In the context of the 1997 bargaining round, employers are in favour of three-year collective agreements but trade unions are arguing for the existing practice of two-year agreements to be continued
1997's collective bargaining in the private sector is concentrating on three main issues: 100% wage compensation during maternity leave; further negotiations over the pension scheme initiated in 1991; and a limited wage increase to allow for inflation. The social partners in the different bargaining areas are largely in agreement on the content of the new collective agreements, but the central social partner organisations - the Danish Confederation of Trade Unions (LO) and the Danish Employers' Confederation (DA) - still cannot agree whether the new collective agreements should be of two or three years' duration.
The question has become increasingly complex because the public sector, involving 225,000 employees, and the agricultural sector, covering some 50,000 agricultural workers, have both agreed on two-year collective agreements. The Union of Commercial and Clerical Employees in Denmark (HK), the largest LO-affiliated union, with 360,000 members, has agreed to a three-year agreement.
Since most collective agreements in the private sector expire on 1 March 1997, the Public Conciliator postponed industrial action for 14 days on 26 February 1997, and can, according to the Act on Public Conciliation, postpone industrial action for an additional 14 days, if notice of industrial action is likely to effect essential services. In the forthcoming bargaining, the Public Conciliator will seek a breakthrough in one or more bargaining areas in the hope of achieving a settlement that will then form the basis for a breakthrough in other, related bargaining areas.
Why did Denmark's 50-year-old practice of two-year collective agreements, with a common expiry date, suddenly change? In the 1995 collective bargaining round, the Confederation of Danish Industries (DI) the largest affiliate of the DA, representing more than 50% of DA's total paybill, signed a three-year collective agreement with its counterpart, the Central Organisation of Industrial Employees in Denmark (CO-Industri). Since other employers' organisations affiliated to DA had signed two-year agreements that, according to the DI, were too costly, it simply signed the three-year agreement to avoid comparability and adaptation to these costly demands. The 1997 collective bargaining therefore only covers half of the DA bargaining area.
From DA's point of view, it is important to arrive at a common agreement on the duration of the collective agreements, together with a common expiry date. There are two reasons for this: firstly, it is essential to reduce the likelihood of an outbreak of secondary action (sympathy strikes and lock-outs); and secondly, to avoid "leap-frogging" settlements from one bargaining area to another. The DA's strategy appears to be to link all the decentralised negotiated collective agreements into one conciliation proposal. and either to accept the inevitability of industrial action or to arrive at a three-year settlement in common with the DI. The DA is therefore proposing that the ongoing bargaining rounds should end with a three-year all-industry collective agreement which will expire in 2000. This will enable the DI, which is to renew its industry collective agreements in 1998, to conclude a two-year collective agreement that will synchronise the duration of all-industry collective agreements in Denmark.
LO attaches equal importance to a settlement on the duration of collective agreements and a common expiry date, since this would be in line with both its "wage solidarity" policy of minimising wage differences among all its affiliates, and its policy of a continuous improvement of living and working conditions, which it has operated throughout the post-war era. LO is proposing a continuation of the practice of two-year collective agreements, and arguing that since it was DI which broke with the practice, DI is responsible for restoring it, by concluding either a one-year industry collective agreement in 1998, or a three-year agreement. It would thus be possible to arrive at a common expiry date for the all-industry collective agreement either in 1999 or 2001.