COVID-19: Agreement on Division of Labour

15 Mar 2020
As part of the financial relief initiatives, presented by the Danish Government Friday 13 March and over the weekend, the Government has agreed on a revision of the so-called scheme on division of labour, enabling Danish companies to initiate an agreement with the employees on division of labour immediately after the agreement has been submitted to the Jobcenter.

The scheme on division of labour is a temporary acceptance of companies reducing working hours and salary for a period for the concerned employees who thus will not be laid off and may receive (partial) compensation for their salary loss through supplementary unemployment benefits from the employees’ unemployment funds.  

During the period of division of labour, the employees who are members of an unemployment fund are entitled to supplementary unemployment benefits during the periods in which the employee do not have to attend work compared to normal circumstances due to the agreement on reduced working hours according to the agreed scheme.

To begin with, the division of labour can run for up to 13 weeks. If it is enduring for a longer period than 13 weeks, it must be submitted for approval to the Regional Labor Market Council no later than 4 weeks before the expiry of the first 13 weeks.

We have briefly outlined below how the work place parties can enter an agreement on division of labour – both when the company’s work is not subject to a collective bargaining agreement and when the work is comprised by a collective bargaining agreement.

Step plan for an agreement on division of labour

If a company wants to initiate division of labour, it must be agreed collectively with the employees concerned or as a local agreement to the applicable collective bargaining agreement.  

Companies not subject to a collective bargaining agreement or where the collective bargaining agreement does not allow division of labour

  1. The company must enter into a local agreement with all employees in the entire company or in the company’s various departments / the company’s production entities which are to be comprised by the division of labour. If one employee refuses to enter the agreement, the agreement cannot be made.
  2. The company is not entitled to decide the frameworks of the division of labour, however the employer is entitled to deicide the division of labour within one of the following frameworks:
  • working time will be reduced with at least 2 full days per week 
  • working time is scheduled with 1 week of full time work followed by 1 one week of idleness
  • working time is scheduled with 2 weeks of full time work followed by 1 week of idleness
  • working time is scheduled with 2 weeks of full time work followed by 2 weeks of idleness

The Company is entitled to change how the division of labour is organized when a period with a certain division of labour has been completed.

The same terms and conditions are to apply to all of the employees covered by the agreement.

  1. The employees confirm the local agreement by signing it individually. If it is difficult to obtain signature from all employees, confirmation may be made by forwarding the local agreement to the employees through e-mail after which the employees confirm to the same e-mail address or through text message or other written confirmation that the local agreement is accepted.
  2. When the local agreement is accepted by all employees, the agreement must be submitted to the Jobcenter accompanied by the following documents:
  1. Employers may immediately after submitting the application to the Jobcenter initiate the division of labour

Companies subject to a collective bargaining agreement which opens for division of labour

  1. Consider which type of division of labour is most suitable for the operations of the company from the options allowed by the collective agreement.
  2. Draw up a local agreement on division of work.
  3. Enter the local agreement with the trade union representative at the company, the local department of the union or all employees

Step 4 and 5 is the same as above.

When the agreement is entered in companies that are subject to a collective bargaining agreement, it is applicable for all employees comprised by the collective bargaining agreement in question or in the department or production entity comprised by the collective bargaining agreement. Thus, the individual employee is not entitled to choose if he/she wants to be a part of the division of labour or not.

Refusal of accepting an agreement on division of labour

Outside the area comprised by the collective agreement, all employees in the company or in the department who are initiating division of labour must approve the agreement.

If just one employee refuses to approve the agreement, it cannot be initiated. If the division of labour is part of the measures for saving the company’s financial foundation, it will, according to our assessment, be appropriate to dismiss the employee who refuses to enter the agreement and be a part of the division of labour – or alternatively sending home the employee with salary temporarily being a de facto suspension.

As the division of labour cannot be initiated without acceptance from all employees affected, the employee who is dismissed must be released from obligations during the period where the division of labour applies. This can be either through suspension or release the employee from the duty to work.

If you need advice about division of labour, please reach out to our employment law specialists Partner, Attorney Michael Møller Nielsen, Attorney Julie Flindt Rasmussen, Assistant Attorney Nikolaj Sommers Gjettermann and Assistant Attorney Marta Valgreen Knudsen.

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