In Denmark, certain services markets within the hotel and restaurant business are to a large extent characterised by the use of foreign labour, both in the form of short-time and part-time employment. However, it can prove to be a costly affair not to be on top of the rules pertaining to work and residence permits.
When a company wants to hire a foreign national from a country within the EU to work in Denmark, it will generally be a requirement that the person in question holds a work permit. Thus, if a company - against better judgement or carelessly - hires a foreign national who does not hold a work permit, the employer may be punished.
This is illustrated in a case from the Danish Supreme Court of 24 October 2011. In this case, an employer was imposed a fine of DKK 200,000 (corresponding to USD 34,500/EUR 26,800) for having engaged a foreign national without a required work permit.
This specific case involved a restaurant that for a period of 29 months had been engaging a foreign national without a work permit for 3-4 hours a day for up to 3 days a week.
The Danish Eastern High Court found the restaurant guilty of violation of the Danish Aliens Act and fined the restaurant DKK 290,000 (corresponding to USD 50,000/EUR 38,900). The Eastern High Court attached great importance to the interpretive notes to the Aliens Act pursuant to which a situation where there are several aggravating circumstances in principle is to result in the passing of a sentence of fine exceeding DKK 20,000 (corresponding to USD 3,450/EUR 2,680) per each month the employer has engaged an employee without a work permit.
Initially - in line with the Eastern High Court - the Supreme Court found that in principle a sentence of fine exceeding DKK 20,000 per month should be passed as there were several aggravating circumstances, including that the employer had acted deliberately. However, the majority of the Supreme Court found that the monthly size of the fine under the interpretive guide notes should be reduced taking into account the employment's limited number of weekly hours and the modest salary. Consequently, the Supreme Court found that it was appropriate to fix the fine at DKK 250,000.
In view of the long case processing time the fine was reduced by an additional DKK 50,000. All in all, the restaurant was ordered to pay a fine of DKK 200,000.
The judgement shows that upon engaging employees from countries outside the EU it is essential that the employer obtains documentation from the employees to the effect that work permits have been issued, as the employer will be held liable if the required permits are not in place. Upon recruiting directly from the foreign country the employer will, however, generally be involved in the application procedure, which means that the employer should only have doubts in the event of recruiting foreign employees who are already residing in Denmark. As such, it should be considering making it standard procedure to obtain a copy of foreign employees' work permits in connection with hiring.