In Denmark, no general fairness or ‘cause’ requirement applies to individual dismissals. However, if the employee is a salaried employee (white-collar employee) and, therefore, protected by the Danish Salaried Employees Act, the dismissal must be reasonably justified by the conduct of the employee or the circumstances of the employer. Similar provisions are found in most collective agreements.
Cause is not a defined concept. ‘Circumstances of the employer’ often means economic reasons. If, for example, the employer is able to prove a need for cutbacks, the dismissals will usually be considered reasonably justified. But when carrying out the dismissals, the employer must ensure that the selection criteria are not arbitrary and not based on age, gender, religious beliefs or any of the other protected characteristics.
Similarly, ‘conduct of the employee’ means that dismissals based on sickness absence, underperformance, etc, will usually be considered reasonably justified. In most cases, however, it will be a requirement that one or more written warnings have been given before the dismissal to allow the employee to remedy the situation and, thus, avoid dismissal.
Salaried employees (white-collar employees) are entitled to compensation for unfair dismissal if they have been continuously employed by the same employer for at least one year before the date of notice. For other employees (blue-collar employees), collective agreements will usually – directly or indirectly – impose a fairness test with respect to dismissals if the employee in question has been continuously employed for a specified period of time.
Must notice of termination be given prior to dismissal? May an employer provide pay in lieu of notice?
Employees are usually entitled to notice of termination unless they are dismissed for gross misconduct. Employers are normally entitled to pay out the employee’s pay during the notice period as a lump sum, and it is up to the employer to decide whether to require the employee to work during the notice period. If the employee is entitled to holiday pay, this amount must be paid into the holiday administration scheme at the end of the notice period.
In which circumstances may an employer dismiss an employee without notice or payment in lieu of notice?
Employers are entitled to dismiss employees with immediate effect for gross misconduct, such as unexplained absence, theft, engagement in competitive actions, disloyalty, inappropriate behaviour, insubordination, etc.
If dismissing a salaried employee (white-collar employee) for gross misconduct, the employer will be entitled to damages for any loss incurred. However, such damages are not very common as the burden of proof is on the employer. In the event of unexplained absence or desertion, the employer is, as a minimum, entitled to damages equalling half a month’s pay in the absence of special circumstances.
Is there any legislation establishing the right to severance pay upon termination of employment? How is severance pay calculated?
There is no such general legislation in Denmark. However, salaried employees (white-collar employees) are entitled to redundancy pay if they have been continuously employed with the same employer for at least 12 years. In such a case, the severance pay – which is payable in addition to the salary during the notice period – will amount to one month’s pay. After 17 years of service, the amount is three months’ pay.
For other employees (blue-collar employees), a number of collective agreements contain somewhat similar provisions.
Are there any procedural requirements for dismissing an employee?
Such procedural requirements apply only to public employers or if provided in a collective agreement.
No prior approval from a government agency is required by law.
In what circumstances are employees protected from dismissal?
Some categories of employees enjoy special dismissal protection. These employee categories include union representatives (under most collective agreements), health and safety representatives (under the Danish Working Environment Act) and employee directors (under the Danish Companies Act).
In addition, dismissal protection is given under various anti-discrimination acts. These include the Danish Act on Equal Treatment of Men and Women, the Danish Equal Pay Act, the Danish Act on Leave for National Service, the Danish Anti-Discrimination Act, the Danish Freedom of Association Act, the Danish Part-Time Employment Act and the Danish Act on Employees’ Rights on Transfer of Undertakings. Further, some collective agreements may provide for dismissal protection in cases of sickness.
Mass terminations and collective dismissals
Are there special rules for mass terminations or collective dismissals?
The Danish Collective Redundancies Act applies if an undertaking plans to dismiss a certain number of employees, depending on the size of the undertaking. Under the Act or similar collective agreements, or both, employers must consult with employee representatives before actually deciding to carry out collective dismissals.
The employees must be given all relevant information, and the employer must notify the relevant regional employment council.
Class and collective actions
Are class or collective actions allowed or may employees only assert labour and employment claims on an individual basis?
Under the Danish Administration of Justice Act, common claims, including labour and employment claims, are allowed to be submitted as class actions under certain conditions. The aim of these rules is to collect similar claims on behalf of a number of individuals to make the process quicker and more efficient and economical for the plaintiffs.
A class action will only be allowed by a court if it is deemed the best way to try the claims. Thus, in practice, a class action involves an assessment on a case-by-case basis and greater discretion for the court. An employee can always choose to assert a claim on an individual basis as well.
Mandatory retirement age
Does the law in your jurisdiction allow employers to impose a mandatory retirement age? If so, at what age and under what limitations?
Employers are not allowed to impose a mandatory retirement age. Nevertheless, a mandatory retirement age set in collective agreements concluded before 28 December 2004 will still be valid if the retirement age is reasonably justified by a legitimate aim and is an appropriate and necessary means of achieving that aim.
