New rules on employment contracts and working conditions adopted
The act implements Directive (EU) 2019 of the European Parliament and of the Council on transparent and predictable working conditions in the European Union. The Directive extends Danish employers' obligation to provide employees with information about their employment conditions. The Directive also introduces a number of minimum requirements for employees' employment conditions.
A brief outline of the new rules
According to the new act employees who work an average of three hours or more per week in a reference period of four consecutive weeks are entitled to an employment contract. The same applies to employees for whom no guaranteed amount of paid work is predetermined before the employment starts. This tightens up the rules. Today, an employee is only entitled to an employment contract if the duration of the employment is more than one month, and if average weekly working hours exceed eight hours.
At the same time, the employer's obligation to provide information is extended to include more information than required in the current Employment Contracts Act. Two of the key additions to the employer's obligation to provide information are that the employee's rights in terms of other absence with pay than holiday, and that information must be provided about any training entitlement. In addition, information must be provided about social security systems.
It has also been decided to tighten the deadline for the provision of certain information. Today, an employment contract has to be provided within a month from the start of the employment relationship. According to the new act, the deadline is seven calendar days in terms of some, but not all, information. It means that such information would have to be provided under the new seven-day deadline, while the other information is still subject to the current one-month deadline. In practice, most employers will probably prefer to provide employees with all the information at the same time. If they do so, the seven-day deadline will have to be observed.
The new act also introduces a number of minimum rights, for example, that a probation period exceeding six months must not be agreed. Further, the employer must not prohibit an employee from taking up parallel employment, unless such secondary employment is incompatible with the existing employment relationship. However, the special legislation should still be observed, including the provision in the Salaried Employees' Act that a probation period must not exceed three months for salaried employees. It is also a novelty that if an employer offers mandatory training, the employee should not incur any expenses. This entails that the training period must count as working hours, and that it, as far as possible, should take place within normal working hours.
The new act introduces a new rule on a shared burden of proof when it comes to cases concerning dismissal or equivalent detriment. Consequently, if an employee is able to prove actual circumstances giving rise to a presumption that the employee, for example, has been dismissed because they sought to exercise the rights under the new act, the employer has to prove that it is not the reason for the dismissal.
Updating of employment contracts
Since a large group of employees will be entitled to an employment contract under the new act, heavier administrative constraints are imposed on employers.
It also appears from the new rules that the employment contract must include more information than prescribed by the current Employment Contracts Act. Consequently, all templates for employment contracts with employees in an enterprise should be reviewed to ensure that the employment contracts comply with the new rules.
Employees who are already employed before the act comes into force are not entitled to a new employment contract, even if the employer does not fully comply with the obligation to provide information under the new act. However, an employer is required to provide the missing information within eight weeks from receipt of a request submitted by such an employee. It is therefore also relevant for employers to prepare a draft annex to be used when responding to such a request.
The Danish Business Authority, Team Better Regulation, has assessed that trade and industry in Denmark will incur total transition costs in an amount approx. DKK 900 million Denmark due to the added administrative costs.
The new rules come into force on 1 July 2023.