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LEGAL NEWS - The Danish Act on the Legal Rights of Temporary Agency Workers upon Assignment by a Temporary-Work Agency

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20. December 2016

The Danish Supreme Court has for the first time ruled on the understanding of the principle of equality set by the Danish Act of Temporary Agency Workers. The judgment was delivered on 23 August 2016 and lays down the duties of the temporary-work agency in according with the principle of equality set by the act.

The principle of equality according to the Danish Act on Temporary Agency Workers

According to article 3, section 1 of the Act the temporary-work agency must ensure that the temporary agency worker, during his or her assignment, as regards the duration of working time, overtime, breaks, rest periods, night work, holidays, public holidays and pay, has conditions that, at least, equal those that would have been valid under legislation, collective agreements, and other legally binding general provisions that would have been applicable, had the temporary agency worker been employed by the user undertaking directly for the purpose of performing the same work.

Since the adoption of the principle of equality there has been uncertainty regarding the pay of the temporary agency worker. The pay of the temporary agency worker includes not just the hourly wages but includes as well additional pay and benefits such as holidays, pension, etc. 

It is important to notice, that payment conditions have to be according to law, collective agreement or other legally binding general provisions. This means that conditions agreed upon in individual employment contracts, despite of whether they are valid for a group of employees, are not covered by the principle of equality. 

The question has been, whether the temporary-work agency is able continuously to convert benefits such as holidays, pension etc. to salary. Until now it has been assumed and it seems to follow the legislative work that it is possible to convert contributions to salary.

The ruling of the Danish Supreme Court of 23 August 2016 

On 23 August 2016 the Danish Supreme Court delivered a judgment that overturned the previous understanding of the principle of equality set by article 3, section 1 of the Danish Act on Temporary Agency Workers. 

In the specific case a temporary agency worker claimed compensation for the temporary-work agencies violation of the principle of equality according to article 3, section 1, and claimed adjustment for the benefits which the temporary-work agency had converted to salary.  

In the specific case the temporary agency worker according to the applicable collective agreement was entitled to some extra days off. The temporary-work agency had continuously converted the value of these extra days off to salary. The parties even agreed upon the value of these extra days off. 

The Danish Supreme Court stated that days off should be equated with holidays and that the employer only was entitled to convert holidays to salary if specific circumstances where fulfilled. The temporary-work agency was not able to proof such specific circumstances. 

In addition, the temporary-work agency had converted the temporary agency workers right to a pension paid by the employer to salary. The parties agreed upon the value of the pension contribution. 

The Danish Supreme Court stated, that the pension contribution could not be converted to salary, because the pension contribution had a greater purpose than payment. The Supreme Court emphasized that the purpose of the pension contribution was to secure the employees in a higher level than the public pension and that the converting therefore put the temporary agency worker in a less favorable situation than the other employees of the user company. 

The Danish Supreme Court therefore stated that the temporary agency worker was entitled to an adjustment to the wrongly converted goods. In addition, the temporary agency worker was entitled to a compensation of DKK 15.000. 

Conclusion

The ruling of the Supreme Court states that only wage benefits that do not serve a specific purpose can be converted to salary. Wage benefits such as extra days off, holidays and pension contributions cannot be converted to salary but must been paid out according to the rules applicable for the user company. 

In addition, the ruling shows, that the compensation for a violation of the Danish Act on Temporary Agency Workers is an amount set by the court according to the specific case and regarding to the nature and extent of the violation. In the ruling the High Court emphasized that the temporary agency worker had by the adjustment of the wrongly converted benefits obtained full compensation for her losses. 

This shows that the compensation as a main rule is not calculated as a weekly or monthly salary as we know from other labor law related legislation, for example the Danish Act on Equal Treatment, the Danish Antidiscrimination Act or the Danish Salaried Employees Act. 

However it has to be noted that in the specific case the temporary agency worker was not terminated as a result of the unequal treatment. Probably the compensation would be higher if the temporary agency worker had been terminated because of her reliance on the principle of equality set by the Danish Act on Temporary Agency Workers.

For any further questions please contact attorney at law Alexandra Huber at ah@leaddenmark.com


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