Employment Law in Denmark

Denmark has a distinctive system of regulating the employment relationship. Traditionally, there was little legislation on employment matters, with collective agreements playing the leading role in regulation. The main exception was that statute provided certain entitlements for white-collar/salaried employees (and not their blue-collar/hourly-paid counterparts). The situation has changed somewhat over the past few decades, largely because of the need to implement EU employment law directives, and there is now legislation on a range of important issues such as working time, annual leave, maternity and other parenthood-related leave, collective dismissals, transfers of undertakings and equality/non-discrimination. However, these laws generally apply only to employees who are not covered by a collective agreement that provides a level of rights and protection that is at least equivalent to the statutory rules.

Collective agreements cover around 80% of employees. As well as agreements on pay and conditions applying to particular industries and companies, there are a number of agreements with a wider scope. The most important is the “main agreement” (hovedaftalen) between the Danish Employers’ Confederation (Dansk Arbejdsgiverforening, DA) and the largest national trade union body, the Danish Trade Union Confederation (formerly Landsorganisationen i Danmark, LO, but now renamed Fagbevægelsens Hovedorganisation, FH, following a merger with the second-largest confederation at the start of 2019). This agreement (referred to as the DA-LO main agreement) covers blue-collar employees across much of the private sector and deals with matters such as aspects of dismissal, employee representation, collective bargaining, industrial action and management prerogative. Another important agreement, the DA-LO co-operation agreement (samarbejdsaftalen) provides for workplace employee involvement through “co-operation committees”.

To illustrate the contents of collective agreements as the main source of employment regulation for blue-collar employees, we refer mainly to the 2020–2023 version of the agreement that covers much of manufacturing industry. This is one of the most important national collective agreements (covering around 230,000 employees and 6000 companies) and is negotiated by the Confederation of Danish Industry (Dansk Industri, DI) and the Co-Industri “cartel” of nine trade unions.

For employees not covered by collective agreements, the employment relationship is largely governed by employment contracts and legislation. As mentioned above, there is a specific statute on the employment rights of white-collar/salaried employees (funktionærer), the Act on the Legal Relationship between Employers and Salaried Employees (Lov om retsforholdet mellem arbejdsgivere og funktionærer), or Salaried Employees Act. This applies broadly to employees who perform administrative, commercial, managerial or professional work, specifically including:

• office workers and shop assistants employed in office work, buying and selling activities, or equivalent warehouse operations (plus employees whose work is mainly of this type)

• those working in technical or clinical services (except handicraft work or factory work) and other assistants who carry out comparable work functions (this covers, for example, laboratory technicians or dental assistants)

• those whose work is wholly or mainly to manage or supervise the work of others on the employer’s behalf — however, senior managers are not included.

The Salaried Employees Act covers only relevant employees who work for more than eight hours per week on average and have at least one month’s service.

This topic refers to employment law in the private sector only.

• Compared with most countries, in Denmark collective agreements play an unusually major role in regulating employment relationships and often take priority over legislation, especially for blue-collar employees. Such agreements cover around 80% of the workforce. Summary

• Recruitment and selection are subject to little specific statutory regulation, except in relation to non-discrimination, data protection and the use of health data. Recruitment and Selection

• There is a statutory maximum probationary period of three months for white-collar employees, while probationary periods for blue-collar employees are generally dealt with by collective agreements rather than statute. Recruitment and Selection

• With the exception of citizens of other EEA countries (plus Switzerland), foreign nationals generally require a residence and work permit (of which there are various types) in order to be employed in Denmark. Recruitment and Selection

• An employment contract is generally deemed to exist where an individual performs work in exchange for remuneration from another party under a dependent employment relationship. Employment Contracts

• Fixed-term employment contracts can be renewed only if this is justified on objective grounds, though there is no statutory limit on the permissible duration of such contracts. Employment Contracts

• Where an employment relationship lasts more than one month, and the employee works more than eight hours per week, the employer must give the employee written information about the essential conditions applicable to the relationship. Employment Contracts

• “Restrictive clauses” in employment contracts — such as non-competition and non-solicitation clauses — are subject to specific statutory rules. Employment Contracts

• All aspects of remuneration (including payment of wages and minimum wages) are governed mainly by collective agreements and legislation has little role to play, except in a few areas such as payslips. Pay and Benefits

• Working time issues are governed principally by collective agreements, which mostly provide for a 37-hour normal working week. Legislation provides a safety net for employees not covered by a relevant collective agreement, for example ensuring that weekly working time cannot exceed 48 hours on average over a four-month period. Working Time, Rest and Holidays

• Rest break and daily/weekly rest periods are governed mainly by collective agreements. Again, legislation provides a safety net for employees not covered by a relevant collective agreement, for example guaranteeing a rest break for adult employees who work more than six hours a day. Working Time, Rest and Holidays

• Employees are entitled to at least 25 days’ annual leave per year. Working Time, Rest and Holidays

• Working parents are entitled to take pregnancy/maternity leave (generally up to 18 weeks), paternity leave (up to two weeks), parental leave (up to 32 weeks, which may be extended to 46 weeks) and adoption leave (generally up to 15 weeks), usually with an entitlement to public benefits. Employees can also benefit from several other types of leave to provide care to close relatives. Parenthood and Work-life Balance

• Discrimination in relation to employment is prohibited on grounds of sex (including pregnancy and marital or family status), sexual orientation, race, skin colour, national, social or ethnic origin, age, disability, religion or belief, and political affiliation. Women and men must receive equal pay for the same work or work of equal value. Equality and Discrimination

• Sexual harassment and harassment on the grounds of the protected characteristics are prohibited, and employers have a duty to prevent such behaviour. Equality and Discrimination

• Employees have a right to join trade unions and must not be refused employment or dismissed on grounds of union membership. Most other aspects of industrial relations, such as collective bargaining and strikes, are governed mainly by rules laid down in collective agreements. Industrial Relations and Collective Rights

• Based on collective agreements, a joint management-employee “co-operation committee” must be established in many enterprises with at least 35 employees — failing this, statutory information and consultation rules apply. Industrial Relations and Collective Rights

• Employers have a general duty to ensure safe and healthy working conditions, in terms of both the physical and the psychological working environment, and numerous detailed obligations in the field of health and safety at work. Occupational Health and Safety

• All employees are protected against dismissal for a number of prohibited reasons (eg unlawful discrimination) and certain information and consultation procedures apply to all cases of collective dismissal. Otherwise, termination rules and procedures largely depend on the employee’s status and often on the industry the employee works in; in general, statutory rules on unfair dismissal, notice periods and severance payments apply only to white-collar employees, while for blue-collar employees these issues are governed by collective agreements. Termination of Employment

• When there is a business transfer, employees’ employment contracts are automatically transferred to the new employer. Other Key Issues