Collective agreements in private sector concluded peacefully

Between February and April 2008, the first private sector agreements were concluded peacefully, notably in the financial services, and agriculture and forestry sectors. Although negotiations in the large agricultural sector, including landscaping and gardening, ended with the assistance of the Public Conciliator, the bargaining atmosphere was favourable. Noteworthy outcomes included increases in pay and pensions in the agricultural sector and a breakthrough for company agreements in the insurance sector.

Alongside the turbulent collective bargaining which occurred in the public sector in early 2008 (DK0803019I), bargaining also took place in the private sector, namely in the financial services, and the agricultural and forestry sectors. A new three-year collective agreement was already negotiated for the large private sector of manufacturing in February 2007 (DK0703019I). In contrast with the public sector, negotiations in both financial services, and the agricultural and forestry sectors ended without dispute.

Collective agreements in financial services sector

The financial services sector has always maintained an independent collective bargaining culture, which has remained separate from the other economic sectors and much larger part of the private labour market, as well as the public sector. Historically, pay and working conditions were, in many respects, similar to those of statutory civil servants – in the sense that provisions were determined at central level and employees enjoyed the same stable employment relationship as civil servants. However, mergers among organisations of the financial services sector have resulted in the emergence of two main bargaining sectors: the banking sector and the insurance sector. Furthermore, collective bargaining has been decentralised in recent decades and the types of agreements simplified. In short, two main types of collective agreements exist in these sectors: companies can either sign a ‘standard collective agreement’ or their own ‘company-level agreement’, the latter giving significant autonomy to the company and its employees. Nonetheless, common provisions in the standard collective agreement have to be retained in the company-level agreement. Both types of agreements provide for local negotiations on ‘wage-packages’ – that is, a voluntary option whereby employees can have a proportion of their pay converted into extra holidays, a higher pension or greater working time flexibility.

New agreement for banks and mortgage lenders

On 21 February 2008, the social partners in the financial services sector – namely, the Danish Employers’ Association for the Financial Sector (Finanssektorens Arbejdsgiverforening, FA) and the Financial Services’ Union (Finansforbundet, FF) – renewed the existing collective agreement for another three years. This agreement covers some 55,000 employees of banks and mortgage lending institutions in Denmark.

Both FA and FF agreed on an economic framework, whose provisions include an overall percentage increase in wages taking into account the national-level agreement in force. Wage increases for the next three years will be 4%, 4% and 3.7% respectively, of which 2.5% will be set aside for local pools. Thus, compared with the pay provisions of the previous collective agreement, the new accord provides for a 11.7% wage increase overall.

In terms of non-pay issues, FA and FF agreed that a clarification of employees’ qualifications is necessary. Scheduling for further training for each employee will thus begin with a clarification of competencies needed. In addition, the parties agreed to extend parental leave by two weeks with full pay.

Flexible working time arrangements

At the same time, FA and FF have agreed on a flexible working time model. Accordingly, companies and shop stewards will be able to agree that working time be organised as ‘individual flexible working time’. Over a 12-month period, each employee will be able to deviate from the standard working hours – either increasing or reducing their hours – provided that a maximum weekly average of 42.5 hours is maintained. The average number of hours during the agreed flexible period must be the standard 37 hours a week. Surplus hours after this period can either be remunerated or transferred to a ‘time bank’; the latter acts as a form of time off in-lieu, which can be ‘spent’ at a later stage.

Breakthrough company agreements in insurance industry

Traditionally, the other half of the financial services sector – the insurance industry – follows closely the improvements of the banking sector. The same trend has occurred in this instance, whereby the economic framework agreed, covering 10,000 employees in insurance, was identical to the FA-FF agreement. FA is also the representative employer organisation in the insurance sector, while the Insurance Workers’ Association in Denmark (Danske Forsikringsfunktionærers Landsforening, DFL) represents the employees’ interests.

Most noteworthy, according to FA and DFL, was the so-called ‘breakthrough’ in relation to company-level agreements. The insurance sector has not, thus far, had any significant company-level agreements as in the banking sector; therefore, it was proposed that a similar structure comprising fewer but larger companies in the insurance sector be established.

Ironically, however, the efforts towards the harmonisation of the two collective agreement systems seems to outdate the historical distinction between the banking and insurance sectors, thus affecting the trade union structure of two unions in the financial services sector – namely, FF and DFL. On the employers’ side, there is only one organisation, that is, FA. Furthermore, the sharp distinction between pure banking companies and pure insurance companies is changing. For example, some banks have opened insurance departments, while insurance companies have started offering banking transactions – both under the slogan ‘keep everything under the same roof’. In the longer term, a merger between FF and DFL might be a possibility.

Collective agreements in agricultural and forestry sector

The agricultural and forestry sector is divided into the so-called ‘green’ agricultural sector – comprising nurseries, farming, forestry and dairies – and the agro-industrial sector, which includes the food-processing industry. In 2008, only the ‘green’ agricultural sector has been involved in negotiating the renewal of its collective agreements; the agro-industrial sector negotiated its collective agreement in 2007 as part of the manufacturing industry. Employers in the ‘green’ agricultural sector are mainly affiliated to the Confederation of Employers’ Associations in Agriculture (Sammenslutningen af Landbrugets Arbejdsgiverorganisationer, SALA), while the trade unions are largely affiliated to the Danish Confederation of Trade Unions (Landsorganisationen i Danmark, LO). In terms of employees covered, the most important collective agreement in the ‘green’ agricultural sector is that between the Employers in Gardening, Farming and Foresting (Gartneri -, Land- og Skovbrugets Arbejdsgivere, GLS-A) and the Green Group within the United Federation of Danish Workers (Fagligt Fælles Forbund, 3F). The agreement covers about 20,000 employees.

Other social partners in sector

The other employer organisations in the sector are the Dairy Employers’ Association (Mejeribrugets Arbejdsgiverforening, MA), the Danish Cooperative Farm Supply (Dansk Landbrugs Grovvareselskab, DLG) and the Association of Danish Agricultural Machinery Dealers (Dansk Maskinhandlerforening, DMiBRUGT), which belong to SALA; these are joined by the Danish Landscape Gardeners (Danske Anlægsgartnere, DAG), which is affiliated to the Confederation of Danish Employers (Dansk Arbejdsgiverforening, DA).

Besides 3F, the other trade unions belonging to LO are the Danish Food and Allied Workers’ Union (Nærings- og Nydelsesmiddelfordundet, NNF), the Danish Metalworkers’ Union (Dansk Metal) and the Danish Clerical Union (Dansk Funtionærforbund – Serviceforbundet, DFF-S). In the dairy sector, the three trade union organisations 3F, NNF and DFF-S had set up a joint bargaining secretariat to coordinate the negotiations.

Details of noteworthy agreements in agricultural and forestry sector

In the ‘green’ agricultural and forestry sector, the wage system is largely based on the normal wage system: in other words, pay negotiations only take place at central level rather than company level. The agreed outcome thus covers all employees with the same occupation equally. Moreover, the agricultural sector is characterised by seasonal work and employs a significant proportion of eastern European workers during the busy seasons.

Between about 20 and 25 collective agreements were renewed in the agricultural and forestry sector, the most noteworthy of which will be outlined here.

Landscape gardeners

The first group to conclude a collective agreement in the agricultural sector, on 1 February 2008, were the landscape gardeners affiliated to DAG and 3F; this agreement covers some 3,500 employees. The employers in landscape gardening have recently joined DA and, for the same reason, the agreement only covers the next two years. A strong wish of the employers was to negotiate in line with the DA-covered sector, for which the next round of negotiations will take place in 2010. The agreement provides for a monthly increase of about DKK 1,000 (around €134 as at 9 May 2008) for employees over the next two years, along with a small rise in labour market pensions to 12%. The accord is largely in line with the collective agreements reached in the sector covered by DA and LO in early 2007. It also makes provisions for access to local bargaining on pay and working time, which is the rule among DA members but the exception among members of SALA.

Dairy industry

In the dairy industry, 3F, NNF and the Union of Danish Dairymen (Danske Mejeristers Fagforening, DMF), a national association within DFF-S, negotiated with the MA-affiliated employers. The renewal concerned about 7,000 employees of Danish dairies. Although negotiations broke down after the first attempt, on 28 February 2008 the bargaining parties reached a new settlement. 3F declared that it was very satisfied with the outcome. The settlement provides for the same monthly pay increase of DKK 1,000 (€134) as that agreed in landscape gardening. It also provides for a rise in the pension contribution to 12.75%, thereby breaking away from the framework percentage of 12%. Furthermore, employees will be entitled to two extra holidays, one for each of the two years; this will mean that, from 1 April 2009, they will be able to take seven extra days’ holidays on top of the official five weeks, as they so please. They can also choose to be paid for two of these extra days or have the payment transferred to their pension savings, rather than taking as holidays. In addition, the employers are to pay into a health plan for all employees, which includes treatment for all work-related health problems. For their part, the employers managed to secure a highly flexible agreement concerning the distribution of working time.

Industrial conflict averted in dairy industry

Thus, the new framework of an additional DKK 1,000 a month, laid down in the agreement for landscape gardeners, was also adhered to in the dairy industry. While consensus had not yet been reached on the normally trend-setting agreement between 3F and GLS-A, covering 20,000 employees, it seemed more difficult for the employers not to follow the trend. Negotiations were initially difficult in the first phase and 3F had issued its first warning of industrial conflict. As a result, the negotiations were continued at the Public Conciliator but without an outcome. The conciliator postponed the beginning of the industrial conflict for 14 days, as it is entitled to do, and put forward a final compromise proposal. The proposal contained the provisions which have already been reached in the agreement for landscape gardeners – that is, a DKK 1,000 monthly pay rise and pension savings of up to 12.75% in the third year. Subsequently, the compromise proposal was put to vote in an obligatory membership ballot. On 11 April 2008, the proposal was accepted as the new collective agreement by a significant majority of trade union members in the dairy industry.

All agreements in the agricultural and forestry sector were voted on in a membership ballot and were accepted by a significant majority of the voters, although the overall participation rate was not that impressive.

Carsten Jørgensen, FAOS