Whether you are an employer or an employee, it is important to know your rights and responsibilities. In this expert interview we speak with Michael Møller Nielsen, an employment law expert and partner in Lund Elmer Sandager, to find out more.
How are the current labour market conditions?
The Danish labour market model is known as the “flexicurity” model. This is due to the combination of a relatively high social benefit protection for each individual and a high degree of flexibility with respect to termination of employment and mobility between employers.
Blue collar workers are to a large extent covered by collective bargaining agreements. In fact, the Danish labour market is characterised by a long tradition of employers and trade unions negotiating and entering into collective bargaining agreements for blue collar workers. Certain groups of non-academic salaried employees (primarily office and administrative staff as well as sales assistants) are – depending on the industry – in most cases covered by collective bargaining agreements.
In general, the Danish labour market model is characterised by the terms of employment, such as salary and salary-related benefits (e.g. additional holidays, pensions, regulation of overtime work and other specific terms of employment) which are established and agreed between the Danish labour market organisations without interference from the state or governmental bodies.
The overall framework of the governing matters, such as work environment-related issues and entitlement to statutory holidays, leave in connection with childbirth and (for salaried employees) the entitlement to pro rata bonus in case of resignation, is settled by Danish legislators.
In 2020, the employers and trade unions will negotiate the conditions for the collective bargaining agreements for the next validity period, which will approximately be a three-year agreement from 1 March 2020 to 28 February 2023.
The Salaried Employees Act contains mandatory rules on length of notice periods, compensation in case of unfair dismissal, severance pay, sick pay and maternity leave entitlements. Additionally, restrictive covenants are regulated in the Danish Act on Restrictive Covenants.
All employees are also protected by the Danish Holiday Act which grants 2.08 days of paid holiday per month of employment and the entitlement to take 25 days holiday per annum. Furthermore, working time regulation sets a maximum average working week of 48 hours based on a consecutive four-month period.
Have there been any recent regulatory changes or interesting developments?
The European Parliament and the European Council adopted a directive on work-life balance in April 2019. According to this, two months of the total parental leave is earmarked for the father of the child. If the father does not exercise his right to paternity leave, it will not be possible to transfer the related financial support for the earmarked paternity leave to the mother.
This directive thus reduces the maximum period for which the mother is entitled to receive financial support during her maternity leave. Denmark is expected to implement earmarked parental leave for fathers in the near future.
How are equal opportunities afforded?
Most of the equal treatment regulation in Denmark is largely based on EU directives prohibiting discrimination.
The Differential Treatment Act prohibits employers from direct or indirect differential treatment of employees or job applicants on the grounds of age, disability, race, skin colour, religious beliefs, political orientation and national, social or ethnic origin.
According to the Equal Treatment Act, an employer is prohibited from discriminating on the grounds of gender in relation to working conditions, including termination of employment. The act provides for the possibility of annulment of dismissals conducted on the grounds of pregnancy, maternity leave or adoption, or payment of compensation for acts of discrimination in contravention of any protected criterion. Any employee associated with someone with protected characteristics is also protected. Victimisation of employees who have acted to enforce their rights is prohibited. From the outset, the employer is responsible for workplace harassment.
Under EU law, atypical workers are protected against discrimination where they are:
- part-time workers;
- fixed-term workers; or
- employed through a temporary agency.
The pro rata temporis principle applies for all part-time workers. This means that part-time workers must enjoy the same employment conditions as comparable full-time employees on a pro rata basis. Fixed-term employees may not be treated less favourably than permanent staff. In general, a fixed-term contract may, from the outset, be extended only once; although where there are objective grounds to do so, it may be successively extended.
Temporary agency workers are entitled to protection with regard to working time, overtime, breaks, resting periods, night shifts, holiday, bank holidays and pay, at least at the same level as those employed directly by the employer making use of the temporary agency workers. The employer shall inform the temporary agency worker of positions available at the company. Exceptions apply where collective bargaining agreements are applicable.
What discrimination challenges still exist?
Studies show that discrimination challenges still exist in relation to people with immigrant backgrounds. Effort is made in solving these challenges, particularly by changing personnel policies and recruitment strategies.
What impact are automation, digitisation and artificial intelligence having on the workplace?
Automation, digitisation and artificial intelligence have become increasingly important and are some of the main reasons why The General Data Protection Regulation (GDPR) was developed.
GDPR regulates the processing of personal data, including an employer’s processing of the employees’ personal data. Employees have the same rights as other data subjects according to the GDPR, including the right to access personal data processed by the employer, the right to deletion, the right to restriction of processing and the right to data portability.
Employees also have the same right as other data subjects to be informed about the employer’s processing of personal data according to Articles 13 and 14 of the GDPR.
The Danish Data Protection Act supplements the GDPR and – in certain areas – provides for even greater protection of personal data, including in relation to the processing of social security numbers, which generally requires consent unless the processing is required by law.
It is a general principle in both the GDPR and the Danish Data Protection Act that the employer – as the controller of employees’ personal data – must have a legal basis for processing employees’ personal data, and that the employer must process such data in accordance with the general data processing principles according to Article 5 of the GDPR.
As a main rule, it is lawful for an employer to process employees’ personal data where the processing is necessary for the employer to fulfil its obligations according to the employment contract and its duties according to applicable legislation.
What role does immigration play in filling labour shortages and skill gaps in your jurisdiction?
There has recently been a lack of engineers and IT specialists. Some Danish industries are therefore in a combined effort putting pressure on the Danish Parliament to make it easier for companies to recruit foreigners and integrate them at the workplace and in Danish society in general.
During recent years, large-scale global non-U.S. corporations have penetrated the Danish
market at a faster pace than previously experienced. These corporations typically base their business case in Denmark on making use of non-Danish manpower, for instance Indian or Chinese specialists. This development has led to a large intake in Denmark of particularly these two groups of nationalities. These corporations wish to be heard by the lawmakers as well.
What legal issues do employers often overlook during a termination process?
Generally, in order to ensure that a termination is to be deemed fair when the reasons relate to the employee, a warning is often required, in particular if the reason for termination is lack of performance or collaboration. The employee must be given the opportunity to adapt to the workplace requirements, including improving performance or collaboration vis-á-vis colleagues and management before dismissal is enacted.
Which dispute resolution methods do you find are most commonly recommend to employers and why?
Any disagreement between the parties, including the reason for termination, is often initially dealt with through out-of-court negotiations either between the parties directly or between the employer and the employees’ union. However, out-of-court negotiations are not mandatory.
Arbitration is rarely included in employment contracts and only in agreements with top executives. The ordinary courts have jurisdiction over all disputes, however, if the employment is covered by a collective bargaining agreement, and the employee is a member of the trade union being a party to the specific collective bargaining agreement, the Labour Court and the Industrial Tribunals have sole jurisdiction over the matter.
Currently, case processing before the ordinary courts is lengthy. It takes between 12 and 18 months from submission of the claim before the actual court hearing is conducted. Case processing before the industrial tribunals is somewhat more expedient, but can vary from three to 12 months, and in some cases even longer.
Many Danish companies have implemented their own individual guidelines on how to prevent and handle harassment, bullying, victimisation and so on in the workplace. This is highly recommended, since it can lead to both temporal and financial savings.
Michael Møller Nielsen is an employment law expert and partner in Lund Elmer Sandager. Michael has solid experience with negotiation of collective bargaining agreements, bonus schemes and collective redundancies on behalf of companies acting especially in the aviation, food and technology industries. He also takes on litigation on behalf of senior managers. Michael has a very international profile, and his client portfolio thus includes publicly listed companies in different jurisdictions and clients outside Denmark. Furthermore, Michael has broad experience within dispute resolution, corporate law, marketing law, litigation and due diligence in connection with transactions and outsourcing. For more information please visit www.lundelmersandager.dk