The Danish labour market is characterised (and distinguishes itself compared to other EU-countries) by the combination of a relatively high degree of social benefits and social protection on the one hand and a high degree of flexibility with respect to termination of employment and mobility between employers on the other hand (the so-called Danish “flexicurity” model).

The terms and conditions of white-collar employees are, to some extent, subject to negotiation between the employer and the employee and reflected in employment contracts, but to a large extent subject to employee-related Danish statutory regulations. A significant part of these statutory regulations is based on or implemented by EU Directives.

The statutory definition of a salaried (white-collar) employee according to the Danish Salaried Employees Act (in Danish: “Funktionærloven”) includes:

• office workers and shop assistants employed in office work, buying and selling activities, or equivalent warehouse operations;
• individuals whose work involves technical or clinical services (except handicraft or factory work) or comparable work functions; and
• individuals whose work wholly or mainly involves managing or supervising the work of others on behalf of an employer.

The specific legislation on white-collar employees covers such employees who have been continuously employed for more than one month and work at least eight hours per week on average. These employees are covered by specific legislation giving them minimum entitlements in areas such as notice periods, severance payments, unfair dismissal, sick pay, maternity pay and probationary periods.

By contrast, for blue-collar employees, such aspects of employment conditions are primarily regulated by collective agreements with no minimum statutory provisions. Collective bargaining agreements are most common in the building and construction industry and trade industry, thus, blue-collar workers are commonly covered by collective bargaining agreements.

Within seven days of commencement of employment, employers must, with a few exceptions (such as in relation to seafarers), provide employees with written details of all essential conditions applicable to the employment relationship. This applies to employees where the predetermined or actual working hours amount to more than an average of three hours per week in a reference period of four consecutive weeks. If the employer fails to provide the required written details, the employee may be entitled to compensation.

The information provided must at least include:

• the name and address of the employer and employee;
• the place of work or, where there is no fixed or main place of work, a statement that the employee is employed at various places;
• a description of the work, or an indication of the employee’s title or grade, or the nature or category of the work;
• the date of commencement of the employment relationship;
• if the employment relationship is not open ended, its expected duration;
• when it comes to temporary agency workers, the identity of the user undertakings as soon as it becomes known;
• the duration and terms of any probationary period;
• the duration of the paid leave entitlement for the employee;
• the notice periods to be observed by the employee and employer;
• the employee’s pay, plus any allowances and other elements of remuneration (such as pension contributions);
• the dates of payment of remuneration; the length of the normal working day or week, or the number of working hours;
• if the work pattern is fully or partially unpredictable, the employer must notify the employee about the variable work schedule, guaranteed paid hours, payment for additional work, reference hours, minimum notice period before starting a task, and any minimum deadline before task cancellation;
• the right to education offered by the employer, if applicable;
• details of any applicable collective agreements; and
• the identity of the social security institutions receiving contributions related to the employment relationship, and any employer-provided social security protection.

The information must be provided to the employee in writing through one of the following methods:

• given in a written statement; or
• sent electronically, provided that:
1. the information is accessible to the employee;
2. it can be stored and printed; and
3. the employer retains documentation of the transmission or receipt.

With regard to paid holiday, notice periods, remuneration and working time, the employer may refer in the written details of employment conditions to relevant legislation or collective agreements governing these issues.

The employer must inform the employee in writing of any change in the above-mentioned employment conditions promptly and no later than the effective date of the changes. This does not apply where the change is caused by changes in legislation or collective agreements referred to in the written details.

Employment contracts may be for full-time or part-time work. Contracts can be concluded for an indefinite duration or for a fixed term – that is, ending on a specific date, when a specific task is completed or when a specific event occurs. Fixed-term contracts may be renewed only if there are objective reasons for doing so. There are several specific types of employment contract governed by particular rules, notably apprenticeship contracts.

Employees must not work more than 48 hours a week, calculated on average over a four-month reference period. The 48-hour limit includes overtime.

Employees are obliged to work a reasonable amount of overtime when this is necessary to carry on the employer’s business. There are no statutory limits on the number of overtime hours, except that the 48-hour maximum week includes overtime, nor statutory rules on compensation for overtime. Overtime is usually regulated by collective agreements, which often contain provisions on prior notification to the employee if overtime work is required and on compensation. Overtime is usually compensated by either time off in lieu or a premium rate of pay.

Agreements on flexible working hours whereby overtime is compensated by time off are common. In some cases, especially for white-collar workers, it may be agreed as part of the employee’s pay package that a reasonable amount of overtime work must be carried out without compensation.

Companies are required to implement a reliable working time registration system to measure each employee’s daily working hours, ensuring compliance with requirements on rest periods and maximum working hours. Employees must have access to their data within the system to protect their rights.

The main obligation for the employer in an employment relationship is to pay the employee for the work that they perform. Remuneration is deemed to include all elements of the pay package and all benefits agreed and provided to the employee as payment for work, including basic pay, overtime pay, paid holiday and holiday pay, bonuses, share incentives and taxable non-pay benefits such as employer-provided cars, newspapers and telecommunications facilities (such as mobile telephones and home computers and internet connections).

There is no statutory minimum wage in Denmark and, unless there is a collectively agreed pay arrangement in place, the employer and the employee are free to agree the pay terms.

There are no statutory provisions governing the frequency of payment of wages, and this issue is usually governed by collective agreements. However, the employer is required to state in the written details of essential employment conditions provided to each employee the wage agreed and how often it will be paid. White-collar employees typically receive a fixed salary, paid monthly, while blue-collar workers are hourly paid and receive their wages every two weeks.

Employees are entitled to a minimum of 25 days of paid annual leave. Collective agreements and individual employment contracts often provide for up to five additional days per year.

On 25 January 2018, a new Danish Holiday Act (in Danish: “Ferieloven”) was adopted and introduced “concurrent holiday”. From 1 September 2020, employees can take paid holiday in the same year that the holiday accrues. Employees are no longer required to work for one calendar year before the beginning of the holiday year to be eligible to take paid statutory holiday. The paid holiday entitlement of 25 days remains unchanged. Holiday is accrued at a rate of 2.08 days of leave per month of service during the holiday year, which runs from 1 September to 31 August. Accrued holiday can be taken in the period from 1 September to 31 December the following year (a period of 16 months).

The requirement to give three months’ notice for the main holiday and one month’s notice for any remaining holiday remains unchanged. However, it is no longer possible for an employer and employee to agree in advance in the employment contract to shorten the notice required for holiday to be taken.

The Act also introduces changes to the payment of holiday supplement, whereby employees who receive salary during their holiday are also entitled to be paid a holiday supplement amounting to 1% of their salary. The holiday supplement must be paid in two fixed instalments in May and August, or alternatively it can be paid at the same time as the holiday is taken. (Previously, the holiday supplement was paid in May each year).

Employees must generally take 15 days of their full leave entitlement consecutively in the summer period between 1 May and 30 September – this is known as the employee’s main holiday. The employer and employee may agree to split the main holiday but at least ten days must be taken consecutively. The remaining entitlement should in principle be taken in two five-day blocks, but the employer and employee may agree that the entitlement can be taken as individual days.

Introduction

The Danish Act on Restrictive Covenants (in Danish: “Ansættelsesklausulloven”) applies to all employment clauses entered into on or after 1 January 2016. The Act applies to clauses agreed with employees, which means that directors, owners, consultants, and others in an independent position fall outside the scope of the Act.

Some provisions of the Act, however, have a broader scope of application, including for executive officers and similar positions – eg, an employment clause is invalid if the termination of the employment relationship occurs without the employee having given reasonable cause for it, or as a result of the employer’s material breach of the employment relationship.

Furthermore, a non-competition clause – or the non-compete element of a combined clause (cf below) – cannot be upheld if, in terms of time, geography, or other factors, it goes beyond what is necessary to protect the employer’s legitimate interests or if it unreasonably restricts the employee’s access to work or business opportunities.

Non-Competition Clauses

The following conditions must be fulfilled in order for a non-competition clause to be valid.

• An employer may only validly enter into a non-competition clause if the employee holds a particularly trusted position or if the employee enters into an agreement with the employer regarding the right of exploitation to an invention made by the employee.
• The employee must be informed of the circumstances of the employment that make it necessary to enter into a non-competition clause.
• The non-competition clause may validly be agreed upon before the commencement of the employment relationship, but it can only be enforced after six months of employment.
• An employee cannot be bound by the non-competition clause for more than 12 months after the termination of employment.
• If the non-competition clause is valid for up to six months, the employee must receive compensation equal to at least 40% of their monthly salary at the time of termination. For agreements with a non-competition clause lasting up to 12 months, the compensation must amount to at least 60% of the monthly salary at the time of termination. The full compensation for the first two months after termination (corresponding to either 40% or 60%, as mentioned above) is a lump-sum payment to which the employee is entitled, regardless of whether the employee obtains other suitable employment within the first two months.
• It is also a condition that the information about all of the above conditions is provided to the employee in writing.

If the employer terminates the employment relationship without reasonable cause, or if the employee resigns due to the employer’s breach of the employment contract, the non-competition clause is invalid.

Set-Off When it Comes to Compensation

If an employee who is entitled to receive a compensation of 40% finds other suitable employment, the compensation may be offset against the new salary from the 3rd to the 6th month after termination, but the compensation can never amount to less than 16% of the monthly salary at the time of termination.

For agreements involving non-competition clauses with a duration of up to 12 months, the compensation must – as mentioned above – amount to at least 60% of the monthly salary at the time of termination. In cases of offset due to other suitable employment, the compensation must amount to at least 24% of the monthly salary at the time of termination.

Termination

The employer may terminate a non-competition clause agreement at any time with one month’s notice to the end of a month. If the employee has been employed for more than three months and resigns within six months after the employer has terminated the non-competition clause, the employee is entitled to a lump-sum payment equal to two months’ compensation. The employee is not entitled to the lump sum if they continue in their position.

This provision means that the employee may be entitled to the lump-sum compensation after just three months of employment, even if the six-month seniority requirement has not been met and the clause is therefore not valid.

Refer to 2.2 Non-Solicits for a description of the so-called combined restrictive clause and the conditions that must be met.

Introduction

Non-solicitation of employees clauses are not valid in Denmark unless agreed upon in connection with a business transfer, in which case they are subject to duration limits.

A non-solicitation of customers clause – also comprised by the rules in the Danish Act on Restrictive Covenants – aims to prevent the employee from taking employment with or performing work for the former employer’s customers, agents, suppliers, or other business partners after the termination of the employment relationship. A customer clause is therefore only directed at the employee’s co-operation with specific business partners and, unlike a non-competition clause, does not generally aim to prevent the employee from engaging in competing business activities.

Non-Solicitation of Customers Clauses

The following conditions must be met in order for a non-solicitation of customers clause to be valid.

• The clause can only concern customers with whom the employee has had direct business contact within the last 12 months prior to the notice or termination date. Therefore, the clause cannot be extended to cover the employer’s former customers or current customers with whom the employee has not had direct business contact.
• The clause can only be enforced if the employee has been employed for an uninterrupted period of at least six months.
• An employee cannot be bound by the clause for more than 12 months after the termination of employment.

For a description of the mandatory compensation requirements, refer to 2.1 Non-Competes under “Non-Competition Clauses”.

Combined Restrictive Clause

A combined restrictive clause must satisfy both the conditions for non-competition clauses and for customer clauses, as set out in separate sections. However, a number of additional conditions must be met for combined clauses.

The combined clause may not have a duration of more than six months after the termination date. This means that the duration requirement is stricter than for separate non-competition and customer clauses, each of which may have a duration of up to 12 months.

Compensation must amount to at least 60% of the monthly salary at the time of termination. If the employee finds other suitable employment, the compensation from the 3rd to the 6th month after termination must amount to at least 24% of the monthly salary at the time of termination. If the employee loses the suitable employment, they will again be entitled to the full compensation of 60%.

The full compensation for the first two months after termination is a lump sum to which the employee is entitled, regardless of whether the employee obtains other suitable employment.

In Denmark, data privacy in the employment context is primarily governed by the EU General Data Protection Regulation (GDPR), supplemented by the Danish Data Protection Act (in Danish: “Databeskyttelsesloven”). These regulations apply to all stages of the employment relationship from recruitment to termination and are interpreted and enforced through guidance from the Danish Data Protection Authority (in Danish: “Datatilsynet”), including their HR-specific guidance on data protection in employment relationships.

Employers are considered data controllers and are required to have a valid legal basis for processing employee data, comply with principles such as data minimisation and purpose limitation, and respect employees’ rights to access, rectification, and erasure. Among the practical obligations is the requirement to provide employees with a clear and transparent privacy policy that outlines how their personal data is collected, used, stored, and shared.

The Danish Data Protection Agency cannot issue fines directly; instead, it refers cases to the police for prosecution, and any monetary penalties must be imposed by a criminal court. While the GDPR sets a maximum fine level of up to EUR20 million or 4% of global turnover, the typical Danish fines in employment related GDPR cases have ranged between DKK50,000 and DKK150,000. The Danish Data Protection Agency has previously recommended fines amounting to DKK400,000 where the fine has been lowered by the Danish courts. Thus, fines in Denmark have historically been more modest compared to other EU countries, although enforcement activity is increasing.

Employers should also be aware that special rules may apply to the processing of sensitive data (such as health or union membership information), and certain types of employee monitoring (eg, email or location tracking) require a strong legal basis, clear documentation, and proportionality. Danish guidance places strong emphasis on transparency and data protection impact assessments, particularly in situations involving high-risk processing.

EU/EEA, Nordic Nationals

Individuals from other Nordic countries (Finland, Iceland, Norway, and Sweden) are free to reside and work in Denmark pursuant to an Intra-Nordic Agreement.

Individuals from EU member states, the EEA and Switzerland are also free to reside and work in Denmark pursuant to EU rules on freedom of movement of persons and services.

Such individuals performing work in Denmark, are obligated to apply for an EU residence document within the first three months of the stay in Denmark if the individual expects or intends to stay in Denmark for more than three months.

These individuals are also obligated to register with the Danish authorities if the individual expects or intends to stay in Denmark for more than six months.

The above individuals cannot and should not apply for a Danish work and residence permit.

Third-Country Nationals

For an individual from a third country to be eligible for working and residing in Denmark, he or she must apply for a Danish work and residence permit through the Danish Agency for International Recruitment and Integration (in Danish: “Styrelsen for International Rekruttering og Integration”).

Various special business schemes have been designed to make it easier for highly qualified and/or skilled employees to obtain a work and residence permit in Denmark. When working with these special schemes, it is essential that the individual from a third country (ie, the employee) obtains the Danish work and residence permit before commencing any work in Denmark.

With a Danish work and residence permit, the employee’s job profile may change within the same company which does not require the company to apply for a new work permit. The salary and employment conditions must still correspond to the Danish standards. However, employees who are granted a work and residence permit under the so-called Positive List, are only allowed to work in the job to which they have been granted a permit.

A work and residence permit allows the employee to stay in Denmark for the period that the permit is valid. In addition, a permit allows the employee to stay in the Schengen area for up to 90 days within the latest 180-day period. The permit, however, does not allow the employee to work in other Schengen countries.

The Danish Immigration Authorities may at any time revoke or refuse to extend a work and residence permit if the legal grounds on which it was issued have changed – for example, if the individual from a third country has been terminated from employment, or if the work and residence permit was obtained through fraud or the like.

Employees, who change jobs while staying in Denmark, must apply for a new work and residence permit and must be submitted to the Danish Immigration Authorities before commencing work for the new employer. However, in some situations – according to “the job change rule” – the individual from a third country, who changes from one job in Denmark to another job in Denmark, may commence the new job upon submission of an application for a new work and residence permit based on the employment with the new employer. Consequently, the individual may commence work for the new employer before the processing of the application has been completed by the Danish Immigration Authorities.

A valid work and residence permit will usually lapse if the individual from a third country leaves Denmark for an extended period or is no longer residing in Denmark. If the employee needs to stay abroad for an extended period, for example, if the person is stationed abroad for a period, the employee may apply for a dispensation to prevent the permit from lapsing. However, with a work and residence permit based on the so-called Fast-Track scheme, the employee is exempted from these rules that can cause the permit to lapse and, accordingly, the employee is allowed to give up the Danish address if the person stays abroad for a period.

RUT (the Danish Foreign Service Provider Register) is a mandatory public register maintained by the Danish Business Authority, designed to monitor foreign service providers operating in Denmark. Any foreign company or self-employed individual providing services temporarily in Denmark must register in RUT before commencing work.

The Danish Working Environment Act (in Danish: “Arbejdsmiljøloven”) also applies to remote work, placing responsibility on the employer to ensure a healthy and safe working environment – even when employees are working from home.

This responsibility can be met by ensuring that remote work is planned and organised in a way that allows it to be performed safely and healthily. Employers should provide employees with the necessary equipment to carry out their tasks effectively and safely from home. This may include computers, ergonomic furniture, and other essential tools.

In addition, employers must offer adequate training and instruction to ensure that employees are able to perform their remote work in a safe and healthy manner. This involves identifying potential risks and challenges associated with remote work and addressing them through proper guidance. Employers should maintain open dialogue with employees to discuss the planning and organisation of remote work, ensuring that any concerns are promptly addressed.

Employers must also be aware of specific requirements related to screen work if employees work from home more than two days per week on average. These requirements concern the workspace, monitor, and other fixtures, ensuring they meet established safety and ergonomic standards.

Although employers do not have direct access to inspect the physical conditions of employees’ homes, they are still required to conduct effective supervision and maintain open communication. This can be achieved through regular dialogue and workplace assessments (APV) tailored to remote work. If performance issues or other business-related concerns arise, employers retain the right to modify or terminate remote work arrangements.

In May 2025, the Danish Supreme Court ruled in a case involving a work-related injury during remote work, where an employee tripped over a box she had placed herself. The court classified it as a work-related injury, underscoring the importance of reviewing and potentially updating remote work policies. Such a policy should clearly outline the expectations and responsibilities of both employers and employees, ensuring compliance with legal requirements and safety standards. It can also help reduce the risk of employment-related disputes in cases of policy breaches.

Apart from the Danish rules on the right to absence from work due to pregnancy, maternity, paternity, and parental leave, any other form of sabbatical leave must be agreed upon between the company and the employee.

An employee is also entitled to absence from work when compelling family reasons arise in cases of illness or accident that make the employee’s immediate presence urgently necessary (force majeure).

This is not relevant for Denmark.

The dominant organisations in the Danish labour market are the Danish Trade Union Confederation (in Danish: “Fagbevægelsens Hovedorganisation”) and the Confederation of Danish Employers (in Danish: “Dansk Arbejdsgiverforening”).

The Danish Act on Information and Consultation of Employees (in Danish: “Lov om information og høring”) implements EU Directive 2002/14/EC establishing a general framework for informing and consulting employees in the EU. The Act sets out a number of minimum requirements for how an employer must establish procedures for informing and consulting employees.

However, the Act does not apply if the employer’s duty to inform and consult employees follows from a collective agreement or arrangement that contains provisions which, at a minimum, are equivalent to those of the directive. As a result, employers who are members of an employers’ organisation under the Confederation of Danish Employers (DA) are not covered by the Act, since the Co-operation Agreement between DA and the Danish Trade Union Confederation applies.

In the public sector, employers are similarly covered by framework agreements on employee involvement, and potentially by one of the many co-operation (MED) agreements that exist in the public labour market.

The respective organisations for employers and employees are, through membership, authorised to conclude collective agreements on behalf of their members, and the members of these organisations are bound by the agreements.

Collective agreements are widely concluded between the trade unions operating in the labour market. When employer organisations enter into agreements, those agreements generally apply to all member companies within the relevant sector. The same applies when employee organisations conclude collective agreements – the employee organisation thereby binds all its members to the agreement.

An employer may also independently enter into a collective agreement. However, it is only considered a collective agreement if the counterpart on the employee side represents a collective of employees. This collective must be indeterminate, meaning that the counterpart on the employee side could, for example, be the employees employed at any given time within the company. If, on the other hand, the company enters into an agreement with one or more specific employees regarding wages and employment conditions, this is not considered a collective agreement. Instead, it constitutes individual employment contracts, albeit uniform in content. However, it does not take much for an agreement to be classified as a collective agreement.

Collective agreements are typically initiated either by employees at a company or by a trade union. This usually occurs when the employees or the union approach the company and present a demand for a collective agreement.

When a company is presented with such a demand, it should consider a range of options. The company should assess whether to join an employers’ organisation, accede to an existing collective agreement, enter into a company-level agreement, or conclude a local agreement.

Introduction

Termination of employment contracts is subject to only limited statutory regulation. All employees are protected from unlawful dismissal on a range of specific grounds. Otherwise only white-collar employees are covered by legislation on issues such as notice periods, unfair dismissal and severance payments.

Collective agreements covering white-collar employees may improve on these statutory provisions but cannot reduce them. For blue-collar workers, these matters are regulated only by collective agreements. While collective agreements cover a relatively high proportion of the workforce, there are employees who do not enjoy any protection against unfair dismissal by statute or collective agreement and are covered only by the provisions in their employment contracts (and the rules on anti-discrimination).

Collective Redundancies

The Danish Act on Collective Redundancies (in Danish: “Masseafskedigelsesloven”) requires that employers inform the relevant regional Employment Council and inform and negotiate with the employees’ representatives before any terminations can be effected in relation to collective redundancies.

Negotiations with the employees’ representatives (or the employees) must be initiated with the intention to reach an agreement so that redundancies are either avoided or limited, eg, by replacing or retraining the employees in question. The only procedural requirement in relation to the negotiations is that the negotiations are real and not pro forma.

The rules apply when the number of employees to be dismissed over a period of 30 days is expected to constitute:

• at least 10 employees in businesses employing more than 20 employees and less than 100 employees;
• at least 10% of the employees in businesses employing more than 100 and less than 300 employees; or
• at least 30 employees in businesses employing more than 300 employees.

The days are counted from the date when notices are effected and not from the expiry of the notice period.

The number of employees employed in a business is calculated on the basis of the average number of employees employed during the four last preceding quarters. The average number of employees in a quarter is calculated by counting the number of employees at the expiry of each month. All employees are included in the calculation with the exception of the managing director and independent consultants (who are not considered to be salaried employees).

Employees, who enter into a voluntary agreement on the employer’s initiative, are also included in the calculation of employees that are dismissed and would therefore also trigger the Collective Redundancies Act.

The general rule in relation to collective redundancies is that terminations cannot be effected before the employer has initiated an information and negotiation procedure with the employees’ representatives.

Compliance with the requirements regarding collective redundancies is important, as a breach is sanctioned by payment of compensation and possible fines. Should the relevant Regional Employment Council believe that the rules have not been observed, the Regional Employment Council has the option of filing a police report.

The employer must initiate an information and negotiation procedure with the employees’ representatives as soon as possible before any dismissals in accordance with the Collective Redundancies Act can be legally effected.

The purpose of the information and negotiation procedure is to reach an agreement on how to avoid or reduce the contemplated redundancies and to mitigate the consequences for the employees through activities aimed especially at redeploying or retraining employees made redundant.

The Collective Redundancies Act does not stipulate minimum requirements with regard to the length of the negotiations. Accordingly, the negotiations may be very short (a few days) with an aim to merely resolve points of dispute in relation to the practicalities of the redundancies.

As part of the information and negotiation procedure, the employer must provide the employees’ representatives with all relevant information of importance to the mass redundancies and must in any event notify the employees’ representatives in writing of:

• the reasons for the contemplated redundancies;
• the number and relevant categories of employees to be made redundant, and the period over which the projected redundancies are to be effected;
• the number and categories of employees normally employed with the employer;
• the criteria proposed for the selection of the employees to be made redundant; and
• whether the employees to be made redundant include employees having a right to redundancy payments in accordance with an individual or collective bargaining agreement, and if so the method for calculating these payments.

In addition to informing the employees’ representatives, the employer must also inform the Regional Employment Council in three separate letters. The information must be given in writing and shall include information on the contemplated redundancies and a copy of the above-mentioned information given to the employees’ representatives. The information to the Regional Employment Council must be sent at the same time (ie, the same day) as the employees’ representatives are informed.

Notice Periods

In regard to white-collar (salaried) employees, employers must observe a statutory minimum notice period for dismissal of:

• one month during the first six months of employment; and
• three months after six months’ employment, increasing by one month for every three years of service with the employer, up to a maximum of six months’ notice.

These notice periods apply to the termination of open-ended contracts and also in cases where a fixed-term contract is terminated before its term. The notice periods must run until the last day of a calendar month.

White-collar employees must give at least one month’s notice (up until the end of a calendar month) of resignation. The employer and employee may agree in writing that a longer period of notice must be given by the employee, but in this case the period of notice to be given by the employer must be extended correspondingly.

The above rules on notice periods do not apply if the work is of a purely temporary nature and the employment relationship does not exceed one month. In such cases, the employment relationship may be terminated without notice.

Legislation specifically allows for a white-collar employee and an employer to reach an individual written agreement to the effect that the employee may be dismissed with one month’s notice after 120 days of sickness absence in any 12-month period (except in the case of pregnancy-related sickness). This applies only if the employee is still absent through sickness, and the employer has paid the employee fully during the sickness absence.

In respect of blue-collar employees, notice periods are generally set by collective agreements and vary according to the agreement applicable. To take the example of one of the most important agreements, the Industrial Collective Bargaining Agreement between the Confederation of Danish Industry and CO-Industry (in Danish: “Industriens Overenskomst”), for manufacturing, it provides that, during the first six months of employment, neither the employer nor the employee is required to give notice of termination. After six months’ service, the employer must give 14 days’ notice, rising to:

• 21 days after nine months’ service;
• 28 days after two years’ service;
• 56 days after three years’ service; and
• 70 days after six years’ service.

Further, employees aged 50 and above are entitled to longer notice, this being:

• 90 days after nine years’ service; and
• 120 days after 12 years’ service.

The notice periods on the part of the employee are:

• seven days after six months’ service;
• 14 days after three years’ service;
• 21 days after six years’ service; and
• 28 days after nine years’ service.

With regard to both white- and blue-collar employees, employers must pay employees their usual pay during the notice period. This applies even if the employer releases the employee from his or her duties during the notice period. However, if this occurs, the employee is under an obligation during the notice period to seek other (non-competing) employment and take it up if available. If the employee finds such employment, the employer is generally entitled to offset the income from the new employment against the employee’s pay during the remainder of the notice period (in any event, after the first three months of the notice period in the case of white-collar employees). During the notice period, an employee is still bound by a duty of loyalty towards the employer.

Employees are entitled to payment in lieu of notice only if they are dismissed summarily and this dismissal is not reasonably justified by the employee’s conduct, or if the employee resigns without notice as a result of a material breach of the contract by the employer.

An employer must also give an employee notice, equivalent to the applicable notice of termination, if it wishes to implement material changes to the employee’s terms and conditions, and these changes are, or may be, to the employee’s detriment.

Probationary Periods

For white-collar (salaried) employees, there is a statutory maximum probationary period of three months, which cannot be extended. It is for the employer to prove that the parties have agreed a probationary period, so such a period is normally specified in the employment contract. During the probationary period, the employer can terminate the employment relationship with at least two weeks’ notice, while the employee can terminate the relationship without notice, unless otherwise agreed in the employment contract.

For other employees, the probationary period cannot exceed six months.

In fixed-term employment contracts, the probationary period cannot exceed one-fourth of the duration of the employment. However, the provision does not affect the rules regarding probationary periods for salaried employees.

In fixed-term employment contracts the maximum probationary period is also six months.

No additional probationary period can be agreed upon in connection with the extension or renewal of a fixed-term employment contract.

Collective agreements often contain provisions regulating this issue.

Employers are entitled to dismiss both white-collar and blue-collar employees summarily without notice for gross misconduct such as unexplained absence, theft, engaging in competition with the employer, disloyalty, inappropriate behaviour or insubordination. Depending on the nature of the breach or misconduct, the employer may have to issue a warning first. If a white-collar employee is dismissed for gross misconduct, the employer is entitled to compensation for any loss incurred as a result. However, such cases are not very common because the burden of proof is on the employer.

Employees are also entitled to resign without notice in the event of a material breach of the employment contract by the employer. In all cases of summary dismissal or resignation, the party terminating the contract must do so swiftly and without delay.

For white-collar employees and senior executives, it is common for companies to enter into separation agreements that include, among other things, a full and final settlement of any claims the parties may have against each other. There are no mandatory rules governing such agreements, which means that the provisions of the Danish Contracts Act (in Danish: “Aftaleloven”) apply. This includes the general clause that empowers Danish courts to set aside or modify any term deemed unreasonable or excessively burdensome. However, it is very rare for such agreements to be challenged, let alone set aside, by the Danish courts.

Employers are prohibited from dismissing employees on the grounds of:

• their gender, race, skin colour, religion or belief, political opinion, sexual orientation, national, social or ethnic origin, age or disability, or on the grounds of the employee claiming equal treatment on the basis of these criteria;
• requesting equal pay;
• their part-time (or full-time) status, or because they have refused to move from full-time to part-time work (or vice versa), or have requested a move from full-time to part-time work (or vice versa);
• having made any claim under the legislation governing fixed-term contracts;
• pregnancy or pregnancy-related illness;
• requesting or taking pregnancy, maternity, adoption, paternity or parental leave;
• requesting or taking leave to care for seriously ill relatives;
• requesting or taking leave to perform national service;
• running as a candidate in municipal council elections or being elected to a municipal council;
• membership or non-membership of any trade union or a particular trade union; and
• making a disclosure under the whistle-blowing scheme.

If an employee is dismissed on any of these grounds, the employer must usually pay compensation to the employee, set by the relevant court or tribunal. The compensation is not subject to a maximum, but case law has established levels of compensation from six to 12 months’ salary in cases of dismissal on the grounds of pregnancy, or requesting or taking maternity, paternity or parental leave, depending on the employee’s length of service and the relevant circumstances.

In some circumstances – for example, dismissal for requesting or taking pregnancy, maternity, adoption, paternity or parental leave or requesting equal pay – employees may seek reinstatement. Reinstatement cannot be ordered if it is considered unreasonable in the circumstances to maintain or restore the employment relationship. In practice, reinstatement is rarely awarded.

Most collective agreements provide special protection against dismissal for workplace trade union representatives, providing that they may be dismissed only for “compelling” reasons. Many collective agreements also provide that representatives may not be dismissed before the relevant trade union and employer or employers’ organisation have negotiated the terms of termination, or the union has had a chance to test the dismissal’s fairness through industrial arbitration. Some agreements stipulate an extended period of notice for union representatives. However, in the event of gross misconduct, union representatives may be dismissed without notice, in the same way as other employees.

White-Collar

White-collar (salaried) employees who have at least 12 months’ continuous service with the employer may be dismissed only if this is considered to be reasonably justified by the conduct of the employee or the circumstances of the business. If the employer dismisses a white-collar employee in breach of this provision, it must pay compensation to the employee. The amount of compensation must be determined by the relevant court with regard to the employee’s length of service and other circumstances. The compensation is generally capped at the employee’s pay for half of the statutory notice period to which the employee is entitled but may be as high as:

• three months’ pay for employees over 30 years of age;
• four months’ pay for employees with at least ten years’ service with the employer; and
• six months’ pay for employees with at least 15 years’ service with the employer.

White-collar employees must, at their request, be provided by the employer with a written statement of the reason for their dismissal.

Blue-Collar

With regard to blue-collar employees, general protection against unfair dismissal is provided only by collective agreements. Notably, the general agreement between FH (the Danish Trade Union Confederation) and DA provides minimum rules in this area for much of the private sector. The agreement provides that “no arbitrary action shall take place in connection with dismissals” and that dismissal should be warranted by the situation of the employee or of the company. The agreement lays down a procedure for claiming unfair dismissal, as follows.

• Employees with at least nine months’ continuous service with the employer are entitled to request the reason for their dismissal in writing.
• If an employee claims that the dismissal is unfair and unwarranted by his or her own situation or that of the company, the employee can seek to have the matter settled by representatives of the employer and of the relevant local trade union. These negotiations must normally be completed within two weeks of notice of dismissal being given.
• If no agreement is reached in the local talks, the relevant trade union or the employer can refer the matter to negotiations between the national union and national employers’ organisation.
• If the national talks do not resolve the matter, the relevant trade union or the employer can, within seven days, refer the case to a special joint dismissals tribunal (Afskedigelsesnævnet) set up by the central trade union and employers’ organisation. The decisions of such tribunals are binding and enforceable by the courts.
• The dismissals tribunal hears the case and makes a “reasoned award”. If it finds the dismissal unfair, and unwarranted by the situation of the employee or the company, it may award reinstatement or compensation for the employee. The amount of compensation depends on the circumstances of the case and the employee’s length of service, but is capped at 52 weeks’ pay. Reinstatement cannot be ordered if there has been a breakdown in relations between the employer and the employee such as to preclude any continuation of the employment relationship.

The above unfair dismissal procedure applies only to blue-collar employees with at least nine months’ service with their employer.

Thus, with regard to both white- and blue-collar employees, whether rules are based on legislation or collective agreements, employers may generally terminate an employment contract only (if the employer is to avoid having to pay compensation) if this is justified by the circumstances of the employer’s business or the conduct of the employee.

Justifiable circumstances relating to the employer’s business notably include a shortage of work (that is, redundancy) for financial or operational reasons. If the employer is able to prove a need for staff reductions, such dismissals will usually be considered reasonably justified.

Dismissal on the grounds of an employee’s conduct covers, for instance, under-performance, disloyalty and lack of co-operation. In the majority of such cases, for the dismissal to be fair, the employer must give one or more written warnings before moving to dismissal, to allow the employee to remedy the situation.

The remedy for unfair dismissal is usually compensation. While reinstatement is an option, especially for blue-collar employees, it is rarely awarded in practice.

Refer to 7. Termination.

There are no rules specifically governing the digitalisation of employment disputes.

Any cases related to breaches of the statutory rules relating to dismissal are generally dealt with by the ordinary civil courts. Most civil proceedings take place in the district courts. There are 24 district courts in Denmark. An appeal from a district court lies with the High Court of Western Denmark or the High Court of Eastern Denmark. The High Court of Western Denmark handles all appeals from the district courts of Jutland, whereas all judgments from the Zealand district courts, including the Copenhagen City Court, are handled by the High Court of Eastern Denmark.

The Supreme Court is a court of appeal for judgments and interlocutory orders made by the High Courts, including the Maritime and Commercial Court. In appeal cases both the factual and legal circumstances of the case are heard.

Where rules are based on collective agreements, individual cases are normally dealt with by tribunals and procedures set up by employers’ organisations and trade unions themselves, breaches of collective agreements are dealt with by the Labour Court (in Danish: “Arbejdsretten”).

In alleged cases of discriminatory dismissal, the employee may seek redress through the statutory Board of Equal Treatment (in Danish: “Ligebehandlingsnævnet”).

In individual employment contracts, the parties may include an arbitration clause stipulating that any disputes will be conclusively resolved through arbitration. The main advantages typically cited for arbitration clauses are the potential for faster proceedings and the resolution of disputes without public exposure. However, arbitration can often be more complex than court proceedings, as arbitration awards are not subject to appeal. Moreover, arbitration can be expensive, as the parties are responsible for covering the costs associated with the arbitration tribunal. Additionally, employees are typically not eligible for legal aid in arbitration cases.

Despite the inclusion of an arbitration clause, questions may later arise as to whether one of the parties can instead bring the matter before the ordinary courts. Under the rules of the Danish Arbitration Act (in Danish: “Voldgiftsloven”), courts are required to dismiss cases that, by mutual agreement, are designated for resolution through arbitration. This provision must be considered alongside Section 21 of the Salaried Employees Act, which stipulates that the Act cannot be modified by agreement to the detriment of the employee. An arbitration agreement may be considered detrimental to the employee’s legal position, particularly due to its financial implications.

Several Danish court decisions suggest that clauses requiring arbitration for disputes concerning the interpretation of an agreement do not necessarily preclude claims involving violations of the Salaried Employees Act from being brought before the courts. This determination depends on the specific circumstances of each case, including whether the Salaried Employees Act applies, whether the clause is clear and explicit, and whether it has been clearly agreed upon by the parties.

The costs connected with a lawsuit in Denmark are:

• court fees;
• costs connected with the litigation, including preserving evidence – eg, expert opinions, witness fees, translations, etc; and
• legal fees.

A party must pay all costs connected with a lawsuit, at least until the case has been closed.

As part of the judgment, the court awards costs to the winning party. As a general rule, the unsuccessful party must reimburse the other party for all costs connected with the lawsuit. In reality, the successful party’s costs are only partly reimbursed, the reason being that only court fees and costs connected with expert witnesses, etc, are covered in full, whereas legal fees – ie, lawyers’ fees – are awarded discretionarily on the basis of the amount in dispute. A party must therefore be prepared to bear parts of his/her own costs, even if the party succeeds in the lawsuit.

The court may, under specific circumstances, decide to derogate from the general rule that the unsuccessful party bears all costs, for instance, if the case is of general public importance. Another reason could be that both parties are responsible for the dispute leading to the lawsuit.