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Notice period in Denmark
Termination of employment in Denmark
Post-termination restraints in Denmark
Waivers in Denmark
Transfer of undertakings in Denmark
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End of employment in Denmark
Every employment relationship eventually comes to an end. And when that happens, there are specific rules that employers need to follow. If you want to hire Danish employees, you’ll need to understand what happens at the end of employment in Denmark, whether it’s a case of dismissal, resignation, or redundancy.
In this section, we’ll go into some of the most important factors impacting the end of employment in Denmark, including the required notice periods for both employees and employers and the different situations when employers can terminate an employee. We’ll also discuss the post-termination restraints that you can impose on employees after the end of employment in Denmark, plus employees’ rights following a transfer of undertaking.
Notice period in Denmark
Both employers and employees in Denmark have to give a certain amount of notice if they want to end their employment agreement. An employee’s notice period is usually defined by their collective bargaining agreement. If the employee is employed under the Salaried Employee Act, there are specific regulations that apply to their notice period. In Denmark, notice periods must be stated in each employee’s employment contract.
Notice periods in Denmark for employers
Under the Salaried Employee Act, the notice period an employer has to give an employee in Denmark depends on how long they have been employed. Collective bargaining agreements may stipulate different notice periods.
Generally speaking, an employer has to give the following notice to an employee if they want to dismiss them:
- 0–6 months of employment: 1 month
- 6 months–3 years of employment: 3 months
- 3–6 years of employment: 4 months
- 6–9 years of employment: 5 months
- 9+ years of employment: 6 months
The notice period to dismiss an employee during their probationary period is 14 days. If an employee is employed for a temporary assignment of one month or less, the employer doesn’t need to give any notice to dismiss them.
Notice periods in Denmark for employees
Employees in Denmark also have to give notice when they resign from a job. If the employee is hired under the Salaried Employees Act, they have to give one month’s notice. Again, collective bargaining agreements may provide different terms. Employees in Denmark have to give notice in writing and generally have to work until the end of the month when they are leaving the company. For example, if an employee gave notice on 15 April, they would have to work until the end of May.
Severance pay in Denmark
Employees in Denmark are only entitled to severance pay if they have worked for a company for at least 12 years. For service between 12 and 17 years, they are entitled to one month’s wages. If they have worked at the company for more than 17 years, they are entitled to three months’ pay.
Termination of employment in Denmark
Employers in Denmark can only dismiss employees in specific circumstances. If an employee is unfairly dismissed, they could be owed compensation.
Termination of employment in Denmark
Employers in Denmark can terminate an employee’s contract if they have a justifiable reason for doing so. This reason could be:
- Financial
- Organisational
- Related to the employee’s conduct
Employers can also terminate an employment contract if the employee has been on sick leave for more than 120 days in the previous 12 months.
Termination of employment in Denmark due to employee conduct
If an employer terminates an employee’s contract due to a problem with their conduct, they must first give them a warning and the chance to improve their performance. This warning must be provided in writing and must include:
- A clear statement of the problem and what needs to improve
- The objective and measurable changes the employee should make
- Ideas on how the employee can improve their performance
- A statement that failure to improve may result in termination
- The time frame in which the employee must improve their performance
Employees who receive a warning that could lead to termination of employment in Denmark have the right to bring a union representative to their meeting with their employer. Employers must give the union representative at least two days’ notice that the meeting is taking place.
Unfair dismissal in Denmark
A termination of employment in Denmark which is not considered to be justified by either the employee’s conduct or the company’s situation may be considered to be an unfair dismissal. In this case, the employee in question may be entitled to compensation. It’s important to note that employees are generally only protected from unfair dismissal once they have worked for their employer for at least a year.
However, it’s always illegal to fire an employee (even during their first year of employment) for any of the following reasons:
- Being pregnant or taking maternity, paternity, or parental leave
- Filing a complaint against their employer
- Being on a temporary work contract
- Protected characteristics such as race, skin colour, sex, sexual orientation, etc.
- Being a trade union member or participating in trade union activities
- Disability, unless the work cannot be adjusted to accommodate the employee’s needs
Collective redundancy in Denmark
There are specific rules that apply to collective redundancies in Denmark. However, what counts as a collective redundancy depends on the size of the company. Dismissal is considered to be collective if, within a period of 30 days, the company lays off:
- 10 employees for companies with 21–99 workers
- 10% of the workforce for companies with 100–299 workers
- 30 employees for companies with 300+ workers
Before an employer can carry out a collective redundancy process, they must first consult with trade union representatives. They also have to consider alternatives to dismissal before proceeding with a collective redundancy decision and notify both the union and the government once the decision has been made.
Post-termination restraints in Denmark
In many countries, employers can impose certain restrictions on their employees’ actions after the end of their employment. This allows them to protect their business interests from former employees, who may (intentionally or unintentionally) cause them harm. These are sometimes known as restrictive covenants or post-termination restrictions.
Possible post-termination restrictions in Denmark
In Denmark, employers who want to impose post-termination restraints on their former employees have three options. They can impose:
- A non-competition clause: This prohibits former employees from working for or setting up businesses that compete with their former employer.
- A non-solicitation of customers clause: This prohibits employees from soliciting (or “poaching”) their former employer’s customers or business associates.
- A combined clause: A clause that includes both of the above restraints.
Maximum terms for post-termination restraints in Denmark
In Denmark, restrictive covenants can’t be for more than 12 months after the termination of an employment contract. If an employer opts for a combined non-competition and non-solicitation clause, the maximum term is six months.
Restrictions on post-termination restraints in Denmark
There are certain restrictions that apply to the post-termination restraints in Denmark. First, the employee in question must have worked for the company for at least six months at the time of their termination.
For non-competition clauses, the employee must also have held a “very special position of trust” within the organisation. Non-solicitation clauses only apply to customers and business partners with whom the employee has business relations during the 12 months before their termination.
Compensation for post-termination restraints in Denmark
Employers in Denmark must compensate employees during the period when a post-termination restraint applies. This compensation must be equal to at least 40% of the employee’s monthly salary if the term of the clause is for six months or less, or at least 60% if it’s for more than six months. This is reduced to 16% and 24% respectively if the employee finds other suitable employment during the restriction period.
Employee non-solicitation clauses in Denmark
In some countries, employers can also prohibit employees from poaching other employees from their former employer. However, this is no longer possible in Denmark and any existing clauses are not enforceable.
Waivers in Denmark
In some situations, employees can waive their statutory rights and their rights to make claims against their employer (or former employer). This usually happens as part of a settlement agreement, in which an employee is paid a sum of money in exchange for waiving their rights.
In Denmark, waivers of rights and settlement agreements are generally enforceable as long as the terms and conditions are fair and balanced. If the terms deviate from employment law legislation, they are not binding and a waiver by the employee is not enforceable.
Transfer of undertakings in Denmark
A transfer of undertaking is when one company is purchased or acquired by another company. There are strict rules concerning what happens to the employees of the purchased company in this situation. In Denmark, employee rights following a transfer of undertaking are set out in the Danish Act on Transfer of Undertakings, which is Denmark’s implementation of the EU directive on the same subject.
What counts as a transfer of undertaking in Denmark?
There has been some debate over what counts as a transfer of undertaking in Denmark. It is generally defined as a situation where there is a transfer of an economic entity which retains its identity. That means that one company simply taking on employees or stock from another company may not count as a transfer of undertaking.
Employee rights after a transfer of undertaking in Denmark
The Danish Act on Transfer of Undertakings states that employees of a purchased entity must be transferred to the purchaser and that their existing terms and conditions must be transferred with them. Prior to the transfer, the employer must inform and consult with employee representatives. Employees can’t be dismissed due to a transfer of undertaking unless there is an economic, technical, or organisational reason for the dismissal.
Avoid risk and missed opportunities with our end-to-end employment solutions
There are many different ways an employment contract can come to an end. But whatever the situation, you need to understand the rules that cover the end of employment in Denmark — or you could end up facing legal issues.
Our solutions ensure your business is protected from risk when a relationship with a worker comes to an end — whatever the reason. We can also help you to avoid missed opportunities by re-deploying talent where possible.
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