In Denmark, work-related injuries are generally handled pursuant to the Mandatory Workers’ Compensation Act and the Danish Tort Liability Act.

The Mandatory Workers’ Compensation Act

All employers in Denmark are obliged to take out mandatory workers’ compensation insurance according to this Act. For injuries covered by this Act, compensation for permanent injury and compensation for loss of earning capacity can be paid if the conditions are met. The types of injury eligible for compensation under the Act are (i) accidents and (ii) occupational diseases.

Further, it is possible to be compensated for costs related to medical treatment and/or rehabilitation when essential for achieving optimal recovery as well as – from 1 July 2024 – educational compensation, if certain requirements are met.

The Danish Tort Liability Act

In the event an employer (or another tortfeasor) is liable for an employee’s injury, the injury will also be handled pursuant to this Act. Just like injuries being handled pursuant to the Mandatory Workers’ Compensation Act, compensation can be paid for permanent injury and loss of earning capacity. In addition, compensation can be paid for loss of earnings, pain and suffering as well as other losses.

Further, under certain circumstances it is also possible to be compensated for medical treatment and/or rehabilitation under this Act.

Certain damages can be claimed under both the Mandatory Workers’ Compensation Act and the Danish Tort Liability Act. However, to prevent instances of “double compensation”, if a particular claim qualifies under both Acts, compensation will be granted under only one of them. If a claim qualifies under both the Mandatory Workers’ Compensation Act and the Danish Tort Liability Act, the former takes precedence.

However, as the compensation amount for loss of earning capacity is not calculated identically under both Acts, this disparity results in situations where:

• in cases covered under both Acts, there may be a residual compensation that must be pursued under the Danish Tort Liability Act; and
• damages or types of compensation exclusive to the Danish Tort Liability Act can only be sought under that legislation.

Such cases are commonly known as “differential claims”.

Generally, employers’ liability insurers have an interest in ensuring that as much as possible can be covered under the Mandatory Workers’ Compensation Act. Against this background, it is particularly important to keep track of any legislative initiatives that have or may have an impact on the calculation of the claims covered under both Acts.

In the spring of 2023, a significant legislative initiative commenced, with the introduction of a bill proposing amendments to the Mandatory Workers’ Compensation Act. The bill, which focuses on altering the methods used to calculate claims under the Act, was adopted in December 2023 and came into force on 1 July 2024. Some of the most important aspects of the bill will be mentioned below under New Legislation.

New Developments in Relation to the Mandatory Workers’ Compensation Act

Notice of Principle No 12-24 (28 June 2024) – insured persons covered by the Act:

The Mandatory Workers’ Compensation Act is based on the territorial principle, which means that the law applies to work performed in Denmark. The principle will apply, even if neither the injured person nor the employer is resident and/or domiciled in Denmark. Consequently, it is irrelevant whether the injured party has a special connection to Denmark or is a Danish citizen, nor does it matter whether the employer is based abroad. Instead, the only decisive factor is whether the injured person – at the time of the event/injury – was performing work in Denmark.

The law does not require that the work must have had a certain duration but provides coverage from the beginning of the employment relationship. A person will be covered under the law immediately after the start of work if the conditions for an occupational injury are otherwise met.

The principle of territoriality will be deviated from in cases where certain international rules nullify or modify the territorial principle. If the injured employee is from another EU country where the EC Regulation on the coordination of social security schemes (No 883/2204 of 29 April 2004) applies, or if the injured party is from a country with which Denmark has entered into a collective agreement, it is the EC Regulation – or the relevant collective agreement – that will regulate the choice of law.

Accordingly, if a person from a country not covered by EU regulations or international conventions and agreements is injured while performing work in Denmark, he/she will be covered by the Mandatory Workers’ Compensation Act if the other conditions are met.

The specific case giving rise to this Notice of Principle No 12-24:

In this case, the National Social Appeals Board (the highest authority in this area in Denmark) dealt with a specific question of whether a foreign worker performing work in Denmark was covered by the Mandatory Workers’ Compensation Act.

The injured person was a Ukrainian citizen who had signed an agreement to work for a Russian employer. The work was performed during performances in a circus in Denmark. The agreement was made between a Danish company and a foreign company. The person suffered an accident when she fell from a height of 6 to 7 metres.

The Board ruled that the territorial principle in the Mandatory Workers’ Compensation Act should not be derogated from, as the injured person came from a country that is not covered by EU rules or international conventions and agreements that derogate from the territorial principle.

Further, the Board ruled that the injured person was covered by the scope of the Mandatory Workers’ Compensation Act at the time of the injury as she was employed to perform work in Denmark at the time of the injury and the injury occurred during the performance of this work.

The fact that the employer was foreign was deemed irrelevant.

Mental Health-Related Injuries

In 2020, the Mandatory Workers’ Compensation Act specifically included mental health-related injuries in the definition of a potential work-related injury. Due to this, the number of reported mental health-related injuries has increased significantly, and this development seems to be continuing.

According to the recent 2023 Report (published in July 2024) from AES (Labour Market Insurance), in 2020, 3,970 cases of mental health-related injuries were reported as occupational diseases. By 2023, the number of mental health-related injuries reported as occupational diseases had risen to 5,569, an increase of more than 40%. Mental health-related injuries include diagnoses such as PTSD but also the potential consequences of, for instance, bullying.

However, despite the rise in the numbers of reported mental health-related injuries as occupational diseases, the number in which coverage of such injuries is actually provided remains relatively unchanged, in fact resulting in a decrease of the coverage percentage.

As an example, in 2020, 254 out of the 3,970 mental health-related injuries reported as occupational diseases were covered by the Mandatory Workers’ Compensation Act.

For comparison, in 2023, 256 out of the 5,569 mental health-related injuries reported as occupational diseases were covered by the Act.

New Supreme Court Ruling in Relation to Work-From-Home Related Injuries

On 23 January 2024, the Danish Supreme Court handed down a decision about an injury that had occurred while A, the employee, was moving his/her work desk at home.

A, who worked from home four out of five days a week, moved his/her desk from the ground floor of his home to the first floor on a day off in October 2016. While carrying the desk up the stairs, A lost the footing and fell down the stairs, causing injury.

In March 2021, the National Social Appeals Board ruled that the incident was not an occupational injury. The case before the Supreme Court concerned whether there was a basis for setting aside the Board’s decision.

The Supreme Court stated that the starting point in a case such as the present one, which concerned an accident in connection with the moving of a work table and thus the furnishing of the home, is that the accident cannot be considered an occupational injury unless the injured party proves that the action had a necessary or natural connection to the work.

The Supreme Court ruled that A had not proved this. The Supreme Court referred to the fact that A’s employer had not asked A to move the work table, that A’s employer had not had any influence on where in the home the work table was placed, and that it had not been proven that the move was necessary to fulfil health and safety regulations. There was thus no basis for setting aside the Board’s decision that the incident was not an occupational injury.

The Eastern High Court had reached the same conclusion.

New Legislation

As mentioned above, significant amendments were made to the Mandatory Workers’ Compensation Act with the adoption of Act No 1541 of 12 December 2023. In August 2024, the applicable law is the Consolidated Act No 919 of 25 June 2024.

Article 1 of the Act sets out its central objective (the “purpose clause”) offering compensation and damages to individuals (or their heirs) following a work-related injury as well as bolstering the injured individuals’ chances of re-entering the workforce post-injury. The aim is to ensure that they achieve stable employment and to support their financial independence. Another aim is to ensure a more speedy handling of work-related injury claims.

A novel proposition within the bill is the concept of “Educational Compensation”, cf. Article 18 a-h. This grants the injured party an opportunity to pursue educational qualifications if it is not possible to return to the job he/she had at the time of the injury if certain requirements are met. The objective is to solidify or enhance his/her connection to the job market. This compensation specifically targets individuals expected to have a permanent injury rate at 10% or higher, cf. Article 18 a (2). The rate of permanent injury is determined by AES, either using their guidelines or through an estimation if the injury is not listed, and more than one work-related injury can be included in this assessment.

AES will annually determine a new amount of compensation for permanent injury. As of 2024, an injury rated at 100% leads to a compensation of DKK1,013,500.

Notably, the Act indicates that those with an anticipated permanent injury of 10% or more tend to demonstrate a weakened connection to the job market post-injury, a trend that remains consistent over time.

Moreover, the bill ensures that there is an offset mechanism. If the injured party qualifies for educational compensation under the Mandatory Workers’ Compensation Act, this can be offset against any compensation for lost earnings he/she might receive under the Danish Tort Liability Act (if applicable), particularly if a liable tortfeasor (such as an employer) is identified.

The introduction of educational compensation is a significant innovation in the field of work-related injuries in Denmark. By equipping injured individuals with new educational qualifications, the scheme sets out to reduce, if not eliminate, any loss of earning capacity.

The Act ensures that a tortfeasor liable for damages – or their liability insurance company – is given extended access to reimbursement of compensation for loss of earnings in accordance with the Danish Tort Liability Act, cf. Article 29(2).

Further to the above, the way that compensation for loss of earning capacity is calculated in the Mandatory Workers’ Compensation Act has been changed. Before the changes, this loss was possible from 15% and then using 5% increments onwards up to 100%. This has now changed, as although it still starts at 15%, the increments are now 10% from 20% onwards.

As the percentage increments regulating compensation for loss of earning capacity in the Mandatory Workers’ Compensation Act and the Danish Tort Liability Act were identical before the new amendments, and the latter have not been changed, this is expected to give rise to more “differential claims”.

Finally, it is worth noting that for workplaces where employees are at risk of being exposed to violence or violent incidents, the new amendments have introduced an obligation for both public and private employers to take out a “Violence Injury” insurance policy that will cover claims for compensation and damages for personal injury under the Danish Tort Liability Act, cf. the Mandatory Workers’ Compensation Act, Article 49 a.

As the new Act has only recently entered fully into force, it will be interesting to see whether these changes will give rise to more “differential claims” or if – as many stakeholders have advocated and hoped for in years – this will result in a more harmonic integration of the Mandatory Workers’ Compensation Act on the one side with the Danish Tort Liability Act on the other.