Direct Request (CEACR) - adopted 2006, published 96th ILC session (2007)

Social Security (Minimum Standards) Convention, 1952 (No. 102) - Denmark (Ratification: 1955)

The Committee takes note of the information provided by the Government in its detailed report on the Convention and in the 33rd annual report on the application of the European Code of Social Security.

Part IV (Unemployment benefit) of the Convention. According to the rules on the readiness and availability of jobseekers to take up offered employment laid down in the Unemployment Insurance Act, as amended by Act No. 1035 of 17 December 2002, the unemployed person shall be available for “reasonable” work from the first day of unemployment (previously after three months of unemployment); the term “reasonable” meaning work which may be outside the occupational field of the unemployed person. Pursuant to section 63 of the Unemployment Insurance Act, benefit shall not be paid to persons who without adequate reason refuse to take up “reasonable employment” offered to them. In its previous direct request, the Committee observed that the notion of “reasonable employment” is at odds with the concept of “suitable employment” used in the Convention, which ensures that during the minimum period of protection unemployed persons shall be offered jobs corresponding to their skills, qualifications, acquired experience and length of service in the former occupation – the criteria normally used in assessing the suitability of employment – and that their benefit could not be suspended for refusal to accept a job unsuitable in this respect (Article 20 of the Convention in relation to Article 69(h)).

In reply, the Government indicated in its report that out of the 24,000 placements of jobseekers made by the Public Employment Service (PES) in 2005 a sanction was imposed upon 352 persons for failure to turn up for an interview or for refusal to take a job offer. There were 1,200 placements of persons who had been unemployed for less than 13 weeks and a sanction was imposed upon only six of them. In order to assess the extent to which the unemployed persons refuse job offers due to the job not being “suitable”, the National Directorate of Labour, which deals with complaints and supervision in relation to the Unemployment Insurance Act, has manually examined all 352 cases. The examination showed that in all cases, except one, the unemployed persons were referred to a job within their occupational field. In the single case where an unemployed person was referred to a job outside his occupational field, he was offered a job in a related field in which he recently had received training. These statistics proved that in practice very few, if any, unemployed persons are affected negatively by the rules on availability for reasonable work from the first day of unemployment. In applying these rules, the PES follows the principles of the labour market reform stated in the agreement “More people into employment” of 2003 between the Danish Government and a broad majority of parties in the Danish Parliament, which required the administration of the rules on availability to be applied in such a way that the skills and qualifications of the unemployed were used in the most efficient and appropriate manner. According to the Government, this principle became binding on the PES following the adoption of administrative orders of 1 January and 1 July 2003.

The Committee thanks the Government for detailed explanations of the changes in the rules on availability, which should be seen in the context of increasing challenges facing Denmark due to globalization, outsourcing of jobs and the demographical development. It understands that in applying these rules to concrete cases of unemployment, the PES has often to strike a difficult balance between taking into account previous experience and qualifications of the unemployed person on the one side and the actual state of the labour market on the other side, where the demand for such qualifications may be an uncertain variable. In this respect, the Committee has always been vigilant to ensure that, whatever the discretionary power of the State to judge the employability and the behaviour of the unemployed persons in the current labour market situation, they were treated with all due respect for their acquired professional and social status and any sanctions imposed on them were kept inside the limits prescribed by Article 69 of the Convention. The Committee would therefore like the Government to continue to indicate in its future reports any changes in the national legislation and practice related to the conditions governing entitlement to and suspension of unemployment benefit.

Part VI (Employment injury benefit). The Committee would like the Government to explain in its next report the main reasons and objectives of the recent reform of the workers’ compensation scheme, highlighting in particular the role of private companies in providing insurance coverage, their supervision by the public authorities and the participation of the representatives of the persons protected in the management of the branch.

Part XI (Standards to be complied with by periodical payments). The replacement rate of the sickness, maternity and unemployment benefits is calculated in the abovementioned Government’s reports on a yearly basis by comparing the total amount of benefit to the yearly reference wage of the skilled manual male employee in the iron and metal industry selected under Article 65 of the Convention or, in case of the employment injury benefit, of an ordinary adult male labourer in the same industry selected under Article 66 of the Convention. The Committee notes, however, that for compensation purposes, sickness, maternity and unemployment benefits are calculated on a daily basis taking into account the hourly pay for which the person would have been entitled had he been working during the period of absence, subject to a maximum of DKK88.30 per hour or DKK3,267 per week fixed for the year 2005. It appears from the report that basic old-age pension and anticipatory (invalidity) pension, which are universal flat-rate benefits covering all residents and not related to the previous earnings of the beneficiary, are fixed at the rate corresponding to the above maximum of daily cash benefit in the earnings-related schemes protecting employees. This maximum, which is fixed by the Government each year, corresponds to 50 per cent of the weekly wage of the standard beneficiary selected under Article 65 of the Convention (DKK6,519). Thus, while the daily cash benefit is 100 per cent of the daily pay in case of sickness and maternity, and 90 per cent in case of unemployment, the standard beneficiary will be entitled to the maximum benefit of only 50 per cent of his daily wage. The Committee observes that in the Danish system the maximum limit for earnings-related benefits is fixed so low that it has the effect of transforming them into flat-rate schemes. It would therefore like the Government to explain in detail in its next report, with reference to the corresponding provisions of Article 65, the methodology used for selecting the standard beneficiary as the skilled manual male employee from the iron and metal industry and for determining his reference wage. The Government is also invited to show that the maximum limit for the benefits in question complies with the requirements of Article 65(3) and to make the calculation of their replacement rate not on the yearly basis, which is not the appropriate time basis for measuring daily benefits, but on a weekly or monthly basis depending on the periodicity of the benefit payments. Finally, the Committee draws the Government’s attention to the fact that the replacement level of the employment injury benefit should be calculated under Article 65 and not 66 of the Convention, inasmuch as it is also subjected to a maximum limit.

Part XIII (Common provisions). Article 69. (a) According to Act No. 327 of 18 May 2005, payment of social pension and other social benefits, as referred to in the Act, shall be suspended in case of evasion of criminal prosecution or execution of a sentence. The Act applies to persons in custody, persons wanted by the police and in the case of a ruling for custody (in absentia). If the person concerned is not found guilty, the amount retained shall be repaid. Taking into account that suspension of benefits in the abovementioned cases may go beyond the grounds listed in Article 69 of the Convention, the Committee would once again like the Government to provide in its next report detailed explanations concerning the social benefits affected by the Act which fall under the ambit of the Convention and the manner in which the new legislation is applied in practice by the administrative and judicial authorities. Please also provide statistics on the number of cases of suspension of benefits under the Act, together with its translation into English, if possible.

(b) The report states that the employment injury benefits for loss of earning capacity and for permanent injury may be reduced or withheld where the beneficiary intentionally or by unlawful conduct or negligence has provoked or to a considerable extent contributed to the occurrence of industrial injury. The Committee would like the Government to explain, on the basis of the relevant judicial or administrative decisions, how the term “negligence” is defined and how assessment is being made of the extent to which such negligent behaviour might have contributed to the occurrence of industrial injury. In this connection it draws the Government’s attention to items (e) and (f) of Article 69 of the Convention, which authorize suspension of the benefit only where the contingency has been caused by a criminal offence or wilful misconduct of the person concerned.

(c) The report states that if the survivor of the victim of employment injury opposes a post-mortem, the claim for compensation may lapse. Please explain the reasons for this provision, which is not foreseen among the grounds for the suspension of benefits listed in Article 69 of the Convention.