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EU PolicyWatch

Database of national-level policy measures

Eurofound's EU PolicyWatch collates information on the responses of government and social partners to the COVID-19 crisis, the war in Ukraine, rising inflation, as well as gathering examples of company practices aimed at mitigating the social and economic impacts.

Factsheet for measure DK-2020-15/1556 Updated – measures in Denmark

Social partners call on the government to pay out frozen holiday pay

DA og FH opfordrer regeringen til at udbetale indefrosne feriepenge

Country Denmark , applies nationwide
Time period Temporary, 05 April 2020 – 31 May 2021
Context COVID-19
Type Other initiatives or policies
Category Promoting the economic, labour market and social recovery
– Support for spending, stimulus packages
Author Carsten Jørgensen (FAOS, University of Copenhagen), Anders Randrup (Oxford Research) and Eurofound
Measure added 02 December 2020 (updated 01 December 2021)

Background information

In connection with the introduction of a new holiday system in the summer of 2020, the normal annual payment of holiday money of the Danish citizens were frozen in a fund and put to payout when the individual citizen reached retirement age. This was to secure that the employers were not to pay double holiday money in the transition period because the new system will overlap the old system. Due to the effect on the Danish economy of the spread of the corona virus and COVID-19, the social partners at peak level, the Danish Trade Union Confederation, FH and the Confederation of Danish Employer forwarded a joint proposal to the government to release the frozen holiday money to payment.

Content of measure

On 5 April 2020, or three weeks after most economic and cultural activities were literally closed down in Denmark, the Danish social partners, FH and DA, in a common letter to the government pointed out that the approaching summer would be severely hard for the many trades and industries making their income from tourists’ visits and the Danes’ appetite for experiences. Therefore, it was important to stimulate consumption with the aim to support the Danish shops, hotels, restaurants and holiday centres. To this end, FH and DA suggested that releasing the frozen holiday money would create a welcomed opportunity to increase consumption in the experience and leisure industry during the summer.

FH and DA were the first to suggest that the frozen holiday money should be released. Shortly after business associations, political parties and members of the Economic Council came up with similar proposals to the government. This resulted in a decision by the government supported by the parliament to pay out an amount covering three of the lawful five paid annual holiday weeks. The deadline for applying to receive the frozen holiday money was 30 November 2020.

Updates

The following updates to this measure have been made after it came into effect.

31 May 2021

This measure has changed from open ended to temporary as the government put an end date as to when the citizens could apply for their frozen holiday pay. The last chance to apply was the 31 May 2021.

Use of measure

After the deadline of 30 November 2020, it turned out that In total 2.3 million employees in Denmark had applied for the payout of the frozen holiday money, which amounted to DKK 51.6 billion (€6.88 billion).

Target groups

Workers Businesses Citizens
Employees in standard employment
Does not apply to businesses Applies to all citizens

Actors and funding

Actors Funding
Social partners jointly
National funds

Social partners

Social partners' role in designing the measure and form of involvement:

Trade unions Employers' organisations
Role Agreed (outcome) incl. social partner initiative Agreed (outcome) incl. social partner initiative
Form Any other form of consultation, institutionalised (as stable working groups or committees) or informal Any other form of consultation, institutionalised (as stable working groups or committees) or informal

Social partners' role in the implementation, monitoring and assessment phase:

  • Social partners jointly
  • Main level of involvement: Peak or cross-sectoral level

Involvement

The issue described is a joint recommendation to the government from the two main social partner confederations in Denmark, Danish Confederation of Trade Unions, FH, and Confederation of Danish Employers, DA. The purpose was to encourage the government to payout frozen funds to the Danish citizens with the aim to support consumption in the hard-pressed experience, leisure and cultural industries that was in particular hit by the prohibition of gatherings, i.e. hotels, restaurants, holiday centres, concert halls and museums.

Views and reactions

It was a joint initiative taken by the social partner confederations. They were satisfied that the government took the advice and paid out parts of the frozen funds.

Sources

  • 05 April 2020: DA and FH: Hjælp dansk økonomi på vej og udbetal indefrosne feriepenge (www.da.dk)

Citation

Eurofound (2020), Social partners call on the government to pay out frozen holiday pay, measure DK-2020-15/1556 (measures in Denmark), EU PolicyWatch, Dublin, https://static.eurofound.europa.eu/covid19db/cases/DK-2020-15_1556.html

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