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What’s an undertaking?

September 2011 - Employment. Legal Developments by Norrbom Vinding Law Firm, member of ius laboris.

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General legal news
An EU judgment from 1995 now leads to an amendment of the rules governing collective redundancies.
The Danish Collective Dismissals Act builds on an EU directive. Under the Danish Act, undertakings considering collective redundancies must consult with their employees. In addition, the relevant employment region and the relevant employment council must be notified. This will allow them to undertake initiatives to mitigate the effects of the redundancies.
The Danish Executive Order on Collective Dismissals details the circumstances in which the Act applies. Under the Executive Order, an undertaking will generally only be subject to the Act if its management can independently effect collective redundancies. According to a judgment from the EU Court which dates back to 1995, however, this is not essential to the definition of an undertaking.
The EU judgment has made the Danish Ministry of Employment revise the rules, and the Ministry is now launching a consultation on the amended rules. With the draft Executive Order, as amended, the Ministry is proposing to abolish the requirement that the undertaking’s management must be authorised to independently effect collective redundancies.
Branches
Many undertakings have a number of branches, such as retail shops and workshops. This poses a challenge in the determination of whether the projected redundancies will affect so many employees as to fall within the scope of the Danish Collective Dismissals Act. Should the number of affected employees be seen in relation to the undertaking as such or the branch in question?
Today, all branches located in an employment region are considered one undertaking. This is also the way it is going to be in future. But, in future, each individual branch will also be considered one undertaking if the number of employees affected by the redundancies means that the Act will apply. In future, undertakings should therefore consider not only if all branches in an employment region are subject to the Act, but also if each individual branch is subject to the Act.
The above does not constitute legal advice and should not be relied upon as such

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