Employment Law- what to expect in 2023

Mette Klingsten Law Firm wishes you a happy new year. As the festivities end and the new year commences, we have summarised below, the pending and developing key areas of HR and labour law that you should be aware of heading into 2023.

  1. Implementation of the Transparent and Predictable Working Conditions Directive

The bill implementing the Directive was initially due to come into force on 1 January 2023, however due to the general election in Denmark the bill was postponed, it is now expected to come into force on 1 July 2023. Many aspects of the Directive already exist in Danish law. However, the Directive will entail some important updates to the Employment Certificate Act, following the adoption of the bill.

The current Employment Certificate Act entitles employees (who are employed for more than a month and who work more than 8 hours on average a week) the right to receive written information on the essential terms of employment. The information that an employer is obliged to obtain includes the following:

  • Name and address of employer and employee
  • The location of the workplace
  • Position designation or title
  • The commencement date of the employment relationship
  • In case of a fixed term relationship, the expected duration of the employment relationship
  • Holiday entitlement and details of payment in connection therewith
  • The employee’s salary, allowances, and other salary components e.g., pension contributions and salary payment dates
  • The normal daily or weekly working hours
  • Notice periods
  • Details of any collective agreements or other agreements that regulate the working relationship.

The new legislation will entail that the above information will now need to be given to employees within seven calendar days of the employment relationship commencing. In addition, the proposed new rules will mean that employees are entitled to an employment agreement if their predicted, or actual working hours amount to more than three hours on average per week over a four-week period.

Furthermore, the new rules also set out several other minimum requirements for contracts of employment including:

  • Maximum duration for trial periods of 6 months
  • Prohibition on secondary employment restrictions, if the employee works in accordance with a schedule determined by the employer
  • Allowing an employer to require an employee to work when directed, if their work is completely/predominantly unpredictable and providing the work is performed within the predetermined reference hours and days.
  • Giving employees with more than 6 months service the right to request another type of employment with more predictable and safe working conditions
  • Employers bearing the cost of any mandatory training for employees, such training will also count as working time and, as far as possible, should take place during working hours.

Currently it is expected that the above rules will come into force on the 1 July 2023 and therefore all employers will be obliged to comply with the extended obligations from this date.

There is no obligation for employers to provide employees who are employed before 1 July 2023 an updated employment contract or addendum detailing the new provisions. However, is an employee requests an updated contract, an employer is obligated to provide this within 8 weeks of the request.

Mette Klingsten Law Firm can assist you in ensuring your contracts are compliant with the new rules. Please get in contact with us for further advice.

  1. Amendments to the Act on Equal Treatment

The purpose of the bill is to ensure a clear legal basis in cases of sexual harassment, higher compensation in serious cases and a better legal position for students and apprentices who have been exposed to sexual harassment. The bill implements the tripartite agreement to combat sexual harassment in workplaces from March 2022.

In 2022 we saw an increasing number of sexual harassment complaints and there have been several significant court decisions on this topic. Mette Klingsten Law Firm can assist you in drafting and developing your policies to help you combat sexual harassment in the workplace.

  1. Amendment of the Act on the working environment, the Act on occupational injury insurance, the Aliens Act and the Act on posting of wage earners, etc.

The purpose of the bill is to ensure  that companies that repeatedly violate the Working Environment Act and the Posting Regulations, without showing the will to correct the breaches, will be more closely monitored by the Working Environment Authority. The bill also means that, as a last resort, construction sites can be closed until the working environment conditions are brought to order (construction site ban).

Additionally, the bill will also strengthen efforts against the use of illegal labor by introducing requirements for employers to ensure that employees present identification papers at the request of the Working Environment Authority and the Agency for International Recruitment and Integration (SIRI) and by requiring more information in the Register for Foreign Service Providers (RUT). These parts of the bill are a follow-up to the agreement on a new reform package for the Danish economy between the government (Social Democracy), Socialist Folkeparti, Radikale Venstre, Dansk Folkeparti and the Christian Democrats from January 2022.

The bill also aims to implement parts of the recommendations from the temporary AMO -committee on an improvement of the working environment representative’s protection and on clarifying the rules on workplace assessment.

  1. Pay limit scheme

The salary threshold for pay limit scheme is adjusted every year on 1 January and has been increased to DKK 465,000 from 1 January 2023. Therefore, work permit applications submitted on or after 1 January 2023 must comply with the new salary requirement.

In calculating the salary for the pay limit scheme, the salary can only include paid salary, pension and paid holiday pay. It is not permissible to include benefits in kind, earned holiday pay or expected bonus in the salary calculation.

Applications submitted before 1 January 2023 must at least comply with the previous amount of DKK 448,000.

If you want further advice on the pay limit scheme or any other corporate immigration advice, please get in touch.

Reduced pay limit scheme

On 29 June 2022 the government and a majority of parties in the Danish Parliament entered into an agreement on a supplementary pay limit scheme. Under the supplementary pay limit scheme, the required minimum salary is reduced to DKK 375,000 per year providing the other offered terms of employment correspond to Danish standards. The applicant can obtain a residence and work permit with a duration of up to 5 years.

The eagerly anticipated change was due to come into force from 1 December 2022, however due to the general election in Denmark the bill was not implemented. It is likely that the bill will be implemented in 2023 and Mette Klingsten Law Firm will keep you updated on any progression in this area.

  1. CBA Negotiations

On the 4 January DI and CO-industri will officially begin negotiations on the 2023 collective bargaining agreements for on Industry Collective Agreement and the Industry Functional Agreement.

The two agreements cover more that 200,000 employees in DI member companies and will set the framework for future negotiations in the private labour market. The negotiations will therefore affect almost all companies in Denmark either directly or indirectly.

We will keep you updated on the progress of the negotiations.

For more information on the above topic or any other labor law needs, please contact Supreme Court Attorney Mette Klingsten, mk@mklaw.dk, Legal Consultant (UK Solicitor) Carley Wilson, cwi@mklaw.dk or Attorney-at-Law Mads Bernstorn, mb@mklaw.dk.