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Commission approves Danish compensation of up to €77 million to Post Danmark for legacy costs of dismissal of former civil servants

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The European Commission has approved, under EU state aid rules, Denmark's compensation to Post Danmark A/S for legacy costs arising from the dismissal of 429 former civil servants currently employed under special terms.

Post Danmark's mail business has discontinued the Universal Service Obligation as of 1 January 2024, which also affects 429 former civil servants. The former civil servants are currently employed under special terms that are more favourable than those for ordinary employees in Post Danmark. These terms give the right to three years of redundancy payment to the affected civil servants. The objective of the state aid measure is to prevent the financial burden being transferred to Post Danmark's parcels business, which will continue operations.

Under the measure, Post Danmark will receive compensation for a maximum of around €77 million (DKK 572 million), which corresponds to the additional costs for making the former civil servants redundant.

The Commission assessed the measure under EU State aid rules, in particular Article 107 (3) (c) of the Treaty on the Functioning of the EU, which allows Member States to support certain economic activities under certain conditions. The Commission found that the measure is necessary and appropriate as it supports the parcels delivery sector, specifically by preventing this economic activity from being undermined by the significant legacy costs of former mail activities of Post Danmark, thereby maintaining a level playing field in the sector. In addition, the Commission found that the measure is proportionate as it is limited to the minimum necessary and it has a limited impact on competition and trade between Member States.

On this basis, the Commission approved the Danish measure under EU State aid rules.

The non-confidential version of the decision will be made available under case number SA.120372 in the state aid register on the Commission's competition website once any confidentiality issues have been resolved.

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