Temporary workers must be compensated for inferior conditions
On 3 November 2025, the Labour Court issued a landmark decision that changes the interpretation of the Danish Temporary Agency Act. The ruling clarifies when a temporary employment agency may lawfully deviate from the principle of equal treatment.
Facts of the case
The case involved a temporary worker who worked as a receptionist at Skejby Hospital for approximately 10 months through a temporary employment agency.
Although the temporary worker was covered by Collective Agreement for Salaried Employees in Trade, Knowledge and Service, her salary and pension were lower than those of the permanent employees at the hospital who performed the same work.
The agency argued that the worker was entitled to the difference in pay, claiming a violation of the principle of equal treatment laid down in the Temporary Agency Act. The matter was referred to the Labour Court.
The principle of equal treatment- Temporary Agency Act
Section 3(1) of the Temporary Agency Act requires temporary employment agencies to ensure that, during an assignment, the temporary worker enjoys employment conditions—such as working hours, overtime, breaks, rest periods, night work, holiday entitlements, public holidays, and remuneration—that are at least equivalent to those the worker would have received had they been directly employed by the end user for the same work.
This principle of equal treatment does not apply if the temporary employment agency is covered by or has acceded to a collective agreement concluded by Denmarks most representative social partners.
Historically, this meant that being subject to a qualifying collective agreement was sufficient to constitute a lawful deviation from the principle of equal treatment.
The EU judgment from 2022 as a background
In its 2022 TimePartner ruling, the European Court of Justice (ECJ) held that employers may depart from equal-treatment principles only where temporary workers receive genuine compensatory advantages in other essential employment terms—such as higher pay, additional holiday, or superior pension contributions.
The ECJ thus rejected the assumption that the mere existence of a collective agreement automatically ensures adequate protection, which had been the practice in Denmark.
This judgment made clear that the previous Danish approach was incompatible with EU law.
The Labour Court’s decision
The Labour Court ruled that section 3(5) of the Temporary Workers Act must be interpreted in accordance with the case-law of the European Court of Justice.
This means that the principle of equal treatment can only be considered a derogation from a collective agreement if the overall package of terms and conditions provides the temporary worker with real compensatory benefits. A formal attachment to a collective agreement will not be sufficient.
In the specific case, the court found that the temporary worker had not received any compensatory advantages was therefore entitled to back pay corresponding to the difference in salary. However, as the employer had acted in reliance on the previous Danish practice and legislation, no additional compensation was awarded.
Consequences for employers and temporary employment agencies
The judgment marks a significant shift in the Danish interpretation of the Temporary Employment Act and will have an impact on both temporary employment agencies and end user companies.
Whereas a temporary employment agency could previously fulfil the principle of equal treatment by being covered by or acceding to a collective agreement, this will no longer sufficient to meet the principle of equal treatment. A collective agreement can still form the basis for deviating from the principle of equal treatment, but only if the overall package of salary and terms of employment ensures that the temporary worker is not at an overall disadvantage.
An individual assessment must now be undertaken, where both salary, pension, working hours, holiday and other significant terms for a temporary worker must be compared with those of a permanent employee.
This means that in the future there will be an increased need for both temporary work agencies and end user companies to map and document the actual conditions for each assignment. This will entail an increase in administrative tasks and greater requirements for the cooperation between the agency and the user company to ensure that the agreements meet the requirements of both national and EU law.
At the same time, the risk of claims for back pay and disputes increases if a temporary worker has received inferior terms to those of a permanent employee without compensatory benefits.
The judgment thus creates a need for greater attention to compliance and for a more proactive approach to the handling of temporary employment.
Practical advice
The judgment emphasizes the need for temporary employment agencies and end user companies to carefully review their collective agreements and practices. Temporary work agencies and end users will need to ensure that that temporary agency workers are not placed at a disadvantage compared to the company’s own employees, unless real compensatory benefits are provided.
Companies should therefore make a full comparison of the actual terms’ conditions and document any benefits that put the temporary worker in a better position in other areas – for example, through higher pay, extra holiday or a better pension scheme.
It may also be appropriate to review existing posting procedures and update internal guidelines that align with the new interpretation of the Temporary Agency Act. If there is uncertainty about how a given collective agreement should be interpreted considering the judgment, legal advice should be sought to avoid claims for back pay or disputes in the future.
