1998 bargaining round ends in major conflict

At the end of April 1998, Denmark faced its first major industrial conflict for 13 years after workers unexpectedly rejected a joint mediation proposal to conclude the bargaining round, which had been agreed by the social partners.

On 24 April 1998, the members of the organisations affiliated to the Danish Confederation of Trade Unions (Landsorganisationen i Danmark, LO) and the Danish Employers' Confederation (Dansk Arbejdsgiverforening, DA) were balloted on the joint mediation proposal for entire DA/LO bargaining area, drawn up by the Public Conciliator and accepted by DA and LO (DK9804163F). As it has been 42 years since a joint mediation proposal was last rejected, the ballot was regarded as a formality. At 47%, the participation rate among union members was the highest for 25 years, and a clear majority of those voting (265,000 out of 565,000, or 56%) rejected the mediation proposal. Consequently, on 27 April 1998, Denmark faced its first major industrial conflict in 13 years (DK9803158F), involving more than 500,000 workers and approximately 5,000 companies.

Hans Jensen, the president of LO commended the rejection, saying that there could be no doubt that it was a reaction to the conduct of the collective bargaining. Many members felt that the employers's strategy, in which the industry sector took the dominant role, had taken the bargaining system to its limit. At the same time, the rejection may have been a reaction to a discrepancy between the content of the mediation proposal and workers' expectations in terms of extra holiday. Whereas workers had been calling for another week of paid holiday (bringing the total to six weeks) the union negotiators achieved only one or two days more paid days off.

DA deplored the situation, stating that workers had chosen a painful and meaningless conflict. The conflict would be costly, costing employers approximately DKK 1 billion in lost production per day. Furthermore, employers claimed that, since 98% of all bargaining units reached an agreement voluntarily and LO accepted the bargaining result and a single joint mediation proposal (which 14 out of 15 LO-affiliated unions involved recommended), the conflict was due to internal differences within the Danish trade union movement. Consequently, it was up to LO and its affiliates to solve the matter.

DA turned down LO's proposal to renegotiate the mediation proposal and LO-affiliated unions therefore contacted their bargaining counterparts in order to examine the will to renegotiate, without any initial results.

The newly appointed Minister of Labour, Ove Hygum, urged the social partners to meet in order to examine the possibilities, saying that since it was the social partners who created the situation, it was up to them to find solutions - thereby stressing that the Government did anticipate intervention.

It was feared that a prolonged conflict would have a negative effect on the referendum on the Treaty of Amsterdam, on 28 May 1998. A lengthy conflict entailing serious consequences for society could force the Government to intervene.