OK23 – Understand the collective agreement negotiations in the private sector

Approx. 600,000 employees in the private sector are about to get a new collective agreement, and negotiations are going on right now. Here you get an overview of the latest updates.

Updated: April 12, 2023

“Yes” to a new collective agreement in the private sector

The workers and employers have voted yes to the conciliator’s mediation proposal for new collective agreements in the private sector. This means that the almost 600,000 employees in the private labor market affected by the proposal will have new collective agreements. This is stated by the Conciliation Institution on their website. You can read the entire mediation proposal here.

Among the professional groups that get new collective agreements, we find everything from bricklayers, milkmen and shop workers to blacksmiths, painters, drivers and plumbers. With a voting percentage of 59.3 per cent. on the workers’ side, the proposal received 79 per cent. yes votes cast. On the employer side, the proposal has been adopted with 100 percent yes votes.

Some of the most central points in the agreement relate to salary increases, greater allowances for overtime, more maternity leave, new distribution of contributions to pensions, an increase in the discretionary account and full pay during participation in self-selected training. You can read more about each of the points further down in this article.

The collective agreements enter into force with effect from 1 March 2023 and are valid for 2 years.

Source: dr.dk

Update: April 5, 2023

Mediation proposal ready for voting

On 25 March, Conciliator Jan Reckendorff put forward a mediation proposal to renew the collective agreements in the private sector. You can read the entire mediation proposal here. Now it is up to the employers and employees to approve or reject the proposal, after which it can be decided whether the new collective agreements have been adopted. The voting result will be published on Wednesday 12 April 2023.

What happens if the proposal is rejected?

If the employees reject the conciliator’s mediation proposal, it ends in a so-called “major conflict”, which will come into force five days after a no to the mediation proposal, i.e. on 17 April 2023. However, major conflicts are very rare in Denmark, and the last time they took place in the private collective bargaining negotiations was in 1998.

We will update you here as soon as the conciliator has published the result of the vote.

Updated: February 12, 2023

The industrial sector has agreed on a settlement

Yesterday, the employers and employees from Dansk Industri and CO-Industri, respectively, signed a collective agreement after historically difficult and long negotiations in the field of industry. There is thus agreement on the so-called breakthrough settlement for the private labor market, which will form the basis for the upcoming negotiations on collective agreements in the rest of the private labor market. The agreement will run for the next 2 years, which means that the next negotiation will take place in 2025.

Some of the most central points in the agreement relate to salary increases, greater allowances for overtime, more maternity leave, new distribution of contributions to pensions, an increase in the discretionary account and full pay during participation in self-selected training.

Higher salary and greater allowances for overtime work

The parties have primarily agreed on a 4 percent increase in the salary package during the period. It includes i.a. an increase in the minimum wage of DKK 9 per hour and that apprentices’ hourly wages increase by DKK 8.

Supplement for overtime etc. increases by 3.5 percent in 2023 and 3 percent in 2024.

More maternity leave

Maternity leave with full pay is extended by 4 weeks in total: 2 weeks for sharing and 2 weeks for the other parent. In other words, in the new collective agreement, the father/partner is earmarked for an additional 2 weeks’ leave with pay, and in addition, the parents get an additional 2 weeks’ leave with pay, which can be shared between them.

Increased employer-paid pension contribution

The distribution of the employee’s and employer’s contribution to pension has also been changed. Up until now, the employer has paid 8 percent and the employee 4 percent, but with the new agreement, employers must in future pay 10 percent, while the employee gets away with 2 percent.

This means that the employees get 2 percent more of their salary rather than going to the pension savings.

Increase in the contribution to the Free Choice Salary Account (DA: Fritvalgskonto)

Regarding the Free Choice Account, it has been agreed that it will increase from 7 to 9 percent in 2024.

The discretionary account is a percentage of the holiday-entitled salary, and it is invested in a special savings account, which today can be used for freedom, extra pension or seniors scheme.

Full salary for participation in self-selected training programs

Previously, the grant was 85 percent if the employee participated in self-selected training/education programs. With the new collective agreement, they will receive a full salary.

Source: Ritzau

OK23 – what is it about?

OK23 was launched on 4 January 2023, when DI (Danish Industry) and CO-industri (Central Organization of Industrial Employees in Denmark) began negotiations in the Industrial Collective Agreement and the Industrial Employees Collective Agreement. The collective agreement negotiations thus start in Industry, which includes 6,000 companies and 230,000 employees. Here, they are working towards a so-called “breakthrough settlement”, which will form the framework for the subsequent negotiations in the private sector.

The negotiations in OK23 will undoubtedly be influenced by a number of external factors: war in Europe, energy crisis and high inflation. The latter gives birth to a labor market with a shortage of labor and record high employment, and therefore it is expected that the workers make unusually high demands for the negotiations. And that the negotiating parties involved are preparing for the negotiations to be historically difficult.

What is a collective agreement?

Before we delve into the content of the negotiations and the various parties, we must have a complete understanding of what a collective agreement is. A collective agreement is an – often industry-specific – agreement that determines the overall terms of an employee’s employment. Agreements thus exist to ensure orderly conditions for employees and employers. The agreement is made between one or more trade unions and employers, and can also be concluded between the individual company and a trade union. It is the trade union that represents and negotiates on behalf of employees (salaried employees), and usually it is an employers’ organization that negotiates on behalf of the employers.

A collective agreement defines a number of rules on minimum terms and handling of everything from conflict, strike and lockout to salary, pension, working hours, maternity leave, further training and termination.

Agreements are typically negotiated and concluded every two or three years, and now negotiations in the private sector have just been started with OK23. As described, the agreements are first negotiated within the industry, where the breakthrough settlement, which concerns i.a. minimum payment, will form the basis for the subsequent negotiations within e.g. transport, construction, service and food.

What are the OK23 negotiations about?

One of the most central themes in the OK negotiations is salary. In addition, the requirements on the private labor market also concern working hours, leave, pension, maternity leave, education, terms of resignation and efforts against social dumping.

Who negotiates at OK23?

On the wage earner side, the top negotiators for OK23 are a mixture of frontmen and trade union representatives mainly within the Industry, Transport and Construction areas. On the employers’ side, it is directors and leading persons in the employers’ organizations who are at the forefront of the negotiations.

Below you can read more about the specific dealers in the most central business areas for OK23.

The Industrial sector

In the industrial area, two collective agreements are being negotiated; The Industrial Collective Agreement and the Industrial Employees’ Collective Agreement.

For the wage earners, it is the cartel CO-Industri (the Central Organization of Industrial Employees in Denmark) that negotiates on behalf of nine unions: 3F, Dansk Metal, HK/Privat, Teknisk Landsforbund, Dansk El-Forbund, Blik- og Rørarbejderforbundet, Malerforbundet, Serviceforbundet and Dansk Railway Association.

DI, which is the largest member organization in the Danish Employers’ Association, DA, negotiates for the employers.

The Transport sector

In the transport area, the Collective Agreement for drivers, warehouse workers and dock workers, entered into between the 3F transport group and DI, is being negotiated.

For the employees, it is 3F’s transport group that is at the forefront of the negotiations, while on the side of the employers and DI there are those who sit in the top positions in DI.

The Construction sector

In the field of construction, the BAT cartel negotiates on behalf of 7 associations: 3F, Dansk El-Forbund, Dansk Metal, Blik og Rør, Malerne, HK Privat and Teknisk Landsforbund.

Here, it is the individual trade unions that negotiate and enter into the collective agreements.

The largest collective agreement in the construction field is the Building and Construction Agreement between 3F and DI byggeri, where 3F’s construction group negotiates on behalf of the employees and the Director and Deputy Director of DI negotiate on the employers’ side.

For other areas of construction, agreements are being negotiated between Tekniq Employer and the Electrical Association, Blik and Rørarbejderforbundet and Dansk Metal.

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Sources: FHO (https://fho.dk/ok23/) og HK (https://www.hk.dk/omhk/sektor/hk-privat/ok23)

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