The layoff law in Denmark - How do you terminate an employee?

Rules for firing employees in Denmark

Firing employees can cause employers many concerns. By reading further in this article, you can learn more about your obligations as an employer in relation to the dismissal of your employees.

One of the first things that you as an employer must examine is the basis of employment.

Are your employees employed as white collar workers, under a collective agreement or something else?

This may have an influence on the notice of termination. In the following sections, you can read about the rules for the various employment situations.

The Danish Salaried Employees Act

If your employee is covered by the Danish Salaried Employees Act, they have the right to receive the notice of termination in a reasonable time. In addition, it is a requirement that the notice of termination must contain a well founded argument for the employee's dismissal.

A notice of termination is a maximum of 6 months.

Below you can see a table of the rules for the length of the notice of termination:

If your employee has more than 120 sick days within 12 months, a shortened notice of termination can be stated in a written agreement at the beginning of employment. The termination must take place after the 120th sick day and this assumes that the employee is still ill.

In addition, you should be aware that in some collective agreements it is prohibited to fire an employee due to illness.

When your employees are covered by the Danish Salaried Employees Act, they can always resign with one month's notice.

With this in mind, we can move on to the next section, which describes how you should behave if your employee is employed under employment conditions other than the Danish Salaried Employees Act.

Dismissal of an employee with other employment conditions

Termination of employees who are not white collar workers will typically be covered by a collective agreement that applies within the relevant work area that the person handles.

If you have an employee employed during a probationary period, you can read more about what the rules for termination in these circumstances are in the next section.

Dismissal of employees during their probationary period

If your employee is employed on a trial period for 3 months, the Civil Service Act will apply for the first 3 months. This means that there is 14 days' notice for both parties.

Termination can occur no later than 14 days before the end of the trial period.

Below you can get an overview of the rules that apply while your employee is terminated and afterwards. 

Rules for firing an employee

If a white collar worker is dismissed, it is the employee's full right to take time off from work to the extent required to find a new job, now that they are in a job search process.

If your employee has been employed for more than 12 years, the company must pay a severance payment equivalent to one month's salary.

If your employee has been employed for 13 years, the employee is entitled to 3 months' salary in severance pay.

If you have not terminated your employee for valid reasons, the company must pay compensation to the employee if the employee is over 18 years of age and has been employed by the company for at least 1 year at the time of termination.

The termination must be submitted in writing no later than the last day of the month before the termination period comes into force. If the employee wants a written reason for the dismissal, you have a duty to fulfil this wish.

If you have dismissed an employee who has worked for the company for more than 3 months, the employee is entitled to three weekdays of unemployment benefit financed by the company after they have stopped working.

 

As an employer, it is also important that you comply with the Equality and Discrimination Act. You can read more about this in the next section.

The Equality and Discrimination Act

As previously described, it is important that you dismiss your employees for factual and valid reasons. This is what the Equality and Discrimination Act helps to ensure.

The law emphasises that as an employer you must not discriminate between genders and this also applies during dismissal. There must be no implicit or explicit discrimination.

As an employer, you may not fire an employee on the basis of the following points:

• Race, colour or ethnic origin
• Religion and faith
• Sexual orientation
• National or social origin
• Political opinion
• Age
• Disability

These prohibitions against discrimination come into force upon employment and apply during employment and upon dismissal of the employee.

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