Collective bargaining coverage increases

Since the mid-1990s, the level of coverage of collective bargaining has been increasing in Denmark, and four out of five employees are now covered by a collective agreement. The increase in coverage is most marked among private sector white-collar employees, while the level of coverage is also increasing within some of the "new economy" and information technology sectors. These are among the findings of a major study undertaken by the Confederation of Danish Trade Unions (LO), published in November 2000.

More than four out of five Danish employees are now covered by a collective agreement, according to a major questionnaire-based study undertaken by the Confederation of Danish Trade Unions (Landsorganisationen i Danmark, LO), in cooperation with the National Institute for Social Research (Socialforskningsinstituttet, SFI) and a labour market researcher from the Copenhagen School of Business Administration (Handelshøjskolen i København), Steen Scheuer ("Employment and organisational structures" 2000 [Ansættelses og organisationsforhold 2000], LO, November 2000).

More than 70% of the people interviewed in the research state that their employment relationship is covered by a collective agreement. However, through using a number of control questions - for instance, whether the respondents have an employee representative or a written statement of their terms and conditions of employment with a reference to a collective agreement, or whether they pay contributions to a collective pensions scheme - the study concludes that a more correct figure is that 83% of Danish employees are covered by a collective agreement. The study thus distinguishes between "perceived bargaining coverage" (tilstedeværende overenskomstdækning) - the lower figure relating to the respondents' own awareness that they are covered by a collective agreement - and "formal bargaining coverage" (formel overenskomstdækning) - the higher figure, relating to the researchers' conclusion from responses to other questions that the respondents are in fact covered by a collective agreement.

Main findings

The table below sets out the study's findings on perceived and formal bargaining coverage for various groups of employees:

Perceived and formal collective bargaining coverage, % of employees by category, 2000
Perceived coverage Formal coverage
Total 70 83
Sector . .
Private 59 71
Public 90 100
Union membership . .
Organised 76 87
Not organised 46 62
Trade union affiliation . .
LO 77 89
FTF* 89 96
AC** 69 80
LH*** 36 56
Others 54 68
Occupational status . .
Manual workers 71 81
White-collar workers 49 62
Economic sector . .
Primary sector 45 54
Manufacturing industries 62 76
Building and construction 60 75
Commerce 47 57
Transport 68 79
Financial sector 82 90
Other/private business services 46 54
Size of the enterprise . .
Group with more than 100 employees 65 79
Independent enterprise with 25-29 employees 59 75
Independent enterprise with up to 24 employees 48 57

* Confederation of Salaried Employees and Civil Servants ( Funktionærernes og Tjenestemændenes Fællesråd , FTF ); ** Confederation of Professional Associations ( Akademikernes Centralorganisation , AC ); *** Organisation of Managerial and Executive Staff ( Ledernes Hovedorganisation , LH ).

Source:"Employment and organisational structures 2000", LO.

Key points of the findings include the following:

  • formal bargaining coverage is 71% in the private sector, while it is close to 100% in the public sector;
  • there has been a marked increase since the mid-1990s in the coverage of white-collar workers in the private sector. In studies conducted in 1985 and 1994, around 40% of workers in this group stated that they were covered by a collective agreement -a figure that has now risen to 49%. During the same period, the perceived bargaining coverage for manual workers in the private sector has remained unchanged at around 70%. In terms of formal bargaining coverage, white-collar workers, at 62%, still lag behind their manual counterparts, at 81%;
  • as might be expected, the members of LO and the Confederation of Salaried Employees and Civil Servants (Funktionærernes og Tjenestemændenes Fællesråd, FTF) have the highest levels of bargaining coverage;
  • in terms of economic sector, the study finds that the lowest levels of coverage are found in the primary sector (agriculture and fishing) and certain parts of commerce and private business services; and
  • as regards the extent to which workers in information technology (IT), "e-business" and "new economy" sectors are covered by collective agreements, the study finds a varied picture. These activities fall within three broad sectors - commerce, finance and private business services. Bargaining coverage is increasing in commerce and finance - though it is relatively low in the former and high in the latter - but appears to be declining slightly in private business services.

Employment certificates becoming more common

EU Council Directive 91/533/EEC of 14 October 1991 on an employer's obligation to inform employees of the conditions applicable to the contract or employment relationship was implemented through legislation in Denmark in June 1993. This requires all employees to be given a written statement of the essential aspects of their employment contract or relationship - an "employment certificate" (ansættelsesbevis). The new LO study examines how many employees have such an employment certificate, finding that 87% of those interviewed do so. Although the trade unions were very sceptical about the EU Directive, Tine Brøndum, the vice-president of LO, has expressed satisfaction that the number of employment certificates has increased in line with the growth in employees covered by a collective agreement.

"We have probably been wrong in believing that individual employment certificates were in conflict with collective agreements. However, the study shows that this individuality is not in conflict with the collective principle. Employment certificates may not only be based on collective agreements. They may also serve to extend collective agreements," said Ms Brøndum. She is convinced that the study shows that the Danish collective bargaining system is still viable and making progress, in spite of rumours to the contrary. In the private sector, two-thirds of employees have both a collective agreement and an individual employment certificate, while only 6% of employees have neither a collectively- nor individually-based set of rights.

Commentary

The study shows that employment certificates, which - like many other EU Directives - were initially received with much scepticism in Denmark, have not led to a weakening of collective agreements. On the contrary, the two have complemented each other, as illustrated by the fact that the degree of coverage of collective agreements has been increasing during the same period as employment certificates have been spreading. This is surprising, given that increasing coverage of collective agreements is seen among those groups of employees and in those sectors which represent the future labour market - although some of these sectors still have relatively low coverage. There is thus no clear or significant trend in the direction of the labour market being split into "yesterday's sectors" covered by collective agreements and "tomorrow's sectors" not covered by collective agreements. In its comments on the study, LO sees this as a positive result.

However, much has to be done by the established organisations if they are to preserve the Danish model in the face of the growth of the new sectors. A recently concluded company agreement in the IT field in finance shows that this is possible (DK0011103F). It seems that employees in the new sectors and activities wish to have both an employment certificate and a collective agreement on which they may possibly exert more influence than earlier. Early in 2001, a new collective bargaining round will start in the finance sector. The recent agreement at E-trade and other developments point in the direction of a new bargaining structure in finance with more individualised agreements. The new study seems to underpin the expectations that collective agreements will not be less common in the future, but will be more individualised within an agreed framework. (Carsten Jørgensen, FAOS)

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