Denmark Employment

Denmark Employment

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Page 4. “Denmark Employment”

establishing business denmarkDenmark Employment

The terms of an employment contract in Denmark will be governed by law, collective bargaining agreements  and  individually  negotiated  agreements.

Some mandatory provisions are made to protect employees and to regulate e.g. working hours, holidays, dismissals, unfair dismissals and dispute resolution.

You may consider the appointment of an agent, distributor or franchisee as an alternative to establishing business on your own and employing your own Staff.

In comparison to other countries Denmark is considered to have a flexible labour market where redundancies are easily carried out, and the Danish state will support and assist the people made redundant.

Executive employees

The  mandatory  rules  would  normally  not  apply  to executives, i.e. managing directors. Officers holding these positions would usually represent the employer in employment matters and are therefore treated separately. The  contracts  of  the  executives  may  be freely negotiated and many of the statutory provisions  and  collective  agreements  mentioned  below would not apply.

Foreign labour

Any  citizen  of  an  EU  Member  State  may  work  in Denmark without a work permit. An employee from outside the EU shall have a work and residence permit in order to work in Denmark.

Employment contract

It  is  mandatory  to  issue  an  employment  contract outlining all essential terms and conditions. The provisions of the Act of Salaried Employees are mandatory in respect of all salaried employees and contain  rules  regarding  the  terms  and  termination of employment. An employment contract would normally  continue  for  an  indefinite  period  (indefinite term contract) until terminated.

Notice period

The  statutory  minimum  notice  period  for  the  employer or the employee (as the case may be) is one month. The employee may, however, be entitled to a longer period of notice, depending on the length of service. The maximum notice period is six months, unless  otherwise  agreed.  The  employee  would  be entitled  to  wages  and  other  employment  benefits during the notice period.

Dismissal

An employee may only be dismissed on reasonable grounds (and for fair and objective reasons). These reasonable grounds would include redundancy and reasons related to the individual employee. Notice of dismissal shall be in writing and contain certain information. The dismissal notice shall be delivered or sent by registered mail to the employee in person. If the dismissal relates to the conduct of the employee, the notice shall be given within a certain time limit.

Summary dismissal (immediate termination of employment) may take place only where the conduct of the employee constitutes gross misconduct.

Working environment

It is generally recognised in Denmark that a healthy work environment is best achieved by the co-operation between employers and employees. Employers are under a duty to create a safe working environment,  ensuring  that  employees  are  protected  from injuries or health damages and that the work place complies with health and safety regulations.

Equal opportunities

Employers shall comply with anti-discrimination legislation, based on EU law, which makes it unlawful for an employer to discriminate on the grounds of sex,  ethnic  origin,  disability,  age  or  sexual  orientation in connection with recruitment, promotion and pay. Employers may be liable to pay compensation if they are in breach of these rules.

Collective bargaining agreements

Trade unions play an important role in the Danish labour market. A collective bargaining agreement can be made between a trade union and an employer or employers’ organisation. Some statutory provisions can be modified through collective agreements.

Collective agreements form the basis for co-operation in the workplace and would regulate the contents  of  the  employment  contracts,  especially  for blue-collar workers.

The  employee  would  always  be  represented  by  a trade  union,  if  a  collective  bargaining  agreement is  entered. The  employer  may  also  be  represented by an employers’ association. Trade unions shall be consulted  regarding  all  major  issues  and  changes, including  expansion,  reorganisation,  closing  of  or cutbacks  in  operations,  transfer  of  a  business,  recruitment policy and working hours. If the employer fails to consult the trade union, the trade union is  entitled  to  demand  that  such  consultations  take place. Trade unions will have no veto, but could substantially delay important business decisions.

Employees as board members

The employees have the right to appoint at least two representatives for the board of directors if the company has 35 employees or more and this has been the case for the last three consecutive years. The position of the employee directors of the board would essentially be the same as that of other directors and they would hold the same responsibilities.

Holidays

Minimum holiday entitlements and holiday pay are regulated by the Danish Holiday Act. The minimum holiday entitlement is five weeks per year but often the employee is entitled to an additional 5 days’ paid holiday. The employee earns 2.5 days’ paid holiday for each month he or she is employed.

Maternity and paternity leave

Employees  have  a  statutory  right  to  take  maternity and paternity leave. In short, the maternal leave starts 4 weeks before birth and ends 14 weeks after birth. A father is entitled to 2 weeks of leave.  Apart from these minimal rules additional grants are offered in accordance with law and collective bargaining  agreements.  Whether  or  not  the  employee  is entitled  to  half  or  full  pay  during  the  leave  of  absence  depends  on  whether  or  not  the  employee  is a  salaried  employee,  or  employed  under  collective bargaining  agreements  or  on  individually  agreed conditions.

Pensions

Employees  will  receive  retirement  pensions  (national pension and national supplementary pension) from the Danish National Insurance Office. This is paid from retirement (the retirement age is normally 65 but could also be 70) and for the rest of the employee’s life. However, it is common practice for the employer to pay a supplementary pension for their employees and this could also be regulated in a collective bargaining agreement.

Page 4. “Denmark Employment”

Read More. Go to:

  1. Establishing Business in Denmark
  2. Buying a Danish business
  3. Danish business with others
  4. Denmark Employment
  5. Property and Environment in Denmark
  6. Intellectual Property in Denmark
  7. Danish Business Environment
  8. Profit and tax in Denmark
  9. Denmark Company Liquidation
  10. Denmark company formation

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