About. 600,000 employees in the private sector are set to receive a new collective labour agreement, and negotiations are currently underway. Here's an overview of the latest updates.
Updated 12 April 2023
“Yes” to new collective labour agreement in the private sector
Employees and employers have voted in favour of the conciliator's mediation proposal for new collective agreements in the private sector. This means that the almost 600,000 employees in the private labour market affected by the proposal will have new collective agreements. This is announced by the conciliation body at their website. You can read the full mediation proposal here.
Among the labour groups receiving new collective agreements are everything from bricklayers, dairy workers and shop workers to blacksmiths, painters, drivers and plumbers. With a vote of 59.3 per cent on the employee side, the proposal received 79 per cent yes votes. On the employers' side, the proposal passed with 100 per cent yes votes.
Some of the key points of the agreement include a wage increase, higher overtime pay, more parental leave, redistribution of pension contributions, an increase in the free choice account and full pay during participation in self-selected training. You can read more about each of these points further down in this article.
The collective agreements come into effect from 1 March 2023 and are valid for 2 years.
Source: dr.dk
Updated: 5 April 2023
Mediation proposal sent to vote
On 25 March, Conciliator Jan Reckendorff presented a mediation proposal for the renewal of collective agreements in the private sector. You can read the entire mediation proposal here. Now it's up to employers and employees to approve or reject the proposal, after which it can be decided whether the new collective agreements are adopted. The voting results will be announced on Wednesday 12 April 2023.
What happens if the proposal is rejected?
If the employees reject the conciliator's mediation proposal, it will result in a so-called “major conflict”, which will come into effect five days after the rejection of the mediation proposal, i.e. on 17 April 2023. However, major conflicts are very rare in Denmark, and the last time they occurred in private collective bargaining was in 1998.
We will update you here as soon as the conciliator has announced the result of the vote.
Updated: 20 February 2023
The industry has reached an agreement
Yesterday, employers and employees from the Confederation of Danish Industry and CO-industri, respectively, finalised a collective agreement after historically difficult and long negotiations in the industrial sector. This means that agreement has been reached on the so-called breakthrough settlement for the private labour market, which will form the basis for the upcoming negotiations on collective agreements for the rest of the private labour market. The agreement will run for the next 2 years, which means that the next negotiations will take place in 2025.
Some of the key points of the agreement include wage increases, higher overtime pay, more parental leave, redistribution of pension contributions, an increase in the free choice account and full pay during participation in self-selected training.
More pay and higher overtime allowances
First and foremost, the parties have agreed on a 4 per cent increase in the wage bill during the period. This includes an increase in the minimum wage of DKK 9 per hour and an increase of DKK 8 per hour for apprentices.
Allowances for overtime etc. will increase by 3.5 per cent in 2023 and 3 per cent in 2024
More maternity leave
Paid parental leave will be extended by 4 weeks in total: 2 weeks to share and 2 weeks to the other parent. In other words, in the new collective labour agreement, the father/co-mother gets an additional 2 weeks of paid leave earmarked and the parents get an additional 2 weeks of paid leave that can be shared between them.
Increased employer-paid pension contribution
The division of the employee's and employer's pension contributions has also been changed. Previously, the employer paid 8 per cent and the employee 4 per cent, but with the new agreement, employers will pay 10 per cent and employees will pay 2 per cent.
This means that employees receive 2 per cent more of their salary instead of going into their pension savings.
Increase in contribution to the Free Choice Salary Account
Regarding the Free Choice Account, it has been agreed that it will increase from 7 to 9 per cent in 2024.
The free choice account is a percentage of the holiday pay and is deposited in a special savings account, which today can be used for time off, extra pension or senior scheme.
Full salary when participating in self-selected training
Previously, the subsidy was 85 per cent if the employee participated in self-selected training. With the new collective agreement, they get full pay.
Sources: Ritzau
OK23 - what is it all about?
OK23 kicked off on 4 January 2023, when DI (Confederation of Danish Industry) and CO-industri (Central Organisation of Industrial Employees in Denmark) initiated negotiations in the Industrial Collective Agreement and the Industrial Salaried Employees“ Collective Agreement. The collective labour agreement negotiations will start in Industry, which includes 6,000 companies and 230,000 employees. Here they are working towards a so-called ”breakthrough agreement", which will form the framework for the subsequent negotiations in the private sector.
The OK23 negotiations will undoubtedly be characterised by a number of external factors: war in Europe, the energy crisis and high inflation. The latter is creating a labour market with labour shortages and record-high employment, which is why workers are expected to make exceptionally high demands in the negotiations. And that the negotiating parties involved are preparing for the negotiations to be historically difficult.
What is a collective agreement?
Before we dive into the content of the negotiations and the different parties, we need to understand what a collective agreement is. A collective labour agreement is a - often industry-specific - agreement that sets out the overall terms of an employee's employment. The purpose of collective agreements is to ensure orderly conditions for employees and employers. The agreement is made between one or more trade unions and employers, and can also be made between the individual company and a trade union. It is the trade union that represents and negotiates on behalf of the employees (wage earners), and normally it is an employer organisation that negotiates on behalf of the employers.
A collective agreement defines a set of rules on minimum conditions and how to handle everything from disputes, strikes and lockouts to wages, pensions, working hours, maternity leave, continuing education and termination.
Collective labour agreements are typically negotiated and concluded every two or three years, and now negotiations in the private sector have just started with OK23. As described, the agreements are first negotiated in the industrial sector, where the breakthrough agreement, which includes minimum wages, will form the basis for subsequent negotiations in areas such as transport, construction, service and food.
What are the OK23 negotiations about?
One of the most central themes in the OK negotiations is pay. In addition, demands in the private labour market are also about working hours, leave, pensions, maternity leave, training, severance conditions and efforts to combat social dumping.
Who negotiates at OK23?
On the employee side, the top negotiators for OK23 are a mix of leaders and trade union representatives, mainly from the Industry, Transport and Construction sectors. On the employer side, CEOs and senior executives from employer organisations are leading the negotiations.
Below you can read more about the specific negotiators in the key industry areas for OK23.
Industrial area
In the industrial sector, two collective agreements are negotiated: the Industrial Collective Agreement and the Industrial Salaried Employees' Collective Agreement.
For employees, the CO-Industri cartel (Centralorganisationen af industriansatte i Danmark) negotiates on behalf of nine unions: 3F, Dansk Metal, HK/Privat, Teknisk Landsforbund, Dansk El-Forbund, Blik- og Rørarbejderforbundet, Malerforbundet, Serviceforbundet and Dansk Jernbaneforbund.
For employers, DI, which is the largest member organisation in the Confederation of Danish Employers, DA, negotiates.
Transport area
In the transport sector, the Joint Agreement for drivers, warehouse workers and harbour workers, negotiated between the 3F Transport Group and DI, is negotiated.
For employees, the 3F transport group is leading the negotiations, while from the employers' and DI's side, it's those who sit in the top positions in DI.
Construction area
In the construction sector, BAT-kartellet negotiates on behalf of 7 unions: 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 conclude the collective agreements.
The largest collective agreement in the construction sector is the Construction Agreement between 3F and DI-byggeri, where 3F's construction group negotiates for the employees and the Director and Deputy Director of DI negotiate for the employers.
For other areas of construction, collective agreements are negotiated between Tekniq Arbejdsgiver and El-forbundet, Blik og Rørarbejderforbundet and Dansk Metal.
What's next?
If CO-industri and DI succeed in reaching an agreement, it is expected that they will reach a settlement in February. They will then present an overall mediation outline in March, which will then be put to a vote by the organisation members before it can come into effect.
If CO-industri and the Confederation of Danish Industry fail to reach an agreement, there could be a major conflict that brings large parts of the labour market to a standstill.
Stay tuned to this post, which we will continuously update with the latest news in the OK23 process.
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Sources: FHO (https://fho.dk/ok23/) and HK (https://www.hk.dk/omhk/sektor/hk-privat/ok23)
