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Labor-Management Relations in Scandinavia / t ' Bulletin No. 1038 UNITED STATES DEPARTMENT OF LABOR Maurice J. Tobin, Secretary BUREAU OF LABOR STATISTICS Ewan Clague, Com m issioner Labor-Management Relations in Scandinavia Superintendent of Documents, For sale by the Bulletin No. 1038 UNITED STATES DEPARTMENT OF LABOR Maurice J. Tobin, Secretary BUREAU OF LABOR STATISTICS Ewan Clague, Com m issioner U. S. Government Printing Office, Washington 25, D. C. Price 20 cents Letter of Transmittal U nited States D epartment of L abor, B ureau of L abor Statistics, Washington, D. C., July 15, 1951. The S ecretary of L abor: I have the honor to transmit herewith a report on labor-management relations in Scandinavia, prepared by Jean A. Flexner under the direction of Faith M. Williams, Chief of the Bureau’s Division of Foreign Labor Con ditions. The principal sources used were interviews by Miss Flexner with officials of government, labor, employer organizations, in the three Scandi navian countries, and the reports of Oliver A. Peterson, Edward J. Rowell, and Walter Galenson, U. S. Labor Attaches, respectively, in Stockholm, Copenhagen, and Oslo. Acknowledgment is also made of the assistance of Florence M. Mishnun, Florence A. Mufson, and Anna-Stina Ericson of the Division of Foreign Labor Conditions in the preparation of the three country sections. E wan C lague, Commissioner. Hon. M aurice J. T obin, Secretary oj Labor. hi Contents Centralized collective bargaining___________________________________________________________________________ Federations of unions andof employers____________________________________________________________ Basic agreements_____________________________________________________________________________________ Denmark_______________________________________________________________________________________ Sweden_________________________________________________________________________________________ Norway_________________________________________________________________________________________ State intervention in strikes___________________________________________________________________________ Relation of unions to labor parties_____________________________________________________________________ Sweden: Swedish trade-unions_________________________________________________________________________________ Swedish federation of trade-unions_________________________________________________________________ Central organization of salaried employees__________________________________________________________ N ational unions_________________________________________________________________________________ Employers’ organizations------------------------------------------------------------------------------------------------------------------Negotiations and disputes settlement__________________________________________________________________ Conciliation service______________________________________________________________________________ Collective industry agreements________________________________________________________________________ Labor court_____________________________________________________________________________________ Agreements between LO and SAF------------------------------------------------------------------------------------------------------Index wage agreements__________________________________________________________________________ Trend of real earnings________________________________________________________________________________ Time lost in industrial disputes----------------------------------------------------------------------------------------------------------Norway: Norwegian Federation of Labor---------------------------------------------------------------------------------------------------------Norwegian Employers’ Federation_____________________________________________________________________ Negotiations and disputes settlement__________________________________________________________________ Conciliation service______________________________________________________________________________ Collective industry agreements________________________________________________________________________ Labor Court_____________________________________________________________________________________ Basic agreements____________________________________________________________________________________ Index wage agreements__________________________________________________________________________ Trend in real earnings___________________________________________________________________________ Denmark: Federation of trade-unions____________________________________________________________________________ Employers’ association_____________________________________________ n________________________________ Basic agreements____________________________________________________________________________________ Index wage agreements__________________________________________________________________________ Trend of real earnings______^____________________________________________________________________ Collective industry agreements_______________________________________ Settlement of disputes_______________________________________________ Labor court____________________________________________________________________________________ Conciliation service______________________________________________________________________________ Time lost in industrial disputes___________________________________________________________________ Page 1 1 2 2 3 4 4 5 6 6 7 7 7 8 9 10 11 11 12 12 13 14 15 16 16 17 17 18 18 19 21 22 22 22 22 23 23 23 24 25 TABLES Table 1.—Extent of labor organization, post World War II__________________________________________________ Table 2.—Extent of collective bargaining agreements in Sweden, 1908-48____________________________________ Table 3.—Workers affected by wage changes made through negotiations and after work stoppages in Sweden, 1920-48_____________________________________________________________________________________ Table 4.—Average hourly earnings, real earnings, and earnings index for all industrial workers in Sweden, 1939-50Table 5.—Average annual man-days lost as a result of industrial disputes in Sweden, 1903-49__________________ Table 6.—Average annual man-days lost as a result of industrial disputes in Norway, 1930-49__________________ Table 7.—Index of real earnings for occupational groups in Norway, 1945-49_________________________________ Table 8.—Average hourly earnings, real earnings, and earnings index for all industrial workers in Denmark, 1939-50. Table 9.—Average annual man-days lost as a result of industrial disputes in Denmark, 1899-1949______________ T 2 9 9 12 13 17 19 22 25 Labor-Management Relations in Scandinavia Centralized Collective Bargaining Free collective bargaining in Scandinavia, mod ified but not superseded by State controls, presents some similarities to American and also to British experience. Yet the labor and employer organizations of Scandinavia differ in many im portant respects from their British and from their American counterparts. Both the similarities and the differences are worth study. For two decades (1930-50) Sweden, Norway, and Denmark have been comparatively free of industrial strife. Institutions developed during the first quarter of this century have been adapted and enlarged to deal successfully with problems arising out of World War II. These problems were met by the continuing machinery which had been devised for settlement of disputes and, still more important, by the habit which had developed of negotiating important issues between the central federations of unions and employers at the national level. Federations of Unions and of Employers In all three countries, the central federations of trade-unions and of employers’ associations are the leading instruments for preservation of industrial peace, the settlement of disputes, and the negotiation of collective agreements covering major segments of the economies. They have set the pattern of labor-management relations. Since 1939, they have assisted the governments in restraining inflation by promoting wage-stabiliza tion policies and by providing an orderly method of adjusting wage rates to compensate in whole or in part for changes in the retail price level. The success of these joint dealings at the highest level is attested by comparative freedom from time lost in industrial disputes (except for one prolonged strike in the Swedish metal industry), the moderate rise in retail prices, and the preservation of the level of real earnings for most Scandinavian work ers despite economic dislocations between 1939 and 1949. Admittedly, a pronounced but tem porary decline occurred during the war years. The full effects of devaluation in September 1949, and of post-Korean price increases may yet cause another drop in real earnings. The usually troublesome problems connected with union recognition, union security, and senior ity rules were solved at an early date in all three countries by agreements between the central fed erations of unions and employers granting mutual freedom to organize. Recognition of unions was guaranteed by employers in return for giving management a free hand in the employment, dis missal, and allocation of labor in the interest of efficiency. No large scale conflicts over union recognition or the closed or the open shop occurred after the conclusion of these agreements. Nor did the unions of production workers suffer from making these concessions and foregoing the closed shop.1 Collective agreements were widely adopted and union strength steadily increased. In this connection, account must be taken of the favorable environment created by homogeneous populations and moderate industrialization, the mutual assistance rendered each other across na tional boundaries by the labor movements of the three countries, and the close link between the eco nomic and political wings of the Scandinavian la bor movements. After World War II, the proportion of nonagricultural wage and salary workers organized in the three countries was ap proximately 53 percent in Denmark, 60 percent in Norway, and 77 percent in Sweden. This com pares with 45 percent in the United Kingdom, and about 33 percent in the United States. So far as industrial establishments are concerned, organi zation is almost complete in the Scandinavian countries. 1The closed shop was banned only in contracts with federated employers. In Sweden the Labor Court ruled in 1948 that an employee’s freedom of asso ciation was violated by an employer’s threat to discharge him for refusal to join a union, having a closed shop contract; but in 1950 it upheld the require ment that a prospective employee join such a union. 1 L A B O R -M A N A G E M E N T R E L A T I O N S I N S C A N D I N A V I A 2 T a b le 1.— Extent of labor organization, post World War II Item Den United United mark Norway Sweden Kingdom States Total population_____ 4, 290,000 3,281,000 7,050,000 50,800,000 152, 271,000 Total labor force, .. __ 1, 950,000 1, 518,000 3,000,100 123, 558,000 64,453,000 Nonagrieultural: Employees _____ 1,178, 875 815, 600 1,943,000 20,079, 600 45,000,000 Trade-union mem bers 2___ _ . _ 628, 667 490,400 1, 504,000 8,947, 640 15,000,000 Percent organized 2. 53 60 77 45 33 1For Great Britain only. 2 Later figures appear on pp. 6, 14, and 21. Organization on the employers’ side followed organization on the workers’ side, except in Den mark; there, the Employers’ Association, formed in 1896, preceded the Trade Union Federation by 2 years. However, in all three countries, the em ployer federations were not, even at the outset, designed merely to fight the unions but to nego tiate with them. Perhaps this was just another manifestation of the impulse, so common in Europe, to form combinations for mutual ad vantage. Just as the legal framework favored business cartels (instead of attempting to prevent them, or break them up), so it favored, or at least did not hamper, the organization of the labor market. The principal organizations (of labor and employers) are affiliated with these central federations, although there are in each country a few and sometimes powerful independent organ izations, which generally follow the lead of the central federation. True, the development of strong central organ izations, with centralized strike funds and a dis ciplined membership behind them, holds the threat of widening the scale of industrial conflict. Actually, the formation of these central organiza tions did not immediately put an end to industrial conflicts, chiefly over wage issues, which recurred at intervals up to World War II. With every swing in the business cycle, unions strove to raise, or employers sought to lower, the wage level. But in Scandinavia, a threat of this magnitude eventually produced its own remedies: (1) the negotiation of basic agreements between the central federations on principles and procedures, and (2) the federations’ entrance into the field of collective bargaining. Control and influence over member organiza tions, exercised by the central labor and employer organizations of Scandinavia, is greater than the practice accepted either in the United States o in Great Britain by trade-unions or employe associations. Thus, in Norway, under a consti tution adopted in 1949, approval of the Executive Council of the National Federation of Trade Unions is required before any member union may terminate a wage agreement, raise a wage demand, or give strike notice. If approval is obtained, the National Federation will assist the striking union with its own central strike fund—as is true also in Denmark, if the strike lasts more than 7 days. In Sweden, a similar provision applies to strikes involving more than 3 percent of a union’s membership. Employers’ organizations also enforce uniform rules and assist their members in approved conflicts. The Swedish organization for example, requires its members to give bonds which are forfeited if a rule of the association is violated (e. g., if a member employer signed a closed-shop agreement); it may also impose fines; and it levies a central strike and lock-out fund and pays benefits to member firms involved in work stoppages. Basic Agreements Dominant in Scandinavian industrial relations are the agreements concluded from time to time by the central or nation-wide federations of unions and employers. Denmark. The first such agreement, negotiated in Denmark in September 1899 after a bitter and protracted lock-out, laid down basic principles and procedures which are still incorporated into every Danish collective bargaining agreement. Therein, the right to organize was recognized as well as the right to strike and to lock-out, provided that a three-fourths vote in favor was cast at a competent meeting of the organization concerned. The giving of notice of an intended stoppage, and the manner of terminating wage agreements were spelled out. The agreement guaranteed the employer’s freedom to distribute the work and to use labor as he deemed suitable, and barred salaried foremen from joining unions of production workers. Workers were protected from arbitrary changes in piece rates (a clause invoked chiefly in the building trades). C E N T R A L IZ E D c o l l e c t iv e b a r g a in in g The signatory organizations were held re sponsible for assuring that agreements concluded between them were carried out by the member organizations on each side; breaches of this basic agreement had to be referred to a permanent arbitration court. The central federations also pledged themselves to develop rules for the arbitration of disputes arising under collective bargaining agreements in the several trades. Such standard rules were centrally negotiated in 1908; and mediation committees were set up, with final resort to arbitration. Disputes arising over the interpretation and application of collective agreements have not been permitted to cause stoppages in Denmark. Uniform rules for the negotiation and for re newal or amendment of collective bargaining agreements in the various trades were agreed to by the central federations in 1936, and have been altered from time to time. Two-year contracts, most of them terminating simultaneously and all requiring 3 months’ notice, have become the general pattern. The Danish Federation of Trade Unions convenes union representatives in advance to agree upon demands. Negotiations are begun at the trade or industry level. After about 6 weeks, the Danish Federation of Trade Unions and the Danish Employers’ Association inter vene to settle any issues that remain outstanding; if they fail, the State mediators take over. The September Agreement, concluded in Den mark in 1899, created the forerunner of Scandi navian labor courts. The Danish Labor Court, initiated by this agreement, was established by law in 1910; it was copied in slightly altered form by Norway in 1915, and by Sweden in 1928. All three Labor Courts are now part of the judicial systems. They are composed of lay representa tives selected by the central labor and employer federations and have independent presiding judges. The distinctive function of the Labor Courts in the three countries is the settlement of all disputes arising under existing contracts and involving either breach or interpretation of agreement (i. e., conflicts of law, or jural disputes). In all three countries strikes and lock-outs over such disputes are illegal. The Labor Courts may impose fines against whichever party engages in an illegal strike or lock-out, or otherwise violates the agree 970988—52-----2 3 ment, e. g., by underpayment of wages, discharge of a shop steward, refusal to work stipulated over time, etc. They are not, however, authorized to arbitrate disputes arising out of the negotiation or renegotiation of agreements. Sweden. The question of requiring arbitration to avoid strikes in these conflicts over interests was fully debated in Sweden in the 1930’s, and was ultimately settled by the parties themselves in top-level negotiations. Between 1920 and 1934 an average of more than 3 million man-days had been lost annually in work stoppages. The Swedish Parliament debated Government regula tion but neither unions nor employers would agree to compulsory arbitration of all disputes. A Government commission, after several years’ study, in 1935 recommended that the parties themselves—aided by Government representa tives—devise machinery for the peaceful settle ment of disputes. At the invitation of the Swedish Federation of Trade Unions, representa tives of labor and management held a series of meetings, without Government participation, ex tending over 2 years, at which the Basic Agreement of 1938 was drafted. It was subsequently ratified by the member organizations. It established a uniform procedure for nego tiating and renewing collective bargaining agree ments, and a code of rules governing some of the most troublesome problems in the field of indus trial relations: the protection of neutral third parties from unfair pressure tactics by parties engaged in labor disputes, and lay-offs and dis missals. An interfederation agreement in 1906 had barred the closed shop but exacted a pledge from employers not to fire workers for union membership; except for this limitation Swedish employers had preserved their freedom to hire, fire, and lay off at will, and the unions do not enforce seniority rules. The Basic Agreement set up a joint Labor Market Board to settle differences arising under these general provisions. It has chiefly dealt with cases of individuals involving lay-offs and dismissals. But the chief interest of this document centers on the preamble which sets forth a basic philosophy in regard to the responsibilities of the two sides: 4 L A B O R -M A N A G E M E N T R E L A T I O N S I N S C A N D I N A V I A The preamble of the 1938 Basic Agreement states the basic philosophy as follows: The central organizations of the Swedish labor market do fully realize how important it is to have their disputes solved as far as possible without resort to open con flicts. . . . However, losses resulting from such conflicts . . . cannot be regarded as sufficiently important to justify the present freedom of collective bargaining being substituted by compulsory public control. . . . Nor from other points of view should the State be justified—aside from the proper sphere of social welfare legislation—in forcing upon Swedish employers and workers a regulation of working conditions, either in general or in specific instances. So long as the organizations in the labor market are prepared to look also to the general public interest involved in their activities, the measure reasonably called for in the inter est of labor peace should most naturally and appropriately rest with the organizations themselves. The Labor Market Committee . . . has deemed it requisite in the first place to make more effective existing methods of collective bargaining and of settlement between the parties, as well as to further a general release of tension in industrial relations. . . . In the activities conducted by trade organizations in the past for asserting their interests, certain methods of direct action have sometimes been employed which cannot be regarded as legitimate for trade organizations having reached the maturity and strength of the Swedish organizations. Because any conflict, if of sufficient scope, might affect the public interest, it was provided that such cases should be referred directly to the joint Labor Market Board, but other special measures were not deemed practicable in view of the difficulty of defining and limiting the public interest. Only two cases have ever come before the Labor Market Board, both referred by a pub lic authority, but neither eventuated in action. Although in 1945 the metal workers’ strike shut down an important industry for 5 months, it was allowed to run its course without invoking these provisions. The joint Labor Market Committee which formulated the 1938 Agreement has continued from time to time to explore new problems. A 1942 agreement supplemented the law on indus trial safety by requiring the appointment of workers’ delegates in plants employing from 10 to 100 workers and of joint safety committees in larger establishments. Later agreements pro vided for labor-management Plant Councils to discuss production problems, and for the introduc tion of time and motion studies by a method acceptable to the unions. Norway. The first interfederation agreement in Norway was concluded in 1902. It provided for the arbitration of “jural” disputes, when requested by one of the parties, and “nonjural” disputes, when requested by both. Although it was not renewed after its expiration in 1905, similar terms were included thereafter in most industry agree ments. When the Labor Court was set up by law in 1915, it exercised a power to adjudicate all jural disputes, which had long been accepted by Norwegian management and labor. A Basic Agreement, negotiated between the two top federations in 1935, was renewed with amendments in 1947. It dealt principally with the rights, duties, and functions of shop stewards, but also regulated the voting on proposed collec tive agreements and sympathetic actions by members of the two federations. A 1945 agree ment, modified in 1950, provided for advisory plant production committees. State Intervention in Strikes As indicated, in all three countries work stop pages have long been banned where agreements are in force (i. e., over disputes arising out of the application or interpretation of these agreements). Furthermore, top level negotiations resulting in basic agreements have reduced the likelihood of stoppages over new issues. Nevertheless, in all three the possibility remains that negotiation of contracts may end in a strike or lock-out. At present there is no general legal prohibition against strikes or lock-outs over conflicts of interests in any of the three countries, provided that the requirements of the mediation statutes are ob served. However, in Denmark the Parliament from time to time has passed special acts to terminate particular disputes; in Norway a 1944 emergency regulation, adopted by the Government-in-exile with the concurrence of labor and management leaders, imposed compulsory arbi tration of all disputes, but this has been relaxed in important respects. In Sweden the parties are, and have been during the entire period, legally free to pursue their own interests. In ail three countries, State conciliation services are made available to the negotiating parties. Laws prescribe their methods of operation step by step. A period of notice to the other party and to the mediator is required by law in each of C E N T R A L IZ E D C O L L E C T IV E B A R G A I N I N G the three countries; in Norway and Denmark, the mediator may, at his discretion, impose waiting periods of short duration (the longest time being 2 weeks) to allow for the completion of the media tion proceedings. The mediator’s proposals are usually submitted to a vote of the interested union and employer memberships in all three countries. The mediator may formulate either single ^or collective proposals so as to include one or more unions in the voting; in collective proposals the acceptance or rejection is decided by the total votes cast. The balloting is regulated by law, by agreement, or by the consti tutions of the central federations, in order to prevent a minority precipitating a stoppage. Where a fairly complete poll is obtained of the membership involved, the matter is decided by simple majority. Failing this, the final decision (at least as to rejection), is placed in the hands of responsible union leaders. If the mediator’s proposal is rejected—or if he has decided not to submit one—the question of whether a legal stoppage of work may take place is handled somewhat differently in the three countries. In Denmark, when the dispute threatened to have a sufficiently adverse effect on the public welfare, the Parliament, by special act, required the parties to accept the mediator’s proposal or an amended version of it. This practice obtained both before and after World War II. Norway followed a somewhat similar course in the interwar period. After World War II, by agreement between the top representatives of employers and labor during the Government’s London exile, a Wage Board with compulsory powers was established to settle disputes over wages. Its jurisdiction was later extended to other matters. This Board still exists, although its powers were curtailed in February 1949 by exempting from its jurisdiction any union or employer demands endorsed by the central federations. Thus full freedom of collective bargaining, including the right to engage in strikes and lock-outs, was restored to these fed erations—whose sense of responsibility for the national economic welfare is counted on to avoid stoppages that would damage the economy. Relation of Unions to Labor Parties The pattern of industrial relations in Scandi navia has been influenced by the close link existing from the very outset between the trade-union federations and the Labor or Social Democratic Parties. In Norway and Sweden the political party was formed first and assisted in federating the unions. In each of the three countries the party and the trade-union federation maintain either an organizational tie or a close advisory relationship. Trade-union leaders frequently have been elected to the Parliaments, and have sat in the Cabinets. Since the 1930’s these parties have held office in the three countries, either as minority or majority governments. On the one hand political victories placed the trade-union movements in a very strong bargain ing position vis-a-vis the government, because trade-unionists provide the bulk of the funds and the votes of the Labor or Social Democratic Parties,. But on the other hand, the participation of trade-union leaders in discussions of national policy during years of economic and political stress, necessitated a very comprehensive review of collective bargaining objectives, particularly wage and hour demands, in the light of the over all public interest, and resulted in modifications of those demands. Thus, the federations of labor have restrained their member unions from pressing postwar demands for shorter hours; and have in some years accepted less than full compensation in wage rates for increases in living costs. N ote .—This section appeared in the May 1951 issue of the Monthly Labor Review entitled 5 Labor-Management Relations in Scandinavia. Sweden Swedish Trade-Unions The Swedish labor market is strongly organized, with an employer’s federation and two union federations, one representing manual workers in private, municipal, and State enterprises, and the other representing salaried employees in govern ment and industry. Membership in these two federations totaled 1,550,216 in 1950, or 65 per cent of a total wage and salary-earning labor force of about 2.4 million. However, at least 80 percent of all manual workers in Sweden, ex cluding farm workers, had been organized by 1945. The central federation of manual workers, the Landsorganisation i Sverige (LO), is composed of 44 national unions and 328 local central councils. Most of the unions are organized on an industry basis. The central councils are geographical units as in the United States. The Federation’s member ship in 1950 was 1,278,409. The local unions, of which there are 8,886 may be affiliated with both a national union and, where it exists, the local central council for the area. The program of LO, as set forth in its consti tution, is to strengthen the Swedish trade-union movement; to promote the amalgamation of existing trade-unions into suitable industrial fed erations; to establish trade-unions in unorganized sections of the economy; to unify policy with respect to employers, including wage policies; to give financial aid to member organizations; to coordinate action in disputes; to supply economic and statistical data on labor market conditions to its members; to support educational programs; and to maintain international relations with worker organizations abroad. Although for many years after its formation in 1898, the LO was a loose federation of autono mous bodies, it exercised leadership within the trade-union movement, and secured the adoption of general wage policies and some tactical coor dination. Each year before collective bargaining negotiations began it convened a conference of national unions representatives in order to hear top-ranking economists and usually the Minister Swedish Federation of Trade-U nions. 6 of Finance, and to discuss probable business trends, general economic and market conditions. In 1941 and 1946, its constitution was revised to give the federation greater central authority over member unions in order better to coordinate collective bargaining and to control strikes. Under the revised constitution, member unions are required to keep LO informed of important wage movements, and of all labor disputes, strikes, and lock-outs. LO has maintained firm control over work stoppages by member unions since 1941 by the provision that a national union may not involve more than 3 percent of its membership in a strike, without LO approval. Upon approval LO pays benefits to members involved in work stop pages. Individual unions may grant strike benefits to their members from their own funds according to their own rules. As a consequence of this increased centraliza tion—enhanced by the self-imposed discipline of the individual unions—LO prevailed upon all member unions in 1948 and again in 1949 to agree to a prolongation of agreements with few changes. The Government, too, had impressed on the organ izations representing employers, farmers, and unions the need for continued stabilization. A close relationship has existed throughout the years between the LO and the Social Demo cratic Party of Sweden. LO owes its formation in 1898 to action taken the preceding year by a So cial Democratic Party meeting. Although the two organizations together constitute the labor movement, each preserves a well-defined division of functions. The present President of LO is leader of the Social Democratic group in the First—or upper Chamber. The strength of the Social Democratic Party depends largely upon its trade-union backing. An important element of party strength is the col lective affiliation of trade-union members. At its first congress LO voted that each local union must affiliate with the Party within 3 years. When, however, a referendum revealed strong rank-andfile objection, the second congress changed the “must” clause to a provision that the federation should “work for” affiliation of member locals with the Party. At present each local trade-union may SW EDEN affiliate by majority vote, and its members auto matically become members of the Party, except those individuals expressly requesting exempt:on. About 400,000 or 25.8 percent of LO’s members were collectively affiliated with the Social Democratic Party at the end of 1950. Central Organization of Salaried Employees. This organization, Tj anstemannens Centralorganisation (TCO) with a membership of 271,807 in 1950, was formed in June 1944 by the merger of two white-collar federations; the Central Organiza tion of Private Employees, operating since 1931 in private industry, and the Central Organization of State Employees, operating since 1937 in munici pal and national governments. In 1949, 36 per cent of the TCO membership was in the State employees section, and 64 percent in the private employment section. The latter includes a union of foremen, who are not eligible to join LO. About 80 percent of all salaried employees in private industry and 90 percent in municipal and State services are organized, but not all of them are in TCO. About 146,000 government employees in lower grades belong to a State Employees InterUnion Section of LO; 20,610 higher-ranking officials belong to an independent National Associ ation of State Employees; and 5,000 State employees belong to still another independent organization, the Swedish Professional Workers’ Federation (total membership 18,000). TCO—although less centralized than LO— performs functions for its member unions analo gous to those of LO, including assistance in collec tive bargaining, leadership in wage policy, and potential financial assistance in disputes. The TCO guarantee fund, however, has not yet been drawn upon. Some individual unions have their own strike funds. The unions bargain independ ently but are under obligation to keep TCO informed on matters of general concern to the white-collar workers. TCO is politically neutral, although its members and officials may be individ ually active in various parties. Some of its leaders, including its president and general direc tor, are prominent Social Democrats. TCO and LO cooperate in many fields. Both TCO and LO are represented in conferences with Government whenever the interests of both groups are involved. Jurisdictional disputes involving their member unions are generally settled by a 7 joint committee of the two central federations. In general, jurisdictional disputes have not created much tension between unions, or between employ ers and unions in Sweden. National Unions. Swedish unions are craft, indus trial, or mixed. The industrial type predomi nates, partly a result of deliberate encouragement by LO to prevent jurisdictional disputes. When unions in a given industry did not merge in response to LO’s recommendations, compromise arrangements were developed between them, coordinating their membership drives and their collective bargaining negotiations. Some very large unions have national industry subdivisions for collective bargaining purposes. For example, 40.000 steelworkers form such a unit among the 215.000 members of the Metal Workers Union. Questions not covered in the national agreement are settled by local bargaining. Some industrial unions have locals based on small industrial sub divisions, for example, the Transport Workers’ Union has separate locals which negotiate for dockers, for teamsters and truck drivers, for inland freight workers, coal carriers, and newsboys. Employers have preferred to sign a single agree ment for an entire industry, in order to eliminate the possibility of successive work stoppages resulting from the presentation of demands by various craft groups at different times. Both sides thus worked toward industry-wide organiza tion and bargaining. Employers’ Organizations The Swedish Employers’ Federation, Svenska Arbetsgivareforeningen (SAF), was founded in 1902, a few years after LO, to promote coopera tion among all Swedish employers who were faced with the growing power of organized labor; to ad vise them in negotiating collective agreements with unions; and to assist them in strikes and lock-outs. SAF confines itself to labor-market problems. It has never opposed union recogni tion or collective bargaining, but has assisted its members in maintaining certain principles, in cluding a refusal to sign closed-shop agreements. The Federation is composed of 40 trade asso ciations of employers and a general group com bining firms belonging to several trades. Most of the associations are composed of manufacturing 8 L A B O R -M A N A G E M E N T R E L A T I O N S I N S C A N D I N A V I A firms. In 1950 member firms employed 693,000 workers. Thirty associations, employing 350,000 workers, remain outside SAF, the most important being associations of shipowners, hotel and res taurant owners, and employers in commerce, agri culture, and forestry. These generally follow the line set by SAF or cooperate with it. All to gether the associated employers employ over 80 percent of the nonagricultural wage earners. SAF general policies are determined by the con stituent groups, who elect representatives to the annual general meeting, the general council, and executive board. A permanent official, the manag ing director, is chosen by the general council in consultation with the executive board. The managing director and two other board members constitute the executive committee, who, in prac tice, decide many important questions between meetings. SAF approval of the constitution of its member associations is required. All member employers are required to adhere to the rules of their associations and of SAF, and to agreements entered into by SAF with its mem bers. SAF has power to enforce its rules by the imposition of fines and damages, denial of privi leges, and, on occasion, forfeiture of bonds. For example, should a member conclude a closed-shop contract in contravention of the anti-closed-shop rule, he may forfeit a guarantee bond (which he has been required to post). It is apparent that SAF has more power directly over its members than does LO over its affiliated unions. In fact, SAF’s high degree of centralization has been one of the chief reasons for LO’s development in the same direction. SAF maintains an insurance fund to aid mem bers involved in strikes and lock-out:, provided they have observed SAF rules and agreements. Bonds posted by members may be drawn upon to finance emergency situations or long conflicts. Work stoppage benefits to management amount to 2 kroner per day per worker, with the possi bility of additional sums being voted by SAF. At the end of 1946 the guarantee fund totaled 188 million kroner, and “funded assets” totaled 52 million kroner. The contributions required of an SAF member are so heavy as to discourage the affiliation of some associations of employers. In its original constitution SAF required its member associations to include in all collective agreements a clause stipulating that the employer has the right: (a) to engage and dismiss workers at his discretion; (&) to direct and allocate the work; and (c) to employ workers regardless of union membership. This clause still stands, although in December 1906 SAF and LO agreed that “ the right of association shall be left invi olate on both sides,” and SAF recognized the union’s right to protest a discharge which seemed to infringe upon the worker’s right to organize. In 1936 the right to organize was given statutory protection, chiefly in order to assist the whitecollar workers. Machinery for dealing with these protests was set up by the central federations in 1938. The right to dismiss was further modified by the 1946 agreement on Enterprise Councils. Closed-shop union contracts have been signed by some independent employers; i. e., not belong ing to SAF. The issue has been brought to the Labor Court in several cases by workers who were members of small syndicalist unions in plants having LO union contracts. The Court originally held that the worker’s right to organ ize was infringed, if he was dismissed or threat ened with dismissal for refusal to join the union with which his employer had signed an agreement. Between 1945 and 1948, the labor-employer majority of the Court countenanced the theory that a worker might hold membership in the two unions simultaneously, retaining membership in the union of his choice while being required to join the union having the closed-shop contract. The public members of the Court dissented, and in 1948 the Court returned to its former position as regards persons already on the payroll. In 1950, it permitted different treatment of a pro spective employee; in such a case it held the employer might require membership in a partic ular union as a prerequisite of employment. Negotiations and Disputes Settlement Although in Sweden workers were not hindered by the courts from combining to raise wages and improve their conditions, and injunctions were unknown in labor disputes, a provision was inserted in the Penal Code in 1899 (the Aakarp law, repealed in 1938), forbidding any person to coerce another to take part in a work stoppage, or to hinder one from returning to or applying for work. In spite of the law, unions resorted to picketing SW ED EN to prevent strikebreakers from going to work. Industrial disputes were less severe after the re peal of the law, but this probably resulted not from the repeal but from growing cooperation between LO and SAF. Negotiation of collective bargaining agreements between unions and associations of employers has been common in Sweden since the early part of this century. The number of employers and work ers covered by agreements has steadily increased (table 2) and the number of agreements concluded without a work stoppage also increased (table 3). At the end of 1948, there were 19,643 agreements in force covering 89,314 employers and 1,178,269 workers. It was still higher in 1951. T able 2.—Extent of collective bargaining agreements in Sweden, 1908-48 Agreements in effect at end of year Year 1908-10...................... 1911-15...................... 1916-20...................... 1921-25...................... 1926-30...................... 1931-35...................... 1938............................ 1939............................ 1940............................ 1941............................ 1942........................... 1943............................ 1948............................ 1,916 1,449 1,963 2,056 3,448 5,947 11,592 12, 511 13,231 13,286 14,346 15,175 19, 643 Number covered by agreements Employers 10, 545 8,315 10,372 11,938 17, 538 24,857 48, 663 52,731 55,650 57,907 57,355 61, 745 89,314 Workers 274,605 237,964 336, 578 383,482 518,801 648, 974 1,015,486 1,047, 771 1,056,949 1,066, 798 1,116, 570 1,129,107 1,178, 269 Source: Statistisk Aarsbok for Sverige, 1949 (p. 241), for 1908-43; for 1948, LO, Verksamhets Ber&ttelse, 1948 (p. 282). (Based on reports of unions.) Usually negotiations take place on an industry basis, with LO and SAF representatives sitting in to assist their members in obtaining certain standard provisions. Since 1939 both LO and SAF have played a more decisive part in influenc ing the wage adjustments of the several trades. Neither LO nor SAF will back up a strike or lockT able 3.— Workers affected by wage changes made through negotiations and after work stoppages in Sweden, 1920-48 Year 1920-24................................................ 1925-29................................................ 1930-34.............................................. . 1935-39................................................ 1940-44................................................ 1945..................................................... 1946-48................................................ 1940-48................................................ Through negotiations 74.0 74.6 76.8 95.6 99.7 84.7 99.9 98.1 Source: LO, Verksamhets BerSttelse, 1948 (p. 275). After work stoppages 26.0 25.4 23.2 4.4 .3 15.3 .1 1.9 9 out by member organizations unless the demands are consistent with the general program adopted by the respective central organizations for that particular negotiating season. Conciliation Service. Since 1906 the Government has placed qualified conciliators (one for each of seven districts) at the disposal of the parties when negotiating new contracts. If the parties are unable to agree they must either apply to the Conciliation Service or serve notice that negotiations have been suspended, and they must do so at least 7 days prior to any stoppage of work. Such notice must be accom panied by a statement setting forth the reasons for resorting to strike or lock-out. The State conciliator may then summon the parties to re open negotiations. The parties are required to comply promptly with the summons of the conciliator and to supply him with documentary and statistical material. They are not required to accept his proposals, or to refrain from direct action. The parties may, by agreement, substitute their own machin ery or may resort to an impartial chairman appointed by the Social Board of the Department of Social Affairs. If the dispute is subsequently referred for arbitration with the consent of the parties the conciliator cannot act as arbitrator. In serious disputes, the Government may appoint a special expert commission to investigate. The Swedish conciliators are part-time officials, combining this work with other official positions in the national or provincial governments, or with careers as judges or lawyers. Employer and union recommendations are considered in appoint ing conciliators. A secretariat is maintained in the Social Board. If a dispute affects two or more districts, the Social Board decides which conciliator is to intervene. The State conciliators have been increasingly successful in proposing acceptable compromises between the interests of labor and management. When a conciliation proposal on a wage matter is accepted by the negotiators for both unions and employers, it is customary to take a referendum of workers and occasionally, of employers, although this is not required by law or mandatory under the statutes of the two parent organizations. The rules governing the voting in the workers’ 10 L A B O R -M A N A G E M E N T R E L A T I O N S I N S C A N D I N A V I A referendum are laid down in the statutes of the individual unions. The referendum is advisory only, the final decision resting with the individual unions’ executive boards. If a dispute arises under a national contract at the local level, the parties negotiate without the aid of a conciliator. If agreement is not reached, the dispute is then referred, under the usual procedures, for negotiation between the union and the employer’s association. Collective Industry Agreements Of all Swedish workers covered by union contracts about two-thirds are under national agreements concluded by industry-wide bargain ing between the national union and the employers’ association. This is true in the following fields: engineering, textiles, tanneries, shoes, clothing, printing and bookbinding, pulp and paper, saw mills, building materials, steamship operations, hotels and restaurants, railways, sugar, flour mills, and several other food-processing industries. (The railways are State-owned but are still cov ered by an agreement.) Local agreements may supplement the national ones. Agreements with independent employers generally include the same basic terms as those with federated firms. The agreement applies to all workers, organized or not, employed by the firm. Collective agreements fix wage rates and other conditions of employment, including: (1) Hourly or weekly wage rates for men, women, and young workers in various occupations, though these differ by cost-of-living area; (2) guaranteed time rates; (3) the percentage above the time rate which piece rates should yield a worker of average competence; (4) details on working hours—which are 48 by law, except for 3-shift workers in under ground mining and iron works who have a 42hour week; (5) overtime rates of pay; (6) time for dismissal notice; (7) sick leave; (8) accident insurance; (9) negotiation and arbitration pro cedures; (10) duration of the agreement; and (11) notice for cancellation or change. Practically all national agreements are for terms of 1 year, and expire at the same time, so that negotiations for their renewal proceed simultaneously. Legislation and collective bargaining overlap on some topics. Although there are no minimum wage laws in Sweden, there are laws on hours of work, vacation, and sickness insurance. A law of 1920 sets 48 hours as the legal maximum work week. Overtime up to 200 hours a year may be permitted by the State Labor Council. There are special laws regulating the hours in coal mines, agriculture, retail trade, domestic service, and on board ship. The union agreements fix overtime rates ranging from time and a quarter to double the regular rate of pay, the higher rates applying to Sunday, holiday, and night work, and to over time exceeding 2 hours on regular workdays. Groups not covered by any hours’ legislation include forestry workers, fishermen, teachers, hospital, and welfare workers. Vacations were regulated by collective agree ments up to 1940, when a law took effect setting 2 weeks as the normal vacation period. It will be extended to 3 weeks in 1952. In addition, there are paid statutory holidays. Similarly, in the field of sickness and industrialinjuries insurance, union agreements frequently require employers to pay benefits during the wait ing period specified in the workmen’s compen sation law, and to contribute to sickness insur ance funds or to pay medical expenses during illness. The unions of salaried employees won recog nition somewhat later than the unions of wage earners, assisted by the passage of a 1936 law on collective bargaining enforceable by the Labor Court. The salaried employees’ unions bargain with individual employers in private enterprise, and with governmental bodies. Negotiations cover conditions of employment, pay during sickness, and notice prior to lay-off or dismissal. Salary scales have been included only recently in certain national agreements; namely, those in the fields of insurance, banking, the merchant marine, avia tion, some sections of the hotel and restaurant industry, and in government employment. In 1928 a law was passed defining what pro visions a legally binding collective agreement must contain. At that time a substantial proportion of Swedish wage earners were already covered by such agreements, and their legally binding char acter had been established by court decisions. In accordance with the law, a Swedish collec tive agreement defines certain rights and duties of employers and unions. It declares its terms binding even upon individuals who join the association or union after the date the agreement becomes effective, or who resign from their re- SW ED EN spective organizations before it expires. The law prohibits any form of direct action, dur ing its term if undertaken for the purpose of al tering the contract terms. It requires the signa tory organizations to use their best efforts to pre vent a member from undertaking illegal action. It permits sympathetic action in support of a party who is legally free to take direct action. Thus if one party has violated the contract the other party may engage legally in strike or lock-out and may gain the support of his fellow workers or employers. Labor Court. The Labor Court was also estab lished by a law of 1928. Its functions are: (1) to enforce and interpret collective agreements; (2) to hear cases of alleged violations of the collective con tract act; (3) to arbitrate disputes over the meaning or application of the agreements but not dis putes over “interests” or collective bargaining issues; and (4) to award damages to an injured party. The law expressly precludes court action until all other peaceful methods provided for in the union contracts have been utilized. Most disputes are settled by the usual negotiation pro cedures. The importance of the Court rests in its availability as much as in its actual case load. Agreements Between LO and SAF Basic Agreements were concluded in 1906 on the subject of the right of association, 1938 on procedures and principles for collective bar gaining negotiations, rights of neutrals in a labor dispute, and lay-offs and dismissals, and 1946 on Enterprise Councils. The issues of lay-offs and dismissals were treated in the 1938 Basic Agreement because they were deemed “especially important for promoting an easing of tension.” Except for the 1906 agree ment not to fire workers for union membership, Swedish employers had remained free to hire, fire, and lay-off at their own discretion. There were no union seniority rules. A Labor Market Board was therefore created, to deal primarily with cases involving individual lay-offs and dis missals. This Board consists of six members, three appointed by the Federation of Employers, and three by the Federation of Trade Unions, serv ing for 3 years each. Special members may be co-opted to represent an association concerned in 11 a particular case. An impartial chairman, chosen by the federations to serve for 3 years, is subject to call whenever the Board is deadlocked. The 1938 Agreement requires the employer to give 2 weeks’ dismissal notice to the worker, and to negotiate with the union on complaints and questions of reemployment after lay-offs. The Labor Market Board is instructed to take into account both the dependence of production on skill and suitability of labor, and the worker’s security, length of service, and family obligations. The Basic Agreement of 1946 concerning Enter prise Councils (or labor-management plant com mittees) requires the employer to notify the work ers’ representatives on the councils of proposed lay-offs or discharges in the case of workers with at least 9 months’ service. In case of inability to agree, the matter is to be referred to the union which may refer it to the Labor Market Board. The Board’s decision is communicated to the union and employer association concerned, which then adopts appropriate measures after consultation with the top federations. The Labor Market Board has the further duty of interpreting and applying the 1938 Basic Agree ment provisions concerning limitation of strikes, lock-outs, and other forms of direct action. En terprises using only family labor, and independent artisans are to be protected from direct action. The exaction of “illegitimate favors” and direct action on religious or political grounds are pro hibited. Secondary boycotts and sympathetic ac tions are prohibited in labor disputes when directed against neutral third parties. The agreement on Enterprise Councils con cluded between LO and SAF provided for the creation of labor-management councils or com mittees in plants where 50 percent of the workers belonged to an LO union which had ratified the agreement, if desired by either the union or the employer. An annexed agreement with TCO pro vided for the participation of the salaried and technical employees in these plants provided the TCO union had also ratified. The councils were to concern themselves “ with questions of technique, organization, planning and develop ment of production, with a view to making use of the experience and insight of the employees.” Training courses for representatives on the councils were subsequently organized by SAF and LO. 12 L A B O R -M A N A G E M E N T R E L A T I O N S I N S C A N D I N A V I A Index Wage Agreements. In view of the strong leadership exercised among employers and unions, respectively, by SAF, LO, and TCO, the Government found it unnecessary to adopt wage regulation by law in Sweden during the emergency created by World War II. Faced with an alarming prospect of war-caused scarcities in the fall of 1939, the central feder ations of unions and employers met to consider means of preventing a wage-price spiral. Five consecutive annual agreements were negotiated by the federations which provided for supplements to wage rates based on changes in the official cost-of-living index, and which compensated in part, but not in full, for the increases in living costs; the compensation varied from 50 to 75 percent of the rise in the index in different years. However, some increases were also negotiated in basic rates. After the end of the war both manual and white-collar workers hoped to regain the losses in real wages sustained during the war period, and therefore the escalator clauses were not renewed in the contracts of 1946-47. Instead adjustments were negotiated which tended to raise the general level of wage rates somewhat more than the current rise in the index would have justified. In 1948, 1949, and 1950 the automatic wage adjustment clause was again suspended, this time in order to achieve something nearer to a wage freeze. However, in 1948 some modest adjustments were made in basic rates and in January 1948 children’s allowances were intro duced, publicly financed, which in effect pro vided a supplement to the wages of workers with families. Every effort was made by the Government during these years to keep the index steady by the use of subsidies and other devices. Trend of Real Earnings. During the early war years, average real hourly earnings reached a low point, about 10 percent below the 1939 level. This latter level was slowly regained by 1945. Factors responsible for the accelerated rise in real wages after 1942 included the price freeze of 1943, negotiated increases in some basic and minimum wage rates, greater piecework output, and greater compensation by cost-of-living index , wage increases. By May 1950 real average hourly earnings were reported between 40 and 45 percent above prewar. However, this figure must be taken with caution because of admitted deficiencies in the cost-of-living index. Increases were especially marked for women and other low-paid workers. This resulted in part from the application of the “solidaric” wage policy, fostered by LO, and indeed by the national trade union federations in all three Scandinavian countries. It means that partic ular attention is paid to raising the wage level of the lowest-paid workers, and that higher-paid groups will assist, if strategically necessary, by refraining from pressing their own demands. The policy first appeared in the depression of the T able 4.—Average hourly earnings, real earnings, and earnings index for all industrial workers in Sweden, 1939-50 [1939=100] Average hourly earnings Year 1939..................................... 1940....... ........ .................. 1941..................................... 1942...................................... 1943......................-.............. 1944..................-................. 1945..................................... 1946..................................... 1947..................................... 1948..................................... 1949..................................... 1950...................................... Kroner 1 (1) 1.18 1.28 1.39 1.52 1.59 1.64 1.73 1.87 2.15 2.34 2.48 ' <2.60 Index (2) 100 108 118 129 135 139 147 158 182 198 210 220 Index of Cost-of- real average living index2 hourly earnings * (3) (4) 100 113 128 138 139 139 139 139 143 150 152 156 100 96 92 93 97 100 106 114 127 132 138 141 i The value of the krona in United States currency was as follows: C ents 1939.......................................................................................................... 21.32 1940-46......................................................................................... 23.81 1947-Sept. 18, 1949................................................................................ 27.78 After Sept.19,1949................................................................................ 19.30 * Without taxes. This is the series used for purposes of wage adjustment. The series including taxes runs 3 to 4 points higher. * Column 2 divided by column 3. If deflated by the index which includes taxes, the real earnings would be about 3 points lower. * Weighted average for May and November 1950, adjusted upward by 6 percent to cover payments for vacation and sick pay, overtime, and payments m kind, which are not included in monthly earnings statistics, but are in cluded in the annual averages. Source: Swedish Royal Social Board. 13 SW ED EN nineteen-thirties, and was used to strengthen trade-union organization among agricultural and forestry workers and the unskilled, where it was weak. During the war it helped control infla tion by raising the purchasing power of groups spending their income chiefly on necessities, which were strictly rationed and controlled as to price. Time Lost in Industrial Disputes There was a marked decline in the number of man-days lost in industrial disputes in Sweden after 1935, when LO and SAF began their joint yearly conferences. The year 1945 was unusual in this respect because of the 5 months’ metal workers’ strike (table 5). T able 5.—Average annual man-days lost as a result of industrial disputes in Sweden, 1903-49 [In thousands] Period 1903-08.............................................................................. 1910-14 i............................................................................. 1915-19...................... ....................................................... 1920-24............................................................................... 1925-29................................................ .............................. 1930-34............................................................................... 1935-39—....... ..................................................................... 1940-44............. ............ ................................................... 1945.................. ............... ................................................. 1946-49............................................................................ 1946—....................... ................................................. 1947....................... .................................................... 1948............................................................................ 1949.......................................................................... Annual average 1,042 345 1,080 4,479 2,408 2,187 706 108 11,321 81 27 125 151 21 i Omitting 1909, year of general strike. Source: A Survey of Labor and Social Conditions in Sweden, (p. 31), pub lished by the Employers Association, 1947; Statistik Aarsbok, Sweden, 1949, (p. 239). Norway Norway has attained a high degree of industrial peace and stability through a combination of centralized guidance of collective bargaining, legislation on industrial disputes, and cooperation between the Government and the organizations representing all productive sectors of the economy. The Federation of Labor and the Federation of Employers have dealt with each other and con cluded agreements from time to time since 1902. A basic agreement negotiated in 1935 and amended in 1947 was in force as of December 1950. Prior to the liberation, the Norwegian Government-inExile obtained an agreement between the repre sentatives of the Labor Federation and the Em ployers’ Federation, which formed the basis of a 1944 Provisional Act regulating the settlement of wages and other disputes. This law banned strikes and lock-outs. Since liberation, the Government consults a joint council representing the Federation of Labor, the Employers’ Federation, the farmers, and the fish ermen, whenever legislation affecting labor and employers is to be considered (e. g., wage and price stabilization). The economy of Norway is more precariously balanced than that of the other two Scandinavian countries and it suffered a greater shock from the devaluation of the currency. Economic controls have therefore been continued. The Labor Party has a large majority in the Riksdag (the Parliament) and there is close coop eration between it and the Federation of Trade Unions. Many of the features of industrial relations found in Sweden and Denmark are found also in Norway, including the labor court, which settles disputes arising out of the application and inter pretation of contracts (jural disputes), and com pulsory conciliation in disputes over new issues which the parties involved are unable to settle. The arbitration of wage disputes has been imposed by legislation in postwar Norway as in Denmark. The Norwegian Federation of Trade Unions pursues the now familiar Scandinavian “solidaric” wage policy—favoring larger increases for low-paid than for high-paid workers. However, piece rates are applied more widely than in the other two 14 countries, resulting in a wider range of individual earnings. The Trade Union Federation has also negotiated over-all wage agreements with the Employers’ Federation since 1939. Norwegian Federation of Labor Over half of all Norwegian wage earners were or ganized by mid-1951, nearly all of them—494,699— being in unions belonging to the Norwegian Federation of Labor or LO (Arbeidernes Faglige Landsorganisajonen). The percentage was con siderably higher in manufacturing industries and among production workers—85 to 90 percent. Some civil servants, technical employees, and the molders are organized independently. Occa sional friction arises between the so-called non political and LO unions. There is no separate federation of white-collar workers as in Sweden. There has been a separate union for foremen, but not all foremen joined it. In 1951 LO organ ized its own foremen’s union. Employers ob jected to bargaining with a federated union. The dispute was referred to a tripartite committee to consider legislation. Norwegian unions do not insist upon close ishop contracts. The Federation of Trade Unions still adheres to the policies enunciated at its 1934 congress disapproving the closed union and the closed shop. The Employers’ Federation adheres to open shop principles, although unions are now generally recognized and union-security provi sions have not been a vital issue in labor-manage ment disputes since the 1930’s. Workers’ organization is substantial in manu facturing, and is complete on the Governmentowned railways, and in shipping, inland trans port, and construction. Important nonunion groups are found in the lumber industry—among handicrafts, and in small manufacturing estab lishments. Between 1935 and 1939 the un employed were directly affiliated with LO in 104 societies having a total of 9,761 members in 1935, and 68 societies, having 4,317 members in 1939. The structure of the 40 trade-unions affiliated with LO is similar to that of the Swedish and is 15 not dissimilar to that of American unions. Craft, place and subjected to financial and other con industrial, and mixed types are included. The trols by LO. LO is closely connected with the Norwegian industrial form dominates, with 12 industrial type unions constituting 75 percent of LO’s 1948 Labor Party (a moderate Socialist Party), which has formed the Government of Norway since 1935. membership. LO wields more authority in Norway than its The Party won its first straight majority in the counterpart in Sweden or Denmark, in the Storting, or Parliament, in 1945, the year of the determination of trade-union policy. The Fed first postwar election. In the 1949 elections the eration requires each affiliate to allocate 20 Communist Party lost its few seats. “The Labor kroner1 per year per member to a centrally Party,” in the words of the Prime Minister in controlled strike fund. At its 1950 convention, 1946, “aims at a planned economy, but not at the LO adopted model rules for national unions and nationalization of industries or of going concerns.” their locals. The member national unions are LO and the Labor Party consult on matters of required to adopt certain basic principles, but common concern in a joint advisory committee. each of them votes upon the question of adapting However, mutual representation on the respective its own constitution to the recommended model. central executive boards of the Party and the The national unions determine the constitution Federation was discontinued after some years. of the locals, and closely supervise them. There Local trade-unions, which may affiliate collec tively, provide about 45 percent of the Party’s are over 4,000 local unions in Norway. Amalgamation of craft into industrial unions membership. Individual members may exempt was adopted as a principle at conventions of the themselves from the payment of dues allocated LO, after a long fight between opposing wings. to the Party. A large number of Labor Party However, a referendum vote revealed the strength officials are former trade-unionists, and national of the opposing factions to be so evenly matched trade-union leaders generally belong to the Labor that the program could not be carried through. Party. Persons who had belonged to Nazi organiza Negotiations (interrupted by World War II) proceeded, industry by industry, for the purpose tions were barred from membership in LO unions of grouping related organizations. In addition, after the liberation. However, the ban was lifted industrial departments have been set up in LO in 1949 though they still were barred from holding to promote cooperation between unions in a single union offices. If workers refuse to work with, industry, e. g., graphics, metals, food, woodwork or under the supervision of, former “quislings,” the dispute is referred for negotiation to the cen ing, leather, and shoes. Most collective bargaining agreements expire tral federations. If no agreement is reached, the together and are renegotiated at the same time case goes to the Labor Court. in Norway. Certain over-all demands are form Norwegian Employers’ Federation ulated by LO for consideration and bargaining with the Employers’ Federation at industry level. The Norwegian Employers’ Federation, founded Particular unions may decide to press for further in 1900, was composed of 16 trade or industrial concessions, with or without the support of LO. associations and a few independent firms in 1946. Basic agreements negotiated by LO are generally Total membership included 4,400 firms employing incorporated into the agreements of the separate about 160,000 workers, or about 40 percent as trades. many as the LO controlled. Independent asso About 20 trade councils unite local unions on ciations in maritime, paper and pulp, lumber a geographical basis for educational, welfare, and industries, and in commerce and banking are con other noneconomic purposes. These councils made sulted and usually follow its lead on labor matters an early bid for power, seeking to displace the of general concern. national unions as basic units of the labor move On joining the Federation and its constituent ment. However, they were firmly put in their* associations, members delegate to it power: (1) to 9 1 bargain and conclude agreements with unions; i Prior to devaluation 1 kroner=20 cents. After devaluation on September (2) to decide the termination of a dispute; and 19, 1949, 1 kroner=14 cents, U. S. NORW AY L A B O R -M A N A G E M E N T R E L A T I O N S I N S C A N D I N A V I A 16 (3) to give support to other employers by financial into negotiations may cause the conciliator to aid and sympathetic lock-outs. All members— institute conciliation proceedings and to require associations and individual firms—are bound by the parties, to furnish him information. the Federation’s decisions. The Federation con As soon as the break in negotiations is made trols a central fund which is available for the known to the conciliator, he is required by law to support of members in any lock-out or strike prohibit a work stoppage until the conciliation approved by the Federation. Norwegian employ proceedings have been completed if he considers ers maintain that such a high degree of centrali the public interest may be prejudiced by the dis zation is necessary to counter the combined pute. He then summons the parties to meet with strength of the unions in their federation. him. His suite of offices includes a meeting room The Employers’ Federation maintains five regularly designated for the use of LO, another for industrial departments, each staffed with special the Employers’ Federation, and a joint meeting ists designated as bargaining agents by the mem room. Authorized representatives cannot in ber associations. Agreements once negotiated are clude lawyers without the conciliator’s consent. submitted to the appropriate members for ap Like the Labor Court, he may require the attend proval, and are rarely rejected. Should an affili ance of witnesses, though he cannot require sworn ated association or firm reject or terminate an testimony. He may appoint expert investigators. agreement without the approval of the Employers’ Sessions are private, but a full record must be Federation, its financial assistance normally would kept. be withheld. If no agreement is reached, the conciliator formulates a proposal which is submitted to both Negotiations and Disputes Settlement sides, who then take a written ballot of their members. The conciliator may formulate a pro In the words of Paal Berg, chairman of the posal for a group of unions after consultation with Norwegian Labor Court for 25 years, “ the best the national organizations concerned. The ques way to avoid conflicts is to have effective negotia tion of acceptance or rejection is then decided for ting machinery standing ready at all times.” the whole group by a majority of the combined This Norway has. votes instead of by the separate vote of each union. A party who has cooperated with the conciliator Conciliation Service. The State conciliator and may demand termination of conciliation proceed assistant district conciliators (appointed by the ings after 10 days have elapsed since the prohibi Crown) are instructed by law to “watch conditions tion was issued. The conciliator then has 4 days of employment throughout the country” for signs in which to wind up the proceedings. A strike or of disturbance to industrial peace. Negotiations lock-out could legally take place at this point under for the conclusion, renewal, or amendment of a the act as it stood prior to World War II. How collective agreement generally take place at the ever, modifications were introduced by legislation industry level. The workers are represented by agreed to by LO and Employers’ Federation when the union concerned and by LO—the employers the Government of Norway returned from exile, by their bargaining agent in the Federation. and the normal procedure has not yet been fully Some issues are disposed of in basic or “master” restored. The present procedure, set forth in an agreements signed by LO and the Employers’ act of February 25, 1949, allows freedom of action Federation, and are then incorporated in the indus to the parties after the conclusion of conciliation try agreements. However, the separate trades proceedings, provided the demand has been also negotiate on other matters peculiar to the endorsed by the top federations (LO, in the case of trade or supplemental to the master agreement. workers’ demands). The conciliator ascertains Parties negotiating or renegotiating a collective the respective Federation’s approval or disap agreement are required to give notice to the con proval. If approved, the government agencies ciliator of a break in negotiations or of an intended step aside and the parties may engage in a legal stoppage of work. A strike or lock-out cannot be strike or lock-out.2 If the demand is disapproved declared in any case until 4 days after the receipt If a stoppage occurs it is customary for the conciliator to intervene again of this notice by the conciliator. Failure to enter after 30 days. 2 NORW AY by the appropriate Federation, the conciliator notifies the Minister of Labor who may then refer the case for compulsory arbitration to a National Wages Board, which also handles nonwage questions. The Wages Board, created by the Provisional Act of 1944, is composed of seven members (three independent, two representatives for labor, and two for employers). It renders final and binding decisions. Since the Wages Board decisions often embody a compromise, unions are encouraged to present demands which will be disapproved by LO, in order to reach the Board, in the hopes of gaining something. Freedom of collective bargaining, including the right to strike, was restored to the central organi zations in 1949. It was felt that the close alli ance with the party in power would deter LO from giving approval in a time of economic crisis to demands which might lead to extensive strikes. The legislation of February 1949 achieved, in effect, the freeing of the central federations from the compulsory jurisdiction of the Wages Board, but not from the moral obligation to the nation, which both sides deeply feel. In fact, both the Employers, Federation and LO have come to accept arbitration as a last resort in disputes which would adversely affect the national interest. Table 6 shows how effectively strikes and lock outs have been controlled since 1945. T a b l e 6.— Average annual man-days lost as a result of industrial disputes in Norway, 1930-50 Year 1930-34 .................................................................. 1935-39_______________ _________________________ 1940-44.................................... ............................................. 1945-49.................................................................................... 1945 ................................................................... 1946-...................................... ....................................... 1947..................... .................... - ........ -......................... 1948 .............. .................................................. ............... 1949 .................................................................... 1950 ...........................................-......................................... Man-days lost (in thousands) 0) 1,764 601 76 65 79 41 92 105 42 i Not available. Source: Norway, Central Statistical Bureau. Statistiske Meldinger No. 3, 1950 (p. 87). Collective Industry Agreements There are about 50 major national agreements between federated employers and their employees in Norway. Independent employers generally 17 sign separate agreements with almost identical provisions. The general form and content of a collective agreement, to be valid and enforceable, must meet specifications laid down in a law originally passed in 1915 (Labor Disputes Act of 1927 as amended.) This law antedated the Swedish act of the same type, by a decade. It requires that agreements: (1) are to be in written form; (2) are to contain provisions regarding date of expiration and length of notice requisite to termination; (3) are to run for 3 years and are automatically renewed for 1 year unless otherwise specified—most agreements specify 2 years; (4) resignation from the signatory employer or labor organization does not relieve a member of liabili ties and obligations under the contract. The provisions of collective agreements which are negotiated for an industry, a district, or a plant, resemble those of Sweden. In general, the postwar agreements still provide for a basic 48-hour workweek. However, office employees’ contracts specify 42 hours a week, and store clerks 45. Overtime rates are usually time and a quarter for the first 2 hours, time and a half thereafter, with double time for work on Saturday afternoons, Sundays, and holidays. Portal-toportal pay is generally required in mining and large establishments. Paid vacations for 2-week periods were generally required in union contracts until 1947 when a law was passed requiring a 3week paid vacation. Closed shop agreements are banned by the Employers’ Association, and are disapproved of by LO. Labor Court. The 1927 law prohibits strikes or lock-outs as a means of settling disputes regarding the validity, interpretation, or existence of collec tive agreements or claims based thereon. All such disputes must be referred to private arbitra tion or to the Labor Court, whose decisions and awards are final and binding. As in Denmark, the agreement between the LO and the Employers’ Federation to submit all such disputes to arbi tration preceded by some years the adoption of the law. Appeals are allowed only in cases in volving fines imposed by the Labor Court for contempt of court or for failure to observe secrecy with respect to confidential matters produced in Court, and against the Labor Court’s dismissal of a case. 18 L a L o r -m anaqem e Nt r e l a t io n e The Labor Court consists of a chairman and 6 members, with 12 substitutes. Officials and em ployees of unions and employers’ associations can not sit on the Court. However, 4 members (2 a side) are appointed from nominations submitted by unions and employers’ associations having at least 10,000 members or employees, to the Minis ter of Labor and Communal Affairs. Two mem bers and the chairman are to be impartial; the chairman and one of these public members must have the qualifications prescribed for judges of the Norwegian Supreme Court. Basic Agreements After the initial agreement of 1902 between LO and the Employers’ Federation (see p. 4) a second basic agreement was negotiated in 1935 to replace a law on voting procedure. It was renewed with amendments in 1947 and 1950. The present basic agreement (as amended in 1947) provides for: (1) Explicit recognition of the right to organize; (2) recognition of the workers’ right to elect shop stewards; (3) definition of stewards’ duties, and of management’s obligation to consult stew ards prior to taking certain kinds of action, e. g., alteration of working rules or conditions, reduc tions in force, and transfers of personnel. In addition, (4) in case of lay-off or discharge of a shop steward the employer is required to confer with the other stewards if they request it; (5) steps in grievance procedures were specified, including negotiation at the plant level between management and shop steward, to be followed by negotiation between management and union offi cials in the presence of a representative of the LO and the Employers’ Federation. If not settled, the national union or the LO were to be consulted; (6) as a final step, the dispute must be referred to the Labor Court. The agreement established (7) rules for voting on collective agreements or mediation proposals and (8) permitted sympa thetic work stoppages if the consent of the LO or the Employers’ Federation was obtained. In December 1945, the top federations concluded an agreement providing for plant production committees composed of management and labor representatives in plants employing 20 or more. These committees were to improve working condi tions in the plants, promote vocational training, IN S C A N D IN A V IA and increase output. About 1,000 such commit tees had been organized by early 1949, some more and others less active. About 80 percent of them dealt with safety and welfare matters, but rela tively few discussed technical suggestions. A National Council for Production Committees was established to receive from each committee a semiannual report on activities and to coordi nate and guide their activities.3 The agreement was renewed in amended form for 2 years in the fall of 1950. The minimum size of establishments in which committees were to be set up was raised from 20 to 50 employees. The agreement requires management to furnish the committees with an annual balance sheet and a statement concerning its economic and trade position. The agreement further required man agement to discuss plans for new techniques and changes in plant operation with the committees. The committees may give advisory opinions only. After December 31, 1952, the agreement is to be automatically renewed each year, subject to denunciation by either party 6 months prior to the annual renewal date. The joint labor-management approach to pro ductivity has been carried a step further in the metalworking industry where a 2-day national con ference on productivity was held in February 1951 by 30 representatives of the union and the indus try employers’ association. The conference urged the establishment or activation of plant production councils, cooperation in the rationalization and revision of piece rates, and measures to reduce absenteeism and improve the flow of work. Dis trict and local conferences are to be held, to plan to carry out the recommendations. In two Norwegian towns, local union presidents and shop stewards have met with local manage ments to stage municipal production drives to raise output in the town’s leading industries. Index Wage Agreements. The principle of periodic wage adjustments geared to changes in the cost-ofliving index was incorporated into many trade-union agreements in Norway during the interwar period. After 1939 the master agreements negotiated by the central federations provided for semiannual adjustments, yielding partial rather than full com-* * Industry councils composed of labor, management, and government rep resentatives have been established under a law of May 1947. 19 NORW AY pensation for price increases. These provisions were incorporated into the fifty-odd industry agree ments. In June 1949, the Trade Union Federation agreed to reopen the wage clauses for negotiation once a year, in January, if the index had registered a rise or fall of 7 points, instead of automatic adjustment twice a year if the index moved 5 points. The Norwegian cost-of-living index for wageearner families moved upward—about 3 percent from 1945 through most of 1949. This stability was due in large measure to subsidies applied to food prices. However, after devaluation in Sep tember 1949 Norway experienced the general rise in prices of imports from hard currency areas. The rise so greatly increased the burden of subsi dies that the Government in March 1950 prevailed on employers and labor to agree to a curtailment of subsidies, and to a change in the escalator clause of the agreement. It was then agreed that the wage clauses could be reopened in September 1950 (instead of in January 1951) if by September the index had risen by 7 points. Actually by September it had risen almost 21 points. In October, LO and the Employers’ Federation negotiated a settlement which added 18 0re an hour for adults and 9 0re for young workers to the existing cost-of-living allowances.4 This gave compensation for the rise in retail prices attribut able to cut-backs in subsidies, but not for the full rise in prices. In effect, the agreement shifted the burden of compensation from government to industry. Should the index rise or fall by 5 more points on or after March 15, 1951, the agreement permits an increase or decrease of 2.6 0re per hour for each point. Should the index rise another 5 points on or after September 15, 1951, the ques tion of further allowances could be reopened.5 All other agreement provisions were to be extended to December 31, 1952. The agreement was endorsed in a nation-wide ballot of both sides—the first comprehensive ballot taken since 1940. Less than 30 percent of LO’s membership voted, 71 percent of these voting in favor of the proposal. 4 Average hourly earnings, including cost-of-living allowances in the first quarter of 1950 had been as follows: K ro n e r U nited States cents Men................................................................ 3.10 43.4 Women________________ ______________ 2.02 28.3 1 krone=14 United States cents. The 18 0re supplement (2.52 cents) was equivalent to a 6-percent increase for men, 9 percent for women. « Both of these steps were taken, in March and September 1951. On November 17, 1950, the Price Directorate an nounced that increases in ceiling prices based on higher labor costs would not be sanctioned, thus attempting to hold the stabilization line and to stimulate increased productivity. Trend in Real Earnings. Table 7 illustrates how well LO succeeded in carrying out the “solidaric” wage policy. It also indicates that other factors besides increases in basic rates and cost-of-living supplements, contributed to improving the work ers’ position. Even allowing for the fact that the cost-ofliving index understated the actual rise in living costs, real earnings in the postwar period main tained a level well above prewar until the effects of devaluation began to appear (table 7). The skilled independent craftsmen were slowest to regain their prewar position, lagging behind the employees in manufacturing and mining (particu larly women). In other branches of the economy and in unorganized plants, earnings are believed not to have advanced as much as for these groups. A marked reversal of the trend, however, occurred in early 1950. The collective agreement con cluded in the last quarter of 1950 mitigated but did not halt the decline in real earnings, although it gave workers more compensation for rising liv ing costs than even spokesmen for the Labor Government thought wise, under the general eco nomic circumstances. T able 7.—Index of real earnings for occupational groups in Norway, 194-5-50 [1939=100] Index of real earnings Year 1945__________________ 1946_________________ 1947........................... ........ 1948__________________ 1949__________________ First quarter_______ Second quarter-------Third quarter....... . Fourth quarter........... 1950: First quarter----------Second quarter-------- Skilled crafts * 1 (nonmanufac turing) men Manufacturing and mining 2 Men Women 76 87 94 101 107 103 107 106 110 100 99 109 116 122 119 123 121 124 90 102 116 126 132 129 132 131 135 100 105 116 122 127 133 1 Printers, bakers, building tradesmen, slaughterers, and sausage makers. 2 Adult men and women, all grades of skill. Source: Computed from earnings data in Statistiske Meldinger, Central Statistical Bureau, Oslo, various issues. These figures are based on wages paid in establishments covered by collective agreements. 20 L A B O R -M A N A G E M E N T R E L A T I O N S I N S C A N D I N A V I A In winning as much as it did from employers and government, the trade-union movement ap pears to have steered a skillful middle course. It gained rank-and-file acceptance in the face of bitter Communist attacks and demands for “full compensation,” and it assured industry 2 years of peace by the extension of agreements for this period. Denmark Denmark pioneered among the Scandinavian countries in developing institutions for reconciling the conflict between labor and employers; namely the first of the Labor Courts and the first basic agreement between national federations of em ployers and workers. Compulsory arbitration has been imposed only in serious disputes by occasional special legislation, except during the war years when it was the required procedure. This ended at liberation. Conciliation procedures, on the other hand, are “compulsory.” The trade-union federation adheres to a “solidaric” wage policy (i. e., favoring low-paid workers), to the adjust ment of wages to changes in the official cost-ofliving index, and to the process of centralized col lective bargaining with the Danish Employers’ Association—much as in Sweden and Norway. Federation of Trade-Unions Unions have been freely formed in Denmark since 1862, when the guild system was abolished by statute. There was no special legislation guaran teeing or protecting the right to organize, except that the right of association and negotiation was guaranteed to employees of the State by legislation of 1927 (amended in 1931). The unions in pri vate industry are federated into a single organiza tion, the De samvirkende Fagforbund, or D. s. F., which was founded in 1898 and is closely allied with the Social Democratic Party. In 1950, the D. s. F., with a membership of 656,406 in 70 unions composed of 3,541 locals, embraced 96 percent of all trade-unionists in Denmark. In 1949, there were 663,667 organized workers representing about 46 percent of the total wage and salary workers and 56 percent of the nonagricultural wage and salary earners in Denmark. Organization is general among industrial workers, State employees, and agricultural workers paid on a daily basis, but is limited among salaried employees. By far the largest union in D. s. F. is the General Workers’ Union. It is composed of unskilled workers, and cuts across all industry lines as does the much smaller Women Workers’ Union. Obviously, given two such organizations, the rest of the organized workers could scarcely be grouped in industrial unions, and, indeed, the craft union predominates. However, federations have been formed in certain industries for collective bargain ing; e. g., the Central Organization of Metal Workers, which groups 22 unions and has a com bined membership of 96,800. State employees have their own federations for bargaining pur poses. However, municipal workers and employ ees of the State-owned railways belong to D. s. F. The D. s. F. has shown a steady growth—unin terrupted even by the German occupation of World War II. As in Sweden and Norway, the Federation has assumed increasing authority, es pecially in the field of wage negotiations. This was necessary to offset the high degree of cen tralized authority wielded by the Danish Employ ers’ Association, and to coordinate the large number of small craft unions which might be ineffective or might involve the whole trade-union movement in costly strikes and lock-outs. Unlike Sweden and Norway, the immediate postwar Government of Denmark was a coalition of which the Social Democratic Party was a lead ing member. It formed a minority government in 1947. The tie between the party and the trade-union federation is strong, although unions do not affiliate with the party collectively. How ever, by decision of a D. s. F. congress a small sum is set aside each week from the union dues of each member for the support of the Social Dem ocratic press, and the D. s. F. owns the leading party and union paper (Social Demokraten). It generally has given financial support to the party in election campaigns, and has elected a number of leading trade-unionists to the Rigsdag. This alliance has brought important social gains in the form of legislation. At times it has caused the unions to moderate demands or restrain strikes which might prove embarrassing to the party. In the postwar period, D. s. F. leaders have yielded to arguments that the national economy could not afford a general reduction in weekly hours, and this demand was postponed in order to assist the Government’s reconstruction program. 21 22 L A B O R -M A N A G E M E N T R E L A T I O N S I N S C A N D I N A V I A Employers’ Association The Dansk Arbejdsgiverforening, formed in 1896, 2 years before the D. s. F., includes prac tically all sizable employing firms. It is divided into trade groups that share a large headquarters building in Copenhagen. Negotiations over gen eral wage increases and broad questions are carried on by the officials and staff of the central asso ciation. The negotiation of piece rates and sub sidiary matters are left to the trade groups. Basic Agreements The September Agreement of 1899, the agree ment of 1908 on standard rules, and the agreement of 1936 on uniform rules for the negotiation of agreements, all concluded between D. s. F. and the Danish Employers’ Association, determine the pattern for Danish industrial relations. By 1950, collective bargaining had become so highly cen tralized that both sides agreed on the need for amending the rules in order to eliminate a mass of technical detail from the general contract nego tiations. In addition, the trade-union federation proposed a change to permit a revision of demands after the commencement of negotiations. In August 1947 a basic agreement was signed between the top organizations of unions and em ployers defining the scope and activities for joint production committees in industry and handicraft, similar to the Swedish enterprise councils. Index Wage Agreements. As in Norway, and less consistently in Sweden, the central organizations of trade-unions and employers, by agreement, have adjusted the general level of wages to changes in the cost of living during the period 1939 to 1950. In October 1939, prior to the establishment of a Labor and Conciliation Board with compul sory powers, the D.s.F. and the Employers’ Association agreed to an extension of contracts until March 1941, provided that, during the interval, wages were to be adjusted quarterly whenever the cost-of-living index changed by three points. Independent unions and employers ac cepted the same adjustment. In May 1940, at the time of the occupation, the Government ordered a wage stop. The implied promise was given that prices would remain stable. Actually, a rapid rise in prices followed, especially of agricultural products. In September a small wage supplement known as “bread bonus” was granted. Subsequently, an nual cost-of-living adjustments were granted by the Labor and Conciliation Board, based on a semiannual index of prices of prime necessities. In addition, the wage rates of the lowest paid workers were raised by collective agreements of December 1942 and August 1944. In March 1946, the D.s.F. and the Employers’ Association again agreed to semiannual index wage adjustment. The wage rates are raised by 5 0re an hour for men and by 3.3 0re for women for each 6-point rise in the cost-of-living index. Trend of Real Earnings. At its lowest point, in 1941 and 1942, the Danish index of real wages (hourly earnings divided by cost-of-living index) stood at 83 percent of 1939. Thereafter the sit uation gradually improved. The prewar level was restored in 1945 and was exceeded by 9 per cent in 1946. The rate of increase then slowed down but the upward trend was maintained. In the third quarter of 1950 real earnings were 24 percent above 1939. (See table 8.) 8 .—Average hourly earnings, real earnings, and earnings index for all industrial workers in Denmark, 1939-50. T able [1939=100] Year 1939_______ ________________ 1940________________________ 1941________________________ 1942____________ ____ ______ 1943___ __________ _____ ____ 1944— ______________________ 1945________ ____ __________ 1946_______________________ _ 1947— ___ _______________ _ 1948____________________ _ 1949............................... .............. 1950________________________ First quarter_____________ Second quarter___________ Third quarter........................ Fourth quarter.................... Average hourly earnings 1 Kroner2 Index 147 164 176 184 197 209 225 248 262 283 295 311.5 299 312 314 321 100 112 120 125 134 142 153 169 178 193 201 212 203 212 214 218 Index Cost-of- of real living average index hourly earnings 100 125 145 150 152 154 156 155 160 163 165 175 168 172 172 178 100 90 83 83 88 92 98 109 111 118 122 122.5 121 123 124 122 Average hourly earnings are based on straight time and piece work for all industrial workers, and include cost-of-living wage supplements, which constitute almost one-third of the earnings of the average industrial worker. Excluded are supplements for vacation pay (4 percent of annual earnings prior to 1950, 4H percent since then), overtime, shift work and special allow ances for dirty work, use of own tools, and for work clothes. 2The official rate of exchange since 1939, in terms of United States cents per Danish krone: Cents 1939............... ................................................................— .............20.3 1940-41.......................................................... ..................................19.3 1942-45.........................................................................................— 20.9 1946-September 1949........................................................................20.8 Since September 1949.......................................................................14.45 Source: Statistisk Aarbog, Statistiske Departement af Danmark, various issues; and Statistiske Efterretninger, 1951, various issues. DENM ARK The situation of agricultural workers and women workers improved more than the general average over the period as a whole. The differen tial between the wages of males in the provinces and in the capital also narrowed. These changes resulted in part from the “solidaric” wage policy. Collective Industry Agreements There were about 2,000 collective bargaining agreements in effect in 1948, some national and others local in scope. They cover employment conditions both for industrial workers and agri cultural day laborers. Such agreements cover wage rates and normal working hours by day and week, overtime, night work, Sunday and holiday work, shift rates of pay, and arrangement of shifts. Some wage rates are fixed on a piece basis, others on a time basis. Some collective agreements pro vide for election of shop stewards, and for vaca tions in excess of those provided by law. The collective agreement for farm workers is divided into two parts, one for the permanently employed, and one for workers paid by the day. Permanent farm workers have the right to free housing and 3-months’ notice prior to termination of service. Minimum wages are specified for all groups of agricultural workers, as are weekly hours, overtime rates, and shift work. The agreement provides for payment of wages up to 13 weeks in case of injury, at which time the worker becomes entitled to workmen’s compensation benefits. The agreement contains detailed provisions con cerning the use of house and garden, the use of employer’s equipment on payment of a fixed fee, the right to purchase livestock and foodstuffs pro duced on the farm, etc. The rental of additional land or buildings by the farm worker is regulated in order to avoid the development of sharecrop ping and to protect the worker from onerous finan cial impositions. The employer is protected against work stoppages, and the employee is re quired to perform overtime when needed. Per manently employed farm workers receive paid vacations of 12 days a year (or 6 days, if em ployed on a semiannual contract) by Government decree of 1941. Practically all agricultural work ers are covered by a single agreement. Nearly all farms of medium size or larger are included in the contract. Almost 90 percent of day workers 23 (who constitute an essential auxiliary part of the labor force) are trade-union members. Settlement of Disputes An agreement was negotiated in 1908 by D. s. F. and the Employers’ Association, setting standard rules for the settlement of disputes arising out of the application or interpretation of agree ments. These rules were ratified by the member organizations. A law of 1934 made mandatory the inclusion of the standard rules in all contracts. Such disputes are not permitted to cause a strike or lock-out but must be referred to a Mediation Committee meeting at the place where the dis pute occurs. If the dispute is not settled by such a committee, further negotiation between the sig natory organizations takes place, and, in the last resort, the dispute must be referred to arbitra tion. For this purpose, each industry ratifying the rules agreement, created an industrial arbitra tion board consisting of an equal number of arbi trators (at least 4) chosen by each side and a chairman, usually a lawyer, chosen by the other arbitrators. Labor Court. The Permanent Court of Arbitra tion, set up by law in 1910, is empowered to decide, on complaint of either party (union or employer’s organization), whether a strike or lock-out con stitutes a breach of agreement and is therefore illegal. This court also has the authority to render judgments on matters concerning the validity of agreements, and to settle disputes, if requested by the parties, concerning the inter pretation of agreements. However, the latter type of case would normally be handled by the industry’s own arbitration board. The court settles questions whenever possible by mediation. It does not act as a court of appeal. The Permanent Court of Arbitration is com posed of 6 regular and 16 deputy members chosen in equal proportions by the Federation of Trade Unions and the Employers’ Association, a chair man and vice chairman selected by the court, and a secretary nominated by the Minister of Labor and Social Affairs. The federation and association members are often officials of unions or employer organizations; the chairman and vice chairman are usually judges. The present chairman is a 24 L A B O R -M A N A G E M E N T R E L A T I O N S I N S C A N D I N A V I A judge of the Supreme Court. Although it is a legal arm of the State, the court’s members are actually elected directly by the employers’ and workers’ organizations. The court meets in Copenhagen for 1 or 2 days every week. Cases are generally discussed infor mally and heard in the same week. Decisions are handed down the following week. Workers have access to the court only through their organizations. Danish labor law has not devel oped into a profession, and only a limited group of persons is familiar with the precedents devel oped by the court. Fines may be imposed on individuals—either employers or workers—as wT as on organiza ell tions. Damages may be awarded to the injured party, and the court may, in lieu of imposing fines, order the payment of moneys owed. A strike contrary to union instructions may result in the levy of a fine upon individual strikers. At times, such heavy fines have been imposed on some unions in the past as to result in bankruptcy.1 In 1946 the court ruled a strike of brewery workers illegal, ordered the strikers to return to work, and levied fines of 15 kroner per strike-day per worker. Conciliation Service. The Conciliation Service was established in 1910 and initially consisted of three mediators nominated by the Permanent Court of Arbitration and appointed by the Ministry of Labor. Twelve sub conciliators were added later. The conciliators choose their own administrative chief. The conciliators generally are high government officials who assume these duties on a part-time basis. In 1949 the three principal posts were held by the State AttorneyGeneral, a provincial Governor, and the Chief of the Factory Inspection and Labor Standards Bureau, the chief of this latter agency being head mediator. The conciliator may enter a dispute at any time at the request of the parties or on his own motion at any time after a strike or lock-out notice has been served. He may request voluntary post ponement of a proposed strike or lock-out. If and when the negotiating parties reject any fur ther voluntary postponement of the strike, the conciliator may postpone the strike or lock-out for 7 days beyond the date on which it would go 1 1LO Studies and Reports A-30, Freedom of Association, Geneva, 1928 (p. 298). into effect. He can make only one such post ponement. After the postponement period has ended, a legal strike or lock-out may come into force. If the conciliator decides against formu lating a proposal, his activity is then at an end and the parties may proceed with their own negotia tions or with the work stoppage. If he does sub mit a proposal, it must be accepted or rejected in a referendum vote within a specified time limit by the memberships affected. If rejected by either party a strike or lock-out may legally take place, unless the National Parliament enacts special legislation resolving the dispute. Such legislation has been enacted on a few occasions, most recently in 1950. The Par liament occasionally has required referral of the dispute to arbitration. At other times it has en acted the mediator’s proposal, or a modified ver sion of it, into law. Except in these instances and for a brief period during World War II, Denmark has not enacted compulsory arbitration of disputes over interests or issues.2 An agreement reached by the negotiators or a mediator’s proposal is voted on by the individual members concerned on both sides, in accordance with rules in the Conciliation Act of 1945. The mediator may formulate a collective proposal, grouping trades according to his own discretion. He may require independent and federated em ployers or unions to vote together as one group. In the case of a collective proposal the total votes cast must equal at least 75 percent of the eligible voters. When the number of votes cast is less than 75 percent either officials or “ competent meetings” of the unions involved are empowered to cast a bloc of votes equal to the difference be tween this minimum and the number of actual votes. This throws considerable influence into the hands of the responsible leadership, and helps to implement the policies adopted by D. s. F. Voting in the elections must be secret and in writing. a In 1940, after the occupation, the Federation and the Employers’ Associa tion recommended that compulsory arbitration be applied in any dispute over wages and working conditions in which the parties could not reach a col lective agreement. Strikes and lock-outs were prohibited by the Act of September 1940 establishing a tripartite Labor and Conciliation Board to hear disputes which could not be settled by a joint committee, composed of repre sentatives of the D. s. F. and the Employers’ Association. Both the loss of the right to strike and many of the Board’s decisions were bitterly resented by the workers. As a result, the Board’s effectiveness appears to have suffered a decline, since man-days lost in industrial disputes rose sharply after 1942. The emergency legislation expired in November 1945 and was replaced in December 1945 by the former act on conciliation with some amendments. DENM ARK If the unions vote separately the leadership has no right to amend the results of the direct mem bership vote by casting a bloc of votes. Instead, as the percentage of members voting declines, the proportion of votes required for a rejection rises. If fewer than 75 percent of the members vote, the majority necessary to secure a rejection must rise by 0.5 percent for each 1 percent of the shortfall. Thus, if 65 percent vote, a rejection requires 55 percent, instead of a mere majority; if only 60 per cent vote, the negative side must muster 57.5 per cent in order to win. In December 1950, the trade-unions were dis cussing the advisability of limiting the preroga tive of the State conciliation service to group trades for voting purposes. Although the system prevents minority groups from forcing legal strikes, it has the disadvantage of retarding voluntary negotiation and complicating the conciliation proc esses. Time Lost in Industrial Disputes. Although the arrangements described have, in most years, kept down the losses from labor-management disputes, 25 major disputes have not been eliminated entirely. In 5 different years, since 1899, the year of the lock-out preceding the September agreement, more than 1 million man-days were lost because of work stoppages—the most recent such year being 1946. Except for 1946 and 1947 the period after World War II has been unusually quiet, as is shown in table 9. T able 9. Average annual man-days lost as a result of in dustrial disputes in Denmark, 1899-1949 Annual average (in thousands) Period 1899-1909_.................................................................... 1910-14________ _________________ _________ 1915-19________ ________________ _____ _____ 1920-24 i__.................................................................. 1925-29______________ ____ _________________ 1930-34-..................................... .............................. 1935-39...................................................................... 1940-44_____________ _________ ______ ______ 1945-49_______________ ______ _____ ________ 1945-.................................................................... 1946.____________ ______________________ 1947.____ ___________ __________________ 1948...................................................... .............. 1949_____________ ___________________ (2) 390 239 309 896 866 128 617 388 66 1,389 467 8 10 1 Figure for 1920 excludes man-days lost in the general strike in April 1920. 2 Not available. Source: Statistisk Aarbog—various issues. Dansk Arbejdsgiverforening data for 1946-49. U. S. GOVERNMENT PRINTING OFFICE: 1982