Employment contracts: a guide for employers

An employment contract is the foundation of any employment relationship. It sets the rules for the cooperation, protects both parties and ensures that expectations are clear from day one. Yet in practice many Danish employers, especially in smaller businesses, use outdated templates, forget mandatory points or draft terms that are legally invalid.

This guide gives you a complete overview of the Danish rules for employment contracts, what they must contain, and the mistakes you must avoid.

Note: Employment law is a complex area with ongoing changes. This guide gives a general overview but does not replace individual legal advice. Contact an employment adviser in cases of doubt, especially for special forms of employment or roles covered by a collective agreement.

What is an employment contract?

An employment contract, also called an employment certificate, is a written document that sets out the essential terms of the employment relationship between an employer and an employee. The document serves as proof of the agreed terms and is in Denmark mandatory for practically all employees.

The contract serves two primary purposes: it ensures clarity about rights and obligations for both parties, and it constitutes a decisive piece of evidence in the event of disagreement or litigation.

The employment-certificate law, what does it say?

The central law is the Act on Employment Certificates and Certain Working Conditions, which in 2023 underwent a significant update as a result of the EU Working Conditions Directive (directive 2019/1152). The new rules came into force on 1 July 2023 and impose stricter requirements on what the employment certificate must contain and when it must be handed over.

Who is covered?

The law applies to all employees who on average work more than 3 hours a week over a reference period of 4 weeks. It thus covers most employees, from full-time staff to part-time and hourly employees.

Typically excluded are:

• Self-employed people
• Certain family members in family-run businesses
• Employees with under 3 hours of weekly working time

Deadlines for delivery

The law requires that certain information is delivered within fixed deadlines:

Type of information	Deadline
Essential information (see below)	7 calendar days after the start of employment
Other mandatory information	1 month after the start of employment

Essential information that must be delivered within 7 days:

• The address of the workplace
• The title and description of the role
• The start date of the employment relationship
• The duration for fixed-term employment
• Any probation period
• The amount of the salary and payment term
• Weekly working hours

If the deadlines are not met, the employee can claim compensation, typically between DKK 1,000 and 25,000 depending on the seriousness of the breach.

What must the employment contract contain?

The law requires that the following points are covered:

Basic information

• The parties' names and addresses, full name and address of both employer and employee
• The address of the workplace, primary place of work, and if variable, that this is stated with the possibility of flexibility
• Job title and description, an overall description of the tasks
• The start date of the employment relationship, precise date
• Fixed term, state the end date if relevant; otherwise the employment is stated as open-ended

Salary and working hours

• Salary, basic pay, supplements, bonus and payment frequency (monthly, fortnightly, etc.)
• Pension contributions, the employer's and employee's share
• Holiday and holiday allowance, a reference to the Holiday Act and any holiday-pay scheme
• Weekly working hours, fixed hours or a flexible range
• Overtime and payment for it, whether overtime is expected, and whether it is compensated

Employment and termination terms

• Probation period, at most 3 months for salaried employees; must be agreed explicitly
• Notice period, follows the Salaried Employees Act, a collective agreement or an individual agreement
• Any collective agreement, if the employee is covered by a collective agreement, it must be stated

New requirements from 2023

The 2023 law added, among other things, a requirement to provide information about:

• Training rights, which training the employer offers
• Rights on leave, for example maternity/parental leave
• Work organisation, rules for shifts, evening shifts, on-call duty
• Social security and pension scheme, the name of the institution

Probation in Denmark

Probation is not automatic, it must be expressly agreed in the contract to be valid.

Salaried employees

Salaried employees (staff in commerce, office, technical work and similar) can agree up to 3 months' probation. During probation a mutual notice period of 14 days applies, both parties can terminate without grounds.

Note: the 120-day rule (the Salaried Employees Act § 5(2)) on shortened notice after 120 sick days within 12 months is a separate, agreed term, not a special probation rule. See the section on notice period below.

Non-salaried employees

For hourly-paid and other non-salaried employees there is no statutory standard model for probation. The terms typically depend on any collective agreement. Without a collective agreement and without a specific agreement there is no probation.

What applies during probation?

During probation both parties are more freely placed on termination, shorter notice and rarely a requirement of fair grounds. It is important to know, however, that:

• Dismissal during probation must not be discriminatory (based on gender, ethnicity, pregnancy, etc.)
• Illness during probation can have limited consequences compared to ordinary employment
• Employees covered by a collective agreement can have special rules

Notice period

The notice period varies depending on the form of employment and seniority.

The Salaried Employees Act

For salaried employees the following notice periods apply (counted from the end of a month):

Seniority	Employer's notice	Employee's notice
0-5 months (probation)	14 days	14 days
0-6 months	1 month	1 month
6 months - 3 years	3 months	1 month
3-6 years	4 months	1 month
6-9 years	5 months	1 month
Over 9 years	6 months	1 month

The 120-day rule

The Salaried Employees Act § 5(2) makes it possible to agree that an employee can be dismissed with 1 month's notice if they have had more than 120 sick days within the last 12 months. The rule requires an express agreement in the employment contract.

It is important to understand that the 120-day rule is only valid if it is correctly worded in the contract. Many templates include the rule as standard text, but it is only active if it is expressly agreed.

Hourly-paid and collectively agreed employees

For hourly-paid or collectively agreed employees the notice period depends on the applicable collective agreement. Collective agreements can give both shorter and longer notice than the Salaried Employees Act.

Non-compete clause and confidentiality agreement

Two additional terms should be considered for many employments:

Non-compete clause

A non-compete clause prohibits the employee from working for competitors or starting a competing business for a period after the employment relationship ends. In Denmark, non-compete clauses in employment are governed by the Employment Clauses Act (ansættelsesklausulloven).

Requirements for validity:

• Must be agreed in writing in the employment contract
• The employee must hold a specially trusted position
• The employee must be compensated (at least 40% of the salary for clauses up to 6 months and at least 60% up to 12 months; the rate can be reduced to 16/24% if the employee finds other suitable work)
• The maximum duration is 12 months (a combined non-compete and non-solicitation clause at most 6 months)

Confidentiality agreement (NDA)

A confidentiality clause obliges the employee not to pass on confidential information about the company. It can be included as part of the employment contract or as a separate document, see confidentiality agreement for a detailed guide.

The most common mistakes

These mistakes occur frequently and can have serious consequences:

1. Outdated template If you use a template from before July 2023, it probably lacks the new mandatory points on training, social security and work organisation.

2. Late delivery The 7-day deadline for essential information is often overlooked. Do not forget that the deadline runs from the start of employment, not the date the contract is signed.

3. Unclear salary description State basic pay, pension and supplements separately. A combined "package" does not provide clarity and can create disputes about, for example, the size of the pension contribution.

4. Missing probation clause Probation is not automatic. If you want probation, it must be stated explicitly in the contract.

5. The 120-day rule is included but not agreed Many standard contracts include the 120-day rule as standard text. If it is not actively agreed with the employee, it is not valid. Make sure the employee understands and accepts the rule.

6. Incorrect notice period Always check whether the employee is a salaried employee, and calculate the notice correctly based on seniority. Collective agreements can exceed the Salaried Employees Act.

7. No references to a collective agreement If the employee is covered by a collective agreement, it must appear in the contract. If it is missing, doubt can arise about which rules apply.

Digital employment contracts

A digital employment contract is fully legally binding in Denmark. The document can be signed with NemID/MitID or other recognised digital signature solutions. The advantage is fast exchange, automatic archiving and easier access for both parties.

With LegalDock you can create an employment contract that:

• Meets all requirements of the 2023 employment-certificate law
• Covers all the 7-day information requirements
• Contains optional clauses (the 120-day rule, non-compete clause, confidentiality clause)
• Can be signed digitally and archived securely

What happens if the contract is deficient?

Deficiencies in the employment certificate are not just a formality problem. The consequences can be:

• Compensation to the employee: the courts can award DKK 1,000-25,000 depending on the nature of the breach and its harmful effects
• Reversed burden of proof: if information is missing from the contract, it is the employer's task to prove that the agreed terms are different from the employee's claim
• Invalid clauses: terms that conflict with the law are invalid, including probation periods that are too long, unlawful termination terms and a lack of compensation for non-compete clauses

Related topics

The employment contract is the first step, but there are more documents that are often relevant in the employment relationship:

• Dismissing an employee, what you need to know as an employer
• Non-compete clause in employment, validity and requirements
• Severance agreement, the alternative to unilateral dismissal

Create an employment contract with LegalDock

With LegalDock you create a mandatory, up-to-date employment contract in minutes. Our template covers all the requirements of the 2023 employment-certificate law, guides you through the most important choices, and can be signed digitally, with no legal expertise required.

See the employment contract template