European Court of Human Rights to rule on closed-shop agreements

In June 2005, the European Court of Human Rights in Strasbourg held a hearing on two applications by Danish workers questioning whether the existence of closed-shop agreements in Denmark is in compliance with the right to freedom of association laid down in the European Convention on Human Rights. The case has fundamental importance for Danish trade unions and indirectly for the country's model of labour market regulation. The Court's judgment is expected in autumn 2005.

On 22 June 2005, the European Court of Human Rights (ECHR) in Strasbourg held a Grand Chamber hearing in order to hear representations in a case concerning closed-shop agreements in Denmark (Sørensen and Rasmussen v Denmark, application nos. 52562/99 and 52620/99). In 1999, two Danish citizens lodged complaints against the Danish state of violation of their freedom of association. The case has fundamental importance for the Danish trade union movement and their historic right to sign closed-shop agreements. Especially during the last decade, experts have debated whether closed-shop agreements are out of step with the contemporary conception of human rights. The final ECHR judgment, which will be delivered in autumn 2005, is thus thought likely to have an influence on the Danish model of collective bargaining.

Closed-shop clauses

A closed-shop clause is a provision in a collective agreement whereby the employer agrees to employ only trade union-organised workers, workers who are members of a particular union, or workers who agree to join the union once employed. In Denmark, this occurs only in areas of the private sector not covered by the basic agreement between the Confederation of Danish Employers (Dansk Arbejdsgiverforening, DA) and the Danish Confederation of Trade Unions (Landsorganisationen i Danmark, LO). The statutes of DA forbid its members to sign closed-shop agreements with LO-affiliated trade unions. Closed-shop clauses thus typically appear in agreements between individual employers (not affiliated to organisations) and a trade union. Outside the LO-DA area, a closed shop exists among medical doctors and lawyers (DK0207103F). In the public sector, closed-shop agreements are rendered invalid by the principle of administrative law that states that citizens must be accorded equal treatment. Though no exact data are available, it is generally thought that around 10% of workers in the private sector are covered by a closed-shop agreement.

Facts of the applications

The two applications to the ECHR concern whether the existence of closed-shop agreements in Denmark is in compliance with the right to 'freedom of assembly and association' as expressed in Article 11 of the Council of Europe's Convention for the Protection of Human Rights and Fundamental Freedoms.

In June 1996, Morten Sørensen, who was a student about to start at university, began working as a holiday relief worker for the supermarket chain store FDB (today know as the Coop). He was dismissed three weeks later for refusing to join the General Workers' Union in Denmark (Specialarbejderforbundet i Danmark, SiD, now merged in the United Federation of Danish Workers (Fagligt Fælles Forbund, 3F) - although he was aware at the time of his employment that membership was a condition of employment in the company. He brought proceedings in the High Court of Western Denmark (Vestre Landsret) against FDB on the ground that the relevant Danish law (Foreningsfrihedsloven) did not comply with Article 11 of the European Convention. He was unsuccessful; on 18 November 1998 the High Court did not find it established that there had been a violation of Article 11 (DK9802153F). This judgment was upheld on appeal by the Supreme Court (Højesteret) on 8  June 1999 (DK9907137N).

Ove Rasmussen was a gardener and a member of SiD in the mid-1980s. However, as he did not agree with its political affiliations, he resigned from SiD and became a member of the Christian Trade Union (Kristelig Fagforening, KF). Subsequently, having been unemployed for a while, he was offered a job with his present employer on the condition that he became a member of SiD, with which the employer had entered a closed-shop agreement. Although he still disagreed with SiD’s political views, in May 1999 he became a member and accordingly obtained the job.

The applicants, Sørensen and Rasmussen, complained of a violation of Article 11 of the European Convention. The applications were lodged with the ECHR in October and September 1999 respectively. They were both declared admissible on 20 March 2003. On 25 November 2004, the Chamber of the court passed jurisdiction of the applications to the Grand Chamber and the applications were joined in January 2005. Following the June hearing, the Court will begin its deliberations, which are held in private.

LO submits observations

Third-party observations were submitted in writing to the ECHR by LO. LO, which is not a direct party to the case, had prior to the hearing in June requested to enter the case as 'bi-intervenant', given the importance of the judgment for the Danish trade union movement. This request was agreed by the Court. Subsequently, LO representatives were present at the hearing, but without the right to speak.

LO argues that a legal prohibition of closed-shop agreements will imply that employers can underpay employees at small enterprises. Denmark has no fixed minimum wage by law or collective agreement. Closed-shop agreements are therefore an important tool to avoid 'wage dumping' in small enterprises that are not members of an employers’ association. Furthermore, competition for members between competing trade unions can lead to turmoil at large companies. LO thus emphasises the advantages of having only one union in each occupational area. Closed-shop agreements, LO argues, also have advantages for the employers, as they can thereby conduct collective bargaining, and have a conflict-resolution system, with only one trade union party. LO further states that closed-shop clauses are mainly found in agreements with employers not affiliated to an employers’ association, and emphasises that in this context the closed shop is crucial for the trade unions in order to enforce the agreement - all the more so because small enterprises are not forced by the provisions of the DA-LO Cooperation Agreement to have a shop steward. Only companies with more than 35 employees are compelled to recognise an elected shop steward if so wished by the employees or the employer.

Danish government’s position

The current Danish liberal-conservative government is in a dilemma in this case. Politically it is against closed-shop clauses and wants to forbid them (DK0207103F), but in legal terms it takes the position that human rights have not been violated in the current case. The government’s representaive at the June hearing in Strasbourg argued that the Danish model of labour market regulation is unique in Europe and that closed-shop clauses can be 'necessary in a democratic society' to maintain collectively agreed rights. He also emphasised that both applicants in the current case had had the possibility to find a job not covered by a closed-shop agreement.

Commentary

The outcome of the case has importance for the Danish model of labour market regulation. It is being dealt with in the ECHR's Grand Chamber, which deals only with important cases of principle. If Denmark loses the case, ie if the Danish law on freedom of association is declared in contravention of the European Convention for the Protection of Human Rights and Fundamental Freedoms, the government will consequently have to forbid closed-shop agreements by law. Such an official prohibition will make 'wage dumping' possible, which would give impetus to the position of the politicians and experts who want to protect minimum wages by law. The result would be the introduction of two laws in the place of voluntary collective agreements, and a weakened position for trade unions. With no closed-shop clauses and a minimum wage fixed by law, small enterprises will be able to 'fill the hole' between the minimum wage and the collective agreed wage with workers willing to work at rates below those set by agreements. This will make it easier for them to compete with the large companies, which on the other hand might see their interests better protected by collective agreements.

Though being dealt with as one case, the two applications are different. Mr Sørensen was informed of the necessity to join SiD in order to get the job, in line with the relevant closed-shop agreement and in accordance with Danish law. He declined to join SiD, was dismissed, took the case to court and lost both at the High Court and at the Supreme Court. The case of Mr Rasmussen is different, in that he reluctantly stayed in SiD against his will in order to obtain his present job, and that his case has not been through the Danish system of justice. Furthermore the judges in Strasbourg have asked for more specific information about the employment situation for gardeners in Denmark and the proportions of them covered by closed-shop agreements (the Christian Trade Union, which support the applicants, and LO have subsequently suggested quite different figures). This could mean that the ECHR will consider the cases individually and it is therefore possible that they will turn out differently. A 'one-all draw' could be the outcome. This could be seen as a small victory for the the unions since it would then not have been ruled 'beyond any doubts' that closed-shop agreements are in breach of contemporary European human rights. On the other hand, it will not prevent the government from making a proposal in parliament to ban closed-shop clauses. The ECHR's final judgement will be delivered in autumn 2005. (Carsten Jørgensen, FAOS)

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