Definitive Report - REPORT_NO254, March 1988

1. 200. By a communication dated 10 July 1987, the Danish Seamen's Union presented a complaint of violations of collective bargaining rights against the Government of Denmark. The Government communicated its reply in a letter dated 2 November 1987.
2. 201. Denmark has ratified the Freedom of Association and Protection of the Right to Organise Convention, 1948 (No. 87) and the Right to Organise and Collective Bargaining Convention, 1949 (No. 98).

A. The complainant's allegations

1. 202. In its communication of 10 July 1987, the Danish Seamen's Union alleges that the Public Conciliator, through his Draft Settlement dated 11 February 1987 (of which a copy is supplied) intervened to impose on and renew the collective agreements between organisations and individual undertakings grouped together under the Danish Employers' Confederation on the one hand, and the Seamen's Union on the other hand, contrary to Conventions Nos. 87 and 98.
2. 203. The complainant union explains that the Public Conciliator is the head of the three-person Conciliation Board, a government institution, and is appointed by the Minister of Labour along with the two other conciliators, for the country as a whole, for three years at a time in pursuance of the Conciliation in Industrial Disputes Act of 1934, as amended. He has the discretion, under section 12 of this Act, to join together "as an entity" various draft agreements or settlements. This "entity" would then be put to the combined union membership of the various trades involved and the employers for a vote as to its acceptance.
3. 204. The complainant (which is not affiliated to the Danish Federation of Trade Unions, LO) explains that it commenced negotiations with its bargaining counterpart, the Danish Shipowners' Association (which is affiliated to the Danish Employers' Confederation), in January 1987 for the collective agreement that was due to expire on 1 March 1987. At the same time, for the metal sector, after negotiations, minutes of the conclusion of their collective bargaining were signed (on 15 and 16 January 1987) by the Employers' Association of the Metalworking Trades (affiliated to the Danish Employers' Confederation) and the Danish Metalworkers' Union (affiliated to the LO). From the minutes it appears that no further claims were outstanding for the metal sector, and the Metalworkers' Union recommended that its members return an affirmative vote. Likewise, between 16 January and 11 February 1987, similar minutes were signed for the private labour market sector by the Danish Employers' Federation and the LO.
4. 205. The complainant states that in early February 1987 it was summoned by the Public Conciliator under section 3(2) of the Conciliation in Industrial Disputes Act to participate in negotiations concerning the union's agreement with the Shipowners' Association. On 11 February the Public Conciliator, in pursuance of section 4(3) of that Act, presented a Draft Settlement containing the minutes of 15 and 16 January concerning the metal sector and similar minutes signed between organisations under the Danish Employers' Confederation and the LO. In spite of the Seamen's Union's objections, the Public Conciliator also determined that this 11 February Draft Settlement was to be regarded "as an entity" with the negotiated agreements reached for the rest of the private sector.
5. 206. The complainant emphasises that this linking together into one Draft Settlement meant that the Seamen's Union had in reality no influence on the adoption or rejection of the agreement because the LO has more than 700,000 voting members, whereas the Seamen's Union musters some 5,000 seamen, of whom - for technical reasons - only 1,000 are regarded as voting members. The overall Draft Settlement was adopted by some 170,000 votes for, with some 150, 000 against. Amongst the members of the Seamen's Union itself the draft was rejected by 982 votes against 6.
6. 207. According to the Seamen's Union, it submitted the Public Conciliator's Draft Settlement to the Ombudsman of the Danish Parliament, who announced - on 19 February 1987 - that reasons of principle prevented him from voicing an opinion on the provisions of the Conciliation in Industrial Disputes Act to the extent that such provisions had been brought before the Industrial Court.
7. 208. The Seamen's Union also brought an action against the Public Conciliator in the Industrial Court, whose judgement of 9 April 1987 held that the Public Conciliator's presentation of the Draft Settlement was consistent with the provisions of the Conciliation in Industrial Disputes Act.
8. 209. The complainant points out that, although the Danish Metalworkers' Union and other workers' organisations have not presented a complaint about the treatment of their negotiated agreements by the Public Conciliator, in its opinion, he had no proper cause to intervene with Draft Settlements for these organisations because agreement had already been reached voluntarily between the parties.
9. 210. Lastly, the complainant stresses that the Public Conciliator had no reason whatsoever for deciding that Draft Settlements for organisations under the Danish Employers' Confederation and the LO (where agreement had in any case already been reached) were to be regarded "as an entity" with the Draft Settlement for the Seamen's Union/Danish Shipowners' Association. It points out that at no time was it substantiated that government intervention was necessary. In addition, it considers that the Draft Settlement from the Public Conciliator, which lays down agreements of four years' duration - whereas two-year agreements are customary in Denmark - has by far exceeded the reasonable period in which renewals of agreements might otherwise be imposed on trade unions.
10. 211. In conclusion, the complainant alleges that this government intervention in effect deprived the Seamen's Union not only of the possibility of freely negotiating the renewal of its agreement (including possible rejection of the proposal for renewal and, as a last resort, calling and implementing a strike with a view to obtaining a better negotiation result), but also of any timely strike action. It states that the Public Conciliator intervened in the collective bargaining - by presenting an overall Draft Settlement 18 days prior to 1 March 1987, i.e. the date of notice for the agreement between the Shipowners' Association and the Seamen's Union, when no strikes or lock-outs had been called - at a time when it was quite unnecessary. In this connection, the Union points out that - notwithstanding any notice of termination - collective agreements continue to run until a strike or lock-out has been called, the earliest time for which is 14 days after such notice has been given.

B. The Government's reply

1. 212. In its communication of 2 November 1987, the Government explains the homogeneous development of the whole organised labour market in Denmark as a result of the renegotiation cycle of collective agreements in the spring of every second year, usually as from 1 March or 1 April (depending on the sector involved). It states that one of the advantages of this system is that it is easier for undertakings to plan production and work because major differences from one occupational field to another are avoided. In order to obtain such parallel results in the labour market, the parties traditionally try to co-ordinate the renewal of collective agreements renewable at 1 March and these new agreements serve as the model for the agreements due for renewal on 1 April.
2. 213. The Government stresses that the Public Conciliation Board was set up to assist the parties in connection with the renewal of collective agreements, and that the only function of the Public Conciliator is to contribute to the conclusion of agreements between the parties; in some cases this is ensured by a Draft Settlement proposed by him which is then subjected to a ballot among both the workers and employers concerned. According to the Government, in his activities the Public Conciliator cannot be bound by government instructions or political authorities.
3. 214. According to the Government, the fact that virtually all collective agreements are renegotiated at the same time means that a global solution should be found in connection with the collective bargaining situation. Otherwise, there would be a risk that where agreement has been reached on the renewal of collective agreements in nearly all fields of the labour market, but where disagreement concerning renewals persists in a few minor sectors, there could be industrial disputes and notices of sympathetic action across the labour market, even in those sectors where agreement had been reached. In order to prevent such a situation, states the Government, the Conciliation Act contains the so-called "linking" clause. This means that the Public Conciliator may decide that a Draft Settlement shall relate to several collective agreements, which are then subjected to a ballot as a whole. According to the Government, such Draft Settlements covering a number of collective agreements are quite common in Denmark, for example, the 1 March renewal concluded between organisations which are members of the LO or the Danish Employers' Confederation, the collective agreements in agriculture, and the collective agreements covering academic staff in public employment.
4. 215. The Government states that in the spring of 1987, the employers and workers in the metal industry had, at a comparatively early stage, reached agreement concerning the basis for renewal of their collective agreement, and subsequently other parties involved in negotiations reached agreement for the renewal of their respective sectoral agreements on terms more or less the same as those agreed upon in the metal industry. One common feature of all these renewal negotiations was that the parties' agreements should form part of a Draft Settlement which the parties expected the Public Conciliator to propose in order to solve the problems in those sectors where the collective agreements were renewable as of 1 March. The purpose of this understanding was to obtain a general solution to the bargaining situation, in particular to avoid a situation where the results obtained in one sector might be considerably poorer than those obtained in another.
5. 216. According to the Government, when the Public Conciliator put forward his Draft Settlement on 11 February 1987 he had, as understood by the parties to the Settlement, included in it those agreements which had been concluded without the assistance of the Public Conciliator. It points out that the agreements renewed with the assistance of the Public Conciliator contained terms corresponding to those obtained without the assistance of the Public Conciliator. This led to a challenge of the contents of the Draft Settlement before the Industrial Court on the ground that such a Draft Settlement should not have included the terms achieved without the assistance of the Public Conciliator. The Government states, however, that on 9 April 1987 the Industrial Court held (a copy of the judgement is supplied) that the Public Conciliator had not overstepped his powers, and emphasised that the negotiation results obtained without the assistance of the Public Conciliator "had not manifested themselves in agreements concluded", i.e. the terms written into the minutes would only lead to collective agreements if similar results were to arise from the negotiations being carried on in the rest of the labour market. If this should not happen - against the expectations - work stoppages could take place in those sectors, and the Government points out that notices of industrial disputes were in fact exchanged by the parties in these fields even after the terms in question had been voluntarily agreed upon. The Industrial Court consequently found that the Public Conciliator was entitled to include these negotiation results in his 11 February Draft Settlement in an attempt to obtain a global solution for all the sectors in question.
6. 217. In conclusion, the Government emphasises that the rules laid down in the Conciliation in Industrial Disputes Act - including the linking provision which reflects the solidarity principle within the trade union movement - are based on the wishes and proposals of the social partners - a tradition which dates back to the start of the century. The Act thus safeguards the interests of the social partners and not the interests of the State. The linking provision, states the Government, has become absolutely necessary for the exercise of free collective bargaining in a manner acceptable to the majority.

C. The Committee's conclusions

1. 218. The Committee notes that the facts of this case are not in dispute: both the complainant and the Government explain that on 11 February 1987 the Public Conciliator exercised his discretion to propose a Draft Settlement to renew for four years all the agreements due to expire on 1 March 1987 in the private sector fields under the Danish Employers' Confederation and the Danish Federation of Trade Unions, which specifically include those agreements made between the Employers' Confederation and the Danish Seamen's Union.
2. 219. Both sides likewise agree that on 9 April 1987 the Industrial Court held that the Public Conciliator had not overstepped his power by including in that Draft Settlement certain terms which had been freely negotiated by other parties.
3. 220. What the complainant criticises is that this government intervention in the free collective bargaining that was going on for the seamen's sector was not necessary and that this imposition of an agreement reached voluntarily in the metal industry on the entire private sector is excessive, and too long.
4. 221. The Government considers, on the other hand, that the linking of a Draft Settlement for the seamen's sector to agreements for the private sector as a whole (through the "linking" provision in section 12 of the Conciliation in Industrial Disputes Act) was necessary as part of the global approach to collective bargaining in Denmark. It cites examples to show that this linking of several sectoral agreements in one settlement is not unusual. The Government also points out that such coverage usually works to the advantage of all the workers' organisations involved by raising poor bargaining results to a higher level. In fact, the Government emphasises that, in the present case, the other private sector unions not only expected, but expressly included in the minutes summarising their negotiations (in particular in the metal sector) that their results be incorporated into the Draft Settlement which the Public Conciliator was expected to present, on threat of industrial action.
5. 222. The Committee observes that this is the second occasion in recent years that it has been called on to examine the Danish Government's intervention in the private sector collective bargaining process. Although the legislation at issue in the earlier case (see 243rd Report, Case No. 1338, paras. 209 to 247, approved by the Governing Body in March 1986, followed up in the 1987 Observation on Denmark's observance of Convention No. 98 made by the Committee of Experts on the Application of Conventions and Recommendations) is not that called into question here, the Committee notes that it is bound to refer the Government to the same fundamental principles, namely that a basic aspect of freedom of association is the right of workers' organisations to negotiate wages and conditions of employment freely with employers and their organisations, and that any restriction on the free fixing of wage rates should be imposed as an exceptional measure and only to the extent necessary, without exceeding a reasonable period; such restrictions should be accompanied by adequate safeguards to protect the living standards of the workers.
6. 223. The Committee must therefore decide whether the Government's intervention of 11 February 1987 was justified in the light of these four criteria. First, the Committee observes that the method used was not, on the facts, exceptional. The Public Conciliator's de officio discretion under the Conciliation in Industrial Disputes Act to summon the parties already engaged in bargaining to negotiations and his discretion to link various sectoral agreements in one Draft Settlement document have existed for many years and have, according to the Government, been used often. The relevant provisions of the Act in question read as follows:
   • Section 3
7. (1) When there is reason to fear a stoppage of work or one has already occurred, and when the conciliator concerned with the matter attaches social importance to the effects and scale of the dispute, he may, if the negotiations between the parties have been carried out under the provisions agreed between them and have been declared by one of the sides as concluded without result, either on his own initiative or at the request of one of the parties, call on the disputing parties to negotiate. The conciliator may also on his own initiative or at the request of one of the parties at an earlier stage provide his assistance for the establishment of fresh agreements, even though the negotiations conducted by the parties have not been declared concluded without result. (...)
8. (2) The parties shall be bound to comply with a summons from the conciliator. (...)
   • Section 12
9. (1) The conciliator is empowered to decide in Draft Settlements providing for a general solution of a conflict submitted by him that these Draft Settlements shall be considered in part or in full as an entity, regardless of how the trades involved in the conflict are organised (as independent local unions, national unions or employer organisations, or grouped as members of an amalgamation of local unions, national unions or employer organisations). In any such linking of Draft Settlements covering several trades, however, organisations consisting of supervisors, etc., shall not be included. (...)
10. (3) In the event that the Conciliator shall have decided that several Draft Settlements shall be regarded as an entity, the decision whether the Draft Settlements so linked have been adopted or rejected by the relevant organisations shall be made by comparing the results of the various trades included.
11. 224. Secondly, the Committee notes that the proposal of the Draft Settlement on 11 February was presented when, as the complainant points out, the time-limits for the calling of industrial action had not been reached. The Committee particularly notes in this connection that neither the Government nor the complainant supply information as to whether the seamen's bargaining was blocked or having difficulties. The Public Conciliator's imposition of the Draft Settlement at that time on the sector concerned was, therefore, in the Committee's opinion, premature.
12. 225. Thirdly, the Committee observes that the legislation does contain certain protective clauses, since a linked Draft Settlement must be put to a vote of the parties concerned. However, The Committee would stress in this connection that the Seamen's Union itself voted overwhelmingly against (982 votes against, 6 for) the Draft Settlement. The Committee would therefore recall, as it has in previous cases, that the extension of an agreement to an entire sector of activity contrary to the views of the organisation representing most of the workers in a category covered by the extended agreement is liable to limit the right of free collective bargaining of that majority organisation and that this system makes it possible to extend agreements containing provisions which might result in a worsening of conditions of work of the category of workers concerned. (See, inter alia, 217th Report, Case No. 1087 (Portugal), para. 223, and 250th Report, Case No. 1364 (France), para. 136.)
13. 226. Lastly, the Committee observes that no justification has been put forward by the Government to explain why the Draft Settlement of 11 February 1987 renewed the terms and conditions of employment for the private sector as a whole for four years, when the usual period covered by collective agreements was two years. In the Committee's opinion, the imposition of such a long time before negotiations can recommence exceeds the reasonable period referred to in the above-mentioned principle on collective bargaining. This aspect of the present case particularly disturbs the Committee since it notes that the other recent case concerning Denmark (referred to earlier) criticised a March 1985 Danish Act on the renewal and extension of collective agreements which rendered impossible collective bargaining for a two-year period. The Committee recognises, however, that the Draft Settlement covering four years was approved by the majority in the private sector by 170,000 votes for, with 150,000 votes against.