New Act on the consequences of the abolishment of Great Prayer Day as a public holiday

Background for the new Act

The new Act was passed by the Danish Parliament on 28 February 2023. The purpose of the Act is to abolish Great Prayer Day (the fourth Friday after Easter) as a public holiday, thereby increasing the annual effective working hours for all employees. The revenues generated from the additional annual working day are intended to finance the increased expenses for the Danish defense expenses.

Great Prayer Day as a regular workday

As a result of abolishing Great Prayer Day as a public holiday, all existing agreements and conditions related to salary and employment on public holidays will no longer be applicable to the former Great Prayer Day. This means that Great Prayer Day will be considered a regular working day as of 1 January 2024.

However, it will still be possible for employers and employees to enter into agreements regarding special salary and employment conditions on the former Great Prayer Day after the Act comes into effect on 1 January 2024. In other words, it will be possible to negotiate in the individual employment relationship that the employee continues to have a day off on the former Great Prayer Day.

It is up to the employer to decide when the additional working hours resulting from the abolition of Great Prayer Day (equivalent to 7.4 hours for a full-time employee) is to be scheduled within the framework that otherwise applies to the placement of working hours in the employment relationship, and whether the employer will take advantage of the opportunity to increase employees' annual working hours by one regular working day.

Salary compensation for extra working hours

As compensation for the increased working hours for employees who previously had a day off or compensatory time on Great Prayer Day, the employer is required to provide a salary compensation.

• Employees paid by the hour will now receive their regular hourly salary for work performed on the former Great Prayer Day including any additional compensation for overtime or other work that is separately agreed upon. However, they will not receive a special salary supplement like monthly salaried employees.
• Monthly salaried employees will be compensated for the increased working hours with a special salary supplement equivalent to the value of a regular working day, which is calculated as 0.45% of the annual salary including pension and other allowances. The supplement is accrued continuously and is either settled twice a year in May and August or paid out periodically with the regular salary.

Can employers refrain from paying salary compensation?

It is our assessment that it is not possible for the employer to avoid paying the salary compensation by offering employees an additional paid day off. This is based on the understanding that the salary compensation is a legally protected right for employees, and the intention of the Act is to increase the labor supply. Therefore, it would be considered a circumvention of the regulations if the employer provided an extra paid day off to avoid paying the salary compensation.

However, the legislation does not prevent employers from negotiating with their employees to reduce their salary in exchange for an extra paid day off if employees still receive a salary supplement equivalent to 0.45% of the annual salary.

How do you implement the new rules?

As the rules generally will imply a significant change in salary and employment conditions for many employees who previously had a day off or compensatory time on Great Prayer Day, we recommend that the employer inform all employees about the changes before the Act takes effect on 1 January 2024. This may be communicated through a collective email, the company intranet or similar means.

As the changes are a consequence of legislation, they are not considered to be significant terms changes. Therefore, it is not necessary to notify employees with their individual notice periods for termination.

Furthermore, we recommend that the salary compensation for monthly salaried employees is paid in addition to the monthly salary rather than being integrated into the monthly salary. Further, we recommend to state the salary supplement on a separate line on the payslip . This documentation can be crucial in case of any dispute at a later stage, especially if there have been salary increases in the meantime. However, the Act does not require the salary compensation to be specified on the payslip.

Finally, we recommend that employers include the salary compensation in the employment contracts for new employees commencing after 1 January 2024. These employees will, naturally, not have received notification of the salary compensation in any collective communication sent out before the Act takes effect. Moreover, it is a requirement in the Employment Certificate Act that the employees' salary at the time of employment, along with any allowances, is stated in the employment contracts.

If you have any questions to the Act or need specific advice on how you can best prepare for the new rules, please contact our employment law specialists; Partner Michael Møller Nielsen, Associate Partner Julie Flindt Rasmussen, Attorney Anna Lindencrone Lundin or Assistant Attorney Mina Faiz.