A collective agreement is an agreement between two parties about the working conditions that apply to employees in a specific company or industry. In Denmark neither Danish nor foreign companies are legally required to comply with or conclude a collective agreement.
The parties to collective agreements are, on the one hand, either a trade union representing the employees or an association of salary/wage earners and, on the other hand, an individual employer, a company or an employers' organisation.
The collective agreement contains a wide range of agreed terms and conditions and a framework for the rights and obligations of employers and employees. The agreements may contain rules about working hours and workplace, about pay, overtime pay, if relevant, holidays, pension and other work aspects. They may also include rules about working environment and dispute resolution. The agreements may be accompanied by different appendices and supplementary agreements. The agreements generally contain both independent rules and provisions found in Danish legislation.
A number of supplementary rules also form part of the agreement, such as the so-called General Agreement between the Danish Employers’ Confederation (DA) and the Danish Federation of Trade Unions (LO) (Hovedaftalen).
Conclusion of collective agreements
As a foreign company, you should expect Danish trade unions to contact you to enter into an agreement for employees posted in Denmark. You can choose to negotiate a collective agreement with the trade union on your own, or you can join an employers’ organisation which can negotiate with the trade union on your behalf.
Trade unions and their use of combat measures
It is a fundamental principle in Denmark that trade unions are entitled to try to conclude collective agreements with employers and employers’ organisations. Trade unions may use various combat measures to reach an agreement with an employer. You may also experience this as a foreign employer with people posted in Denmark.
The rules about combat measures are not embodied in legislation but based on extensive case law from the Danish Industrial Court. In Denmark, workers have extensive rights to initiate industrial disputes and sympathetic strikes. Sympathetic strikes are launched to support an existing dispute. The dispute is only legal if the work which the trade union is trying to regulate by an agreement falls under the trade union’s scope. However, it is not a requirement that the trade union has members working for the company in question.
Danish trade unions may use industrial disputes to support the demand for payment of wages or salaries in accordance with a collective agreement with a foreign company posting employees to Denmark. An industrial dispute may be directed at the company with which the trade union is trying to conclude a collective agreement or it may be a sympathetic strike aimed at other companies that supply products to the company in question. Industrial disputes are subject to a notice period.
Combat measures which a trade union may take subject to notice include:
• Strikes, where the trade union instructs its members to stop work at the company in question.
• Blockades, where the trade union instructs its members to refrain from accepting work for the company in question.
• Sympathetic strikes, where the trade union or other unions under the same umbrella organisation want to support the main conflict by instructing its members to strike or refrain from accepting work for the company or performing any tasks related to the company affected by the main industrial dispute.
To be legal, an industrial dispute requires, in principle, that the trade union involved has a reasonable professional interest in demanding a collective agreement. This means that the work which the trade union is trying to regulate by concluding an agreement must fall under the trade union’s scope.
The Industrial Court also performs a proportionality assessment to determine whether the objective which the union is trying to achieve by means of the dispute justifies the combat measures used.
Pursuant to Section 6 a of the Danish Act on Expatriate Wage Earners, a number of conditions must be complied with for Danish labour market organisations to make use of combat measures against foreign companies. The section also describes the maximum wage and wage components that can be demanded under the collective agreement.
It is a condition for the use of combat measures to achieve a collective agreement that the labour market organisation first notifies the foreign employer of the provisions in current collective agreements on which its demands are based. The collective agreements in question must apply nationwide and have been concluded between the most representative Danish employee and employer organisations.
It is up to the foreign company to refer a dispute to the Industrial Court to determine whether the demands for a collective agreement are legal and whether a strike or blockade is legal. The Industrial Court will make a prompt decision on such questions.
The Industrial Court can therefore make decisions about both the use of sympathetic strikes and the individual components of the demand for a collective agreement such as limits to demands for wage components, holidays and pension.
A company affected by a sympathetic strike may also refer the decision about the legality of the notified sympathetic strike to the Industrial Court.
A company may also contact a Danish employers’ association and apply for membership so that it becomes covered by the same collective agreement(s) as the employers’ association in question and other members.
Use of collective industrial action, payment etc.
§ 6 a. In order to ensure posted workers receive payment equal to that which Danish employers are obliged to pay for the performance of similar work, collective industrial action may be used against foreign service providers in the same manner as against Danish employers in support of a demand to enter into a collective agreement, see however paragraph 2.
Para. 2 A condition for the implementation of industrial action referred to in paragraph 1 is that the provisions of the collective agreements concluded by the most representative labour market parties in Denmark, and which cover the entire Danish area, have been brought to the attention of the foreign service provider. These collective agreements must state with sufficient clarity what wage must be paid according to the agreement.
Danish trade unions may use industrial dispute to obtain a collective agreement
In Denmark there are many examples of trade unions that have initiated an industrial dispute to conclude a collective agreement. The examples involve both Danish and foreign employers. As regards foreign employers, the right to take industrial action has been particularly relevant in the construction industry.
Example 1: A trade union requests its members to take part in a sympathetic strike by refusing to supply goods, remove waste and perform tasks associated with a principal or employer with whom the trade union wants to conclude a collective agreement.
Example 2: Electricians performing work as part of a construction project refuse as part of a sympathetic strike to perform work for the principal because the foreign company which is responsible for the other construction tasks has not yet signed an agreement, as requested in the main industrial dispute against the foreign company.
Read more about the main Danish labour market organisations
Read more about the main Danish labour market organisations, which can provide information about the content of the collective agreements, including key issues such as wages.
The umbrella organisation for 14 employers’ organisations in the private labour market within industry, trade, transport, service and construction.
Telephone: +45 33 38 90 00
Umbrella organisation for a large number of trade unions. Represents 1.4 million members across different sectors.
Telephone: +45 35 24 60 00
Contact the Ministry of Employment
Monday to Thursday 8.30-16.0
+45 72 20 50 00