COVID-19 and the Impact on Danish Employers and Employees

Date 19 mar. 2020
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Introduction

The recent outbreak of COVID-19 has given rise to a number of questions in relation to employers and employees and their rights and obligations. The Danish government has implemented measures to mitigate the severe consequences that COVID-19 will have for Danish economy, including employers’ and employees’ rights and obligations. The following is a summary of some of the questions that employers and employees may have.

 

New Legislation as a Consequence of COVID-19

15 March 2020, the Danish government announced new legislation as a result of COVID-19 that implements a temporary salary compensation scheme in connection with the expected lay-offs of employees in the private sector.


The purpose of this legislation is to ensure that private companies that intend to terminate their employees due to lack of customers and reduction in orders as a consequence of COVID-19 may receive partial compensation/reimbursement for salary costs incurred for up to three months.

The salary compensation scheme applies to all companies that must lay off at least 30% of its employees or more than 50 employees.

 

If a company is covered by the salary compensation scheme, the company can receive compensation of 75% of the salaries of the full-time employees concerned (maximum DKK 23,000 per month). The remaining 25% (or the amount above DKK 23,000 per month) must be paid by the company. For hourly employed workers, compensation amounts to 90% (maximum DKK 26,000 per month).


The salary compensation scheme requires that the company commits to not dismissing the relevant employees due to financial reasons during the period in which the company receives the compensation/reimbursement. The employees concerned are not allowed to work and must be sent home during the compensation period.


The salary compensation scheme applies retroactively from 9 March 2020 until 9 June 2020.


The individual employee for whom the company seeks compensation must take holidays and/or time off in lieu for a total of five days in connection with the period during which the company receives salary compensation. If the employee in question does not have five days of holidays, time off in lieu etc., the employee must take time off work for five days without pay. The company does not receive salary compensation for these days.


The companies must apply for salary compensation with the Danish Business Authority. In the application, the company must disclose the number of employees who would have been dismissed as a result of the COVID-19 situation. The application must also state and substantiate the period during which the company expects a shortage of work. The statement should only cover the period from 9 March 2020 to 9 June 2020. Subsequently, with the assistance of auditors, the company must document that the employees concerned have actually been sent home during the period.

 

Employers’ and Employees’ Rights and Obligations

The answers below are purely from a legal perspective. The Danish government strongly suggests that all employers send employees home if possible. Also, several companies are required by law to temporarily close down their businesses.


Is the Employer obligated to impose special Guidelines with Regard to COVID-19?


The employer is obligated to maintain a healthy and safe working environment for its employees, in accordance with the Danish Health and Safety at Work Act (in Danish: “Arbejdsmiljøloven”). The employer should therefore prepare relevant guidelines, procedures and precautionary measures in order to prevent its employees for potential exposure to risk of infection, such as considerations when imposing that the employees must work from home.


Is the Employer allowed to send Employees Home or force them to work from Home?


Yes, the employer can make this decision on a discretionary basis. Since this is the employer’s decision, the employer must still pay usual salary to the employees.


Is the Employer obligated to pay Salary to Employees in Quarantine due to COVID-19?


If an employee is infected with COVID-19 and as a consequence thereof has been put in quarantine, the employee is absent due to illness, and the employer must pay salary to the employee as usual.


17 March 2020, as a result of COVID-19, the Danish government adopted new legislation granting companies an option to receive reimbursement for sickness benefits (in Danish: “sygedagpenge”) for employees infected with COVID-19 virus. Previously the employer would only be eligible for reimbursement for sick benefits for employees who were absent due to illness for more than 30 days and only for the period exceeding 30 days. With the new legislation, employers will be able to receive reimbursement for sickness benefits from day one. Note that this scheme will only apply to illness due to COVID-19 and will be in effect in the period 27 February 2020 until 1 January 2021.


If the employee is in quarantine without being infected, this would normally constitute absence from work. Whether or not the employee has the right to receive salary in this period depends on the specific circumstances. 


If an employee has been infected with the COVID-19 virus and this is self-inflicted (in Danish “selvforskyldt”), e.g. by not following the Danish government’s recommendations on how to avoid the COVID-19 virus, the employee will lose their right to receive salary.


Does the Employer have the right to order an Employee to take Holiday during a Quarantine Period?


No, not unless the employer gives proper holiday notice. In other words, an employer can only order its employees to take holiday if notice has been given in due time. The main holiday (the period from 1 May to 30 September) must be duly notified at least three months before the holiday begins, and the rest of the holidays must be duly notified at least one month before the holiday begins. However, the company’s situation should be assessed in a holistic view. If the alternative is for the employer to terminate employees, the parties should be entering into dialogue on how to resolve the COVID-19 situation.


Should Employers send their Employees Home?


The Danish government recommends that the private sector sends employees home if possible for at least 14 days for the purpose of limiting the spread of the COVID-19 virus. It must be noted that this is primarily aimed at employees who are able to work from home. It is not the government’s proposal to shut down the entire private sector. However, the Danish government has now adopted legislation prohibiting several local businesses and shops from opening their business to the public. If the companies’ businesses demand that employees are physically present, the employer must implement other measures in order to protect its employees against COVID-19.


Is the Employer allowed to request Information about its Employees’ private travel Activities?


Yes. The reason why an employer can request information about its employees’ private travel activities is that employers must be properly informed so as to be able to take the necessary precautions to make sure that all employees have a safe working environment. All precautions/measures that the employer implements should be emphasized in writing to the employees.


Can the Employer instruct its Employees to go on a Business Trip to a high Risk Area/Zone?


No, the Danish Ministry of Foreign Affairs advises against any travelling outside of Denmark. Whether the area is a “low risk” or “high risk” area is irrelevant seeing as the Danish Ministry of Foreign Affairs has stopped categorizing these areas until 13 April 2020 and now advises against travelling outside of Denmark altogether.


Can Employees refuse to show up at work due to the COVID-19 virus?


If an employee can prove that their life of health will be in danger by showing up for work, the employee may refuse to do so without being in breach of their employment contract. However, an employee does not have the right to go into a self-imposed quarantine merely out of fear of potential infection.


 

If you have any questions or would like additional information regarding the legal aspects above, please feel free to contact Partner Pernille Nørkær (pno@mwblaw.dk) or Senior Associate Poul Guo (pgu@mwblaw.dk).

 

The above does not constitute legal counselling and Moalem Weitemeyer Bendtsen does not warrant the accuracy of the information. With the above text, Moalem Weitemeyer Bendtsen has not assumed responsibility of any kind as a consequence of any reader’s use of the above as a basis for decision or considerations.