Remember to update employment contracts before 1 January 2016
On 18 December 2014, the Danish Parliament passed a decision to repeal the 70-year rule set forth in the Danish Act on Prohibition against Discrimination in respect of Employment. As from the entry into force of this amendment on 1 January 2016, it will no longer be possible to maintain individual agreements on automatic termination of the employment relationship due to the employee having reached the age of 70.
This means that after 1 January 2016, any provisions in employment contracts on automatic termination will be invalid. Therefore, it would be a good idea for companies already now to start amending their employment contracts to the effect that such provisions are deleted from the contracts before the above-mentioned date. If the employment contracts are not amended, there is a risk for the employer to be in breach of the provisions of the Danish Act on Employment Contracts and, in the worst case, to be ordered to pay compensation. If there are employees in the company who reach the age of 70 before 1 January 2016, there is no need to amend the contracts of these employees.
If the company is subject to a collective bargaining agreement entered into after 1 January 2008, the provision on automatic termination upon reaching the age of 70 can be maintained until the date on which it is possible to terminate the collective bargaining agreement.For collective bargaining agreements entered into before 1 January 2008, it will still be possible to maintain the applicable age limits for compulsory termination, provided that such limits are objectively and reasonably justified by legitimate purposes and that the means to reach such purposes are appropriate and necessary.