Employee or self-employed? – The common definition of employee in Danish and EU law
The boundary between employees and self-employed individuals is a cornerstone of employment law. This is because only employees are covered by central employment laws – including the Salaried Employees Act, the Holiday Act, the Working Hours Act and the Employment Contracts Act – and in many cases also by collective agreements. An incorrect classification can therefore have far-reaching consequences for both employees and employers.
A formally common but actually different definition
In Danish law, an employee is often defined as an individual who “receives remuneration for personal work in the course of employment“. This definition appears in the Employment Contracts Act and is widely used in Danish case law. However, a number of these rules are based on EU directives, and EU law uses a specific definition of an employee that in some cases goes beyond the Danish one.
EU law defines an employee as an individual who, through a certain time period, provides services for remuneration to and under the direction of another individual. That definition must be interpreted functionally and autonomously, namely, independently of the national definitions of the Member States.
Criteria for delimitation
The assessment of whether an individual is an employee or self-employed is based on a specific, comprehensive assessment of the relationship between the parties. The following factors speak in favour of employee status:
The employer has the power to instruct and supervise
- Working hours are determined by the employer
- The employer pays the expenses
- The remuneration is paid as a fixed salary (monthly salary, hourly wage, commission, etc.)
- The work is personal – it is not allowed to send someone else in your place
Conversely, the following speaks in favour of self-employment:
- The person organises and carries out the work independently
- There is freedom to work for others
- There is a financial risk for the person concerned
- Invoices are invoiced according to invoice
- Materials and rooms are provided by the self-employed person
The Supreme Court's judgment of 3 April 2025
In a judgment of 3 April 2025 (BS-49851/2024-HJR), the Supreme Court ruled on the scope of the definition of an employee in relation to an agreement between a municipality and a father who provided support to his adult son with a disability under a temporary home care scheme. The municipality and the father had agreed that the father would provide support to the son 30 hours a week and receive remuneration from the municipality for the support work.
The father claimed that he was an employee within the meaning of the Working Hours Act and that he had worked more than 48 hours a week and was therefore entitled to compensation under section 8 of the Working Hours Act.
Section 4 of the Working Hours Act
The average working hours during a seven-day period calculated over a period of 4 months must not exceed 48 hours including overtime. Periods of paid annual leave and periods of sick leave are not included in or neutral in relation to the calculation of the average.
The Supreme Court referred to the Court of Justice of the European Union, including the judgment in case C-147/17 (Sindicatul Familia Constanţa), and emphasised that the definition of an employee in EU law must be given on the basis of objective criteria, including the existence of a relationship of subordination.
In this specific case, the Supreme Court found that no such relationship had been established. The father was able to organise the work himself, there were no action plans, no requirements for reporting, and the municipality did not supervise.
On this basis, the father was not considered to be an employee, and thus the Working Hours Act did not apply.
This decision is also significant for the interpretation of the 48-hour rule, as the Supreme Court found that even in the instance that the father had been considered an employee, there would not have been a breach of the 48-hour rule because the municipality had not ordered the father to work more than 30 hours a week, but on the contrary had rejected this.
Why Correct Classification Is Crucial
Misclassification can have serious consequences. If an individual is wrongly classified as self-employed, an employer may be met with demands for:
- Retrospective payment of holiday pay and pension
- Notice periods and allowances
- Pay during illness and maternity leave
- Equality requirements and bonus settlement
- Health and safety obligations and working time rules
Since large parts of the employment law legislation are mandatory for protection, these rights cannot be deviated from by agreement – even if both parties originally agreed.
The question of whether an individual is an employee or self-employed cannot be determined solely on the basis of the wording of the contract or its organisational affiliation. This requires a specific assessment of the actual working relationship, where both Danish and EU law criteria must be included.
The Supreme Court’s judgment of 3 April 2025 underlines the importance of this assessment and provides another benchmark in relation to the interpretation of the concept of employee, especially in borderline cases.
