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Supreme Court decision on the extent to which severance pay should be paid

By Morten Ulrich

The Danish Supreme Court has recently considered the issue of severance pay in a case involving 15 combined claims.

Under section 2 a of the Danish Salaried Employees Act (funktionærloven), salaried employees who have been continuously employed for 12, 15 or 18 years are entitled to receive severance pay (fratrædelsesgodtgørelse) (of respectively one, two or three months’ salary) if their employment is terminated by the employer. However, an employee is not entitled to severance pay if, the employee had joined a pension scheme to which the employer made contributions and from which the employee was entitled to draw a pension at the time of the termination of the employee’s employment.

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