Employment 2023 Comparisons

A blue-collar employee performs manual labour (ie, not salaried work) and is normally subject to a collective agreement containing the main regulations of the employment. The regulations of collective agreements vary depending on which area of practice the collective agreement governs.

If an employee performs work such as office work, purchase or sales work, technical or clinical assistance or management, the employee will be considered a white-collar (salaried) employee. A white-collar employee is subject to the Danish Salaried Employees Act, if the employee performs salaried work for eight hours or more per week on average. The Danish Salaried Employees Act contains the main regulations of the employment, including compensation in the case of unreasonable termination, severance pay, notice periods, etc. However, the act does not contain any regulations regarding a white-collar employee’s normal salary and this solely depends on an agreement between the employer and the employee.

If the employee is not subject to the Danish Salaried Employees Act or a collective agreement, the employment is regulated by the individual employment agreement.

An employee who performs work for three hours or more on average per week over a reference period of four consecutive weeks is subject to the Danish Employment Contract and Certain Working Conditions Act.

This act requires that an employer must provide an employee with the following, in writing:

• the name and address of the employer and the employee;
• the expected workplace(s);
• a description of the work assignments or the employee’s title;
• the commencement date of the employment;
• the duration of the employment (if fixed term);
• the employee’s holiday rights;
• the parties’ notice periods;
• the employee’s salary;
• the employee’s daily or weekly working hours;
• the employee’s right to paid leave (eg, leave in connection with childbirth);
• the employee’s right to education during their employment;
• the employee’s social security coverage during the employment; and
• whether the employment is subject to a collective agreement and, if so, the parties that have entered into the collective agreement.

If an employer does not comply with the act, an employee may be entitled to compensation of between DKK1,000 and DKK25,000, depending on the severity of the breach.

Types of Contracts

Employment can be non-fixed term or fixed term, and it can be part time or full time.

The employment will be non-fixed term, unless otherwise agreed in the individual employment agreement or in an applicable collective agreement.

If the employment is fixed term, the employment lapses on a specific date or when a specific project is completed. Such employment is subject to the Danish Temporary Employment Act, under which an employer is not entitled to treat an employee who is fixed term any differently compared to an employee who is non-fixed term. Under this act, an employer can only extend the duration of fixed-term employment if the extension is based on objective reasons. Such objective reasons include seasonal work, the employee being a substitute for employees on leave, the extension of a project, etc.

If the employment is part time, it is subject to the Danish Part-Time Act under which the employer is not entitled to treat an employee who is employed part time any differently compared to an employee who is employed full time.

If an employer does not comply with these acts, an employee may be entitled to compensation paid by the employer.

A full-time employee in Denmark normally performs work for 37 hours per week, but there is no general regulation of an employee’s working time, unless this is agreed in an applicable collective agreement.

This means that an employer and an employee can agree that the employee must perform work for more or less than 37 hours per week. Furthermore, the parties can agree that employees are obliged to perform overtime work with or without any additional payment.

Several collective agreements regulate flexible working hours, overtime payments and payments in relation to such work, and these regulations must be complied with, if the employment is subject to a collective agreement.

Regardless of the above, however, the employer is obliged to comply with the Danish Working Time Act, which stipulates that an employee is not allowed to perform work for more than 48 hours per week on average over a four-month period, that an employee is entitled to a weekly day off, and that an employee must have a break of 11 hours between each work shift. However, the break of 11 hours can be reduced to eight hours, if certain requirements are met.

If an employer does not comply with this act, an employee may be entitled to compensation, which varies depending on the severity of the breach. Furthermore, the employer may be fined by the Danish Working Environment Authority.

As a main rule, an employer and an employee are entitled to freely agree on the employee’s salary as there are no statutory minimum salaries in Denmark.

However, most collective agreements contain minimum salary requirements, which must be complied with, if the employment is subject to such collective agreement.

Bonus

An employer and an employee can freely agree on a bonus agreement, but there is no mandatory 13th-month bonus/salary in Denmark.

However, if an employee who is entitled to a bonus and who is subject to the Danish Salaried Employees Act resigns from their position during a bonus accrual year, the employee is entitled to a proportional bonus based on the bonus that the employee would have been entitled to receive, if they had still been employed at the end of the bonus accrual year, and on how long the employee was employed during the bonus accrual year. The same can also be agreed in a collective agreement.

Vacation and Vacation Days

Under the Danish Holiday Act, an employee accrues 2.08 holidays each month during the vacation accrual year (1 September – 31 August the following year), which can be taken the month after being accrued until 31 December the following year (1 September – 31 December the following year, ie, 16 months).

Here are some examples:

• holidays accrued in September 2023 can be taken from 1 October 2023 until 31 December 2024;
• holidays accrued in January 2024 can be taken from 1 February 2024 until 31 December 2024;
• holidays accrued in June 2024 can be taken from 1 July 2024 until 31 December 2024; and
• holidays accrued in September 2024 can be taken from 1 October 2024 until 31 December 2025.

Leave

An employee is entitled to pregnancy leave, maternity leave, paternity leave, co-mother leave and parental leave under the Danish Act on Leave in Connection with Childbirth.

This act entails that a female employee giving birth is entitled to take:

• four weeks of pregnancy leave prior to the expected birth date;
• ten weeks of maternity leave after the birth (of which the first two weeks after giving birth are mandatory); and
• 32 weeks of parental leave after the lapse of the maternity leave, which can be prolonged by up to five weeks.

A male employee or co-mother is entitled to take:

• two weeks of paternity/co-mother leave after the birth, which must be taken during the first ten weeks after the birth; and
• 32 weeks of parental leave, which can be prolonged by up to five weeks.

Furthermore, an employee is – as a rule – entitled to state benefits during leave in connection with childbirth in accordance with the overview below:

• For a female employee giving birth:
1. four weeks of pregnancy leave prior to the expected birth date;
2. ten weeks of maternity leave after the birth; and
3. 14 weeks of parental leave after the lapse of the maternity leave.
• For a male employee or co-mother:
1. two weeks of paternity/co-mother leave during the first ten weeks after the birth; and
2. 22 weeks of parental leave after the lapse of the first ten weeks after the birth.

The above-mentioned also applies to employees who adopt.

In addition to the above, female employees who are subject to the Danish Salaried Employees Act are entitled to leave with half salary four weeks prior to giving birth (pregnancy leave) and 14 weeks of half salary after giving birth (maternity leave).

Usually, collective agreements cover regulation of salary during leave in connection with childbirth.

An employer and an employee can also freely agree to additional salary during leave due to childbirth.

Under certain circumstances, an employer is entitled to receive reimbursement from the government covering (parts of) the salary that the employer paid to an employee in connection with child leave.

Sick Leave

An employee who is subject to the Danish Salaried Employees Act is entitled to salary during sick leave. The same is applicable under certain collective agreements and can be agreed individually. If an employer pays salary during illness, such employer is usually entitled to receive reimbursement from the government for (a part of) the salary paid out to the employee during an illness lasting more than 30 days.

If an employee is not subject to salary during illness, the employee may be entitled to illness benefits from the government.

Liability

If an employee’s negligent actions entail that an employer must pay damages, the employer is entitled to claim damages from the employee, if this is reasonable in regard to the employee’s negligent action, the employee’s position and the surrounding circumstances.

An employer and an employee can enter into non-compete, non-solicitation and combined non-compete and non-solicitation clauses under certain requirements in the Danish Employment Clauses Act.

A valid non-compete clause prohibits an employee from performing competing work after the lapse of the employment, and a valid non-solicitation clause prohibits an employee from having any commercial relationship with their previous employer’s customers, clients and collaboration partners after the lapse of the employment.

Non-compete Clauses

A non-compete clause must meet the following requirements:

• the employee must hold a position of trust or have entered into an agreement with the employer concerning an invention invented by the employee;
• the employer must have informed the employee of the reason for the non-compete clause;
• prior to the employment lapsing, the employee must have been continuously employed by the employer for at least six months;
• the employee must receive compensation during the duration of the non-compete obligation of 40% of the employee’s salary (if the non-compete obligation applies for a period of up to six months) or 60% of the employee’s salary (if the non-compete obligation applies for between six and 12 months);
• the non-compete obligation cannot apply for more than 12 months; and
• the employer must inform the employee of the above-mentioned requirements in writing.

Non-solicitation Clauses

A non-solicitation clause must meet the following requirements:

• the non-solicitation clause can only concern customers, clients and collaboration partners, with whom the employee has had commercial contact within the last 12 months of employment;
• prior to the employment lapsing, the employee must have been continuously employed by the employer for at least six months;
• the employee must receive compensation during the duration of the non-solicitation obligation of 40% of the employee’s salary (if the non-solicitation obligation applies for a period of up to six months) or 60% of the employee’s salary (if the non-solicitation obligation applies for between six and 12 months);
• the non-compete obligation cannot apply for more than 12 months; and
• the employer must inform the employee of the above-mentioned requirements in writing.

Combined Non-compete and Non-solicitation Clause

If the parties enter into a combined non-compete and non-solicitation clause, the above-mentioned requirements must be met with the following amendments:

• the employee must receive compensation of at least 60% of the employee’s salary during the duration of the combined clause; and
• the combined non-compete and non-solicitation obligation cannot apply for more than six months.

If any of the above-mentioned requirements are not met, the clause will be invalid and unenforceable in its entirety.

If an employee breaches the obligations of a clause, the employee may be obliged to pay damages to the employer. Furthermore, the employee may also be obliged to pay a penalty payment, if this has been agreed in the clause. 

See 2.1 Non-competes.

The employer is obliged to comply with the Danish Personal Data Act, as well as the European General Data Protection Regulation.

If a foreign employee performs work in Denmark, the employee is subject to the Danish Aliens Act. Under this act, non-EU employees must obtain a work and residence permit to perform work in Denmark.

Furthermore, if a foreign employee is permanently employed outside Denmark and is seconded to work in Denmark for a temporary period, such secondment is subject to the Danish Posting of Workers Act.

Under the Danish Posting of Workers Act, an employer who seconds employees to work in Denmark, must ensure that such employees are registered in the Register of Foreign Service Providers in Denmark (the “RUT”) prior to commencing work in Denmark.

If the employer does not report the mandatory information in time or if any of the information is incorrect or inadequate, the employer might be penalised with a fine.

As a rule, an employee who performs mobile work in Denmark is subject to the same employment regulation as other employees. 

See 1.5 Other Employment Terms concerning leave in connection with childbirth.

There is no other statutory regulation concerning sabbatical leave. However, collective agreements may contain regulations relating to sabbaticals, and an employer and employee are entitled to enter into an agreement concerning sabbatical leave.

No new regulation in Denmark has been passed concerning “new work”. However, the Danish Work Environment Authority has issued orders concerning codes of guidance regarding working from home, remote working places, etc, which must be complied with in relation to “new work”.

As an example, in relation to working from home, the Danish Work Environment Authority’s guidance states that the employer must ensure that:

• the work is arranged and organised to be performed in a way that is completely safe;
• the employee has been trained and instructed on how to perform the work in a way that is completely safe;
• the necessary work equipment, etc, has been made available for the work;
• the regulation regarding screen work is complied with where screen work is regularly performed more than two days per week; and
• process ventilation has been installed in cases where harmful gas is generated by the work.

In Denmark, labour unions and employers’ organisations have a substantial influence on the Danish labour market, as labour unions and employers’ organisations enter into collective agreements regulating the terms of employment of employees who are subject to collective bargaining agreements, without any involvement from the government.

See 6.3 Collective Bargaining Agreements. 

The right to have an employee representative is not regulated by Danish legislation and is, therefore, not a legal requirement.

However, collective agreements usually contain a right for employees to appoint one or more employee representatives, who – as a rule – will be subject to mandatory termination legislation due to their role as employee representatives.

In addition to the above, see 7.5 Protected Categories of Employee.

There are no collective agreements in Denmark that have general application. As a rule, collective agreements are only applicable to employers, who:

• have entered into a collective agreement with the respective labour union; or
• are members of an employers’ organisation,

If an employer becomes a member of a Danish employers’ organisation, the employer will – with certain exceptions – automatically be obliged to comply with the relevant collective agreement entered into between the employers’ organisation and the relevant labour union(s).

The typical material terms and conditions included in collective agreements are:

• minimum salary;
• working time stipulations – normal weekly working hours are 37 hours, however, the parties can (with certain restrictions) enter into a local agreement regarding variable weekly working hours;
• an allowance or time off in lieu of overtime work;
• pension entitlements (normally, 8% paid by the employer, 4% paid by the employee);
• an educational allowance;
• staggered working time;
• holiday rights – 25 days paid holiday per holiday year and an additional five paid holidays per holiday year; and
• a mandatory annual special allowance.

An employee is entitled to terminate the employment freely and without any reason.

As a rule, an employer is entitled to terminate an employee without any reason.

If the employment is subject to the Danish Salaried Employees Act, the termination must be based on reasonable grounds, if the employee has been employed for 12 months or more on the day of giving notice of termination. Collective agreements usually contain regulation similar to this with some deviations. If the termination is not based on reasonable grounds (described further below), the employee may be entitled to compensation.

An employer’s termination can be based on the employee’s circumstances (such as lack of performance, misbehaviour, collaboration issues, etc) or the employer’s circumstances (restructuring, lack of work tasks, etc).

If a termination is based on the employee’s circumstances, the termination is, as a rule, only reasonable, if the employee has received a warning prior to the termination.

If a termination is based on the employer’s circumstances, the termination is, as a rule, reasonable.

Under the Danish Salaried Employees Act, an employee is entitled to compensation, if the termination is unreasonable. The compensation is dependent on the circumstances of the termination and the employee’s seniority and can amount to one to six months’ salary. The same or similar is usually specified in collective agreements.

If a termination is based on the employee’s race, gender, nationality, ethnicity, age, disability, part-time or fixed-term employment, leave in connection with childbirth, pregnancy, etc, the termination is a breach of the Danish Non-discrimination regulation and the employee may be entitled to compensation of between three and 12 months’ salary.

Collective Redundancies

An employer is required to comply with the Danish Mass Redundancies Act if, within 30 days, the employer:

• terminates ten employees or more and employs between 20 and 99 new employees;
• terminates 10% or more of the employees and employs between 100 and 299 new employees; or
• terminates 30 employees or more and employs 300 new employees or more.

If the act applies, the employer must initiate negotiations with the employees or the employees’ representative.

In this connection, the employer must inform the employees’ representatives or the employees of the cause for the terminations, the number of terminations, the number of employees employed with the employer, the selection criteria, severance payments, etc.

In addition, the employer is obliged to forward several notices to the Danish Regional Labour Market Council during the duration of the collective-redundancy process.

If an employer does not comply with the above-mentioned requirements, the employees will be entitled to compensation of 30 days’ or eight weeks’ salary (depending on the percentage of terminated employees). In addition, an employer can be fined, if the employer breaches its obligations under the act.

In Denmark, an employment can be terminated in accordance with the terms of the individual employment agreement, the regulation in the Danish Salaried Employees Act (if applicable) and the regulation in an applicable collective agreement.

If neither the Danish Salaried Employees Act nor a collective agreement governs an employment, the employment can be terminated in accordance with the agreed notice. If no notice has been agreed upon, the employment can be terminated with reasonable notice.

Under the Danish Salaried Employees Act, a white-collar employee can terminate their employment with one month’s notice and the employer can terminate the employment in accordance with the following: 

• employed for less than six months – one month’s notice;
• employed between six months and three years – three months’ notice;
• employed between three years and six years – four months’ notice;
• employed between six years and nine years – five months’ notice; and
• employed for more than nine years – six months’ notice.

The above is based on how long the employee has been employed when the notice period lapses (ie, if the employee has been employed for two years and 11 months when the employer gives notice of termination, the employee will have been employed for more than three years, when the notice period of three months lapses and, in this situation, the employee’s notice period is four months).

The parties are also entitled to agree on a trial period for the first three months of employment.

A notice of termination takes effect at the end of the month in which it is given.

A notice of termination from the employer must be given in writing to the employee. Furthermore, the employer must inform the employee of the reason for the termination in writing, if this is requested by the white-collar employee.

Collective bargaining agreements also contain regulations concerning termination similar to the regulations in the Danish Salaried Employees Act, but normally with shorter notice periods. Furthermore, collective agreements may contain procedural requirements, which the employer must comply with prior to terminating an employment (such as joint meetings, meetings in front an appointed board, etc). The same procedural requirements may be agreed in individual agreements.

The employee may be entitled to compensation, if the employer does not comply with the applicable procedural requirements.

Payments in Connection With Termination

Employees are entitled to their normal salary during the notice period.

Furthermore, under the Danish Salaried Employees Act, employees who have been employed for more than 12 years are entitled to severance pay of one month’s salary and those who have been employed for more than 17 years are entitled to compensation of three months’ salary, if the employer terminates the employment, regardless of the grounds on which the termination is based. Collective agreements usually contain the same regulation and the same may also be agreed in individual agreements.

If a termination is unreasonable, employees who are subject to:

• the Danish Salaried Employees Act are entitled to compensation of one to six months’ salary depending on the employee’s seniority and the circumstances of the termination; or
• collective agreements and individual agreements are entitled to the amount of compensation stipulated in the collective agreement or individual agreement. 

See 7.1 Grounds for Termination and 8.2 Anti-discrimination concerning terminations that are a breach of the Danish Non-discrimination or Equal Opportunities Acts.

If an employee is entitled to compensation under both the Danish Salaried Employees Act and the Danish Non-discrimination or Equal Opportunities Acts, the employee will only be entitled to one (the highest) of the compensations. 

Payment in Lieu

Payment in lieu of notice is generally accepted under Danish law, unless the employment is subject to a collective agreement or an individual agreement that stipulates otherwise.

Employers and employees are entitled to terminate the employment without notice (dismissal), if the other party has breached its obligation substantially under the employment contract. In such cases, the employment will lapse on the day of termination and the employee’s entitlement to salary will lapse simultaneously.

If an employee terminates the employment due to the employer’s substantial breach, the employee is entitled to claim damages from the employer. 

If an employer terminates the employment without notice and such termination is unreasonable, the employee will be entitled to damages for lost salary, equivalent to the salary during the ordinary notice period, and any other losses.

There are no general procedural requirements in relation to a termination without notice. Collective agreements and individual agreements may, however, stipulate specific procedural requirements regarding termination without notice, which must be complied with. 

An employer and an employee are entitled to enter into a severance agreement regulating the terms of termination of the employment.

Such severance agreement must be reasonable and must comply with the mandatory requirements in the Danish Salaried Employees Act (if applicable) and applicable collective agreements. 

An employee who has been elected as an employee representative under a collective agreement will, as a rule, be subject to specific protection. Such specific protection entails, inter alia, that:

• an employee representative cannot reasonably be terminated in the absence of “compelling cause” making it a necessity to terminate the employee representative;
• the termination of the employee representative will be considered unreasonable if the termination is based on the employee representative’s duties as an employee representative; and
• the employee representative may be entitled to a prolonged notice period.

The employee representative is entitled to compensation regulated in an applicable collective agreement, if the termination of the employee representative is not reasonable. The size of the compensation will differ depending on the applicable collective agreement and the circumstances of the termination.

The same protection applies for safety representatives elected under Danish work environment legislation.

See 7.1 Grounds for Termination and 7.2 Notice Periods.

See 7.1 Grounds for Termination.

See 7.1 Grounds for Termination and 7.2 Notice Periods.

Under the Danish Non-discrimination regulation, the burden of proof differs depending on the circumstances of the termination.

If the termination occurs during a pregnancy or an employee’s statutory leave in connection with childbirth, the employer bears the burden of proof that the termination is not based on the employee’s pregnancy or leave in connection with childbirth. This burden of proof is challenging in practice.

In other cases, the employee has to document factual circumstances indicating that the termination is based on age, gender, race, nationality, ethnicity, part-time or fixed-term employment, etc. If the employee can document such factual circumstances, the employer must document that the termination is not based on age, gender, race, nationality, ethnicity, part-time or fixed-term employment, etc.

The Danish courts and the chairman of an industrial arbitration may decide that a court proceeding or parts thereof (such as witness statements) can occur via video, but there is no legal entitlement to digital proceedings.

In Denmark, employment cases can be tried in front of the ordinary Danish courts, the Danish Labour Court and in front of an industrial arbitration tribunal depending on whether the case concerns issues relating to interpretation or breach of legislation, a breach of a collective agreement or interpretation of a collective agreement.

Class actions are unusual, but possible.

See 9.1 Litigation.

The prevailing party will usually be awarded its legal costs from the opponent. The awarded costs are decided by the court and are based on fixed rates previously decided by the Danish High Courts.

The complexity of the case, the processing time of the dispute and the size of the claim will determine the awarded costs which, usually, will not cover the prevailing party’s legal costs to its attorney. This means that the prevailing party will still have additional costs, despite being awarded costs from their opponent.

If an employee’s annual gross salary is below a certain threshold, the employee may be entitled to legal aid. The economic threshold for such legal aid is decided annually by the Danish Ministry of Justice.

In addition, an employee’s labour union or an employer’s organisation may also cover the fees of the dispute in accordance with the article of association of the union or organisation.