The government and the social partners recently agreed to establish a new temporary work distribution scheme in order to prevent dismissals.
Earlier in 2020, the rules on work distribution set out in the Executive Order on Payment of Unemployment Benefits were eased (for further details please see "COVID-19: changes to rules on distribution of work").
Based on the tripartite agreement, a new work distribution scheme will be established by statute and all employers will be able to use this scheme. Employers may still apply the existing work distribution rules but not concurrently with the new rules.
According to the tripartite agreement, employers must inform and consult with the relevant employees in accordance with the rules in any applicable cooperation agreements or the Act on Consultation and Information of Employees. If, after the information and consultation process, an employee does not wish to take part in a work distribution plan, the employer can either choose to dismiss the employee or refrain from using the plan altogether because, also under the new rules, the plan must cover all of the employer's employees, an entire department or a specific production unit.
The requirements for employees' work rotation plans will change under the new rules. As such, employees must be sent home, or furloughed, for 20% to 50% of their usual working time calculated on the basis of four-week periods. Employers may change this percentage rate after each four-week period. In this context, it is important to bear in mind that employers can require their employees to work outside their usual working hours only subject to agreement in this regard.
New employees hired during an ongoing work distribution plan will be automatically covered by that plan. Accordingly, employment may be made conditional on the employee accepting the plan. Employers will not be allowed to hire new trainees, wage-subsidised employees or use temps during a work distribution plan.
Work distribution plans of up to four months can be agreed (without approval from the Regional Labour Market Council). Employers can report a work distribution plan under the new rules until 31 December 2020, which means in practice that a work distribution agreement may run through April 2021. The parties to the tripartite agreement have agreed to meet again in November 2020 to discuss the possibility of extending the scheme.
Employers' contributions and transitional scheme
Employers' duty to pay two of the so-called 'G-days' (ie, days of unemployment) to employees in connection with a work distribution plan was suspended until 1 September 2020. This duty was reinstated as of 1 September 2020.
However, under the new work distribution scheme, employers will have to pay three G-days per month to employees (calculated on a pro-rated basis if the employee is not covered by a work distribution plan for an entire month). In 2020 one G-day amounts to Dkr881 for a full-time employee.
Employers covered by a work distribution plan under the existing rules as at 31 August 2020 can transfer to the new scheme before the end of September 2020. In such case, no G-days will be payable for the first month of the employer's new work distribution plan and, for the remainder of 2020, only two monthly G-days per employee must be paid.
Employees covered by the new work distribution scheme will receive supplementary unemployment benefits during the part-time furlough period and, for these employees, the maximum unemployment benefits rate will be increased to Dkr23,000 per month for an unemployed full-time employee. The evaluation of whether an employee is entitled to supplementary unemployment benefits will still be made by unemployment insurance funds.
Non-members of unemployment insurance funds will be able to join such funds with retroactive effect.
The normally applicable time limits relating to employees' right to unemployment benefits are currently suspended, both under the existing and the new scheme. Thus, employees are not at risk of exhausting their right to unemployment benefits while working under a work distribution plan.
Additional requirements and implementation
In addition to the abovementioned changes, the former requirements for work distribution plans, including the duty to notify a local job centre, still apply.
As mentioned above, the tripartite agreement states that the new work distribution scheme will be set out by statute. It is expected that a bill on the new scheme will be submitted soon.
