Denmark: Latest working life developments – Q1 2017

New collective agreements providing small wage increases and improvements to education and training, taxi firm Uber’s exit from Denmark; and strengthened working environment rules are the main topics of interest in this article. This country update reports on the latest developments in working life in Denmark in the first quarter of 2017.

Collective agreements concluded in private sector

At the end of March 2017, the social partner organisations in the private sector, covering 600,000 employees, concluded their collective agreements. As is traditional, the first parties to conclude an agreement were those in manufacturing. The Confederation of Danish Industries (DI), and the Central Organisation of Industrial Employees (CO-industri) signed the Industrial Agreement on 12 February. This became the pacesetter for the whole of the private sector.

Wage increases and more education

Education and training options have improved significantly as part of the collective agreements. The aim is to provide financial support for training, and so upgrade the skills of all workers.

There was also an increase in wages. For the first time since the crisis, a collective agreement reflected optimism with wage increases appreciably higher than in the first three agreements during and after the crisis (in 2010–2012, 2012–2014 and 2014–2017), where increases did not exceed 1.6%. Under the Industrial Agreement, hourly pay will increase by DKK 2 (€0.27 as at 15 May 2017) every April during the three years that the new agreement will run. That is an increase of the agreed minimum wage in the sector of a little more than 2% every year, or 7% over the three-year period.

One of the most significant changes was a gradual increase in the so-called ‘free-choice wage account’ from 2% to 4% of the total wage during the agreement period. The free-choice wage account (initiated in 2007) is an amount set aside for an employee to spend freely on extra holidays, higher pension contributions, more childcare days or ‘senior holidays' (these can be obtained five years before the existing official pension age). The employee’s choice is generally closely connected to age and marital status. Older workers will have the right to ‘buy’ extra senior holidays through the free-choice system, which allows a total of 32 days leave per year.

Issue of social dumping arises again

After the conclusion of the Industrial Agreement, the other large sectors followed suit, generally copying the improvements in the Industrial Agreement. One recurring difficulty, however, was the demand by the United Federation of Danish Workers (3F) to introduce ‘chain liability’ to combat social dumping in, for instance, the construction sector. (Chain liability is a firm's being held responsible for the behavior of its upstream partners.) 3F says this would ensure that subcontractors are linked to the agreement in force. The first compromise settlement concluded by the two main negotiators of 3F and the Danish Construction Association (Dansk Byggeri) was rejected by the negotiation committee of 3F Construction on the grounds that it did not contain any improvement regarding chain liability. The negotiators went back to the table and a final agreement, which included minor improvements, was concluded at the end of March with the help of the Public Conciliator.

Uber leaves Denmark

In March, the Danish government passed a new Taxi Act. Its rules on compulsory tax reporting and checks on drivers were unacceptable to Uber, which has now left Denmark. The unions, referring to the Ryanair case, which judged workers at the airline’s Copenhagen base as subject to Danish labour law and not Irish civil law, have pointed out that the result so far is 2–0 in favour of the Danish model of labour market regulation.

New working environment recommendations

The social partners have presented 19 new recommendations (PDF) to prevent further injuries at work. This is a follow-up to the scandal in May 2016, where 64 workers suffered exposure to epoxy and isocyanate at Siemens Wind Power and Vestas. All the proposals were approved by the Danish Parliament in March.

The Danish government will appoint a committee to make recommendations for new and improved efforts to make the working environment safer. The decision comes after a survey by the National Research Centre for the Working Environment (NFA) which showed that, since 2012, some 17% more employed people are experiencing mental stress, with 15% more reporting musculoskeletal issues.

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