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Co-Determination at the Workplace

The Co-determination Act of 1977 incorporates a large number of rules which principally concern the relationship between the company as employer and the employee’s trade union organisations.

It is without doubt the single most important legislative act regarding employee influence at the workplace. The act is discretionary legislation which enables the parties on the labour market to come to more detailed agreements on participation by the employees by means of collective bargaining agreements. In addition to defining the prerequisites of a collective bargaining agreement (see under the section “What is a Collective Bargaining Agreement”), the act contains regulations governing the following main issues:

The Right of Association

The employee and the employer have a right to join associations and engage in activities through these without hindrance by the other side. This is referred to as the right of association. This right has been regulated by statute for many years and is the major legal ground upon which joint action by unions may be based. The Co-determination Act provides that the right of association shall not be violated. If an employer takes action against an employee on account of his/her trade union membership, or activity on behalf of the trade union, the employer may have to pay damages. Critical or adverse comments are not normally in themselves regarded as a breach of the right of association.

The Extended Right of Negotiation

According to the Co-determination in the Workplace Act, an employer is obliged to initiate and carry out negotiations with a trade union that has a collective bargaining agreement before making and implementing a decision concerning major changes at the workplace in general or for individual employees. This is referred to as the primary obligation to negotiate. Should the employee’s side so request, the issue may be referred to negotiations at central level. The employer must defer the decision and the implementation thereof during the entire negotiations procedure.

In all other questions, a union bound by a collective bargaining agreement has the unilateral right to demand local and central negotiations. In such cases, the employer is also obliged to delay making the decision or to postpone implementation of a decision which already has been made.

The extended right of negotiation does not imply any legal obligation on part of the employer actually to reach an agreement. If the negotiations come to a conclusion without an agreement being reached, the employer is entitled to make his decision in whatever way he finds appropriate. The employer is also entitled to make decisions unilaterally once the negotiations have been completed. In some extreme situations the employer is entitled to make a decision and implement it before negotiations have been carried out. This exception occurs only very rarely.

The Extended Right to Information

The information rules in the Co-determination Act in principle imply that there should be an open attitude towards giving the employees insight into the progress and circumstances of the company in various respects. In the first place, the employer is obliged regularly to inform his local negotiation counterparts about the development of the business in financial and operational terms and about personnel policy guidelines. This obligation is called the primary obligation to inform.

The union is also entitled, upon request, to examine accounting records and other documents to which the employer has access and which, as an organisation, it needs in order to safeguard the common interests of its members. Copies of documents etc. need only be provided if this does not lead to unreasonable costs or difficulties. In certain exceptional cases, the employer is released from the obligation to inform.

The extent of the trade union representatives’ duties to keep the information that they have received confidential is primarily determined through negotiations between the parties. If no agreement can be reached, the employer must apply to a court for a decision concerning secrecy. Such a decision is only made if there would otherwise be a risk of serious harm being done to employers affairs.  It should however be pointed out that trade union representatives are also always covered by either explicit or implicit clauses in their employment contracts which prohibits disclosure of confidential unformation.

The Interpretive Precedence etc.

In addition to the provisions regarding negotiations and information, the act also contains provisions that give the view of the trade union precedence before the view of the employer in certain disputes. The interpretive precedence is applicable until a court has decided on the matter. The issues where the trade union has this so-called interpretive precedence concern cases of disputes regarding the extent of an individual employee’s duty to work, disputes concerning wages or other financial remuneration and disputes regarding so-called co-determination agreements.

Furthermore, the act provides that an employer is obliged to enter into primary negotiations before deciding to engage a subcontractor, viz. to engage persons who will actually not be employed by the said employer. The counterparty to the negotiations is the union which the employer has a collective bargaining agreement with covering the work that the subcontractors shall carry out. There are only a few situations where the employer does not have to negotiate. The act provides that the central unions under certain circumstances have a right to veto the employer’s decision, thus preventing the employer from engaging a sub-contractor. This can only be the case if the sub-contractor can be shown to be disregarding laws or collective bargaining agreements or is acting in some other way in serious conflict with general practice in the relevant industry. The right of veto has a relatively restricted purpose and may therefore not be used to ensure that certain work is reserved for the employees at the company in question.