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End of Employment in Denmark

Employee Termination Procedures & Guidelines in Denmark

While termination procedures are straightforward in Denmark, there are a few statutory rules for salaried employees.

The process includes following the notice period, having a reasonable justification for termination (if the employee has been with the company more than a year) and, if applicable, compensating the employee.

Employers have the right to terminate an employment contract due to:

  • Financial reasons
  • Organisational changes
  • Employee misconduct, such as lack of cooperation or underperformance
    • Dismissal based on dissatisfaction with the employee requires a warning and a chance to improve before leading to termination
  • The employee has been sick for over 120 days in the past 12 months (must be agreed in the employment contract).

Unjustified terminations by the employer can lead to employee compensation.

A written notice is not required but strongly encouraged for documentation purposes. Sufficient reasoning for termination must be provided in writing if required by the employee.

Depending on the length of the employment, the employer needs to give the following notice periods to the employee:

  • One month for up to five months of employment  
  • Three months for up to two years and nine months of employment 
  • Four months for up to five years and eight months of employment  
  • Five months for up to eight years and seven months of employment 
  • Six months for over nine years of employment

Employees need to give employers one month notice when resigning.

Gross misconduct from either the employer or the employee entitles the other side to end the employment contract without any notice.

There is no general statutory rule for compensation when ending the employment relationship. When there is one, it's usually mandated by collective agreements and mostly benefits salaried employees. The standard rules are:

  • Non-salaried workers: the employment contract or the collective agreement would need to indicate one
  • Salaried (white-collar) workers: compensation corresponding to half of the notice period. It will depend on the length of continuous employment, circumstances of the termination, age of the employee and others. Usually, the compensation will be for 1-3 months.
  • Executive officers: Only if provided for in the employment contract or service agreement.

At the termination of employment, the employer is required to pay any outstanding holiday leave to the employee's holiday fund.

In addition, salaried employees are entitled to a severance pay corresponding to 1-month salary if the employee has been employed in 12-17 years. If the employee has been working for more than 17 years, the severance pay will be three months of salary.

Blue-collar employees

In Denmark, there is no general protection for unjustified termination for blue-collar employees unless this is agreed in the employment contract or through a collective bargaining agreement. In turn, there is no general regulation on the length of the notice periods for blue-collar employees unless agreed in a collective bargaining agreement.

Procedure guidelines

Before terminating an employee based on their performance, misconduct or cooperation issues, the employer must follow a procedure that allows the employee to improve before ceasing employment. If the employer doesn't follow the guidelines, the termination can be considered unjustified and can lead to employee compensation.

The employer must first give a written warning to the employee containing:

  • A clear statement of the issue and explanation where improvement is required
  • Proposed objective and measurable changes
  • Ideas on how the problem can be solved
  • Suggestions for follow-up meetings (if applicable)
  • A statement that failure to comply with the requirements may carry employment consequences
  • A time frame (if applicable)

Employees have the right to bring a union representative to the meeting. Employers must inform the union representative of the warning within two days of the meeting.

If the conduct or performance of the employee doesn't improve, employers may terminate the employment following the required notice periods.

Unfair Dismissal in Denmark

Employee protection

All employees are protected from unfair dismissal for the following reasons:

  • Pregnancy, maternity, paternity or parental leave
  • Filing a complaint against the employer
  • Temporary work
  • Race
  • Colour
  • Sex
  • Sexual orientation
  • Religion
  • Political opinion
  • Social, ethnic and national origin
  • Age
  • Trade union membership and activities
  • Disability, unless the employer has fulfilled his obligation to adjust the work to the employee's disability

Dismissal not considered reasonably justified by the conduct of the employee or company circumstances may entail compensation to the employee. Salaried employees with less than 12 months seniority are not protected from unjustified termination. Therefore they are not entitled to compensation unless the dismissal is reasoned in one of the bullet points above.

For employees having worked for at least 12 months, compensation cannot exceed their salary for half of the notice period. Compensation may amount up to three months' salary for employees over 30 years of age, four months' salary for employees with at least ten years of service or six months' salary for employees with at least 15 years of service.

Redundancy Pay & Entitlement in Denmark

Collective dismissal

Dismissal is considered to be collective when the company, in a period of 30 days, lets go of 10 employees (companies with 21 to 99 workers); 10% out of 100 to 299 workers; or 30 employees if there are more than 300 workers in the company.

Before proceeding with dismissal, the employer must consult the trade union representative, consider alternatives to dismissal, and notify both the government and the union.

There is no specific statutory redundancy payment for collective dismissal.

Redundancy Pay

For service of 12 to 17 years, employees are entitled to a redundancy pay of 1-3 months' salary respectively. Employees might be entitled to contractual redundancy pay under their employment contracts or collective bargaining agreement.

Resignation Procedure in Denmark

Employees who would like to resign have to do so in writing and give their employers a one month's notice and work until the end of the month they are leaving. This means that if an employee resigns in March, they are expected to work throughout March and April.

Employees resigning before the end of the probationary period need to give one day's notice. Some contracts might state more extended periods, such as 14 days, which must be respected.

Other End of Employment Regulations in Denmark

Notice period

Employers must give one month's notice to employees who have been with the company for less than six months. For employees working for more than six months, the notice period is three months.

After three years of employment, the notice period becomes four months and is extended by one month for every additional 3-year period of work, for a maximum of 6 months' notice.

Pay instead of notice is allowed, but not a common practice in Denmark.

Severance

Employees who have worked continuously for the same company for 12-17 years are entitled to severance pay corresponding to 1-month salary (3 months' salary for those who worked for more than 17 years). Some collective bargaining agreements include severance pay based on seniority.

This page was last updated on 
22 September, 2022,
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