Flexicurity at Company Level

Research paper by Anna Ilsøe (May 2006)

It is well known, that the intensified international competition from the 1980s and onwards have forced social partners in a number of European countries to decentralise bargaining competencies. Less known is, however, how management and workers representatives have addressed the increasing need for company level bargaining, and how they balance a flexible production with security for the employees.

Considering the current success of the Danish Flexicurity Model one could state the thesis that management and workers representatives in Denmark succeed to develop more balanced and more locally adjusted company level agreements (i.e. flexicurity at company level) than their European colleagues. Furthermore, one could state that this is an important part of Denmarks competitive advantage.

The thesis was examined through an empirical investigation of company level bargaining on flexible working hours at 10 companies in the metal industry of Germany and Denmark in year 2005. Management and workers representatives were interviewed and company agreements studied at five companies in Denmark and five companies in Baden-Württemberg (both small, medium and large companies were included).

The findings partly confirm the thesis. Management and workers representatives seem to agree on profitable and balanced trade offs on flexible working hours in many of both the Danish and German companies. However, the administration of the flexible working hours agreed seems very different. Where the administration in the German companies first and foremost is characterised by managerial control, the administration in Danish companies is predominantly characterised by time sovereignty for the employees based on trust. The time sovereignty in the Danish companies contributed heavily to the overall gain of the local flexicurity arrangements by paving the way for further efficiency and cut backs on administration. Second, the bargaining of flexicurity at company level seems to imply a tendency to polarisation both in Denmark and Germany, which can undermine trust in labour-management relations. Not all groups of employees can meet the demand for flexibility and risk exclusion from the regulation, and at the same time smaller companies have fewer resources to develop and implement balanced flexicurity than large companies. This underlines the ongoing importance of the sector level agreements even in times with flexicurity developments at company level.

Research paper, FAOS, Department of Sociology, University of Copenhagen, May 2006.