Collective Agreements and Negotiations with Trade Unions
Labor law in Denmark is a specialized discipline requiring a thorough understanding of the traditions and unwritten rules established throughout over 120 years of case law in Denmark.
One of Littler | Denmark's core areas of expertise is collective labor law, and we have extensive experience assisting both Danish and foreign companies in navigating the complex rules. Several of Littler | Denmark's lawyers and legal professionals have experience from employer and employee organizations, providing an in-depth understanding of the practical work around the collective bargaining agreements.
"The Danish Labor Market Model"
The Danish labor market is unique in the sense that wage and contractual terms are negotiated between the labor market parties and are not regulated by legislation. This is what we refer to as "the Danish labor market model." Employers and employer organizations, in collaboration with the Danish Trade Union Confederations and trade unions, establish the framework for the Danish labor market.
The Danish labor market, particularly in skilled areas, has a high degree of coverage by collective agreements. Employees with higher education levels are less likely to be covered by such agreements.
Collective agreements often contain very specific and detailed regulations regarding employees' salary and working conditions, including provisions on wages, overtime pay, pension, working hours, and location, among others. These agreements also often include procedural provisions on employee representation (shop stewards), dispute resolution, and more.
During the term of a collective agreement, the parties are subject to a duty of peace. This principle, known as "fredspligt," obliges the labor market parties not to give notice or initiate a labor dispute to achieve better conditions. During negotiations or renegotiations of a collective agreement, the duty of peace is suspended, and the parties can initiate industrial actions, such as lockouts and strikes, to put pressure on the other party to meet their demands.
Companies only become subject to a collective agreement if they accede to it. This can happen either through joining an employer organization or directly acceding to a collective bargaining agreement by agreement with a trade union.
Labor Disputes
Given that the Danish labor market is highly regulated by collective agreements, Denmark has established a conflict resolution system with expertise in collective labor law.
The Mediation Institute is a state entity assisting labor market parties in conflicts related to the negotiation and renewal of collective agreements. Conflicts may also arise when a claim for an agreement is made in an area where there has not previously existed a collective bargaining agreement. The purpose of the Mediation Institute is to help labor market parties conclude agreements without labor disputes.
The Labor Court is a specialized court that primarily handles cases of violation of collective agreements, violation, and interpretation of general agreements, and the legitimacy of announced industrial actions. If a company or organization has acted in violation of a collective bargaining agreement, the Labor Court can impose a fine, known in the labor law system as a "bod."
Industrial Arbitration assesses questions related to the interpretation of collective bargaining agreements.
We assist companies and employers in negotiating collective agreements and support companies in connection with demands for collective agreements, potential conflicts in the labor law system, as well as other issues related to collective labor law.
