Posting Employees to Denmark

1. Introduction

It is increasingly common for employees to spend some time working for their employer abroad. This is particularly true in Europe as one of the pillars of the Treaty of Rome is the ability of workers to move freely within Europe. In this guide we look at some of the issues arising when posting employees to Denmark.

2. The EU Directive

The EU Posting of Workers Directive (Directive 96/71/EC (“Directive”)) broadly ensures that posted workers are subject to national minimum employment rights when posted to another member state. A posted worker will therefore as a minimum have employment rights such as minimum terms and conditions of employment, regardless of whether the worker is posted temporarily by their employer to work in another member state and regardless of the governing law of their contract of employment. The Directive does, however, not prevent workers benefiting from minimum terms and conditions which are more favourable and are applied in the state from which they are posted.

The Directive also prevents dissimilar treatment by undertakings from non-member countries. Workers from undertakings from third countries must therefore benefit from the same minimum terms and conditions of employment as those applicable to workers posted from undertakings in Member States.

2.1 What is a posted worker?

A posted worker is one who, for a limited period, carries out her/his work in the territory of a European Community Member State other than the State in which (s)he normally works. The Directive applies to undertakings which:

  • post workers to another Member State under a contract between them and a party in the oter State for whom the services are intended;post workers to another Member State under a contract between them and a party in the other State for whom the services are intended;
  • make intra-company postings; and
  • are employers that post workers and maintain an employment relationship during the posting.

2.2 What terms and conditions of employment are covered by the Directive?
The Directive regulates the following:

  • Maximum work periods and minimum rest periods;
  • Minimum paid annual holidays;
  • Minimum rates of pay, including overtime rates;
  • Conditions of hiring out workers, in particular the supply of workers by temporary employment undertakings;
  • Health, safety and hygiene at work;
  • Protective measures in the terms and conditions of employment of pregnant women or those who have recently given birth, of children and of young people; and
  • Equal treatment between men and women and other provisions on non-discrimination.

3. The implementation of the Directive in Denmark

In Denmark the Directive has been implemented by Lov om udstationering af lønmodtagere (Lov nr. 964 af 2. november 2001 (“the Posting of Employees Act)).

Employees posted to Denmark by a foreign undertaking are also protected by:

  • Lov om arbejdsmiljø (the “Working Environment Act”);
  • Lov om ligebehandling af mænd og kvinder med hensyn til beskæftigelse og barselsorlov m.v. (the “Equal Treatment of Men and Women as regards Access to Employment and Maternity Leave Act”);
  • Lov om lige løn til mænd og kvinder (the “Equal Pay to Men and Women Act”)
  • Paragraf 7 i funktionærloven (Section 7 of the “Salaried Employees’ Act”);
  • Lov om forbud mod forskelsbehandling på arbejdsmarkedet m.v. (the “Prohibition against Discrimination in respect of Employment and Occupation Act”); and
  • Ferieloven (the “Holidays Act”). With respect to holiday, the regulations of the country that are more favourable to the worker will apply.

The Directive contains some provisions for working hours and minimum wages. These provisions are not included in the Posting of Employees Act, and it has been left to the local trade unions to implement these provisions in Trade Union agreements. Note, however, that the Working Environment Act does to some extent regulate working hours and rest periods.

3.1 The Working Environment Act
The Working Environment Act contains general provisions regulating the working environment. The act regulates all work carried out on behalf of an employer. The act is a so-called framework statute; i.e. the provisions are generally worded rules and the act does not contain any specific provisions on material requirements for environmental health and safety conditions.

3.1.1 Health and Safety at Work
The objectives of the Working Environment Act are to ensure a safe and healthy working environment, the standard of which shall at all times be in line with the technical and social developments, and a basis on which the undertaking is able to solve health and safety issues independently with guidance from the labour market’s organisations as well as guidance and supervision by Arbejdstilsynet (The Working environment Authority equivalent to the The Health and Safety Executive in the UK)

3.1.2 Duties and responsibility
The Working Environment Act identifies a number of duties, the majority of which rest on the employer. Breach of these duties may result in criminal prosecution.

3.2 Non-discrimination
Foreign undertakings posting employees in Denmark are also subject to the following acts: Act on Equal Treatment of Men and Women as regards Access to Employment and Maternity Leave Act, the Equal Pay to Men and Women Act, the Prohibition against Discrimination in respect of Employment and Occupation etc. Act and Section 7 of the Salaried Employees’ Act.

3.2.1 The Equal Treatment of Men and Women as regards Access to Employment and Maternity Leave Act.
According to this act men and women are to be treated equally in connection with recruitment, transfer and promotion. Men and women have a right to equal working conditions and any recruitment advertisement must be gender neutral.

The act also imposes an obligation on the employer to treat women and men equally in connection with recruitment and maternity leave. The act does not prevent introduction of special measures protecting women; this particularly applies to introduction of special measures in relation to pregnancy and childbirth.

3.2.2 The Equal Pay to Men and Women Act
Men and women have a right to equal pay for equal jobs or jobs of the same nature. The job description must be based on a general assessment; i.e. on elements such as education, experience and other qualifications as opposed to gender.

A general assessment, however, is not required when determining whether the various components of the salary may give rise to discrimination. Each component of the salary must be assessed individually.

3.2.3 The Prohibition against Discrimination in respect of Employment and Occupation Act
An employer must not discriminate against employees on grounds of race, colour, religion, political belief, sexual orientation or national, social or ethnic origin. The Act guarantees employees equality with respect to recruitment, dismissal, transfer, promotion as well as pay and working conditions. The Act prohibits discrimination of employees with respect to access to vocational guidance, training or re-training measures.

Job adverts must not indicate a preference of race, religion etc. and the employer must not collect, store or use such information.

Failure to comply with these provisions is sanctioned by fines.

3.3 Section 7 of the Salaried Employees’ Act
The Salaried Employees’ Act regulates the legal relationship between employers and the vast majority of salaried employees. The act contains a number of provisions on protection with respect to terms of notice, severance pay, fairness in situations of dismissal, compensation for unjustified dismissal, pay during illness, full pay during illness in connection with pregnancy, early retirement pay and restrictive covenants.

3.4 Holidays
Foreign undertakings posting employees to Denmark must act in accordance with the holiday regulations of the country which are the more favourable to the employee. In practice the rules of the home country will apply, but if the Danish holidays’ regulations offer more favourable rules with respect to the period or holiday pay, the holiday entitlement must be supplemented up to the level of Danish regulations.

3.4.1 The Holiday Act
All employees in Denmark earn a right to holidays with pay and/or a holiday allowance according to the Holiday Act. The holiday allowance may consist of either holidays with pay and a holiday supplement or a holiday allowance of 12½ percent of the salary earned during the previous calendar year.

The holiday entitlement is 2 1/12 days for each month of employment during a calendar year (the “Qualifying Year”). A full year of employment, therefore, entitles an employee to 25 days of holiday, equal to 5 weeks of holiday. Holiday earned in one Qualifying Year must be taken in the following year (the “Holiday Year”). The Holiday Year runs from 1 May in the year following the Qualifying Year to 30 April in the next year. The main holiday period is from 1 May to 20 September during which the employee is entitled and obliged to take at least 15 consecutive holidays.

4. Registration of employees posted to Denmark

Foreign businesses posting employees to Denmark must file certain information about the employees to the Danish Commerce and Companies Agency.

The reporting requirements comprise:

  • name and domicile of the foreign business concerned;
  • identity of the employee;
  • secondment period;
  • place of delivery of the services;
  • dates for the commencement and discontinuation of services; and
  • details of a contact person based in Denmark for the foreign business concerned.

The notification must be made before or no later than the commencement date of the employee’s activities in Denmark. Any change to the information must be notified no later than 8 calendar days after the change has become effective.

The following are exempt from the duty to notify:

  • short-term postings (max 8 calendar days),
  • employees performing activities as part of the delivery, installation or start-up of equipment or technical facilities.

Please click here for more information about who to notify the details.

Failure to notify in time is subject to fines.

The details notified may be shared with other public authorities by the Danish Commerce and Companies Agency.

The object of the regulation is to enable the Danish authorities to monitor compliance by foreign based businesses with Danish regulations. Furthermore, the Danish authorities have indicated that they intend to use the data for statistical purposes.

The material contained in this article is provided for general purposes only and does not constitute legal or other professional advice. Appropriate legal advice should be sought for specific circumstances and before action is taken.

© , March 2009

Please contact:

Steen Rosenfalck

DD +44 (0)20 7553 9931