Denmark: Industrial relations profile
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Industrial relations
Collective bargaining
The collective bargaining system is characterised by multi-level regulation and a centrally controlled decentralisation – also referred to as ‘centralised decentralisation’.
At national level, DA and LO negotiate a basic agreement (Hovedaftalen) and a cooperation agreement (Samarbejdsaftalen), which have a longer validity period than the collective agreements at sectoral level. These basic agreements build a bargaining framework for sectoral agreements by defining fundamental procedural rules – including the right to organise, a peace obligation, cooperation at the workplace or the handling of unfair dismissals.
Based on this framework, most of the collective bargaining on pay, working time and working conditions takes place at sectoral level. The sectoral agreements, in turn, are used as a comprehensive framework that is implemented at company level.
|
National level (Intersectoral) |
Sectoral level |
Company level | |
|---|---|---|---|
| Principal or dominant level |
X |
||
| Important but not dominant level |
X |
X |
|
| Existing level |
Jesper Due and Jørgen Steen Madsen conclude in their 2010 study that the coverage rate of collective bargaining in the private sector was 74% in 2006 (based on information from Statistics Denmark). In 2002 it was 79%. The coverage in the public sector has traditionally remained close to 100%.
In the TR survey in 2010 (Larsen et al, 2010) managers were asked if they had concluded collective agreements with the different groups of employees. On average 75% answered ‘yes’, divided between 65% on average in the private sector and 92% in the public sector and 88% in autonomous organisation/institutions.
Collective agreements are legally binding for the signatory parties.
Extension of collective agreements
There is no formal procedure for extending collective agreements by legislation. Government action, if any, is taken to adopt EU legislation. More importantly, a high share of public sector employees, about one-third of the workforce, as well as the high trade union density and employer centralisation, together provide for the establishment of widely accepted informal standards far beyond those negotiated at companies covered by collective agreements (Scheuer, 1999).
There are no other voluntary mechanisms of extension/application of the terms of collective agreements.
There are no provisions for opt outs in the Danish sector agreement
Main mechanisms in wage bargaining coordination
The main pattern of wage bargaining is set by sectoral agreements; these agreements are, in turn, increasingly supplemented by company agreements. Individual pay is mostly set at company level. In the public sector, the central level still plays the most important part in wage bargaining.
Main trends in collective bargaining
The main trend for collective bargaining is a higher degree of decentralisation. A provision in the trend-setting sector agreement – the Industry Agreement – allows parties at company level to take joint decisions that are in contrast to some provisions at sectoral agreement – for example, in relation to working time arrangements. The central parties do not have to sanction these deviations. In the public sector negotiations at state level continue to control bargaining issues in the regional and municipal sectors and decentralisation in the private sector is not taking place.
Other issues in collective agreements
Collective agreements cover many issues that are not solely related to pay and working time. These issues include sickness pay, maternity leave, children’s sickness and hospitalisation, continuing vocational training, supplementary pensions and cooperation within the company. Lifelong learning is also an integral part of the Danish agreements. Stress and harassment are not particular issues on the collective bargaining agenda.
Issues of training and lifelong learning are traditionally important issues on the bargaining agenda and an important part of the Danish flexicurity model. Access to qualified continuous vocational training is seen as a measure to mitigate the effects of restructuring and mass redundancies.
The issue of gender equality is not specifically addressed in the sector agreements. Formally, the issue of equal pay was introduced in the agreements of 1973. Since then, the agreements have not distinguished between men and women. However, in 2003, DA and LO published a joint report on gender equality in the labour market which was the result of a bipartite investigation into the gender pay gap.
At the 2007 bargaining round paternity leave conditions were tightened. This was followed up in 2010 and accordingly, if the father does not make use of the leave he is entitled to (2 plus 3 weeks), the leave or payment will not be transferred to the mother, as was the case before.
Industrial disputes
Strikes and lockouts in the years of crisis 2009–2010 resulted in the lowest number of working days lost in Denmark since the current calculation method was introduced by Statistics Denmark in 1996. The total number of working days lost in the public and private sectors combined was 15,000 in 2009 compared with 1.9 million in the so-called ‘conflict’ year of 2008. The unusually high number of days lost in 2008 meant that Denmark topped the European ranking for industrial disputes for 2005–2009.
According to the EIRO report Developments in industrial action 2005–2009, which looks at the EU27 and Norway, Denmark tops the ranking of lost working days due to industrial conflict.
A prolonged strike occurred in the public sector in 2008. The eight-week conflict involved a strike for equal pay, and the protesting workers represented typical female professions in the public sector – such as nurses, social and healthcare workers, nursery school teachers and youth educators. The workers demanded a substantial pay rise for those working in typical female professions, as a means of evening out the gender pay gap (DK0907019I).
As a result, in 2008 Denmark recorded the highest annual figure for working days lost per 1,000 workers of any country (701.9) during the period 2005–2009, inflating its annual average for the five-year period to more than 159 days lost per 1,000 workers. But if only 2005, 2006, 2007 and 2009 are considered, Denmark had an annual average of 23.7 working days lost.
This would place Denmark around ninth/tenth on the ranking with a normal number of working days lost in 2009. In other words, the normal level of strikes in Denmark over this period places the country in the lower end of the upper third of strike-prone countries in EU, only occasionally taking place in connection with renewals of collective agreements; as in 2008 and in 1998, when 11 million working days were lost due to a major conflict in the private sector covered by DA (see table below).
| Number of work stoppages | Number of workers involved | Number of lost working days | |
|---|---|---|---|
| 2004 |
804 |
75,710 |
76,400 |
| 2005 |
534 |
32,833 |
51,300 |
| 2006 |
476 |
79,128 |
85,800 |
| 2007 |
862 |
61,113 |
91,700 |
| 2008 |
335 |
91,409 |
1,869,100 |
| 2009 |
207 |
12,679 |
15,000 |
| 2010 |
329 |
15,828 |
18,500 |
Source: Statistics Denmark 2010
Over the past 10 years strike activity has been particularly prevalent in the meat processing industry, the metal sector and the public sector at regional and municipal levels. According to the DA conflict statistics, pay is traditionally the most frequent reason for strikes, followed by working conditions and strikes for political reasons.
Collective industrial dispute resolution mechanisms
The resolution of conflicts in the collective labour law builds on the distinction between a ‘conflict of rights’ and a ‘conflict of interests’.
A ‘conflict of rights’ arises where the matter in dispute is already covered by a collective agreement. In the event of a conflict of rights, there is generally no right to resort to industrial action or a lockout. Once enacted, Danish labour law prescribes a peace obligation while the collective agreement is in force.
If the case concerns a breach of the collective agreement, it must be referred to the Labour Court (Arbejdsretten). On the other hand, if there is disagreement concerning the interpretation of the agreement, the dispute must be settled by the industrial arbitration tribunal (Faglige voldgiftsretter). The legal basis for conflict resolution is the Standard Rules for Handling Industrial Disputes from 1910 (Danish abbreviation is Normen).
A ‘conflict of interests’ occurs in periods and areas when and where there is no collective agreement in force – in these instances, industrial action, such as strikes, lockouts or blockades can be taken provided that there is a reasonable degree of proportionality between the goal to be obtained and the means used to obtain it. This freedom applies both to the workers and the employers. Conflicts of interests may occur in connection with the renewal of a collective agreement. In this case, an attempt at mediation is made by the public conciliator (Forligsmanden) in order to avoid further conflict, such as a general strike.
In addition, conflicts of interests may arise between trade unions and employers not covered by a collective agreement. During the period when a collective agreement is in force, conflicts of interests could also arise if, for instance, new technology at the workplace creates new work not covered by the existing collective agreement. On both occasions, the trade unions can take industrial action against the employer in order to obtain a collective agreement.
The collective labour law deals primarily with conflicts of rights. Conflicts of interests are mainly of a political–economic nature.
Tripartite concertation
There are no specific and formal tripartite councils or national social pacts in Denmark. Tripartite dialogue takes place on an ad hoc basis.
Traditionally, the division of labour between the social partners and the government has been relatively clear. The social partners have regulated wages and working conditions through collective bargaining and the government has regulated welfare through legislation, although the social partners in many cases have had influence over the preparation and implementation of legislation. However, this division of labour has been blurred in recent decades in so far as welfare and social affairs have increasingly emerged as issues in collective agreements. Moreover, the policy concertation between the social partners and the government has increased in the form of ad hoc invitations to tripartite cooperation from the government.
Examples of tripartite concertation include the following: the employment political reform ‘Bringing more people into employment’ from 2002; the Globalisation Council; the Tripartite committee on lifelong learning and qualification and education for all groups in the labour market; the Welfare Commission; and a tripartite agreement on reducing sickness absence. All of these initiatives are aimed at the private sector and were formed in the period 2004–2008.
Furthermore, a Tripartite Committee for Quality Reform in the Public Sector was set up in 2007. The committee is responsible for promoting the development of competencies in the public sector. In addition, the government established the Family and Working Life Commission in the autumn of 2005, as a response to an intense public debate on workers’ difficulties in trying to reconcile work and family life. Although the social partners were not direct members of the commission, they secured involvement in the Commission, which issued a report in 2007. In 2012 the newly elected government led by the Social Democrats invited the social partners to a tripartite dialogue on working time and welfare issues but they were cancelled by the government. Trade union representatives from Danish Metal insisted they would not accept any attempt to extend working time, such as abolishing two public holidays as suggested by the government. The Minister of Finance then chose to cancel the negotiations.
Workplace representation
Denmark has a single-channel workplace representation system, which basically gives the trade unions responsibility for representing employees at the workplace. Thus, workplace representation is codified by collective agreement.
The main channels of employee representation at workplace level are the shop stewards and the Cooperation Committee – in the public sector, the latter is referred to as the Co-determination Committee (MED-udvalg). These committees consist of an equal number of representatives of employees and management. The employee representatives are elected, as is the shop steward. The health and safety committee, along with board member representatives, are other important channels for employee representation.
In the public sector, ‘MED-udvalg’ or the Co-determination Committees incorporate the health and safety system; hence, it is a one-tier as opposed to a two-tier system with cooperation committees and health and safety committees, as is the case in the private sector. The co-influence and co-determination system is based on a framework agreement – the so-called MED agreement. The president of the Co-determination Committees in the public sector is usually the director of the municipality or county, while the vice-president is the joint shop steward.
|
Works council type (WC) |
Trade union (TU) | Other | |
|---|---|---|---|
| 1 Most important body |
Cooperation Committee (parity of members) Public sector: Codetermination Committee, MED-udvalg EWCs |
Shop steward Joint shop steward |
Health and Safety Committee, Board member representation |
| 2 Alternative body |
Spokesperson |
Employee rights
The nationally negotiated basic agreement (Hovedaftalen) between LO and DA defines fundamental procedural rules concerning employee rights – including the right to organise, a peace obligation, or the handling of unfair dismissals. In addition, there are two legal regulations that can be interpreted as a basis for industrial action and the employees’ right to strike: namely, Act No. 106 of 26 February 2008 on the Industrial Court and the Industrial Arbitration Courts, which replaced Act No. 183 of 12 March 1997 on the Industrial Court.
Conflicts of rights concern disagreement about questions regulated by collective agreements. In such cases, it is unlawful to take industrial action and the peace obligation applies. These conflicts must be solved in accordance with the procedural rules on mandatory conciliation and binding judicial decisions. The peace obligation is one of the most important characteristics of the Danish system. If possible, local conflicts should always be solved at the lowest level – that is, the company level. If this fails, it is followed by conciliation at organisational level. The highest level is the Labour Court or an Industrial Arbitration Tribunal. Decisions made in such instances are legally binding.
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