Denmark's 50 years long tug-of-war with the EU

Among the Nordics, Denmark is also the most vocal representative of what is sometimes called the Nordic labour market model. What sets the Nordic model apart is that the relationship between employers and employees to a large extent is regulated through collective agreements – especially when it comes to wages. None of the Nordic countries has statutory minimum wages. But Denmark prefers collective agreements over legislation to a greater degree than Iceland, Norway and Sweden.

In a comprehensive anthology “Denmark and the EU through 50 years”, professor Jens Kristiansen details the various strategies the Danes have used in order to protect their labour market model. He calls it a particularly problematic policy area for Denmark's coexistence with the EU.

The division of labour between lawmakers and the social partners was an important issue way back when Denmark held a referendum on whether to join the EC. In order to convince people to vote yes, the Confederation of Danish Employers and the Danish Confederation of Trade Unions joined forces and published the following message in daily newspapers: “We are still cracking the nuts ourselves” – meaning Danish employers and trade unions would continue to solve labour market issues even if the country joined the EC. 

So the starting point was that the government should negotiate with the other member states on how to shape directives and have the main responsibility for them being implemented correctly once they were adopted. However, most of the implementation would be left to the social partners.  

But already when the equal pay directive of 1975 was to be implemented, it became clear that the social partners could not, in fact, crack all the nuts themselves, writes Jens Kristiansen.

The European Commission protested and a few years later, Denmark was found to be in breach of EU law because Danish legislation did not contain a rule which existed in the directive. The fact that collective agreements covered this "gap" did not help because the agreements did not apply to workers who were not trade union members. For the sake of these workers, the legal text had to be completely clear.

The next blow came with the working time directive. By then, the EC had become the EU and a new treaty had come into force. It clearly stated that member states could leave the implementation of directives to the social partners. Denmark interpreted this to mean that using only collective agreements was now even more acceptable.

So no complementary legislation was introduced since an overwhelming majority of all employees were covered by collective agreements and these agreements “rubbed off” on non-union employees. The social partners also took it upon themselves to solve all potential disagreements on the working time directive.

The EU Commission protested again, and this time the Danish government yielded. In agreement with the social partners, it presented a proposal on complementary legislation on rest time, a cap on weekly working hours, and night work.

Since then, Denmark has introduced a new way of passing legislation. The social partners are still given “first dibs” on entering into collective agreements that implement directives, while complementary legislation is developed in cooperation with an “implementation committee” where the partners are represented. In workplaces that are covered by collective agreements, these always take precedence over the legislation. 

In later years it has also become harder for the partners on the implementation committee to agree. It has been particularly difficult to adapt Danish rules in line with rulings coming from the EU Court.

The directives themselves always give member states space to adapt the rules to fit their own labour market models. But once the EU has adopted rules in some area or other, they sooner or later end up with the EU Court. It has a tendency to define even the vaguer directive rules in a way that step-by-step reduces member states’ – and the social partners’ – room for manoeuvre.   

This is one of the reasons why Denmark is now challenging the EU over the minimum wage directive. This time, it is about the division of power between the EU and member countries. Is the European Union actually allowed to adopt a directive with content like that of the minimum wage directive?