New Act on Statements of Employment Terms now adopted

The new act on statements of employment terms was adopted on the basis of the so-called Working Conditions Directive which the EU has adopted to ensure greater transparency and predictability for employees in the EU. As a result of the stricter EU rules, on 11 May 2023, the Danish Parliament adopted a new act on statements of employment terms[1], which introduces fundamental changes to the employer's duty of disclosure and the range of employees covered by the rules, and the bill introduces a number of minimum requirements regarding employment conditions.

Thus, as of 1 July 2023, the new act on statements of employment terms will replace the current act on statements of employment terms of 2010.

The most significant changes compared to the previous act on statements of employment terms are:

1. A wider range of employees are covered

Under the current rules of the act on statements of employment terms, an employee is entitled to information on working conditions from an employer (i.e. an employment contract) if the employment relationship has a duration of more than 1 month and if the average weekly working time exceed 8 hours.

With the adoption of the new act on statements of employment terms, as of 1 July 2023, all employees with an employment relationship where the predetermined or actual working time exceeds an average of three hours per week over a reference period of four consecutive weeks will be covered by the rules of the act.

The three-hour limit will apply to both the predetermined working time and the time actually worked. If an employee works more than an average of three hours per week over a period of four weeks, the employee is entitled to information on working conditions from the employer regardless of what may have been agreed in advance concerning working time.

The new act also will also apply to employees with an employment relationship where no guaranteed amount of paid work is fixed in advance before the start of the employment relationship. Such employees will often be in an employment relationship where they are called upon when there is work for them. If the employees are obliged by the employment contract to be on call, which has often been characterised as "zero-hour contracts", they are entitled to be informed of the terms and conditions of employment regardless of the actual number of working hours.

2. Extended information obligations for employers

In the new act, it follows from section 3 that the employer must provide the employee with information on all material terms and conditions of the employment relationship, including at least the information listed in Section 3 (2) (no. 1-15).

The provision is a continuation of the existing provision in the act on statements of employment terms, but with the amendment that the list of pieces of information that an employer must provide to the employee is now extended by five items. The five items relate to information for temporary agency workers, employees with an "unpredictable work pattern", the duration and conditions of any probationary period, the duration of paid absence (i.e. not only for holidays), any arrangements for overtime and payment thereof, a description of entitlement, if any, to training, and social security schemes.

The additions to section 3 (2) are not intended to change the assessment of what constitutes material information items beyond the 15 items listed in sub-section 2.

Furthermore, the new act also includes an addition of the specific information to be provided to posted workers, cf. section 4 of the bill, as well as a requirement that changes to employment contracts must be given in writing as soon as possible and no later than the date on which the change takes effect, cf. section 5 of the bill.

3. The information must generally be provided after seven days

Under the act on statements of employment terms currently in force, the employer must provide the employee with information on all material terms and conditions of the employment relationship no later than one month after the employee has taken up employment. Under the new act, a significantly shorter deadline of seven calendar days after the employment relationship has commenced applies to most of the required information, but for a few of them, the deadline of one month still applies.

However, it is recommended that employers provide all information items together to ensure that the now stricter seven-day deadline is observed.

4. Strengthening minimum requirements on employment conditions

With the adoption of the new act, a number of minimum requirements concerning specific terms and conditions of employment also apply. This means, among other things, that:

• A time limit which may not exceed six months is introduced for probationary periods, if any. In case of fixed-term contracts, the probationary period may not exceed one quarter of the duration of the contract. The statutory probationary period of 3 months in the Salaried Employees Act is still maintained.
• An employer may not prevent an employee from taking up concurrent employment or treat the employee unfavourably on that basis if the employee can continue to work in accordance with a timetable set by the employer and if the concurrent employment is not incompatible with the existing employment relationship
• An employer can only require an employee whose work pattern is "wholly or mainly unpredictable" to work if the work takes place within the predetermined reference hours and reference days and if the employee has been given the notice of the work assignment of which the employee was informed.

Protection against unfavourable treatment, burden of proof and sanctions

As a novelty, an employer may face claims for compensation for breach of the obligation to provide information, as well as for unfavourable treatment of an employee who claims to have been dismissed or subjected to measures having equivalent effect because he or she has asserted his or her rights under the act. In the latter case, a shared burden of proof between the employer and the employee is also proposed. 

Entry into force

As mentioned, the new act will enter into force on 1 July 2023.

Employees already employed before 1 July 2023 may request to receive their contract or to have it supplemented in accordance with the new requirements under the act. The employer has eight weeks to fulfil such request.

In this context, employers should ensure that their current templates are updated for use by new recruits and current employees (to the extent requested by the latter).

Bird & Birds comments

If you have any questions about how to deal with the new rules as an employer, you are welcome to contact Bird & Bird. We will also be at your disposal to update employers' current contract templates.

[1] To Bill no. L 84, Folketinget 2022-23 (2nd session), Proposal for Act on statements of employment terms and certain working conditions (ft.dk)