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What you need to know if you lose your job in Denmark

It's not fun to lose your job, but Danish laws and collective agreements give you a number of rights and there are steps you can take to help insure yourself against the possibility of being out of work.

What you need to know if you lose your job in Denmark
If you lose your job in Denmark, you may have certain rights to a notice period and unemployment insurance. Photo by Kelly Sikkema on Unsplash

Denmark is currently experiencing a labour shortage and low unemployment. Many companies and sectors are calling for additional foreign labour to meet their recruitment needs, something the government appears to be willing to take steps to accommodate.

Of course, none of these things mean individual companies might not be experiencing headwinds or that the situation can change. There are various kinds of business needs that could be the catalyst for a restructuring, such as financial hardships or pending mergers. This can also mean that some employees will lose their jobs.

If you do lose your job in Denmark, you are covered by certain aspects of the law. It is also a good idea to think about taking the necessary measures — such as A-kasse membership — that can protect your from some of the financial implications of unemployment.

Notice periods 

If you are covered by the Salaried Employees Act (Funktionærloven), then you are entitled to certain notice periods before any significant change happens to the terms of your employment.

You can see in your contract whether you are a salaried employee (funktionær), but generally, the term applies to staff who have been employed for over 1 month and work more than 8 hours weekly, on average.

Sectors in which staff are considered funktionærer include business and administration, purchasing, selling, technical and cleaning services; and management and supervision. In short, people who work in offices, sales or purchasing or certain types of warehouse jobs are likely to be covered.

Areas which may not be covered include factory work or craftsmanship, nor are people hired through temp agencies (vikarbureauer) covered by the act.

The notice periods provided by the Salaried Employees Act cover things like notification of termination of employment or significant changes to your job duties. 

The amount of notice that you are entitled to is determined by how much seniority you have, as follows:

0-6 months of employment

1 month’s notice

6 months to 3 years

3 months

3 years to 6 years

4 months

6 months to 3 years

3 months

6 years to 9 years

5 months

More than 9 years

6 months

When you have worked at the company for 12 or more years, you are also entitled to additional compensation (Danish: fratrædelsesgodtgørelse) if you are let go from your job, per the Danish Salaried Employees Act.  

The compensation is 1 month’s salary after 12 years’ employment and 3 months’ salary after 17 years of employment.

It is possible that your company will also provide other additional payments due to restructuring activities. This varies from company to company and is not part of the Danish Salaried Employees Act. 

Should I join an A-kasse?

Membership of an unemployment insurance service provider, an A-kasse (arbejdsløshedskasse) is the first step to keeping your income steady while you begin the process of finding new employment. Finding a new job is a task the A-kasse itself can assist you with.

It can be difficult to figure out which A-kasse to join and while some are cheaper than others, it’s not just about paying an insurance premium. In the event that you become unemployed, it’s good to have an A-kasse that is an appropriate fit for your background, so that they can better help you with your plan to get back into the workforce.

A-kasser are private associations which have been authorised by the Danish state to administer unemployment benefits. The state regulates the requirements for receiving benefits while the A-kasse administers the benefits.

If you are interested in A-kasse membership, you must apply to the A-kasse of your choice, either as a full-time or part-time insured member. A-kasse members pay a tax-deductible monthly fee, which gives them the right to receive unemployment benefits (dagpenge) should they become unemployed.

There are a lot of rules that you’ll have to familiarise yourself with, including when you will be allowed to apply for benefits and how long you can receive them for. Members must meet certain eligibility requirements to receive unemployment benefits, which include being a member of an A-kasse for at least 12 months.

According to Denmark’s digital self-service website, one must also have earned at least 246,924 kroner (2022) in the past three years for full-time insured and 164,616 kroner (2022) for part-time insured. You also have to have worked for a certain period of time within the last three years, which varies depending on whether you were insured as full-time or part-time.

READ ALSO: A-kasse: Everything foreigners in Denmark need to know about unemployment insurance

What else should I keep in mind?

In general, the Danish labour market system is not primarily based on laws, as you may be used to from other countries, but on agreements and negotiations, primarily collective bargaining agreements or overenskomster between trade unions and employer associations. You may have heard of the concept ‘the Danish model’ (den danske model) referred to in this regard.

A large proportion of people who work in Denmark are therefore trade union members.

Collective bargaining agreements cover many aspects of Denmark’s labour market, from wages to paid parental leave. 

A lesser-known fact about the Danish labour model is that employees covered by collective bargaining agreements won’t have to negotiate general employment terms – regardless of whether they are trade union members.

There are large central agreements in both the public and private sectors. Therefore, employees whose contracts are regulated by a central bargaining agreement won’t individually have to negotiate general terms of employment, like working hours or a minimum salary. 

The particular collective agreement upon which your contract is based may be mentioned in your contract, and if it isn’t, you can ask your employer. 

READ ALSO: What is a Danish collective bargaining agreement?

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‘It’s really hard to live here in Denmark without working’

The restaurant manager refused a work permit because his salary was deemed too high to be believable has told The Local of the struggles he is facing as he battles to overturn the decision on appeal, while his lawyer has complained of his client's 'crazy' treatment.

'It’s really hard to live here in Denmark without working'

Editor’s note: Article updated on March 2nd, 2023 to include comments from SIRI.

Ramesh Subedi, from Nepal, was hired as kitchen manager at the Klubben restaurant in Copenhagen, after studying business administration at Roskilde University. But the Danish Agency for International Recruitment and Integration (SIRI), rejected his application for a work permit. 

The rejection and Subedi’s appeal has become a high-profile work permit case in Denmark, with the Politiken newspaper among Danish media to have written about his situation. 

Siri rejected Subedi on the basis of formodning, which translates to “presumption” or “suspicion”, meaning the case officer thought the salary he was being offered, which met the 448,000 kroner per year minimum for the Pay Limit Scheme, was unrealistically high based on the position in question and his qualifications.

The Pay Limit scheme allows work permits to be granted to applicants who have been offered a salary above a government-set amount by a Danish employer.

When The Local spoke to Subedi, he said life had been difficult since the rejection, as he was forbidden from working and had been forced to move out of his apartment as his rental contract was linked to his visa. 

“It’s really hard to live here in Denmark without working. It’s already been three months,” he said.

Subedi, his pregnant wife and three-year-old son are now at risk of becoming homeless as they are unable to rent a new apartment without a salary. 

“We are borrowing [an apartment] from relatives and they are on holiday. So we are living in their apartment, but they are coming back,” he said. “If we [apply] for an apartment they [landlords or housing associations, ed.] ask me to show my salary for the agreement, but I can’t work so I can’t show them the salary.”

He said his treatment by the Danish authorities had been “disappointing”, and had had an effect on his pre-school age son, who was born in Denmark in 2019 and has not lived in any other country.

“It’s really hard. My son is three years old and he goes to kindergarten. He’s really happy to go there and it’s really disappointing,” he said. “Without working it’s really hard to live here and my wife is pregnant and taking psychiatric help with these things.” 

What he found frustrating, he said, was the way his case had been decided without anyone speaking to him in person.

“I hope they will have another look at the case and [that I can have] a meeting with them so they can see we are working in a good way. So I really hope they will look at the case again and allow us to stay on,” he said.

Subedi’s lawyer, Anders Boelskifte, complained that no one from SIRI had visited the restaurant or interviewed Subedi before deciding on the case, and said the agency had no real backing for the presumption that Subedi’s salary had been set artificially high.

READ ALSO: Denmark set to permanently ease work permit rule as bill reaches parliament

“They accuse [the restaurant owner] of doing something illegal in order to give him a legal basis for staying,” he said.

But Subedi’s predecessor in the role of kitchen manager, he pointed out, had received an even higher salary. He also argued that Subedi was very difficult for the restaurant to replace, increasing his value to the business.

“But when you’re losing an employee, you also have [to ask] what is the value for you? What can you get instead? Can you get someone to replace him?,” he said.

He said that he also had evidence that another non-EU national with a comparable qualification background, salary and position to Subedi’s had been approved under the Pay Limit Scheme. 

“SIRI has to review this case. They have to review it because this is new information of importance,” he said.

If SIRI had any suspicions about the veracity of the salary, he continued, the agency could simply have checked Subedi’s bank account to make sure he was genuinely being paid the sums that Klubben claimed.  

“SIRI has full power to go into the bank account of the applicant and check what is coming in. They can see that and then after one month, two months, five months then say, ‘okay, does it fit with the figures you mentioned to us?’. They can say ‘okay, then you get the permission’,” he said. 

SIRI told The Local in a written statement that it assesses in Pay Limit Scheme applications “whether there is a certain suspicion that it is not a case of genuine employment or that the purpose is solely to obtain residence in this country which the alien would otherwise not be able to obtain.”

“In such cases, the application is rejected,” the agency wrote.

The “formodningsafslag” law, introduced in January 2021, was introduced to prevent abuse of the Pay Limit Scheme, particularly in cases where restaurants hired Chinese chefs, SIRI said.

READ ALSO: Explained: How Danish visa laws may have been misused to exploit Chinese chefs

The law allows SIRI to reject applications that fulfil the regular criteria related to salary and employment terms “if there is a certain suspicion that the factual employment circumstances do not fit with those outlined in the application,” it continued.

These can include a “certain suspicion” (vis formodning) related to the applicant’s education and employment history, previous applications for Danish residence permits and the salaries considered to be normal for the business and sector in question, it said.

“We always conduct a concrete and individual assessment of the relevant information of the case,” SIRI wrote.

“In the legal descriptions there is no suggestion that a labour shortage or domestic difficulties acquiring in-demand labour can be seen as a criteria in the assessment of whether a job offer is genuine,” it stated.

In a written response earlier provided to Politiken, SIRI said with specific reference to Subedi’s case that it had deemed his educational background to be unrelated to his duties at the restaurant and his experience in the sector to be relatively limited.

Boelskifte initially contacted the parliamentary ombudsman to file a complaint about how the application had been processed but was told that the ombudsman could not address the complaint until it had made its way through the lower appeal system via Udlændingenævnet, the Immigration Appeals Board.

Even convincing SIRI to stay Subedi’s deportation until his wife had given birth had been difficult, he said.

“It was really stupid. It’s really crazy how many details they wanted to have about the pregnancy. But then they finally said, ‘okay, they can stay here until two months after the time of birth’,” he said.

READ ALSO: How can you get a work permit in Denmark if you are not an EU national?