Social responsibility of companies tops the political agenda

Over March and April 1997, the Danish Government has been putting pressure on the social partners to create jobs on special terms of employment, and has backed up this pressure with threats of legislative initiatives.

With 270,000 persons either on early retirement, unemployed or otherwise excluded from the labour market, theSocial Democrat-led Government is anxious to involve the social partners in producing workable alternatives for job creation for these groups of workers, rather than simply paying lip-service to the idea. In the 1995 collective bargaining round, the social partners were invited to elaborate on social clauses in their collective agreements. Accordingly, 90% of the bargaining units in the are covered by the LO trade union confederation and DA employers' confederation agreed on what have become known as "Social Chapters", which contain framework provisions on job creation on special terms of employment - ie, content of work, working hours and pay - to be negotiated and elaborated upon at local and company level. Similarly, the bargaining parties in government employment agreed on Social Chapters in their 1995 collective agreements. Employees in local government at regional and municipal level were also covered by a framework agreement negotiated in May 1996.

Those employers taking on workers on special terms receive a subsidy of either a half or a third of the level of the minimum wage, depending on the ability of the person to work.

Two years after the inclusion of Social Chapters in collective agreements, the Minister of Labour, Jytte Andersen, is disappointed, along with other political colleagues, about the lack of real progress, saying: "Personally, I would like to intervene here and now, but I do not have sufficient political support in Parliament and in any case it is the responsibility of the social partners." Although the Government set a target of creating some 20,000 jobs on special terms of employment, only 6,000 jobs have so far been created. Furthermore, a recent survey shows that 70% of companies are reluctant to be involved in such an initiative. These facts led the Prime Minister, Poul Nyrup Rasmussen and the Minister of Economic Affairs, Marianne Jelved, to question whether a voluntary approach to such job creation is adequate.

On 24 March 1997, a majority in Parliament supported the Government's idea of a fund for the creation of jobs on special terms of employment, financed by the employers. The idea was fiercely opposed by the social partners, who claimed that such matters should be for the social partners themselves to decide. On 7 April 1997, following the hostility to this proposal, Ms Jelved acknowledged that the idea was unworkable. She stated that: "There is no point in establishing a fund which engenders such fierce criticism from the social partners. I am surprised about this hostility. It worries me, because it shows that substantial barriers exist."

The Danish Government is, however, working on new proposals. The Minister of Finance,Mogens Lykketoft, is reported to be working on a scheme to improve economic incentives by way of increasing the wage subsidy. A flexible model has been designed which contains three different subsidies depending on the circumstances of each case. In May, the Government and the social partners were due to meet to discuss the issue.

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