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LEGAL NEWS - New Holiday Act on its way?

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25. September 2015

The new government has decided to change the rules about the Danish Holiday Act. The decision is based on a statement from the European Commission that Danish legislation might be in conflict with the EU-law. 

In Denmark, the right to paid leave is earned during the calendar year, but the time, where you actually can use your paid leave is during 12 months from May the following year. Paid leave collected in the calendar year 2015 can be used during the period 1st of May 2016 to the 30th of April 2017. 

The Commission stated that this system might be in conflict with the EU-law, which is why the Danish government has announced that a committee will be established to propose easier and clearer rules. It is not known yet what those changes might be, but it is expected that the new legislation will open up for the possibility to receive paid leave in the same year where paid leave is earned.

If the Act is to be renewed, it will most likely benefit people who have graduated recently and employees who change jobs. Austrian and German Employees moving to Denmark will likewise benefit from such a change.

The leading labor unions in Denmark state that the current rules work fine, but they also admit that a change might be necessary considering EU-law.  

Notice of paid leave in case of termination of employment

The Danish Supreme Court has ruled that it is possible to derogate from the non-mandatory provisions of the Danish Holiday Act before entering the contract of employment. In the particular case, the Court decided that it was ok to shorten the notice period for paid leave in connection with the termination of employment.

In Denmark, the general rule is that the employer has to notify the employee in which period the employee must take leave as soon as possible. The employer has to notify the employee at least three months before the main holiday period. Furthermore the law states that a terminated employee cannot be asked to take his main holiday in the period of notice if the notice period is three months or shorter. However, the Act states that both these rules are non-mandatory which gives the parties the opportunity to establish their own terms. 

In the Supreme Court case, the employer agreed with the employee in the contract of employment that notice about the main holiday must be given only a month before taking the leave. They also agreed that the employer could instruct the terminated employee to take the main leave in the period of notice with only one month of notice.

The question was now, whether these terms were enforceable. The rules were established at a time when the employee was about to enter the contract of employment. The Supreme Court ruled that there is no question about the validity of the contract and that both parties have agreed to it. The term was therefore enforceable.

The consequences of this decision are that the employer has an opportunity to terminate the contract of employment more efficiently. When drafting the employment contract, employers should seek legal advice to draft an enforceable clause.

In case of questions, please do not hesitate to contact lawyer Stefan Reinel, or assistant attorney Sabine Glatz,