Bill for a new law on employment certificates will expand employers’ duty to inform employees about the terms of the employment relationship
On 29 March 2023, a bill for a new law on employment certificates was tabled. The purpose is to implement the EU directive on transparent and predictable working conditions (working conditions directive) in Danish law. This should originally have been implemented d. 1 August 2022, but has subsequently been postponed several times. The background to the bill The recent development of new forms of employment has created uncertainty about applicable rights and social protection, and therefore there has been an increased need for workers to be informed about their most important working conditions. Who is covered by the bill? The proposed bill is to replace the current Employment Certificate Act, and with its entry into force more wage earners will be covered. The current Employment Certificate Act covers all employees whose employment lasts more than 1 month and whose average weekly working hours exceed 8 hours. However, with the new bill, far more people will be covered by the law. Here, as an employee, you will already be covered if, for a period of 4 consecutive weeks, you have an actual or predetermined working time that amounts to an average of more than 3 hours per week. week. What significance will the bill have? In addition to the fact that more employees will be covered by the new bill, and thus many more employees will be entitled to an employment certificate (employment contract), it also expands the employer’s duty to inform the employee of the terms of the employment relationship that will be most significant for the employee . In the current employment certificate act, a total of 10 conditions are mentioned, which the employer must inform the employee about, but in the new bill, however, a further five conditions have been added, which the employer must inform the employee about. These five conditions are: Temporary employees must be informed of the identity of the user company as soon as this is known The duration of and conditions for any probationary period The right to training, which the employer may offer The identity of the social security institutions that receive the social contributions linked to the employment relationship, as well as any protection in connection with social security from the employer. If the work pattern is completely or predominantly unpredictable, the employee must be informed; 1) That the work schedule and number of paid working hours may vary, 2) Which days and reference hours can be assigned to work and 3) The minimum notice period the employee is entitled to before starting a work assignment, as well as any deadline for canceling the work assignment The new bill also contains a limit for the maximum length that a possible trial period in an employment relationship can last. In the current Employment Certificate Act there is no such limit, but according to the bill, such a probationary period must be set to last a maximum of 6 months. If it is a fixed-term position, the probationary period may not amount to more than a quarter of the employment period, however, the probationary period may not exceed 6 months here either. Changed deadlines for submitting information In future, the employer will have to be aware of a changed deadline for submitting the mandatory information on 7 calendar days or 1 month after the beginning of the employment relationship or the day on which a change takes effect. This information can still be provided by sending it on paper or in electronic form. Prohibition against preventing concurrent employment In future, an employer may not prevent an employee from taking up ongoing employment or, on that basis, treat him unfavorably if it is still possible to work in accordance with a schedule determined by the employer. However, this does not apply if the circumstances of the work in question make the employee’s secondary employment incompatible with the existing employment relationship. Entry into force The bill is being considered in the Danish Parliament, but it is proposed that the law enters into force on 1 July 2023. Employees hired after 1 July 2023 must receive employment contracts in accordance with the new law. Employees employed before this date do not have to have new employment contracts, but they can request the disclosure of the new information that the law entails, which request must be complied with by the employer within 8 weeks after it is made. Necessary considerations for the employer The amendment to the employment certificate act thus gives the employer a good opportunity to review the company’s current employment contracts, so that one is ready for the new rules to come into force and with a view to avoiding having to fall into any payment of compensation for a violation of the law. At DreistStorgaard Advokater, we are happy to help review and possibly update the company’s contracts so that these harmonize with the new legal provisions. You are welcome to contact us by email kontakt@dslaw.dk or by phone 56 63 44 66. Of Stud.jur. Katrine Abildskov Roel & Attorney Nicolai Runge Andersen
DreistStorgaard expands the international focus and enters into partnership with Africa Innovation Network
In recent months, Martin Skovbjerg and Nikolaj Juhl Hansen have joined as new partners at DreistStorgaard, and one of the strategic focus areas behind the recruitments is to be able to support our customers in connection with transactions and trade with foreign countries. Martin and Nikolaj both have extensive experience in this area, and both have more than 20 years of process-managed legal advice abroad, e.g. company acquisitions, entering into strategic partnerships and commercial agreements, handling disputes, rolling out compliance programs, etc. In this context, DreistStorgaard are members of the International Bar Association, so that we thus have a finely meshed network of lawyer connections locally as well as members of the more commercially focused organizations such as the British Chamber of Commerce and the Danish-Chinese Business Forum. As Denmark’s Foreign Minister Lars Løkke Rasmussen announced in connection with the update of the foreign policy strategy, a lot is currently happening on the African continent, and many Danish companies are opening their eyes to the business opportunities. With this development as a background, DreistStorgaard has entered into a partnership with the Africa Innovation Network , which is a network organization for Nordic companies with a focus on Africa ( Read more ). AIN advises, among other things, on business models, geographic selection of markets and entering into partnerships. Martin Skovbjerg has previously, as long-standing chief legal officer at Welltec, worked with African matters and has experience with transactions, cross-border tax matters, handling anti-corruption programs, project implementation and general business development in a large number of countries including Libya, Algeria, Mauritania, Gabon, Nigeria, Angola, South Africa, Egypt, Equatorial Guinea, DR Congo, Ghana and Sao Tome & Principe. During his time at the English law firms Travers Smith and Eversheds Sutherland, Nikolaj Juhl Hansen has been responsible for a wide range of legal advisory tasks in the Middle East and Africa, and is currently working with several clients who are in the process of rolling out their business on the African continent . DreistStorgaard’s managing partner Svend-Aage Dreist Hansen says: “With the recruitment of Martin and Nikolaj, we are working strategically to focus on helping our customers around the world. It has previously been Europe, the USA and Asia that have been in focus, but we believe that in the coming years there will be a lot of focus on Africa as a place where business opportunities are lined up, including in the energy and infrastructure area and it fits well with the focus we have in our new energy team. We have two strong profiles in Africa with Martin and Nikolaj, so the partnership with Africa Innovation Network makes an incredible amount of sense.“ The first time DreistStorgaard participates in an event under the auspices of the Africa Innovation Network is on 8 June when “Funding Your Business in Africa – Today’s financing opportunities” ( Link to the event here ) is on the programme. Interested clients and other contacts can write to Martin ( mask@dslaw.dk ) or Nikolaj ( njh@dslaw.dk ) if the event is of interest.
DreistStorgaard is again assisting the Environmental Therapy Organization with acquisitions
Earlier this year, DreistStorgaard assisted the Environmental Health Organization (DMO) in connection with the purchase of Jyderup Private Full Day School ( read more ) and we have now again assisted the DMO. This time with the purchase of Holmegaardshuset, which is a place of residence that accepts children, young people and families either urgently or planned. DMO is a company that is active in the operation of residences, residential facilities and day care schools, all of which are characterized by living up to the organisation’s desire for recognition, closeness, well-being and development for children, young people and adults – and Jesper Christensen, who is owner-manager at DMO, is now expanding again. Jesper talks about the relationship with DreistStorgaard:The collaboration with DreistStorgaard, Nikolaj Juhl Hansen and Casper Simonsen is excellent. We felt again in safe hands”. Nikolaj Juhl Hansen, who is a client partner for DMO, says:We are happy to have once again assisted Jesper and DMO with an expansion of the business. We generally see a number of transactions in this segment; companies that are active in the social field at the moment, so it is an exciting field to be in”. DreistStorgaard’s team consisted of Casper Simonsen and Nikolaj Juhl Hansen, and they assisted DMO with all aspects of the transaction. DreistStorgaard is generally busy in the transaction area at the moment and we do not see a slowdown in buying interest in the SME segment. ( Read more news here ) DreistStorgaard together with Nordea will hold an event on “The good change of ownership” in Køge on 8 June. Invitation appears here . If you need advice on buying and selling businesses, we are ready to help with all aspects of the deal. You can contact us on phone 56 63 44 66 or by email kontakt@dslaw.dk.
DreistStorgaard assists in connection with acquisitions in Canada
DreistStorgaard has assisted the Danish company FabricAir in connection with the purchase of Borealis Wind Inc. in Canada. DreistStorgaard has a long-term customer relationship with FabricAir, which, based in Denmark, has developed into a global market leader in the design and production of textile-based air distribution solutions for a wide range of applications. Before the purchase of Borealis Wind, FabricAir had already established itself with subsidiaries in 15 countries, including the USA, China, Turkey, Poland, Lithuania, Germany and a number of other EU countries as well as Mexico. Borealis Wind is a company started by Daniela Roeper in 2016 that has developed a patent-protected technology for de-icing wind turbine blades. Together with the local US/Canadian law firm Cozen O’Connor, DreistStorgaard has assisted FabricAir in all aspects of the transaction, including entering into the letter of intent, conducting due diligence, drafting transaction documents and negotiating terms. Brian Refsgaard, who is CEO and owner manager at FabricAir says: “We chose DreistStorgaard to manage the process around our purchase of Borealis Wind based on the relationship of trust we have with them. Nikolaj Juhl Hansen and Casper Simonsen were the Danish part of the transaction team, and you can tell that they have a lot of experience in process management of this kind of transaction. We have felt well supported throughout. A really good experience”. Nikolaj Juhl Hansen, who joined DreistStorgaard as a partner in November 2022, was responsible for managing the process for FabricAir and says: “A fantastic opportunity to work with Brian in the expansion of FabricAir’s business. All parties see great opportunities in this acquisition. Helping our customers navigate law and entering into agreements outside Denmark’s borders is a strategic focus area for us, and together with my partner colleague Martin Skovbjerg, I have a team that has extensive experience in this area.” In the cross-border M&A area, DreistStorgaard has recently, among other things, assisted Brandgruppen in connection with the sale to American Jensen Hughes ( Read more here ) and a number of authorized electrical installers in connection with the sale to the Norwegian capital fund Credo Partners ( Read more here ) . DreistStorgaard has also recently established an energy team that also focuses on the cross-border area (read more here) just as, in relation to Africa, we have just entered into a strategic partnership with the Nordic organization Africa Innovation Network (read more here), which may very well become the next major growth area for Danish companies and complements the other organizations we are members of and which focus more on the traditional places where Danish companies have established themselves, including England, the EU, the USA and Asia (especially China) . If you need advice on buying and selling businesses, you can contact us on 56 63 44 66 or kontakt@dslaw.dk.
Change of generation and change of ownership of your company
A generational change is when a business, regardless of the legal form in which it is run, must be handed over to the next generation, either in the owner’s own family, to an employee, or changes ownership to others. Fundamentally, generational change is about securing your company’s future, even without your presence. A change of generations involves many emotions, big questions and to some extent also a risk of conflicts in the family. In addition, the transition can cause the company to become vulnerable, because liquidity, management, employees and other relationships are suddenly at stake. In addition, there are many different rules that must be taken into account: inheritance law, tax and duties, financing etc It is therefore extremely important that the process is organized well in advance, so that the transition can take place in a controlled manner and at a pace so that the process is controlled. Changes in ownership structure due to generational change Changes in ownership structure, in connection with the transfer of a business to the next generation, therefore require thorough preparation and detailed planning for it to be successful for the current owner as well as the future owner. In the event of a generational change, the ownership structure can be changed at once or in several planned stages. Whatever you choose, with careful consideration and preparation, you will get the best results, both in the short and long term. Restructuring models at generational change There are many ways to restructure the company, including tax-free company conversion, share exchange, demerger, and the addition of assets. Company transformation into a joint-stock or limited liability company upon generational change Ownership structure and company form are inextricably linked to the opportunities and challenges you will face in connection with a generational change. If you run a company under personal auspices, it may be relevant to consider converting the company into a joint-stock or limited liability company to facilitate the generational change. However, it is always the specific situation that determines whether a tax-free conversion to a limited liability company has more advantages than a taxable transfer. Establishment of a holding company in the event of a change of generations If you run a business in company form, it is often relevant to establish a holding company that will own the operating company. In connection with a change of generations, the holding company structure makes it possible to transfer shares or shares tax-free between e.g. parents’ and children’s holding companies, as well as to isolate operating assets and surplus liquidity in the parents’ holding companies. If a holding company is to sell shares in a subsidiary company tax-free, the holding structure must, as a general rule, be established at least three years prior to the sale. Although establishing a holding company can be a useful preparation for the generational change, this can never stand alone. Financing, ownership structure and tax Financing a change of generations depends on many factors, including the financial capacity of both generations. If the change of generations triggers gift tax and capital gains taxation, this must be financed from personal taxed funds. If the taxes and duties are significant, the financing will often require large withdrawals from the company, which will impair the company’s opportunities in the future. It is therefore often of absolutely crucial importance for the company’s future opportunities and performance that the generational change and the company’s ownership structure are organised. Changes in ownership structure, e.g. in connection with the transfer of a business to the next generation, requires thorough preparation. The various forms of generational change all have both advantages and disadvantages and therefore require careful consideration and the involvement of relevant sparring partners to implement a successful generational change that involves all aspects of the economy, tax, law and the managerial aspects thereof. At DreistStorgaard, we advise on all aspects of the generational change. Contact us for an informal chat about how we can help ensure the best possible handover from one generation to the next.