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:

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 Borger.dk, 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?