Denmark: Temporary agency work and collective bargaining in the EU

  • Observatory: EurWORK
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  • Published on: 18 December 2008



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The growth of TAW in Denmark is still quite new and cannot be termed as a sector in its own right. This fact is reflected in the limitations of the availability of statistical data concerning TAW in Denmark. The EU enlargement and increased inflow of foreign workers from old and new EU countries adds to the blurring of actual numbers and intensity of TAW work in Denmark. On the other hand TAW is a well organised area. Around 80 % of the TAW are covered by collective agreements.

Section 1. Definitions

1) In your country, is there a statutory definition of:

a) temporary agency work?b) agency worker?c) user enterprise?

If yes, please give definitions.

There is no statutory definition of neither temporary agency work, nor an agency worker or user enterprises in Denmark. The Danish labour market rests on the tradition of regulation through collective bargaining processes and rely only little on statutory definitions and regulation.

2) Is there a collectively agreed definition of:

a) temporary agency work?b) agency worker?c) user enterprise?

If yes, please give details (e.g. how and where defined).

Temporary agency work is understood to be a certain employment situation where a company hires external manpower through an agency for a task of a fixed duration. The temporary agency worker is hired by an agency and leased to the user company.

3) In your country, would you describe TAW as a sector in its own right?

TAW can not in the strictest sense be termed a sector in its own right in Denmark. Even though it is rapidly growing at present, TAW still comprises no more than approx.1 % of the total workforce (Economic Council of the Labour Movement, Arbejderbevægelsens Erhvervsråd, EA, April 24 2008). TAW agencies are to be found as suppliers of services within various business sectors.

Some of the larger TAW agencies are organised in trade associations such as VICE (TAW Agencies Certified in Denmark, Vikarbureauer Certificerede i Danmark), FVD (The Association of Temporary Work Agencies in Denmark, Foreningen af Vikarureauer i Danmark) or FASID (The Association of Nursing Temp Agencies in Denmark, Foreningen af Sygeplejevikarbureauer i Danmark). Associations which are all members of the Danish Chamber of Commerce (Dansk Erhverv, DE) an independent private business association organising trade organisations within the sectors of trade, transport and services. Lately several TAW agencies have organised in other business associations such as Confederation of Danish Industries (Dansk Industri, DI) and The Danish Construction Association (Dansk Byggeri, DB) depending on which sector they are working within.

Section 2. Regulatory framework

1) Have there been any changes in the law concerning TAW since 2004?

b) No

2) How is TAW regulated in your country?

a) Is there a legal framework specifically for TAW; and/or is it covered by general labour law (including case law/ jurisprudence)?

There is no national legal framework for TAW in Denmark. Salary and working conditions are regulated through collective agreements between the social partners on various levels.

b) What is the role, if any, of collective labour agreements and self-regulation?

Labour regulation by collective agreement is the main pillar in the Danish labour market. During the 1990’ies coverage of collective agreements of TAW increased significantly and is today estimated to a level around 80 % (Danish Chamber of Commerce, Dansk Erhverv). TAW has spread to a number of different business sectors such as storage, construction, nursing and teaching. Today, all sectors are extensively covered by collective agreements on either general organisational, sector specific and/or company level. The agreements have secured basic rights for TAW workers, though the actual pay and working conditions varies to some degree according to business sector. Most of the regulation covering TAW is to be found in sector level collective agreements concluded between trade unions and employer organisations.

3) What is regulated in these provisions? In particular, does it cover:

a) use of agency work (e.g. length of assignment, sectoral bans, permitted reasons of use, number of agency workers per company, other)

For the main part of the labour market there are no legal limitations to the use of TAW. However, TAW agencies providing nurses for hospitals have to obtain a certificate issued by the Health Authorities ( Sundhedsstyrelsen) according to § 8 in the Ministry of Health’s order no. 759 from 14 November 1990.

b) the form of the contract (e.g.project, fixed-term, special contract, open ended, etc.)

In general the collective agreements do not hold regulation of the form of contract for TAW work. A demand according to the Act on the Employers Duty to Inform the Employee of Terms and Conditions for the Work is that work beyond the first month and for more that 8 hours per week in average must produce a statement of terms and conditions.

c) social security and social benefits

A main concern for the trade union movement has been to secure the same rules and rights to TAW workers as permanent workers hold. To a large extend the trade unions have succeeded in securing wages and basic social rights for TAW workers. Today TAW workers have the right to uphold pension, holiday benefit as well as sickness and maternity benefit. However, some problem areas remain. Trade unions are thus continually working to shorten the period before TAW workers gain full access to the above mentioned benefits. Furthermore, the right to so-called “G-days”, according to which the employee is entitled to pay the following two days after the termination of work, continues to remain an area of contestation between the social partners.

d) conditions to open a TAW agency (e.g. license or authorisation schemes, supervision by public authorities, financial requirements, or others - please specify)

There is no legislation specifically meant to regulate TAW agencies. They must uphold general business rules and laws as other companies. Only within the sector of transport and health where official license or certificate needs to be issued from a public authority one can find specific rules which apply to TAW agencies.

e) business activities/services delivered by TW agencies (e.g. prohibition to provide other services than TAW)?

TAW agencies primarily deliver actual TAW services within different business sectors. Many of the lager agencies also work more broadly with recruiting labour. A business which also has experienced growth due to the positive economic development and increased demand for labour in Denmark

f) third-national companies or temporary agency workers (e.g. activities of foreign agencies)?

None

4) Do any regulations (by law and/or collective bargaining in the TAW sector) specify equal treatment rights for agency workers with permanent workers in the user enterprise concerning:

a) pay

It has traditionally been the policy of the Danish trade union movement that all workers should be hired permanently. However, due to the expansive development in temporary work during the 1990’ies, trade unions have increasingly been committed to include TAW in the collective agreements, with the aim to secure them equal terms with permanent workers.

However, the rather complex network of collective agreements and company agreements displays differences in wage levels between the different sectors. For instance the wages in the hospital and healthcare sectors are much higher proportionally than in clerical and storage work.

The positive economic development and the European enlargement have increased the use of TAW workers from both the old and the new EU member states. Especially in connection to the recruitment of labour from the Central- and Eastern European countries it can be questioned whether they actually gain equal pay to permanent workers. Often TAW agencies subtract expenses for transport, board and lodgings and thereby severely reduce the pay compared to the pay stipulated in the relevant collective agreement.

b) training

Training and education is accessible to TAW workers as long as they are covered by a collective agreement, which would most likely hold demands for employer paid training and education. In the most recent general agreement between Danish Chamber of Commerce (Dansk Erhverv) and the United Federation of Danish Workers(Fagligt Fælles Forbund,3F) from 2007, TAW agencies must pay an amount per working hour to a collective fund which can be applied to finance training or education for TAW workers.

c) other terms or conditions of employment?

If yes, please give details.

TAW agency workers are not covered by the act protecting the salaried employees (white collar workers), the Act on the legal relationship between employer and employee (Funtionærloven) although this type of work is among one of the typical jobs of a TAW worker. The Act on the legal relationship between employers and salaried employees offers the right to pay during sickness and the right to a notice of termination of minimum one month. These rights are usually written into the collective agreement covering the TAW worker, if such an agreement exists. However, often these rights are not achieved right from the beginning of employment.

5) Do TAW workers have the right to information, consultation and representation?

If yes, please specify the nature/basis.

TAW workers can choose to become member of a trade union within their specific sector of work. As a member of a trade union TAW workers have equal rights to information, consultation and representation in the Danish legal system of labour.

However, if a TAW worker has not joined a trade union their legal rights are only supported by basic contractual law, which does not cover for instance general rules of hiring, firing, training and access to certain social benefits.

6) Is there a control/enforcement mechanism regarding any TAW regulation?

If yes,

a) is there a special labour inspectorate or a bi-partite body governing TAW?

None

b) are there any sanctions/penalties for not respecting the regulations (whether stemming from law and/or collective agreements)?

In case of breaches of the collective agreements the TAW agencies will be met with the same sanctions and penalties as other companies covered by the relevant collective agreement.

7) Are there any procedures governing use of TAW and strike breaking?

In particular, can workers on strike be replaced by agency workers?

Please state whether any provisions are based on law and/or collective agreement.

TAW agencies which are members of a business association which is part of a general collective agreement must restrain their members from taking on work affected by strike. TAW covered by collective bargaining agreements are thus governed by the same rules as permanently employed workers during a strike. If temporarily employed in a business during a strike, TAW workers have the right to collect pay from the strike fond of the trade union of which they are members or should their employment expire during the strike, they can report to the local employment service and collect daily allowances from an unemployment insurance fond.

Section 3. Social dialogue and collective bargaining

1) Is there any employers’ association(s) for TAW firms in your country?

If yes, please provide any data on membership (e.g. sectoral coverage of firms/workers)

There are no specific employer associations for TAW firms. However, several firms have joined to form trade associations. The Association of Temporary Work Agencies in Denmark (Foreningen af Vikarbureauer i Danmark, FVD) was the first of its kind and has set up a code of conduct which among other demand that member agencies should be able to present a positive account revised by a certified accountant; member agencies must observe provisions of collective agreements and social legislation, contracts must observe existing rules and may not contain competition clauses for the employee; workers from FAV member companies do not take up work affected by strike.

The four largest agencies in Denmark (Adecco, Manpower, Randstad and Temp-Team) have created the trade association VICE – Temporary Work Agencies Certified in Denmark (Vikarbureauer Certifiserede i Danmark) which adheres to a similar code of conduct.

The above mentioned associations are all members of the employers’ association Danish Chamber of Commerce (Dansk Erhverv). Lately TAW agencies has increasingly joined other business associations such as Confederation of Danish Industry (DI) and The Danish Construction Association (Dansk Byggeri) depending on which sector they are working within.

2) Is there any union(s) specifically for agency workers?

If no, have any unions or confederations targeted the recruitment of agency workers? launched any campaigns around agency workers’ rights?

TAW workers do not have their own union, but can become members on equal terms in one of the sector specific unions in Denmark. The Danish labour market is characterised by a high level of organisation and TAW workers are as a rule organised in trade unions following occupational lines.

3) Collective bargaining levels

Is TAW governed by collective bargaining at:

a) intersectoral/ national level?b) the sectoral level for TAW?c) company (i.e. temporary agency firm) level?

If yes, please provide details of the parties concerned.

Collective bargaining takes place at both organisational and company level. It is on the sector level of the different industries that the main collective agreements are to be found.

The general rule is that it is the collective agreement held with the temporary agency which matters and not necessarily the rules sat down in the collective agreement held between a certain union and the user company, though rulings in the Danish labour court on more than one occasion has disputed this.

4) Collective bargaining outcomes

Please provide examples and details of any recent/ significant collective agreements governing TAW at the levels referred to in question 3.

In the fall of 2007 the Union of Commercial and Clerical Workers in Denmark (Handels og Kontorfuntionærernes Forbund,HK) and DE signed a collective agreement shortening all qualifying periods for social benefits. Previously one had to be employed in the same job for 9 months before gaining the right to for instance maternity benefit. After 2007 this period has been shortened to 1443 hours employment within a period of 3 years to gain the same right.

5) Are there any examples of sector- or company-level collective agreements in other sectors that restrict, permit or otherwise regulate the use of TAW within their domain?

Most of the main sectors where TAW agencies operate are today covered by sector collective agreements with protocols on TAW. As mentioned in the above it is not always clear whether it is the sector specific agreement involving the user company or the local agreement involving the TAW agency that applies. For instance among electricians it is the sectoral collective agreement which regulates TAW working conditions whereas it is the collective agreement held with the specific TAW agency that regulates within the area of construction or trade, transport and service.

6) Please provide any data concerning:

a) trade union density for agency workers

Experts from the trade unions estimate that approximately 50% of TAW workers are organised, but no statistical data is available

b) the coverage of collective bargaining within the sector.

The coverage of collective agreements for TAW is estimated to 80 % by the Danish Chamber of Commerce (DE).

Section 4. Employment and working conditions of TA workers

1) Please provide the most recent data (averages) on TAW employment

a) longevity of TAW employment, i.e. how long workers remain employed

- in the sector?

- with a particular agency?

b) duration of TAW placements, i.e. i.e. the length of assignment in a user company.

No data available.

2) Please provide any evidence from official, academic and social partner sources concerning:

a) the reasons for user companies’ usage of TAW, including any differences by sector, occupation, firm size etc.

There are several reasons for user companies’ usage of TAW. The most important are; to replace employees in case of sickness, maternal leave, etc; to meet peak demand; to use TAW as part of recruitment policies both with regard to domestic and foreign labour; to avoid the administration of the employment relationships via the use of TAW.

b) reasons for workers participation in the sector and levels of satisfaction, including any differences by age, sex, education etc.

Only few studies have been conducted in this area. A study from 2004 conducted by Oxford Research on behalf of HK Denmark (that mainly organises commercial and clerical employees) argues that TAW workers usually choose the position out of necessity and mainly use it to get a hold in the labour market. Only very few state that they also have positive interest for being in the business such as a wish to gain from the flexibility. It should be noted that this study is based on answers from 35 TAW workers, and is not representative of the whole group. No doubt there are differences in reasons for participation and level of satisfaction as working conditions for TAW workers are also quite different between the different sectors. With nursing being one of the more profitable sectors and immigrant TAW workers in construction probably representing the lowest level in terms of salary and social benefits.

3) In practice, which rules and procedures may apply to temporary-agency workers in contrast to other workers in the user company?

In practice it has been difficult for TAW workers to make use of the security otherwise provided through the collective agreements, as most agreements have had qualifying periods of typically 6-9 months before the TAW worker gained the right to pension, holiday, sickness and maternity benefits. Qualifying periods also involve permanent workers who experience a quick change of job, and as such it is not strictly speaking differential treatment. In 2007 HK (the organisation of commercial and clerical employees) succeeded in shortening the qualifying period on behalf of TAW workers within their sector.

Another problem area concerns foreign TAW workers primarily recruited to Denmark from countries such as Germany, Poland and Lithuania. There are not much reliable data on actual working and living conditions, but it is expected that they do not have access to social benefits to the same extend as Danish TAW workers and often their salary is also effected as TAW agencies subtract living and transport expenses.

Section 5. The extent and composition of TAW.

1) For 2004 and 2007, please state

a) the number of agency workers

Mainly due to the favorable economic development and the low level of unemployment, TAW workers have continued to expand in numbers over the last couples of years, recently especially within the production and construction sector. There are no data available for 2007 as of yet.

The latest report from the Economic Council of the Labour Movement (Arbejderbevægelsens Erhvervsråd, AE) from April 2008 states that the total number of TAW workers have grown from 0,3% of the total labour force in 1999 to 1% in 2007. This equals about 26.000 fulltime TAW worker positions out of the total labour force. (AE April 24 2008).

b) total revenues of the TAW sector

The TAW business has continued to experience a marked improvement in total revenues. During 2006 total revenues doubled from 1.4 billion to 2.8 billion DDK. 67% of the revenues come from private businesses, whereas 29% come from the public sector (product statistics for TAW agencies and recruiting businesses 2006, Statistics Denmark).

There are no data available for 2007 as of yet.

2) What proportion of the TAW workforce is currently

a) male/ female?b) full/part time?c) young (<c. 25) or older (>c. 50) workers?

Data not available.

3) Has there been any changes to the TAW sector in terms of

a) concentration, i.e. proportion of employees or turnover accounted for by the largest firms?

There has been a significant growth in the number of TAW agencies in Denmark. Only in the last quarter of 2007 82 new TAW agencies have been registered. In 2005 the number of TAW businesses was 305 whereas this had doubled to 623 by the end of 2007. (AE, April 24 2008)

b) internationalisation, i.e. number/significance of multinational TAW firms?

The positive economic development and the European enlargement have increased the use of TAW workers from both the old and the new EU countries. Approximately 13% of all work- and stay permissions granted since May 2004 went to East Europeans hired by Danish TAW agencies (Ugebrevet A4 17. marts 2008 /nr. l1, based on statistics fromThe Danish Immigration Service).

4) What is your evaluation of the availability and quality of statistical data concerning TAW in your country?

The growth of TAW in Denmark is still quite new and cannot be termed as a sector in its own right. This fact is reflected in the limitations of the availability of statistical data concerning TAW in Denmark. The EU enlargement and increased inflow of foreign workers from old and new EU countries adds to the blurring of actual numbers and intensity of TAW work in Denmark.

Commentary by the NC

Since the early 1990s the regulation of wages and working conditions for TAW have in an incremental way been included in sector level collective agreements. Accordingly, today around 80 % of the TAW are covered by collective agreements. Over the last decade TAW employment has increased significantly in Denmark. This might seem like a paradoxical development as the so-called Danish ‘flexicurity-model’ emphasises the liberal regulation of dismissals which traditionally has been seen as the key explanation for the relatively modest share of TAW employment in the Danish work force. However, among other things the historical low level of unemployment have made companies change recruitment strategies and thereby increased the usage of TAW. Like in many other European countries the demographic development will decrease the Danish work force. Combined with the low level of unemployment this might lead to a further increase in the use of TAW. Further it is likely that foreign TAW agencies – not at least agencies based in Eastern Europe – to a higher extend will offer their services in Denmark. This again might challenge the existing regulation based on collective agreements.

Nana Wesley Hansen, Søren Kaj Andersen, FAOS

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