The Supreme Court Remands Loss of Earning Capacity Case to the Danish Appeals Board
In a judgment dated April 28, 2026, the Supreme Court ruled on the conditions for compensation for loss of earning capacity under the Danish Workers’ Compensation Act. The case concerned whether the National Social Appeals Board had grounds to reject an employee's claim for compensation for loss of earning capacity after the employee was granted a flex job following a recognized workplace injury.
The case arose after a municipal employee sustained a concussion in April 2000 when she was hit in the head by the car’s tailgate while at work. Her injury was recognized as a workplace injury later that same year.
In a decision issued in June 2002, the then National Board of Industrial Injuries found that the injury had not resulted in a loss of earning capacity of at least 15%, and the employee’s claim for compensation was therefore for loss of earning capacity under was therefore rejected with reference to Section 32 of the Danish Workers’ Compensation Act then in force, which is now Section 17.
The employee was later placed on sick leave and, in 2014, was granted a temporary flex job, after the municipality assessed that her working capacity had been permanently and substantially reduced due to health-related reasons.
In 2020, the National Social Appeals Board reopened the case concerning loss of earning capacity but upheld the denial. The Board stated that the reduced working capacity and the granting of the flex job were due to circumstances other than the workplace injury.
Supreme Court: The Danish Appeals Board Applied an Incorrect Interpretation of the Provision
The Supreme Court referred to its case law, and held that an injured person may be entitled to compensation for loss of earning capacity corresponding to 15% if there is a clear, permanent loss of income resulting from the workplace injury, and if the loss of income is at least 5%.
The Supreme Court emphasized that the National Social Appeals Board had applied an interpretation of Section 32 (now Section 17) of the Danish Workers’ Compensation Act that differed from the interpretation established in the Supreme Court’s case law.
The court also referred to the opinion of the Danish Medico-Legal Council, which stated that the workplace injury was part of the overall causal complex behind the employee’s reduced working capacity. The fact that there were also other causes of the reduced working capacity does not mean that the workplace injury was irrelevant to the assessment of the loss of earning capacity.
On that basis, the Supreme Court ruled that the case should be sent back to the National Social Appeals Board for a renewed assessment of the loss of earning capacity.
Littler Comments
The judgment confirms the Supreme Court’s recent practice regarding the assessment of loss of earning capacity under the Danish Workers’ Compensation Act.
The decision emphasizes that a right to compensation for loss of earning capacity may exist even when the loss of income is relatively limited, provided that it is clear, permanent, and amounts to at least 5%. At the same time, the judgment illustrates that compensation is not precluded simply because several factors contribute to the reduced work capacity, as long as the occupational injury is a contributing cause.
The judgment is expected to impact the Danish Appeals Board’s future assessments in cases regarding loss of earning capacity, particularly in cases where the occupational injury forms part of a more complex overall chain of causation.
At Littler | Denmark, we advise companies on, among other things, occupational health and safety regulation, organizing work in a safe and responsible manner, workplace assessments, handling occupational injuries, and inspections and responses from the Danish Working Environment Authority. You can read more about this here: Occupational Safety & Health
