Supreme Court rules on bargaining rights in the public sector

On 17 September 1997, the Danish Supreme Court ruled on which trade union should have bargaining rights over local pay for those employees in the public sector who are members of a organisation which does not have bargaining rights.

By a majority of four to three, the Danish Supreme Court ruled on 17 September 1997 that a trade union which already has bargaining rights in the public sector should also have bargaining rights in local pay negotiations on behalf of those public sector employees who are members of employee organisations which have not been granted the right of negotiation.

The case was brought Sammenslutningen af Firmafunktionærer, a trade union not affiliated to one of the main confederations, which argued that by giving an organisation which has the right to negotiate a "right of veto" with regard to local pay negotiations, the public employers were infringing the principle of equal treatment for all employees.

In the ruling, the majority of judges agreed that the risk existed that an organisation entitled to negotiate and bargain could take advantage of its "right of veto" at the expense of those employees who were not members of the organisation. Despite this risk, the majority of judges emphasised other conditions which did not support the above argument. The agreement on local pay in the public sector covers all employees and an organisation entitled to negotiate and bargain cannot refrain from negotiating on behalf of employees who are not members of an organisation with such rights. The judges also supported the legitimate interest of the public employers, which wished to conclude collective agreements on local pay with those organisations which had the great majority of members within the area.

The ruling is of great importance for two reasons. Firstly, it affects many employees in the public sector: of approximately 800,000 employees in the sector, 80%-90% are organised in established organisations with a right to negotiate and bargain; while the rest are either non-unionised or members of unions which are not affiliated to the mainstream confederations.

Secondly, the public sector is presently undertaking a "silent" wage revolution, converting the old seniority-based wage system into a more decentralised and achievement-based wage system. From 1 January 1998, Government institutions will initiate a three-year experiment with a new salary-scale system, introducing a centrally determined basic salary and three decentralised negotiated allowances based on function, qualifications and results (DK9705110F). From 1 April 1998, more than 60% of all Government employees in Denmark and some 56% of all municipal sector employees will convert to the new salary-scale system.