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Rules Concerning Termination of Employment

How and when should you give in your notice? What are your rights if your terms and conditions of employment are drastically changed? And what should you know about notice periods and severance agreements? Learn about your rights and options in relation to termination of employment.

Termination of employment is when you give in your notice, when you are dismissed by your employer or in some cases, when your terms and conditions of employment are changed so drastically that it also counts as a termination of employment.

Termination and resignation - summarized

Both you and your employer are obliged to follow the rules concerning termination of employment. This means that there are procedures and warnings that you should be aware of. Get a quick summary of the most common questions asked about termination of employment or read more of the details below.

Questions about giving notice

Do you want to resign?


You must give one month’s notice to expire at the end of a month. If, for instance, you give in your notice on 30 November, you can vacate your post on 31 December. This shall apply unless an agreement has been concluded on an extended period of notice.

It may be an advantage to speak up as late in the month as possible, as your employer then cannot ask you to use all your holidays during the notice period.

If you resign during the first three months of the probationary period, you may stop at a day's notice. This shall apply unless both parties have agreed that a mutual notice of 14 days shall apply in the probationary period - in this case you must remember to give in your notice at least 14 days before the probationary period expires.

Your notice should be made in writing and include the date. Apart from this there are no specific requirements as to what you may write and you do not need to state a reason for your resignation. For example, you could write: “I hereby give notice of my resignation as of today, so that I will vacate my post on xxx”.

What are the rules for being dismissed?

A dismissal may be both oral and written, but will usually be in writing and include a date for your resignation.

You are entitled to a notice period depending on the time you have been employed. You can always demand a written reason for the dismissal. If you believe the reason is not real, or you disagree with the reason, you should contact your union representative, your local union or Finansforbundet centrally for an assessment of the circumstances of the dismissal.

It is stated in the Danish Salaried Employees Act that you are entitled to compensation for a wrongful dismissal if you have been employed a year or more.

Your case will initially be negotiable by your union representative, or Finansforbundet locally or centrally. Please note that there is an important deadline of 4 weeks from the date of dismissal to bring up the case!

When may your employer dismiss you?

Your employer has the right to manage and is therefore entitled to employ and dismiss personnel. Your dismissal must be objectively justified if you have been employed for a period of more than one year at the time of dismissal. The circumstances at the time of dismissal are decisive for weather or not the justification is objective.

Your employer may justify the dismissal with reasons concerning:

  • The company, e.g. finances or organisational changes. If the reason is real, it is usually also objective, or
  • Your conduct, e.g. lack of performance, cooperation problems or illness. The justification generally requires that you have previously received a warning, which means that you have had the opportunity to rectify the issues criticised by your employer.

Regardless of whether the dismissal is justified by circumstances concerning the company or your conduct, your employer must give notice of the dismissal depending on how long you have been employed.

How long is my period of notice?

Your employer shall dismiss you by giving a period of notice, which reflects your duration of employment with the company.

The rules of the Danish Salaried Employees Act apply regardless of whether you are the only person dismissed or as a part of mass redundancies.

The only exception is when you and your employer have concluded an agreement on extended notice periods. However, it may also be shorter if you are dismissed during the trial period or because the 120-day rule has been agreed and you are dismissed with one month’s notice. If this is the case, you should contact Finansforbundet for an assessment.

The notice periods are as follows:

Duration of employment

Period of notice

0-3 months (probationary period)

14 days within the probationary period, i.e. within 2 ½ months

Less than 6 months

1 month

6 months - 3 years

3 months

3 years - 6 years

4 months

6 years - 9 years

5 months

9 years or more

6 months

What am I entitled to receive in unemployment benefits if I am dismissed?

If you are fully insured and were on a salary of at least DKK 23,400 per month (2021 figures), you can generally receive the maximum unemployment allowance.

See the current unemployment benefits

You can contact the consultants in Finansforbundet’s unemployment insurance fund if you would like to know more:

Susanne Ilsøe, si@finansforbundet.dk, 32 66 14 50, eller Cirkeline Martinussen, cma@finansforbundet.dk.

What am I entitled to receive in severance pay?

You are entitled to severance pay if you are dismissed and have been continuously employed in the same company for more than 12 years.

There are different types of severance pay:

Danish Salaried Employees Act: In addition to your salary during the period of notice, you are entitled to compensation of one or three months’ salary respectively if you have been employed for at least 12 or 17 years respectively at the time of your resignation.

Standard collective agreement: You are entitled to severance pay if you have been employed for more than 12 years and have not yet reached retirement age.

The amount shall be as follows:
40 years: one month’s salary
45 years: two month’s salary
50 years: three month’s salary
55 years: five month’s salary
60 years: six month’s salary

Retirement age or direct transition to retirement from the company: No compensation.

Additional pension contributions: You are entitled to additional pension contributions for 8/20 months if you have reached the age of 50/55 and have not yet retired from the company nor are entitled to receive retirement pension at the time of resignation.

Mitigations: You are entitled to a compensation of one month's salary if you are dismissed due to the circumstances of the company, have not been employed long enough to be entitled to the above compensations and have not agreed on new employment at the time of resignation.

If you have been dismissed and released from your duties, in special cases you may be paid even if you have started a new job.

Calculate your minimum compensation

What happens to bonuses when I vacate my post?

Bonuses are salary and may be included as part of your salary model. There are two forms of bonus models:

  • A subjective bonus model where there is relatively free discretion on the part of the employer as to whether you should be awarded a bonus.
  • An objective bonus model based on objective criteria such as figures or results you must achieve to receive a bonus.

If you have a bonus agreement and it has been a fixed, foreseeable part of your salary to receive a bonus, and if the criteria in your bonus model are met, you are entitled to a bonus, regardless of whether you are resigning or being dismissed.

What do you get in a bonus?

The rules for what happens with your bonus when you vacate your position depends on when you stop working. The size of the bonus also depends on what is agreed in your bonus agreement.

If you stop working:

  • At the end of a year, you are entitled to be considered for bonuses for the entire earning year.
  • In the middle of the year, e.g. 30 September in the earning year, you are entitled to be paid a proportionate share of your bonus corresponding to 9/12 of your bonus for the earning year.

If you as an employee enter into a severance agreement which states that it is for the full settlement of any claims in the employment relationship, you should be sure not to disqualify yourself from the right to a bonus as stated in your bonus agreement. Therefore, it is very important that you contact your union representative, your local union or Legal Services in Finansforbundet before signing a severance agreement.

Bonuses in relation to holiday pay and pension

As bonuses are part of salary, holiday pay must be calculated from the bonus you are paid.

However, bonuses are not eligible for pension unless specifically agreed in your bonus agreement.

Questions about bonuses

Please contact Legal Services in Finansforbundet if you need advice and guidance about bonuses.

What are the rules for outplacement?

Your employer must offer you an outplacement plan you if you are dismissed due to the circumstances of the company, e.g. restructuring or finances. You will be given time off with salary to participate. The plan must have a value of at least DKK 25,000 per dismissed employee and adhere to the principles of the Code of Good Outplacement Practices in the Financial Sector.

In the event that you are not offered an outplacement plan, even though you have been dismissed due to the circumstances of the company, you should contact Finansforbundet on +45 3266 1330 or raadgivning@finansforbundet.dk.

Outplacement agreements

We work with FTFa, and we have entered into agreements with a number of suppliers who can help you:

  • Amendor
  • AS3
  • Brodal Search & Selection
  • Charlotte Juul Search & Outplacement
  • Corecompetence
  • Effektiv Rekruttering v/ Michael Folmann
  • Finansforbundet’s unemployment insurance fund / Mercuri Urval
  • Globiz1
  • GML-HR
  • Hartmanns A/S
  • iHeadHunt
  • Job Vision
  • KEA Kompetence
  • Konsulenthuset Ballisager
  • Konsulenthuset Provi
  • Lundmann
  • LunnPlus og KarriereCoach
  • Makio
  • Moving People
  • Myrup og Nyhauge
  • Nordic Transition
  • Otto Consult
  • Peoplement
  • Promando
  • Resources v/ Søren Kiebe
  • Right Management
  • SAM International
  • Unique Human Capital
  • Wise Consulting

 

Are you considering the conclusion of a severance agreement?

Are you considering the conclusion of a severance A severance agreement is a voluntary agreement on resignation concluded between you and the company. It is important to know all the details of the agreement before you sign.

We therefore recommend that you consult Finansforbundet or your professional representative before signing. You should also contact your unemployment insurance fund, as a voluntary agreement on resignation may result in you being placed in quarantine, and wage insurance often does not cover that situation.

In principle, a severance agreement is an alternative to a notice of termination and should be considered as such. You should therefore ensure that the agreement at least contains the terms you would be entitled to if you had been dismissed.

Have you been summarily dismissed?

It is important that you:

  • Immediately enter a protest against the summary dismissal with your employer.
  • Involve your union representative, local union or Finansforbundet who can help with presenting a claim for salary and holiday pay, as well possible compensation in the event of an unfair summary dismissal.
  • Contact your unemployment insurance fund.

If you would like a legal assessment of your dismissal/summary dismissal, an absolute deadline of four weeks from when you received the notice of termination/summary dismissal applies.

Have you been given a warning?

If your employer is dissatisfied with your work effort or certain conduct, you may be admonished or given a warning. This will take place at a meeting with your employer - you are entitled to have your union representative present, and it must be possible for him/her to participate if required. Irrespective of whether your union representative participates, he/she must be briefed within two days after the meeting.

The warning must be in writing and both clear and specific:

  • The issues that give rise to criticism and the changes you should make must be clearly specified.
  • The changes you should make must be objective and measurable.
  • It must specify how you can solve the problems.
  • Follow-up meetings should be specified where this makes sense.
  • The warning should be in writing and specify that failure to comply with the requirements may have employment-related consequences.
  • A deadline may be specified but is not a requirement, as it does not always make sense.

Failure to address the criticisms contained in the warning may result in your dismissal.

If you are dismissed from a flex job

You must contact the municipality responsible for the administration of the flex job arrangement. The municipal must assess whether you are unemployed through no fault of your own and are entitled to unemployment benefits.

You should also contact our legal advisers who can help to assess your case. Write to us at raadgivning@finansforbundet.dk or call us at +45 32 66 13 30.

You can also contact our social workers at Finansforbundet if you have any questions regarding social issues:

Have you been released from your duties?

If you have you been released from your duties, you are still employed but are not to obliged to perform your work. You are therefore not obliged to meet up at your place of work. You will receive your usual salary, and your terms in relation to other benefits will generally continue, unless otherwise agreed by both parties.

You may perform other work providing it is not with a competing company. But be aware that your employer may set off your new income against your salary, unless otherwise agreed by both parties - you are, however, always entitled to a salary corresponding to a minimum of three months. You will therefore benefit most from an agreement on unconditional release from duties, which expressly ensures that you may work with a competing company without it being possible for your employer to set off your income.

If you are released from your duties for longer than three months, you are obliged to look for other work throughout the notice period. Your employer can ask for documentation of your job search. We therefore recommend that you keep a log of all your job search activities – then you are prepared if your employer asks for documentation.

In the worst case, your employer may refuse to pay you a salary if you do not apply for jobs during the entire period of being released from your duties. In this context, you must be aware that education and starting your own business does not count as a job search.

You continue to be in an employment relationship even though you have been released from your duties and therefore have a duty of loyalty. This means that you must be loyal to your employer and may not take up employment with a competing company, unless otherwise agreed by both parties. You must also continue to speak loyally about your employer. Make sure to make an agreement with your employer about what and when you can change your settings on LinkedIn and other social media.

Read Finansforbundet’s booklet on resignations (pdf)

Have your terms and conditions of employment been changed?

Your employer has the right to manage and can therefore make changes in your terms and conditions of employment. There are two different types of changes:

 

  • Immaterial: Your employer may change your terms and conditions without warning. Changes may include, e.g. changes to your working hours, place of work or work tasks.
  • Material changes: Your employer is entitled to make changes in your terms and conditions if notice of the changes is given by the same period as your notice of termination. The changes can only enter into force when the period of notice has expired. This also means that material changes are actually considered as a dismissal and an offer of re-employment under changed terms and conditions, and that you may refuse and instead choose to consider yourself dismissed. This entitles you to the same rights, e.g. a claim for an objective justification, period of notice, severance pay and a possible claim for compensation.

Change in salary is generally considered a material change, while other changes require a specific assessment regarding the circumstances of your personal situation. This is often difficult to assess, as what is material for one employee may not necessarily be material for another. We therefore recommended that you contact your union representative, local union or Finansforbundet if you are in doubt as to whether a change may be material.

Period of notice

Your notice period depends on how long you have been employed.

The rules are set out in the Danish Salaried Employees Act and will typically be between 1 and 6 months. See more under the drop down “When can your employer dismiss you?”.

If you have been dismissed and released from your duties, you may be paid even if you have started a new job.

Calculate your minimum compensation

Mass lay-offs or mergers

If you are part of a mass lay-off or merger, you get help from our advisory unit.

Contact your union representative or write to us at beredskabet@finansforbundet.dk

Questions about termination and parental leave

How are you protected from termination during pregnancy and parental leave?

The rules of the Danish Equal Treatment Act protect you from termination due to:

  • Pregnancy.
  • Adoption.
  • Parental leave
  • Fertility treatment
  • Termination immediately after return from leave

Finansforbundet recommends that you notify your employer of the fertility treatment and/or addition to your family. Even though you as a mother are only obligated to report your pregnancy 3 months before the expected birth and as a father/co-mother 4 weeks before the expected parental leave, it might be a very good idea to be open about the circumstances early in the process. This gives you greater job security.

In addition, you as an expectant mother will have the right to absence for pregnancy examinations by a doctor or midwife, as well as better opportunities to organise your work together with your manager to reduce the risk of inconvenience and sick leave.

As a father, you can agree on absence for participation in examinations and scans in connection with the pregnancy.

What is your position if you are terminated during pregnancy or parental leave?

If you are terminated during your pregnancy or absence and your employer is aware of the pregnancy, the employer must be able to prove that the termination has nothing to do with the pregnancy or parental leave. You are protected by the rules both as a mother and as a father/co-mother, and a termination in violation of the Danish Equal Treatment Act may entitle you to compensation.

Often there is a close temporal relationship between the time you notify your employer of the pregnancy and your termination and if you are in doubt about the actual reason for the termination, you should always contact your professional representative and/or Finansforbundet.

What is your position if you are terminated due to illness in connection with your pregnancy?

If you are dismissed due to too much sick leave, it matters why you have been sick. If your doctor determines that it is a pregnancy-related illness, this means you are also protected under the Danish Equal Treatment Act (ligebehandlingsloven). Therefore, your absence due to illness cannot lead to a termination, because then you would actually be terminated due to your pregnancy.

What do you do if you are terminated after parental leave – or your job changes significantly?

According to the rules of the Danish Equal Treatment Act (ligebehandlingsloven), you are entitled to go back to the same or equivalent work under terms that are no less favourable than before your leave. If you find that your salary is reduced or you are moved very far away or similar circumstances, these are significant changes that in some cases are considered equivalent to a dismissal. In this case, you can generally demand to be reinstated in your old position.

In practice, however, the solution is often that you can instead demand or be awarded compensation for the violation of the law. The exact amount of the compensation depends on your seniority and the actual circumstances of the case, but there is often compensation of 6, 9 or 12 months of salary.

As a member of Finansforbundet, you have the opportunity to get legal advice if you have been terminated in violation of the rules of the Danish Equal Treatment Act. We recommend that you first contact your union representative or your local union for advice and guidance. Remember that you have a deadline of 4 weeks to respond and possibly claim compensation – this applies from the time you have received a notice of termination or information about a significant change in your work.

Terminated in connection with parental leave?

Remember that you have a deadline of 4 weeks to respond and possibly claim compensation – this applies from theRemember that you have a deadline of 4 weeks to respond and possibly claim compensation – this applies from the time you have received a notice of termination or information about a significant change in your work.

You may retain your membership regardless of whether you are dismissed or resign. You may also retain your insurance scheme if you continue to be a member.
Salary insurance with FTFa

Take out a salary insurance

You can take out an additional insurance for unemployment benefits with Finansforbundet's unemployment insurance fund, which is part of FTFa. This can give you up to 90 per cent of your current salary. You must have been employed for a period of 12 months and insured for at least six months prior to your dismissal in order to receive payment from salary insurance.

Salary insurance with FTFa

Contact Legal Department

32 66 13 30

Call us Monday-Thursday 8.30 - 16.00 or Friday 8.30 - 15.00

You can also write an email to raadgivning@finansforbundet.dk