The 1997 Danish collective bargaining round completed
The 1997 collective bargaining round in Denmark was generally more concerned with structural and procedural matters than with substantive bargaining issues. In the public sector, collective bargaining resulted in the introduction of a new salary scale system, whereas in the private sector collective agreements were concluded of varying duration ranging from one to three years.
Public sector - salary scales revolution
A two-year collective agreement was approved by the 225,000 employees in the government sector (DK9702103N) and the 662,000 employees in the county and municipal bargaining area, offering a 4.25% pay increase, wage adjustment schemes, and improved pension and maternity leave provisions. However the 1997 collective bargaining rounds represented more than adjustments of pay, pensions and maternity leave; it was, as the Minister of Finance, Mogens Lykketoft said, "a peaceful wage revolution", introducing a more flexible and decentralised salary-scale system.
The new salary-scale system consists of a centrally determined basic salary, supplemented by three types of allowances: an allowance based on the employees' functions measured by tasks; an allowance based on qualifications measured by educational background and work experience; and an allowance based on results. All the allowances will be subject to local bargaining between shop stewards and management and will not affect the salaries of those currently employed.
For a minimum three-year period from 1 January 1998, government institutions are invited to experiment with the new salary-scale system, covering all personnel in one or more institutions, or one group of personnel across the institution. From 1 April 1998, more than 60% of all government employees in the country and some 56% of all municipal sector employees will convert to the new salary-scale system.
The objectives of the new salary-scale system is to improve the recruitment and retention of qualified employees and to seek to link pay settlements with the aims and strategies of institutions. The decentralised wage settlement will reflect the individual employees' responsibility, qualifications and effort.
Private sector - duration issues dominate
The 1997 collective bargaining round in the private sector was unusual in a number of ways. Whereas the substance of the 1997 bargaining had already partly been determined by the industrial settlement in 1995 - ie full pay during maternity, a further extension of the pension schemes and an increase in pay in real terms - the question of the duration of the agreement played a major part of the bargaining.
The Danish Employers' Confederation (DA) proposed that the various agreements in the private sector should be arranged so that they expire in 2000; this would enable the Confederation of Danish Industries (DI) to conclude a two-year collective agreement in the 1998 bargaining round. This strategy was based on the assumption that bargaining sectors outside the domain of DA - agriculture, forestry and associated industries, the financial sector and the public sector - would have to accept a change in the length of the agreements if the pattern of synchronised bargaining were to be re-established in 2000. The LO trade union confederation opposed any change in the duration of the agreement, stating that since it was DI which had upset the pattern, it was therefore up to DI to revert to the existing pattern by entering into a one-year settlement for 1998 or a three-year agreement, so that a common expiry date could be agreed for the all-industry collective agreement in either 1999 or 2001. Members of the LO and negotiators from the major trade unions did not, however, lay down any ultimatum regarding the length of the agreement. It was for the employer to make another offer if they wanted to realise their "three-year" strategy.
At the end of January, SALA, the main employers' organisation in the agricultural sector, which is not affiliated to the DA, concluded a series of two-year collective agreements in its sector. Although the content of the agreements corresponded with DA's requirements, their duration was not in line with the DA's "three-year" strategy.
In February, a three-year collective agreement was reached for commercial and administrative salaried employees - represented by the HK union - within DA's area. By agreeing to DA's three-year strategy, HK gained a long standing objective - a sectoral division of the current national-level agreement. HK's sub-sectors in the private sector therefore had good reasons of their own for accepting a three-year agreement. It was also possible to offer HK a special minimum rate of pay for skilled workers in the retail sector. The problem of persuading the unions in other bargaining sectors to accept a settlement including improved maternity pay, extended pension schemes and an increase of pay in real terms as its key features, was that these questions did not assume the same importance in those sectors as they did in HK.
As mentioned above, the public employers concluded two-year agreements. The price set by the negotiators on the public employees' side for extending the period of the agreement was too high to make it attractive to employers. In addition, the public employers did not want to insist on three-year agreements and, thereby, risk jeopardising the introduction of the new salary-scale system.
Since the financial sector also concluded two-year agreements, it was clear that DA's strategy could not be realised. It was evident that the synchronised pattern whereby all agreements would run until 2000 is unlikely to be realised, even if DA did manage to achieve three-year agreements with LO throughout its own area. DA therefore had to adjust its strategy and, as a provisional intermediate target, it sought to ensure that all agreements in its own bargaining areas would expire at the same time. The result was therefore a series of compromise agreements which could have a duration of one year and which could, therefore, expire concurrently with the major industrial agreement on 1 March 1998. This was the solution which emerged from the very lengthy and difficult negotiations in the last stage of the bargaining process in March, when the public conciliator had assumed responsibility for effecting a settlement.
With one-, two- and three-year collective agreements in operation, and the fact that collective bargaining will take place once a year until 2000, both public and private employers fear that the trade unions will use a "leap-frogging" strategy. According to the Minister of Finance, Mr Lykketoft, it is inevitable that there will be a higher risk of conflict and uncertainty in the future.
By the end of April, two conciliation proposals (one for the three-year agreement and one for the one-year agreement) were easily approved. On the employers' side, 95% of the DA general assembly voted yes. Of those voting in the ballot among the LO members, 75% and 89% respectively voted in favour of the one-year and the three-year proposal. Nearly all of agreements within the DA/LO area were concluded voluntarily between the parties without the involvement of the public conciliator.
It was expected that there would be an increase in the numbers voting in the union ballot from the previous year; however, this did not occur. The rate of participation was only around a third of those eligible to vote, and both employers and unions found the low participation in the ballot very disappointing.
Eurofound welcomes feedback and updates on this regulation