Judicial decisions strengthen hand of established trade unions

Denmark's "alternative" trade unions have won a battle, but the established, traditional unions have won the war. Such was the interpretation placed on two important judicial decisions handed down on 6 May 1999 by the Supreme Court and Labour Court in cases involving the largest alternative union, the Christian Trade Union (DFK). The cases centred around the right of established unions to sign closed-shop agreements and to take industrial action against companies which already have an agreement with DKF.

The established "mainstream" trade union movement in Denmark is essentially made up of the three main confederations, the Danish Confederation of Trade Unions (Landsorganisationen i Danmark, LO), the Confederation of Salaried Employees and Civil Servants (Funktionærernes og Tjenestemændenes Fællesråd, FTF) and the Danish Confederation of Professional Associations (Akademikernes Centralorganisation, AC). However, there are a number of "alternative" organisations, the largest being the Danish Christian Trade Union (Den Kristeligt Fagforening, DKF), followed by Denmark's Free Trade Union (Danmarks Frie Fagforening, DFF) and Firma-funktionærerne (which organises civil servants).

One of the important means employed by the established trade union movement in maintaining their high membership rates are closed-shop or "exclusive" agreements with companies which are not members of employers' organisations. A closed-shop agreement provides that all employees of a business covered by a collective agreement must be members of the trade union with which the closed-shop agreement was made. Closed-shop agreements are often used in areas in which unions are relatively weak. They have undoubtedly been an effective tool and are one of the reasons why Danish union membership is as high as it is, at up to 85%.

In recent years, closed-shop agreements have come under pressure because they have been seen as contrary to Article 11 of the Council of Europe's Convention for the Protection of Human Rights and Fundamental Freedoms, which states that: "Everyone has the right to freedom of peaceful assembly and to freedom of association with others, including the right to form and to join trade unions for the protection of his interests." This has been construed not only positively as the right to join an association, but also negatively as the right not to be compelled to join a specific association (DK9802153F).

In the competition between the relatively limited alternative trade union movement, spearheaded by DKF, and the traditional unions, one of the alternative unions' chief goals has for many years been the abolition of closed-shop agreements, and along with them the effective monopoly position of the established unions. On 6 May 1999, the Supreme Court (Højesteret) concluded its deliberations on a case which had been trailed as a probable deathblow to closed-shop agreement. Instead the decision, at least for the time being, confirmed the validity of closed-shop agreements under the Danish Act on Freedom of Association.

The Jensen case

In 1996, legal action was taken by DKF against Novadan, a company based in Kolding that had dismissed an employee, Hans Henrik Jensen, on grounds of non-compliance with a closed-shop agreement concluded with the LO-affiliated General Workers' Union (Specialarbejderforbundet i Danmark, SiD) in 1990. The closed-shop agreement stated that employees recruited after 1990 should already be or become a member of SiD. Having been employed for a year at the company when the closed-shop agreement with SiD was reached, the employee at the centre of the case became a member of SiD. Later, he regretted the membership and refused to pay union dues, resulting in his exclusion from the trade union and later his dismissal.

Under the existing Act on Freedom of Association, it is unlawful for an employer to dismiss an employee for not joining a particular trade union. However, there are two exceptions:

1. if at the time employment starts prospective employees are informed that membership of a particular trade union is a condition of employment, the employer may decline to employ them or immediately dismiss them if they are unwilling to join the union; and

2. the employer may dismiss an employee who joins a trade union with which the employer has a closed-shop agreement at the time employment starts, but later resigns from it.

Thus the right to freedom of association protects only those employees already employed by a business at the time when the latter enters into a closed-shop agreement.

In February 1998 the Danish High Court (Western Division) found in its ruling in the case that this practice was unobjectionable and that therefore closed-shop agreements were valid under Danish law (DK9802153F). Mr Jensen was employed by the company at the time that the closed-shop agreement with SiD was entered into, but he later joined SiD, thus accepting the terms of the agreement. When at a later date he resigned from SiD, the employer was entitled to dismiss him. However, in giving grounds for judgment the High Court explicitly doubted whether the Danish Act on Freedom of Association was compatible with the Convention for the Protection of Human Rights and Fundamental Freedoms. It was therefore possible that a case at the European Court of Human Rights (ECHR) in Strasbourg would go against Denmark.

Supreme Court judgment

In the Supreme Court, to which the case had been referred, the judges decided by a majority of five to four that the dismissal of Mr Jensen was contrary to the Act on Freedom of Association, and awarded him damages of DKK 200,000 in consequence.

The reason that Mr Jensen was awarded judgment was that current practice regarding the right to remain outside a particular union has been tightened up in cases where an employee is already serving with a company at the time that the employer makes an exclusive agreement with a union. According to the majority view of the Supreme Court, such an employee is not only entitled to remain outside the union in question but also to resign from it after subsequently joining it.

However, the Supreme Court made no finding of principle on the compliance or non-compliance of closed-shop agreements with the international conventions which Denmark has pledged to uphold. The outcome was thus a clear setback to DKF's many years of opposition to closed-shop agreements.

The setback was all the greater in that it is doubtful whether the case can be reviewed by the ECHR. The plaintiff won the case, his dismissal was found to be in contravention of Danish law and he was granted damages accordingly. In all probability, DKF will have to find a new case which clearly complies with the Danish Act on Freedom of Association but which can still be claimed to contravene the Convention for the Protection of Human Rights and Fundamental Freedoms. It could take a long time for such a case to go through the Danish legal system and be taken up in Strasbourg.

Reactions to the Supreme Court ruling

DKF had been optimistic about the final ruling from the Supreme Court and when the judgment became known, its disappointment was great. The Supreme Court was clear in rejecting any problem over the compatibility of the Act on Freedom of Association with the human rights Convention, in the view of labour law expert Jens Kristiansen of the University of Copenhagen. He therefore sees the case as something of a damper on DKF's ambitions. In a comment on the case, Mogens Stig Nielsen, DKF national secretary, also conceded that the aim of abolishing closed-shop agreements had not been promoted by the judgment.

Hans Jensen, general secretary of LO stated that he was pleased with the ruling because it leaves the existing legal position unchanged. In SiD, the union which makes most use of the closed-shop agreement facility, the Supreme Court judgment has also been greeted with relief. Group secretary Torben Bach considers the judgment a cause for celebration because it proclaims that employers and trade unions are free to conclude agreements - including closed-shop agreements. The free right of negotiation is thus assured.

Picketing case at the Labour Court

On the same day as the ruling in the Jensen case, Thursday 6 May, judgment was given by the Labour Court (Arbejdsretten) in another leading case with great significance for the competition between the established and the alternative trade unions. The case had bee brought against SiD by DKF and the Christian Employers' Association (Kristelig Arbejdsgiverforening), which have an agreement mutually renouncing the use of conflictual methods such as strikes and lockouts.

The two Christian associations had concluded a collective agreement with two companies - Ikadan Plast and Brørup Maskinstation- and therefore considered it a breach of industrial relations practice for SiD to use pickets to try to force the companies to negotiate a new collective agreement. SiD's action was seen as an attempt to encroach on an area already covered by collective agreement.

In its judgment, the Labour Court unequivocally rejected this assertion. In respect of membership and collective bargaining representation, SiD and DKF are in free competition and consequently SiD is fully entitled to attempt to obtain representation in its natural area - if necessary by using conflictual means.

In a comment on the ruling, Hans Jensen of LO stated that it is a natural acknowledgement of the trade union movement's right to use its traditional conflictual methods, and that the Christian unions will make no headway in "undermining" the Danish collective bargaining model.

Commentary

The decision of the Labour Court has at the very least a far-reaching significance for the ability of DKF and other alternative unions to break the virtual monopoly position of the established unions in the area of collective agreements.

In 1998, DKF achieved a breakthrough with the conclusion of an agreement with employers in the Nyhavn entertainment district in Copenhagen (DK9811195N). This was in the aftermath of the bungled handling of negotiations by the established union for the area, the Restaurant Workers' Union (Restaurationsbranchens Fagforbund, RBF). It was therefore a special case, but nonetheless a breakthrough for DKF. The question was whether there was any scope for following up this success.

If the Labour Court had upheld DKF's contention that it was unlawful for other unions to engage in conflict with companies which already have an agreement with DKF, this might have tempted non-unionised employers to make agreements with it - instead of accepting a closed-shop agreement with SiD, for example.

If this had been the outcome, the established trade union movement would now be facing a serious problem which could have undermined its position. However, given the Labour Court's rejection of the Christian union's case, the situation remains that companies will continue to think twice before jumping on the alternative trade union "bandwagon". The result for them could easily be an economically damaging conflict with the established trade union. Thus the growth potential for the alternative unions is still fixed within narrow boundaries. It is now doubtful whether DKF can follow up its success at Nyhavn, and there is little prospect of raising the union's membership from the level of under 100,000 at which it stands today.

The question of whether the issue of closed-shop agreements can be said to have equally far-reaching significance is debatable. Only about 200,000 employees are covered by such agreements, compared with the LO membership of more than 1.4 million and total membership of the established trade union movement of around 2 million.

In the public sector, closed-shop agreements are not permitted, nor is this form of agreement found in principle in the predominant private sector area covered by the Danish Employers' Confederation (Dansk Arbejdsgiverforening, DA). The area covered by closed-shop agreements is therefore marginal. Abolition of the right to enter into such agreements would thus scarcely represent a major reduction in either coverage by collective agreement or membership figures. It would, however, probably be large enough to cause a perceptible fall in the very high rate of unionisation - although in international terms the figure would still be very high.

Closed-shop agreements can also be seen as a "free ride" for the unions, because they can arguably obtain numbers of members at no cost simply by "twisting the arm" of a non-unionised employer. Without these agreements, trade unions would have to carry out extensive and more positively oriented recruitment campaigns in the relevant companies. The level of membership in such companies if the established unions decided to support the abolition of closed-shop agreements is a matter for conjecture.

The established union movement finds it hard to understand that closed-shop agreements could be in violation of the Convention for the Protection of Human Rights and Fundamental Freedoms. In a complex society there will always be a balance between individual and collective interests and rights. Denmark has developed an model of agreements based on collective rights and thus the balance between the individual and the collective is different from that which applies in countries where regulation of the labour market depends to a higher degree on legislation laying down individual rights. This does not necessarily mean that the rights of the individual are less well protected in a collective agreement model: overall it can be claimed that the Danish agreement model actually provides an extremely high degree of protection for the rights of the individual. Thus, while closed-shop agreements show that individuals can get into difficulties in a collective system, it is still an open question whether this can be said to be in breach of the human rights Convention, which Denmark has pledged to uphold. For the time being, the Supreme Court's judgment has pushed this issue into the background.

Even if the international pressure with regard to the Convention for the Protection of Human Rights and Fundamental Freedoms has been relieved by the Supreme Court judgment, it is far from clear that the closed-shop agreement as such has been saved for the foreseeable future. There is some likelihood that a change of government at the next elections, to be held no later than March 2002, will lead to a tightening up of the Act on Freedom of Association and the abolition of closed-shop agreements. At any rate, the main opposition party, the Liberal Party (Venstre), has stated that it will seek such an amendment. (Jørgen Steen Madsen, FAOS).