2000 Annual Review for Denmark

This record reviews 2000's main developments in industrial relations in Denmark.

Political developments

No significant national, regional or local elections were held in 2000 in Denmark. The present ruling coalition, composed of the Social Democratic Party (Socialdemokratiet) and the Social Liberal Party (Det Radikale Venstre), has formed the government for nine years and is now widely deemed to be suffering from general fatigue. Following controversy over the reform of the voluntary early retirement scheme in 1998 (DK9812197F), Prime Minister Poul Nyrup Rasmussen suffered a serious loss of credibility which he has found difficult to restore, and the result of the referendum on joining the European single currency (see below) signalled a further weakening of his position. In December 2000 there was a government reshuffle of certain ministerial posts following the decision of the Minister of Foreign Affairs, Niels Helveg Petersen, to resign after the Nice European Council and the appointment of the Minister for Defence, Hans Hækkerup, to the post of chief for UN activities in Kosovo. The Minister for Foreign Affairs found that he could no longer credibly administer Denmark's EU policy after the voters had rejected the single currency.

The most significant political event of 2000 was the referendum concerning the possible reversing of Denmark's opt-out from the third stage of Economic and Monetary Union and the euro single currency, obtained at the Edinburgh summit in 1992. Following the successful completion of the 2000 collective bargaining round (see below under "Collective bargaining"), the government chose to hold a referendum on joining the euro in 2000 . Until then, it had been expected that a referendum would, at the earliest, take place in 2001 or maybe after the next general election, which must be held before March 2002. The referendum took place on 28 September after a very rough campaign, during which those on both sides brought out data and forecasts which were seen as unrealistic. The situation was made even more difficult for the voters when economic experts disagreed about the economic consequences of a "no" vote. (DK0008193F). The social partners were nearly unanimous in their support of a "yes vote" (DK9909144F and DK0004175F).

However, the referendum showed that the Danes were not ready to give up the krone for the euro - 53.2% voted against joining the single currency. With a turn-out close to 90%, this can be seen as reflecting the fact that the population does not follow the normal party political lines when it comes to EU policy matters. If that had been the case, those in favour would have won 80% of the vote, as pro-euro parties have 80% of the seats in the Danish parliament (DK0010199N).

As mentioned above, the next general election must be called before March 2002. Many experts expect that the government will call an election in connection with the negotiations over the 2002 Finance Act in the autumn of 2001. Elections for municipal boards and county councils will take place in November 2001.

Collective bargaining

In the spring of 2000, negotiations took place in the trend-setting private sector bargaining area represented by the Danish Confederation of Trade Unions (Landsorganisationen i Danmark, LO) and the Danish Employers' Confederation (Dansk Arbejdsgiverforening, DA), covering 637,000 employees (DK0002167F). LO and DA do not participate directly in theses negotiations, but through their so-called "climate agreement" (see below under "Pay"), concluded in September 1999, they had an influence on the negotiation process and thus again played a political role which they were at risk of losing, especially after the large-scale industrial dispute in 1998 (DK9804166N). There are some 600 agreements at sector and local level in the LO/DA field. The most notable aspect about the 2000 agreements was that they were concluded for a period of four years instead of the usual two (DK0002168F). It is hoped that the four-year period will ensure a balance between centrally-negotiated and locally-implemented provisions.

Research published in 2000 (DK0011104F) indicated that the level of coverage of collective bargaining has been increasing in Denmark since the mid-1990s, and that 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

Pay

During the introductory phase to the 2000 collective bargaining round, LO and DA concluded a "climate agreement" under which they committed themselves to contribute to ensuring a calm negotiating process and to dampening expectations so that wage increases would not be too high in relation to Denmark's main trading partners (DK9910151F). This agreement should be seen in the light of the breakdown of the DA/LO area negotiations in 1998 which led to a large-scale industrial dispute which lasted 11 days. With a historically low level of unemployment, it could be expected that trade unions would seek large wage increases in 2000. However, this was not the case and the sectorally agreed pay rises did not exceed the expected 4% in the private sector. The sectoral agreements concluded in 2000 provided for a minimum pay increase of 2.4% from March 2000. The subsequent wage negotiations at enterprise level, which occur in most sectors, seem to have kept within the framework of the average 4%.

During the course of 2000, a new wage system was introduced in Denmark's second-largest bank, Unibank, which shortly afterwards merged with the Finnish/Swedish-owned Merita-Nordbanken and thus became the biggest bank in Scandinavia (DK9912159F). This initiative was significant and may point the way to future developments in pay systems. With the finance sector moving away from the traditional system of regulating pay and working conditions towards a system based on a higher degree of flexibility at the workplace (DK0011103F), Unibank chose to test a wage system which is based more on work functions, rather than education, job title and seniority. However, new pay systems introduced in the public sector led to some conflict during 2000 (see below under "Industrial action").

In September, LO called for employee share-ownership - which has boomed in Danish companies over the past decade - to be regulated by collective agreements (DK0009197F). While the union confederation stressed that it would continue to seek better pay and believed that employee share-ownership should not replace wages, it stated that the increased use of such schemes makes it necessary for unions to decide how to tackle the issue through bargaining.

Working time

A keyword in the 2000 collective agreements was working time flexibility. Although the contractual working week is still 37 hours, in the industrial sector the reference period for averaging out working time was extended from six to 12 months. This means that employers may plan work for 12 months ahead, provided that the average working week is 37 hours and subject to agreement with the employees at the local level.

Another step in the direction of increased flexibility was the agreement in the DA/LO area on five extra days of holiday a year (bringing the total to six weeks). This does not constitute an additional week of statutory annual leave, taking the form of individual days off which may be organised in accordance with the needs of both the employer and the employees. These special holiday days may also be converted into cash payments.

Job security/ training and skills development

There were no significant developments in the area of bargaining on either job security or training in Denmark in 2000. The need for job security clauses is not widespread, given the current robust state of the economy and the resulting tightness of the labour market.

Legislative developments

In May, parliament adopted a new Holiday Act (DK0007188F). The new legislation increases flexibility relating to when holiday may be taken - primarily by making it possible to conclude agreements concerning the transfer of the fifth week of annual leave from one holiday year to the next. The new rules were introduced after many years of discussion and reflect a strengthening of the role of the social partners. Employees in fields which are not covered by any collective agreement will also be covered by the Act, but are to follow the rules laid down in the agreement which would normally be applicable in the field concerned. The Holiday Act does not regulate the five extra days of holiday negotiated in 2000's collective agreements (see above under "Working time").

The organisation and role of the social partners

The year saw a number of trade union mergers among affiliates of LO. In June, the Railways Association (Jernbaneforeningen) was amalgamated with HK/Stat, the state employees section of the Union of Commercial and Clerical Employees in Denmark (Handels- og kontorfunktionærernes Forbund, HK), after 12 months of preparations (DK0006181N). The Railways Association will maintain a certain independence, as a branch unit for traffic and railways has been set up inside HK/Stat. On 1 January 2001, the Union of Brewery Workers (Bryggeriarbejder Forbundet) merged with the General Workers' Union (Specialarbejderforbundet i Danmark, SiD). At the same time, the Union of Postal Workers (Dansk Postforbund) also became part of SiD (DK9909146N).

Industrial action

Although no figures from Statistics Denmark (Danmarks Statistik) were available by the end of the year, it is widely thought that 2000 was a relatively peaceful year in industrial action terms. The renewal of collective agreements took place without disputes and there were only a few work stoppages in breach of collective agreements. Workers employed at a large meat factory went on strike for the right to maintain a piecework agreement without any reduction in wages (DK0009198F). Bus drivers in Copenhagen went on strike in protest against new working time arrangements and subsequently negotiated less rigid arrangements (DK0003169N). Childcare workers in Copenhagen successfully took strike action to prevent the introduction of new rules on morning opening hours in childcare institutions (DK0010101F). Finally, the Danish Association of Masters and PhDs (Dansk Magisterforening, DM) took industrial action in connection with the implementation of a new wage system in the state sector, with two academic employees in the county administration of Northern Jutland striking for nearly six months (DK0004173N).

National Action Plan (NAP) for employment

The Danish labour market model is characterised by a multi-layered system based on collective and other agreements and legislation. The social partners play a central role in the determination of pay and working conditions by means of collective agreements and other agreements. Traditionally, the social partners are also involved in connection with legislation and not least the administration of legislation, both at the central and regional level. With a growing need for labour market flexibility, the strong involvement of the social partners is of strategic importance. Since 1999, the social partners at the national level have been involved in a tripartite forum concerning the labour market. This includes negotiations on employment and in this connection the social partners participated to a great extent in the drawing up of the Danish NAP for 2000. Although political responsibility naturally lies with the government, the views of the social partners are heard in every detail.

Equal opportunities and diversity issues

Legislation prohibiting discrimination at work is now being amended in order to extend its scope to discrimination on grounds of age and disability, in addition to ethnic origin. However, the social partners will have the responsibility of implementing as many of these provisions as possible by means of collective agreements. In connection with the 2000 collective agreements (DK0002168F), LO and DA agreed to initiate a study on the topic of gender pay equality and non-discrimination in the labour market. However, by late 2000 the social partners had not come up with any initiatives in this area.

In early summer 2000, a study undertaken by the Danish National Institute for Social Research (Socialforskningsinstituttet, SFI) on behalf of the Ministry of Labour (Arbejdsministeriet) was published. One of the conclusions was that gender pay inequalities still exist in spite of promises during the past two decades to solve this problem (DK0006182F). The Minister for Equal Opportunities introduced a new Equality Act which was adopted just a week before the Minister of Labour's pay inequality report was published. This new act is held to be the most far-reaching act in this field so far. It introduces the use of the "mainstreaming" principle as an instrument in work to promote equal opportunities. The mainstreaming principle means that all public authorities are to incorporate the gender aspect in all planning activities and in their administrative activities. An interesting feature was that the new act did not cover equal pay. Given this fact, and that the social partners had the opportunity of negotiating an agreement on the issue but failed to do so, in autumn 2000 the Minister of Labour asked civil servants to draw up a bill on equal pay which will make wage data more easily accessible so as to create a greater transparency in terms of individual pay at company level (DK0012106N).

In August, the High Court delivered its long-awaited judgment in the high-profile "headscarf case", in which a woman of Iraqi descent sued the Magasin department store for refusing to take her on as a trainee because she insisted on wearing her Muslim scarf. The High Court ruled that this was a violation of the Act prohibiting discrimination on the labour market, as it constituted indirect discrimination. However, two major retail firms, FDB and Dansk Supermarked, stated that they would maintain their ban on special headgear among their employees (DK0008192F).

Information and consultation of employees

There were no significant developments in the area of the information and consultation of employees in Denmark in 2000.

New forms of work

In autumn 2000, the Danish Commerce and Service (Dansk Handels & Service, DHS) employers' organisation and the services section the Union of Commercial and Clerical Employees (Handels- og Kontorfunktionærernes Forbund/Service, HK/Service) concluded an agreement regarding new rules for teleworking, with the aim of facilitating work at home (DK0011102N). Under the terms of the agreement, the statutory requirement to take a break of at least 11 hours between working days will no longer stand in the way of those of the 95,000 members of HK/Service who want to telework from home. Up until now, this 11-hour rule meant that if an employee chose to work at home, for instance during the period from 21.00 to 00.00, they would not be able to start work until 11.00 the following morning.

Other relevant developments

The 2000 bargaining round had two further key aspects. First, in the course of the four-year agreement period, contributions to occupational pension schemes for most groups will reach 9% of pay, of which the employers pay two-thirds and the employees one-third. This was the target set when these schemes were introduced in 1991. Second, in the industry sector it was agreed to work towards an amalgamation of agreements for manual workers and salaried employees into a single "umbrella" agreement. This development reflects the trend in enterprises towards a closer involvement of employees and towards giving employees a higher degree of influence over their own working conditions

Outlook

The collective bargaining which took place in the LO/DA field in 2000 covered most areas of the private sector. In 2001, new agreements will be concluded in the two other fields in the private sector - agriculture and finance. Both fields operate the so-called "normal wage system" which means that actual (rather than minimum) hourly wage rates, pension and holiday are negotiated at the central level.

(In early 2001, the first agreements were was signed in the agriculture sector (DK0101112F). A four-year deal for 6,000 workers in the "agrarian-industrial" sector provided, alongside increases in pay and holiday entitlement, for occupational pension contributions of 9.9% of pay, compared with the 9% agreed in most of the private sector in 2000. Shortly afterwards, similar agreements were concluded for horticulture and bakeries.)

New bargaining and agreement structures will be implemented in the finance sector in 2001. The two main organisations in this field, the Organisation of Employers in the Finance Sector (Finanssektorens Arbejdsgivere, FA) and the Financial Services Union (Finansforbundet, FF), agreed during the course of autumn 2000 on the procedure and themes of the negotiations (DK0011103F). Considerable flexibility will be introduced into a traditionally rigid structure.

Finally, on the political front, as mentioned above, the possibility of a general election in the autumn of 2001 cannot be excluded. This may have a range of implications for industrial relations in Denmark in 2001.

Useful? Interesting? Tell us what you think. Hide comments

Eurofound welcomes feedback and updates on this regulation

Add new comment