- 16 Sep 2014
A new ministerial circular and guidance on labour clauses has taken effect as a result of an agreement between the Danish Government and its two supporting parties to modernise the existing rules.
A labour clause is a clause in a public contract which specifies that pay, working hours and other working conditions may not be less favourable than those which normally apply for work of the same nature in the district where the work is to be carried out, including under a collective agreement concluded between the most representative social partners in Denmark. Labour clauses thus form a central part of the fight against social dumping.
Since the current rules in this area date back to 1966 and 1990, respectively, the Danish Government has decided together with its two supporting parties that there is a need to modernise the rules. The purpose is to make it easier to administer the use of labour clauses, and therefore a set of guidance notes has been issued together with the ministerial circular.
The circular builds on the following key elements:
- The threshold of DKK 37 million for public contracts has been removed so that all government authorities must include labour clauses in all contracts concerning building and construction projects, manufacturing and execution or provision of services, regardless of the amount of the contract
- State-owned companies which are not in competition with other companies must include labour clauses in all building and construction contracts
- In the same way as before, municipalities and regions are not required to use labour clauses, but are encouraged to do so in all building and construction contracts as well as other public contracts where such clauses may be appropriate
- It must be clear from the labour clause that it also applies to employees of any subcontractors
- It must be clear from the contract that failure to comply with the labour clause will be sanctionable. In this connection, the contracting body must verify contractors’ and any subcontractors’ compliance with the labour clause
The accompanying guidance notes include a proposed wording for a labour clause. The notes must be taken as meaning that, in the opinion of the Danish Ministry of Employment, the proposed labour clause is compatible with EU law.
The circular entered into force on 1 July 2014.