The danish model and collective agreements

The Danish model is the term for how we have organised the labour market in Denmark. The model is based on collective agreements between employers and employees.

In Denmark there is no act governing how much you should be paid as a minimum. Contrary to e.g. Germany where the German government has adopted a minimum wage of 8.50 EUR per hour (1 January 2015).

There is broad agreement that agreements on pay and working conditions are best dealt with between the employers on the one hand and the employees on the other; they have the insight into and most knowledge of how the labour market works. And that is at the core of the Danish model.

If you wish to find out what the minimum wage is within an area, there must be a collective agreement covering the area.

Other examples of employee rights that are safeguarded via collective agreements are pension schemes, pay on child's first day of sickness, overtime pay and special vacations.

However, politicians do not leave everything that has to do with labour market conditions to the collective agreements. For instance, the working environment is highly regulated by legislation.

Basically, it is fair to say that the collective agreements build on legislation.

Vacations: Legislation and collective agreement

Another example is the Danish Vacation Act which provides the right to 5 weeks' vacation– in addition, the collective agreement entitles you to an extra week. The collective agreement may of course also include conditions not mentioned in any act.

In Denmark, all employees in the public labour market are covered by collective agreements. In the private labour market, not all employees have a collective agreement. In these cases, the employees are only covered by legislation plus individual terms.

Contact HK if you want to know more about collective agreements.

Parental leave: Legislation and collective agreement

Legislation provides for maternity/paternity benefits for up to 52 weeks - but the collective agreement provides the right for salary for up to 40 out of these 52 weeks.