Academic journal article The Economic and Labour Relations Review : ELRR

Direct Participation in Denmark: The Positions of the Social Partners

Academic journal article The Economic and Labour Relations Review : ELRR

Direct Participation in Denmark: The Positions of the Social Partners

Article excerpt


The aim of this paper is to set out the positions of the Danish labour market actors regarding direct participation of the employees at the firmlevel within the private sector, with special reference to the metal industry and banking.

Denmarkis a small country of43,000 square kilometres and a population of 5 rnillion. The economy is highly dependent upon foreign trade. Imports amount to 38 percent of GNP and exports to 47 percent. The European Community is the most important market. GNP has been growing during the 1980s and since the beginning of the 1990s. A surprising feature of the 1980s, however, was a decrease in Danish labour productivity, especially between 1983 and 1986. This drop in productivity growth was partly explained by the organizational difficulties of firms in implementing new technology.

The Danish Industrial Relations System

The Labour Market Organizations

The Danish labour market is highly organized with two main central organisations: the Danish Federation of Unions (LO) and the Danish Employers Confederation (DA). The proportion of manual workers and salaried employees who are members of unions is 80 to 90 percent, depending upon the method of calculation. Within the financial sector it is close to 100 per cent. On the employers' side, DA covers a little less than half of the total number of employers, within the private sector, excluding the financial sector and agriculture However, DA covers around 70 per cent of manufacturing and construction (Due et al. 1993: 403). The Confederation of Employers in the Finance Sector is even more dominant within its area of coverage.

Since the end of the 1980s, the organisational pattern has been in a state of flux. Among the member organizations of DA, centralization has taken place. The Metal Employers' Confederation, the Confederation of Manufacturing and the Council of Manufacturing Employers have merged in recent years. Since 1992 the new Confederation of Danish Industries has dealt with both labour market and business matters, and it is the most dominant organization. Within the trade union movement, the Metal Workers Union has been a leading supporter of converting the predominantly craft unions into industry-wide organisations. A significant breakthrough for such a process has yet to occur, although there was the formation of a small number of large cartels from the beginning of the 1990s.

Within the finance sector, employers' organizations of banking, insurance and mortgage credit associations merged to form the Confederation of Employers of the Finance Sector in January 1990. One year later, in February 1991, a joint organization of employees within commercial banks and saving banks was formed, but insurance employees stayed outside this new union, known as the Federation of Employees of the Finance Sector.

Collective Agreements

Another important feature of the Danish labour market system is the consensus regarding fundamental principles of the relationship between the parties. The two main central organisations for employers and unions, DA and LO, recognized each other as legitimate collective bargaining parties after a historic compromise in 1899. After the Second World War, DA and LO agreed upon rules for cooperation at the enterprise level, and defined management's right to manage in a new General Agreement or Main Agreement. According to the Main Agreement, revised in January 1993, employers direct and distribute work in accordance with the provisions of the collective agreements and in cooperation with the employees and their elected representatives. Under the Agreement, the management of Danish enterprises must be carried out in cooperation with the employees and their representatives. This means direct participation by employees in one form or another, as well as representative participation

The content of the Main Agreement is further developed in the Cooperation Agreement of 1986. …

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