Flexible working time used to counter labour shortages

The Danish labour market is currently experiencing a record low rate of unemployment combined with a shortage of labour, with the result that many companies have started to introduce flexible working hours, an option which has been provided for in several collective agreements. There is widespread take-up of a pilot scheme to conclude agreements at local level, within the framework of the collective agreement for the manufacturing sector, as companies try to manage their staffing requirements.

Unemployment levels in the Danish labour market are currently at a record low, at 4.5% (or 3.9% according to the EU definition) as of June 2006. Combined with the urgent need for labour, there are signs of bottlenecks emerging in many sectors of the economy. Companies are trying to meet this shortage of qualified labour by resorting to unconventional solutions such as hiring out workers among different companies, using temporary workers and entering into agreements with employees on flexible working time arrangements. The latter option allows weekly working hours to be extended, and this additional time is not necessarily considered as overtime work as specified in collective agreements. A pilot scheme in the manufacturing sector presents companies with an opportunity to introduce a wide range of flexible working time arrangements at local level (DK0402104F).

Change in agreement approval process

The collective agreement for 2000–2004 in the manufacturing sector introduced a pilot scheme that made it possible to conclude agreements on flexible working hours at local level that deviated from the provisions laid down in the sectoral agreement. However, any such agreements had to receive the prior approval of the parties to the collective agreement, namely the Central Organisation of Industrial Employees (CO-industri) and the Confederation of Danish Industries (Dansk Industri, DI), which had the right to reject agreements. As an experiment, this right was abolished in conjunction with the conclusion of the new agreement in the manufacturing sector for the period 2004–2007. Currently, therefore, the signatory parties, CO-industri and DI, only have to be informed about any new schemes concerning working time, but it was agreed that this issue will be renegotiated in connection with the renewal of the collective agreement in 2007. In relation to the conclusion of such working time arrangements, the two sides at local level have come to an arrangement that if one of the parties rejects the plan, the agreement will not go ahead.

Increasing number of agreements

Initially, the possibility to conclude alternative agreements at local level on working hours was not widely used, but during the last year usage has increased to the extent that there are now 59 agreements at local level in relation to varying working hours. Moreover, President of the industrial group within the United Federation of Danish Workers (Fagligt Fælles Forbund, 3F), Børge Frederiksen, believes that this represents only the official number of such agreements. He believes that there are probably many more agreements in existence, but that the central social partners have simply not been informed of them.

Longer working week proposed

The Danish Centre for Political Studies (Center for Politiske Studier, CEPOS), a liberal think-tank, has proposed that the normal 37-hour working week should be increased to solve the problems of labour supply. However, Mr Frederiksen rejects this proposal.

Also acting as Vice-president of Co-industri, Mr Frederiksen states: ‘We know that overtime work today occurs to a great extent and the collective agreement already provides a lot of scope for flexibility. It is, for instance, possible to conclude agreements on varying weekly working hours as long as the average weekly time worked over a 12-month period amounts to 37 hours. On top of that, we have a number of pilot schemes and experiments that go further than the agreement so, quite honestly, I find it difficult to see what all this moaning is about.’

Working time initiatives

Various enterprises have chosen to introduce different initiatives relating to working time. Some companies have decided to adapt working hours for employees with children. In one enterprise, an agreement has been concluded concerning long work shifts for travelling fitters, extending to 12 hours per day over a period of seven days. At Morsø Jernstøberi, a Danish iron foundry, the management and employees concluded an agreement in August to extend weekly working time to 48 hours over a longer period of time, and at the Tican meat processing factory an agreement has been reached on a weekly working time of 42.5 hours.

Companies can choose to remunerate these extended working times in the form of overtime pay or as reduced working hours at another time so that the overall time worked will average out at 37 hours per week over a certain reference period, for instance 12 months. This matter is also subject to agreement at local level.

Trade union demands

Several local 3F branch offices have submitted demands for the abolition of these voluntary pilot schemes in connection with the negotiations concerning the renewal of the manufacturing sector collective agreement in the spring of next year. Representatives from these offices consider that the schemes could soon become the rule rather than the exception in relation to the sectoral agreement. Alternatively, if the agreements are not abolished, the local offices call for the reintroduction of the contracting parties’ right to reject agreements.

Mr Frederiksen does not wish to comment on the demands submitted by the 3F branch offices until they have been discussed by the committee of representatives of 3F and by CO-industri. The trade unions will deliver their final demands during the autumn of 2006.

Carsten Jørgensen, FAOS

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