Meat industry employers to join Confederation of Danish Industries

In August 2002, the Danish Employers' Association of the Meat Industry (SA) applied for membership of the Confederation of Danish Industries (DI) - and thus of the Danish Employers' Confederation (DA) - having resigned from the Confederation of Employers' Associations in Agriculture (SALA) in March 2002 due to disagreement concerning future strategy. Acceptance of SA's membership application should be a formality. This move will strengthen both the position of SA in its next collective bargaining round in 2003, and DI's position as DA's largest member organisation.

In March 2002, the Employers' Association of the Meat Industry (Slagteriernes Arbejdsgiverforening, SA) - which includes one of the three largest companies in Denmark, Danish Crown- decided to leave the Confederation of Employers' Associations in Agriculture (Sammenslutningen af arbejdsgivere i landbruget, SALA) with effect from 1 October 2002. In August 2002, the SA leadership decided to apply for membership of the Confederation of Danish Industries (Dansk Industri, DI). Acceptance of the application should be a formality. SA's membership of DI will mark a definitive break with the tradition of the agricultural sector having its own employers' associations (DK9707119N). Membership of DI automatically means membership of the Danish Employers' Confederation (Dansk Arbejdsgiverforening, DA) - indeed, DA membership was one of SA's motives in resigning from SALA.

SA is currently the largest member organisation of SALA and its departure will essentially make SALA an organisation only for the traditional 'primary' sectors - agriculture, horticulture and forestry. The number of workers employed by SALA's member companies will fall from 55,000 to about 40,000.

SA pushed into expensive agreement

The collective bargaining round in the agricultural sector in spring 2001 was notable for a significant agreement in the meat industry between SA and the National Union of Food and Allied Workers (Nærings- og Nydelsesmiddelforbundet, NNF). NNF members in the industry rejected in ballots two compromises reached by the bargaining parties, before accepting a third proposal in April 2001 which provided for a 9.5% total pay increase over two years (DK0104117F). This was more than twice the level of pay increases agreed elsewhere in the agricultural sector in the 2002 bargaining round (DK0101112F) - or in the major sectors covered by DA in the 2000 bargaining round (DK0002167F). It was clear that the result was a defeat for SA. However, it chose to conclude an agreement rather than enter a dispute which would have had major consequences for the entire food industry.

A decisive factor in SA's decision to settle was that it had no access to a strike fund through SALA. This was also the reason why SA has earlier proposed that the entire SALA sector should join DA, thus placing agricultural employers in a much stronger position in negotiations with the trade unions. With no movement in this direction, and finding itself in a weak bargaining position, SA left SALA due to disagreements concerning future strategy and decided to join DI, the largest organisation affiliated to DA. Both SA and member companies such as Danish Crown will benefit from DI membership, especially in terms of access to a strike fund through affiliation with DA.

DI to strengthen its position

SA's affiliation will strengthen DI's position as the largest organisation within DA. Once SA joins, DI will take over the employer representative function for the meat industry and, in the area of industrial policy, will enter into a formalised cooperation with the Danish Council of Agriculture (Landbrugsrådet), the trade association for the agricultural sector. However, in the longer-term perspective, it is the objective of DI to become a spokesperson for the Danish food industry, with companies such as Danish Crown and the Arla Food dairy concern as forerunners. The sectoral trade organisation for the meat industry, Danske Slagterier, is closely associated with the Council of Agriculture and has no plans to follow the employers' organisation, SA, into DI. It thus looks as if cooperation between DI and the Council of Agriculture will become significantly strengthened in the years to come, with these two major organisations speaking with a single voice in some fields.

In the wake of these events, the president of the Council of Agriculture stated that the withdrawal of SA had virtually removed the raison d'être of SALA. This is probably an exaggeration, but the leadership of SALA called on the president of the Council of Agriculture not to interfere.

Commentary

One of the decisive factors in SA's strategic resignation from SALA and subsequent application for membership of DI was the two-year duration of the collective agreement it signed with NNF in 2001. The parties will thus negotiate again in 2003 - one year ahead of the next bargaining round in the major trend-setting DA sector, which concluded four-year agreements in 2002. If the outcome of the meat industry bargaining round in 2003 is again advantageous for workers, this will place wage pressure on the major industrial sectors in the following year. In the 2001 meat industry negotiations, the employers' associations in other major sectors had no possibilities of influencing the result. With SA joining DI, and thus DA, the other sectoral organisations will be able to exert such an influence in 2002. Although NNF has stated that it does not matter who is sitting at the negotiating table when SA negotiates with the union in 2002, it is likely that DI will press hard to conclude a one-year agreement so that the meat industry will fall into step with the other industrial sectors. Furthermore, all agreements concluded by members of DA must be approved by the general assembly of DA, and this will also apply to future agreements between NNF and SA. DA is not likely to accept an agreement in 2003 with wage increases as high as in 2001, but NNF can probably obtain an acceptable compromise in return for concluding an agreement which runs for just one year. (Carsten Jørgensen, FAOS)