In this part 3 of the FAQ we will cover topics relating to termination of the employment, including the termination process, the notice of termination, statutory severance pay, release from the duty to work, and unfair and discriminatory dismissals.

What is the formal process for terminating the employment?

Generally, private employers are under no obligation to comply with a specific formal termination process under Danish law. Certain formal requirements may, however, be stipulated by applicable collective bargaining agreements.

Typically, the termination process will (at least) include the following steps:

  • Considering and documenting the background of the potential termination carefully, including the reasons for the termination and the reason for selecting a particular employee for termination;
  • Drafting a letter of termination setting out, inter alia, the rights and obligations during the notice period;
  • Setting up a meeting between the employee and the employee's superior;
  • Handing over the letter of termination at the meeting and explaining the background for the termination.

If the termination is attributable to the employee it may be necessary to follow a certain procedure, see also later regarding unfair dismissals and warnings. 

What is the notice of termination for salaried employees?

Under the Danish Salaried Employees Act the notice of termination to be given by the employer to terminate the employment varies depending on the employee's seniority as set out below:

Length of continuous employment at the time of notice

Notice period

Up to five months

one month

Up to two years and nine months

three months

Up to five years and eight months

four months

Up to eight years and seven months

five months

More than eight years and seven months

six months

The employee may, on the other hand, terminate the employment by giving one month's notice regardless of the length of employment.

Any such notice must be given to expire on the last day of any calendar month.

The parties may agree to extend the notice periods set out above (i.e. the one month notice period to be given by the employee and the one to six months' notice period to be given by the employer) as long as the extension of the notice to be given by the employer is extended by at least as much as the extension of the notice to be given by the employee.

An employer and an employee may agree on a trial period of a maximum of three months during which either party may terminate the employment by giving 14 days' notice. The 14 days' notice period must expire before the expiry of the trial period. If the parties have not specifically set out that either party may terminate the employment by giving 14 days' notice during the notice period, the employee may terminate the employment without notice during the trial period but the employer must observe the 14 days' notice period.

What about notice of termination for blue-collar workers?

The notice periods for termination of the employment for a blue-collar worker depends on the applicable collective bargaining agreement. Generally, the notice periods set out by collective bargaining agreements are shorter than the notice periods stipulated by the Danish Salaried Employees Act. By way of example, the Confederation of Danish Industry's Industrial Agreement (in Danish “Industriens Overenskomst”) sets out the following notice periods:

Notice to be given by the employer:

Length of employment

Notice period

Less than six months

No notice

More than six months

14 days

More than nine months

21 days

More than two years

28 days

More than three years

56 days

More than six years

70 days

More than nine years (and only in respect of employees of at least 50 years of age)

90 days

More than 12 years (and only in respect of employees of at least 50 years of age)

120 days

Notice to be given by the employee:

Length of employment

Notice period

Less than six months

No notice

More than six months

seven days

More than three years

14 days

More than six years

21 days

More than nine years

28 days

If no collective bargaining agreement applies to the employment, the parties may agree to the notice periods that they want as long as such notice periods are deemed “appropriate”.

When is statutory severance pay payable?

If an employer dismisses a salaried employee with at least 12 years' seniority, the employee is entitled to statutory severance pay regardless of the fairness of the dismissal. The severance pay amounts to one month's salary if the salaried employee has been employed for more than 12 but less than 17 years, while 17 years of service (or more) entitles the employee to the maximum statutory severance pay of three months' salary.

Further, applicable collective bargaining agreements may set out additional severance pay entitlements for employees.

Can an employer release the employee from the duty to work during the notice period?

As a starting point, an employee is required to continue his/her work during the notice period. The employer may, however, choose to release the employee from his/her duty to work, provided that normal salary is paid during the notice period. There is no statutory right for the employee to be released from his/her duty to work during the notice period.

Before releasing an employee from his/her duty to work, the employer should keep in mind that such decision is final, and the employer may therefore not subsequently demand that the employee returns to work.

An employee who is released from his/her duty to work is entitled and obliged to look for other employment with another (non-competing) employer. If the employee manages to find such employment before the expiry of the notice period, salary paid by the new employer may be set-off against the employee's claim for salary from his/her original employer. For salaried employees, the original employer may, however, not set off the employee's other income for the first three months of the release period. 

What are the rules on unfair dismissals?

If a salaried employee with at least one year of service is dismissed by the employer and the fairness of the dismissal is not justified by the conduct of the employee or the circumstances of the employer, the employee will be entitled to compensation for unfair dismissal.

Generally speaking, dismissals caused by restructuring or redundancies will not entitle the employee to compensation for unfair dismissal since the dismissal will usually be considered justified by the circumstances of the employer.

Dismissal due to an employee's breach will be considered fair as it is justified by the circumstances of the employee. On the other hand, if the employer is not satisfied with the employee's performance in general, it will probably be necessary to give the employee a written warning, give the employee the chance to improve the performance, before turning to dismissal in order for the dismissal to be regarded fair (and even in that case the dismissal may not be considered fair).

As a starting point, an employee's ordinary sickness absence will not justify a fair dismissal. However, dismissal owing to the employee's sickness absence may very well be considered fair depending on the specific circumstances at hand including the duration of the sickness absence, the opportunities for the employee to take up the work again and the problems caused to the employer's operations due to the employee's absence.

The compensation amount for unfair dismissal varies depending on the circumstances of the case and the employee's length of continuous service. Generally, the maximum compensation equals the salary payable during half of the salaried employee's notice period. For employees of more than 30 years of age, the compensation may, however, be up to three months' salary regardless of the applicable notice period. For employees with more than ten or fifteen years of seniority, the compensation may be up to four- or six-months' salary respectively.

For blue-collar workers, the protection against unfair dismissal varies depending on the applicable collective bargaining agreement.

Do some employees enjoy special protection against dismissal?

Yes, in addition to the general protection against unfair dismissal as described above and the anti-discrimination law touched upon below, certain types of employees are specifically protected against unfair dismissal. This applies to shop stewards, working environment representatives and employee-elected board members who may generally only be dismissed if the dismissal is due to “compelling reasons”. If an employee is dismissed in violation of the applicable protection against unfair dismissal, the employee may be entitled to compensation that is a lot higher than the amounts specified above.

How about discriminatory dismissals?

Anti-discrimination law protects employees against dismissal (and other differential treatment) on grounds of race, ethnic origin, age, handicap, gender, etc.

If a dismissal violates anti-discrimination law, the employee discriminated against may be awarded compensation. Although the law does not set out specific compensation levels, case law shows that such compensation will generally amount to approximately six months' salary and not more than 12 months' salary depending on the employee's length of continuous service.

A future part of this FAQ will deal with discrimination in detail.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.