The first three or four months of 1999 will see collective bargaining in Denmark's public sector, agriculture and forestry sector (including slaughterhouses) and financial services sector. Following the widespead industrial dispute in spring 1998 in the main private sector bargaining area covered by the LO trade union confederation and DA employers' confederation, the prospect is of a difficult collective bargaining round in these three other areas, not least in the public and agricultural sectors. One particular problem is the rules on working hours in the education sector - this issue alone could lead to a general industrial dispute and renewed political intervention.
Bargaining in the main private sector area covered by the two largest confederations, the Danish Federation of Trade Unions (Landsorganisationen i Danmark, LO) and the Danish Employers' Confederation (Dansk Arbejdsgiverforening, DA), took place in spring 1998. It resulted in a major industrial dispute, when union members rejected a joint mediation proposal for the entire bargaining area, which ended only when the government intervened to impose a settlement (DK9807178F) It seems that this conflict will perhaps not be a one-off event, and the spring 1999 bargaining round, which covers a number of other bargaining areas, may also result in a failure to reach an agreement. There is less risk of this happening in the financial services sector than in the two other sectors in which bargaining is to take place at the beginning of 1999 - agriculture and forestry and the public sector. In the two latter areas, there are great difficulties which are a direct result of the conclusion to the spring 1998 DA/LO bargaining round. Additionally, a fight is expected in the public sector concerning a simplification of the rules on working hours in the education sector. All in all, there is therefore a considerable risk of a new widespread industrial dispute. If such a dispute materialises, it must be expected that it will end in the same way as in spring 1998, with the Government intervening and dictating pay and working conditions by the introduction of legislation.
The collective bargaining round at the beginning of 1999 will cover around 1 million workers - 850,000 in the public sector (650,000 in counties and municipalities and 200,000 in central government), just over 60,000 in agriculture and forestry (including slaughterhouses), and just over 80,000 in financial services.
The bargaining parties
Collective bargaining in the public sector is divided into two principal areas:
- the central government sector, with the Minister of Finance as the chief negotiator on the employers' side and the trade unions' joint bargaining organisation, the Joint Committee of the Central Organisations (Centralorganisationernes Fællesudvalg, CFU), on the workers' side; and
- the local government area, with a joint bargaining committee for the employers - the Associations of County Councils (Amtsrådsforeningen, ARF), the Association of Local Authorities (Kommunernes Landsforening, KL) and the two municipalities of the capital, the City of Copenhagen and the Municipality of Frederiksberg- and the unions' joint bargaining organisation, the Association of Local Government Employees' Organisation (Kommunale Tjenestemænd og Overenskomstansatte, KTO), for the employees.
The bargaining is coordinated, particularly on the employers' side, where, as a general rule, the central government bargaining is decisive for the overall framework of the result. Public sector bargaining generally takes place collectively for all staff groups, with CFU and KTO covering organisations from all three major union confederations - LO, the Confederation of Salaried Employees and Civil Servants in Denmark (Funktionærernes og Tjenestemændenes Fællesråd, FTF) and the Danish Confederation of Professional Associations (Akademikernes Centralorganisation, AC).
In agriculture and forestry, in which the slaughterhouses are often the main fulcrum, bargaining is coordinated on the employers' side by the Danish Confederation of Employers' Associations in Agriculture (Sammenslutningen af Landbrugets Arbejdsgiverforeninger, SALA), which is not affiliated to DA. On the workers' side, the most important bargaining parties are two LO-affiliated unions, the General Workers' Union (Specialarbejderforbundet i Danmark, SiD) and the National Union of Food and Allied Workers (Nærings- og Nydelsesmiddelarbejder Forbundet, NNF).
In the financial services sector, the two bargaining parties are the Employers' Association for the Financial Sector (Finanssektorens Arbejdsgiverforening, FA), which is also not affiliated to DA, and the Financial Services' Union (Finansforbundet), affiliated to the second-largest central organisation, FTF, which, apart from the Financial Services' Union, otherwise has its strength in the public sector.
Hangover from 1998
The first and perhaps greatest problem of the coming collective bargaining round is the demands which can be seen as a direct result of the collective bargaining, general industrial dispute and government intervention in the spring of 1998 in the DA/LO area. The intervention resulted in the award of two to two-and-a-half extra days of holiday and three days of family care leave (with variations due to differences in the preceding collective agreements in the various bargaining units).
In the bargaining area covered by SALA, it is therefore a demand from the trade unions that at least equivalent time off is secured, preferably in the form of an increase in holidays to achieve a sixth week of annual leave. In the public sector bargaining areas, there is already a scheme providing for family care days and, therefore, here the emphasis is primarily on turning the results of the government intervention into days of holiday for all, with the introduction of a sixth week of holiday as a principal demand.
In the financial services sector, it is already common to have both longer holidays and better rules on issues such as care days than in the DA/LO area, and thus it is the issue of pay which will be the principal fulcrum of collective bargaining. There seems to be agreement between the parties on this point, judging by their statements in the period up to the commencement of the collective bargaining. Given this background, bargaining in financial services looks like being relatively undramatic, and this is undoubtedly the area in which it seems easiest to find a solution which is acceptable to both parties.
However, the picture looks more difficult in the area covered by SALA and in the public sector. Here, the trade unions have stated that they are seeking the same result as that achieved by other employees via the government intervention in the DA/LO area. They argue that, since it must be assumed that the government makes interventions which are economically sound, this is thus a demand which must be regarded as both reasonable and economically acceptable (DK9811194N). The fact that the government holds a different view - one reason being a deterioration of the economic situation since spring 1998 - makes it a difficult task from the outset to find a compromise between the parties.
Problems in the public sector
It had been predicted that public sector collective bargaining in 1999 would take the shape of a kind of truce between the parties. A pay reform was introduced in by 1997's collective bargaining in the public sector (DK9705110F) which means, in the long term, that a considerable proportion of pay will be fixed through local collective bargaining based on qualifications, functions and results. As the parties have been in agreement on giving the new pay system a chance, any major conflict between the parties had not been expected to materialise until 2001, when the difficult implementation period could be said to be over.
In the central government sector, the new pay system has been introduced in the form of pilot schemes and, so far, the results have been meagre. Only a limited proportion of central government employees have switched to the new system. There are thus grounds for discussing how to get past the initial difficulties which often characterise the implementation of major reforms. In the the local government sector, 56% of employees have switched to the new pay system, and it is therefore a priority wish among the employers to have the remaining 44% - in which primary and lower secondary school teachers and kindergarten and youth centre teachers are by far the largest groups - switch to the new system.
The problems concerning the results of bargaining in the rest of the labour market in 1998 are a factor hampering 1999's bargaining. However, there are additional difficulties especially in the area of education, with by far the main emphasis on the counties and municipalities - that is, in upper secondary schools and primary and lower secondary schools respectively. Here, the employers are demanding a more flexible planning of working hours than that allowed under the existing rules on working hours. This is probably first and foremost due to financial reasons as, for example, in the primary and lower secondary school system there will be a large increase in the number of pupils in the coming years. Without a change in the rules on working hours, which means that teachers will have more hours of actual teaching instead of hours for preparation and other tasks, it is argued that the finances of the schools will spin out of control.
To this are added educational arguments, as the employers are of the opinion that modern teaching, which is characterised by cooperation between teachers instead of conventional classroom teaching, also requires a more flexible and locally determined planning of working hours. Rigid rules fixed centrally, it is claimed, create obstacles to modern forms of teaching.
Teachers counter these arguments by claiming that it was the employers themselves who participated in having the existing rules introduced at the beginning of the 1990s. Teachers also feel that it is an exaggeration that the rules constitute an obstacle to modern forms of teaching.
Both parties are refusing to budge from their opinions, and the various employers' parties, - ARF, KL and the Government - have sworn to stand together, to the effect that none of them will enter into general agreements with the opposite party before the rules on working hours have been changed. Furthermore, the political parties which recently agreed a 1999 state Budget settlement (DK9812197F) inserted a comment that more flexible rules on working hours are to be introduced in the area of education. The FTF-affiliated Danish Union of Teachers (Danmarks Lærerforening, DLF), representing primary and lower secondary school teachers, has described this as a declaration of war and a threat of government intervention. Seen in this light, the prospects for the collective bargaining round are gloomy. However, at the beginning of December signals began to emerge which indicate that the parties, despite their entrenched opposing positions, will nevertheless in the final instance be able to find a solution.
Commentary
A major problem for the coming collective bargaining round is that the government intervened in the spring of 1998 and made concessions which can be described as being at the upper end of what is economically sound. This was arguably done out of consideration for the then imminent referendum on Denmark's ratification of the Amsterdam Treaty on European Union, with the population "rubbed up the right way" in order to secure a "yes" vote.
Another factor is that the economic situation has deteriorated since the spring of 1998. Denmark is now feeling the more turbulent economic winds which are blowing in the wake of the financial crisis in Asia. One result has been that a longstanding surplus on the balance of external payments has been turned into a deficit. Therefore, there will in all likelihood be markedly less scope economically in the spring of 1999. The question is whether workers can be persuaded solely on this basis to accept a less favourable solution than the one the Government itself granted to a large part of the labour market in 1998.
A further theme may become topical during collective bargaining: the duration of collective agreements. The problem with the "hangover" from one bargaining round to the next is, to a great extent, the result of the abandonment in 1995's bargaining of the longstanding system of overall coordinated collective bargaining for the whole Danish labour market (DK9705110F). This has since resulted in nearly annual bargaining, and experience indicates that this contributes to making the results more costly than would otherwise be the case. It is therefore a wish on the central government employers' part that the term of collective agreements should be changed this time, either to a one-year or three-year duration, so that the bargaining rounds are again brought into line with the dominant private sector area covered by DA and LO. (Jørgen Steen Madsen, FAOS)