Coronavirus - Government measures in key jurisdictions - Flipbook - Page 33
Denmark
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3
4
Employment
What financial
support is the
government
providing to
businesses and
to individuals
on employment
issues?
Insolvency
•
The Danish government has introduced a temporary wage compensation scheme for
employees at risk of being laid-off. The temporary compensation scheme will apply
from 9 March 2020 to 9 June 2020.
•
The compensation scheme applies to all private Danish companies regardless of size,
however, it is a requirement that the company is materially adversely affected financially by
COVID-19 and is facing having to lay-off at least 30 per cent of its employees or more than
50 employees. If this is the case, the company can apply for state salary compensation
whereby the Danish state will compensate 75 per cent of the salaries of the employees
concerned, but a maximum of DKK 30,000 per employee per month. For hourly wage
earners, the state wage compensation amounts to 90 per cent of the salaries of the
employees concerned, but a maximum of DKK 30,000 per employee per month.
•
It is a condition for receiving compensation under this scheme that the employees
are sent home with full salary and that they do not work during the period for which
compensation is received. Furthermore, as a starting point, employees are obliged to
take holidays and/or take time off in lieu of overtime amounting to a total of five days in
connection with the compensation period.
•
Companies receiving compensation under this scheme undertake not to layoff employees due to financial reasons during the period in which they receive
the compensation. If employees are laid-off during the compensation period,
compensation of wages will cease as per the date of the dismissals.
•
The Danish government has announced that they will start negotiations with the Danish
Employers’ Confederation and the Danish Trade Union Confederation on an extension of
the wage compensation scheme; however, such extension is not yet adopted.
•
For additional information about the temporary wage compensation scheme, see here.
•
The Danish government has not introduced any changes to insolvency legislation.
•
The Danish government has not implemented any specific measures to reinforce contracts.
•
While some countries have implemented specific legislation on force majeure, this is
not the case under Danish law. Accordingly, whether COVID-19 will constitute a force
majeure event under Danish law comes down to a case specific assessment of (i) the
legal framework, contracts etc. of the individual relationship, and (ii) the very specific
matters surrounding each case of non-performance, both in terms of geography,
business sector and market conditions.
•
However, part of the legislation adopted by the Danish government, as a consequence
of COVID-19, directly or indirectly affects contracts. As an example, the Danish
government has implemented two Executive Orders under which the Danish Medicines
Agency has a right to order Danish manufacturers, importers and distributors to supply
Has the
government made
any changes
to insolvency
legislation?
Contractual
Issues
What measures
have been taken
to reinforce
contracts?
Government measures in key jurisdictions
33