
• Finally, one may find other acts governing specific categories of workers, such as domestic and agricultural workers, trainees and seafarers.
The managing director of a company falls outside the abovementioned categories of worker. Generally, directors are not covered by the Salaried Employees Act. This is also the case for directors who are registered with the Danish Commerce and Companies Agency. This is due to the fact that the position of such directors is independent and directors are thus not subject to take instructions from anyone. Consequently, directors are not regarded as employees.
Hence, in such cases the company and its directors are free to regulate all aspects of the employment through the employment contract.
At times, the courts have, however, declared that a managing director in a particular company should be regarded as an employee. In most cases, the director in question worked in a small limited liability company, where the management board supervised the activities of the directors on a daily basis.
5. CONTRACT
There are no rules in Danish legislation stipulating that an employment contract should be in writing.
However, in pursuance of the Danish Act on Employment Contracts, the employer is obliged to notify employees whose seniority exceeds one month and work eight hours per week on average of all material conditions of the employment relationship in writing.
The employee should as a minimum be given the following information:
Collective agreements, acts and case law may imply various terms in the contract. An important implied term is the mutual duty of trust and confidence and the duty of the employer to give notice in case of material changes of terms for the employee in writing, including details as to the applicable legislation.
6. TERMS AND CONDITIONS
The Danish Health and Safety Act stipulates that employees must have a resting period of 11 continuous hours at a minimum within a period of 24 hours.
Moreover, the employee must have no less than 24 continuous hours off weekly, which must immediately follow a daily resting period. The weekly day off should to the widest possible extent fall on Sundays, and to the widest extent possible the same must apply to all employees of the company in question.
The provisions may be derogated from in case of unforeseen events, such as accidents and mechanical failures.
According to the Holiday Act, a worker is entitled to 25 days’ holiday per year and earns the right to 2.08 paid days’ holiday each month of employment in the previous calendar year. It is a privilege of the employer, however with some restrictions, to decide the timing of the vacation in accordance with production plans etc for the company.
7. EMPLOYEE REPRESENTATION
In pursuance of the acts on and regulation of limited liability companies and private limited companies, the employees of a company which has employed no less than 35 people on average during the previous three years may elect members of the board. The members of the board elected by the employees enjoy the same rights and obligations as the other members of the board.
In 1996, Denmark implemented Directive 94/45/EC on the establishment of European Works Councils.
The purpose of the Danish Act on European Works Councils is to improve the right to information and consultation of employees.
The Act applies to community-scale undertakings, but the Act will not apply to the extent that a similar obligation is found in a collective agreement.
According to the Act, a community-scale undertaking is an undertaking which:
The Act stipulates that a community-scale enterprise must either establish a European works council or introduce procedures for information and consultation with employees upon a written request from at least 100 employees.
In order to either establish a European works council or introduce procedures for information and consultation a special negotiation body must be formed. The negotiation body must have a minimum of three and a maximum of 17 members elected by either the employees or employee representatives.
The task of the negotiation body is to enter into an agreement with the central management of the community-scale undertaking concerning the scope, composition, functions and term of office of the European works council or the implementation of procedures for the information and consultation of employees.
Once formed, the European works council must have a minimum of three and a maximum of 30 members elected by either the employees or the employee representatives.
The Danish members of the European works council are elected by the employee representatives in the local works councils.
The enterprise is obliged to inform and consult the members of the European works council on issues concerning, for instance, planned mergers, collective redundancies and future investment plans. The European works council, however, is only entitled to be informed and consulted if the conditions relate to the community-scale undertaking as a whole or a minimum of two of the undertakings or establishments in two different countries.
8. INFORMATION AND CONSULTATION
In late 2004, a new bill was introduced as a result of Directive 2002/14/EC on information and consultation of employees. In pursuance of the bill, all enterprises with 35 employees or more must inform and consult employee representatives concerning essential issues and initiatives. Information must be given at such a time which is appropriate in order to enable employee representatives to conduct an adequate survey and present the opinion of the employees. Thus, the mandatory legislative information and hearing of the employees is no longer limited to issues such as collective dismissals.
The representatives enjoy the same protection against dismissal as the shop stewards. Hence, only cogent reasons may legitimise a dismissal.
The bill took effect from May 2005.
According to the Danish Act on the Legal Position of Employees in Connection with the Transfer of Undertakings, employers are obliged to inform and consult their employees when proposing a business transfer. The obligation applies to both the transferor and the transferee in relation to a sale of assets.
The employees must be given information on:
In addition to the above, an employer who contemplates taking measures as regards the employees in connection with the transfer of undertaking must, within reasonable time beforehand, initiate negotiations with employee representatives with the purpose of reaching an agreement.
On the other hand, consultation is usually not required in connection with share sales.
In pursuance of Directive 2001/86/EC, Denmark has passed an act on employee participation in European companies. This act imposes on the management or administrative bodies an obligation to create a special negotiating body for the information and involvement of the employees in European companies.
The Danish Collective Dismissals Act stipulates that an employer is obliged to consult representatives of affected employees in case of proposed collective dismissal as quickly as possible. The procedure to be followed in case of a collective dismissal is described in paragraph 11 below.
Under the Danish Health and Safety Act, enterprises with 20 employees or more are obliged to establish a health and safety board. Its task is to issue general guidelines concerning various aspects of health and safety in the workplace, whereas it is the task of the safety steward and the management to handle the different questions as they arise on a day-to-day basis.
Finally, most collective agreements, both in the private and public sectors, contain provisions concerning shop stewards and co-operation agreements under which works councils are established. Often the national collective agreements leave it to the individual employer and the shop stewards to negotiate more specific issues of special interest to that particular workplace, such as the organisation of working hours.
9. EQUAL OPPORTUNITIES
There are four acts concerning discrimination in the labour market.
The Act on Equal Pay for Men and Women stipulates that men and women performing the same work or work of the same value for the employer must be equally paid. When evaluating whether the work is of the same value, one must take into consideration all the relevant qualifications which are necessary for the proper performance of the job in question.
Where the principle of equal pay has been violated, the employee is entitled to be paid the difference.
The Act also protects against dismissals due to an employee’s demand for equal pay. If an employee is dismissed within one year after having made such a claim, the burden of proof is on the employer.
If wrongfully dismissed, an employee may ask for compensation, which can be the equivalent of up to 78 weeks’ wages.
The provisions of the Act are mandatory and cannot be derogated from to the detriment of the employee. However, the Act does not apply to the extent that the employee is covered by a collective agreement which grants the same rights as the legislative provisions.
In pursuance of the Non-Discrimination Act, any direct or indirect discrimination based on race, colour, religion, political opinion, sexual orientation, national, social or ethnic origin, age or disability is prohibited. The Act applies to all questions concerning the recruitment, dismissal and transfer of the employee. Pay and working conditions also fall within the scope of the Act.
The Act is mandatory; but in accordance with section 6(1), exceptions are made when the enterprise has the expressed objective of promoting a particular political, religious belief and the employees’ political and religious beliefs must be considered of importance to the enterprise.
Section 6(2) also makes an exception where it is of decisive importance in connection with the exercise of certain types of occupational activities that the person concerned is of a particular race, political opinion, sexual orientation, national, social or ethnic origin or has a particular skin colour or belongs to a particular religion. In these cases permission to derogate from the non-discrimination principle is granted by the relevant minister.
A person whose rights have been violated may ask for compensation.
In late 2004, an amendment to the Non-Discrimination Act was passed. This amendment implemented Directive 2000/78/EC establishing a general framework for equal treatment in employment and occupation.
The amendments to the Non-Discrimination Act extended the principles of nondiscrimination to protection against discrimination based on age and disability. The amendment has significant consequences in a number of situations.
For example, the employer may no longer advertise for an employee belonging to a certain age group. Likewise, it is no longer possible to negotiate into an individual employment contract a mandatory age of retirement below 65 years. Should a collective agreement, however, stipulate that the mandatory age of retirement is below 65 years this will be accepted, if it is justified for legitimate reasons.
With regard to disabled employees, the employer is obliged to organise the workplace in a disability-friendly manner. Exceptions are only made if it is of a disproportionate financial burden to the employer when taking into account the size and financial situation of the enterprise.
The amendment took effect from early 2005.
The Act on Equal Treatment of Men and Women with regard to Access to Employment incorporates a number of EU Directives into Danish law, such as Directive 76/207/EEC on the principle of equal treatment for men and women.
The Act stipulates that no direct or indirect discrimination may take place on the grounds of gender, in particular with reference to pregnancy, marital or family status.
The principle of equal treatment of men and women applies when recruiting, transferring, promoting or dismissing employees. A person whose rights have been violated may ask for compensation or – in case of dismissal related to the employee’s pregnancy, maternity/ parental leave or adoption – re-employment.
9.4 Parental rights
The Act on Maternity Leave incorporates into Danish law Directive 92/85/EEC on the introduction of measures to encourage improvements in the safety and health at work of pregnant workers and workers who have recently given birth or are breastfeeding, and Directive 96/34/EC on the framework agreement on parental leave. The rules of the Act concerning maternity and parental leave are as follows:
The parental leave may under certain circumstances be extended to 40 or 46 weeks. Any extension of the parental leave will not create a right to receive social benefits.
Further, the parents may choose to postpone between eight and 13 weeks of their parental leave until a later time. In accordance with an agreement with the employer, up to 32 weeks may be postponed. A new employer, however, is not obliged to honour an agreement entered into between the employee and the former employer.
The postponed parental leave must be taken before the child’s ninth birthday.
Adoptive parents are entitled to a total of 48 weeks’ leave with social benefits as from the adoption of the child. Two of the weeks must be taken simultaneously. Like biological parents, the adoptive parents may extend and partially postpone their leave.
10. DISCIPLINE AND TERMINATION
10.1 Disciplinary actions
Although no legislative disciplinary action as such is available to employers under Danish law, it is, however, possible to take action against employees within the framework of the employers’ managerial rights. Should the employer be dissatisfied with the performance of an employee in a given position, it is possible to assign the employee to new and other tasks.
However, if the terms/conditions of the employment are fundamentally changed, this is regarded as a dismissal of the employee with an option to be re-engaged under the new terms or conditions. Hence, fundamental changes must be made with respect to the terms of notice described below. An example of a fundamental change could be the transfer of the employee to another unit of the enterprise if located far away from the place where the employee has worked until that time.
10.2 Terms of notice and compensation
In pursuance of the freedom of contract, the employer and employee are free to negotiate any term of notice they find acceptable.
However, either a collective agreement or employment legislation will often stipulate a minimum term on notice.
The contract of an employer may be terminated if justified for reasons relating to either the enterprise or the employee.
A common example of justifiable reasons relating to the enterprise would be financial problems relating to shortage of new contracts.
Even though a particular act of an employee might not justify a dismissal if it is viewed separately, the continuation or repetition of the act after the employer has warned the employee, will.
The Salaried Employees Act prescribes that an employment relationship can only be terminated by giving notice. However, temporary employment relationships of duration of less than one month de facto are exempted.
According to the Act the employee is entitled to:
If a salaried employee has been continuously employed in the same enterprise for 12, 15 or 18 years, the employer is obliged to pay a severance payment to the employee corresponding to one, two or three months’ pay on termination of the employment. Exceptions are made in the event that the employee is covered by a pension scheme. The provisions also apply should the employee be unjustifiably dismissed.
If the termination of the contract of a salaried employee who has been continuously employed in the enterprise concerned for at least 12 months is not justified by either the conduct of the employee or the circumstances of the enterprise, the employee is entitled to compensation. The amount to be paid is determined with due regard to, inter alia, the length of the employment relationship but cannot exceed the salary of the employee for the period corresponding to half the period of the due term of notice. If the employee is over 30 years of age at the time of notice, the compensation may amount to up to three months’ salary.
Although a particular collective agreement or act may stipulate a certain notice, notice of termination given by either the employer or the employee may at times be carried out without notice, if the contractual partner has materially breached the employment contract.
This, however, only applies if the breach is considered to be fundamental. It must be seen as unreasonable to commit the parties any further. An example of a material breach where the employee may terminate the contract without notice could be the employer’s failure to pay salary.
Should one party wish to terminate the contract without notice, he or she must act swiftly and without delay. Before terminating the contract without notice, it can be a prerequisite that the employer has given the employee a warning that the continuation of a particular behaviour will lead to the termination of the employment contract. This depends on the nature of the breach of contract.
When dismissed, the salaried employee is entitled to demand a reason for the dismissal in writing from the employer.
Finally, when deciding to terminate an employment relationship, special attention must be paid to the Non-Discrimination Act described in section 9.2 above. The Non-Discrimination Act imposes on the employer a duty to substantiate that the termination of the employment relationship is based on a justifiable reason and not on conditions covered by the Non-Discrimination Act, such as pregnancy or religious beliefs.
10.3 Shop stewards
Most collective agreements stipulate that shop stewards may only be dismissed with cogent reasons. Hence, the protection of shop stewards against dismissals is greater compared with other categories of workers.
Further, several collective agreements prescribe that a shop steward may not be dismissed before the respective organisations have negotiated the conditions regarding the dismissal. The collective agreements may also contain provisions which stipulate that a disputed decision to dismiss may not be carried out before it has been settled before an Industrial Arbitration Tribunal. However, in the event of gross negligence, the shop steward may, like his or her colleagues, be dismissed without notice.
10.4 Safety stewards
In pursuance of the Danish Health and Safety Act, safety stewards enjoy the same protection against dismissal as shop stewards in the particular trade. Thus, the safety steward is protected regardless of whether the employer has committed him/herself to the collective agreement covering the particular trade.
As mentioned in section 7.1 above, the acts regulating limited liability companies and private limited companies stipulate that the employees of a company of a certain size may elect members of the board. In accordance with government regulations issued under these acts, the employee representatives enjoy the same protection against dismissal as the shop and safety stewards.
Special rules apply for employees in the public sector who fall within the scope of the Civil Servants Act.
11. COLLECTIVE DISMISSALS
According to the Danish Collective Dismissals Act, an employer is obliged to consult representatives of affected employees in case of proposed collective redundancies as quickly as possible.
The purpose of the Act is to limit the number of dismissals and to minimise the effect of those that are unavoidable, for instance by offering alternative employment in other areas of the industry.
In areas covered by collective agreements containing provisions in relation to collective redundancies, the collective agreements must be followed instead of or in addition to the said Act.
11.1 The scope of the Danish Collective Dismissals Act
The Act applies to dismissals which take place within a 30 day period for reasons unrelated to the employee’s performance. The Act does not apply should the collective dismissals be the consequence of a stoppage of the operations due to a legal decision.
Some provisions do not apply if the dismissal is a result of the company’s bankruptcy.
The provision applies only when a certain number of employees are to be dismissed. The number of employees varies depending on the size of the organisation:
The employees or their representatives must be given all relevant information of importance and, at a minimum, written information concerning:
The employer must also notify the Regional Labour Council of its intention to commence the consultation process. The Council must also be given a copy of the information for the employees listed above.
Should the employer wish to proceed with the collective dismissals after the consultation with the employees has ended, the employer must inform the Regional Labour Council of its decision.
Where 50 per cent or more of the workforce in a company with at least 100 employees are to be dismissed, the Regional Labour Council need not be informed until at least 21 days after the consultation has started. Exceptions are made where a collective agreement states otherwise.
As quickly as possible, but no later than ten days after the notification of the dismissal has been received by the Council, the employer must inform the Council of the names of individuals to be dismissed. At the same time, the employees in question must be informed.
Should the employer fail to consult either the employees/representatives or the Regional Labour Council, compensation must be paid to the employees. The employer may also be fined.
Employees must be given notice of termination at the same time as the Council is notified of their names.
At the earliest, the dismissals can take effect 30 days after notice of the proposal has been given to the Council and the staff. Where at least 50 per cent of the employees are to be dismissed in a company with at least 100 employees, the dismissal cannot enter into force until eight weeks after notification, unless a collective agreement stipulates a longer period.
The Act does not affect an employee’s right to a longer notice period in pursuance of provisions in the Salaried Employees Act (should it apply) or the employment contract. In the selection of the individuals to be dismissed, the employer should apply objective criteria only, and the possibility of an alternative employment of the individuals must be considered. The employer should also seek voluntary redundancy first.
12. FORTHCOMING LEGISLATION
The Minister for Employment has proposed a bill on raising the minimum mandatory retirement age from 65 to 70. It is suggested that the bill should take effect from 1 January 2008.
The amendment of the Non-Discrimination Act will have the consequence that all provisions in individual employment contracts stipulating a mandatory retirement age below 70 will be invalid from 1 January 2008.
Provisions stipulating a mandatory retirement age below 65 in collective agreements in force at the time of the enactment of the original prohibition against age discrimination (27 December 2004) may be maintained on the condition that the provisions are objectively and reasonably justified by a legitimate aim and that the means of achieving that aim are appropriate and necessary. Provisions stipulating a mandatory retirement age between 65 and 70 in collective agreements enacted from 27 December 2004 until 1 January 2008 may be maintained only up until the expiry of the collective agreement, even though the parties may wish to uphold such provisions.
13. USEFUL REFERENCES
General bodies
Danish Ministry of Employment: www.bm.dk The site contains an English-language version and has a range of information concerning the Danish labour market and international and EU co-operation.
The Confederation of Danish Employers (DA):
www.da.dk
The site of the DA, which represents 13 employers’ organisations with a total of more than 29,000 private companies in the retail, transport, service, manufacturing and construction sectors, contains information on its policy areas, the basic agreements and facts and figures about Denmark.
The Danish Confederation of Trade Unions (LO):
www.lo.dk
The site contains information on, for instance, the goals and methods of work of the LO and new initiatives and issues of concern to trade unions.
