LABOUR RELATIONS

Denmark has a rather civilised attitude to labour relations. Employer and union organisations, as opposed to individual firms and workers, sit down together and agree longish-term contracts (usually 2 years) covering the whole of their industry. Individual firms tend to go along with any deal agreed, though some use it as a floor, and offer better terms. Companies within the industry that are not formally part of the deal still tend to use it as a benchmark.

The "agreement season" starts around now, and kicks off with the negotiations for industry, 240,000 production workers spread across some 6,000 companies. Because of knock-on effects, the industry agreement sets the tone for all other groups' negotiations, and is widely considered to be the bellweather for the economy. So there was relief all round when agreement was announced on Monday. Civilised relations have been under a bit of strain since the beginning of the financial crisis, so one of the most important elements of the deal was that it is for three years instead of the normal two. The other major point was a rise over the period in the minimum wage from kr.108.70 an hour to kr.113.65. Many production workers get paid more than that, but it is still good for Danish competitiveness that the wage floor will only rise by around 5% over three years.

With industry done and dusted, other groups should find it easy to settle. Which is what the country needs as it slowly emerges from the havoc of the past six years.

Walter Blotscher