Denmark 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.
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If you wish to register a company in Denmark our team will be happy to help you there and provide you with more detailed information, you can contact us at [email protected]
Denmark Employment
Related pages:
Establishing Business in Denmark
Property and Environment in Denmark
