11 May 2011

New holiday rules

The Danish Parliament has adopted a number of amendments to the Danish Holiday Act, inter alia, a limited possibility for the employer to consider holiday as taken in the period when the employee is released from the duty to work, an extended possibility to agree on transfer of remaining holiday to the next holiday year and an extended period of limitation in case the employer does not pay holiday allowance to the employee. Further, the Act provides an extended opportunity for the holiday funds to control payments of holiday allowances that have not been withdrawn. The new rules came into force on 1 May 2011 and thus apply to the new holiday year.

Holiday in the period when the employee is released from the duty to work

Under the current rules, holiday is considered taken in a period when the employee is released from the duty to work if the notice concerning holiday and the actual holiday may be placed in the period when the employee is released from the duty to work - regardless of whether the employee has obtained a new job in this period.

If the employee obtains a new job in the period when he is released from the duty to work, the current rules may result in the employee working for the new employer at the same time as he is considered to take holiday earned with his former employer. After three months of the period when he is released from the duty to work, the former employer may furthermore set off the pay of the remaining period (including pay during holiday) against the pay from the new employer.

The new rules imply that, in the future, the employee may only be considered to take holiday in the period when he is released form the duty to work if he – after the expiry of the notice period - has a work-free period equivalent as a minimum to the length of the holiday. In the future, the employer cannot consider the entire holiday as taken in the period when the employee is released from the duty to work if the employee obtains a new job in this period, unless the employee is actually taking holiday from his new employer.

In order for the holiday not to be considered taken, the employee must prove to the employer that he has not had a work-free period with the new employer, for instance by presenting pay slips or a statement from the new employer.

In those situations where the employer cannot set off in a notice period, e.g. due to collective agreements or a severance agreement, the holiday may still be considered taken to the same extent as under the current rules.

The new rules only apply to releases made after 1 May 2011.

Transfer of remaining holiday

Under the current rules, an employee wishing to transfer days in excess of 20 days must enter into an agreement with the employer no later than 30 April. As regards employees covered by a collective agreement, it is only possible to make such an agreement if explicitly stated in a collective agreement.

The new rules imply that the deadline is changed to 30 September, and that all employees – whether covered by a collective agreement – may enter into agreements on transfer of holiday. However, this does, not apply if the collective agreement directly precludes this possibility.

Extension of the period of limitation

Under the current rules, when the employer is unwilling to pay holiday allowance, the employee must raise a claim against the former employer no later than 30 September after the expiry of the holiday year. If the employer still fails to pay, the employee must no later than 30 November the same year seek to recover the claim bringing legal action or the like. If the employee does not meet the deadline, he will loose his right to holiday allowance.

The new rules imply that the employee no longer has to prove that the claim has been made in due time and that the deadline for recovery is now three years after the expiry of the holiday year.

Control of payments of holiday allowances that have not been withdrawn
The change gives Arbejdsmarkedets Feriefond and private holiday funds the opportunity to control whether the employer settles the holiday allowance that the employee has not withdrawn during the year. Arbejdsmarkedets Feriefond is given the opportunity to make random checks of 150 companies each year to ensure that the employers settle holiday allowances not withdrawn from Arbejdsmarkedets Feriefond so that they do not gain financially from e.g. the employees' non-taking of holiday, etc.

See the adopted bill at the homepage of the Danish Parliament (L 108):


The content of this Newsletter is not, and should not replace, legal advice. 

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