First agreements concluded in agricultural sector

In early 2001, new collective agreements are being negotiated in Denmark's agriculture and forestry sector, which is not covered by the main private sector agreements concluded in 2000. The first agreement was signed in January for 6,000 workers in the "agrarian-industrial" sector. Alongside increases in pay and holiday entitlement, the four-year deal increases occupational pension contributions to 9.9% of pay, compared with the 9% agreed in most of the private sector in 2000. Shortly afterwards, similar agreements were concluded for horticulture and bakeries.

The agriculture and forestry sector is not included within the main private sector bargaining area covered by the Danish Employers' Confederation (Dansk Arbejdsgiverforening, DA) and the Danish Confederation of Trade Unions (Landsorganisationen i Danmark, LO), where new four-year agreements were concluded in 2000 (DK0002167F). Collective agreements in agriculture and forestry are being negotiated in 2001 (to replace two-year agreements signed in 1999 - DK9902110F), and the process started smoothly in January with the conclusion of a first agreement, for the "agrarian-industrial" sector, which covers about 6,000 workers in food-processing factories, mink production, fish farms etc in rural districts. The agreement was signed by the Agriculture and Forestry Employers (Land- og Skovbrugets Arbejdsgivere, LSA) and two unions - the General Workers' Union (Specialarbejderforbundet i Danmark, SiD) and Women Workers' Union (Kvindeligt Arbejderforbund, KAD). It largely follows the pattern set by the agreements signed in the DA/LO area in 2000, and is expected to influence the main agreements in agriculture and forestry, those for abattoirs and dairies, as well as the rest of the sector.

Four-year agreement

The agrarian-industrial sector agreement runs for four years, like those signed in the DA/LO area in 2000. This is the first time since 1987 that a four-year agreement has been concluded in the agriculture and forestry sector and, given 2000's four-year DA/LO agreements, it means that collective bargaining in the various parts of the private sector continues to be out of step. The employers in agriculture and forestry see this as an advantage: LSA and the other employers' organisations affiliated to the Confederation of Employers' Associations in Agriculture (Sammenslutningen af Landbrugets Arbejdsgiverforeninger, SALA) negotiate with some of the same trade unions as DA's affiliates do, and if all private sector employers' organisations negotiated at the same time, the agriculture and forestry sector would risk being forced merely to follow in the track of the major agreements in the DA/LO area.

Significant increases in pensions

The new agreement provides for wage increases of DKK 10.25 per hour over the entire period (DKK 2.40 during the first of the four years) and two more special holidays, making six weeks' annual leave, plus 24 December as an extra holiday. In addition, occupational pension contributions are increased to 9.9% of pay, which is 0.9 percentage points more than agreed in the LO/DA field in 2000. The agricultural sector is thus functioning as a "lever" for future negotiations on occupational pensions elsewhere in the private sector. Overall, the deal will involve an increase in labour costs of 3.7% per year.

SiD and KAD are satisfied with the agreement, as is LSA which believes that wage increases of this scale are necessary in order to attract new labour. However, the agricultural employers' confederation, SALA, is not fully satisfied with the line set by this first agreement in the sector. Jens Lorentzen, the president of SALA, believes that the economic situation in the sector as a whole does not have the necessary flexibility to match the agreement's provisions and that the agreement will require increases in production in order to keep up with the level of costs.

Agreement for horticulture and bakeries

Shortly after the agrarian-industrial sector settled, an identical agreement was concluded in the horticulture sector, represented by the Horticultural Employers' Association (Gartneribrugets Arbejdsgiverforening, GA), covering about 8,000 members of SiD. This was followed by a four-year agreement covering bakery workers, signed by the Food and Allied Workers' Union (Nærings- og Nydelsmiddelforbundet, NNF) and the bakery employers' organisation (Bager- og Konditormestrene, BKD). The deal provides for occupational pension contributions to increase to 9.9% after four years, as well as for six weeks' annual leave, in the form of five special holidays, plus a holiday on 24 December, while special arrangements will apply to apprentices.

Commentary

Although SiD had, before the start of the negotiations in agriculture, identified occupational pensions as a key bargaining issue, a contribution of 9% of pay - as agreed in the main DA/LO area in 2000 - would have been considered a good result, and the achievement of 9.9% was notable. In the DA/LO negotiations in 2000, trade unions had stated that 9% was not the final target, and the 9.9% now achieved in agriculture will thus becomes a lever for the next LO/DA negotiations in 2004, when pension contributions will probably exceed 10%.

Agriculture is one of the minority of sectors covered by the so-called "normal wage system", whereby all issues are negotiated exclusively at the central level, without local bargaining, and without any mid-way negotiations during the agreement's term. By accepting the same four-year term as agreed in the majority of sectors which are covered by the "minimum wage system" - whereby sectoral agreements set only minima, subject to local-level bargaining - the social partners in the agricultural sector have thus chosen to put aside concerns about the viability of such a long-term agreement under the normal wage rules - as the transport industry, another normal wage sector, also did within the LO/DA area in 2000 (DK0002167F).

The wage increases in the new agreements seem to be at a level where an increase in real wages can be maintained during the entire period with an unchanged economic policy - both the opposition and the government have no plans to change this policy. The agreements concluded in the agrarian-industrial sector, horticulture and bakeries share a common feature which may have a knock-on effect: the wage increases reflect a wish to attract labour. Special wage increases for apprentices in bakeries are intended to make this occupational field more attractive for young people, while in the agrarian-industrial sector, LSA has also found it necessary to offer higher wages and pensions and more holiday in order to retain existing labour and attract new labour. (Carsten Jørgensen, FAOS)