Unexpected compensation in case regarding employment contract

Date 28 sep. 2009
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On 17 July 2009, the City Court of Copenhagen ruled in a case where an employee was granted about DKK 100,000 as compensation for a faulty employment contract.

 

 

The case in brief

The case concerned an employee who was trained as a sales assistant. The employee was employed under three contracts.

 

It appears from the first contract of 5 January 2000 that he was employed as a semi-skilled worker and was therefore subjected to a collective agreement between the employer and the Warehouse and Tradeworkers’ Union.

 

On 27 November 2002, a new employment contract was made, from which it appeared that the conditions of employment were subject to the provisions of the Danish Salaried Employees Act.

 

A third employment contract was made on 31 March 2004, from which it appeared that the employee was employed as floorman and that the notice period was equivalent to the one that appeared from the collective agreement between the employer and the Warehouse and Tradeworkers’ Union.

 

The employee was given notice on 14 May 2007. The notice period, was in compliance with the last mentioned employment contract.

 

The employee claimed that, because of the nature of the job, he was a salaried employee and was therefore entitled to a longer period of notice as he was not subjected to the collective agreement between the employer and the Warehouse and Tradeworkers’ Union. This, however, did not appear from his employment contract.

 

 

The legal background

According to Section 1(1) of the Danish Salaried Employees Act, salaried employees are trade and office workers occupied in purchases or sales, office work, or stock handling equal hereto. A person whose job consists of technical or clinical assistance in a non-craftsmanship or in a non-manufactural sense, and other assistants who perform jobs equal hereto also fall within the definition of a salaried employee. Persons whose jobs consist exclusively or primarily of managing or supervising the work carried out by others on behalf of the employer also fall within the definition of a salaried employee.

 

According to Section 4 of the Danish Employment Contract Act, the employer must provide the employee with information on all significant conditions applying to the employment, including the length of the notice period for the employee and the employer.

 

Additionally, if the employer has not complied with his duty of information, the employee may be entitled to compensation in court, according to Section 6(1) of the Danish Employment Contract Act. The compensation, which cannot exceed 13 weeks salary, is determined considering the circumstances of the particular case, including whether or not the shortcoming has been of specific importance to the employee. In a case of aggravated circumstances, the compensation can be increased to 20 weeks salary.

 

 

The decision of the City Court of Copenhagen

The City Court of Copenhagen stated that the nature of the job had such characteristics, that the employee fell within the Danish Salaried Employees Act.

 

In its decision, the City Court of Copenhagen emphasised that the employee, when agreeing to the latest employment contract, already had two prior employment contracts beforehand, where the job title alternately was stated as floorman and salaried employee, but that the job assignments were the same. Based on this, the City Court of Copenhagen found that the employer should have been aware of the issue when making the contract.

 

As it was not considered in the assignment certificate that the employee was a salaried employee, the stated notice period was not correct. Based on this, the court found that it was a case of aggravated circumstances, and that there was basis for increasing the compensation according to Section 6(1)(3)of the Danish Employment Contract Act,

 

Thus, the City Court of Copenhagen found that it was a case of aggravated circumstances, which resulted in the compensation being determined as 15 weeks salary.

 

The decision was not appealed.

 

The decision of the City Court of Copenhagen, in which the compensation amounts to DKK 100,000 equivalent to 15 weeks salary in the specific case, deviates from former decisions, as compensation up until now typically has been set between DKK 5,000 and 10,000. It has never been seen before that the level of compensation has been set this high.

 

Section 6(1)(3) of the Danish Employment Contract Act, concerning aggravated circumstances, has never previously been used by the Danish courts when determining compensation. Thus, the decision enables the use of aggravated circumstances to a higher extent than what has been the case up until now.

 

The above proves that the level of compensation following the 2007 amendment has not yet been established, and that an establishment awaits a decision in which the Supreme Court decides on the level of compensation.

 

 

If you have any questions or require additional information on the above, please contact attorney Claus Molbech Bendtsen (cmb@mwblaw.dk), junior associate Lotte Gydesen (lgy@mwblaw.dk) or junior associate Pinar Gökcen (pgo@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 a reader’s use of the above as a basis of decisions or considerations.