On Sunday 18 March, the official mediator presented a mediation draft. This draft constitutes the mediation proposal which the mediator is going to present unifying the collective agreements on which the labour market parties have agreed and the collective agreements on which the parties did not agree. The mediation proposal will be put to a ballot within the next couple of weeks. We will describe the main elements of the draft and other important elements from the recently agreed renewals.

The content of the draft

Pay and pension
As at 1 March 2012, the minimum pay was increased by DKK 1.35 per hour as at 1 March 2012 for adults and by DKK 0.80 per hours for persons under 18. As at 1 March 2013, the pay for adults will be increased by another DKK 1.35 per hour and DKK 0.75 per hour for persons under 18.

As at 1 March 2012, the standard pay was increased by DKK 1.60 per hour amounting to a total of DKK111.30 per hours, and as at 1 March 2013, it will be increased by DKK 1.85 amounting to total of DKK 113.15.

The rate for apprentices will be increased by an average of 2.25 % as at 1 March 2012 and 1 March 2013.

Nuisance compensation is regulated by 1.4 % as at 1 March 2012 and by 1.4 % as at 1 March 2013.

The above increases will become effective from the beginning of the pay week of 1 March 2012 and 1 March 2013.

Parental leave
As at 1 July 2012, the maximum pay during parental leave will be increased by DKK 5 to a total of DKK 140 per hour. It is still a condition that the employer is entitled to reimbursement equivalent to the maximum benefit rate.

It is no longer a requirement that the parental leave is taken in immediate continuation of the maternity leave. However, the parental leave must be taken 52 weeks after childbirth. Unless otherwise agreed, the employee must notify the employer about the paid parental leave no later than three weeks prior to the commencement of the leave.

These amendments have effect on children for whom the leave commences on 1 July 2012 or later.

If a special pension contribution has been agreed which is payable during the 14-week maternity leave, the total contribution is increased by DKK 2.25 per hour with the result that the employer's contribution amounts to DKK 1,120 per month, and the employee's contribution amounts to DKK 560 per month.

Senior schemes
Senior schemes may be established five years prior to the actual age entitling employees to full state pension.

Within the area of standard pay, a senior scheme is introduced involving reduced working hours where the current pension contribution - or parts thereof - is converted into extra days off for the employee to take in consideration of the company's operations and according to the same rules applicable to other days off.

The maximum share of the pension contribution to be converted is equivalent to the share still covering the contributions to the insurance scheme and the health insurance and the administration costs.

According to the collective agreements on minimum pay, including SH payment (payment on Danish holidays), it is possible to accumulate 10 % on the employee's SH account to be used either for reduced working hours or extra days off.

Within the other areas, individual agreements concerning senior schemes with reduced working hours may be agreed if based on a local agreement. The parties will determine the reduced working hours based on the employee's wish and the operational needs of the company. The employee may choose to have the current pension contribution paid as an allowance to the salary.

Pay during sickness
The requirement concerning length of service is reduced by three months with the result that most collective agreements entitle employees to full pay during sickness after six months' employment.

Education during the notice period
For collective agreements with competence funds ("kompetencefonde") within the standard pay area of DA/LO, where entitlement to two weeks' education during the notice period has already been agreed as at 1 October 2012, the following applies:

Employees who have been employed for a continuous period of at least one year and who are dismissed due to restructuring or other conditions are entitled to participate in one or more relevant courses of a duration of maximum two weeks within e.g. AMU, FVU, etc. entitling the employers to public compensation for lost pay.

When participating in such courses, the employee is entitled to a proportional extension of the notice period for up to two weeks provided that the employee notifies the employer in writing as quickly as possible and no later than within the first week after the dismissal that he/she wants to exercise the right to maximum two weeks' additional education and proves that he/she is now carrying out up to four weeks' education within the extended notice period. However, these rules do not apply in relation to employees entitled to post-service salary or pension from the employer or the public authorities.

The course fee is paid by the employer, however, maximum DKK 1,780, and the employer may receive grants from a competence fund to cover costs for the usual pay of the collective agreement. The employer may receive compensation for lost pay.

Electronic documents
It is now possible for the employer in full discharge to submit holiday cards, pay slips, etc. through electronic solutions like e.g. e-boks.

Pension and age
It has been agreed in many collective agreements that pension contribution is to be paid when the employee reaches the age of 18 and not 20. However, this issue is not included in the mediation draft.

Elements from the agreed renewals

In relation to many of the so-called major collective agreements, the labour market parties have agreed on renewals, and the content of these renewals is therefore not included in the draft. But the content of the draft is very similar to what has been agreed in connection with the Industrial Agreement and Fællesoverenskomsten concerning minimum pay. The most important elements are emphasised below.

In particular in relation to "Industriens Funktionæroverenskomst"
In the future, it will be possible to agree on function-based pay with the result that no overtime pay is paid.

HK spokesmen
As at 1 May 2012, spokesmen are introduced in a number of collective agreements covering salaried HK employees in companies where the collective agreement has not come into force due to the 50 % rule. The spokesmen must be HK members and have a power of attorney from more than 50 % of the members. A spokesman does not enjoy any special protection in the event of dismissal.

Aggregate ballot

Both the employers and the employees are required to pass the aggregate mediation proposal. This means that the parties are not to pass each collective agreement separately. The employees will pass or reject the proposal by way of a membership ballot. The executive council of DA will decide whether to pass the proposal.

From the introduction of a mediation proposal to the balloting three weeks will typically pass. As soon as the proposal has been passed, the collective agreements come into force.

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

contact

Jonas Enkegaard

Partner

Marianne Lage

Partner