Lidl signs new collective agreement in Denmark

Lidl, the German discount supermarket chain with more than 6,000 stores in a number of European countries, concluded a collective agreement with Denmark's United Federation of Workers (3F) in January 2006. Lidl had already signed agreements with the HK/Commerce union in November 2004.

The German-owned discount supermarket chain, Lidl, has concluded a collective agreement with the United Federation of Workers (Fagligt Fælles Forbund, 3F). Commentators argue that this would appear to challenge Lidl's reputation in Denmark as having a poor staff policy and paying low wages - it has often been accused of trying to copy the model of the US-owned Wal-Mart, which has a very difficult relationship with trade unions. But on 4 January 2006, Lidl concluded an agreement with 3F covering 50 warehouse workers working in the chain’s first big central warehouse in Kolding (Jutland). Lidl has more than 6,000 stores in a number of European countries.

John Bondebjerg, chair of 3F in Kolding, states: 'So far things look promising. Lidl’s management seems to have a forward looking approach and we are now in the middle of organising information meetings about the agreement and of electing employee and safety representatives'. The Lidal agreement is based on the agreement that was concluded with the employer organisation, the Danish Chamber of Commerce (Handel, Transport og Serviceerhvervene, HTS), for the rest of this sector in 2004. The warehouse workers will be paid a wage of DKK 108.05 per hour (EUR 14.48), which is DKK 5.15 (EUR 0.69) higher than the standard wage in this sector. This corresponds to a seniority supplement. But Lidl was not willing to agree to make occupational 'labour market' pension contributions on behalf of the employees to the PensionDanmark scheme, where 3F is represented on the board. Lidl has agreed, though, that the workers's conditions concerning pensions must not be poorer than the PensionDanmark scheme. PensionD\nmark was established in 1992 as a joint labour market pension company between the social partners.

This means that Lidl has concluded two sets of agreements since it entered the Danish market towards the end of 2004. In November 2004, Lidl concluded agreements with Union of Commercial and Clerical Employees in Denmark/Commerce (HK/Handel); one that covers shop assistants and one that covers office workers and warehouse workers. The two agreements follow the agreements that HK/Commerce has concluded with Danish Commerce & Service (Dansk Handel & Service, DHS).

The abovementioned agreements have been concluded at enterprise level and are based on the closest sector agreements. Lidl has not joined any Danish employers' organisation.

Retail experts and labour market researchers see the change in Lidl’s strategy in Denmark as a sign of the strength of the trade unions there. HK and 3F are the two biggest unions in Denmark. They both feared the worst when it became clear in 2004 that Lidl would set up outlets in Denmark. But under the rules that apply on the Danish labour market the trade unions may take industrial action to force an enterprise - whether Danish or foreign - to conclude an agreement in accordance with the Danish rules and conditions. This should be taken into consideration when considering Lidl’s decision to conclude agreements.

Lidl is also expected to set up a big warehouse in Zealand in line with the opening of more outlets in Denmark.

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