Rules on termination of employment

Read about the most important issues you must be aware of when you are dismissed or resign from your job.

Termination

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If you give in your notice

If you want to resign from your job, you must give one month's notice to expire at the end of a month. If, for instance, you give in your notice on 15 November, your notice runs until 31 December, following which you resign.

If a probationary period of three months has been agreed, you can resign at a day's notice, unless it has been agreed that a mutual notice of 14 days applies in the probationary period. Please note that you must give notice in time for the notice period to be within the probationary period.

Please also note whether an agreement has been concluded on extended notices of termination.

What should a notice include?

A notice should always be in writing and state the date, but otherwise there are no specific requirements to the contents, and you need not give reasons for your resignation. You may for instance write as follows: "I hereby give notice of my resignation from my position as of today, so that I will resign on 30 November 2015".

If you are dismissed

If your employer wants to dismiss you, you must be given notice in accordance with the provisions of the Salaried Employees Act. Your notice period depends on your length of service.

 

Length of serviceNotice period
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 and above6 months

 

In a probationary period, the employer's notice is always 14 days, and the notice period must be within the probationary period, which means that notice of termination in the probationary period must be given before 2½ months have passed.

Please also note whether an agreement has been concluded on extended notices of termination.

If you are dismissed in connection with massive lay-offs, the same rules apply as described above.

When may your employer dismiss you?

By virtue of the managerial authority, employers have the right to employ and dismiss their staff.

However, the Salaried Employees Act requires that the dismissal of employees with more than one year's service be reasonably justified. The circumstances at the actual date of dismissal are decisive for the assessment of reasonableness.

Dismissal may be justified by the circumstances of the company, e.g. finances or organisational changes, or by the conduct of the employee, e.g. lack of performance or cooperation problems.

Regardless of whether the dismissal is justified by the circumstances of the company or your conduct, the employer must give notice of the termination with the above notice periods (see also the sections on dismissals).

 

Termination justified by the circumstances of the company

Employers can always dismiss employees with reference to the need for savings, restructuring, etc. If the dismissal is in reality justified by such circumstances, it will be reasonable.

 

Termination justified by the conduct of the employee

A dismissal justified by your conduct may, for instance, be because you have not performed satisfactorily, you do not keep your agreements, there are cooperation problems or because of sickness.

Dismissal justified by some sort of dissatisfaction with you as an employee will generally require that you have received a warning (see more below) and have thus had an opportunity to improve. However, this does not apply in case of illness.

 

When there are changes in your employment terms

By virtue of his managerial authority, the employer may make changes in your employment terms without special warning, but only as long as the changes are immaterial.

Changes in terms can be a change of working hours, duties or the place of work. A pay cut will always be material, but otherwise a specific assessment is always required.

If the changes are material, the employer will be entitled to make them, but in this case, the changes must be notified by giving you the same notice as your notice of termination, and consequently the changes do not take effect until at the expiry of the notice period.

A material change is to be considered as dismissal and a simultaneous offer of re-employment on changed terms and conditions. This also means that you can choose to refuse re-employment on the changed terms and instead consider yourself as being dismissed by the employer. In that case you have the same rights as if you had been dismissed, i.e. you are entitled to a notice of termination, any severance pay, etc.

The fact that a material change in terms and conditions is put on a par with dismissal also means that the employer must have reasonable justification for making the changes, and that in the case of unreasonableness, a claim for compensation may be filed according to the collective agreement and the Salaried Employees Act.

Whether changes in the employment terms can be considered material depends on the specific facts and your personal circumstances. It is often a rather difficult assessment, and it is important to stress that what is important to one employee is not necessarily important to his or her colleague. It is in no way black or white, and it is recommended that you contact your shop steward, union branch or Finansforbundet (Financial Services Union Denmark) if you are in doubt as to whether a change may be material.

If you have been given a warning

What is the dismissal procedure when my employer is dissatisfied with my performance?

If your employer is dissatisfied with your performance or a specific conduct, he or she can give you an admonition or a warning about the areas that need improvement.

What must a warning contain?

A warning must be clear and specific:

  • It must clearly state the issues that give rise to criticism and where improvement is required
  • The changes must be objective and measurable
  • It must state how the problems are expected to be solved
  • Follow-up meetings should be agreed where this makes sense
  • The warning should be in writing and must state that failure to comply with the requirements stated may have employment law consequences
  • A time frame may be given but this cannot be required and will not always make sense

Participation and briefing of the shop steward

You are entitled to bring your shop steward to the meeting, and it must be possible to call him/her in should you so wish. Irrespective of whether the shop steward participates in the warning meeting, he/she must be briefed within two days of the meeting.

When the warning expires

If the conduct or performance criticised in the warning is not improved, this may lead to dismissal.

What does summary dismissal involve?

If you are in material breach of your obligations, this may lead to summary dismissal. In that case your employment is terminated with immediate effect, which also means that your salary stops immediately.

When there are changes in your employment terms

By virtue of his managerial authority, the employer may make changes in your employment terms without special warning, but only as long as the changes are immaterial.

Changes in terms can be a change of working hours, duties or place of work. A pay cut will always be material, but otherwise a specific assessment is always required.

If the changes are material, the employer will be entitled to make them, but in this case, the changes must be notified by giving you the same notice as your notice of termination, and consequently the changes do not take effect until at the expiry of the notice period.

A material change is to be considered as dismissal and a simultaneous offer of re-employment on changed terms and conditions. This also means that you can choose to refuse re-employment on the changed terms and instead consider yourself as being dismissed by the employer. In that case you have the same rights as if you had been dismissed, i.e. you are entitled to a notice of termination, any severance pay, etc.

The fact that a material change in terms is put on a par with dismissal also means that the employer must have reasonable justification for making the changes, and that in the case of unreasonableness, a claim may be filed for compensation according to the collective agreement and the Salaried Employees Act.

Whether changes in the employment terms can be considered material depends on the specific facts and your personal circumstances. It is often a rather difficult assessment, and it is important to stress that what is important to one employee is not necessarily important to his or her colleague. It is in no way black or white, and it is recommended that you contact your shop steward, union branch or Finansforbundet if you are in doubt as to whether a change may be material.

What am I entitled to receive in severance pay?

If you have been continuously employed in the same company for more than 12 years, you are entitled to severance pay if you are dismissed by your employer.

Both the Salaried Employees Act and the standard collective agreement contain provisions on severance pay.


Salaried Employees Act

Besides salary in the notice period, you are also, under the Salaried Employees Act, entitled to compensation of one or three months' salary, respectively, if you have been employed for at least 12 or 17 years at the time of resignation.


Standard collective agreement

The standard agreement contains a right to severance pay as stated below if you have been employed for more than 12 years at the time of resignation.

The amount is fixed according to age:

  • 40 years: one month's salary
  • 45 years: two months' salary
  • 50 years: three months' salary
  • 55 years: five months' salary
  • 60 years: six months' salary

The right to compensation lapses if you have reached the age entitling you to old-age pension.


Right to extra pension contribution

If you have reached the age of 50/55 at the time of resignation, you are entitled to 8/20 months' additional pension contributions.

The right to additional pension contributions lapses if you are entitled to old-age pension.


Mitigating measures

You are entitled to a compensation of one month's salary if:

  • you are dismissed because of the circumstances of the company, and
  • you have not been employed for long enough to be entitled to the above compensations, and
  • you have not agreed on new employment at the time of resignation.

Severance agreements

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

Consequently, Finansforbundet recommends that you should consult your union representative or Finansforbundet before signing. In addition, you should also seek guidance from your unemployment fund as a voluntary agreement on resignation may result in suspension of unemployment benefits.

 

Note the terms

In principle, a severance agreement is an alternative to a notice of termination and should be considered as such. For this reason you must ensure that, as a minimum, the agreement contains the terms you would be entitled to if you had been dismissed by your employer.

 

Specifically about release from the duty to work

If you are released from the duty to work, you are still employed but you do not have to perform any work. Accordingly, you should not meet for work in a release period.

You will receive your usual pay, and your terms in relation to other benefits will generally continue, unless you have agreed otherwise.

In the release period, you may take on other work as long as it is not with a competing company. Your employer will then be entitled to set off your new income in your salary, unless it has been agreed that set-off is not possible. However, you are always entitled to pay corresponding to three months' salary (minimum compensation).

Generally, you will gain most from a release from the duty to work if it is unconditional. The release from the duty to work is unconditional if it has been agreed that you can take up employment with a competing company and no set-off is made in your new earned income.

 

Loyalty

Although you are released from the duty to work, you are still in an employment relationship and for this reason subject to a duty of loyalty. This means that you must be loyal to your employer, and that you must not take up employment with a competing company, unless it has been agreed. You must also continue to speak loyally about your employer.

How much can I receive in unemployment benefits?

If you are full-time insured, work at least 24.67 hours per week and are paid at least DKK 22,220 per month, you can get the maximum unemployment benefit rate, which is DKK 849 per day.

Can I take out salary insurance?

Yes, as a member of FTFa, you can take out insurance in addition to the unemployment benefits, which may give you up to 90% of your present salary. You must have been in employment for 12 months and have had the insurance for at least six months before being dismissed by your employer, before you can receive pay from the salary insurance.

The insurance scheme is very flexible, which means that you can tailor it to fit your financial situation and needs.

What are the rules for outplacement?

If you are dismissed because of the circumstances of the company, the company will offer an outplacement plan.

 

You will be offered an outplacement plan with the following features:

  • a value of at least DKK 25,000 per dismissed employee
  • adherence to the principles of the Code of Good Outplacement Practices in the Financial Sector
  • time off with pay in the notice period for outplacement activities

The choice of provider and the contents of the plan are agreed between the union representative and the company.


Agreement with provider

Finansforbundet cooperates with FTFa, and we have entered into agreements with the following providers, who can give you the best assistance:

  • Amendor
  • AS3
  • Brodal Search & Selection
  • Charlotte Juul Search & Outplacement
  • Corecompetence
  • Effektiv Rekruttering represented by Michael Folmann
  • FTFa / Mercuri Urval
  • Globiz1
  • Hartmanns A/S
  • iHeadHunt
  • KEA Kompetence
  • Kjer & Partnere
  • Konsulenthuset Ballisager
  • Konsulenthuset Provi
  • LunnPlus and KarriereCoach
  • Makio
  • Moving People
  • Otto Consult
  • Peoplement
  • Promando
  • Resources represented by Søren Kiebe
  • Right Management
  • Nordic Transition
  • Unique Human Capital
  • Wise Consulting

Can I get advice and support in connection with mergers and major rounds of layoffs?

Finansforbundet has established an advisory unit, which holds information meetings for members who have been dismissed. At the meetings, members are informed about:

  • Severance terms
  • Unemployment fund rules
  • Labour market (skills clarification, training/education, job search)

If you have any questions or if you or your colleagues need help from the advisory unit, then contact your shop steward.

Dismissals

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I have been summarily dismissed. What should I do?

If you have been summarily dismissed, it is important that you:

  • immediately enter a protest against the summary dismissal with your employer
  • involve your shop steward, the union branch or Finansforbundet, which can help you claim compensation for salary and holiday pay and possibly damages if your dismissal was wrongful
  • contact your unemployment fund

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

Can I take out salary insurance?

Yes, as a member of FTFa, you can take out insurance in addition to the unemployment benefits, which may give you up to 90% of your present salary. You must have been in employment for 12 months and have had the insurance for at least six months before being dismissed by your employer, before you can receive pay from the salary insurance.

The insurance scheme is very flexible, which means that you can tailor it to fit your financial situation and needs.

How much can I receive in unemployment benefits if I am dismissed?

If you are full-time insured, work at least 24.67 hours per week and are paid at least DKK 22,220 per month, you can get the maximum unemployment benefit rate, which is DKK 849 per day.

How are the unemployment benefits paid out?

The unemployment benefits are paid in arrears for a period of either four or five weeks. The period runs from the last but one Sunday in a month to the last but one Sunday in the following month. Contact FTFa's contact person in Finansforbundet to learn more about the unemployment fund:

I am in a subsidised job. What do I do if I am dismissed?

You must contact the local authority, which administers the subsidised employment scheme. The local authority must assess whether you are undeservedly unemployed and can receive temporary benefits under the subsidised employment scheme.

You should also contact Finansforbundet's legal advisers to get a legal assessment of the reasonableness of your dismissal.

Write to Legal Affairs and Negotiations at raadgivning@finansforbundet.dk or call on telephone +45 32 66 13 30. Remember to state your civil reg. no. or membership number on inquiry.

You may also contact the social workers in Finansforbundet if you have questions about social issues:

Am I entitled to an outplacement plan?

If you are dismissed because of the company's circumstances, you are guaranteed the right to an outplacement plan according to the collective agreement.

If you are not offered an outplacement plan in connection with your dismissal, and the reason is your company's circumstances (i.e. savings, organisational changes, etc.), you must contact Finansforbundet on +45 32 66 13 30 or at raadgivning@finansforbundet.dk.

What happens to my membership of Finansforbundet if I am dismissed?

You can keep your membership, irrespective of whether you are dismissed or resign. You can continue as a member, irrespective of whether you become unemployed for a period of time, are pensioned off or get a new job.

You may have different rights depending on whether you get a new job in the financial sector, outside the financial sector or become unemployed.

Can I keep the insurance schemes that I have with Finansforbundet if I am dismissed?

Of course, you can keep your insurance schemes if you continue to be a member of Finansforbundet.

Contact Finansforbundet if you have any questions about your membership or insurance schemes on telephone +45 32 66 13 76.