Challenges facing the Danish Collective Bargaining Model

Research paper by Trine P. Larsen, Steen E. Navrbjerg & Katrine Søndergaard (March 2009)

The Danish collective bargaining system faces a wide range challenges following the increased European integration. Some challenges concern the further development of the European and national social dialogue as well as the crossborder collaboration at company level. Other challenges are more country specific and in some instances mainly apply to specific sectors.

This research report examines the recent challenges facing the national systems of collective bargaining, using the banking sector in Denmark, Estonia, Northern Ireland (the UK) and Sweden as empirical examples since the banking sector is one of those sectors where the European integration has gone furthest in terms of deregulation, free movement of capital, the common currency and cross-border collaboration. The report is based on interviews with 35 representatives from the European Commission, national ministries, European and national trade unions and employers associations.

The report shows that the challenges facing the national collective bargaining systems can be divided into three broad categories: firstly, the European cross-national collaboration, secondly, the challenges facing specifically the national collective bargaining systems in the banking sector and thirdly the challenges deriving from the bargaining system at local level. Its main conclusion is that a sort of spill-over has taken place not only across sectors at European level but also in the individual member states and have in some instances triggered new initiatives which have been developed at local and sector levels to respond to the European challenges such as the idea of a European arbitration system. The handling of the European challenges are largely down to the member states' traditions of regulating the labour market, ongoing power games between social partners and political institutions, respectively as well as European policy under consideration. As a result, the various challenges have been handled differently by social partners, even among member states with relatively similar collective bargaining systems.

The more specific challenges with respect to the European cross-national collaboration the findings were that the negotiations at European level to a varying degree influenced the development of social dialogue at national level. The social partners can be inspired by other ways of tackling the international challenges such as the further development of the European social dialogue, the implementation and legal handling of European labour market policies at national and European level, including the idea of a European arbitration system which seems to gain support mainly from Nordic trade unions. The empirical findings also indicates that the European social dialogue often influences the national dialogue in terms of triggering a dialogue between social partners at supra- and national levels and is therefore in a sense a spill-over effect is in action. Also the analysis of the European Court of Justice's recent rulings in Viking, LAVAL and Rüffert highlight the national differences between member states and how these ruling to a varying degree challenge the national collective bargaining systems.

Regarding the challenges facing the collective bargaining systems in the banking sector the analysis emphasise the problems related to the low and declining union density and coverage rate of collective agreement in some member states as well as the more specific problems social partners face within the banking sector in Denmark, Estonia, Northern Ireland and Sweden. With respect to the local challenges the empirical analysis focuses on the cross-border collaboration at company level, and the analysis shows that the cross-border coordination and negotiations which takes place within different cross-border work councils trigger various problems due to language barriers and different cultures and traditions of collective bargaining.

FAOS, Department of Sociology, University of Copenhagen, March 2009.