Termination of an employee - read about rules and rights here

Termination of an employee

When terminating an employee, a workplace should thoroughly investigate the requirements for the termination, for example many terminations must be factually justified.

In this article, we will make you more aware of the rules and rights regarding terminations. As in all legal matters, it is a good idea to put the strategy together with a lawyer or legal advisor in the HR department.

How do you terminate an employee?

It is crucial that you have investigated before the termination whether there is a requirement that the termination must be factually justified. In addition, it must be determined whether the employee must work, be suspended, or released during the notice period.

If the employee is covered by the Civil Service Act, the employee can demand that the employer give written reasons for the termination. This justification can be important when it has to be assessed whether the termination is factually justified.

A factual justification can be:

• The company's conditions, including savings and organisational changes
• The employee's conditions, e.g. negative behaviour. Here, the employer can emphasise that a written warning has previously been issued

Must a termination always be factually justified?

A civil servant with more than 12 months' seniority has the right to a formal notice of termination. The termination must also be factually justified after 9 months of employment if the employee is covered by a collective agreement. This applies to both salaried and non-salaried employees.

If the employee is neither a civil servant nor covered by a collective agreement, it is not a requirement that the termination be factually justified.

However, it should be noted that a number of employees may belong to the group, "specially protected employees". This group is often subject to special termination rules based on the Equal Treatment and Discrimination Act. The rules ensure that all employees are treated equally, which is why it is not permitted to dismiss an employee on the basis of the following criteria:

• Sex
• Age
• Pregnancy
• Handicap
• Ethnicity
• Religion
• Sexuality
• Political beliefs

Trade union representatives and working environment representatives belong to the category, "specially protected employees", if there is protection for these within the professional area.

If the employer terminates a specially protected employee, the employee can be awarded a special compensation if one or more of the above criteria is emphasised and this type of compensation can be costly. Thus, it is the employer's burden of proof that no emphasis is placed on unreasonable criteria in the termination, which can be a difficult burden of proof to meet.

It is therefore recommended that you receive legal support at all times when you want to dismiss an employee.

The Danish Salaried Employees Act and notice of termination

An employee's notice of termination may depend on several factors. The notice of termination often appears in the employment contract.

If the employee is covered by the Civil Service Act, the notice of termination must follow the guidelines defined herein, even if there is a specific agreement in the employment contract. We have prepared an article that can make you more knowledgeable about the Civil Service Act, which you can read here.

In the event that the employee is not a white collar worker (a person who performs professional, managerial, desk, or administrative work), but the workplace is covered by a collective agreement, the company must follow the rules set out in the collective agreement regarding notice of termination.

It should also be noted that a number of groups of employees are entitled to collective agreement terms despite the workplace not being covered by a collective agreement. This applies, among other things, to employment with wage subsidies.

On the other hand, the employer and the employee can freely agree on the notice of termination if the employee is not a white collar worker and the company is not covered by a collective agreement. Remember that the notice of termination must in any case be included in the employment contract.

Furthermore, rules also apply to hourly paid employees and employees during a trial period, for example hourly paid employees often do not have a claim to a notice of termination.

What is the difference between suspension and exemption?

The employer decides whether a terminated employee must work as usual during the notice period, be suspended or released. However, the employee is typically entitled to pay during the notice period – regardless of the workplace's choice.

Suspension means that the employee does not have to attend the workplace as usual. On the other hand, the employee must be available and show up if there is a need for him. On the other hand, layoff means that the employee does not have to report to work or be available during the notice period.

If the employer chooses suspension, there should be a real need for the terminated employee's labor. Thus, it is not permitted to suspend an employee in order to avoid a layoff.

In addition, an employee can also be dismissed. An expulsion implies that the employment relationship ends from the time of expulsion. This means that the employee is no longer employed by the company, and is only entitled to his salary until the day of expulsion, which differs from both a suspension and a layoff.

What is a severance agreement?

The severance agreement is an alternative to a termination. A severance agreement can be used if the employer and employee agree that the employee must resign from his position.

The purpose of a severance arrangement may, for example, be to end the employment relationship amicably. Therefore, a severance agreement allows the employer and the employee to jointly agree the terms for the termination of the employment relationship. However, the severance scheme should at least include the conditions that the employer should have complied with in connection with a termination. In addition, the agreement may also include benefits as an incentive for the employee to sign the agreement.

Holiday allowance upon termination

When an employee entitled to paid holiday resigns from his position, the employer must settle a holiday allowance corresponding to 12.5% ​​of the employee's holiday-entitled salary. The holiday allowance replaces the holiday with pay that the employee has not yet taken before he resigns from his job.

The employer must pay the employee's holiday allowance into the Holiday Account no later than the last day of the employee's employment.

Collective dismissal and the Mass Redundancy Act

If a workplace has to dismiss a large group of employees within a period of 30 days, this must typically be done cf. the rules in the Mass Redundancies Act. The purpose of the mass redundancies law is to avoid or limit the planned redundancies, and also to ensure the best possible conditions for the dismissed employees. The Act contains the procedures for orientation and negotiation with the employees and their representatives.

G-days upon termination

G-days are an expression of the first two days of unemployment after an employee has resigned from his position, and during which the employee is entitled to an employer's allowance. The company must pay G-days to the employee when an employee is dismissed or sent home, and is free for the first two days after the resignation.

There are two conditions for being paid G-days, namely the employee must: 

• Be a member of an union (unemployment insurance)

• Within the last 4 weeks before resignation, have worked what corresponds to full contractual working hours for at least 2 weeks

Finally, we would like to draw your attention to the fact that this article is indicative and we recommend contacting legal assistance at any time.

See also the rules for termination when it applies to the: