DEAR READER OF EMPLOYMENT LAW NEWSChristmas is near, and we would like to wish our readers a Merry Christmas and a Happy New Year and use the opportunity to give you an overview of the legislative measures and recent case law within employment law during the second half of 2013. Finally, we will comment on the arbitration proceedings between DONG Energy A/S and the former CEO Anders Eldrup and take a look at the tendencies for 2014.

We are looking forward to our cooperation in 2014.

Merry Christmas and a Happy New Year.

Horten

Jonas EnkegaardHead of the Employment Law Team

LEGISLATIONThe second half of 2014 has been quiet with only a few new legislative measures within employment law.

Based on the government’s legislative programme for 2013/2014, it also seems as if the next six months will be quiet - seen from an employment law perspective. The dominant legislative measures will concern a change of the sickness benefits based on the government’s proposal for a new sickness benefit model.

It was also a part of the legislative programme that a working committee was set up for the purpose of preparing a number of bills containing initiatives to improve the conditions for attracting highly qualified foreign labour. In this respect, the government introduced an accreditation scheme. This scheme implies that Danish representations must be able to accredit foreign companies, and the employees and other persons with fixed attachment to the accredited companies will then get access to a flexible visa procedure.

In December 2013, a bill should have been introduced on maternity bonus for the purpose of supporting a more equal division between men and women of parental leave. The aim was to

CHRISTMAS GREETINGS FROM THE EMPLOYMENT LAW TEAM DECEMBER 2013

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introduce a maternity bonus of DKK 100 per day in the period when both parents are on leave for more than four weeks. The bill is, however, not going to be introduced as it was not possible to reach an agreement during the negotiations concerning the budget agreement.

Horten will, of course, keep you updated on any new legislative measures.

CASE LAWMany interesting employment law rulings were delivered during the second half of 2013. The Supreme Court affirmed the High Court’s and the City Court’s decisions in August to dismiss a case on age discrimination.

The case concerned an office worker who was dismissed when turning 67 according to the mandatory retiring age under a local agreement. She brought legal action against her employer, TDC, claiming compensation for dismissal contrary to the Anti-Discrimination Act. TDC claimed dismissal of the action as the employee’s union had initiated prior industrial arbitration.

The Supreme Court agreed with the previous instances that the collective agreement sufficiently implemented the provisions of the directive and, consequently, the Anti-Discrimination Act did not apply. The employee’s claim was therefore characterised as a claim based on a contract, which was to be settled under the general industrial disputes procedures.

The Supreme Court found that the employee had not proved that her union, CO-Industri, had given up pursuing her claim by way of industrial arbitration, and that this doubt should be to the detriment of the employee. For more information, please see the newsletter.

The Supreme Court ruled in another action in August concerning an employee, who - as part of the employment - was entitled to waiting time payment for five years if he was dismissed. The waiting time payment would cease, however, when the employee turned 67, which was the mandatory retiring age under the collective agreement.

The employee argued that a mandatory retiring age of 67 was contrary to the Anti-Discrimination Act, and that it was also contrary to the Act that he would receive waiting time payment for a shorter period due to his age.

The Supreme Court affirmed that the discrimination due to age was justified by legitimate objectives. The Supreme Court attached importance to the fact that a provision on mandatory retiring age may ease young peoples’ access to the labour market and at the same time show consideration for the older employees by connecting the retirement with pension. For more information, please see the newsletter.

Two interesting rulings were delivered in September. For example, it was established that 3F’s notice of conflict vis-á-vis a non-organised employer was illegal. The Industrial Court found that, under case law, objective reasons must exist to make stricter requirements for an employer simply because the employer is not a member of an employers’ organisation with which the organisation has not entered into a collective agreement. The Court found that the objective of the notice of conflict had been to pressure the company to accept unlawful and non-objective terms. For more information, please see the newsletter.

At the end of September, the long awaited ruling of the European Court of Justice was delivered as to whether public servants are entitled to redundancy pay after the age of 65. The European Court of Justice followed the proposed decision of the Advocate-General that section 32 of the Public Servants Act is contrary to the prohibition against discrimination due to age. The Supreme Court ruling is expected in the beginning of 2014. For more information, please see the newsletter.

In October 2013, the Supreme Court found that the dismissal of a single mother due to her lack of lack of flexibility while her children were staying with her was not contrary to the Equal Treatment Act. The Supreme Court found that flexibility in relation to working hours is a gender-neutral criterion. So when attaching important to lack of flexibility in connection with the dismissal of an employee, this is

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not considered direct discrimination. However, the Supreme Court found that this could have a wrong effect in terms of gender, and it could therefore not be ruled out that the application of such criterion could be considered indirect discrimination. For more information, please see the newsletter.

In November, the Supreme Court affirmed the High Court’s ruling and found that dismissal of young workers because they turn 18 is not contrary to the prohibition in the Employment Equality Directive against discrimination due to age.

The case concerned a young man who had worked with Irma since he was 16, but who was dismissed when he turned 18. The reason for the dismissal was that, when turning 18, he was to receive a much higher hourly pay. The dismissal was in accordance with section 5 (5) of the Anti-Discrimination Act implementing the Employment Equality Directive. The section provides that young people under 18 are not covered by the Act if the employment is covered by a collective agreement containing rules on payment of young people under 18. For more information, please see the newsletter.

Finally, the European Court of Justice ruled in an action concerning age discrimination (C-476/11) on 26 September 2013. The European Court of Justice found that a pension scheme granting a higher employer-paid contribution the older the employee is is in accordance with EU law.

The Court stated that articles 2 and 6 (2) of the Employment Equality Directive must be interpreted as “not precluding an occupational pension scheme under which an employer pays, as part of pay, pension contributions which increase with age, provided that the difference in treatment on grounds of age that arises therefrom is appropriate and necessary to achieve a legitimate aim, which it is for the national court to establish.”.

The Western High Court ruling is expected during 2014.

DONG ENERGYSomewhat unusual, the arbitration tribunal’s conclusion in the proceedings between DONG Energy A/S and the former CEO Anders Eldrup has been published. Making reservations as to the proceedings and the explanations not having been published, the decision of the tribunal of 16 September 2013 (for more information, see the Internet) contains a number of “learning points”, which are considered unusual.

The tribunal states that the CEO’s acceptance of the pay and employment conditions of the four key employees, which conditions deviated significantly from the other employees, was not a breach of the CEO’s employment, but it was an error of judgement of the part of the CEO. On the one hand, this means that the CEO is entitled to the agreed severance pay, which will therefore not lapse due to breach.

On the other hand, it means that the tribunal finds that the CEO has reasonably caused the dismissal resulting in the agreed non-competition clause being in force, see section 38 (2) of the Contracts Act. A company’s dismissal of a CEO normally results in the lapse of an agreed non-competition clause.

Very few rulings exist on the definition of section 38 (2) of the Contracts Act and, in the future, this ruling may be used as a landmark when it comes to the assessment as to whether an employee has reasonably caused a dismissal, which is decisive as to whether an agreed non-competition clause is in force or not upon the company’s dismissal of the CEO.

In addition to this interesting decision, the tribunal has delivered two decisions on an agreed non-competition clause and a combined non-solicitation and supplier clause - the term of both clauses was two years.

The tribunal decided to limit the term of both clauses to one year, and in relation to the non-competition clause, the tribunal stated that the CEO was subject to a duty of loyalty for one year, that no remuneration had been paid for accepting the clause, and that the CEO was not in possession of any business secrets or other specific knowledge, which - in the opinion of the tribunal - resulted in a limitation of the term from the agreed two years to one year.

Apart from this being a remarkable limitation, it is even more remarkable that the tribunal also reduces the term of the non-solicitation and supplier clause from two to one year. The tribunal states that the

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market is very narrow and DONG is very dominant, that a duty of loyalty applies for one year, that no remuneration has been paid for accepting the clause, and that the CEO is not in possession of any business secrets or other special knowledge.

There are no similar decisions from case law concerning limitation of non-solicitation and supplier clauses.

It will be interesting to see in the future whether the Tribunal’s decision will rub off on actions before the ordinary courts.

TENDENCIESThe private labour market is going to renew collective agreements covering more than 600,000 employees as at 1 March 2014. Focus will presumably be on preventing social dumping and on absence due to sickness. And, of course, also on the classic subjects such as pay and flexibility.

In 2012, the European Commission presented a proposal for new rules on the protection of personal data. The latest proposal in this respect is from 21 October 2013, where the European Parliament’s Committee on citizen’s rights adopted the final package of amendments to the Commission’s proposal. After the formal adoption by the entire Parliament, these proposals for amendments will be part of the discussions between the Parliament and the Council on the final adoption of the regulation on personal data. The Parliament and the Council will negotiate the amendment proposals for the purpose of reaching agreement on the wording, which is expected ready in 2015. The regulation on personal data and the amendment proposals of the Parliament are predicted to involve significant changes within personal data law, and this subject will therefore presumably still give rise to debate in the period to come.

Finally, we expect that also the first half of 2014 will introduce rulings within discrimination, in particular as regards discrimination due to age and disability. Please note that, in January 2014, the Supreme Court will deliver rulings in the so-called 2a actions, which were decided upon by the Eastern High Court in the spring of 2013. These actions concern when employees who do not immediately leave the labour market upon resignation are entitled to compensation under section 2 a of the Salaried Employees Act.

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At Horten we are working hard every day to ensure our clients an advantage within their respective areas. It takes courage to make a decision - and to speak out bluntly. But we challenge the things which others take for granted. We ask questions, share knowledge and lead the way - especially in sectors characterised by particularly strict regulation and rapid development. Today, Horten is a leading legal adviser, and we rely on our solid experience to create better possibilities and results for Danish and foreign companies, municipalities and other public authorities.

Horten AdvokatpartnerselskabPhilip Heymans Allé 7DK-2900 HellerupCopenhagen

Tlf.: +45 3334 4000info@horten.dk