Denmark: country report
The structural reform, which is currently being implemented in Denmark, is the most important reorganization of public sector tasks in 35 years.
The reform implies 1) a large-scale redistribution of core tasks between the 3 territorial levels (state, counties/regions and municipalities), 2) a reduction of the number of municipalities from 271 to 98 and the abolishment of the 14 counties, which have been replaced by 5 regions, and 3) a reduction in the number of territorial levels that have the right to impose taxes from 3 to 2, as the regional level no longer has this right.
Redistribution of tasks
Changes in the distribution of tasks impact on all 3 levels, but most importantly on the counties (regions) who are left with very few tasks and, in addition, have lost the right of taxation (cf. above).
The counties are handing over large parts of their tasks in the environmental field, which are being distributed between the state and the municipalities. The upper secondary schools, Higher Preparatory Examination and Adult Education Centres are being handed over to the state, whereas a large part of tasks in the social field is handed over to the municipalities. The regions are left with hospitals as their primary task, a few tasks in the social field and regional development.
Employment services are being brought together in a number of centres, which will either be purely municipal or set-up with both state and municipal employees. Till now there has been a sharp division between the municipalities who have been responsible for the non-insured unemployed and the state who - via the placement services - has been responsible for the insured unemployed.
The tasks hitherto carried out by the municipalities in the field of taxation and debt-collection will be handed over to the state, bringing taxation and debt-collection under the sole responsibility of the state. Taxation has traditionally been one of the core tasks of the municipalities and has accounted for far more than half of the enquiries made by citizens to the municipalities.
The political and legal process
The package of laws on the municipal reform was passed in June 2005, and the reform will come into full force on 1 January 2007.
The reform has been subject to intense debate in the media as well as among politicians. There has been a general agreement on the need to reduce the number of local and regional units in order to create more viable ones. But as a consequence of the government’s handling of the process - which has been steering the political decision-making process top-down instead of basing the reform on broad political compromises - the implementation of the reforms lack broad political support and that is obviously a problem.
In general, just like other interest groups, the trade unions have invested a lot of resources in trying to influence the political decision-making and legal process, which was ended for the moment when the law package was passed last June.
Trade union activities have included responding to government consultations, lobbying the political parties, getting media coverage on some of the paradoxes (e.g. regarding job guarantees, cf. below), etc. By way of example, a hearing in Parliament on fair play for public employees was jointly organized by HK, DJŘF and FOA. The Government has however failed to the extent circumstances require to recognize the objections made by the trade unions in the fields of personnel policy and law. So to conclude: the trade unions can hold up their heads, but have only managed to get minor changes accepted.
Challenges to the trade unions
Almost all of the 600.000 employees in the councils and municipalities are affected to a larger or a lesser degree by the reform, which also involves a number of state employees particularly in the fields of taxation and employment services.
So the challenges to the trade unions have been and are still important.
First of all there are the challenges linked to the process of moving together in terms of work, with different cultures meeting and merging into a whole new culture. Here the trade unions have a natural interest in influencing the process towards the most favourable direction.
In addition to this, there are a number of more classical trade union problems.
The most noteworthy example is the lack of a job guarantee. In spite of all its verbal declarations, the Government has refused to give a written guarantee that no employee would be dismissed as a consequence of the municipal reform. The trade unions have highlighted this paradox and will prosecute any cases (hopefully there won’t be any) where employees are dismissed.
Other problems have to do with employees coming under a new appointing authority and perhaps having to move physically and perhaps even with changes to their conditions of appointment. There is the question of the special conditions that apply to statutory civil servants whose employment area is extended e.g. if they are transferred from a municipality to the state, and there is the question how much an employee must ‘endure’ according to the salaried employee act when the work place is physically moved (e.g. the geographical distance and the content of the new job after the merger compared to the content of the original job).
For trade unions that have managers as members there has been and will continue to be a number of very tangible problems as a number of managers, for obvious reasons, cannot maintain existing managerial positions unchanged. And as the managers are one of the turning points in the local reform process, their attitude and lack of motivation will quickly contaminate down the system to the disadvantage of the rank and file employee groups.
In the field of taxation, the government has raked in the economic gain (of the concentration of tax services under the state) in advance. This has born hard on senior employees and has hampered the reform process.
The industrial process
Political lobbying aside, trade union reactions to the reform fall in two parts: 1) agreements concluded with the employers and 2) more process-oriented activities (own activities as well as joint activities with the employers).
The public employers and the trade unions have concluded a large number of agreements on the reform, of which the most important are listed below:
In connection with the renewal of the collective agreement in 2005, agreement was reached on wage and security guarantees by the social partners in the municipal sector and, likewise, by the social partners in the state sector.
An agreement on wage and working conditions for the transfer of employees in the counties, the Greater Copenhagen Authority (HUR) and the Copenhagen Hospital Corporation (H:S) to employment in the municipalities (concluded by KTO and Local Government Denmark/Danish Regions in May 2005).
An agreement on wage and working conditions for employees who are transferred to employment in the state as a consequence of the municipal reform (concluded by CFU and the State Employer’s Authority in December 2005).
Negotiations on the terms and conditions for the transfer of state employees to the 14 pilot job centres that are purely municipal are still ongoing. (As regards the other mixed job centres, the municipal employees and the state employees will continue to be covered by their respective agreements).
A joint agreement on temporary cross-going cooperation committees in the new job centres (signed by, on the trade union side, KTO and CFU, and, on the employer side, Local Government Denmark and the State Employer’s Authority in February 2006).
All public sector trade unions, associations of unions and collective bargaining co-operations have been on the alert and some have set up proper reform secretariats or units.
A multiplicity of activities, some of which are own trade union activities whilst others are joint activities between trade unions and employers, have been and are still being launched. Below are some examples:
Membership meetings on rights and duties.
Courses, e.g. for shop stewards or for members of co-operation committees on how to build cooperation on different work place cultures, including identification of values.
Joint guidelines for everybody involved in the process, be it as manager, shop steward, member of a co-operation committee or in any other way.
Web pages (own or joint), e.g. with catalogues of FAQ, tools for competence (career) clarification, advise regarding the emotional aspects of mergers, links to the Job Exchange which has been set-up by the State Employer’s Authority, Danish Regions and Local Government Denmark, special web pages for managerial staff on how to manage mergers.
Hot lines that provide help from psychologists to managerial staff and shop stewards in relation to the dilemmas, strains and challenges they experience.
A lot of funding is channelled to activities at the local level and spent on e.g. hiring additional manpower to handle local enquiries, the organisation of conferences and membership meetings and the running of projects.
Effects on the financing and quality of services
As a starting point, the reform is not expected to have any substantial effect on the financing and quality of services. But there is no doubt that the reform process, as far as the government goes, is driven by the philosophy that larger municipal entities will lead to more tasks being out-sourced. In Denmark, there has been a 25% drop in the number of PPPs over the past few years, and new legislation is underway.
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