New Danish Holidays Act finally in the pipeline

As described in some of our previous newsletters, the European Commission stated in April 2015 that the Danish Holidays Act was not in compliance with EU legislation, i.a. because of the deviation in the accrual of holiday (accrual year) and the actual leave period (holiday year). Consequently, the government established a holiday act committee which was to review the possibilities for and the circumstances in respect of a new Danish Holiday Act. The Holidays Act Committee has now – after a long delay – published a proposal for the new holiday act.

See our previous update here.

The key element of the proposal, and the reason for the work to be initiated, is the implementation of so-called concurrent holidays. The concurrent holidays imply that the employees accrue and take the leave during the same period. The proposal implies that employees who are new to the job market will be able to take paid leave already in the first year of their employment – contrary to the current system where it may take 16 months from accrual of the leave until the actual leave can be held. According to the proposal, all employees will be entitled to the same amount of leave as currently.

Specifically, the Holidays Act Committee recommends that the leave is accrued during a 12 months' period from 1 September to 31 August (the accrual period) but that the employees have the possibility to take the leave during a 16 months' period from 1 September to 31 December (the leave period). In this way, the leave period is four months longer than the accrual period which increases the flexibility when taking the leave.

Before the new holiday system enters into force, it is necessary to implement a transitional arrangement. The purpose is to ensure that the transition from the current to the new holiday system is as flexible as possible. In this connection, the committee recommends that leave accrued in the year prior to the entry into force of the new Danish Holidays Act will be "frozen" implying that the employee cannot take the leave or receive payment in lieu of the leave until the employee retires.

When does the new Danish Holidays Act enter into force?

At this point, political negotiations regarding the new Danish Holidays Act begin, and the Danish government is expected to submit a legislative proposal for consultation based on the report and subsequently, the political negotiations regarding the new Danish Holidays Act will begin.

If adopted, the new legislation will enter into force in September 2020.

The reason for the long transition period is among other things to ensure that the parties to the relevant collective agreements get a chance to amend these to the new holiday rules. Furthermore, the aim is to ensure that it is taken into consideration that the transition to the new rules will happen simultaneously for all employees to keep the burden of administration as low as possible for the employers.