Inclusive Growth Through Collective Bargaining in Denmark

This case report investigates collective bargaining in post-financial crisis period with a special focus on whether the bargaining parties – employers’ organizations and trade unions – are actively engaging in new strategies and practices of inclusive growth through collective bargaining. The report shows that the bargaining system has remained stable throughout the period. No significant institutional changes have occurred in the bargaining system and basic employer and trade union strategies and practices has to a large degree remained stable too.

There are a number of explanations behind the enduring stability. Firstly, the institutional strength of the bargaining system based on the role of the Confederation of Danish Industries (DI – Dansk Industri) and CO-Industri (The Central Organisation of Industrial Employees in Denmark); the bargaining parties behind the Industrial Agreement. These two organizations make up the main axis of the Danish collective bargaining system in the private sector, setting the framework for collective agreements in other parts of the private sector. Secondly, this is done via a tight coordination in bargaining process first and foremost on the employers’ side, but on the trade union side as well. Still, the coordination of the bargaining process goes even further, as the public conciliator can interlink the different sector agreements and make them part of a total settlement proposal (mæglingsforslag), which then is sent for approval both among trade union members and the legally competent bodies among employers. Both the employer and the trade union side can oppose proposals that are out of sync with what DI and CO-Industri agreed upon in their break-thorough agreement. Consequently, the interlinking of agreements ensures a high degree of coordination. Thirdly, ‘inclusive growth’ is not explicitly a concept that is part of trade union or employer strategies or policy formulations. However, especially the trade unions emphasise that growth via a ‘fair’ wage for all is an inherent part of the bargaining strategy and that the bargaining coordination is a decisive element in securing the fair wage for all in the reoccurring bargaining rounds. Furthermore, coordinated bargaining and the inter-linking of agreements is seen as decisive in order to shelter against the development of a low-pay segment in for instance parts of private services where unionization is relatively low.

Read the full report "Inclusive Growth Through Collective Bargaining in Denmark" by Søren Kaj Andersen.