European Restructuring Monitor (ERM)
Eurofound's ERM database on restructuring-related legal regulations provides information on regulations in the Member States of the European Union and Norway which are explicitly or implicitly linked to anticipating and managing change.
Whole legislation
Employees can apply to the Employees’ Guarantee Fund (Lønmodtagernes Garantifond, LG) for wage and holiday compensation, indemnification for interruption of the employment relationship and compensation in connection with discharge from employment.
The claims have to arise in the period of four months after bankruptcy or six months after notice of suspension of payments or the death of the employer.
LG is an independent national institution governed by the social partners and regulated by law. All private employers pay a quarterly contributions based on company size to the fund.
Support is provided in case of bankruptcy, the employer’s death where the court declares the company is insolvent, the termination of the business while it is proven that the employer is unable to pay the employees’ claims or during the employer’s court-supervised suspension of payments according to the provisions of the bankruptcy law.
All employees are eligible, including part-time and fixed-term workers, except for family members and close associates of the insolvent employer.
There is no minimum duration for the employment relationship in order for workers to qualify for the guarantee. An employee's claim is usually paid 4 weeks after the fund has received the application from the employee.
The maximum compensation from the fund is DKK 160,000 (€ 21,300).
In 2022, LG paid DKK 794 million (€ 106 million as at 31 December 2022) to 10,701 employees as a consequence of 1,582 bankruptcies
In 2021, LG paid DKK 310 million (€ 41 million as at 31 December 2021) to 11,127 employees as a consequence of 1,259 bankruptcies
In 2020, LG paid DKK 780 million (€ 104 million as at 31 December 2020) to 15,456 employees as a consequence of 1,651 bankruptcies
In 2019, LG paid DKK 569 million (€ 76 million as at 31 December 2019) to 17,365 employees as a consequence of 1,937 bankruptcies
In 2018, LG paid DKK 531 million (€ 71 million as at 31 December 2018) to 16,960 employees as a consequence of 1,945 bankruptcies.
In 2017, LG paid DKK 483 million (€ 65 million as at 31 December 2017) to 14,771 employees as a consequence of 1,854 bankruptcies.
In 2016, LG paid DKK 435 million (€ 58 million as at 31 December 2016) to 14,486 employees as a consequence of 1,968 bankruptcies.
In 2015, LG paid DKK 488 million (€ 65 million as at 31 December 2015) to 16,217 employees as a consequence of 1,838 bankruptcies.
In 2014, LG paid DKK 531 million (€ 71 million as at 31 December 2014) to 20,280 employees as a consequence of 1,615 bankruptcies.
Eurofound (2015), Denmark: Wage guarantee in case of insolvency, Restructuring legislation database, Dublin, https://apps.eurofound.europa.eu/legislationdb/wage-guarantee-in-case-of-insolvency/denmark
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