EIRO 2005 ANNUAL REVIEW

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Introduction

The 2005 annual review aims to provide an overview of the main developments in industrial relations at EU level and in EU Member States plus Norway and the accession countries of Bulgaria and Romania.

National centre contributions for country chapters

Your contribution must answer all points listed in the questionnaire below - if a particular question is not relevant, there have been no developments concerning a particular topic, or no data is available, this should be stated. Where national centres do not follow the questionnaire structure, or fail to make any response at all to any question, the questionnaire will be returned to the national centre concerned for correct completion.

The format of the individual country chapters will remain largely the same as in previous years, so national centres should aim to submit a contribution which is similar in style and format to last year’s published chapter for their country on EIROnline. Please look at your edited contribution for 2004 (not the original material submitted) for an indication of the framework to follow. In addition to the usual questions, this year the special topics to be looked at are:

  • collective bargaining and social dialogue relating to labour migration from the new Member States to the old Member States; and
  • collective bargaining and social dialogue relating to corporate social responsibility.

National contributions should not be more than 2,500 words in length - brief summary information is therefore required (please make sure you adhere to this limit, otherwise your contribution will be cut in order to keep the size of the whole review within set limits).

Your contribution must include all relevant references to previous EIRO records for your country, in addition to any other references as appropriate.

Important: please use this EIRO template questionnaire to respond. Please remember to propose this as a January feature and submit it in the normal way.

Please submit your contribution by 13 January 2006.

If you have any queries on the content of the questionnaire, please contact:

Andrea Broughton, tel: 44 20 8212 1987, fax: : 44 20 8662 2041 e-mail: andrea.broughton@irseclipse.co.uk

If you have any administrative queries, please contact Shivaun Lindberg.

1. Political data

Please give brief details of:

  • Any general or significant regional/local elections which were held in 2005
  • Any significant political events which took place in 2005
  • Any forthcoming national or important regional/local elections or significant political events

If there have been no political events of note over the past 12 months, please give details of the government currently in power

ELECTIONS TO THE Danish Parliament (Folketinget) took place on 8 February 2005. The result was a strengthening of the Government in office since 2001, the liberal-conservative coalition under Prime Minister Anders Fogh Rasmussen from the Liberal Party (Venstre). The election was a defeat for the Social Democrats and the top candidate and for many years a leading profile in the party, Mr Mogens Lykketoft, took the consequence and resigned as chairman of the party. The Social Democrats reorganised and after an internal election Mrs Helle Thorning-Schmidt was elected as chairman and potential candiate to the post as Prime Minister after next election in four years. Mrs Thorning-Schmidt was former member of the European parliament, but had not earlier taken up a seat in the Danish Parliament.

Municipal elections took place the 15 November 2005 in the light of the comprehensive structural reform - A New Denmark - which was passed in spring same year. The structural reform that takes effect 1 January 2007 means a merger of 274 municipalities to 100 and the conversion of 14 counties into five regions. A comprehensive rearrangement of the Danish geographical map, which arroused the sentiments when it came to who was going to marry who during the preliminary phase. At the time of the municipal election the new map was drawn up and the candidates were in place.

2. Collective bargaining update

Please give details of the number of collective agreements negotiated in 2005 by level (eg national, sectoral, company), compared with numbers of agreements negotiated in 2004. Outline any trends/shifts between levels of bargaining.

In 2005 collective bargaining thus took place in the public sector (at central and local/regional level) in agriculture and in the financial sector. In November 2003 the Danish Nurses’ Organisation (Dansk Sygepleråd, DSR) and other unions in the health sector left the bargaining cartel KTO and created the Health Cartel (Sundhedskartellet) as a new bargaining unit (DK0312101N). This cartel negotiated for the first time in spring 2005.

On 19 February 2005, a new three-year collective agreement in the local public sector for approximately 560,000 employees in municipalities and counties (DK0502103F) was signed by the joint trade union negotiating body, the Association of Local Government Employees’ Organisations (Kommunale Tjenestemænd og Overenskomstansatte, KTO), and the two employers' organisations, the National Association of Local Authorities in Denmark (Kommunernes Landsforening, KL) and the Danish Confederation of County Councils (Amtsrådsforeningen, ARF). This was the first bargaining round since KTO decided to conduct negotiations in reverse order compared with earlier practice, so that the negotiations of a number of themes (eg the New Wage system) between the individual trade unions of KTO and the employer side had already started, when the general negotiations began between KTO and the employers' organisations KL and ARF. The reverse-order bargaining turned out to be functioning very effectively. There are approximately 390 agrrements concluded between the individual unions and the local public employers.

By end of February 2005, the negotiating parties in the central state sector, the The State Employers' Authority, (Personalestyrelsen) an agency within the Ministry of Finance, and the employees’ organisations’ bargaining unit, the Danish Central Federation of State Employees (Centralorganisationernes Fællesudvalg, CFU) concluded a new three-year agreement. The 160,000 employees obtained an agreement, which was very similar to the agreement concluded in the municipal/county sector a few days earlier.After the conclusion of the central agreement 72 agreement are signed between the state and the individual unions.

The most important agreements in the green sector are concluded by the organisations that are members of the two central organisations the Danish Confederation of Employers’ Organisations in Agriculture (Sammenslutningen af Landbrugets Arbejdsgiverforeninger, SALA) and the Danish Confederation of Trade Unions (Landsorganisationen i Danmark, LO). The pace-setting agreement is concluded between the United Federation of Danish Workers (Fagligt Fælles Forbund, 3F) and the association of employers in agriculture, horticulture and forestry (Gartneri-, Land- og Skovbrugets Arbejdsgivere, GLS-A). At a point of time it looked as if an industrial dispute could be foreseen in the dairy sector; but on 31 March 2005 the Official Conciliator postponed the dispute for 14 days. Over the following night the two sides reached agreement on the last outstanding details. That was at the very last moment as the existing agreement expired on 1 April (DK0504101N). The green sector concludes 17 agreements.

New collective agreements for the Danish banking and insurance sectors were concluded in March and January respectively (DK0503103F).

In early March 2005, a new three-year collective agreement for 50,000 employees in banks and mortgage credit institutions was signed by the Danish Employers' Association for the Financial Sector (Finanssektorens Arbejdsgiverforening, FA) and the Financial Services' Union (Finansforbundet, FF). During February, the talks in the negotiations in banking hit a stalemate, and FF gave notice of a strike, which was followed by notice of a lockout from FA. This is very unusual for the industry, and not since 1991 had the parties in the finance sector had to call in the Public Conciliator. The disagreement was resolved by extending the agreement's duration to three years instead of the traditional two years.

Prior to the conclusion of the agreement in the banking sector, a more or less similar agreement was signed in the other part of the finance sector, insurance. FA represents the employers in both subsectors, while the 10,000 employees in insurance are represented by the National Insurance Workers' Association (Danske Forsikringsfunktionærers Landsforening, DFL).

On 28 February 2005, a new three-year 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) (DK0503102F).

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 cartel secured a new wage model that includes improvements for lower-paid groups, and a new agreement on local wage formation.

Please give details of significant collective bargaining developments concerning the following specific themes:

  • Pay (including both general trends and the level of collectively-agreed pay increases)
  • CONNECTION with the municipal/county bargaining KTO secured a pay increase of the order of 5.6% over the coming three-year period that would. On top of this, there are the results of local wage bargaining, the wage regulation mechanism that links wage in the public sector to trends in the private sector and other improvements in employment conditions, so that the total cost-increase framework of the agreement is about 9.7% over the three years. The New Wage decentralised pay system (DK0409104F) will be continued, but a more flexible model of the new wage system was chosen which makes it possible to earmark up to 2.5% for individual wage negotiations. This is what the Union of Commercial and Clerical Employees in Denmark (Handels- og Kortorfunktionærernes Forbund, HK/Kommunal) chose to do, whereas the rather New wage -sceptical Danish Teachers’ Union (Dansk Lærerforening, DLF) choose to earmark only 1.25% for local wage negotiations

The wage framework in the central state sector was agreed to 6.96%, i.e. a general wage increase of 5.76% over a period of three years; only 1.20% of the wage increase was earmarked for negotiations with the individual employees under the New Wage system.

In Finance the three-year agreement gave space for an agreed pay increase of 2.35% in each of the first two years and of 2.4% in the third year. Furthermore, 0.5% has been set aside for local negotiations. The pension contribution has been increased by 0.5 percentage points and, together with a small increase in holiday allowance, the total cost increase will amount to 6.71% over the first two years and 9.61% over the three years. The agreement, which was reached in insurance between FA and the DFL, provides for a total cost-increase framework of 6.13% over a two-year period, of which wage increases represent 5.25%.

In the green sector the organisations agreed on an increase of the hourly wage by just over DKK 8, or 9%, over the three-year period (EUR 1.1). Furthermore an increase of the pension contribution by 1.65% over the three-year period was agreed. All bonuses, allowances and increments will be raised by 3% each year.

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. The unpopular New Wage system was replaced with a new wage system, but a percentage for local wage formation could not be completely abolished as wished by the nurses.

  • Working time (including working time reductions and flexibility agreements)

BY WAY OF experiment, it will be possible in the banking sector over the next three years to conclude local agreements at company level on individual working time. According to the new agreement, the individual working day can be between four and 12 hours. The working week must not exceed 48 hours and the reference period during which the weekly average of the normal 37 hours must be maintained is set at 26 weeks. An overtime pay premium of a minimum of 20% is paid for work after 18.00 and at the weekends. Another novelty is that the agreement offers employees a choice between paid overtime and the possibility of saving the time off to take a seventh week of annual leave. The employees already have five weeks' annual leave and five special days of leave, known as the sixth week of leave, which can be taken individually as desired.

  • Job security
  • UNIONS IN the public sector did not obtain job security guarantees as wished in connection with the structural reform, but they did obtain a wage guarantee for the workers affected.

In the green sector the agreement for the dairy products delivery drivers gave a guarantee against continued outsourcing of the jobs of delivery drivers in the future.

  • Equal opportunities and diversity issues, including efforts to close pay inequalities
  • NEW maternity scheme in the municipality sector will ensure women full pension contributions during the entire maternity leave period and will equalise maternity expenses between female- and male-dominated parts of the sector.
  • significant improvement was also the agreement of a paternity benefit equalisation scheme in the municipal sector. The agreement regarding equalisation of expenses for maternity/paternity and adoption leave now ensures a financial equalisation among all workplaces within the county/municipality sector, which means that expenses for employees during pregnancy, maternity/paternity and adoption leave is not only the responsibility of the individual workplace.
  • Training and skills development
  • TRAINING fund for maintenance of jobs and upgrading of skills were set up in the green sector.
  • Any other issues which have featured significantly in your country during 2005
  • NOVELTY in the agreement in insurance was the introduction of a flexible pension arrangement. Occupational pension contributions for all employees will increase by at least 0.5 percentage points. However, at the same time employees under the age of 35 years will be entitled to receive up to 5% of their wage as pay rather than pension contributions. The employer’s contribution, however, is always to be 10% of pay as a minimum.

Please make sure you fill out all of these sections. If there is no relevant information, please state this.

(In this section, where no statistics [from official or other sources] are available on the number of collective agreements, or of agreements on specific themes, please give your view of how collective bargaining has developed in 2005, referring to the main events of the year from your own monitoring for EIRO purposes.)

3. Legislative developments

Are there any legislative developments, which have taken place in your country in 2005, which are not mentioned in any of the other sections? If so, please give details, including a short contextual summary.

IN GENERAL, legislation is scarce in Danish labour market regulation. However, 2005 saw the adoption or proposal of a number of relevant items for the labour market:

• An amendment was proposed to the Act on equal pay, i.e. the introduction of gender based wage statistics and reports about equal pay.

• Proposal to amendment of the Act on an active employment effort and an active social policy. The amendtment is part of the new structural reform, which fundamentally changes the framework for the responsability of public tasks and service in Denmark - including the role of the social partners in the new councils and committees.

• Proposal to amendment of the Act on health and safety.

• Poroposal to Act on information and consultaton rights of employees. The act implements the Council Directive no 2002/14/EC of 11 March 2002 about the introduction of a framework for information and consultation of employees in EU.

• Proposal to amandment of the Act on prohibition of discrimination at the labour market. Age and handicap/disability were proposed as criteria in the act.

4. The organisation and role of the social partners

Have there been any changes in the organisation and role of the social partners in your country (eg trade union or employers’ organisation mergers or decisions about participation in bargaining) during 2005? If so, please give details.

THE LONG TIME prepared merger between the General Workers’ Union (Specialarbejderforbundet i Danmark, SiD) and the National Union of Female Workers (Kvindeligt Arbejderforbund, KAD) into United Federation of Danish Workers (Fagligt Fælles Forbund, 3F) took effect 1 January 2005 (DK0410103N). The new union had approximately 375,000 members but lost close to 15,000 members during 2005. In general the affiliated unions of the Danish Confederation of Trade Unions (Landsorganisationen i Danmark, LO) are facing a decline in membership (DK0508103F).

The Confederation of Danish Employers (Dansk Arbejdsgiverforening, DA) entered 2005 in a new shape. At an extraordinary general meeting in December 2004 the delegates from the member associations decided to cut the annual budget of DA by a third and to cancel the annual general meeting. All member associations (currently 13) are instead represented in a board. Also the regional network of DA was closed down. However, the employers’ confederation still has an important coordinating role in collective bargaining and in labour market policy (DK0501103N).

5. Industrial action

Please give brief details of major strikes and industrial action in your country during 2005 (including any statistics available, if only for part of the year). Please highlight any particularly significant developments that have taken place over the past year.

DETAILS ABOUT industrial action is only available from April 2006, where statistics and other details will be dealt with in an information update. See also (DK0506101N).

6. Employee participation

Have there been any legislative or other significant developments in the area of employee information and consultation (and other forms of participation) in your country in 2005? Have there been any developments related to the implementation of the European Company Statute (EU0206202F) or the Directive on national information and consultation rights (EU0204207F), or any debate on these issues (eg any indication on the extent to which companies headquartered in your country intend to use the European Company Statute to incorporate as a European Company)? Have there been any significant developments connected with European Works Councils over the past year?

AS MENTIONED under point 3 the Directive 2002/14/EC establishing a general framework for informing and consulting employees was implemented by law in Denmark during 2005. In February 2004, however, LO and DA signed an agreement on the incorporation of the mentioned EU Directive into their existing cooperation agreement (DK0403102N). The implementation of the Directive via the DA-LO cooperation agreement means that company-level joint cooperation committees (DK0309102T) will now have a duty to consult all groups of employees in the enterprise and not only those who are covered by a collective agreement between LO and DA member organisations. No significant developments in the area of the ECS or EWCs have taken place. On the other hand a bill on the adoption of the Council Directive no 2003/72/EC on supplementary provisions to the statute of European Coorporative Societies, SCEs, concerning worker involvement has been submitted to the social partners for consideration. Answers were received in December 2005.

7. Labour migration

Please give a summary of the debate on labour migration, including any discussion of the proposed EU services Directive (the Bolkestein Directive). If you are reporting from an old Member State (the EU15 including Norway), please give details of whether your government has put into place restrictions on labour migration from new Member States (as permitted by the EU) and whether it intends to lift these restrictions in 2006. Please include any statistics if available and/or brief details of any particularly interesting cases.

If you are reporting from a new Member State (the 10 that joined on 1 May 2004) or a candidate country, please summarise the debate on labour migration from your country to the old Member States, including any relevant statistics and/or a summary of any interesting cases. If any issue has been reported already in EIRO, readers can be pointed to the relevant EIRO inbrief or feature for a more detailed overview.

THE DANISH Economic Council, presided by a chaimanship of three university professors called the wise men, recommended in their semi-annual report in December about the state of the Danish economy that Denmark should enact the Services Directive in a version close to that proposed by the EU Commission. In a response to the report the trade union confederation LO strongly opposed the adoption of the directive due to the principle of country of origin. This will undermine the Danish collective agreement model at the labour market, LO stated.

The Danish Parliament passed a transitional scheme, the so-called East Agreement (Østaftalen), prior to the admission of the new EU member states 1 May 2004. According to the agreement, which was supported by the social partners, workers from the new member states should obtain a full-time job covered by a collective agreement or a job on equal terms in order to get a work and residence permit (DK0312103F). The transitional scheme was evaluated in December 2005 in relation to the duty of the Danish government to inform the EU Commission before 1 may 2006 if Denmark wishes to carry on the existing national transition scheme another two years. The evaluation report showed that by the end of August 2005, a total number of 5,472 workers, mainly from Poland and the Baltic countries, had been granted a work permit in accordance with the rules laid down in the transitional scheme. The report thus draws the conclusion that the total number of work permits must be said to be rather modest. It has been discussed, so far without reaching a conclusion, if the restrictions of the scheme should be lifted. The government is in favour of relaxing the rules; the employers rather saw them removed at the present state - and the trade unions are satisfied with the scheme as it is (DK0512101N).

8. Corporate social responsibility

Please give details of any developments in collective bargaining or social dialogue in the area of corporate social responsibility. This may take the form of company-level agreements, international agreements in multi-national companies that are headquartered in your country, or agreements at national or sectoral level. If no examples of agreements exist, please give an overview of the debate in your country.

CORPORATE SOCIAL Responsibility (CSR) is in a Danish context mostly connected with the inclusive labour market. Government conferences with participation of the social partners and representatives from the Danish trade and industries have been held during the last years. CSR is, however, not a single specific collective bargaining issue; the provisions in the agreements about wage, working condition, working environment combined with the penal code cover the different elements of CSR (human rights, environment, anti-corruption, etc.) It is only in the companies with international contacts that CSR is visible.

According to DI, demands of CSR between companies and their customers and collaborators have become more common in step with the globalisation of the market, and CSR increasingly concerns both large companies and SMEs. CSR is a reality for approx 60% of Danish companies today. DI support companies to set up a CSR-declaration, a kind of certificate to show on demand from collaborators, customers, suppliers, employees, the local society, NGOs, etc. DI has developed an online tool, the CSR Compass, where companies can piece a declaration together or just get informed about corporate codes of conducts. The Danish Human Rights Centre has made up the Human Rights & Business Project, including a Human Rights Compliance Assesment Portal for companies, in cooperation with the trade unions and DI. The programme and the portal has been praised and recommended by the UN.

9. New forms of work

This is a topic that encompasses part-time work, fixed-term contracts, temporary work through agencies, teleworking, on-call working or any other atypical types of working. Have there been any legislative or other significant developments - such as collective agreements or social partner policy statements - during the past year concerning these types of atypical work?

Further, if there have been any significant trends concerning the growth of a particular form of atypical work in your country, please include brief statistical details and a summary of the debate and/or direction of possible action on that issue.

THERE HAS been no significant developments in the field of new forms of work in 2005.

10. Other relevant developments

Have there been any other significant industrial relations developments over the past year, which have not been mentioned above? If so, please give details.

THERE WAS significant focus - internationally as well as nationally - on the Danish flexicurity model during 2005 (DK0506103F). Flexicurity is a construction of flexibility and security. The features that account for the high degree of flexicurity in Denmark are the flexible rules on recruitment and dismissal, combined with a relatively high level of benefits in the event of unemployment and an active labour market policy concerning the duty and right to activation and. Furthermore flexible rules at company level concening local agreements on working time further add to the picture that flexicurity is highly connected to the bargaining system.

11. Outlook

In order to enable us to include a conclusion and forward-looking section at the end of each national contribution, please give an overview of the issues, which are likely to dominate the coming year in your country.

THE EFFECTS of globalisation and how to deal with them entered the Danish political agenda relatively late compared with other EU countries like Sweden for instance. There is, however, an increased focus on the issue and it has been discussed how Danish companies and Danish economy can remain competitive at the global market. Analyses have shown that for every unskilled job that is recolated outwards ane or two skilled jobs are created in Denmark (DK0506102F). From several sides it has been pointed out that the answer to globalisation thus is increased innovation and education. Globalisation will certainly stay in focus in 2006. Not the least because three major reports will be discussed in 2006:

A Globalisation Council was set up in April 2005 with the purpose to analyse the situation of Denmark in the globalised world. The aim is to make Denmark a leading knowledge society.

After years of preparation the Welfare Commission issued a final Welfare Report in December 2005. This will be subject to political discussions, involving the social partners to a certain degree, about future welfare reforms in Denmark

A tripartite committee will issue an also long waited report on education and vocational training in February 2006. Seen in the wide perspective the background for this report is the effect of globalisation. The committee has gone deeply into the current level and impact of education and vocational training in Denmark. The intention is to present solutions that will enable Denmark to strenghten education and training in order to combat negative efffects of globalisation, i.e. relocation of entire industries. More vocational training, specialisation and innovation will be the buzzword known at every workplace in Denmark in 2006.

(Carsten Jørgensen, FAOS)

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