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Collective Bargaining

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Bargaining at national level provides a framework for much of the Danish industrial relations system. Pay and conditions are negotiated between unions or “cartels” of unions and the employers at industry level, but complementary negotiations at company level are becoming increasingly important. Overall 80% of employees are covered by collective bargaining.

The framework

Collective bargaining in Denmark operates within a clearly defined structure. At the highest level there are the framework agreements between the LO and the Danish employers' federation (DA), which set the rules for issues which in many other countries would be regulated by the law. The most important agreement at this level is the general agreement which covers the right to organise, rights on dismissal and industrial disputes. The cooperation agreement (see below), which has been revised several times since it initially came into force in 1947, was also signed at this level.

 

 

Agreements covering pay and conditions, which in the 1960s and 1970s were largely also signed at this national level, are now dealt with at the level of individual industries. In most cases, these industry level agreements leave substantial room room for further negotiations at company level, particularly on pay.

 

 

In a briefing paper produced before the 2014 private sector negotiating round FAOS, the employment relations research centre at the University of Copenhagen, divides the agreements to be negotiated into two main groups. For one group, by far the largest, covering around 85% of employees in LO unions in the private sector, pay is set through local negotiations at company level. The industry level agreements are limited to other conditions and for some industries, though not all, will also set basic rates – a floor which applies in very few cases. The main manufacturing settlement, and the retail and finance agreements all follow this pattern. For the remaining 15%, which include the transport sector and food, the industry level agreements set out all the main terms, including on pay, which are then followed locally1 .

 

 

In the public sector, the main collective agreements are also between “cartels” of unions on the one hand and employers (central government and the associations for regional and local government) on the other. However, here the central agreements are crucial in setting pay rates, although since the late 1990s a small part of the pay of public sector employees has also been determined through local bargaining.

 

 

Overall, the coverage of collective bargaining is high. A 2010 study, using material from the Danish statistical office and the employers’ federation DA, found that 71% of those employed in the private sector and 100% of those in the public sector were covered by collective bargaining in 2007. This produces an average level of coverage of 80%.

 

 

One other factor in the final outcome of negotiations is the frequent intervention of the official conciliator, appointed by the government, to resolve disputes.

The subject of the negotiations

As already noted, negotiations in Denmark cover a range of issues that elsewhere are often dealt with by legislation. And since the late 1980s bargaining at industry level has covered issues such as pensions, increased flexibility in working time – by providing frameworks for local agreements – and collective funds for maternity leave and training. For the overwhelming majority of the workforce in the private sector, only the minimum rates are determined by industry level negotiations and actual earnings depend on negotiations in the company and the workplace.

There is no system for setting a single national minimum wage.

Who negotiates and when?

 

As already noted, negotiations in Denmark cover a range of issues that elsewhere are often dealt with by legislation. And since the late 1980s, bargaining at industry level has covered issues such as pensions, increased flexibility in working time – by providing frameworks for local agreements – and collective funds for maternity leave and training. As already stated, for the overwhelming majority of the workforce in the private sector, only the minimum rates are determined by industry level negotiations and actual earnings depend on negotiations in the company and the workplace. This is much less the case in the public sector.

 

There is no system for setting a single national minimum wage.

 

There is also a fairly rigid calendar for negotiations on collective agreements, with the negotiations for the bulk of the manufacturing sector between the union cartel CO-industri and the employers’ association DI starting the process.

 

Agreements normally last for several years, typically either two or three. The most recent agreements reached in early 2014 run for three years.

 

Most private sector agreements begin in March.

L. Fulton (2015) Worker representation in Europe. Labour Research Department and ETUI. Produced with the assistance of the SEEurope Network, online publication available at http://www.worker-participation.eu/National-Industrial-Relations.