10 December 2012

The Danish model still exists - for better or worse

On 29 November 2012, the Industrial Court delivered the long awaited ruling on the legality of 3F's strike and blockade against Restaurant Vejlegården. The Court mainly found for 3F in relation to the conflict being legal.

Background

On 1 November 2011, Restaurant Vejlegarden ApS took over the lease of Restaurant Vejlegården, which had previously had a collective agreement with 3F. Shortly after the takeover, 3F contacted Restaurant Vejlegården concerning the entering into of a collective agreement. The restaurant rejected the proposition, registered with Kristelig Arbejdsgiverforening thereby becoming bound by the union's collective agreement with Kristelig Fagforening.

On 1 November 2011, Restaurant Vejlegarden ApS took over the lease of Restaurant Vejlegården, which had previously had a collective agreement with 3F. Shortly after the takeover, 3F contacted Restaurant Vejlegården concerning the entering into of a collective agreement. The restaurant rejected the proposition, registered with Kristelig Arbejdsgiverforening thereby becoming bound by the union's collective agreement with Kristelig Fagforening.

However, 3F did not accept this collective agreement as the union believed that it contained less favourable pay and employment terms compared to 3F's collective agreement covering the restaurant business. On 19 March 2012, 3F initiated a principal conflict. Subsequently, a sympathy conflict was initiated in support of the principal conflict resulting in the restaurant not receiving mail and food - and for some time, its waste was not collected. In addition, 3F used banners with different slogans held by so-called picketers on the restaurant's areas.

Kristelig Arbejdsgiverforening then commenced legal proceedings before the Industrial Court claiming, inter alia, that 3F was to recognise that the aggregate extent of the initiated conflict was not proportionate taking into consideration that the restaurant was already covered by a national collective agreement and that the sympathy conflicts were therefore illegal. Further, Kristelig Arbejdsgiverforening claimed that the principal conflict was illegal.

The Danish model

The characteristic feature of the Danish regulation of the labour market is that the pay level and other terms are ensured by way of collective agreements and not by way of legislation as in most other countries. The unions' right of conflict in order to achieve a collective agreement is therefore decisive for the importance of the development of the pay determination and the achieving of other central terms in Denmark. For the past couple of years, many proposals have been made in the Parliament for the government to introduce a motion concerning limitation of the unions' access to conflict in relation to the rules developed by the Industrial Court's practice; e.g. in case a union initiates a conflict in order to achieve a collective agreement in an industry already covered by a collective agreement with another union, e.g. the case concerning Nørrebro Bryghus in December 2007. None of these motions have resulted in legislation as reference has been made, inter alia, to the fact that a regulation of the right of conflict will be very difficult and will fundamentally change the way the roles in the Danish labour market have been distributed so far.

Most unions are organised in so-called central federations of which FTF and LO are the largest. There is a firm practice that, in relation to the companies that have entered into collective agreements with other unions within the same central federation, the unions cannot start a conflict in order to achieve a collective agreement. Kristelig Fagforening and 3F are not members of the same central federation, and in the present case, the Industrial Court was to decide whether the protection also applied to companies that had entered into other national collective agreements.

The grounds of the Industrial Court

With reference to the previous motion, which did not result in legislation, the Industrial Court found that the case was to be decided upon based on the Court's previous practice. And the Court was therefore to decide whether the conflicts and the steps taken vis-á-vis the restaurant exceeded the limits permissible.

The Court quoted a statement made by DA and LO from 2003 concerning "the right to initiate conflicts supporting a demand for a collective agreement" as regards the conflict's overall nature, purpose, means and the extent and effect.

The Court then found that the principal purpose of 3F to demand a collective agreement was to maintain and defend the well-established status of collective agreements, and that 3F had the necessary interest in achieving a collective agreement with the restaurant, and that it cannot be considered significant that the restaurant was already covered by a collective agreement between Kristelig Arbejdsgiverforening and Kristelig Fagforening.

The Court further found that 3F's interest in maintaining and defending the above well-established status is fundamental and so strong and legitimate that it justifies the sympathy conflicts initiated by the other departments of 3F - conflicts that necessarily had to impact the restaurant. The Court found, however, that a conflict may not be so extensive that it completely deprives the employer from performing his business, and 3F's handing out of flyers urging the restaurant's customers to boycott the restaurant was illegal. The Court also found that the failure to collect organic waste was not proportional taking the health danger into consideration.

However, the Court found that no prof had been produced that the steps and sympathy conflicts initiated had led to the unavoidable consequence that the restaurant was forced to close. The Court took into account that the conflicts only involved 3F's own members. There are therefore no grounds for establishing that the legally initiated steps and sympathy conflicts exceeded the limits of what is permissible.

Comments

As in the case concerning Nørrebro Bryggeri, the Industrial Court has once again ruled that legal authority is necessary in order to stretch the Danish model the way case law has developed since the September agreement in 1899. It is, however, worth noting that the Court makes an actual assessment of whether the conflict is so extensive that it completely deprives the employer from performing his business.

The content of this Newsletter is not, and should not replace, legal advice.

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