New bargaining structures and flexibility in finance

It is thus up to the employees to choose whether pay and working conditions are to follow the collective agreement or whether an individual agreement should be concluded on the central questions of pay and working time. Part of the salary may be in the form of shares or a bonus if model A is chosen. Although the "social provisions", such as pensions and pay during maternity leave, will still be the same for all employees, the agreement can be seen as a fundamental breach with the principle that the same conditions should apply to all employees. According to FA, the differences will be to the benefit of both the employees and the enterprises. Work will become more performance-oriented and will be remunerated accordingly.

The future collective bargaining structure

The E-trade agreement is an example of what can be expected in the finance sector collective bargaining round in spring 2001. Since summer 2000, FA and FF have been working on a paper describing the new bargaining structure. The document, which is now finished, in many ways breaks with former structures. For many years, the finance sector has had only a single collective agreement which applies to all employees from the top to the bottom, with very few variations. The new structure will comprise five types of agreement, as follows:

• the main agreement between FA and FF regulates the relationship between the organisations and lays down the general rules of the game;

• common provisions lay down the common economic framework for the field covered by FF and the provisions which are to be common for the entire finance sector. This could, for instance, include the rules concerning trainees and provisions on days off for care purposes. The common provisions apply to all employees in this sector, both those covered by enterprise agreements and those covered by the standard agreement (see below). The common provisions thus form the foundation for the standard and enterprise agreements and form part of both. However, the common provisions must not be so detailed that there is nothing left to negotiate at lower levels;

• the standard agreement, to apply where there is no enterprise agreement, is based on the existing sectoral agreement with the exception of the matters which will be included in the common provisions. To start with, there will probably be several standard agreements, for instance one for banks and one for savings banks. In the longer term, the agreements will be merged into a single agreement;

• enterprise agreements are two-year agreements which are renewed at the same time as the common provisions and the standard agreement. An enterprise agreement replaces a standard agreement and is concluded by the local parties. The provisions applying to the enterprise will thus be the provisions agreed locally combined with the rules laid down in the common provisions. If the parties fail to reach agreement over an enterprise agreement, the standard agreement will automatically apply. However from the next collective bargaining round after 2001, probably in 2003, there will be changes. In the event of disagreement over an enterprise agreement, the negotiations will be referred to arbitration - the first time in Denmark that a neutral "umpire "will be used at local level on matters including pay. The right to call industrial action is held by the central level and is normally not transferred to the local level; and

• local agreements may be concluded between company management and employees through the employee representation system, irrespective of whether the enterprise is covered by an enterprise agreement or a standard agreement. Even if there is a high degree of detail in individual agreements, there will always be a need for local agreements. These could typically be agreements about a single issue, such as flexitime.

Commentary

The simplified, though not exactly simple, bargaining structure to be introduced in finance is a compromise between the employers' wish for a high degree of decentralisation and the wish of the FF trade union to maintain elements of existing bargaining rights at the central level. The trend on the Danish labour market is in the direction of local negotiating rights, and the new bargaining structure in the finance sector is a step in this direction. There will be room for a wide degree of company-level individualisation in negotiations, but if an enterprise does not want to conclude its own agreement, it may base its pay and conditions on the sector's standard agreement.

There is little doubt that many enterprises in the finance sector will opt for enterprise agreements with a high degree of flexibility, in relation to both remuneration and working time. This structure also seems to be tailor-made for the information technology sector, which has in many ways fallen outside the normal bargaining framework. There may be a risk of very diverse conditions for the employees. Employees who are not willing to conclude agreements involving elements of risk may end up as "second class" employees, but will, on the other hand, be covered by centrally agreed conditions. The advantage of the system may very well be that it can solve the possible conflict between: the employers' and the employees' interest in been organised and working under orderly, contractual conditions; and, on the other hand, having the possibility of agreeing on more flexible pay and working conditions at enterprise level. Such a solution will require a departure from the very centralised, traditional bargaining system with its roots in the "September compromise" () (DK9908140F) and the "Danish model", in the direction of a more framework-oriented bargaining system which still upholds the concept of collective agreements. (Carsten Jørgensen, FAOS)