In February 2002, Denmark's new Liberal-Conservative government proposed a new system of maternity-related leave, whereby the current childcare leave scheme would be scrapped and replaced with increased maternity/childbirth leave entitlement for both parents. The aim is to simplify the existing legislation and create a higher degree of flexibility for families with small children. Employers view the proposals as reducing flexibility and encroaching on managerial prerogative, while employers in the finance sector in particular fear that the new system will be very costly for them, owing to the terms of their collective agreement, which provides for full pay during maternity/childbirth leave.
Early in February 2002, the new coalition government of the Liberal Party (Venstre) and Conservative People's Party (Konservative Folkeparti) (DK0112147F) tabled a proposal for an amendment of the existing legislation concerning maternity and parental leave. Under the proposal, the maximum period of combined maternity/childbirth and paternity leave at the full benefit rate will be extended to 52 weeks; at the same time, the present childcare leave scheme will be abolished.
Proposed changes
The table below sets out the current entitlements to maternity-related leave and the government's proposed changes.
Current and proposed duration of maternity-related leave
| Type of leave | Existing legislation | Proposals |
| Pregnancy leave | Four weeks | Four weeks |
| Maternity leave, compulsory | Two weeks after birth | Two weeks after birth |
| Maternity/childbirth leave available only to mother | 12 weeks | 12 weeks |
| Maternity/childbirth leave available to either parent | 10 weeks to be taken by either parent | 32 weeks individual entitlement for both parents |
| Childcare leave | Up to 52 weeks available to both parents | Abolished |
| Paternity leave, not compulsory | Two weeks after birth, plus two weeks following the 14th week after birth | Two weeks after birth |
Under the current rules, following the birth of a child, women must take two weeks of compulsory maternity leave and are then entitled to 22 weeks of maternity/childbirth leave, during which they receive a benefit of 90% of previous pay, up to a ceiling. The last 10 weeks of the maternity/childbirth leave may be taken by the father instead. Independently of this, the father is also entitled to two weeks paternity leave immediately after the birth of a child, plus another two weeks at some point following the 14th week after the birth. Furthermore, after the end of the maternity/childbirth leave period, both parents may take up to 52 weeks' childcare or parental leave in the period up until the child's eighth birthday, during which they receive a childcare leave allowance corresponding to 60% of the maximum rate of unemployment benefit. Figures from March 2000 show that the average duration of childcare leave is 26 weeks among those who take up this possibility. It is rare for men to avail themselves of this leave (DK0102114F).
The government proposes to abolish the childcare leave entitlement entirely, and instead increase the period of maternity/childbirth leave available to either parent after the 14th week after the birth. Currently, the total entitlement is 10 weeks, which may be taken by either the father or the mother. In future, each parent would have a separate individual entitlement of 32 weeks. They could take this 32 weeks of leave at the same time or in succession, depending on their wishes. The proposals would also abolish the two weeks of paternity leave following the 14th week after the birth (but retaining the two weeks after the birth). Families could choose to postpone between eight and 13 weeks of the 32-week maternity/childbirth leave until a later point – though before the child reaches the age of nine years. It would also be possible to agree with the employer to postpone up to 32 weeks of the leave period, to be taken as the parents see fit, but this must again before the child reaches the age of nine years.
Adding together the pregnancy leave, compulsory maternity leave, the maternity/childbirth leave available only to the mother, the maternity/childbirth leave entitlement for both parents and the paternity leave, this would give a total maximum leave period of 78 weeks, or until the child is 18 months old.
Mothers would be entitled to the full rate of benefit up until the 14th week after the birth. Thereafter there would be a total 32-week entitlement to full benefits (compared with a total period of 10 weeks under the current rules). The parents could share this benefit entitlement or one of the parents could exhaust the benefit entitlement during their period of leave. It the parents wish to use up their benefit entitlement over a period of 38 weeks (after the 14th week) so that the child is one year old before being placed in childcare outside the home, the weekly benefit will be reduced so that it corresponds to full benefits for a period of 32 weeks. In total, adding together the various forms of leave, the parents would be entitled to full benefits for 52 weeks.
Costly implications for the financial sector
The shift from childcare leave to extended maternity/childbirth leave will have important consequences for one particular sector. The collective agreement between the Danish Employers' Association for the Financial Sector (Finanssektorens Arbejdsgiverforening, FA) and the Financial Services' Union (Finansforbundet, FF) – which covers about 55,000 employees in banks and insurance companies – guarantees employees a top-up to full pay during maternity-related leave attracting the full rate of benefit, as laid down by the legislation in force. The legislative change from 32 weeks to 52 weeks at the full rate of benefit would mean that employers would have to offer full pay for 20 weeks longer – according to FA, this will mean an extra cost of the order of DDK 100 million (EUR 13.5 million). The same problem will arise under the collective agreement for major newspapers and probably also under a number of company-level collective agreements.
FA has thus criticised the proposals, claiming that the government was fully aware of the problems they would cause for the financial sector. FA has expressed its concerns to parliament (Folketing), but it is not very likely that politicians or the government will introduce special rules for a single sector. Full pay during maternity-related leave is a matter which is regulated by collective bargaining and parliament is not going to intervene in the bargaining process, according to a statement made by the chair of the parliamentary Labour Market Committee. For its part, the FF union does not see any reason to renegotiate a collective agreement in the middle of its term.
Commentary
The Liberal Party (the largest in the governing coalition) had promised the employers that the new maternity rules - which had been discussed for nearly a year before the new government came to office in November 2001 – would not entail extra costs for them. During the discussions, FA more than once emphasised the major problem for finance employers arising from the proposal. This disregard for employers' concerns leads to the conclusion that the maternity leave bill proposed by the Liberal Party should mainly be seen as an offer to families of a more flexible and improved leave scheme. The proposal should primarily be seen as an element of the Liberal Party's family policy, which is based on increasing the time spent together by the parents and the child and reducing the time spend in costly childcare facilities, which are guaranteed to parents. This is in accordance with the so-called 'freedom package' contained in the government's platform.
Another concern for employers is the possibility provided in the proposals of postponing part of the leave period. As employees enjoy protection against dismissal during such leave (DK9804164N), this means that it may be difficult for employers to dismiss an employee if that employee has not fully exhausted their leave entitlement, which may run until the child reaches the age of nine years. This may be costly in terms of payment of compensation to dismissed employers. The Danish Employers' Confederation (Dansk Arbejdsgiverforening, DA) and Confederation of Employers in Commerce and Services (Dansk Handel & Service, DHS) have called the bill an encroachment on managerial prerogative. DA admits that employers have long been pressing for a higher degree of flexibility in maternity-related leave, but argues that what they wanted was flexibility in the sense of agreements between employers and employees on the organisation of the leave period - and this is not what the proposed legislation provides for.
The Knowledge Centre for Equality (Videnscenter for Ligestilling) has expressed concern that the extended maternity/parental leave will have adverse effects upon the current guarantee of a place in a childcare facility, because the municipal authorities will cut down on the number of places available. Women may be forced to stay home to look after their children. This is not very flexible, it is claimed, and may also be very costly for employers, especially as regards women in the highest income brackets
Following the presentation of the proposal, an agreement concluded by the government and the Danish People's Party (Dansk Folkeparti) in connection with negotiations over the 2002 Finance Act has paved the way for prolonging the maternity/childbirth leave period from 32 to 46 weeks in future. The total amount of benefits would, however, be the same - ie benefits corresponding to 52 weeks at the full benefit rate. If the parents wish, they could spread the benefits over the entire period. . (Carsten Jørgensen, FAOS)