1 semester – 8 lessonEmployment law, chapter 20

Lene Ravn Rasmussen, lfrr@iba.dk

Plan for today• Introduction employment law• Collective agreements – the Danish model• Individual agreements

• Regulation – non-discrimination etc.• Salaried employers act• Contracts• Absence• termintion

• Questions• Next time

Introduction to employment law• An employee puts his labour at the disposal of an employer on a

regular (exclusive) basis, which in turn pays the employee wages for the work performed• Normal starting point: The contract of employment• Narrowed considerably by mandatory law on e.g. holiday, equal treatment

etc.• Also narrowed considerably by collective agreements between employers’

and employees’ associations on subjects like minimum-wages, working conditions etc. within certain areas of trade• In Denmark we have no law setting minimum wages!

Industrial Relations Law = the collective labour law• General agreements, master agreements and local agreements

• General agreements• Agreements between associations• General trade agreements are not applicable to individual employers, if they are not within an association which adheres to such an

agreement. Individual employers can however make an adoption-agreement directly with the union.• Master agreements

• Made between the overall unions – often consists of rules regarding notice of termination, renewal of general agreements, strikes and the fundamental right for the employers to manage and distribute work

• Local agreements• Made between the individual employers and an employee representative

• The agreements are so-called ”no strike”-agreements. Meaning that you will not do anything to make a dispute as long as the other party adheres to the agreement• But you are allowed to do the things in your contract – e.g. terminate your employment, if you are unhappy• Of course you cannot get fired for exercising your right under a collective agreement, if it is lawful! • In case of a party breaking the collective agreeement, they might be penalized by the Industrial Court (not within

the normal court system) with penalties (fines on a daily basis, until you stop breaching the collective agreement – the earnings from the fines is given to the aggrieved party)

Conflicts• Main rule: You have the right to intigate industrial conflicts

• For the employee:• Strike (omission of work)• Blokade (Resistance against taking up employment – this does not mean that you are allowed to stop

someone from entering the workplace of the employer. It means that members of a certain association is not allowed to take up employment at that specific employer)

• For the employer:• Lockout (exclusion of work)• Boycott (resistance against employing)

• Limitations:• Not during a settlement period of a collective agreement• Certain employees do not enjoy the right to strike. These are public servants who has their rights

governed by civil servants legislation. Example: police officers

How to solve conflicts• 1. negotiation• First between the company and a representative from the employees• Next: mediation between the relevant organizations

• 2. the Industrial Court • In case the parties cannot agree on a new collective agreements

negotions will be made in a conciliation institute – if the parties still cannot reach a settlement the government might interfere and pass legislation instead.

The individual contract• Nearly every contract is under these rules:• Law on holidays• Law on equal treatment

• Most contracts are subject to special legislation of the Salaried Employment Act (Funktionærloven)• You can agree on the status as a salaried worker – but you cannot

deny a salaried worker the rigths stated in the salaried employment act.

Salaried employers• Covers ”salaried employees”

• Persons who in full or in substantive part are engaged in buying and selling activities or in office work or equivalent warehouse operations

• Persons who in full or in substantive part are engaged in technical or clinical services not pertaining to trade and industry, and other assistants performing comparable work

• Persons whose work consists in full or in substantive part of managing or supervising on behalf of the employer the execution of the work of others

• Also covers fixed-term employments within the abovementioned categories (except the provisions on termination, naturally)• Only applies if the employee in employed for an average of at least 8 hours

per week, and the employee is hired in a way, where the employer can instruct him in his work

QuestionIs a 15-year old office messanger who works for two hours every day after school a salaried employee?

What if it was only one hour every day after school?

Employment clauses• Are made to protect companies! An alternative could be “stay on bonuses” or prolonging

the notice from the employees• Employee non-solicitation clauses

• The employee is obligated to pay a contractual penalty if any more of the employer´s staff follow the employee to a new employer within a certain time. Could be considered invalid in whole or partly according to the Danish contracts act section 36

• Non-competition clauses• Section 18 of the salaried employees act. It is stated that non-competition clauses are only binding if

the employee receives compensation amounting to at least 50% of the salary at the time of retirement

• Customer non-solicitation clauses• Section 18a of the salaried employees act. Only valid if the employee receives compensation

• No-hire clauses• Agreements between businesses. The employee is entitled to be informed and get compensation.

Who can be employed?• Free choice• Limitations to freedom of choice

• Limited by the equal treatment act• You may not discriminate based on gender or status, neither indirectly nor directly

• Directly: ”I will not hire women”• Indirectly: ”I will not hire those, who are able to give birth”

• It also restricts the freedom of choice in the advertisement for labour in the way that you are not allowed to write that you prefer a specific gender

• Limited by the Non-Discrimination Act• Meaning, you may not discriminate based on race, colour of skin, religion, political

persuasion, sexual orientation or origin – probably not age either• You are not even allowed to ask questions in this regard at job interviews!

Question• Axel has an add in the newspaper. The add has the following wording:

”Inspirational job offer! Danish speaking people will be prefered”• Is this add OK?• What if the add had said: ”Danish people will be prefered”?

The employment contract• MR: No formal requirements – oral agreements are binding• The Act on an Employer´s Obligations to Inform Employees of the Conditions Aplicable to

the Employment Relationship Act. No. 240 of 17 March 2010 is based on an EU Directive – the rules are therefore largely identical throughout the EU.

• Information an employer has to give the employee (examples):• Names and adresses of the employer and employee• Location of place of work, title, holiday rights, pay, working hours etc.

• Which employees are covered by the rules:• MR: all employees• E1: seamen• E2: Employment lasts less than 1 month• E3: Employment lasts less thant 8 hours work per week• E4: employees who have at least the same protection under collective agreements

What happens if the employee does not get the information?• If excusable omission compensation from DKK 0-1,000• Other omissions without specific effect DKK 2,500-5,000• If the omissions lead to conflict or risk of conflict DKK 7.500-10,000

QuestionsThomas was hired as at the advertising agency "Colours" from June 1st 2014. Thomas had no written contract - it was not necessary his boss said. After the first month of employment, Thomas got his first salary, but the salary was DKK 3,000 lower than agreed. Thomas got mad - what can he do?

Duties• The employee

• Perform the work agreed to in accordance with the instructions of the employer• Must be with reasonable skill and care, in an ordinary pace and at agreed place• The employer cannot ask the employee to do something at risk to the employee’s life, honour or welfare• Working environment act ss. 50-51: You are obligated to have 11 hours of continuous free time every day and 1 day completely free

from work per week• Loyalty towards the employer• Non-competition clauses (limited by Salaried Employments Act s. 18)

• The employer• Needs to pay you for your work

• Time wages (calculative)• Performance wages

• Commission (succes fee)• Overtime• Bonus’• Perks (free car, internet, phone etc)

• Needs to adhere to the Equal Pay Act (non-gender based factors is the only thing, where you can differentiate)

Absence of the employee• Holiday

• Act on holidays – applicable on all employees – defined as ”Persons who receive consideration for personal work in an employment relationship”• Cannot be deviated from in favour of the employer

• You earn 2,08 days of paid holiday for every months employment in a calendar year (year af accrual)

• Always right to 25 days of holiday (not necessarily paid)• Must be used in the following calendar year from 1 May to 30 April and must be for 5 days a

week. You have the right to a main holiday period of 15 days (3 weeks, since you don’t count weekends)

• The employer decides on your exact holiday dates, but cannot prevent you from taking a holiday in certain weeks, if it does not effect the operation of the business

• Holidays begin at work start on the first day and ends at the end of the last day.

Absence of the employee• Lawful absence

• Sickness• Salaried Employees Act s. 5

• If not intentional or gross negligence, then it is lawful, meaning that you can get your normal wages as if you had been at work

• The employer can demand medical documentation (but at his own expense)• Maternity leave Act

• Any woman has a right of ansence from work on grounds of pregnancy from the point in time where four weeks’ absence remain until the estimated time of birth

• After birth, the woman is entitled to take the first two weeks off. Afterwards she is entitled to 12 weeks of absence

• The father has a right for 2 weeks of continuous absence within the first 14 weeks after birth• Upon the expiration of the 14th week, the parents each have a right to absence for 32 weeks –

postponed absence (up to 13 weeks) has to be taken before the child becomes 9 years old

Termination of the contract• From the employee

• Free right to termination (no reasons needed).• Notice:

• Salaried Employees Act: 1 month from the end of the current month• If the employer has committed a fundamental breach of contract (e.g. by refusing to pay your salary), you are allowed to terminate employment

immediately. You still have claim for the duration of your normal notice period

• From the employer• MR: Free right, but you are not allowed to breach law or collective agreement and it has to be because of the employees or the

companies relations (you cannot fire a woman because she is pregnant, you cannot fire someone because of his age or colour, you cannot fire someone simply because you don’t like him etc)• You are not allowed to fire someone because of the union membership (or lack thereof)• Employee representatives have special protection

• Notice:• Salaried Employees Act: Up to 6 months notice. Only one months notice within the first 5 months of employment

• The parties may agree to a probationary period of up to three months during which the employee can be terminated from employment with 2 weeks notice• If the employee commits a fundamental breach of contract (e.g. by telling company trade secrets to a third party), you can terminate their contract

without notice!• If you fire someone, when they are pregnant or on maternity leave, you have to prove that it was not because of their

pregnancy!

Cancellation of the contract• Cancellation from the employer:

• If the employee commits a fundamental breach of contract (e.g. by telling company trade secrets to a third party, stealing from the company, not coming to work without a reasonable explanation), termination can be done without any notice!

• Cancellation from the employee:• If the employer has committed a fundamental breach of contract (e.g. by refusing to pay the agreed

salary), the employee is allowed to terminate employment immediately.

QuestionOn October 20, 2013 Marie was employed by the company "Furniture A/S". The advertisement was worded as "accounting, purchasing and telephone service and casual tasks as needed." The remuneration was "salary" and working 37 hours a week.

Marie had been repeatedly late for work and her boss had raised this with her - Marie had promised improvement, but it had not helped. 12 December 2013, Marie stayed home to bake Christmas cookies - she thought she needed a day off but she had not notified the workplace. When her boss found out Marie received a written warning that if something similar happened again she would be expelled immediately. On January 9, 2014 Marie was in a bad mood and decided not to go to work. She didn’t inform her boss. The following morning, she was expelled.

Marie's union intervened and demanded that Marie had earnings equivalent to a notice period of 3 months. The company declined.1.1 Is Marie a salaried employee according to the Salaried employees Act? 1.2 Is the dismissal justified? 1.3 Had it made any difference if Marie December 20, 2013, had informed her boss that she was pregnant?

QuestionChristian owns and manages a manufacturing company in Kolding. He also plays soccer on a relatively high level. Christian has received an offer to play professional football in Liverpool on a three year contract and therefore Christian need to hire a managing director who can take care of business. Christian is single and he could well imagine a young, unmarried woman as the new managing director, but is unsure whether he should write this in the advertisement - his good friend Kurt believes, however, that it is no problem, as long as it is not a man he specifically would prefer in the advertisement. Do you agree with Kurt?

QuestionJulie had been employed as a seller in the company "Top Fashion" for 7 years. She knew the business well and she decided to start a business of her own instead and therefore she gave her notice to Top Fashion. In her employment contract however it was stated that Julie upon termination of employment was not allowed to work in a competing business for 2 years. Is such an agreement valid? What requirements must such an agreement meet?

Next time• Credit agreements and guarantees, chapter 10 and 18