Danish store workers get pay rise in new bargaining agreement

Some 150,000 people who work in retail in Denmark will see their pay increase after trade unions and employers’ organisations came to a new agreement on working terms.

Danish store workers get pay rise in new bargaining agreement
Industriens Hus in Copenhagen. Collective bargaining agreements are under negotiation this spring. Photo: Liselotte Sabroe/Ritzau Scanpix

The union HK Handel and the Danish Chamber of Commerce (Dansk Erhverv) announced the conclusion of collective bargaining negotiations on Wednesday, news wire Ritzau reported.

The agreement covers around 150,000 people who work in the retail sector.

Under the new agreement, the lowest wage that can be paid to staff will go up by the equivalent of 721 kroner per month. The increase is set to take effect through pay rises once per year during the two-year term covered by the agreement.

Additionally, a so-called fritvalgskonto (“free-choice account”) will see its deposits rise by two percent. Workers can choose whether to use the account for salary, holiday or pension.

Employer contributions to staff pensions rise from 8 percent to 10 percent, while contributions from staff pay go down by 2 percent.

Danish trade unions negotiate with employers’ organisations every few years to develop collective bargaining agreements (overenskomster in Danish) regulating many aspects of Denmark’s labour market, from wages to pensions and paid parental leave. 

Union members and employers are given the option to vote for or against the bargaining agreement, as is the custom under the Danish labour model. Leaders of unions will generally issue recommendations to members on whether or not to vote for the agreement.

READ ALSO: EXPLAINED: What is a Danish collective bargaining agreement?

“This has been a long negotiation process and an intense final straight,” the vice CEO with the Chamber of Commerce, Laurits Rønn, said in a statement.

“Both sides typically say after the end of collective bargaining negotiations that it was hard. This time I’d say it was the toughest negotiations I’ve been a part of,” he said.

“But we have to say it’s an expensive agreement,” he said.

Collective bargaining deals this spring are likely to see wage increases for workers due to higher living costs connected to inflation.

An agreement for workers in the industrial sector was announced last weekend, also securing increased pay in response to inflation.

Another deal, in the financial sector, was also announced on Wednesday. That agreement will see 41,000 workers covered by the participating unions receive a wage increase of 4.5 percent this year and 3.7 percent next year, Ritzau reported.

READ ALSO: ‘Be very blunt’: How to navigate Danish office culture and come out on top

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Denmark announces major spending plan to fight social dumping 

The Danish parliament has agreed a 1.3 billion kroner spending plan that is designed to tackle social dumping and other problem areas at workplaces.

Denmark announces major spending plan to fight social dumping 

The deal, termed a “working environment agreement” (arbejdsmiljøaftale), specifies social dumping as a major area of focus.

“This is an agreement of historic level. I am happy that everyone is part of it,” employment minister Ane Halsboe-Jørgensen said following the conclusion of negotiations on Thursday.

Social dumping is the practice by which foreign workers are used to circumvent Danish collective bargaining agreements, saving employers money by hiring staff on wages and working conditions inferior to those set by the Danish labour model.

READ ALSO: ‘One in two’ tax inspections found social dumping at Danish companies

Some 673 million kroner of the total 1.3 billion are earmarked for prevention of social dumping.

“This is an anti social dumping effort that acts against labour crime and cheating the system. So that people who actually play by the rules get fair competition,” Halsboe-Jørgensen said.

Other elements of the spending will aim to address industrial accidents and mental health at workplaces.

“Work should not make you sick. Neither physically or mentally.  That’s why we’re also proud that we’re tackling psychological working environments,” Socialist People’s Party (SF) representative Astrid Carøe said.

The money provided by the deal will be spent over a four-year period from 2024 until 2027.

The signatory parties describe it as a “historically large grant” to the agency Arbejdstilsynet, which is responsible for ensuring acceptable working environments.

Increased inspection frequencies, introduced in a prior 2019 agreement, continue under the new deal.