Act on temporary division of labour

On 10 September 2020, the Danish Parliament passed a law on access to the implementation of temporary division of labour as part of the measures for handling COVID-19. The bill is an implementation of the tripartite agreement on a new temporary division of labour scheme in the private labour market, which the government and the social partners entered into on 31 August 2020.

The law, which enters into force on 14 September 2020, means that all companies, both those covered by collective agreements and those who are not, have the right to establish a division of labour scheme, according to which the employer can reduce employees’ working hours and corresponding pay for a temporary period as an alternative to dismissal.

The adopted law on division of labour allows the employer to retain employees who cannot be employed on full time hours. Employees have the opportunity to apply for supplementary unemployment benefits to cover the loss of income caused by their reduced working hours/salary.

The law makes it possible to establish a division of labour for all employees for up to four months, however the law requires that the use of the scheme be objectively justified. If the employer wants to make use of a temporary division of labour, the division of labour period must be implemented before 31 December 2020. The division of labour period can thus run until the end of April 2021.

Procedure and requirements for consultation
An employer who wishes to initiate a division of labour scheme must inform all employees who may be covered by the scheme. The employee must be informed of the terms and conditions that will apply during the division of labour scheme, as well as of the division scheme’s expected start time and end time. The employees then have 24 hours to decide whether they will be covered by the division of labour scheme.

An employer who wishes to initiate a division of labour scheme pursuant to the new law must inform and consult the affected employees in accordance with the established rules in the applicable collective agreement or alternatively follow the Information and Con-sultation Act if relevant.

Termination and other working conditions
If an employee decides that they do not want to participate in the division of labour scheme, then the employer has the option of determining whether the person in question should be dismissed. The law does not regulate the right to dismiss employees, and the general principles of objectivity and fairness in connection with dismissal pursuant to the legislation and collective agreements therefore continue to apply.

Employees who are subject to division of labour scheme, are during the scheme period covered by their usual terms of employment (save as hours and pay), however an employee during the division of labour, without prior notice, can resign to move to another job with a longer working hours.