EU part-time work Directive implemented through new dual method
In the past, EU employment and social Directives have been implemented exclusively through collective agreements in Denmark. However, in June 2001, parliament adopted legislation transposing the Directive on part-time work, essentially extending the provisions of an agreement concluded by the LO trade union confederation and DA employers' confederation to those areas without their own agreements on the matter. This new "dual" implementation method - involving both law and bargaining - represents a break with tradition, and is not without problems. The other main social partner organisations on both the union and employer sides have complained to the Ministry of Labour that they had not been consulted.
On 1 June 2001, the Danish parliament (Folketing) adopted legislation aimed at implementing the EU Directive on part-time work (97/81/EC). This represents an important new development in Danish labour law - the first time that the so-called erga omnes principle has been used in connection with the implementation of EU Directives. This principle means that agreements between the social partners are - by means of supplementary legislation - extended to cover fields which are not covered by any collective agreements. It is not yet clear whether the new law represents a historic break with the key principle which has so far been respected by the social partners and the political parties: that EU Directives concerning pay and employment conditions should, as the main rule, be implemented exclusively through collective agreements. Until now, there has been a consensus that the Danish "collective bargaining model" should be preserved (DK0001164F).
New implementation principle
The Danish Confederation of Trade Unions (Landsforeningen i Danmark, LO) and Danish Employers' Confederation (Dansk Arbejdsgiverforening, DA) were due to have presented a complete agreement concerning the implementation of the part-time work Directive on 1 January 2001. The fact that this Directive (EU9712175N) is a "negotiated Directive" - ie implementing an agreement (EU9706131F) concluded between the Union of Industrial and Employers' Confederations of Europe (UNICE), the European Centre of Enterprises with Public Participation and of Enterprises of General Economic Interest (CEEP) and the European Trade Union Confederation (ETUC) - meant that it would have been "natural" to use an agreement as the sole instrument to implement the Directive in Denmark. However, in January 2001, the social partners gave up this idea as they believed that such an agreement would, in the present case, not have sufficient coverage. However, they did not propose completely subjecting the issue to legislation, but instead a construction whereby an agreement would be supplemented by legislation which offered protection to groups not covered by the agreement. Thus, the new legislation provides that fields which are not covered by their own agreements implementing the Directive will be covered by the agreement on the issue between LO and DA.
Although a connection was thus established to the traditional bargaining model, the new approach is nevertheless a form of erga omnes which deviates from the long-standing principle of self-regulation by the social partners. In the 100-year history of the bargaining system, it is probably only the regulation of annual leave which has deviated from this principle (DK0007188F). The combined statutory and agreement-based implementation of the part-time work Directive will perhaps be the first step in the direction of a new implementation principle - ie the final abandonment of the original Danish viewpoint concerning the implementation of Directives exclusively in the form of collective agreements. However, if this is the case – as it may very well turn out to be – then the part-time work case has revealed serious problems.
Disagreement among main organisations
The first problem relates to disagreement among the central social partner organisations about the fact that, in areas not covered by their own agreements on the issue, the new part-time work law implements an agreement concluded only by LO and DA. While these areas will be covered by the provisions of the new legislation, rather than an agreement, these provisions are based on agreement between LO and DA. The other main social partner organisations - the Confederation of Professional Associations (Akademikernes Centralorganisation, AC) and the Confederation of Salaried Employees and Public Servants (Funktionærernes og Tjenestemændenes Fællesråd, FTF) on the union side, and the Confederation of Employers' Associations in Agriculture (Sammenslutningen af Landbrugets Arbejdsgiverforeninger, SALA) and the Employers' Association for the Financial Sector (Finanssektorens Arbejdsgiverforening, FA) on the employer side - have criticised this procedure. In a joint letter to the Minister of Labour, they clearly expressed the view that they have been bypassed and more or less described the legislative implementation as a "coup". They also called for a system under which they would be involved in the drawing up of the provisions to apply to sectors without their own agreements.
It thus seems that there is not yet a way of reaching the agreement which provides the substantive basis for the new combined implementation method for EU Directives, without creating internal problems among the social partners. In future, all the central social partner organisations could be involved in drawing up the agreements. This would probably not lead to any significant changes in the substance of the agreement, but would ensure a broader participation in the drafting process.
Amendments to the Act on Salaried Employees
The second problem is connected with the political handling of the part-time work legislation. The government amended the Act on Salaried Employees (Funktionærloven) - which governs some aspects of the employment conditions of white-collar staff - so as to change the definition of the part-time workers covered by the legislation from those working 15 hours a week to those working eight hours a week. The Minister of Labour, Ove Hygum, argued that the social partners had asked the government for legislative implementation of the Directive, and that it was thus the government's responsibility that this should take place in a manner which will ensure that Denmark is not at risk of being accused of incorrect transposition of the Directive. The working hours limit thus had to be reduced so as to comply with the Directive. However, the employers have disagreed with this position, arguing that the part-time work Directive leaves the question of the working hours threshold to the national level.
Given Danish collective bargaining traditions, the fact that this legislative amendment has been introduced politically without the question being first negotiated among the social partners has attracted criticism. Employers have also stated that the major reduction in the working hours threshold for coverage by various employment rights may lead to serious problems, as a large group of employees will now be covered. According to DA, the question of whether an employee is covered by the Act on Salaried Employees will also depend on an evaluation of the specific case, as has been demonstrated by the extensive case law in this field.
In the context of Danish bargaining model, it is a break with a key principle when the government and parliament intervene in the substance of the issues normally covered by bargaining (as has occurred with the amendment of the Act on Salaried Employees). The bargaining model can be preserved in combination with the erga omnes principle, only if it is left exclusively to the relevant parties on the labour market to negotiate and conclude agreements. The sole task of the government and parliament in this connection is to adopt supplementary legislation which provides that those sectors which are not covered by their own accords will be covered by such agreements. An obvious problem of this dual implementation method is that it is difficult for a political system to impose such restrictions on itself. Such restrictions conflict with the very foundation of political activities. At the same time, it will also be a temptation for the social partners to try to obtain advantages during the final political stage of the process which they have been unable to achieve in the negotiations with their bargaining counterparts. It cannot be ruled out that this fact has played a certain role in connection with the process leading to the implementation of the part-time work Directive. It may perhaps be seen as an unintended effect of the current four-year duration of most of Denmark's important collective agreements (DK0002168F) - which otherwise solves a number of other problems for the bargaining system – that it seems to create a certain vacuum whereby the social partners may be tempted to act more politically than they would normally have done. The result may very well be that the bargaining model's traditional independence from the changing political environment will be replaced by a form of labour market regulation which will be more dependent upon changing political majorities in parliament. This may mark the start of a new "regime-dependent" Danish labour market model. (Carsten Jørgensen, FAOS)