Collective Agreements in Denmark

What is a collective agreement?

In other words, collective agreements are the rules and agreements that both employees and employers must adhere to. For employees, there are many benefits to working for an employer who has entered into a collective agreement. It ensures organized pay structures, vacation agreements, payment during illness, etc. For employers, there are also significant advantages to being part of a collective agreement. It helps attract and retain employees, as well as plan and budget employment costs effectively.

An employer is not required to enter into a collective agreement, just as an employee is not obligated to join a union. However, a negotiated collective agreement is a significant advantage for both parties.

Union Membership

For employees, being a member of a union means receiving help and advice in cases of workplace conflicts, unpaid wages, disputes, and so on. Unions also work to improve workplace conditions, achieved through collective bargaining.

In the past, employees were often more or less pressured to join a relevant union before starting at certain workplaces. Even today, organized colleagues may sometimes pressure new employees to join a union. However, it should be emphasized that there is no organizational requirement in Denmark.

While having many members naturally strengthens unions, it is also accepted if one chooses not to join. Unions work to improve conditions for employees regardless of whether they are union members or not.

Unions can also negotiate agreements with employers who are not part of an employer organization. This is known as an accession agreement, where it is determined which collective agreement will apply at a specific workplace, and special terms are agreed upon—this may involve pension arrangements, for example. An accession agreement is just as valid as a standard collective agreement.

When does a collective agreement apply and how do they work?

A collective agreement becomes effective once negotiations are concluded and approved by union members and employer organizations. These agreements typically last two to three years, after which new negotiations take place.

Since collective agreements establish employment conditions and ensure orderly pay and working conditions, the labor movement in Denmark has long fought for the right to collective bargaining. These agreements apply to all employees, regardless of whether they are union members.

Although companies are not obligated to enter into collective agreements, having structured pay and working conditions fosters workplace harmony, well-being, and peace. Employer organizations and unions negotiate a framework agreement, which can then be adjusted to suit the specific needs of individual companies. These local agreements are made between the company management and employees (often represented by a union representative). This allows collective agreement terms to be tailored to the workplace and its employees.

If a collective agreement is not upheld, it is referred to as a breach of agreement. Disputes regarding such breaches are handled by the Labor Court, which operates faster than regular courts. Before a case reaches the Labor Court, the parties involved in the dispute must hold a joint meeting. If no resolution is reached, the matter is escalated to the Labor Court. The Labor Court is the only court of its kind, and its rulings cannot be appealed to civil courts.

During collective agreement negotiations, unions work to improve wages, employment conditions, recognition of skills, and work performance. These discussions cover topics such as further education, working environment, wages, overtime compensation, etc.

The Danish Model

Denmark is renowned for "The Danish Model," which is based on:

1. Tripartite collaboration (cooperation between the state and labor market stakeholders)

2. Collective agreements

3. High unionization rates

In Denmark, the state does not set a minimum wage. Instead, collective agreements determine minimum wages for different professions. This means Denmark does not have a fixed national minimum wage.

The entire Danish labor market relies on collective agreements being negotiated and approved. These agreements provide employees with security, knowing that unions are working for the common good. Although unions are not as powerful today as they were decades ago, they remain strong advocates for workers. Without unions, employees would likely not have the same benefits, such as pay during illness, parental leave, or limits on working hours.

For employers, collective agreements are also advantageous. Companies can ensure agreement coverage by:

• Joining an employer organization with a collective agreement.

• Signing an accession agreement with a union.

A collective agreement is a mutual commitment that ensures order and stability for employers and proper conditions for employees. Often, employees covered by a collective agreement elect a union representative, who acts as a partner to the company to promote workplace harmony and well-being.

What does a collective agreement guarantee?

• Notice periods for both employers and employees, giving companies time to plan if an employee decides to resign.

• Opportunities for employees to participate in further education without significant costs to the company. Companies can join an education fund that covers most employee wages and training expenses.

• Through a maternity fund, companies are reimbursed for a large portion of wage costs during an employee’s maternity leave.

How are collective agreements negotiated?

Collective agreements—dealing with pay and working conditions—have existed in Denmark for over 100 years. Some agreements are renegotiated every two years, while others are revised every three years. If union federations and employer organizations cannot agree, a meeting is held in the Conciliation Institution, where a mediator seeks a resolution. Both parties are required to participate under the Conciliation Act.

Negotiations involve unions, their federations, and employer organizations, representing all employees and employers, regardless of union membership.

In principle, pay and employment terms are agreed upon in collective agreements. However, at some workplaces, employment terms are negotiated directly between employers and employees without union involvement.

The Danish Employers’ Confederation (DA) and the Danish Confederation of Trade Unions (LO) have signed a main agreement that includes:

• The employer’s right to manage and distribute work.

• The right to engage in collective strikes, blockades, sympathy actions, lockouts, and boycotts.

• A peace clause (it is illegal to strike while a collective agreement is in effect).

• Rules for union representatives.

• Rules on dismissal of employees and union representatives.

• The duration and termination of collective agreements.

• Rules on breaches of agreements, which must be brought before the Labor Court.

Which collective agreement applies to me?

The collective agreement that applies to you depends on the industry in which you are employed. For example, couriers at Just Eat are covered by the agreement between the trade union 3F and the Danish Chamber of Commerce (Dansk Erhverv). You can find more information here.

All employees are covered by the collective agreement, regardless of whether they are members of a union or not. You are also covered if you are a member of a different union than the one your employer has entered into an agreement with. However, if you are not a member of the applicable union, you cannot vote on the approval or rejection of a new collective agreement. Only members of the relevant union have voting rights in this regard.

In summary, a collective agreement is a contract between an employer organization and a trade union regarding the terms and conditions of employment for the employees covered by the agreement. An individual agreement, on the other hand, is a contract between an employer and an individual employee regarding that employee's terms of employment. The key difference is that a collective agreement applies to all employees of the company or industry, while an individual agreement applies only to one specific employee.

Who is covered by the industry's collective agreement?

The Industrial Agreement typically covers employees working in production. These employees are generally paid hourly, meaning their salary depends on the number of hours they work.

The Industrial Agreement includes provisions on wages, working hours, notice periods, employee representatives, local agreements, payment during illness, maternity leave, pension, and training.

Just Eat is the first delivery company in Denmark, and currently the only one, to have entered into a collective agreement. We are very proud of this! The agreement ensures good working conditions and job security for employees. It creates peace of mind and a positive working environment for everyone.

We hope you would like to work for a company that values its employees and ensures proper working conditions and fair pay. Therefore, we warmly welcome you to a workplace where we appreciate your efforts.

FAQ:

• Does my company have a collective agreement?
  Just Eat has a collective agreement. Companies that have collective agreements often advertise this, and you can typically find this information on your company’s website.

• What does a collective agreement include?
  Agreements on wages and working conditions at the workplace.

• Is a company required to have a collective agreement?
  No.

• Who negotiates collective agreements?
  Employee organizations and employer organizations negotiate on behalf of all employees and affiliated employers.

• Which collective agreement am I covered by?
  You can find this information on your company’s website or by contacting your union.

The information included on this page is only intended for general information purposes and does not relate specifically to work at just-eat.dk. Although just-eat.dk. makes every effort to keep the content on this page up to date, the information is offered without any guarantee or claim of accuracy. We therefore recommend that you consult official government websites or seek professional advice before acting.