Tripartite agreement provides opportunity for wage compensation for private employers

Today the Danish government and the social partners entered into an agreement allowing for wage compensation to employers that, as a consequence of the current economic situation, are facing redundancies. The scheme will also apply to businesses that are not covered by collective agreements.

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It is expected that the Danish Parliament will enact the necessary legislation during the coming week and that businesses will be able to send applications for wage compensation to the Danish Business Authority during the week starting on Monday 23 March. The scheme will apply for the period from 9 March to 9 June 2020.

According to the scheme, employers will be able to send home the affected employees with full wages/salaries and receive compensation subject to application to the Business Authority.

The main elements of the scheme, according to the press release from the Danish Ministry of Employment, are as follows:

  • The scheme will apply to businesses that are facing dismissal of at least 30% of their employees or more than 50 employees.
  • The compensation for businesses will amount to 75% of the affected employees’ salary, however DKK 23,000 per month per full-time employee as a maximum, if the businesses choose to send home their employees instead of dismissing them. The compensation for hourly paid workers will amount to 90% of the wages, however DKK 26,000 per month per full-time worker as a maximum.
  • Each of the employees for whom the employer applies for wage compensation must take five days of holiday and/or days off in lieu in connection with the compensation period. If the employees do not have any accrued holiday or time off in lieu, the employees must take five days off without pay or use days of holiday from the new holiday year.

Further details on the scheme can be found here in the press release (in Danish) from the Ministry of Employment which also links to the tripartite agreement and a fact sheet regarding the tripartite agreement.

Norrbom Vinding will of course follow up with more information when the Bill is introduced and further details on the possibility of wage compensation are available.

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

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