2000 bargaining round completed peacefully

In the favourable climate which characterised the course of the Danish collective bargaining round in 2000, it did not take long for the Public Conciliator to draw up a draft compromise in February which could be accepted without problems by both the DA employers' confederation and the LO trade union confederation. Only 3% of the LO/DA area did not conclude an agreement before the Public Conciliator became involved. The peaceful bargaining climate spread to the transport sector, where negotiations could have faltered over the issue of the unusual four-year period of the agreement.

During the night of Wednesday 16 February, the last collective agreements in Denmark's 2000 bargaining round for the 650,000 employees covered by the Danish Employers' Confederation (Dansk Arbejdsgiverforening, DA) and the Danish Confederation of Trade Unions (Landsorganisationen i Danmark, LO) were concluded. Since 11 February, the Public Conciliator, Asbjørn Andersen, and the negotiating committees of DA and LO had been working hard to draw up an overall draft compromise for all employees in the DA/LO area. In the favourable climate that had characterised the course of collective bargaining in 2000, it did not take long for the Public Conciliator to draw up a draft compromise which could be accepted without problems by both DA and LO. The compromise settlement for the entire DA/LO area (including those sectors which had reached no agreement on their own) was then put to a vote among employers and trade union members.

Agreements had been reached by negotiations for as many as 97% of those in the DA/LO area before the Public Conciliator entered the scene. For the remaining 3% - about 18,000 employees - pay and working conditions for the next four years will be those laid down in the compromise drawn up by the Conciliator. It contains the same improvements as the four-year agreements concluded in the other bargaining units - primarily five extra days of "flexible" leave per year (constituting a sixth week of annual leave) and improvements in occupational pension schemes (DK0002166N).

The biggest group for which no agreement was reached was office workers in the construction, graphical, textiles and newspaper industries organised by the industry section of the Union of Commercial and Clerical Employees in Denmark (HK/Industri). Here, attempts failed to renegotiate a three-year agreement signed in 1997, which lagged behind other in terms of pension rights, with the employers believing that a general increase in pension contributions to 9% of pay, as in most of the other agreements concluded in 2000, would be too great. Bakers and butchers working in supermarkets also failed to reach agreement with their employers, represented by Danish Commerce and Service (Dansk Handel & Service, DHS). The bone of contention here was a satisfactory arrangement - in line with that agreed for shop assistants - for days off on Sundays and public holidays, in connection with an envisaged liberalisation of the Shop Hours Act (DK0001161N).

The terms and conditions to apply to these groups will now be those laid down in the compromise drawn up by the Conciliator; this means that they will benefit from the general improvements in areas such as extra leave and pension contributions, but that their specific demands will not be met. The employees are said to be unhappy with this result and have criticised their negotiators. However, this is virtually the only voice of discontent to have disturbed the calm and peace which characterised 2000's collective bargaining round.

Agreement concluded in the transport sector

The bargaining round was marked by a peaceful atmosphere from as early as the third week of January, after the trend-setting agreement had been concluded in the industry sector. This agreement set the pattern of agreements running for four years and providing for special additional days of leave and improved occupational pension contributions (DK0002168F). However, this pattern could be transferred directly only to the other sectors which apply the "minimum pay" system (ie whereby the sectoral agreement sets only minima which are built on by subsequent local bargaining), where the employees might be less afraid to commit themselves to a collective agreement with such an unusually long duration, because they have annual pay negotiations at enterprise level. The minimum pay system covers about 85% of the total DA/LO field. The big question was whether agreement could be reached on such a long-running deal for the remaining 15% of the DA/LO area, which applies the "standard wage" system, whereby the sectoral agreement sets actual rates and there is no possibility for local pay negotiations during the term of the collective agreement. Employees in the standard wage areas were especially sceptical, not least in transport, which is the largest sector in the standard wage field and normally sets the trend within it. Another important sector in this field is the confectionery industry, where the Food and Allied Workers' Union (Nærings- og Nydelsesmiddelforbundet, NNF) managed to maintain the standard wage system in spite of strong pressure from the employers' organisation, the Confederation of Danish Industries (Dansk Industri, DI), which has a general objective of spreading the minimum wage system to the entire labour market.

As a first reaction, the transport sector of the General Workers' Union (Specialarbejderforbundet i Danmark, SiD) turned down a four-year agreement period, because it thought it too risky to be bound for such a long period without any possibility of obtaining compensation through local pay negotiations for any increases in inflation. For some time, it thus looked as if the issue of a four-year duration might jeopardise the possibilities for obtaining a general compromise for the entire DA/LO field. Up until now, unions have been prepared to accept agreements running no longer than two years within the standard wage field. Nor could SiD accept the clause which formed part of the agreements concluded in other fields, providing for further negotiations after three years without any right to take industrial action. They wanted either a right to take industrial action, or a supplementary scheme which would guarantee the real wages of the employees in the standard pay area. Without these options, SiD was willing to accept a four-year agreement only if the wage increases were so high that they would almost by themselves guarantee the maintenance of real wages. The employers feared that such higher wage increases would have a "contagious" effect on local wage bargaining in other sectors. For several weeks, there were no prospects of a compromise.

However, peace prevailed. After these problems and the subsequent breakdown of negotiations during the initial phase, SiD and the Employers' Federation for Trade, Transport and Service (Arbejdsgiverforeningen for Handel, Transport og Service, AHTS) reached a compromise on 9 February which was in most respects identical to those in other sectors; pension contributions increased to 9% of pay and five extra special days of flexible leave per year. On top of this, a wage increase - a total amount of DKK 10.60 per hour during the period - was agreed which was sufficiently high for SiD to accept an agreement period of four years. However, the result was still at a level where the parties estimated that the total result would lead to cost increases of about three percentage points per year; this meant that the compromise was also acceptable to the employers. The compromise initially covered 20,000 drivers and warehouse workers, but it was repeated in the negotiations for a further 40,000-50,000 employees in the transport sector.

Commentary

The transport sector settlement facilitated the task of the Public Conciliator as he then had to solve the problems of only some small groups which together accounted for about 3% of the entire DA/LO area. The Public Conciliator would have been facing a major problem if this trend-setting compromise had not been concluded at the last minute in the standard wage field. In that case, Mr Andersen might have succeeded in drawing up a draft compromise for this field, but there would have been a risk that manifest discontent could have led to a rejection of the compromise and thus to major industrial action in spite of the agreements in the minimum pay field or, at least, to a long period of unlawful strikes and boycotts in the transport sector. In spite of the peaceful outcome, this development in the course of the negotiations thus illustrates that the fact that there is still a large group on the Danish labour market which has not introduced wage systems with local-level wage negotiations may give rise to problems.

The Public Conciliator has availed himself of the right to link together the voting procedures to approve the various settlements in the 2000 pay round, so that both those sectors which have concluded agreements on their own and those sectors covered by the draft compromise constitute a single entity. The employers vote on the proposed overall settlement within the competent bodies of their organisations, while on the employee side the voting, as a rule, takes the form of a ballot among the union members covered. The votes are added together and the compromise will be rejected only in the event that there is a "no" majority for all agreements as a whole. Discontent, and a resulting "no" majority, within individual groups will not be sufficient to trigger an industrial dispute. This is the price which has to be paid by these groups when they participate in a collective bargaining system with simultaneous negotiations for the major parts of the labour market. If individual groups were allowed to take industrial action on their own, this could quickly result in a major dispute in the entire DA/LO area, owing to the right to take secondary action. This is why the employer side, in particular, upholds the principle of common votes which has now become a tradition in the Danish collective bargaining system. The ballots took place over late February/early March and the result was due to be published on 7 March. (Carsten Jørgensen, FAOS)