The Confederation of Danish Industry have discussed the current situation with the unions FAOD, JA and KF. Companies are in immediate need of adjusting both staffing and finances in order to preserve as many jobs as possible and bring everyone through the COVID-19 crisis in the best possible way.
The collective agreement is still in effect, but the parties to the collective agreement agree on requesting all companies and employees to exercise as much flexibility and cooperativeness as possible with reference to the provisions of the agreement, in order to avoid dismissals to the greatest possible extent.
The parties to the collective agreement request that management takes the initiative in discussing the situation at the companies on an ongoing basis, and use the union representatives.
Below is a short description of some of the measures the companies might make use of if they have to make changes to their operation because of COVID-19. Which measures might be relevant to the company depends on the specific situation.
Working from home
In order to contain the spread, the government have per March 11th urged the corporate sector to have their employees work from home temporarily to the greatest possible extent.
The employee is obligated to work from home to the extent that is feasible. You can also think along the lines of having employees take turns of working from the office so that they avoid close contact with one another. It is the company that assesses whether there are employees who can work from home partly or wholly, and which employees this includes.
If the company sends employees home, these employees are entitled to their wages. This is because it is the company’s choice that their employees cannot come to work. The obligation to payment of wages can change if the authorities order companies to send home their employees.
Sending home employees
Companies can, in general, always send home employees with wages for a limited period of time.
Sending home employees without wages demands a special title, or that force majeure is invoked. It is generally assumed that salaried employees cannot be sent home without pay according to the rules of force majeure. Whether force majeure is invoked or not is a very specific assessment of the individual company’s situation.
Companies should contact DI for further consultation, if they consider whether they are entitled to send home employees without wages.
Members and union representatives should contact their unions.
Extra hours and time off in lieu
For hours in the individual account exceeding 75 it is, following the collective agreements, possible for the employer, with 24 hours’ notice, to request the employee to take time off in lieu for these hours.
The employees still have the right of disposition over the first 75 hours. The fundamental basis of the collective agreements is, that the hours should be used shortly after they have been saved, but the employer cannot give notice to using those hours. Because this situation makes room for time off in lieu, everyone is encouraged to be flexible when it comes to using your hours.
The first 75 hours in the individual account may be given notice to be used with a months’ notice in a dismissed employees notice period.
Individual account for extra hours in the negative
The employees cannot be asked to take time off in lieu that they have not accrued. However, it is possible to enter into a voluntary individual agreement that the account of extra hours can be in a negative balance. Following this, the unions have said that it will be a condition for the approval of a voluntary individual agreement on this, that it will be agreed at the same time, that the hours cannot be set off, if the employee resigns.
With reference to the Danish Holiday Act, all remaining holiday must be used before May 1st 2020. The companies then have the possibility to give notice to use remaining holiday with 1 months’ notice. The Holiday Act allows companies to impose holiday without notice under special circumstances. It is going to be an assessment of the individual company’s situation whether the circumstances for imposing holiday without notice are present.
In light of the current situation, DI and the unions encourage everyone to exercise flexibility in using remaining holiday now, and moreover, make an agreement of where to use these days according to the individual company’s situation. This is in effect regardless of earlier announcements of saving holidays because of the transitional period to the new Holiday Act.
According to the collective agreement, floating holidays must be placed after an agreement between employer and employee. Everyone is, because of this, encourages to use floating holidays now, if the current operations in the company makes it hard to fill up a full days’ work.
Voluntary agreements on reduced hours and wages
During the financial crisis of 2008 and forward, many voluntary, time-limited agreements on reduced hours and wages were made in architect firms. Many people stood by each other in order to keep as many colleagues as possible in the work force, and thereby avoiding unnecessary dismissals.
Both the unions and DI are ready to consult on entering into such agreements. Because the agreements are voluntary, they can take effect immediately. The union representatives can contact their respective union, which will be ready to help. At companies where no union representative is chosen, we recommend that the employees select a contact person who will be able to coordinate these agreements.
The organizations are working on drawing up a joint template, that companies and employees can use, if they wish to enter into such agreements.
Update 26. March.: Read the agreement and download the template here.
Agreement on division of labour
It is, besides the above, also possible to enter into agreements on division of labor. When a company has division of labor, the employees are not fully employed, but work some days and get paid from the company for these days, while they are unemployed the rest of the days. Employees who are members of an unemployment insurance fund will get supplementary unemployment benefits for the days they are unemployed. The purpose of this division of labor is to give the company the possibility to decrease the working time in a situation where they are hit by shortage of work, and thus, avoid dismissals.
Related to COVID-19, the government has decided to make this arrangement more flexible.
The government’s aid packages
The government have drawn up some aid packages in order to support the Danish corporate sector. Among other things, there is a wage compensation arrangement for companies who do not dismiss employees in the period up to June 9th 2020. There is also a special aid package for small businesses with up to 10 employees.
When it comes to the wage compensation arrangement, both DI and the unions agree that the arrangement cannot be employed, if there is an agreement on division of labor within a company.
The companies need to seek advice with DI in order to get a general overview of which solution will be the best for the company in their given situation.
Do you have questions?
DI and the unions invite employers and union representatives to contact their respective organizations, if they have questions.
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