Examples of a mobile labour market

  • Since 1990s, transferable occupational pension rights have been introduced gradually in Denmark. According to the contractual obligations, the employer pays in a monthly sum to the employees individual pension account, administered in collective occupational pension funds or commercial life assurance companies. This allows the employee to transfer the pension from one pension fund to another without a loss when they change job
  • Also since 1990s, social partners have worked to gradually introduce individual wage setting. This entails that the collective agreements only states a minimum wage level. The exact level is negotiated directly between employer and employee. Today, individual wage setting covers 85 pct. of the employees who work under a DA-LO collective agreement as well as specialists and managers without collective bargaining coverage. 640,000 people out of a work force of 2.8 million. It allows companies to set wages suited their specific situation – and thereby encourage employees to seek to companies/sectors in financial prosperity willing to reward employees with the right competences, underpinning voluntary job mobility
  • Denmark has a well-established system of industrial dispute-resolving, covering all employees under a DA-LO collective agreement. This entails that all conflicts of right are settled through negotiations at the local, the organisational or the central organisational level, involving both sides of industry. Most conflicts are resolved at this level. If not, a dispute concerning the interpretation of a collective agreement is referred to industrial arbitration and a dispute concerning a breach is brought before the Labour Court. This system ensures a fast and resolute dispute-solving. Companies and employees avoid long and costly cases at the civil courts – and the employees are able to move to new jobs and further their careers

Also in the employment policies, an attempt has been made to achieve mobile labour markets:

  • One of the main pillars of the Danish labour market legislation is the obligation of all unemployed to be at the disposal for work. In brief, an unemployed must be willing at one days’ notice to take on a job he or she can perform. To ensure this, the unemployed must agree to spend up to three hours commuting daily, confirm his / her status of unemployment every week, apply to a minimum of two vacancies and participate in at least one job evaluation with the job center every three months. Furthermore, a CV must be made available at the website of the job center, stating at least one job opportunity within a field with job vacancies
  • To underpin voluntary mobility, a job center can – within areas with labour shortages - provide financial support for moving to an unemployed who chooses to move to take up a job (maximum DKK 25,000 under certain conditions). This support can be provided in cases where an employer has requested an employee but the job center has not been able to find a qualified person or in cases where the daily commuting will exceed four hours
Christina Sode Haslund
27. december 2011