Employee handbook: legal requirements and content

An employee handbook is one of the most underrated documents a business can have. Many see it as a "nice to have", a collection of internal rules and cultural descriptions. But a well-written employee handbook is an important tool that can head off conflicts, reduce the risk in a dismissal and ensure uniform treatment of all employees.

This guide goes through what an employee handbook should contain in Denmark, how it relates to the employment contract, and which pitfalls to avoid.

What is an employee handbook?

An employee handbook is an internal document that gathers the business's policies, rules and procedures for employees. It supplements but does not replace the individual employment contract.

The handbook can contain anything from HR policies and leave rules to a dress code and ethical guidelines. Legally it is relevant because many of its provisions can have contractual effect.

The relationship between the handbook and the employment contract

It is important to understand what an employee handbook can and cannot do:

The employee handbook can:

• Supplement the employment contract with policies and procedures
• Specify rules within what the contract already regulates
• Document practice and give employees clear expectations

The employee handbook cannot:

• Change terms in the individual employment contract (for example pay or working hours); that requires an amendment
• Restrict employee rights following from the Salaried Employees Act or collective agreements
• Replace the mandatory information that must appear in the employment certificate

Important: If the handbook contains provisions you want to enforce, the employment contract should state that the employee has been made aware of and accepts the handbook. Refer to the handbook explicitly in the contract.

Is an employee handbook required by law?

In Denmark there is no direct duty to have an employee handbook. But certain matters require policies or documentation by law, and the handbook is a natural place to gather them:

Required or strongly recommended policies

1. Working environment and workplace assessment (APV). All businesses with employees must prepare a workplace assessment (APV) under the Working Environment Act. Businesses with at least 10 employees must in addition establish a working-environment organisation. A working-environment policy in the handbook supports this work.

2. Sexual harassment and offensive conduct. The Equal Treatment Act and the working-environment rules require the employer to prevent and handle offensive conduct. A written policy is strongly recommended.

3. Alcohol and substance policy. The Working Environment Act requires a safe working environment. An explicit policy supports enforcement.

4. A whistleblower scheme (for businesses with 50+ employees). Under the Whistleblower Act, businesses with at least 50 employees must have an internal whistleblower scheme and an associated procedure. Businesses with 50 to 249 employees can share a scheme with other businesses.

5. GDPR and processing of personal data. Businesses that process employees' personal data (payslips, contact details and so on) should have an internal data policy for employees. It can usefully be integrated into the handbook.

What should an employee handbook contain?

Terms of employment

Here the contract's basic terms are specified and supplemented:

• Working hours: normal daily and weekly working hours, flexitime if relevant
• Overtime: rules on time off in lieu or payment for overtime
• Holiday and days off: the Holiday Act's rules and any supplementary company holiday
• Sickness absence: the sick-reporting procedure and requirements for contact during sickness
• Parental leave: the business's leave policy (possibly beyond the statutory minimum)
• Anniversary and senior days: any extra days off

Conduct and expected behaviour

• Code of ethics: the business's values and expectations of employees' conduct
• Social media policy: what may employees share about the business?
• Dress code: any dress requirements, including safety requirements
• Conflict handling: an internal procedure for resolving disagreements and complaints

IT and confidentiality

• IT use: what is permitted on the business's network and equipment? Private use?
• Confidentiality: what is regarded as confidential information? Applies during and after employment
• Passwords and security: requirements for password handling and security behaviour
• Use of own devices (BYOD): rules for using personal devices for work

Internal communication and meetings

• Communication channels: which systems are used for what?
• Meeting policy: expectations of preparation and attendance
• Working from home: the terms for remote work, if offered

Health and wellbeing

• Working environment: the APV procedure and the role of working-environment representatives
• Stress handling: the business's approach to stress
• External help: any psychology scheme
• Smoking policy: applies on the business's premises

Responsibility and consequences

• Disciplinary matters: a procedure for written warnings and any suspension
• Grounds for dismissal: what the business regards as valid grounds for dismissal
• Complaint procedure: the employee's right to appeal decisions

Legal pitfalls with the employee handbook

Pitfall 1: the handbook is changed without the employees' acceptance

An employee handbook containing provisions of a contractual nature (for example overtime pay) cannot be changed unilaterally by the employer. A material change requires notice corresponding to the employee's notice period, or acceptance.

Solution: state clearly in the handbook that certain policies are guidance and not contractual terms, and that the business can update them with appropriate notice.

Pitfall 2: conflicting provisions in the contract and the handbook

If the employment contract has a clause contradicted by the handbook, the contract as a rule prevails, since it is the individual agreement. That creates confusion and potential disputes.

Solution: coordinate the contract and the handbook, and state in the contract that the handbook applies as a supplement.

Pitfall 3: the handbook is not updated

An outdated handbook can create doubt about what actually applies. Rules on parental leave, holiday and the working environment change over time.

Solution: state a version date and review the handbook at least once a year.

Pitfall 4: the employees have not received and accepted the handbook

A handbook the employees do not know carries limited legal weight.

Solution: have the employees confirm receipt and that they have read the handbook.

What about collective agreements?

If the business is bound by a collective agreement, the agreement prevails over the employee handbook on the topics it regulates. The handbook can supplement the agreement with business-specific policies, but it cannot reduce the rights the agreement gives.

Frequently asked questions about the employee handbook

Is the employee handbook part of the employment contract?

Only if it is explicitly stated. If the contract contains wording that the employee is obliged to comply with the business's handbook as amended from time to time, the handbook has contractual effect.

Can we dismiss an employee for breaking rules in the handbook?

Yes, but the breach must be sufficiently material. The procedure is typically a written warning, a repetition and then dismissal. If the warnings are skipped, the dismissal can be regarded as unfair.

Must the employee handbook be translated if we have foreign employees?

There is no statutory language requirement for the handbook, but it is good practice to ensure the employees actually understand the content. An English-language version is often sensible for international employees.

How does a staff policy differ from an employee handbook?

"Staff policy" is often used synonymously with an employee handbook, but can also refer to a single policy (for example a sickness policy). An employee handbook is a combined publication that includes all the policies.

Does the employee handbook apply to freelancers and consultants?

Normally not, unless the agreement with the freelancer explicitly includes certain policies (for example an IT security policy). It is good practice to specify this in the consultancy agreement.

Conclusion

An employee handbook is an investment in clear expectations and fewer conflicts. Combined with a solid employment contract, it gives the business good legal protection. Make sure to refer to the handbook in the contract, keep it updated, and have the employees confirm receipt.

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The content of this article is for guidance only and does not constitute legal advice. Consult a lawyer for advice on your specific situation.