On Sunday 19 February 2023, the Confederation of Danish Industry (DI) and CO-industri agreed on a two-year renewal of the collective bargaining agreements in the industrial sector. The agreement is a breakthrough, which forms the basis for the forthcoming negotiations on collective bargaining agreements in the rest of the private labour market.
DI and CO-industri have reached an agreement on the renewal of the collective bargaining agreements in the industrial sector. The two collective bargaining agreements that have been agreed upon are the Industrial Agreement and the Industrial Agreement for Salaried Employees, which together apply to approximately 6,000 companies and approximately 230,000 employees.
The industrial area is a so-called “minimum salary area”, which means that only a smaller part of the salary increases is negotiated by the organisations, as the final salary is negotiated locally.
Traditionally, the collective bargaining agreements apply for a period of three years, however insecurity due to the war in Ukraine and the inflation has meant that the parties have agreed on a two-year renewal of the collective bargaining agreements. Adjustment of salary etc. takes effect when the collective bargaining agreements have entered into force, but with retroactive effect from 1 March 2023, and the collective bargaining agreements apply until 1 March 2025.
Salary and pension
DI and CO-industri agree that the minimum salary rate shall increase by DKK 4.50 per year. In addition, supplements for overtime will increase by 3.5% in 2023 and 3% in 2024.
The contribution to the flexible salary account (Fritvalgskonto) increases by 2 percentage points from 1 March 2024, so that the contribution amounts to a total of 9% of the employee’s holiday-entitled salary.
The flexible salary account (Fritvalgskonto) is the share of the salary that the employees themselves can dispose of, including whether the contribution is to be used for salary, holidays, senior holidays or pension payments.
Changes regarding the employer’s and employee’s pension contributions have also been decided. The employer’s pension contribution will be increased from 1 July 2023 from 8 to 10%, while the employees’ own contribution will be reduced from 4 to 2%.
The total pension contribution of 12% is thus unchanged, but the redistribution of 2% from an employee-paid contribution to an employer-paid contribution results in the employees receiving a net salary increase.
Although the salary increases may appear modest from an immediate perspective, the real salary increases lie in the increase of the contribution to the flexible salary account (Fritvalgskonto), the change in the pension contribution and the fact that the salary must be negotiated locally.
The maternity provisions of the collective agreements have also been revised, so that the father/co-mother has the right to an additional two weeks of absence under the Act on Maternity Leave with full pay, while the parents also get an additional two weeks of absence with full pay, which can be divided between the parents.
The expected abolition of the Danish national holiday “Great Prayer Day” is not part of the agreements.
Employers and the members of the respective trade unions must approve the agreements in a referendum before the new agreements come into force.
This article was first published on 22 February 2023 by our Danish member firm Mette Klingsten Law Firm. For further questions on this topic or any employment question, please reach out to our representative Mette Klingsten, Partner of the boutique law firm.