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Labor-Management Relations
in Scandinavia



Bulletin No. 1038
Maurice J. Tobin, Secretary
Ewan Clague, Com m issioner


Labor-Management Relations
in Scandinavia

 Superintendent of Documents,
For sale by the

Bulletin No. 1038
Maurice J. Tobin, Secretary
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.



Centralized collective bargaining___________________________________________________________________________
Federations of unions andof employers____________________________________________________________
Basic agreements_____________________________________________________________________________________
State intervention in strikes___________________________________________________________________________
Relation of unions to labor parties_____________________________________________________________________
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___________________________________________________________________________
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___________________________________________________________________




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,
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______________





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
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.

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


T a b le 1.— Extent of labor organization, post World War II

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
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.
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 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


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
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:


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

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


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


Labor-Management Relations in Scandinavia.

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.


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


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


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


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


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

in effect at end
of year


12, 511
19, 643

Number covered by agreements
10, 545
17, 538
48, 663
61, 745

336, 578
648, 974
1,047, 771
1,066, 798
1,116, 570
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

1930-34.............................................. .


Source: LO, Verksamhets BerSttelse, 1948 (p. 275).

After work




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’


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
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-


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


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.


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,

Average hourly earnings
1940....... ........ .................. 1941.....................................

Kroner 1
2.48 '


Index of
Cost-of- real average
living index2 hourly
earnings *


i The value of the krona in United States currency was as follows:
C ents
1939.......................................................................................................... 21.32
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.



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]

1903-08.............................................................................. 1910-14 i.............................................................................
1915-19...................... .......................................................
1925-29................................................ ..............................
1935-39—....... .....................................................................
1940-44............. ............ ...................................................
1945.................. ............... .................................................
1946—....................... .................................................
1947....................... ....................................................

Annual average

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 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
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

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

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.
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
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
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.


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
(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.



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
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

1935-39_______________ _________________________
1940-44.................................... .............................................
1946-...................................... .......................................
1947..................... .................... - ........ -.........................
1948 .............. .................................................. ...............
1950 ...........................................-.........................................

Man-days lost
(in thousands)



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


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.


L a L o r -m

anaqem e


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,


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.



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

Women________________ ______________
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

Index of real earnings
1947........................... ........
First quarter_______
Second quarter-------Third quarter....... .
Fourth quarter...........
First quarter----------Second quarter--------

Skilled crafts *
turing) men

Manufacturing and
mining 2








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.


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

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
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.


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,

T able


1939_______ ________________
1942____________ ____ ______
1943___ __________ _____ ____
1944— ______________________
1945________ ____ __________
1946_______________________ _
1947— ___ _______________ _
1948____________________ _
1949............................... ..............
First quarter_____________
Second quarter___________
Third quarter........................
Fourth quarter....................

Average hourly
earnings 1
Kroner2 Index


Cost-of- of real
living average
index hourly


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:
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.


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


(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
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


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
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
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.


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
Time Lost in Industrial Disputes. Although the
arrangements described have, in most years, kept
down the losses from labor-management disputes,


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)

1910-14________ _________________ _________
1915-19________ ________________ _____ _____
1920-24 i__..................................................................
1925-29______________ ____ _________________
1930-34-..................................... ..............................
1940-44_____________ _________ ______ ______
1945-49_______________ ______ _____ ________
1946.____________ ______________________
1947.____ ___________ __________________
1948...................................................... ..............
1949_____________ ___________________



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.