Unity needed to deal with EU pressure on the Nordic model

It is completely misleading to suggest that EU legislation and EU law is about to undermine the unique Danish and Nordic labour market model, at least if you ask Denmark’s Minister For Employment Jørn Neergaard Larsen.

“Put bluntly the only threat to the Danish model rests with the social partners and politicians. I cannot see any external threats,” the Minister for Employment told a conference on the EU and the Danish collective-bargaining model organised by the Council of Nordic Trade Unions (NFS) and the Danish think tank Europa on 25 September in Copenhagen. 

The conference was a follow-up of the report ‘Europe and the Nordic Collective-Bargaining Model’ which has just been published by NFS and the Nordic Council of Ministers.

Jørn Neergaard Larsen has been Denmark’s Minister for Employment since the new Liberal Party-led government came to power in June 2015. Before that he spent 19 years as CEO for The Confederation of Danish Employers (DA), a member of the Danish Councils, a judge in the labour court and a member of a commission looking at how to reform the jobseekers’ allowance system. As a result he knows the Danish and Nordic labour market model like the back of his hand and is a prime advocate for it: 

“I fully support the way in which the social partners are developing the model,” he says, adding  he believes the Nordic model does in fact have a global potential.

Jørn Neergaard Larsen views the model as a guarantor for a labour market where workers can easily switch jobs, and points to the fact that this is an opportunity many make use of: Some 750,000 Danes switch jobs every year. The minister says that this secures “fantastic dynamics and productivity”. 

The minister does not know of any other model which has so much social capital and allows for such a healthy development of company culture. 

The minister frowns

Yet he still finds reason to frown. The model is under pressure, but not from an increase in EU regulations an EU rulings, the minister says. The social partners in Denmark are, according to him, brilliant at spotting the areas where there is a need to marry EU regulations with the Danish collective-bargaining system. The partners find the right keys.

According to the minister the problems stem from the fact that Danish benefit systems allow for a food chain of public benefits. This is not a threat to the Danish collective-bargaining model, but a challenge which must be solved, the minister said. Even before he became a government minister he was a keen supporter of public service cuts. He has called Denmark a “losers’ country” compared to Sweden when it comes to the number of people of working age who are claiming benefits. 

Jørn Neergaard Larsen also wants more joint proposals from the professional organisations, for instance on touchy subjects like whether the EU should pass minimum wage legislation. Disagreement in this area muddies the waters and makes it more difficult to explain to the EU Commission and the EU Court of Justice that there is a need to adapt solutions to fit the Danish labour market model, thinks the Minister for Employment. 

Come out of the bubble

The NFS President, Bente Sorgenfrey, admitted to the conference that there are major disagreements within the European trade union movement over a legally binding minimum wage, and that this makes it challenging when trying to give the European trade union movement a clear mandate in the dialogue with the EU.

Right to left: Bente Sorgenfrey, Pernille Knudsen, Lizette Risgaard

Trade unions in Southern European countries are very much in favour of a legally binding minimum wage. Bente Sorgenfrey underlined that she is opposed to both a legally binding minimum wage and universally applicable collective agreements, like what you find in Norway. But it is an issue which must be debated despite being controversial with the Nordic trade union movement. 

“We cannot sit in our own little bubble and not face up to the challenges,” she said. NFS represents nearly nine million Nordic workers; members from a total of 16 confederations of trade unions, civil servant and academics’ organisations, including the Confederation of Professionals in Denmark, FTF with its 450,000 public and private sector Danish workers, led by Bente Sorgenfrey for many years. 

An actual determination of a minimum wage by the EU does not seem realistic in the foreseeable future, but the Nordic models are increasingly becoming the exception in Europe, says the report “Europe and the Nordic Collective-Bargaining Model’. In it, a range of experts describe how EU legislation and EU law influences the Nordic countries’ labour law regulations, for instance when it comes to wages.