The flip coin of organised decentralisation – company-level bargaining in the Danish industrial sector and its effects

Paper by Anna Ilsøe

Decentralisation of collective bargaining has been a common trend in a number of Western economies over the last two or three decades. Two types of decentralisation have been identified. Organised decentralisation, which we find in countries, where decentralisation has taken place without significant drops in union densities and coverage of collective agreements, and disorganised decentralisation, where the process of decentralisation has been accompanied by an erosion of union densities and coverage of collective agreements.

The Danish version of organised decentralisation is often referred to as centralised decentralisation. The Danish case offers a good example of organised decentralisation as union densities and the coverage of collective agreements remain comparatively high. Today, union density in Denmark is close to a level where eight in ten wage earners are organised, and eight in ten are covered by collective agreements.

However, the concept of centralised decentralisation goes further than defining the delegation of bargaining competencies from the sector level to the company level within a context of high union densities and high coverage of collective agreements. Centralised decentralisation also includes a reproduction of the bargaining power and the bargaining culture found at sector level at the local level. Sector-level bargaining in Denmark has often been characterised as integrative bargaining (win-win situations) building on trust between the bargaining parties. It remains, however, an open question how collective bargaining works in practice in Danish companies, and whether or not it reflects the situation at sector level. In fact, the hypothesis of centralised decentralisation has never been verified or rejected by any empirical study at company level.

Drawing on a comprehensive survey among managers and employee representatives in the Danish industrial sector this paper aims at testing whether or not the long lived hypothesis of centralised decentralisation in fact is true. Analysing the data the paper tries to answer this question in three steps. Firstly, whether employee representatives with bargaining competencies (in Danish: tillidsrepræsentanter) are present at companies supplying employees with a similar bargaining power as at sector level. Secondly, if the bargaining culture between managers and employee representatives is characterised by trust as the bargaining culture between the sector level parties. And finally, whether the outcomes of company level bargaining include benefits for both sides of the table like at sector level. Data is drawn from a web-survey on company level bargaining conducted among a random selection of companies in 2008. A pre-survey was done by phone to identify companies with and without employee representatives and collect contact details. A total of 151 employee representatives and 145 managers from large companies as well as SME's answered the final web-survey.

Article for the IIRA Regional Congress, June 28th to July 1st 2010, Copenhagen