Coronavirus – Bill on wage compensation for the private sector enacted

The Danish Government has enacted the Bill on wage compensation for private-sector employers. In connection with the enactment, various issues and questions have been addressed.

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The Government recently introduced a Bill on wage compensation reflecting the agreement between the Government and the social partners regarding wage compensation for businesses which, as a consequence of the current economic situation, are facing dismissals. Our commentary on the Bill can be read here

Two issues, which both arose during the Bill’s passage through the Danish Parliament, are particularly worth noting:

  1. The wage compensation scheme may be combined with pay cuts, but it is a condition that the pay cuts are agreed with employee representatives or a majority of the affected employees. Such employees will, on the other hand, not be required to take days off on their own account during the period of being sent home, and they will thus be entitled to receive pay throughout the compensation period.
  2. The number days off during the period of being sent home when the employees do not receive pay but must instead take holiday or time off in lieu will be calculated on a prorated basis taking into account the duration of the period of being sent home. Employees who have been sent home throughout the duration of the wage compensation scheme (from 9 March to 9 June 2020) must therefore take five days off on their own account, whereas employees who have only been sent home for, for example one month, must take time off on their own account corresponding to one-third of five working days, i.e. 1.67 working days.

    The employer decides the timing of the holidays subject to agreement with the employee. If the employer and the employee cannot reach agreement in this regard, the days will be distributed proportionately over the entire period.

In addition to the above, a number of questions have been raised and answered in the process, and this has helped clarify various aspects of the wage compensation scheme. For example, even though the employees’ duty to work is suspended during the period of being sent home this period must still be included when calculating their period of continuous employment, and the employees will be entitled to terminate the employment relationship also in a situation where they have been sent home – and, in such case, the employees will still take part in the scheme.

Further, it has been specified that during the compensation period the employer may require the employees to resume work subject to one day’s notice and the employees will resume the duties and responsibilities applicable at the time of being sent home.

Finally, it should be noted that some uncertainty as to the scope of the wage compensation scheme still exists, and we therefore encourage employers to administer the scheme in such a way so as to ensure that they do not lose their entitlement to receive compensation under the scheme.

The content of the above is not, and should not be a substitute for legal advice.

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