New agreement signed for healthcare staff

Denmark's 2005 public sector bargaining round was completed in late February, when a new three-year agreement for 71,00 nurses, physiotherapists, midwives etc was concluded by employers and the Health Cartel of trade unions. The cost-increase framework is 9.3% over the three-year period, is in line with the agreements for the wider county/municipal sector and the central government sector. However, the cartel secured a new wage model that includes improvements for lower-paid groups, and a new agreement on local wage formation.

On 28 February 2005, a new collective agreement for some 71,000 nurses, physiotherapists, midwives, catering officers and dental hygienists was signed by the Health Cartel (Sundhedskartellet) of trade unions and the employers, represented by Local Government Denmark (Kommunernes Landsforening, KL), Danish Regions (Amtrådsforeningen, ARF) and the Copenhagen Hospital Corporation, (Hovedstadens Sygehusfællesskab, H:S). The members of the unions affiliated to the Health Cartel were the last group in the public sector to be covered by a new three-year agreement in the 2005 bargaining round (DK0503101N and DK0502103F).

Nurses' strategy 'unsuccessful'

The renewal of the collective agreement in the health sector had been awaited with considerable interest, as the unions in the Health Cartel, headed by the Danish Nurses’ Organisation (Dansk Sygeplejeråd, DSR), had broken with the overall municipal/county bargaining cartel, the Association of Local Government Employees’ Organisations in Denmark (Kommunale Tjenestemænd og Overenskomstansatte, KTO) in December 2003 (DK0312101N). The background was disagreement concerning the decentralised 'New wage' (Ny Løn) public sector pay system, and dissatisfaction on the part of DSR with the previous collective agreement, concluded in 2003, which had failed to stop the wages of nurses falling behind those of other groups. KTO at that stage comprised about 65 trade unions with some 650,000 members, and there had from time to time been differences of opinion about the common framework which had until then covered all its member groups, but 2005 was the first time that the Health Cartel negotiated on its own.

The outcome of the Health Cartel's independent bargaining was a three-year agreement with a total cost-increase framework of 9.3% - exactly the same result as achieved in the rest of the county/municipal sector. It appears to have led to a certain bitterness within the Health Cartel that its individual strategy did not break the sector's pay framework and thus achieve a higher degree of equalisation of wages. 'If the Health Cartel had expected to obtain a better result than other groups of public employees by standing outside KTO, it must now acknowledge that this has not been the case', commented Professor Jesper Due of FAOS, University of Copenhagen.

Annoyance that it did not prove possible for the Health Cartel to break the 9.3% framework that had been agreed one week previously in both the county/municipal and central government sector has, in particular, been directed towards the president of KTO, Dennis Kristensen. Just after the overall KTO agreement had been signed, Mr Kristensen declared that he reserved his position in the event of extraordinarily high wage increases subsequently being agreed for the members of the Health Cartel. He stated that if the Health Cartel succeeded in negotiating a higher wage framework, he would reopen talks over the KTO agreement. This gave rise to indignation among Health Cartel negotiators, who argued that the employers would not run the risk of having to reopen the KTO negotiations, and that Mr Kristensen's comments had thus de facto set a ceiling for wage increases in the health sector.

'With this sort of friends, we don’t need any enemies', declared the president of the Health Cartel, Connie Kruckow, who is also chair of DSR. She was backed by Johnny Kuhr, the president of Danish Physiotherapists (Danske Fysioterapeuter) who stated: 'I think it is quite unheard of that trade unions try to obstruct each other.' For his part, Mr Kristensen argued that if the Health Cartel succeeded in obtaining a higher rate of wage increase it would not be possible to obtain the support of union members in the ballot on acceptance of the overall KTO agreement. In a very centralised bargaining system, as in the local public sector, with a united employer side, the trade unions are tied together - whether they negotiate within KTO or outside - he commented. The employers are bound to provide the same framework to all in order to prevent problems in securing agreements for the whole sector.

Main points of the agreement

In spite of the bitterness, Ms Kruckow states that the bargaining outcome is a good result for nurses. The new three-year agreement, she argues, means that the staff represented by the Health Cartel will now longer be covered by the unpopular 'New wage' system (DK0409104F and DK0111128F) with a more simple local wage model: 'We have now got our own model with our own pay scales; this is very important to us as it means that we will no longer be bound by the agreements concluded in KTO. We have terminated the framework agreement about New wage and have concluded an agreement on our own wage scales and a wage model which reflects the working conditions and professional qualifications of our members. We have now taken the first step towards an equalisation of the wage gap which exists between the members of the Health Cartel and employees in the private sector with a comparable educational background. This was our objective in connection with the negotiations.'

The wage model in the new Health Cartel agreement comprises a wage scale with eight grades. This scale will mean a better basic grading for employees, with a higher initial wage and a shorter interval from the initial pay grade to the final pay grade for many groups. The agreement earmarks a sum equal to a 1.25% pay rise for local wage negotiation for members on the initial pay grade and 2.5% for employees with managerial functions. This means that all wage supplements will, as a minimum, amount to DKK 6,000 (EUR 800) and that all employees are ensured a one-off supplement of DKK 3,800 in 2005. Furthermore, the Health Cartel has obtained a full guarantee that these amounts will actually be paid out - ie that the local funds will actually be distributed among the members of the Health Cartel and will not, as has previously been the case in some municipalities, be frozen or used for other local purposes. Last, but not least, the Health Cartel has obtained a 'security' agreement in connection with staff transfers during a forthcoming local government reform.

Commentary

The Health Cartel has disposed of the 'New wage' system, which was much disliked by its members. Instead a new model has been introduced with eight pay grades into which individual groups are placed with a possibility of moving to a higher grade. Another achievement in the new agreement is the general increase in wages at the central level and the minimum amount earmarked for wage bargaining at local level. Together with other improvements, this represents what the Health Cartel has called in a press releases a 'tailor-made agreement'.

However, not all participants and observers fully agree. There is disagreement as to whether the Health Cartel has actually obtained special results by pursuing its own strategy apart from KTO. One of the reasons for leaving KTO was to obtain an increases in the overall framework for pay increases. Sceptics argue that the three-year wage framework actually agreed is exactly the same as that obtained in the KTO field, and that it was very optimistic to think that the result could have been different. The Health Cartel got rid of 'New wage' system but did not get rid of local wage formation. The cartel has certainly obtained its own wage model, but that would also have been possible as a member of KTO. According to the new KTO agreement, it is possible to establish the percentage increase earmarked for local wage bargaining at individual trade union level. The Union of Commercial and Clerical Employees in Denmark (Handels- og Kontorfunktionærernes Forbund, HK), among others, chose to use 2.5% of the framework for local wage bargaining, while the teachers earmarked only 1.25% for this purpose. Like the nurses, the teachers are opponents of 'New wage', but this time, they seem to be rather satisfied with the bargaining outcome, which was approved by a large majority of the members after many had voted against the previous agreement. Furthermore, it seems that the 'reversed' bargaining model in the muncipal/county sector, whereby the individual unions first negotiated the issue of 'New wage' and the wage system before seeking an overall sectoral agreement, has turned out to be quite successful. To a large extent, the problems with finding compromises that had been foreseen failed to materialise during the negotiations.

It is thus open for discussion whether the result obtained by the Health Cartel is good or disappointing; this very much depends on the eyes of the beholder. The nurses and their colleagues have obtained a more compressed wage model, which should mean a lift for lower-paid staff - something sought by the unions for many years. (Carsten Jørgensen, FAOS)

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