Denmark: Annual Review - 2011

  • Observatory: EurWORK
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  • Published on: 28 November 2012



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A new centre-left government headed by the Social Democrats took office in September 2011 following a general election. One of its first deeds was to repeat an earlier invitation to tripartite negotiations about welfare and labour market issues to the social partners. The economic crisis has softened but not vanished completely. Thus, collective bargaining in the public sector in early 2011 took place without great expectations for wage increases to the employees. The result was consequently a ‘minimum agreement’ that barely prolonged status quo for another two years. However, the number of large restructurings showed a decreasing tendency.

1. Political and economic developments (200 words)

Please give very brief details of:

  • The government (s) in office during 2011
  • Any general or significant regional/local elections held in 2011
  • Any other significant political events which took place in 2011
  • Any forthcoming national or important regional/local elections or significant political events
  • Any major economic developments which are likely to impact upon employment and industrial relations.

If a new government took office during the year, briefly summarise the implications for policy on employment and industrial relations.

A new government took office during 2011. After 10 years in opposition a centre-left coalition headed by the Social Democrats won the general election on 15 September 2011. The new government - with participation of members of the Socialist Peoples’ Party (SF) and the Danish Social-Liberal Party (Radikale Venstre) - was formed under the leadership of the Social Democrat Ms Helle Thorning-Schmidt. She replaced Mr Lars Løkke Rasmussen from the Liberals (Venstre) as Prime Minister. In October Ms Thorning-Schmidt and her new ministers presented the government platform, which contains suggestions to changes in the labour market policy. The new government will also make their European debut when Denmark takes over the EU-chairmanship in first half of 2012.

There was no significant regional/local elections held in 2011.

During the election campaign Ms Thorning-Schmidt invited the social partners to tripartite negotiations about labour market policy issues, such as continuing vocational training and education and employment for young people. The negotiations will take place in 2012 after the completion of collective bargaining in the private sector around 1 March 2012. The trade unions had pressed for negotiations before the collective bargaining round, that is in December, but the employers refused to deal with potential issues that belong to the agenda of the upcoming collective bargaining in January.

2. Legislative developments (300 words)

Please give brief details of important legislative developments with implications for industrial relations and working conditions, where these are not covered in other sections of your response. For example, this might include new or amended legislation on issues such as employment rights, working time, pay and conditions of employment, termination of contract, equality, social security (with implications for the employment relationship), training, new forms of work, the labour market, health and safety etc.

The Danish labour market is primarily regulated by virtue of collective agreements negotiated by the social partners. Thus legislation on core requirements on pay, employment conditions, working time and employment rights in general is not commonplace, apart from historical contingent legislation protecting white-collar personal and public servants. Furthermore, 2011 was general election year, which normally reduces the law initiatives taken.

The following legislation in the field of the labour market was approved by the Danish parliament, “Folketinget” 2011:

One of the hottest issues in Danish labour market politics the recent years has been the so-called ‘voluntary early retirement pension’ (da: Efterløn). Initiated in the 1970ies this pension was earmarked workers worn out after many years in physically hard work. At the age of 60 these persons could chose to stop working and receive an early retirement pension. The remuneration was then around 80% of a full-time wage of a skilled employee. Currently the percentage is around 50%. It differs due to different criterias passed in the parliament the last two decades.

Besides securing old workers’ health, the aim of the scheme was to bring a large young generation into work. However, now things are turned around. The demagogic change made the voluntary pension a costly affair for the state. A certain amount of self-financing was introduced when the scheme in the 1990ies was reformed and some politicians even began to talk about abolishing this pension scheme. That was, however, a very hot potato since the pension scheme was very popular and the unions defended the scheme from all kinds of attacks. After 10 years in office the liberal-conservative government in the spring of 2011 nevertheless gathered a majority in the parliament for an incremental abolishing of the voluntary early retirement pension scheme. Even if the new government was not part of the majority, the majority still exists because the Social-Liberals voted for the incremental abolishing of the scheme before their entrance in the new government and has no intention of taking another stand. See the act::

LOV nr 1365 af 28/12/2011: Lov om ændring af lov om arbejdsløshedsforsikring m.v. og flere andre love (Forhøjelse af efterlønsalder, forkortelse af efterlønsperiode og tilbagebetaling af efterlønsbidrag m.

In 2002 the former centre-right-government introduced a tightening of the laws on social security. The laws concerned the rules of when and how and how long a person was entitled to receive social security benefits. In this law the new government abolished some of these ‘poverty benefits’, as they called laws. A so-called ‘start help’ that was close to half of the social security benefit was cancelled and so was a similar ‘introductory benefit’ and a so-called 225-hour rule, which implicated that a person had to have 225 hours of work the last 12 months in order to receive social security benefit. The former tightened provisions were introduced mainly to get unemployed immigrants into work instead of receiving social security benefits. See:

LOV nr 1364 af 28/12/2011 The Act on abatement of the start help, tightening of the social security benefit, the introduction benefit, etc.

Other laws that was implemented in 2011:

LBK nr 256 af 25/03/2011 Loven om udstationering af lønmodtagere The act implements the Directive 96/71/EC of the and Council, concerning the posting of workers in the framework of the provision of services

LOV nr 459 af 17/06/2008 Lov om arbejdstid for mobile lønmodtagere, der udfører grænseoverskridende tjenester i jernbanesektoren. The Act implements Council Directive 2005/47/EC of 18 July 2005 on the Agreement between the Community of European Railways (CER) and the European Transport Workers' Federation (ETF) on certain aspects of the working conditions of mobile workers assigned to interoperable cross-border services in the railway sector.

3. Organisation and role of the social partners (300 words)

Please provide brief details of any major changes in the organisation and role of the social partners in your country during 2011. This might include trade union or employers’ organisation mergers, changes to social dialogue structures, or changes in membership levels and representativeness.

No major changes in the organisation and role of the social partners took place during 2011. However, the decline in membership of the trade unions, in particular belonging to the Danish Confederation of Trade Unions (LO), continued. Since the peak in 1996 union membership has showed a falling trend among the LO-unions. In 2009 membership decreased to below one million active members. As of the end of December 2011 the LO-unions had 872,000 members, which was a decrease of 44,000 compared to 2010 or equivalent to 5%. Only every second (around 50%) union member is member of a LO-union. When membership peaked in mid-1990ies 65% of all members were member of an LO-union.

In comparison every tenth union member is member of an alternative union, the so-called yellow unions, which are in opposition to the traditional trade unions. Especially the Christian Union has grown. From having 3% of all members in 1995 they have 10% in 2011 or 175,000 members.

Despite this change in membership levels it does not seem that the existing balance of representativeness among the unions will change. The alternative unions do not engage in collective bargaining. However, seen in a longer perspective a similar development in membership levels might change the picture. But so far LO still has sufficient political influence, only a part of the political territory has been lost and the coming tripartite negotiations under the direction of the Social Democrats will possibly bring LO back in a stronger position.

4. Developments in collective bargaining and social dialogue (350 words)

Please give details of the number of collective agreements negotiated in 2011 by level (e.g. national, sectoral, company), compared with numbers of agreements negotiated in 2010. Outline any trends/shifts between levels of bargaining, or changes in bargaining coverage.

  • To what extent are there derogations from collective agreements? Describe any trends in terms of derogations.
  • If there have been any major bipartite or tripartite initiatives at national level, please provide details. (Do not include initiatives which deal specifically with the economic situation as these should be covered in question 5)
  • Other conditions of employment (these might include training and skills, job security, occupational pensions, equal opportunities and diversity issues)

In Denmark, there are no details of the number of collective agreements negotiated by level. Collective agreements are not reported to any kind of authority, nor statistical nor administrative. Collective bargaining takes place in a combination of sectoral and local level.

It is very seldom that there is particular derogation from collective agreement in Denmark. Over the last two decades the system of bargaining has been significantly decentralised. This means that in the main part (85%) of the private sector, collective agreements on actual wage increases and working time arrangements are negotiated at company level between the management and the employees’/trade union representative. There are virtually no limits set in the central framework agreement to what can be agreed at company/local level, provided the local parties both agree. This obstructs unilateral decisions, and this is also why derogations seldom occur.

In 2011, the two-year agreement in the public sector was to be renewed. Negotiation took place in January-February still in the light of the economic crisis. The outcome was a classic compromise settlement, where both parties could claim they got the best deal possible in the context of the economic crisis. The new ‘minimum agreement’ maintained the status quo with nothing much new. However, the agreed modest pay rises was not enough to secure a real wage increase throughout the year, partly because of an adjustment scheme regulating the balance between public and private sector wages and partly because the inflation was over 2% at the end of the year (DK1104019I).

5. Responses to the economic situation (200 words)

With regard to the current economic situation, please give brief details of:

  • cross-sectoral and sectoral level initiatives, the responses of the social partners in your country, with a focus on any bipartite or tripartite initiatives to tackle any economic problems;
  • government responses to the economic situation with an impact on industrial relations and on labour law;
  • and any significant effects of the economic situation on the industrial relations system.

If initiatives have been reported in an earlier Annual Review, please provide an update.

There has been no focus during 2011 on bipartite or tripartite initiatives to tackle economic problems caused by the financial/economic crisis. Neither has the economic situation had any influence or effects on the industrial relations system during 2011.

The parliament passed a new bank package in August 2011. It was number four in a row over the last three years and was also called the consolidation package. The main objects of the help package are: to set up an expert committee with the task to nominate systematically the most important banks (the big key banks) that are too important for the economy to go bankrupt. At the same time the so-called ‘dowry scheme’ will be extended so that healthy banks can more easily take over all or part of a bank in troubles. Finally, the State may take over the bad exposures in banks before they go bankrupt. The loans are taken over by the state’s economic garbage company Financial Stability, which was created after the first bankrupcies during the crisis.

6. Developments in working conditions (550 words)

Please report the most important developments in the field of working conditions and quality of work and employment during 2011 in your country. The following topics should be taken into consideration:

  • career and employment security – including job security, income, information, consultation and participation and equal opportunities;
  • health and well-being of workers – including health problems, risk exposure, impact of changes in work organisation, and violence, harassment and discriminations;
  • developing skills and competences – including qualifications, skills and competences, career prospects and training opportunities
  • work-life balance – including issues such as working time, time management at work and social infrastructures.

For answering this question, please make use of all national sources of data on working conditions such as national surveys, quantitative and qualitative research and administrative reports (for example, from the labour inspectorate or health and safety authorities). Please report also on policies, programmes or initiatives implemented at national and regional/local levels by public institutions and social partners. Please make sure you are not reporting the information already provided in question 2.

The employment level increased with a total of 8,000 persons in the first and second quarter of 2011, but decreased again in the third and fourth quarter of 2011, with a total of 16,000 persons. In the fourth quarter of 2011 the employment level decreased with 8,000 people compared to the fourth quarter of 2010. The decrease is solely found among part-time workers, which declined by 13,000 persons, while the number of full-time employees rose by 5,000 persons. The number of ILO-unemployed - that is unemployed people in the labour force who are actively looking for a job- is 228,000, which corresponds to 8 % of the total labour force (Statistics Denmark, The Labour Force Survey 4 quarter 2011 (In Danish, 89,9 Kb PDF)).

In 2010 the income level increased by 3.1 % and in contrast to 2009 the real income level also increased in 2010 by 0.7 %. (Statistics Denmark, Income Statistics 2010, 2011 (In Danish, 81.8 Kb PDF)). The income statistics for 2011 are not yet available.

  • health and well-being of workers – including health problems, risk exposure, impact of changes in work organisation, and violence, harassment and discriminations;

According to the annual report of work accidents for 2010 (Work related accidents 2010, annual statement by the Danish Working Environment Authority, 2011 (In Danish, 221 Kb PDF)) conducted by the Danish Working Environment Authority (Arbejdstilsynet), 44,382 work accidents were reported in 2010. It is a rise of 1,853 accidents compared to 2009, but is still the second lowest number since 2005. The rise may be explained by an increase in falling accidents due to the particular cold winter of 2010. Furthermore the report states that employees who have been employed for less than one month represents twice as many accidents as those who have been employed for six months. Also, there are almost as many accidents on the first day of employment, as in each the following four weeks. In 2010 39 employees died from a work accident in Denmark, which is the lowest registered number of fatal accidents. Work accidents statistics for 2011 are not yet available. For a different calculation method on work accidents or for gender mainstreamed statistics see the annual report Work Accident Statistics 2010, 2011 (In Danish, 640 Kb PDF) from the Danish National Board of Industrial Injuries (Arbejdsskadestyrelsen).

An Equal Pay Tribunal (Ligelønsnævn) was established with effect from 1 June 2011 by the social partners the Central Organisation of Industrial Employees (CO-Industri) and the Confederation of Danish Industry (DI). In six month since its establishment, the tribunal has not heard any cases. Neither DI nor CO-industri is surprised by this, but it has led to some public debate (DK1111029I).

  • developing skills and competences – including qualifications, skills and competences, career prospects and training opportunities.

In 2011 Danish trade unions have had continued focus on the possible negative effects of the financial crisis in regards to employee development. According to 3F´s Unemployment Insurance Fund (A-kasse) the number of members in job who attends adult vocational training (AMU) has decreased by 9,069 persons, corresponding to 24.5 % from first quarter of 2010 to first quarter of 2011. In the same period the number of unemployed members attending AMU has decreased by 60 %. For more information see Dramatic decline in adult vocational training, 3F, 2011 (In Danish).

  • work-life balance – including issues such as working time, time management at work and social infrastructures.

A recently published report Mediating the effects of work-life conflict between transformational leadership and health-care workers’ job satisfaction and psychological wellbeing, 2011, conducted on the basis of a project by the National Research Centre for the Working Environment (NFA) states, that transformational leadership promotes job satisfaction and well being at work. The relationships can be explained by the fact, that employees experiences less conflict between work and private life. For details on the project, see Transformational leadership helps employees to balance work and private life (In Danish) by NFA.

7. Industrial action (200 words)

Please give brief details of strikes and other industrial action during 2011, including:

  • statistics on the number of strikes, workers involved and working days lost (absolute number and per 1,000 workers) for as much of 2011 as is available (please indicate briefly what types of action are or are not included in these figures – e.g. are only strikes with a minimum number of workers or days lost included, or is only “official” action included?), and how this compares with previous years; and
  • any particularly large or significant strikes/lockouts or other disputes;

During the economic crisis strikes and other industrial action have been limited – with the exception on 2008, see table 1. The year of 2009 showed the lowest number of lost working days due to industrial action since this statistics was introduced in 1996. The economic crisis has obviously put a damper on industrial action. In 2008 nurses, care workers and the child and youth educators were on strike in connection with the renewal of collective agreements in the public sector that year. Thus the strikes were legal – and they took place during spring, i.e. before the financial crisis broke out. The figures in table 1 cover all strikes, official as well as unofficial, in the private sector as well as in the public sector. Figures from 2011 are not published until April 2012.

Table 1. Number of work stoppages and working days lost due to industrial action 2007-2010

Total

Number of work stoppages

2007

2008

2009

2010

862

335

207

329

Number of employees involved

61,113

91,409

12,679

15,828

Number of working days lost

91,700

1,869,100

15,000

18,500

Source: Statistics Denmark. Statistikbanken. Arbejdsstandsninger.

Two years of unsuccessful negotiations about a renewal of the collective agreement between the multinational IT-company CSC (former Danish state owned) and the IT-trade union PROSA ended in June 2011 when the Labour Court ruled against the union, stating that CSC was entitled to release itself from the agreement with PROSA. After the ruling, CSC signed a new agreement with another IT-union, HK. This agreement was much less favourable to the programmers and system consultants at CSC. PROSA consequently lost its bargaining rights and employee representatives for their 700 members at CSC (DK1111019I).

A part from being underway for two years the conflict was different in so far as the employer opened with a lockout which led to a following strike and not vice versa as usual. Furthermore it showed that the time for previous years’ very favourable collective agreements for IT specialists is running out. PROSA was unable to enforce their agreement, partly because the CSC-agreement was a company agreement and not covering nationally, and partly because CSC was able to hire Indian IT specialist from CSC India to work in Denmark. This shows that IT specialised jobs are now as vulnerable to globalisation as jobs in processing industry.

8. Restructuring (250 words)

Please give brief details of major and significant incidences of company restructuring and workforce reductions in 2011 and how they were dealt with, especially where these led to important industrial disputes or collective agreements, or had other notable industrial relations implications.

Compared with earlier years during the economic crisis the number of major restructurings involving dismissals of more than 100 employees reported to ERM was modest in 2011, see table 2. Almost all major restructurings took place in the second half of the year. The majority of the companies were private companies but the trend at the end of the year and into 2012 has been that the cost-cutting requirement in the public sector has led to mass redundancies in ministries and ministerial agencies. Restructurings in the private sector involved the closure of American-owned Flextronics whereby 280 employees in Jutland were without job, and the take over of what was considered a Danish flagship Danisco by American Dupont. This sale gave rise to a public debate about the limits for selling off the family silver. Besides, all large banks in Denmark went through internal restructurings in 2011.

However, none of the restructurings ended in important industrial disputes nor did they have any influence on industrial relations.

Table 2. Number of restructurings involving more than 100 employees being made redundant 2008-2011

Year

2008

2009

2010

2011

Number of restructurings

29

72

25

18

Source: European Restructuring Monitor (ERM)

Table 3. Restructuring indicators. Number of notifications 2008-2011

Year

Number of employees involved

Number of companies involved

2008

17.228

316

2009

28.132

587

2010

14.162

316

2011

11.356

356

Source: The National Labour Market Authority. Jobindsats.dk - Ledighedsindikatorer

9. Other relevant developments (150 words)

If there been any other significant developments affecting employment relations in 2011 that have not been mentioned above, please give brief details.

No.

Carsten Jørgensen, FAOS, University of Copenhagen and Helle Ourø Nielsen, Oxford Research.

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