an alliance of employers counsel worldwide Denmark

Transcription

1 Employment Law Overview 2017 Denmark

2 Table of contents I. General 01 II. hiring practices 03 III. employment contracts 04 IV. working conditions 06 V. Anti-Discrimination Laws 08 VI. Social Media and Data Privacy 09 VII. Authorizations for Foreign Employees 10 VIII. Termination of Employment contracts 11 IX. Restrictive Covenants 13 X. RIGHTS OF EMPLOYEES IN CASE OF A TRANSFER OF UNDERTAKING 14 XI. TRADE UNIONS AND EMPLOYERS associations 15 XII. Social Security / Healthcare / Other Required Benefits 16

3 I. General 1. Introductory Paragraph The legal regime governing employment relationships in Denmark is generally more liberal and favourable towards the employer than in many other EU countries. This is basically due to the fact that the Danish labour market model is a negotiation model and accordingly, the labour market is basically ruled by the labour market parties, however framed by mandatory legislation protecting employees rights, including a legal framework originating from the EU. According to the principle of freedom of contract, the parties of an employment agreement are free to agree on the content and terms of their agreement to an extent that is substantially greater than in most other European jurisdictions. Danish employment law, however, does contain basic mandatory provisions. Almost all disputes are settled in civil court proceedings. Where collective bargaining agreements apply, the instance is either the nationwide Labour Court or Labour Arbitration. It should be noted that quite a number of disputes are solved by the parties before court proceedings are initiated. 2. Key Points Employees who are not from EU/EEA will find it very difficult to obtain permission to work in Denmark; The legal framework surrounding the employment relationship is, compared to other European jurisdictions, considered very liberal and in favour of employers interests; The Danish labour market model is a negotiation model; accordingly mandatory legislation on basic terms such as salary level and the number of daily working hours do not exist and will be based on agreement individual or collective bargaining agreement; Denmark has the highest tax level in the World, but a special 25 % tax scheme applies to foreign experts taking up work in Denmark; The Danish labour market is well-organised and wildcat strikes happen very rarely. 3. Legal Framework A Danish employment law matter must be assessed from various angles such as whether the employee in question is an executive, a white-collar employee or a blue-collar employee. The legal framework surrounding members of the topmanagement is solely a matter of contract interpretation, but at the employee level, a clear distinction must be made between white-collar and blue-collar employees. White-collar employees are protected by the Danish Act on Salaried Employees, while the legal framework protecting blue-collar employees is determined by either individual or collective bargaining agreements, and of course, mandatory legislation as well. Certain rules cover all Danish employees, and certain rules solely protect special employees, e.g. seamen, or specific areas, e.g. share options or holiday provisions. Unfortunately, in Danish employment legislation no such thing as an aggregate employment law constitution exists. 4. New Developments By 1 January 2016 Danish employers ability to use noncompetition and non-solicitation clauses as well as antipoaching clauses was reduced. The Danish Parliament passed a legislative act regarding employment clauses, which consolidates the different laws on the use of the different types of employment clauses into one single law, including non-competition clauses, non-solicitation of customer clauses, non-solicitation of employee clauses and combined clauses. New rules apply to all clauses concluded from 1 January 2016, while clauses concluded before the term of the year are subject to the previous rules. The new rules say that neither non-competition nor non-solicitation of customers clauses can exceed a period of 12 months after the expiry of the employee s employment. Furthermore, a combined clause was introduced, and this instrument combines non-competition and non-solicitation of customers and the period for the combined clause cannot exceed six months. The new rules entail that nonpoaching of employees clauses are not allowed in the future. Finally, compensation for entering into non-competition clauses and non-solicitation for 01

4 02 customers clauses entail the payment of 40 % or 60 % of the employee s remuneration during the period, these clauses are upheld. However under certain circumstances, the payment of the compensation to the employee will be reduced to the payment of either 18 % or 24 % of the remuneration to the employee.

5 II. Hiring Practices 03 The recruitment of employees in Denmark must be conducted in a non-discriminating way. This means that it is not allowed for an employer to obtain or receive information as to race/skin color, faith/religion, political view, and sexual preferences, national, social or ethnical origin. Accordingly, an employer cannot obtain nor receive the above information. Furthermore, it is not allowed to discriminate due to sex, age or handicap. According to the Danish Act on the Use of Health Data, an employer during a recruitment process is only allowed to collect health data, which is relevant for determining whether the candidate is suffering from or has suffered from a disease and if the disease will be of significant importance to the performance of the specific job in question. Accordingly, the employer is not allowed to ask general questions such as information on the candidate s number of sick days and general health condition. On the other hand, prior to the commencement of the employment, the candidate must submit information either voluntary or upon the employer s request, as to whether the candidate suffers from a disease or shows symptoms of a disease that might materially affect the working capacity of the candidate with respect to the job in question. During a recruitment process, the employer is allowed to carry out a background check on confidential and sensitive data if the candidate has specifically accepted that such a background check is being carried out.

6 III. Employment Contracts Minimum Requirements According to the Employment Protection Act, the employer is obliged to provide the employee with an employment certificate with certain information containing the most important terms of the employment in writing within one month from the starting date. At least the following information must be included: Information about the identity of the employer and the employee Date of employment and work place Information about the position Employment term Notice period Salary and other benefits Number of vacation days Working hours Collective bargaining agreement, if applicable In addition, the certificate must include information regarding, inter alia, bonuses (and how such bonuses are calculated), overtime pay, time off in lieu of payment for overtime and salary during maternity/paternity leave. It is the responsibility of the employer to ensure that the information provided is accurate, up-to-date, and not misleading. Non-compliance with the Act may entitle the employee to a compensation, which, according to the most recent case law, will be in the level of EUR , depending on the circumstances. fixed term employees employed through a temporary employment agency. Non-compliance with the Act may entitle the employee to compensation. 3. Trial Period New white-collar employees are generally employed subject to an initial probationary period of maximum three months during which either party may terminate the relationship on short notice and without the need for just cause. Such an arrangement must be agreed expressly as it will not be implied into the contract. For blue-collar employees, individual or collective agreements also often provide for new employees to be subject to a very short notice period during the first period of employment. 4. Notice Period For white-collar employees, the Salaried Employees Act stipulates the following notice periods based on the individual employee s length of service: 2. Fixed-term/Open-ended Contracts The Danish Act on Fixed Term Employment provides that the employer cannot treat a fixed term employee differently than a comparable permanent employee, unless justified by objective circumstances. Consequently, fixed term employees are generally entitled to receive the same benefits as permanent employees. In a fixed term employment, the end of the employment is determined by objective conditions such as a specific date, completing a specific task, or the occurrence of a specific event. However, the Act does not apply to The white-collar employee may terminate the employment with a one-month notice regardless of seniority. It may be agreed in writing that a longer period of notice shall apply, provided the period of notice by the employer is extended correspondingly. A salaried employee who has been continuously employed for 12, or 17 years is entitled to severance pay

7 05 corresponding to one, or three months salary in case of dismissal by the employer. The length of notice when terminating a contract with a blue-collar employee is solely based on an individual or collective bargaining agreement. Typically, such notice is much shorter than for white-collar employees and is typically between days depending of seniority.

8 IV. Working Conditions Minimum Working Conditions The terms and conditions for employment are regulated in the individual employment agreement and/or in the collective bargaining agreement (if applicable). Mandatory rules regarding, inter alia, working hours, working environment, equality and non-discrimination, must also be observed. 2. Salary There are no provisions regarding minimum salary stipulated in law. Thus, the employer and the employee are free to agree on any salary level. However, collective bargaining agreements will as a general rule contain provisions regarding a minimum salary level as well as a minimum annual salary rise. 3. Maximum Working Week The Danish Act on Working Hours provides that the average working hours in a period of seven days, as calculated over a period of four months, cannot exceed 48 hours including overtime. The Danish Act on Working Environment stipulates that, within a period of seven days, the employees are entitled to a weekly day-off. The weekly day-off should as often as possible be on a Sunday. Furthermore, the working hours should be arranged in such a way that the employees are given a time of rest of at least 11 consecutive hours within each period of 24 hours. 4. Overtime There are no statutory rules regarding the extent of overtime, that can lawfully be worked, nor the payment for overtime work. However, the Act on Working Hours must be observed. In the absence of a collective agreement, it is presumed that the employee has an implied duty to undertake overtime work to a reasonable extent. Depending on the agreement, the payment for overtime work is either included in the salary or paid at a special hourly rate. 5. Holidays The Danish Holiday Act provides that employees are entitled to five weeks holiday per year corresponding to 25 working days, irrespective of whether the employee has earned the right to paid holiday. The employee earns the right to 2.08 days of paid holiday for each month of employment in a calendar year (qualifying year). Holidays must be taken during the holiday year from 1 May to 30 April following the qualifying year. The employer shall, after consultation with the employee, fix the time at which the holiday is to be taken. However, as a general rule, the employee is entitled to take three consecutive weeks of holiday in the period from 1 May to 30 September. The employer shall, with due consideration to the operation of the business, to the widest possible extent meet the employee s wish as regards to the timing of the holiday, including the employee s wish to take the main part of the holiday during the school holiday of the employee s child(ren). The employer shall inform the employee of the time of the holiday as early as possible, and not later than three months before commencement of the main holiday period, and not later than one month before the start of the remaining part of the holiday. Quite a number of individual employment agreements and most collective bargaining agreements provide for additional five special days off. 6. Employer s Obligation to Provide a Healthy and Safe Workplace The Danish Act on Working Environment includes requirements and provisions to ensure that Danish working environments are fully sound in terms of occupational safety and health. In Denmark, there

9 07 is a strong tradition of employer s and employee s cooperation in ensuring a good working environment. This act includes rules about machines and personal protective equipment, psychosocial working environment, chemicals and computer work. The act also includes general rules such as the rule that employees must normally have at least 11 hours from the time they go home from work until they meet for work again. One of the most important aspects of preventative work is to conduct workplace risk assessments. The strenuous work and dangerous elements at a workplace are documented in a workplace risk assessment, and all work routines are thoroughly examined. All workplaces must conduct a new workplace risk assessment at least once every three years.

10 V. Anti-Discrimination Laws Brief Description of Anti- Discrimination Laws A number of EU-based laws are incorporated in Danish legislation to prevent anti-discrimination. The most important laws are the Danish Act on Non-discrimination and the Danish Act on Equal Treatment. 2. Extent of Protection Danish legislation prohibits discrimination on various grounds such as gender, race, skin colour, religion or faith, political beliefs, sexual orientation, age, disability or national, social or ethnic origin. Generally, breach of any of the statutory provisions prohibiting discrimination leads to civil claims, although, in certain circumstances there may also be concurrent criminal liability. The concept of victimisation contains special protection against retaliatory action by the employer for those who have brought claims or assisted those who have brought claims under Danish anti-discrimination legislation. circumstances, provided the discriminatory criteria are necessary in order to attain a lawful goal and they are applied equally in every comparable situation. 3. Protections Against Harassment The rules of the Act on Non-discrimination establish that an employer must provide all reasonable efforts in order to accommodate the work of a disabled person within the organisation. The definition of reasonable efforts is dependent on the work and the specific employer s business. 4. Remedies The rules of the Act on Non-discrimination establish that an employer must provide all reasonable efforts in order to accommodate the work of a disabled person within the organisation. The definition of reasonable efforts is dependent on the work and the specific employer s business. The principal remedy in respect of a successful claim under Danish anti-discrimination legislation is compensation. Employers transgressing discrimination law may also be subject to a fine payable directly to the government. The Act on Equal Treatment prohibits both direct and indirect discrimination on grounds of sex and marital status and its provisions apply equally to both men and women. This means that employers are statutorily obliged to treat men and women equally in terms of their recruitment, employment, training and career progression. Direct discrimination occurs when a person is treated less favourably on account of their sex, for example if an employer decides to dismiss or fails to recruit a person specifically because of their sex or marital status. Indirect discrimination occurs where the criteria used by an employer has an unintentional discriminatory impact. Indirect discrimination may be lawful in certain

11 VI. Social Media and Data Privacy Can the employer restrict the employee s use of Internet and social media during working hours? The use of social media during working hours is regulated by employment tradition and case law. If an employer wishes to limit the employee s use of social media during working hours this must be carried out based on the employer s managerial rights. The decision as to if an employee is in breach of the employer s rules and regulations regarding the use of social media, must be based on interpretation of the rules in question, and based on an assessment of whether the employee is in breach of general loyalty obligations towards the employer. From a starting point, the employer can decide the content of such rules on the use of social media, including whether this should be strict or soft rules in question. 2. Employee s use of social media to disparage the employer or divulge confidential information Only limited case law exists regarding the use of social media, and such case law demonstrates that if the employer has imposed rules on the use of social media, employees are bound to follow such rules and regulations, and if not, the employee can be dismissed on fair grounds. If no rules and regulations exist, the employer must issue a written warning prior to dismissing an employee who has used social media in a disloyal way. If the employee is in breach of the written warning, the employee can be dismissed with immediate effect.

12 VII. Authorizations for Foreign Employees 10 EEA nationals are entitled to apply for work in Denmark and will not need a work permit. They must, however, register with the local authorities in the area where they reside, no later than six months after arrival and apply for an EEA residence certificate if their stay exceeds six months. EEA nationals who do not work or apply for work in Denmark must apply for a residence permit no later than three months after their arrival if their stay exceeds three months. Non-EEA nationals are, as a basic rule, not allowed to enter Denmark without obtaining a residence permit and a work permit from the Royal Danish Embassy or Consular General in the relevant non-eea country of residence. Permission will automatically be granted to applicants possessing special skills and qualifications according to the so-called job-card regime as defined by the Immigration Service, which maintains a positive list of skills and qualifications deemed to be special and in demand on the Danish labour market. Individuals who have been offered a highly paid job (DKK 375,000 /EUR 50,000 per year in 2015) may be granted a permit under the Pay Limit Scheme. There are no specific requirements with regard to education, field or the specific nature of the job. The Corporate Scheme is an initiative that makes it possible for companies or corporations in Denmark to bring employees with special skills or qualifications from the company s foreign affiliates or departments to Denmark for projects of limited duration with an innovative, developmental or educational purpose. For non-eea nationals who are not covered by any of the above schemes, the possibility of obtaining a work and residence permit is very remote. Pursuant to the Aliens Act, the employment of an individual who does not have a valid Danish work permit is an offence committed by the employer, which is punishable by a severe fine or imprisonment.

13 VIII. Termination of Employment contracts Grounds for Termination As a principle, both parties to an employment contract may terminate the employment agreement at any time, subject to either the statutory or contractual notice period, without the need to fulfil any statutory grounds for termination. The employer issuing the termination must, however, provide a written explanation of the termination upon the employee s request. 2. Collective Dismissals The Danish Act on Collective Redundancies obligates the employer to inform and negotiate with the employees (or the employees representatives) when the number of employees to be made redundant over a period of 30 days is expected to reach the following thresholds: at least ten employees in businesses employing more than 20 and less than 100 employees; at least ten per cent of the employees in businesses employing at least 100 and less than 300 employees; or at least 30 employees in businesses employing at least 300 employees. Redundancies governed by the Act must be notified to the Regional Employment Council. The Act on Collective Redundancies provides detailed regulation on the negotiation procedure and the deadlines for notifying the Regional Employment Council and the employees concerned. Non-compliance with the Act may result in fines and/or compensation. 3. Individual Dismissals Danish labour market practice requires that an employee who is dismissed receive a notice letter stating the dismissal terms. At a starting point, the employee cannot reject the fact that he/she is being dismissed, and no unions or public authorities can prevent the dismissal from being carried out. However, under certain collective bargaining agreements, a number of employees enjoy special projection, such as shop stewards, safety stewards and a few other categories of employees, and they cannot be dismissed unless a special negotiation has taken place prior to the issuing of the notice letter. In order for the notice letter to take legal effect, the notice letter must be received by the employee, and the employer must be in a position to prove that the employee has received the notice letter. Typically, this involves that the notice letter is sent as registered mail and/or by courier. a. Is severance pay required? A white-collar employee, referring to a salaried employee who is dismissed without just cause and who has been employed for at least one year at the time of dismissal, is entitled to severance pay. The maximum amount payable is the salary payable for 50 per cent of the statutory notice period. However, if the employee is above 30 years of age, the potential severance pay is increased to an amount equalling 3 months salary. If the employee has been employed for at least 10 years, the severance pay may be increased to a maximum of 4 months salary. The amount payable is further increased to 6 months salary if the employee has been employed for at least 15 years. A dismissal is without just cause if it is not reasonably justified by the conduct of the employee, e.g. poor performance or misconduct or by the circumstances of the company, e.g. restructuring or cost cutting. If the dismissal is due to performance related issues on the part of the employee, a written warning will normally be required in order to render the dismissal just. As a general rule, the fact that a dismissal is considered to be without just cause does not render the dismissal void. Instead, the employee may be entitled to a financial compensation as described above. A blue-collar employee who is dismissed without just cause, may, based on collective agreement, be entitled

14 12 to a severance pay, however, this depends on the rules of the collective agreement in question. 4. Separation Agreements The entering into separation agreements is not mandatory under Danish law, but typically for members of the management team or for key employees it is a usual tool to use to replace an ordinary dismissal in order for all terms to be agreed between the parties. Basically, entering into a separation agreement under Danish law is a matter of agreement between the parties; however, mandatory Danish legislation must be fulfilled. 5. Remedies for employee seeking to challenge wrongful termination In case of wrongful termination of employment, the termination can be challenged by the employee and may lead to the payment of a severance pay, see above. a. Is a Separation Agreement required or considered best practice? Entering into a separation agreement is not required, but is considered good practice when entered with members of the management group and key employees. b. What are the standard provisions of a Separation Agreement? A standard separation agreement typically involves agreement on compensation and benefits during the notice period, the duty to work during the notice period and agreement on communication regarding the separation. Typically, outplacement assistance for the employee in question is a part of the terms as well. A separation agreement will always involve terms that ensure that the employee cannot raise further claims against the employer when the separation agreement has been finalized and fulfilled by both parties. c. Does the age of the employee make a difference? The age of the employee will not make a difference. d. Are there additional provisions to consider? Additional provisions to consider will be if the employee must carry out a certain task before the employee is released from his/her duties, which again typically will involve the payment of an extraordinary retention bonus.

15 IX. Restrictive Covenants Definition of Restrictive Covenants Restrictive Covenants are defined in the Danish Act on Restrictive Employment Clauses. A non-competition clause is defined as a provision prohibiting an employee from doing business or taking up employment in competition with the employer s business. Noncompetition clauses are only valid if they are agreed upon with an employee defined as an exceptionally entrusted employee. A non-solicitation of customer clause is defined as a provision preventing the employee from engaging himself in business with customers or other business relations with whom the employee has rendered services during the last 12 months before the point in time when the employee was dismissed. 3. Use and Limitations of Garden Leave Under Danish legal practice, imposing garden leave on an employee means that the employer irrevocably has renounced the employee s duty to work during his/ her notice period. If an employer has requested the employee to take garden leave, the employer cannot ask the employee to take up work during the remaining part of the garden leave. Regardless of whether it has been agreed between the parties, the employer, based on managerial rights, decides if the employee should be placed on garden leave during a notice period or continue carrying out his or her duties. With effect from 1 January 2016, non-solicitation clauses regarding non-solicitation of employees are not allowed. 2. Enforcement of Restrictive Covenants process and remedies The enforcement of restrictive covenants typically involves an employer s claim for compensation and/or a claim for an agreed penalty. Furthermore, the employer might request that the employee cease work in a way not allowed under the agreed restrictive covenants. The employer might consider requesting Danish courts to issue an injunction to protect his interests following from the non-compete and non-solicitation clauses. Requesting an injunction means participating in a fasttrack procedure with the Danish courts, and that the courts must act as fast as possible in order to protect the employer s legal and commercial interests.

16 X. RIGHTS OF EMPLOYEES IN CASE OF A TRANSFER OF UNDERTAKING Employees Rights The Danish Act on Transfers of Undertakings provides for a certain protection of the employees in relation to transfers of undertakings. Pursuant to the Act, rights and obligations under individual employment agreements and collective bargaining agreements are automatically transferred to the transferee in the event of a transfer of a business or part of a business. Furthermore, the transferee is considered as having adopted the transferor s collective bargaining agreements unless the transferee gives notice to the unions within a certain time limit after the transfer date, stating that the transferee does not want to adopt the collective bargaining agreement(s) to which the transferor was a party. from the act and from collective bargaining agreements. If negotiation obligations follow from a collective bargaining agreement, it will be a breach of collective consultation obligations, not initiating such negotiations. Typically, negotiations/consultations can be carried out within a short period of time, and it should moreover be noted that neither the unions nor any public authorities can prevent the transfer of an undertaking under Danish law. The Danish Act on Transfers of Undertakings furthermore establishes that prior to the transfer of the employees, the employer must in writing inform the employees or the employee representatives about the future transfer and the legal and practical details concerning the transfer of the employees. Pursuant to the Act, dismissal due to a transfer of a business or part of a business is not considered reasonably justified by the circumstances of the company unless the dismissal is due to financial, technical, or organisational reasons which cause occupational changes. If, in connection with the transfer, the employees working conditions are changed to the detriment of the employees, the employees may choose to consider themselves dismissed. Consequently, they may terminate their employment without notice from the date on which the changes have come into effect. The Act also contains provisions on information and consultation of the employees (or the employee s representatives). Non-compliance with these rules is sanctioned with fines. 2. Requirements for Predecessor and Successor Parties According to the Act on Transfers of Undertakings, an employer who considers a transfer of the employees must consider carefully if negotiations or consultations with the employees or the employees representatives must be initiated. Such obligations may follow both

17 XI. TRADE UNIONS AND EMPLOYERS ASSOCIATIONS Brief Description of Employees and Employers Organizations Denmark enjoys relative stability in labour relations with most conflicts being resolved amicably. The origin of the current system is the 1899 September Settlement between the Danish Employer s Confederation (DA) and the Danish Confederation of Trade Unions (LO). The organizations were founded in 1896 and 1898 respectively, but did not recognize each other s right to exist until 1899, when a major industrial dispute ended with the September Settlement. The settlement provides a set of basic rights and obligations to be respected by the parties, including: (i) the employees right to form trade unions; (ii) the employer s right to manage and control the work; (iii) the right to take industrial action, e.g. strikes and lockouts; and (iv) the peace obligation. The peace obligation is a general principle, which states that where a collective bargaining agreement has been concluded, the peaceful course of work must not be disrupted while the agreement remains in force. The Confederation of Danish Employers (DA) and the Danish Confederation of Trade Unions (LO) are the major umbrella bodies for employers and employees respectively; however, other umbrella bodies exist on the Danish labour market. 2. Rights and Importance of Trade Unions Danish trade unions rights are solely based on collective bargaining agreements with employers or employees associations. The Danish trade unions are considered important to the labour market. Works Council Board of Directors Security at work and health protection committee Collective dismissals Transfer of undertakings 4. Appointment of Representatives The number of representatives, the appointment of representatives and their tasks and obligations depend on the forum in question, the size of the business and/ or the number of employees employed. However, such employee representatives enjoy special protection against dismissal at the same level as apply to a shop steward. 5. Employees Representation in Management According to the Danish Company Act, in Danish companies, who have for a period of at least three years employed 35 or more employees, the employees can request that an election be established to decide whether the employees will claim representation in the board of directors. If the election leads to the conclusion that the employees are entitled to representation in the board of directors, such employee-elected board members will carry out their duties on the same terms as the board members elected by the shareholders. The members of employee-elected board members cannot exceed the number of board members elected by the shareholders. 3. Types of Representations Danish employees are, under certain rules, entitled to representation in the following fora;

18 XII. Social Security / Healthcare / Other Required Benefits Legal Framework The Danish legal framework regarding social security and healthcare is to be found in a number of individual acts providing social security for employees. A number of these acts are based on EU-legislation. 2. Required Contributions The Danish Act on Labour Market Supplementary Pension provides that employers and employees must contribute to a supplementary pension scheme for employees, who are employed in Denmark. The supplementary pension is paid out in addition to the oldage pension, and the employer s contribution is a fixed monthly payment of approximately EUR 25 covering a fulltime employee. 3. Insurances There is no obligation under the law for the employer to provide the employees with different insurances apart from mandatory insurances, such as group life insurance or work injury insurance. However, employers that are bound by collective bargaining agreements are typically obliged to take out certain insurances on death and disability. 4. Required Maternity/Sickness/ Disability/Annual Leaves Maternity leave The right to maternity, paternity, and parental leave is regulated by the Danish Act on Maternity Leave and Allowance. Pursuant to the Act, a female employee has the right to absence in connection with pregnancy and childbirth from 4 weeks before expected childbirth and until 14 weeks after childbirth. Furthermore, a female employee has the right to absence during 32 weeks of parental leave after the 14th week after childbirth. A male employee is entitled to absence during 2 consecutive weeks of paternity leave within 14 weeks after childbirth. In addition, a male employee is entitled to absence during 32 weeks of parental leave. Some individual employment agreements and collective bargaining agreements provide for full salary during some of the above periods. An employer who pays salary during maternity, paternity, and parental leave may be entitled to reimbursement from the municipality. Employees who are not entitled to any payment from their employer may be entitled to maternity/paternity pay from the municipality. The Salaried Employees Act stipulates that a female employee is entitled to 50 per cent of her salary during absence from work due to pregnancy and maternity leave from 4 weeks before expected childbirth and until 14 weeks after childbirth. Sick pay Pursuant to the Salaried Employees Act, salaried employees are entitled to full salary, including bonus, during sick leave. An employee who is not covered by the Salaried Employees Act may be entitled to pay during sick leave under the relevant collective bargaining agreement or pursuant to the individual employment agreement. If the employee is not entitled to pay during sick leave, the employee may be entitled to sickness benefits from the municipality pursuant to the Danish Act on Sickness Benefits. An employer who pays salary during sick leave may be entitled to a refund from the municipality, cf. the Danish Act on Sickness. Disability/Annual leaves An employee is entitled to unpaid leave when compelling circumstances occur in the family, such as illness or an accident, make the immediate presence of the employee urgently necessary (force majeure). The right to paid leave on e.g. the child s first sick day must be agreed with the employer or stipulated in a collective bargaining agreement. In general, the right to paid leave on the child s first sick day is a standard benefit on the Danish labour market.

19 17 5. Mandatory and Typically Provided Pensions Danish citizens with permanent residence in Denmark are entitled to old-age pension payable by the State in accordance with the provisions of the Danish Act on Social Pension. There are, however, a number of exceptions to the residential and nationality qualifications following, inter alia, from EU Directives, international treaties and the Danish Act on Social Pension. The old-age pension is financed through taxes and is consequently not dependent on contributions from the pensioner. The old-age pension is currently payable from the age of 65 to 67 years. It is not mandatory law for employers to provide pension schemes to employees, however, quite a number of individual employment agreements and, in general, all collective agreements will involve the paid contributions both by the employer and by the individual employee to a pension scheme. The level of contribution is solely a contractual matter and not set by legislation. The pension scheme model will, apart from pension schemes involving civil servants, be a defined-contribution pension scheme model.

20 Labora Legal denmark 18 The firm of Labora Legal was established in Copenhagen in 2010 and has, since its inception, been committed towards employment and labour law advice of the highest quality. The firm has experienced continued growth and is a leading Danish boutique law firm committed to employment and labour law. This memorandum has been provided by: Labora Legal Teglværksgade 27 DK-2100 Copenhagen Ø P Contact Us For more information about L&E Global, or an initial consultation, please contact one of our member firms or our corporate office. We look forward to speaking with you. L&E Global Avenue Louise 221 B-1050, Brussels Belgium This publication may not deal with every topic within its scope nor cover every aspect of the topics with which it deals. It is not designed to provide legal or other advice with regard to any specific case. Nothing stated in this document should be treated as an authoritative statement of the law on any particular aspect or in any specific case. Action should not be taken on this document alone. For specific advice, please contact a specialist at one of our member firms. This document is based on the law as of L&E Global is an alliance of independent law firms. L&E Global is not a law firm nor does it provide legal services. The L&E Global publication is intended for informational purposes only. Nothing in the document is to be considered as either creating an attorney-client relationship between the reader and L&E Global, or any of the law firms that are part of the L&E Global alliance and/or named in the publication, or as rendering of legal advice for any specific matter. Readers are responsible for obtaining such advice from law firms of L&E Global upon retaining their services. The independent law firms of L&E Global are not responsible for the acts or omissions of each other, nor may any firm or any of its partners or other employees, act as agent for any other L&E Global firm. Absent the express agreement and consent of the parties involved, no L&E Global firm has the authority to obligate or otherwise bind any other L&E Global firm.

21 2017