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5 year-end topics for employers in Denmark

Written by
Norrbom Vinding, the largest labour and employment law practice in Scandinavia and the market leader in Denmark.
What should employers in Denmark keep in mind as 2019 draws to a close? This article sets out some key issues to consider.  

 Obligations following from the new Holiday Act

The new Holiday Act was gradually introduced in 2019. It implements a concurrent holiday system (thus abolishing the discrepancy between the period of holiday accrual and the actual holiday period).

From 1 September 2020, the accrual year and the holiday year will be placed in the period from 1 September to 31 August. Employees can also take holiday in an additional four-month period (until 31 December), which means that the holiday period will cover 16 months.

To avoid employees having to take ten weeks of holiday during the first year the new Holiday Act is in force, the holiday accrued in the year prior to the effective date (i.e. 1 September 2019 – 31 August 2020) will be ‘frozen’.

Employers must decide how they wish to handle the ‘frozen’ holiday. Employers have two options:

  • convert the holiday into savings in the new holiday fund called ‘Lønmodtagernes Feriemidler’ (the Employees’ Fund for Holiday Funds); or
  •  keep the holiday in the company (in exchange for paying an annual indexation amount to Lønmodtagernes Feriemidler).


In both cases, the employer must report the frozen holiday to Lønmodtagernes Feriemidler and the deadline for such reporting is 31 December 2020.

The ‘frozen’ holiday will be available when an employee retires, leaves Denmark, etc. Consequently, the holiday must not be paid out to the employee (i.e. paid into ‘Feriekonto’) in the event of termination of employment.

How do you count 120 sick days?

According to the Salaried Employees Act, it is possible to include a clause in an employment contract that entitles the employer to terminate employment on shorter notice if the employee has received pay during sickness absence for a total of 120 days in any 12-month period. It may seem like a straightforward task to calculate the 120 days, but this is not the case.

It was recently established that it is necessary to distinguish between employees working part-time and full-time when calculating sick days. If the employee works full-time, non-working days will be included in the 120 days if the employee is absent the day before and after the non-working day. However, this is not the case if the employee works part-time. According to a new Supreme Court judgment, in these situations only days and hours when the employee was supposed to work can be included in the calculation.

The Supreme Court’s way of interpreting the rules regarding part-time employees has led to several new cases about the calculation of 120 sick days in relation to full-time employees and whether case law must be changed in light of the Supreme Court’s new method of calculation. So far, the Copenhagen Maritime and Commercial Court has decided that the new practice regarding part-time employees does not change the practice regarding full-time employees. This decision has been appealed and we are now awaiting the high court’s judgment in the case. Until then, special attention must be given to the way of counting 120 sick days if an employer is considering allowing an employee to work part-time during sickness absence.

Employers’ right to set-off in relation to sickness benefits: what does it take?

In October 2019, the Supreme Court delivered its judgment on employers’ right to set-off in relation to sickness benefits. The judgment is relevant in cases where the employer loses the right to reimbursement from the employee’s municipality of residence because of the employee’s non-fulfilment of his or her obligations in this regard. These obligations consist of providing information to the municipality on the health situation of the employee from time to time in order for the municipality to determine whether the employee is eligible for sickness benefits.

The Supreme Court ruled that where an employee fails to comply with his or her obligations, the employer may set off the reimbursement amount lost against the employee’s pay if the conditions for claiming damages are fulfilled. This means an assessment must be made, whether the set-off is reasonable considering the employee’s liability, the employee’s position and other relevant circumstances.

Consequently, the employer must ensure it informs sick employees about their obligations in terms of sickness benefits. The employer must also offer guidance to the employee and ensure guidance is provided if needed.. If, in spite of this, the employee still fails to fulfil his or her obligations, the employer may (depending on the circumstances) be entitled to set off the reimbursement amount lost against the employee’s pay.

Have you updated your policies on offensive behaviour in the workplace?

In the light of the #MeToo movement, there has been increased focus on sexual harassment in the workplace. The Working Environment Authority has published new guidelines regarding offensive behaviour in the workplace (see here) and has stated that they will attach importance to whether the employer has these policies in place if they are inspecting the company. Employers are therefore recommended to ensure that they have policies regarding offensive behaviour at the workplace in place, that these policies are updated and that employees are familiar with them.

What happens when an employee in a ‘reduced-hours job’ is entitled to state pension?

In May 2019, the Supreme Court delivered a judgment (see here) on whether it was a violation of the Anti-Discrimination Act to dismiss an employee with a ‘reduced-hours job’ (in Danish ‘fleksjob’) on the grounds that the reduced-hours job arrangement ceases at the time when the employee is entitled to state pension.

The Supreme Court concluded that the dismissal did not constitute a violation of the Anti-Discrimination Act, stating that the directive on equal treatment in employment and occupation (2000/78/EC) provides the necessary powers to uphold a reduced-hours job arrangement like the one in Denmark. It was therefore fair to dismiss the employee on the grounds that his reduced-hours job arrangement ceased at the same time he became entitled to state pension.