Definitive Report - Report No 259, November 1988

1. 163. In a communication dated 10 March 1988, the Danish Computer Workers' Trade Union (known by its Danish acronym, PROSA) presented allegations of violations of trade union rights against the Government of Denmark. It supplied further information on 29 August 1988. The Government supplied its observations on the case in communications dated 14 July and 11 October 1988.
2. 164. Denmark has ratified the Freedom of Association and Protection of the Right to Organise Convention, 1948 (No. 87) and the Right to Organise and Collective Bargaining Convention, 1949 (No. 98).

A. The complainant's allegations

1. 165. In its communication of 10 March 1988, PROSA alleges violation of Conventions Nos. 87 and 98 by the adoption by the Danish Parliament on 20 August 1987 of Act No. 542 on the renewal of certain collective agreements for computer workers. According to the Act, a copy of which is supplied, PROSA's collective agreements with the government-owned "Computer Corporation of 1959" and the Ministry of Finance are renewed until 1 June 1989 and 1 April 1989, respectively.
2. 166. In addition, the terms and conditions of the average weekly working period and wage adjustment are renewed until 1 April 1991; the Agreement with "Computer Corporation of 1959" concerning the continuation of vital computer services during industrial action is prolonged until 1 June 1989; the original wage indexation scheme is annulled in the renewed agreements; questions concerning the distribution of wage increases during the renewal period shall be determined by a committee set up by the Minister of Finance and, if the committee fails to reach a solution, the Minister shall appoint an arbitrator who is empowered to settle the matter with binding effect; all industrial action shall be discontinued during the operation of the Act.
3. 167. The complainant alleges that this Act was introduced in order to discontinue an ongoing lawful dispute between the union and the public sector employers: strike notice had been duly notified in accordance with the law and the Conciliation Board had had time to negotiate; the Board failed to arrive at a solution acceptable to both sides and PROSA decided to exercise its rights and took appropriate industrial action. The complainant explains that it had entered into negotiations with its public and private counterparts at the beginning of 1987 with a view to concluding new two-year agreements, but despite giving considerable concessions, negotiations with "Computer Corporation of 1959" - 100 per cent publicly owned with a government majority on its board of directors - ran into difficulties. PROSA explains that a salary gap between private and public computer workers had grown enormously and it was trying to negotiate an alleviation of this gap with the public employer.
4. 168. According to the complainant, it was forced to call a strike on 17 April 1987 in seven different public institutions, such as university administrations and the State Statistics Bureau, involving 125 workers of the 600 covered by the previous collective agreement with the Minister of Finance. The strike at "Computer Corporation of 1959" started on 25 June 1987 with 130 of the 900 workers covered by the collective agreement. PROSA stresses that the two strikes did not affect vital community functions or the security or safety of individuals; the strikes adhered strictly to the terms of the Agreement on the continuation of vital computer services (copy enclosed). On 25 May, "Computer Corporation of 1959" gave notice to lock out 480 workers not covered by the strike notice for June. The lock-out was delayed until 1 July 1987 because PROSA immediately contested its validity. The Arbitration Court passed an award on 29 June 1987 finding that the intended lock-out was legal only for approximately 400 computer workers. PROSA alleges that the lock-out affected certain services which threatened to create considerable inconvenience to the general public and thereby served to aggravate the situation in the public opinion.
5. 169. According to the complainant, the Government never tried to enter into real negotiations. For example, when asked in the Parliamentary Committee on the labour market whether the Government had been willing to accept the proposed settlement of the Conciliation Board, the Minister of Labour declined to answer by referring to the secrecy of the conciliation procedure.
6. 170. In addition, according to the complainant, it had the right to expand the industrial action as from 25 August 1987 so as to involve computer workers who were carrying out functions covered by the Agreement on continuation of vital computer services. PROSA had, however, already on 12 August 1987 notified the Government that it would not make use of its rights under the Agreement and that no industrial action would take place within the functions covered by the Agreement. This fact was acknowledged by the Minister of Labour during question time in the Parliamentary Committe on the labour market. PROSA alleges that the Government, however, gave Parliament the impression that PROSA would draw upon its rights under the Agreement and used this to push Parliament into legislative intervention. This is clearly demonstrated in the Minister of Labour's presentation of the Bill which was later enacted as the above-mentioned Act No. 542. He stated that "as from 25 August there is, finally, the risk important to society, that the industrial disputes will be extended to fields that are of particular importance for society such as the Parliament, the defence and the police where the crime prevention in that case will be endangered".
7. 171. The complainant explains that its industrial action was only intended to affect the computerised registration and payment of tariffs and taxes, but did not affect the payment of salaries, pensions, etc. When questioned in Parliament the Minister for Finance acknowledged, inter alia, that "the computer conflict will not have any consequences for payments between the Government and the municipal authorities" and that "the Government will not lose its legal claims to payments on tariff and VAT".
8. 172. It was against this background, states the complainant, that the Government chose to end the lawful strikes by measures in contravention of ILO obligations. The intervention cannot be said to be justified on account of the need for continuation of vital social functions since these were never affected by the strikes. By intervening in the industrial dispute, the Government took away all possibilities for PROSA to improve the salary level by means of lawful labour rights, in spite of the fact that PROSA at all times had agreed to pay due regard to the public interest and to uphold all emergency and other vital functions.
9. 173. In addition, the complainant alleges that the forced renewal and prolongation of the collective agreements mentioned above constitute an intervention in the right of collective bargaining. PROSA thus had no real opportunities to exercise its right to negotiate to the full extent possible.
10. 174. It points out that the Government has a long record of intervening in the collective bargaining process. This tendency has now turned into an established practice which, it claims, means that the right of free collective bargaining is virtually annulled within large segments of the Danish labour market. It refers to the complaints lodged in 1985 by the Danish Federation of Trade Unions (LO) and the Danish Salaried Employees' and Civil Servants' Confederation (FTF) against the Government of Denmark (Case No. 1338) which gave rise to criticism of the Government's conduct with respect to its international obligations under ratified ILO Conventions. The complainant cites the Committee on Freedom of Association's 243rd Report, which was approved by the Governing Body in March 1986 (paragraph 246): The Committee hopes that in the future, no similar measures will be taken to interfere with free collective bargaining or to restrict the right of workers to defend their economic and social interests through industrial action.
11. 175. According to PROSA, this strongly worded disapproval of the conduct of the Danish Government apparently had no effect on its decision to intervene in the computer workers' dispute, although the facts of the case are similar, and although PROSA had argued with the Minister of Labour that the intervention would be contrary to ILO Conventions Nos. 87 and 98. It accordingly requests direct contacts with the social partners and the Government and the opportunity to be heard by the Committee.
12. 176. In its communication of 29 August 1988, PROSA - to which the Government had sent a copy of its reply - contests the Government's explanations. In particular, it disagrees with (1) the Government's description of the Act which does not address its compatability or non-compatibility with Conventions Nos. 87 and 98 and the decision in Case No. 1418 against the Government of Denmark (which recently (254th Report, paras. 200-227, February 1988) criticised the renewal of a collective agreement covering seamen for a four-year period); (2) the argument concerning the serious consequences of the industrial disputes; (3) the contention that the union had merely promised not to extend the industrial action (PROSA adds that, according to the law, strike notice would have had to be given if it had intended to extend the action, and this was not done so the Government clearly knew that there would be no extension); (4) the contention that the Government was obliged to treat all public sector agreements in the same manner, i.e. the principle in Danish administrative law of "equality".

B. The Government's reply

1. 177. In its communication of 14 July 1988, the Government explains generally that in Denmark the collective bargaining process normally takes place every second year as the majority of collective agreements are renewed as of 1 March or 1 April in odd years. The social partners have intentionally aimed at ensuring that collective agreements are concluded more or less at the same time in all sectors, partly in order to obtain a parallel development in the negotiations in the individual occupational fields, and partly to avoid the risk of industrial disputes in connection with the bargaining process in one or another occupational field.
2. 178. As regards the background to the present case, the Government states that the renewal of private sector collective agreements in the spring of 1987 took place without industrial disputes on any major scale and, in some of the important fields, the parties even reached agreement without having to resort to the assistance of the public conciliator. It was the social partners themselves who decided that the collective agreements were - as an innovation - concluded for a four-year period in 1987. It was further agreed to reduce the normal weekly working time by two hours per week by steps during this period and that it should be possible to negotiate increases in wage rates in 1989.
3. 179. As regards the public sector, the Government explains that in early 1987 collective agreements were renewed - also for four years - for the majority of public employees following negotiations between the parties without any assistance from the public conciliator and covered about 220,000 public servants, about 25,000 academic staff covered by the joint bargaining unit called the Central Organisation of Academic Staff and about 55,000 employees covered by the joint bargaining unit called CO-Stat. The Government admits that in some minor areas it was not possible to reach agreement on the renewal of the collective agreements by direct negotiations but that agreement was reached following negotiations within the framework of the public conciliation service, in some cases by the adoption of a compromise worked out by the public conciliator. It adds that in these fields, the general trend was for the renewal of the collective agreements on the same conditions as those applying in the other sectors of the labour market.
4. 180. As regards the two agreements to which this case relates, the Government gives the following information: the negotiations for renewal of the collective agreement between the Ministry of Finance and PROSA started within the framework of the public conciliation service on 30 March 1987. Industrial action was taken in this field from 17 April. The dispute affected about 130 persons out of the total number of about 600 persons (corresponding to 400 full-time employees) covered by this collective agreement. Eight meetings were held - presided over by the public conciliator - between 30 March and 12 June when the public conciliator declared the negotiations terminated without result. The negotiations for the renewal of the collective agreement between "Computer Corporation of 1959" and PROSA started within the framework of the public conciliation service on 5 June 1987. Six meetings were held - presided over by the public conciliator - until 22 June when the public conciliator declared the negotiations terminated without result. In this field, which covers about 900 full-time employees, a strike started on 25 June 1987 affecting about 150 employees and a lock-out started on 1 July 1987 affecting about 400 employees. The industrial disputes in these two fields continued until the two collective agreements were renewed by the passing of Act No. 542 on 20 August 1987.
5. 181. According to the Government, under this Act the two collective agreements were renewed on terms which correspond to the terms agreed upon by other parties in both the public and the private sectors through voluntary bargaining, i.e. renewal for a four-year period, with a possibility of negotiating wage increases in 1989 and a reduction of the normal weekly working time by two hours per week in the course of this period. The Act further provides that the sums fixed in the Act for wage increases should be distributed by a joint board set up in each of the two fields. Questions on which the board could not obtain majority by 1 October 1987 should be settled by an arbitrator appointed by the board, and if the board fails to agree on such appointment, the arbitrator is to be appointed by the public conciliation service.
6. 182. It explains that the Government and Parliament found it necessary to terminate these industrial disputes by passing legislation to this effect because their consequences for excise duties and taxes were so serious that the impact on the state finances was unforeseeable; they were also a nuisance to the general public. In the longer term it was to be expected that it would not be possible to restore fully certain electronic data processing systems and the introduction of a planned tax reform would be impeded. In the state sector, especially for the National Statistical Service, continued industrial action would lead to significant deficiencies in the statistical data needed for decisions of the Government and Parliament concerning, for instance, economic policy. Moreover, the Government points out that PROSA had merely indicated that, in spite of the lapse of the Agreement concerning exemption of vital computer functions from strikes, the union would not take industrial action in the fields which had been excluded. However, there was no firm agreement to this effect and therefore, under the law, there was nothing to prevent PROSA from taking industrial action in the fields originally exempted at a later stage.
7. 183. As regards the principles in this case, the Government states that it is correct that the same rules apply to collective bargaining in the public sector as to collective bargaining in the private sector. This also covers the right to take industrial action if it is not possible to reach agreement concerning the renewal of collective agreements. However, the complainant's impression that the Government always intervenes - and at an early stage - in public sector disputes resulting from failure to reach agreement about renewals is not correct. For example, during negotiations for renewal of the collective agreements between the public employer and the National Union of Watchmen and Security Officers, the strikes - of which due notice had been given - started on 1 April and continued until mid-August when they stopped without any statutory intervention. In the present case, the disputes continued for a long period of time before the Government and Parliament found it necessary to take legislative action to stop them.
8. 184. In this connection, the Government stresses that the right of a union to take collective action to support its claims in a bargaining situation does not confer any obligation on the employer to meet such claims. The basis - in both the private and public labour markets - must be that the right of an employees' organisation to raise claims, to stick to them and to take industrial action in support of such claims has its counterpart in the employer's right to make offers in a bargaining situation, to stick to them and to use a lock-out in support of them. As regards public employers, a further rule applies: when the public employers have concluded voluntary agreements with employees' organisations representing the majority of the employees in the public sector, they should not accept claims which go much further than these voluntarily concluded agreements, especially when such claims are made by organisations which represent a small - although vital - group of employees. The Government argues that otherwise it could be claimed that if the public employers meet such claims, they not only violate the equality principle of administrative law, but also their obligations in relation to those employees' organisations with whom they have already concluded new collective agreements and who are justified in expecting that the State will not subsequently conclude collective agreements with other employees' organisations which place the latter's members in a significantly better position.
9. 185. As regards PROSA's allegations concerning the wage indexation scheme (section 7 of Act No. 542), the Government states that this provision is a consequence of Act No. 297 of 4 June 1986 on the lapse of automatic indexation of remuneration, etc., on the basis of the cost-of-living index. The Committee had been informed about this Act on an earlier occasion. According to the Government, Act No. 542 ensures (sections 1(2) and 2(2)) that employees covered by the Act are subject to the special wage adjustment agreed on in 1987 between the Minister of Finance and the Central Organisation of Public Servants (which in practice covers the whole public sector) under which adjustments may take place as of 1 April 1987, 1988, 1989 and 1990 on the basis of the development in wages in the private labour market. In this connection, it points out that the special wage adjustment as of 1 April 1988 resulted in a general increase in the wages of public employees corresponding to 1.86 per cent of their earnings.
10. 186. Lastly, as concerns the possibility of sending a direct contacts mission to examine the situation, the Government is of the opinion that there is no need for this since sufficient elucidation has been given by the available written documentation.
11. 187. In its communication of 11 October 1988, the Government replies to the complainant's criticisms of its initial reply of 14 July 1988 (which the Government had copied to PROSA). In particular, it stresses that it objected to the Committee's decision in the previous Case No. 1418 and that it had no influence on the bargaining partners' 1987 agreements (often reached with the assistance of the Public Conciliator) to renew collective agreements for four years. On the question of a potential extension of the disputes, the Government maintains that notice could have been given by the union to do so, and this possibility had necessitated intervention. As regards the complainant's reference to parliamentary questions throwing light on the consequences of the disputes, the Government points out that the questions were put on 17 July and replied to on 24 July, whereas the Bill to which the complaint relates was only introduced on 18 August 1987. On the issue of equality of treatment, the Government admits that the public authorities may conclude different agreements with different groups. It adds that the right of a trade union to take industrial action in support of its claims in a collective bargaining situation does not imply a duty on the part of the employer to comply with such claims. If industrial action is taken to support claims in a central and vital field, so that the society is taken hostage, the situation - in the Government's view - may necessitate legislative intervention, in such a situation it would be natural to use as the basis for such intervention the negotiation results obtained in most other fields in the labour market. It notes, however, that in the other fields where the Public Conciliator proposed a settlement, the basis for legislation has been that very proposed settlement.

C. The Committee's conclusions

1. 188. This case involves allegations that the Government's unilateral intervention by legislative measures in order to stop two lawful strikes, the prolongation and renewal of two public sector collective agreements and the imposition of involuntary dispute settlement procedures constitute an infringement of the obligations undertaken by the Government of Denmark in ratifying Conventions Nos. 87 and 98.
2. 189. The Committee takes note of the detailed information provided by both the complainant and the Government as to the background of the adoption, on 20 August 1987, of Act No. 542 and notes that the facts of this case are not in dispute. It observes from the translation of the Act supplied by the complainant that the PROSA/"Computer Corporation of 1959" agreement is renewed (section 1) until 1 June 1989 with certain provisions on working hours and adjustment clauses extended until 1 June 1991; likewise, the PROSA/Ministry of Finance agreement is renewed (section 2) until 1 April 1989 with similar provisions extended to 1 April 1991, including the special wage regulation agreed upon; for each of the two agreement areas a committee shall be set up (section 8) having equal representation of the parties to determine the partition of certain wage increases over the two-year renewal periods and failing agreement, the committee (not the Minister of Finance as alleged) or the Conciliation Board shall appoint an arbitrator; section 9 terminates work stoppages started in relation to the agreements.
3. 190. The Committee notes that there is disagreement, however, as to the necessity for government action. For example, the complainant alleges that the strikes of April and June 1987 only affected part of the workforce in the undertakings involved and did not affect vital services. The Government justifies its action because of the unforeseeable impact on state taxes, the nuisance to the general public and the long-term problems for certain electronic data processing systems and statistical data collection, as well as the potential spread of the strikes to vital services listed in a formal agreement as being exempt from computer employees' industrial action, such as defence work and crime prevention.
4. 191. Another area of disagreement concerns the conduct of negotiations: on the one hand, the complainant describes the difficulties in bargaining, despite the attempts to find a mutually agreeable settlement by the conciliation service, including the lock-out which only led to an aggravation of the situation. The Government, on the other hand, stresses the number of meetings held in an attempt to reach agreement and the fact that, in most other public sectors, agreements had been reached voluntarily or with conciliation help for four-year renewals and that it had an obligation not to give in to more favourable claims proposed by one group after it had signed agreements with other public employees' organisations.
5. 192. On the issue of the ban on industrial action, the Committee points out, as it has in past cases, that the right to strike may be restricted or even prohibited in the civil service (i.e. where public servants act as agents of the public authority) or in essential services in the strict sense of the term, i.e. services the interruption of which would endanger the life, personal safety or health of the whole or part of the population (see, for example, 236th Report, Case No. 1140 (Colombia), para. 144). Under this criterion, the Committee is of the opinion that the computer workers who interrupted services for the collection of excise duties and taxes from 17 April and 25 June 1987, respectively, until 20 August (when the Act in question was passed) were not civil servants or engaged in essential services. The unilateral termination of their strikes was therefore in contravention of the principles on freedom of association.
6. 193. The second aspect of this complaint centres on the allegation that Act No. 542 is yet another example of government intervention in voluntary collective bargaining. The Committee observes - as does the complainant - that this is not the first time in recent years that it has been called on to examine the Danish Government's intervention through legislation in both private and public sector collective bargaining processes. Although the pieces of legislation at issue in the earlier cases (see 243rd Report, Case No. 1338, paras. 209 to 247, approved by the Governing Body in March 1986, followed up in the 1987 observation on Denmark's observance of Convention No. 98 made by the Committee of Experts on the Application of Conventions and Recommendations ; and 254th Report, Case No. 1418, paras. 200 to 227, approved in February-March 1988, also referred to the Committee of Experts) are not called into question here, the legislation in Case No. 1338 contained very similar provisions. The Committee is therefore bound to refer the Government to the same fundamental principles upon which it based its criticism of the Government's earlier intervention. These are that a basic aspect of freedom of association is the right of workers' organisations to negotiate wages and conditions of employment freely with employers and their organisations, and that any restriction on the free fixing of wage rates should be imposed as an exceptional measure and only to the extent necessary, without exceeding a reasonable period; such restrictions should be accompanied by adequate safeguards to protect the living standards of the workers.
7. 194. In addition, the Committee recalls that Article 6 of Convention No. 98 permits the exclusion from this basic right to bargain collectively of "public servants engaged in the administration of the State", a term which the ILO supervisory bodies have looked at in the light of the distinction to be drawn between civil servants employed in various capacities in government ministries or comparable bodies and other persons employed by the Government, by public undertakings or by independent public organisations (see, for example, 236th Report, Case No. 1267 (Papua New Guinea), para. 596.). In this case, therefore, the Committee considers that the Danish Computer Workers' Trade Union (PROSA) legitimately had enjoyed the right to negotiate the terms and conditions of employment of computer workers employed in the areas in question in the present case by means of collective agreements until Act No. 542 put an end to all possibility of negotiations for the life of the extended agreements.
8. 195. Given the facts of the present case, it appears to the Committee, for the following reasons, that the Government's intervention went beyond the criteria set out in the preceding paragraphs concerning acceptable restrictions on the voluntary fixing of conditions of employment. The method used was not exceptional especially in view of the fact that the Government's earlier two-year statutory renewal of collective agreements (between April 1985 and April 1987) has already been criticised in a past case by both the Committee of Experts and this Committee. The Committee also notes that no evidence was put forward to show that the Danish economy as a whole or the administrative sectors serviced by computer workers were faced with an emergency situation such as to justify intervention in voluntary collective bargaining; in fact, the Government only put forward financial justifications and equality of treatment arguments.
9. 196. Finally, as regards the statutory imposition of involuntary disputes settlement procedures, the Committee notes that there has traditionally been a "peace obligation" during the life of collective agreements in the Danish industrial relations system. In addition, it observes that Act No. 542 sets up a joint committee for each of the two areas involved, to determine certain items open to discussion during the extended periods for the two agreements, so that there is the opportunity for the complainant to share in the practical implementation of the new agreements. Likewise, the Act (section 10) provides that "questions in relation to the interpretation or violation of the renewed agreements shall be settled in accordance with the usual industrial relations rules for the area" concerned. The Committee considers that the Act therefore provides adequate and impartial disputes settlement procedure to safeguard the interests of the workers who are obliged to maintain industrial peace under the legislation.