Denmark has a distinctive system of regulating the employment relationship. Traditionally, there was little legislation on employment matters, with collective agreements playing the leading role in regulation. The main exception was that statute provided certain entitlements for white-collar/salaried employees (and not their blue-collar/hourly-paid counterparts). The situation has changed somewhat over the past few decades, largely because of the need to implement EU employment law directives, and there is now legislation on a range of important issues such as working time, annual leave, maternity and other parenthood-related leave, collective dismissals, transfers of undertakings and equality/non-discrimination. However, these laws generally apply only to employees who are not covered by a collective agreement that provides a level of rights and protection that is at least equivalent to the statutory rules.

Collective agreements cover around 80% of employees. As well as agreements on pay and conditions applying to particular industries and companies, there are a number of agreements with a wider scope. The most important is the “main agreement” (hovedaftalen) between the Danish Employers’ Confederation (Dansk Arbejdsgiverforening, DA) and the largest national trade union body, the Danish Trade Union Confederation (formerly Landsorganisationen i Danmark, LO, but now renamed Fagbevægelsens Hovedorganisation, FH, following a merger with the second-largest confederation at the start of 2019). This agreement (referred to as the DA-LO main agreement) covers blue-collar employees across much of the private sector and deals with matters such as aspects of dismissal, employee representation, collective bargaining, industrial action and management prerogative. Another important agreement, the DA-LO co-operation agreement (samarbejdsaftalen) provides for workplace employee involvement through “co-operation committees”.

To illustrate the contents of collective agreements as the main source of employment regulation for blue-collar employees, we refer mainly to the 2020–2023 version of the agreement that covers much of manufacturing industry. This is one of the most important national collective agreements (covering around 230,000 employees and 6000 companies) and is negotiated by the Confederation of Danish Industry (Dansk Industri, DI) and the Co-Industri “cartel” of nine trade unions.

For employees not covered by collective agreements, the employment relationship is largely governed by employment contracts and legislation. As mentioned above, there is a specific statute on the employment rights of white-collar/salaried employees (funktionærer), the Act on the Legal Relationship between Employers and Salaried Employees (Lov om retsforholdet mellem arbejdsgivere og funktionærer), or Salaried Employees Act. This applies broadly to employees who perform administrative, commercial, managerial or professional work, specifically including:

  • office workers and shop assistants employed in office work, buying and selling activities, or equivalent warehouse operations (plus employees whose work is mainly of this type)

  • those working in technical or clinical services (except handicraft work or factory work) and other assistants who carry out comparable work functions (this covers, for example, laboratory technicians or dental assistants)

  • those whose work is wholly or mainly to manage or supervise the work of others on the employer’s behalf — however, senior managers are not included.

The Salaried Employees Act covers only relevant employees who work for more than eight hours per week on average and have at least one month’s service.

This topic refers to employment law in the private sector only.

Temporary COVID-19 Crisis Measures (as at 11 June 2020)

During the COVID-19 pandemic, the Government has taken a number of temporary measures affecting employment law. The main instrument to prevent crisis-related job losses has been a temporary pay compensation scheme, whereby the state reimburses employers part of the wages of employees unable to work and threatened with redundancy because of pandemic-related factors (the reimbursement is 75% for white-collar/salaried employees and 90% for blue-collar/hourly-paid employees, up to a cap). This scheme is currently due to expire on 8 July. Where employees are off sick with COVID-19, the employer receives public reimbursement for their sick pay from the first day of absence, rather than the 31st day under normal rules (see Sick Leave). Employees are also entitled to sick pay (and their employer to reimbursement) if they are unable to work because of being quarantined. In addition, the Government has introduced special rules allowing the postponement of annual leave in some circumstances (see Annual Leave).

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