Tripartite agreement on reducing sickness absence

In September 2008, the Danish government concluded an agreement with the Danish Confederation of Trade Unions and the Confederation of Danish Employers on reducing sickness absence in companies. The agreement aims to get 4,000 persons back to work and thereby help to ease the current significant pressure on the labour market. The initiative is expected to cost almost €23 million; however, up to €5 billion is currently spent each year on sick pay.

Context

Every day, 150,000 people in Denmark stay home from work because of illness. This is equal to one in every 20 employees in the entire workforce. Each year, DKK 37 billion (almost €5 billion as at 10 February 2009) is spent on sickness pay. In addition, healthcare costs arise – as well as a loss in corporate productivity – when employees are sick.

Tackling sick leave and labour shortages

On 29 September 2008, the Danish government concluded an agreement with the Danish Confederation of Trade Unions (Landsorganisationen i Danmark, LO) and the Confederation of Danish Employers (Dansk Arbejdsgiverforening, DA) on reducing sickness absence in companies. With the objective of getting 4,000 persons back to work, the agreement aimed to ease the significant pressure on the labour market at the time. Despite the global financial crisis taking its grip on the country’s economy, the unemployment rate stood at only 2.1% in December 2008, according to Statistics Denmark (Danmark Statistik), and labour shortages were being experienced in certain sectors of the economy. The agreement was thus a contribution to the tripartite negotiations on the labour shortage which took place in the autumn of 2008.

Both LO and DA expressed satisfaction with the final outcome of the negotiations. The Vice-President of LO, Lizette Risgaard, stated:

It is requisite for reducing sickness absence that the dialogue between the sick person, the company and the job centre is improved. The new tripartite agreement contributes to this.

Meanwhile, a Director of DA, Henrik Bach Mortensen, commented:

It is important that the companies experience legislation as a support rather than a barrier regarding the initiatives concerning sickness absence. With the provisions of the tripartite agreement, we have taken the first steps.

Key proposals

The government and social partners have emphasised the importance of an early and active effort to avoid long periods of sickness. Thus, the agreement contains 39 specific initiatives aiming to reduce sickness absence. These measures focus on improved dialogue between the employer, the long-term sick employee and the job centres. The central elements of the agreement are outlined below.

  • Job centres should be able to offer assistance to employees on long-term sick leave, for example in the form of guidance and retraining as well as in-house company training. This opportunity has not been available up to now.
  • Before the fourth week of sick leave, employers must communicate with the employees in order to establish if they can continue working and what the company can do to support this.
  • After eight weeks on sick leave, the job centre will assess whether the possibility exists of a partial return to work.
  • The current ‘Doctor’s note on incapacity’ is replaced by a so-called ‘opportunity statement’. This statement is based on two parts. The first element is the dialogue between the employer and sick employee about a possible re-entry into the labour market, and secondly a medical doctor will evaluate the outcome of the ‘opportunity statement’.

Trade unions give cautious support

Denmark’s largest trade union, the United Federation of Danish Workers (Fagligt Fælles Forbund, 3F), is satisfied overall with the initiatives concerning early intervention when a person becomes ill in order to find possible employment alternatives. However, 3F is uncertain regarding how the replacement of the doctor’s note – the ‘opportunity statement’ – will work in practice. The Vice-President of 3F, Jane Korczak, explains:

We would like to have included in the agreement that the sick employee could bring their shop steward as a companion when meeting with the employer. Since this did not happen, we obviously will observe this issue very carefully, to see whether members will experience this conversation as an excessive pressure.

President of the Danish Metalworkers’ Union (Dansk Metal), Thorkild E. Jensen, welcomes the new active approach to avoid overlooking sick employees. He points out, however, that the agreement will not eliminate sickness absence: 

The fundamental problem remains that there are too few companies which have the wish and willingness to make room for people that maybe cannot work 100%. There are still many people queuing for jobs on special terms. We know that these kinds of jobs can help keeping people from early retirement.

The agreement was also approved by the Confederation of Salaried Employees and Civil Servants in Denmark (Funktionærernes og Tjenestemændenes Fællesråd, FTF) and the Danish Confederation of Professional Associations (Akademikernes Centralorganisation, AC), which were consulted in the preliminary phase. However, both organisations noted that they would have welcomed more preventive initiatives in the agreement. The well-being of employees in a safe and healthy working environment is an important factor in reducing sickness absence (DK0804019I, DK0801019I, DK0612019I, DK0611019I). They also highlight that, on the basis of the agreement, sick employees are categorised in almost the same way as unemployed people. This harmonisation could create insecurity and put unnecessary pressure on the sick employee.

Cost of initiative

The total projected cost of the tripartite agreement, in its present form, is expected to amount to DKK 170 million (almost €23 million). The agreement was accepted without changes on 5 November 2008 by a majority of the political parties in the Danish parliament (press release (in Danish)), and was to form part of the national budget due to be passed in the parliament soon after.

Carsten Jørgensen, FAOS

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