Deadlock in municipal/county bargaining

In early 2002's bargaining over new collective agreements in the Danish public sector, a compromise deal was reached in the state sector. Traditionally, the state sector agreement is followed fairly closely by the municipal/county sector, but in 2002 this failed to occur and municipal/county bargaining became deadlocked in February. This situation is unprecedented in the history of Danish public sector bargaining. Disagreement on the economic framework for a recently introduced new wage system led the union side to leave the municipal/county negotiating table and, for the first time ever, negotiations have been transferred to the Official Conciliation Service.

In mid-January 2002, central bargaining started in the public sector, with separate negotiations covering the state sector and the municipal/county sector (DK0111128F). A ballot of trade union members was due to be held in March on a compromise deal reached for the state sector. For many years, the tradition has been that the conclusion of an agreement for the municipal/county sector is more or less a mere formality following the end of the state sector bargaining, which normally sets the trend. However, in 2002, for the first time ever, bargaining in the municipal/county sector has failed and the Official Conciliation Service (Forligsinstitutionen) has been called in.

The employer-side parties in the municipal/county sector are the National Association of Local Authorities in Denmark (Kommunernes Landsforening, KL) and the Danish Confederation of County Councils (Amtsrådsforeningen, ARF), plus the municipalities of Copenhagen and Frederiksberg. The 65 trade union organisations are represented by a negotiating body, the Association of Local Government Employees' Organisations, (Kommunale Tjenestemænd og Overenskomstansatte, KTO). Unions belonging to the three main confederations - the Confederation of Danish Trade Unions (Landsorganisationen i Danmark, LO), the Confederation of Salaried Employees and Civil Servants (Fællesorganisationen af Tjenestemænd og Funktionærer, FTF) and the Danish Confederation of Professional Associations (Akademikernes Centralorganisation, AC) - are all represented in KTO.

In previous years, there have been disputes or a risk of disputes in the municipal/county sector, but this has involved solitary action by individual major unions, such as those for teachers or nurses (DK9904120N). It has long been a source of irritation for the employers in the municipal/county sector - with KL and ARF at the forefront - that KTO has not been able to bind its member organisations through a single ballot, as is the case in the state sector, but holds individual union ballots. Thus, the employers declared before the start of the 2002 negotiations that they would not say 'yes' or 'no' to an agreement before the ballot result from all KTO members was available. If it was again the case that major unions could not accept the deal, the employers would reject it and this would mean that bargaining for the entire municipal/county sector would end up in the Official Conciliation Service. They wanted to ensure a general KTO compromise which would be binding for all the organisations. The employers have thus introduced a new practice in the public sector which comes closer to the bargaining system in the private sector, where the Official Conciliation Service plays a centralising role by grouping all the different collective agreements and putting them to a single ballot of union members (DK0003172F).

In February 2002, negotiations in the municipal/county collapsed and the talks thus moved to the Official Conciliation Service, which will thus seek to coordinate a common deal for the entire municipal/county sector.

A key disagreement between unions and employers concerns the economic framework for the new wage system, 'New pay' (Ny Løn). This system, which has been introduced in the public sector in recent years, makes employees' pay more dependent on their functions and qualifications than on their seniority (DK9705110F). The municipal/county employers want to to earmark 2.2% of total paybill for the financing of the new wage system, while the unions want to use only 1.5% of paybill for this purpose. However, there is internal disagreement among the unions. Those affiliated to LO were ready to agree a compromise which would have given a total paybill increase of 7.55% over the term of the new agreement, but opposition to this came mainly from teachers' unions affiliated to FTF and from AC affiliates. The background for their opposition differs. The teachers' unions take a sceptical attitude to the new wage system, which they consider to be in breach of the solidarity principle. The professional organisations affiliated to AC wish to avoid earmarking any fixed percentage of paybill for the new pay system.

As the KTO negotiating body is jointly accountable to all its member organisations, the dispute will affect the entire municipal/county sector although only unions representing about 120,000 of the sector's 650,000 employees are opposed to the compromise proposal. The deadlock also arguably reflects a fear among the leaderships of the teachers and nurses' unions of going against the will of their members. By opposing the compromise they have now referred the matter to the Public Conciliator, Mette Christensen. The first negotiations in the Official Conciliation Service did not lead to a result and the talks were due to reconvene on 10 March.

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