Jørgensen, Carsten

Private sector wage agreements in the early spring of 2010 were signed in Denmark in the wake of the global economic crisis and were predicted to be low-cost settlements in favour of the employers in order to sustain the competitiveness of companies. It was anticipated that wage increases would be minimal and it was difficult to guess what employees would receive as a trade-off. The trend-setting Industry Agreement, which sets the pace for private sector bargaining, was signed at the end of February and it granted only nominal wage increases in order to leave space for increases at company level, where actual wage rises are negotiated. New benefits to employees included the introduction of severance pay and earlier access to pensions. Both new measures were transferred to the agreements that followed (*DK1003011I* [1]). [1] www.eurofound.europa.eu/ef/observatories/eurwork/articles/industrial-relations/innovative-concession-agreement-in-manufacturing-sector

After a period of intense negotiations, the social partners in industry – the Confederation of Danish Industry (DI – organisation for erhvervslivet, DI [1]) and the Central Organisation of Industrial Employees (Centralorganisationen af Industriansatte, CO-industri [2]) – concluded a renewal of the collective agreement in the trend-setting manufacturing sector on 22 February 2010. DI and CO-industri signed a two-year agreement covering 240,000 employees. The agreement is traditionally the first to be signed during collective bargaining [3] in the private sector by the organisations affiliated to the Confederation of Danish Employers (Dansk Arbejdsgiverforening, DA [4]) and the Danish Confederations of Trade Unions (Landsorganisationen i Danmark, LO [5]). This year was no exception and, soon after, other sectors such as transport, construction and the cleaning industry signed collective agreements that more or less mirrored the agreement in manufacturing. [1] http://www.di.dk/ [2] http://www.co-industri.dk/ [3] www.eurofound.europa.eu/ef/observatories/eurwork/industrial-relations-dictionary/collective-bargaining [4] http://www.da.dk [5] http://www.lo.dk/

The global economic crisis began to affect Denmark slightly earlier than other European countries, gathering pace in the summer of 2008. Since then, there have been job losses among unskilled labour, especially in the export business, closures of production sites and/or delocalisation to low-wage countries. Many companies had started restructuring before the financial crisis broke out in September 2008 and were left with core skilled workers who were not expendable when the economic ‘tsunami’ arrived in Denmark. A wave of work-sharing schemes became the alternative to layoffs or off-shoring (*DK0903021I* [1]). [1] www.eurofound.europa.eu/ef/observatories/eurwork/articles/economic-crisis-leads-to-extensive-use-of-work-sharing

At the beginning of 2009, the membership of the trade unions organised under the Danish Trade Union Confederation (Landsorganisationen i Danmark, LO [1]) fell to under one million active members. This was a symbolic milestone of a development that has been steadily ongoing since the middle of the 1990s when membership peaked at 1.5 million and started to decrease after decades of continuous growth. The declining membership has been a contentious issue in the debate among the trade unions. They fear that further decline will leave them without influence towards employer organisations and that this will be the end of the so-called Danish model of labour market regulation, with its main emphasis on collective bargaining [2] between strong labour market organisations. [1] http://www.lo.dk [2] www.eurofound.europa.eu/ef/observatories/eurwork/industrial-relations-dictionary/collective-bargaining

The industrial holiday, where a company closes for three to four weeks during the summer months and all employees take annual leave, was in general thought to have been eliminated a long time ago. This is due to the fact that industrial change and various collective bargaining [1] rounds provided for greater flexibility in companies regarding working time and leave arrangements. Companies needed operations to continue all year round and thus granted employees more flexibility in organising their summer holiday. [1] www.eurofound.europa.eu/ef/observatories/eurwork/industrial-relations-dictionary/collective-bargaining

Large-scale conflicts among nurses, child and youth educators and home carers in connection with the renewal of the collective agreements in the public sector at municipal and regional levels resulted in some 1,837,600 working days being lost in Denmark in 2008/./ The employees on strike belonged to the female-dominated trade unions: the Danish Nurses Organisation (Dansk Sygeplejeråd, DSR [1]), the Danish Federation of Early Childhood Teachers and Youth Educators (Forbundet for Pædagoger og Klubfolk, BUPL [2]), and Trade and Labour (Fag og Arbejde, FOA [3]). They were striking for equal pay under the slogan ‘men’s wages for women’s occupations’ (*DK0804029I* [4]). [1] http://www.dsr.dk [2] http://www.bupl.dk [3] http://www.foa.dk [4] www.eurofound.europa.eu/ef/observatories/eurwork/articles/longest-strike-in-public-sector-ends-with-pay-settlement

The use of work-sharing has increased significantly during 2009 in Denmark, as a means of avoiding redundancies arising due to the economic recession. In February 2009, the Danish multinational light engineering company Danfoss [1] announced that 416 employees would take part in a work-sharing initiative. In March, another large multinational company, Grundfos [2], announced that 1,080 employees would begin sharing jobs. Danfoss, which at the end of the 1990s had concluded four agreements [3] to enhance its competitiveness while maintaining employment, urged the Minister of Employment to introduce more flexible legislation concerning work-sharing, in light of the serious employment effects of the economic recession. Danfoss had already dismissed 350 employees in October 2008 and a further 200 employees in February 2009. The company argued that a longer period of lower production through work-sharing could help the company to survive the recession. [1] http://www.danfoss.com/ [2] http://www.grundfos.com/ [3] www.eurofound.europa.eu/ef/observatories/eurwork/case-studies/pecs/pacts-for-employment-and-competitiveness-danfoss

Every day, 150,000 people in Denmark stay home from work because of illness. This is equal to one in every 20 employees in the entire workforce. Each year, DKK 37 billion (almost €5 billion as at 10 February 2009) is spent on sickness pay. In addition, healthcare costs arise – as well as a loss in corporate productivity – when employees are sick.

On 18 September 2008, the Danish government sent an invitation to the social partners to participate in the creation of a commission to ‘identify, analyse and discuss several issues regarding wages, recruitment and management conditions in the public sector’.

The annual results on work stoppages, published by Statistics Denmark (Danmarks Statistik [1]), show that 91,700 working days were lost due to strikes in 2007. This constitutes an increase of about 7% compared with the 2006 results [2] for the number of working days lost (*DK0706039I* [3]). Collective bargaining [4] took place in most of the private sector during 2007, which could explain the increase in work stoppages. However, no conflicts of interest arose in connection with the conclusion of collective agreements to explain the moderate growth in industrial action. Strikes at company level in connection with pay bargaining could account for the increase compared with 2006, which had been a quiet year in the Danish labour market, with collective bargaining taking place only in small sectors of economic activity. [1] http://www.dst.dk/ [2] http://www.dst.dk/HomeUK/Statistics/focus_on/focus_on_show.aspx?sci=201 [3] www.eurofound.europa.eu/ef/observatories/eurwork/articles/overall-increase-in-strike-activity-over-past-year [4] www.eurofound.europa.eu/ef/observatories/eurwork/industrial-relations-dictionary/collective-bargaining