Forums For Adjudicating Employment Disputes

The ordinary civil court generally deals with employment cases, e.g. cases concerning breach of contract, dismissals and pay.

The Labour Court (Arbejdsretten), a court set up by the unions and the employers’ organizations outside the ordinary court system, deals with violation of collective agreements.

In case of a dispute concerning the understanding of a collective agreement, the dispute shall be decided by arbitration.

When dealing with employment disputes in Denmark, it is essential to examine in detail which rules apply and in which forum the dispute shall be decided.

The Main Sources Of Employment Law

Employment law in Denmark is based on legislation, collective agreements and case law and most areas of employment law are regulated in detail. Although the starting point is freedom of contract, employment contracts are mandatory and are often subject to – and overridden by – collective agreements and legislative requirements. Some employees, mainly commercial and office employees, enjoy by law a higher level of protection than others.

All EU-regulation related to employment law has been implemented in Danish law.

National Law And Employees Working For Foreign Companies

In the absence of an agreement concerning governing law, the statutory rights under national law do apply to all individuals physically working in Denmark, regardless of nationality.

A governing law clause stating another governing law than Danish law will be respected if validly entered into. However, different restrictions apply as to protect the employee. For instance, no agreement regarding governing law may deprive an EU-citizen working in Denmark of his or her mandatory rights according to Danish law.

Any foreign business providing services in Denmark must register with the RUT-register.

National Law And Employees Of National Companies Working In Another Jurisdiction

If posted in another jurisdiction, an employee of a Danish company may agree on Danish law or another governing law.

However, if posted to another EU member state, then mandatory rights according to Danish law still apply and after 12 months the employee is entitled to the same rights as employees in the EU member state in which the employee works.

Data privacy

Data privacy law relating to employment in Denmark is to a very great extent based on EU Data privacy law. In addition to EU data privacy law, Danish law provide a clarification of the legal basis for processing of data belonging to employees whereby employers roughly may process employee data if necessary to comply with legislation or certain rights or if it is part of the usual operation of a business.

Legal Requirements As To The Form Of Agreement

The employment contract must be in writing. Furthermore, the employer is obliged to inform in writing the employee of a number of obligatory conditions (e.g place of work, working hours, pay, se “compulsory terms” below) as the employer otherwise risks to have to pay compensation to the employee.

Mandatory Requirements
  • Trial Period
  • No legal obligation to provide a trial period exist but it is very common practise to include it in an employment agreement as the notice is much shorter during a trial period. As a general rule, a trial period cannot exceed three months.

  • Hours Of Work
  • The number of hours per week shall be stated in an employment agreement if not stated in a collective agreement which is part of the agreement. Usually, 37 hours of work per week is regarded as full time. If no collective agreement applies, the employer and employee may agree on a higher or lower number of hours per week for a full-time job, however limited to a maximum of 48 hours per week including overtime (averaged over a four months’ period). In general, the employer has to compensate for overtime unless specified to the contrary in the employment contract.

  • Special Rules For Part-time Work
  • If the rights for a part time employee are not provided in a collective agreement, the unions and the employer organizations have agreed that part time employees are entitled to the same pay and rights as full time employees - albeit pro rata.

  • Earnings
  • The pay shall be stated in an employment contract. Collective agreements usually provide a minimum wage but there is no statutory minimum wage.

  • Holidays/Rest Periods
  • Holiday rights shall be stated in an employment contract. An employee in Denmark is entitled to minimum 5 weeks of holiday per year whether or not the employee has earned the right to paid holiday. A considerable number of employees in Denmark have more than 5 weeks of yearly holiday.

    An employee earns a right to 2.08 days paid holiday for each month of employment. Earned holiday may already be spent in the following month.

    Accrued but not spent holiday is to be paid by the employer in case of dismissal or resignation.

  • Minimum/Maximum Age
  • The minimum age for employees is 13 years. There are restrictive, mandatory regulation when employing children/young people who are 13-18 years old.

    There is no maximum age limit.

  • Illness/Disability
  • In case of illness, it is usual that an employer shall continue to pay wages; the period of payment depending on collective agreement and/or legislation.

    An employee with a disability is by legislation protected to a considerable degree in case of dismissal or change of employment terms.

  • Location Of Work/Mobility
  • Location of work shall be stated in an employment contract. The contract may include a mobility clause but with limitations as to what can be required from the employee.

  • Pension Plans
  • Contribution to pension plans is not required by law. However, most collective agreements and individual employment agreements do include contribution to pension by the employer as well as the employee.

  • Parental Rights (Pregnancy/ Maternity/ Paternity/ Adoption)
  • Mandatory, minimum parental rights are laid down by law and are detailed regarding right to pregnancy leave, parental leave (incl. adoption), pay, restrictions on questions at job interviews and high penalties for dismissal due to pregnancy/parental leave, etc. Additional rights may have been agreed in collective agreements or individual employment agreements.

    In general, a pregnant employee is entitled to 4 weeks of paid* pregnancy leave prior to the expected date of birth and 14 weeks of paid* maternity leave after the date of birth. The father/partner is entitled to 2 weeks of paid* parental leave after the birth. Furthermore, the parents are entitled to share 32 weeks of state-subsidised paid* parental leave between them. Paid*: paid in full or in part, depending on individual employment agreement and/or collective agreement but as minimum state-subsidised pay.

  • Compulsory Terms
  • The employment contract must be provided within one month after commencement of employment if working more than 8 hours a week and the contract must include all significant conditions of the employment agreement. This does, as a minimum, include the names and addresses of the parties, the place of work, a job description, start date for commencement of employment and duration, if fixed, working hours per week, salary and possible benefits as well as conditions regarding holiday and notice period in case of resp. dismissal or resignation. If an employment agreement is covered by a collective agreement, this must be stated, too.

  • Non-Compulsory Terms
  • Having agreed on the compulsory terms, the parties may agree on other terms. If another term is of significance, for instance a bonus agreement, it shall be stated in writing, too. Please notice that non-compulsory terms may also be subject to legislative restrictions.

Types Of Agreement

Employment agreements may concern fixed term, full-time or part time; however, legislative restrictions apply regardless of the type of contract. If a fixed term contract is prolonged, the employee may be entitled to the same rights as an employee employed on a time-unlimited contract.


Business secrets are protected by law during and after employment. Most employment contracts do include an additional protection, widening the scope for protected knowledge, describing how to keep confidentiality and possibly adding sanctions in case of violation of the confidentiality clause.

Ownership of Inventions/Other Intellectual Property (IP) Rights

Ownership of IP-rights created during and in relation to employment and the process of transfer is laid down by law. Often an employer is regarded as owner of IP created during or relation to employment, but it depends on the nature of the employment and the IP created.

Pre-Employment Considerations

Prior to any employment, the economic consequences of possibly offered employment terms, especially of duration of notice period, pension, bonus and holiday should be considered.

Hiring Non-Nationals

EU citizens (and citizens of the Faroe Islands and Greenland) are entitled to work in Denmark whereas non-EU citizens must have a residence and work permit prior to any employment in Denmark.


Hiring Specified Categories Of Individuals

Restrictions apply for job advertisements and hiring of specified categories of individuals.

Outsourcing And/Or Sub-Contracting/Temporary Agency Work

Outsourcing, sub-contracting and temporary agency work is allowed. Focus on sub-standard working conditions for foreign nationals working in Denmark as part of outsourcing or sub-contracting has increased and restrictions have been laid down by law. The mandatory registering requirement for foreign service providers (RUT-register) is one of the controlling instruments by the authorities.

Changes To The Contract

An employer is entitled to implement small changes of working conditions during employment.

Any significant changes to the employment require the same amount of notice as would be required in the event of a termination. If the employee refuses to accept the changes, he or she may elect to consider the notice of the changes as a notice of termination.

Usually, significant changes beneficial for the employee are not problematic and may be agreed on with immediate effect.

Change In Ownership Of The Business

Change in ownership of the business is regulated by implemented EU law.

Unless the employees’ contracts are terminated and their notice expires before the change of ownership, all employees are automatically transferred to the new employer on the same terms and conditions.

The former employer is obliged to inform the employees about the reason for the transfer, the transfer date and the legal, social and economic consequences of the transfer to the employees.

The new employer is obliged to take over all obligations towards the employees, including claims for compensation, sick payment, claims for payment of accrued but not spent holiday, etc.

Social Security Contributions

Both the employer and the employee are required to make social security contributions but the contributions are relatively modest. Additional EU law concerning social contribution and coverage apply for employees posted in Denmark and for employees from Denmark posted within the EU.

Accidents At Work

A work accident must be reported by the employer 9 days from first absence from work due to the accident. Notification is made digitally and will reach the Danish Labour Market insurance and possibly the Danish Working Environment Authority and the insurance company of the employer.

The employer is obliged to take out industrial injury insurance.

Discipline And Grievance

Private employment legislation does not include discipline and grievance procedures but case law does provide certain guidelines. Collective agreements and businesses with many employees may have such procedures.

Harassment/Discrimination/Equal pay

Legislation concerning equal treatment and anti-discrimination provides for fines if found to be violated. The regulation covers the hiring process, the employment term and termination/resignation.

Compulsory Training Obligations

Apart from limited training regarding working environment and security, no general compulsory training obligations are imposed on employers or employees. Some professions do have mandatory training in order to obtain required certificates, etc.

Offsetting Earnings

In general, it is not allowed for employers to offset an employee’s debt against earnings unless the employee has provided prior consent, or it is permitted by a statutory provision.

Payments For Maternity And Disability Leave

Regarding parental leave, please see “Parental Rights” above.

The concept “Disability Leave” is not applied in Denmark.

If absent due to illness or workplace accidents, legislation and possibly collective agreements apply. If a person with known disabilities is hired as an employee on special terms, including partly subsidies, such special terms apply for the employment.

Compulsory Insurance

It is compulsory to take out industrial injury insurance and insurance against work related diseases. Some professions may have additional, mandatory requirements regarding insurance.

Absence For Military Or Public Service Duties

As a general rule, an employment contract is suspended during military service or public service duties. As a consequence, a dismissal when an employee is absent from work carrying out such service is regarded as unfair and incurring compensation.

Works Councils or Trade Unions

Employees are entitled to form work councils and to be member of a union (or not). There are several unions in Denmark, national as well as local.

Collective agreements contain provisions regarding work councils and shop stewards.

Employees’ Right To Strike

If the conditions in a collective agreement provided for strike are fulfilled and the procedure for strike is followed, the employees are entitled to strike and the strike will be deemed justified.

Strikes are financed by the union.

Employees On Strike

If a strike is not deemed justified, an employer is entitled to terminate the employment with striking employees

Employers’ Responsibility For Actions Of Their Employees

The employer is to a great degree liable for actions by an employee when carried out in the line of duty. An employee is liable for damage caused by his/her own gross negligence but case law is restrictive on liability for employees, especially in case insurance has been taken out by the employer.

Procedures For Terminating the Agreement

Most often, the procedure for dismissal is not described in an employment agreement. Although there are no formal requirements to the procedure of the dismissal, the fact that the employer carries the burden of proof for the dismissal means that a dismissal in writing is recommended.

Instant Dismissal

Instant dismissal without notice period is possible in the case of a very gross breach of contract by the employee. However, the basis for such dismissal is limited and even in such a situation, the employee enjoys certain basic rights.

Employee's Resignation

As a main rule, an employee may always terminate an employment contract by giving due notice.

Termination On Notice

Either party may terminate the employment agreement with due notice. Statutory legislation and collective agreements on notice periods tend to override short contractual notice periods.

However, if a dismissal, even with proper notice, is deemed unjustified, the employer may be met with claims for compensation.

Termination By Reason Of The Employee's Age

Termination only or mainly due to age may be regarded as discrimination.

Automatic Termination In Cases Of Force Majeure

The usual consequence in Danish law of Force Majeure is suspension of obligations for a while. Force Majeure does normally not result in automatic termination.

Collective Dismissals

In case of dismissals of a certain number of employees within 30 days, special regulation applies.

Termination By Parties’ Agreement

If the parties agree, they may agree on as short a notice as they like – and other conditions. In case the agreement is not beneficial for the employee, the employer is likely to carry the full burden of proof for a valid agreement.

Directors Or Other Senior Officers

Usually, CEOs are not covered by protective legislation or collective agreements which increases the significance of the agreed conditions in the CEO’s individual employment agreement.

Senior officers are protected by legislation and sometimes collective agreements.

Special Rules For Categories Of Employee

Generally, commercial and office employees enjoy a higher level of protection than other employees.

Furthermore, special regulation applies to certain groups of employees, such as shop stewards, union representatives, health and safety representatives, pregnant women, disabled persons, etc.

Whistleblower Laws

The coming EU-directive regarding protection of whistle-blowers is being implemented in Denmark.

For certain kinds of businesses, including banks, insurance companies, etc., whistle-blower protection is a requirement.

Specific Rules For Companies in Financial Difficulties

Employees are not automatically dismissed if a company is declared bankrupt or applies for liquidation or for reconstruction. Usually, if the court appoints a trustee or a liquidator, the appointed person shall within a short period decide on dismissal, change or continuation of the employment agreements.

If the employment agreement continues, the employer (bankruptcy estate, company under liquidation or company under reconstruction) is obliged to abide by the terms and conditions of the employment agreement (including, possible a collective agreement).

If an employer due to financial difficulties, prior to bankruptcy etc. is unable to pay wages to the employees, claims for wages to a certain degree may be covered by a national guarantee fund.

Special Rules For Garden Leave

Garden leave is a not a right for the employee as it is the employer’s decision whether to grant garden leave in connection to a dismissal.

When granting garden leave, it is worth seeking to reduce the amount of holiday accrued by the employee during the garden leave. The Danish Holiday Act includes some limitations as well as some useful provisions in this regard.

Restricting Future Activities

Non-competition clauses are thoroughly regulated by legislation, collective agreements and case law. Failure to comply with the restrictions result in invalid non-competition clauses.

In general, non-competition clauses are relatively expensive and are not binding if the employer terminates the employment agreement without the employee being at fault.

Severance Payments

Severance payments are regulated by legislation, collective agreements and case law.

Objective severance payments only depend on the duration of the employment agreement, such as commercial and office workers being entitled to resp. 1 month’s or 3 months’ wages after 12 or 17 years of employment.

A claim for subjective severance payment arises in case of unfair dismissal but the claims are relatively small (often 1,5-3 months’ wages if employed less than 10 years) compared to most other EU-countries.

Special Tax Provisions And Severance Payments

All income from work in Denmark is subject to tax, including severance payments. Tax is regulated in detail in Denmark.

Benefits, however, such as free phone and internet, is taxed light compared to the value for the employee.

Allowances Payable To Employees After Termination

During the notice period, all usual payments and benefits shall be paid/available unless otherwise specifically agreed.

Accrued but not spent holiday shall be paid after expiry of the notice period.

Bonus and similar income is often to be paid pro rata, depending on the agreement in this regard.

Time Limits For Claims Following Termination

Claims based on employment agreements are time-barred after 5 years. Given the fact that case law tends to be very employee-friendly, it is less likely that a claim against an employer lapses due to failure to act in time.

Specific Matters Which Are Important Or Unique To This Jurisdiction

Danish employment law is based on a variety of sources and include very detailed regulation. We strongly recommend that you always seek specific advice from a local specialist.

Search by:
Need more information?
Contact a Contributing Author:
Jesper Bach Jensen

Eva Kaya


© 2021, Advokatgruppen. All rights reserved by Advokatgruppen as author and the owner of the copyright in this chapter. Advokatgruppen has granted to Multilaw non-exclusive worldwide license to use and include this chapter in this guide and to sublicense Lexis Nexis, a division of RELX Inc. and its affiliates certain rights to use and distribute this Guide.

The information in the How to Hire and Fire Guide provides a general overview at the time of publication and is not intended to be a comprehensive review of all legal developments nor should it be taken as opinion or legal advice on the matters covered. It is for general information purposes only and readers should take legal advice from a Multilaw member firm.

Publication Date: June 2021