Denmark: New Legislation Would Allow Employee Ownership of Companies

This complete global solution for HR professionals combines custom research, strategic white papers, country primers, webinars, and the expert guidance you’ve come to expect from...

By Marcus Hoy 

Oct. 6—Legislative amendments due to be presented to parliament this month will allow employees at the Danish Crown meat packing plant to become partial owners of the enterprise, a precedent likely to encourage similar initiatives at other companies, Confederation of Danish Industry (DI) senior adviser Morten Qvist Fog Lund recently told Bloomberg BNA.

Rather than accept a pay cut or face closure of the facility, employees at Danish Crown voted unanimously to approve an employee investment scheme, under which they would be permitted to invest up to 7.5 percent of their annual salaries into the company up to an annual limit of 30,000 krone ($5,000). Investment would be tax exempt for three years, although any dividend would be taxable. For the plan to be legal under Danish law, amendments were required to sections of the Capital Gains Tax Act, the Tax Assessment Act and the Company Tax Act.

According to Lund, the legislative changes will encourage other employers to consider employee ownership as a way to raise capital.

To contact the reporter on this story: Marcus Hoy in Copenhagen at correspondents@bna.com

To contact the editor responsible for this story: Rick Vollmar at rvollmar@bna.com

The draft proposal is available in Danish at https://hoeringsportalen.dk/Hearing/Details/37889.

For more information on HR law and regulation, see the Denmark primer.