A new law on Contract of Employment comes into force on 1 July 2023

The new Employment Certificate Law comes into force on 1 July 2023

A bill regarding employment certificates and certain working conditions was passed on 11th of May 2023. The new law will come into force on 1 July 2023, replacing existing legislation in this area.

Read on to learn more about what the Employment Certificate Law is all about and how your organisation should handle the new rules.

What is the Employment Certificate Law?

The Employment Certificate Law is essentially about how employers are obliged to notify their employees in writing of all material terms and conditions of the employment relationship.

Why is a new law needed?

In 2019, the European Parliament and the Council adopted a new Directive 2019/1152 on Transparent and Predictable Working Conditions (the so-called Working Conditions Directive), which necessitates changes to the Danish Law on Employment Certificates. Some of these changes have already been implemented in pre-existing Danish legislation, but there is still a need to implement new obligations, which is why the new law in Denmark has been passed.

Among other requirements, the Directive obliges employers to provide comprehensive information about the employee's material working conditions. This requirement is intended to ensure greater transparency and predictability of working conditions for employees.

When does the new law come into force?

The new law will come into force on 1 July 2023. It will not apply retroactively. This means that employees who either were recruited or began work before this date will not need a new certificate of employment or an addendum, even if the certificate of employment does not fulfil the employer’s obligations to inform under the terms of the new legislation.

However, an employee may request to have missing information added to their certificate of employment and you, the employer, are obliged to provide this information within eight weeks.

NB! There is an exception to this rule. As an employer, you should be aware that if an employee’s current certificate of employment contains unlawful restrictions on concurrent employment, your employees will need a new one in which the unlawful wording is deleted, regardless of the employment date. Read more about this below.

Who does the new law cover?

There are also new rules about when an employee may request a valid certificate of employment.

 The old rules

  • Employment period of more than one month; and
  • average weekly working hours of eight+ hours.

The new rules

  • Predetermined or actual working hours of three+ hours a week on average; and
  • a reference period of four consecutive weeks.

You are, therefore, likely to have several employees who are covered by the new law. It may be worthwhile to draw up a list already now of those in your company’s workforce who will need a new certificate of employment.

Zero-hour contracts

In addition to the above groups of employees, the law will also apply to all employees employed on so-called zero-hour contracts. The law stipulates that if a certain amount of paid work is not guaranteed in advance before the start of the employment relationship, the employee must receive a certificate of employment.

Exceptions to the law

The law does not apply to employees covered by a collective agreement concluded by the most representative labour market partners in Denmark, which is valid in Danish territory in its entirety and which provides overall protection of employees.

What changes have been made to current legislation?

The new law extends employers' information obligations. Moreover, the new rules regarding certificates of employment and certain working conditions include an extension of the information obligation and a requirement for information to be provided earlier in the employment period.

Among other obligations, changes to the employer's duty of disclosure mean that the employer must inform the employee of all material terms and conditions of the employment relationship at different times, including

  • Information on the nature of the work
  • The employee’s job title
  • Employment relationship start date
  • Holiday entitlements
  • Notice of termination
  • Salary
  • Working hours, etc.

Some of the changes must be provided as early as within seven calendar days of the start of the employment relationship, while other information must be provided within one month.

Does the law impose formal requirements?

Several formal requirements apply under the new law.

Employees must receive information in writing, in the form of one or several documents, and these must be provided and sent either on paper or by electronic means (subject to certain conditions).

Shorter deadline

Later changes to the terms and conditions of employment must be communicated within a significantly shorter timeframe. This may require you to change the way your organisation informs its employees.

The old law stipulates that employees must receive written notification of changes to their terms and conditions of employment as soon as possible and no later than one month after the date on which the changes take effect.

Under the new law, employers must notify employees in writing of changes to their terms and conditions of employment at the earliest opportunity and no later than the date on which the changes take effect.

Minimum protective standards for employees

The bill also contains a number of minimum protective standards for employees. For example, the new law limits the probationary period in the employment relationship to a maximum of six months, and employees now have a protected right to concurrent employment. This means that, as a general rule, the employer may not prevent an employee from taking up another job, or treat the employee unfavourably because they have taken up a second job.

You can read the wording of the full law here (in Danish).


Free webinar on the topic

If you want to know more, Head of HR Legal, Lisbeth Lindorff Riis, at Azets will host a free webinar about the topic on the july 15. 

The webinar will review the new Employment Certificate Act and certain working conditions that your employment contracts must comply with as of 1 July 2023.

Sign up here

Need advice?

If you, as an employer, need advice on the new Employment Certificate Act or other employee/HR-related matters, please contact us.

Find out more about how we can assist your organisation with HR matters.


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