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Coronavirus news: An important financial plan to secure Danish employees

The Danish model proves its worth as the State, employer and employee organisations stand together and present a historic three-part deal.

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By Bente D. Knudsen

These words were repeated by both the Danish Prime Minister, Mette Frederiksen, and all those present representing trade unions and employer organisations such as Dansk Erhverv and Dansk Industri at a press meeting on Saturday 14th March at the Danish State Department.

At today’s press meeting, Denmark’s Prime Minister underlined that the new epicentre of the coronavirus is Europe.

The actual status in Denmark is that 864 are confirmed ill with COVID-19, and that 28 are hospitalised, two at intensive care units.

Two Danish citizens above the age of 80 have died (they had other severe illnesses but where both tested positive after their demise).

Mette Frederiksen said. “These figures will rise in the coming days and weeks and we expect that more will need medical attention in hospitals.”

The measures taken to counter the spread of the virus will and are already impacting the Danish economy, therefore the government has been negotiating since Friday evening with the trade organisations and employee organisations, Dansk Erhverv and Dansk Industry.

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“We must do everything possible to protect Danish businesses and their employees and as many Danish businesses are experiencing that their production and activity level comes to a standstill, we are saying to them ‘ send home your employees but do not fire them’ “.

The solutions the Danish Government have presented are based on the contribution of all those involved, everyone taking responsibility for their share.

Mette Frederiksen said that she believes the measures taken now are necessary as waiting will only make it more expensive on the long term, both humanely and economically.

The more efficient the reduction in the spread of the virus, the more quickly everyone can resume their activities and the economy start functioning again.

Therefore, the following measures are put forward dated from the 9 March 2020 to the 9 June 2020:

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For a business that is seeing an important or total reduction in their business activity and who would be forced to layoff 30 percent of their employees or have more than 50 employees, the Danish State is prepared to pay 75 percent of the salary up to DKK 23,000. The business will contribute by paying the remain 25 percent or the share of the salary above DKK 23,000.

For those employed as paid by the hour, the so-called “timelønnede”, the Danish State is prepared to pay 90 percent of the salary up to DKK 26,000.

The company in question must promise NOT to lay off their employees.

Employees must accept to take five days holiday or the equivalent of five days overtime, or if none of this applies, they must accept five days’ time off without pay. This is the share the employees must give to the deal.

Prime Minister Mette Frederiksen underlined that the Danish model once again proves its worth and shows that it is possible to negotiate such a three-part agreement (in Danish trepartsaftale) in just 24 hours.

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The Danish Finance Minister was asked how many employees would be concerned with the new agreement. The answer was that there is no limit and that it is not yet known, how many it will concern.

“There is a spread sheet model talking of 70,000 employees who with 2.5 months’ worth of pay would cost the Danish State DKK 3,8 billion, of which savings of DKK 1,3 billion would be taken from the unemployment benefit that would not be paid out to those laid off. However, there is no limit in the agreement and the cost could potentially be much higher,” he underlined.

The next deal being negotiated concerns the small one-man businesses, which are not able to benefit from unemployment payment unless they close their businesses.

The Prime Minister said that finding a solution for them was being worked on with the greatest haste.

This new measure comes on top of the delay in the payment of VAT and taxes worth DKK 125 billion, which the Danish State has accorded to all businesses in Denmark due to the coronavirus situation.