Definitive Report - Report No 262, March 1989

Case No 1470 (Denmark) - Complaint date: 19-AUG-88 - Closed

1. 33. The Danish Federation of Trade Unions (LO) presented a complaint of violations of trade union rights against the Government of Denmark in a communication dated 19 August 1988. The Danish Seamen's Union presented its complaint on the same matter in letters dated 7 September and 7 October 1988. By a letter dated 7 November 1988, the Salaried Employees and Civil Servants Confederation (FTF) supported the LO's complaint on behalf of its following member organisations: the Danish Merchant Navy Officers Association, the Association of Shipmasters in Denmark, the Danish Radio Officers Union and the Danish Ship Personnel Catering Association. By a letter dated 24 January 1989, the Danish Federation of Managerial Staff (FR) also endorsed the LO's complaint.
2. 34. The Government supplied its observations on the case in a communication dated 17 January 1989.
3. 35. Denmark has ratified the Freedom of Association and Protection of the Right to Organise Convention, 1948 (No. 87) and the Right to Organise and Collective Bargaining Convention, 1949 (No. 98).

A. The complainants' allegations

1. 36. In its letter of 19 August 1988, the LO alleges that the Danish Government has infringed Conventions Nos. 87 (Articles 2 and 3) and 98 (Article 4) by its introduction, on 2 December 1987, of a Bill on the Danish International Ship's Register which finally became law on 23 June 1988. It calls for a direct contacts mission to visit Denmark to discuss the Government's intervention.
2. 37. The complainant refers in particular to section 10 and quotes the Minister's speech introducing the Bill on this point: The other crucial element in the Bill is that the existing collective agreements on wage and working conditions will not be applicable to ships in the Danish International Ship's Register. New collective agreements must be concluded, explicitly stating that they shall apply only to employment in ships registered in the Danish International Ship's Register. Such collective agreements, concluded with Danish trade unions, will only comprise persons who are residents in Denmark, or who by virtue of international obligations are put on an equal footing with Danish citizens. Similarly, a collective agreement concluded with a foreign organisation, will only comprise persons who are citizens in the country where the organisation is domiciled, but Danish labour law will also be applicable to such collective agreements. I am aware that these rules represent a new idea in Danish labour law, but I consider it a necessity, if the Act is to work at all, that shipowners have the possibility of concluding special agreements for employees on ships in the Danish International Ship's Register.
3. 38. The explanatory comments on section 10 of the Bill state the following:
   • Subsection 1 states that collective agreements concerning wage and working conditions for employees on ships registered in the Danish International Ship's Register shall explicitly state that they comprise such employment only. This means that existing collective agreements on wage and working conditions concerning employment on ships, concluded between Danish shipowners and Danish trade unions, will not comprise ships being transferred to the Danish International Ship's Register. For employment on such ships new collective agreements have to be concluded, explicitly stating that they comprise employment on ships registered in the Danish International Register. (Emphasis added.)
   • Subsection 3 states that a collective agreement concluded with a foreign organisation - besides comprising the seafarer who is a member of the organisation - will also comprise the seafarer who is a citizen in the same country where the organisation is domiciled, whether this seafarer is a member of another organisation who has not concluded any agreement with the relevant shipowner or shipowners' association, or whether he is not a member of any organisation. Collective agreements concerning wage and working conditions for employees on ships in the Danish International Register may be concluded with several - Danish as well as foreign - trade union organisations at the same time. Wage and working conditions for employees who are hereafter not covered by a collective agreement, must be agreed between the individual employee and the relevant shipping company or a person authorised by this company to do so.
   • Subsection 4 means that the relations between shipowners with ships registered in the Danish International Register and foreign trade union organisations are otherwise governed by Danish collective labour law. Foreign trade unions will thus have the same opportunity as Danish trade unions to demand negotiations on the conclusion of collective agreements and to take industrial action in support of their demands. It further follows from the Bill that the question of industrial action taken in support of a demand for conclusion of collective agreements may be brought before the Industrial Court. The same applies to questions concerning violation of existing collective agreements unless otherwise explicitly agreed between the parties.
4. 39. According to the LO, the question of section 10's incompatibility with ILO Conventions ratified by Denmark was raised both during the first reading of the Bill and in correspondence with the Ministry of Industry. The Minister, however, refused the LO's request for discussions and replied that:
   • The international conventions, etc. in question do not, however, prevent the fixing by legislation of certain general rules for collective agreements. The Working Environment Act and the Holiday Act for example contain rules which cannot by agreement be circumscribed to the detriment of wage earners, and in the legislation of other countries there are often rules on the conditions in which a trade union organisation may raise a demand for a collective agreement for its members, and thus on the coverage of a collective agreement, not least where several organisations raise a demand for an agreement at the same time.
5. 40. The LO, on the other hand, maintains that section 10(1) represents an intervention in existing collective agreements to an unprecedented level inasmuch as it means that existing collective agreements on wages and working conditions in those ships transferred to the Danish International Ship's Register are cancelled once the ship is registered in that Register. Without this legislative intervention, the collective agreements would have been in force until 1 March 1991; employees are now forced to endeavour to conclude new agreements with the employer. Likewise, states the LO, section 10(2) and (3) represent a curtailment of the organisations' freedom to bargain collectively in the future and thus once again disregard Denmark's international obligations.
6. 41. According to the complainant, simultaneously with the reintroduction of the Bill in June 1988, the Parliament passed bills amending the tax legislation which, in practice, establish tax exemptions for people employed on vessels registered in the Danish International Ship's Register. From parliamentary question No. 22 and the reply from the Minister of Taxation, the following appears:
   • Question No. 22:
   • Is the coming into force of the Act conditioned by prior conclusion of collective agreements?
   • Reply
   • It is a condition for the coming into effect of the proposed rules on tax exemption that seamen, etc., who serve on board ships registered in the Danish International Ship's Register, are paid according to wage agreements which are internationally competitive.
7. 42. Moreover, states the LO, under subsection 2 of section 10, Danish wage-earner organisations can only conclude agreements for persons domiciled in Denmark. It follows from subsection 3 of section 10 that foreign wage-earner organisations may conclude parallel agreements for their own nationalities. Thus, a Danish ship registered in the Danish International Ship's Register may, for example, conclude three agreements, one for Danes, one for Poles and one for Philippine nationals. The effect of this is that the Danish workers' organisations must choose between concluding a collective agreement on terms which leave no possibility for making a living in Denmark, or they may leave the jobs to foreign workers. The legislative intervention is in other words not accompanied by adequate safeguards to protect workers' living standards.
8. 43. The LO points out that Denmark has previously committed flagrant breaches of ILO Conventions Nos. 87 and 98. It refers to Cases Nos. 1338 and 1418, as well as two further complaints before the Committee which had not at that date been examined. In comparing the Act on the Danish International Ship's Register with the Committee's reasoning in these past cases, the LO stresses the following points:
   • a) the Act is an intervention in already concluded agreements;
   • b) it has a direct impact for a long period (i.e. up to 1 March 1991 when already existing agreements were due to be re-negotiated);
   • c) it not only changes the terms of the agreements (as in Case No. 1338), but involves the complete removal of agreements as concerns ships registered on the Danish International Ship's Register;
   • d) this legislative intervention has not been negotiated with the wage earners and the Minister of Industry has refused a request to discuss the matter with their union;
   • e) the Act is not part of the overall economic policy of a government, but hits selected wage-earner groups. The Government's stated reason for the proposal, namely to assist the shipping trade, does not necessitate the intervention chosen because the shipping trade may be helped in other ways (e. g. by direct subsidies, improved conditions for financing, abolition or reduction of employers' costs);
   • f) the Government's objectives set out in the Minister of Taxation's above-mentioned statements could have been achieved by voluntary agreements. After all, once the rules on tax exemption have thus been conditioned by the conclusion of (new) "competitive" agreements which, according to the Government, Danish wage earners will seek out voluntarily in the interest of maintaining employment, it seems superfluous to remove compulsorily the collective agreement as occurs under subsection 1 of section 10.
9. 44. Turning to the alleged violation of Article 2 of Convention No. 87, the LO points out that due to the international nature of shipping, the Danish trade unions have traditionally also organised foreign wage earners in this area. If, however, trade unions are prevented from concluding agreements which are to comprise foreign wage earners as well, then the right of an employee to join an organisation of his own choosing is also violated. (The LO refers to the General Survey by the Committee of Experts on the Application of Conventions and Recommendations, 1983, para. 146, and the Committee on Freedom of Association's Digest of Decisions and Principles on Freedom of Association (3rd edition, 1985), para. 254.)
10. 45. In its letter of 7 September 1988, the Danish Seamen's Union alleges that the adoption of the Act on the Danish International Ship's Register invalidates current collective agreements and quashes the rights of seafarers. It claims that the sole object of the Act is to enhance the competitiveness of the shipowners by depreciating the workers' wages and other terms of employment. In support of this, it quotes the Minister of Industry's introduction of the Bill to the Danish Parliament:
    • The Bill aims to strengthen the competitiveness of the shipowning business and, thereby, counter the trend towards transferral to flags of convenience (flagging out). The establishment of a Danish International Ship's Register will enable Danish shipowners to employ foreign crews on the wage terms applying in the native countries of those crews.
11. 46. The Act prevents the Danish Seamen's Union from entering into collective agreements for a significant part of its own members. The Danish Seamen's Union claims that now about 400 of its members annually cannot be embraced by the agreements entered into by it, either because - notwithstanding that they are Danish citizens - they have no residence in Denmark, or because - despite the fact that they may have been sailing on Danish ships for several years - they are not included in the circle of persons towards whom Denmark has international obligations as is required under section 10(2).
12. 47. This complainant points out that within one week of the coming into force of important delegated legislation, the Act substantially curtailed the scope of the merchant shipping agreements applying until then, because 82 per cent (measured in terms of gross register tonnage) of the Danish merchant navy was transferred to the Danish International Ship's Register and thus withheld from the provisions of the agreements hitherto in force.
13. 48. The Danish Seamen's Union also refers to the Danish Government's past interventions in collective bargaining which have been criticised by the ILO supervisory bodies (Cases Nos. 1338, 1354 and 1418) as proof of the present Government's attitude towards the ILO Conventions which have been ratified by Denmark. This complainant accordingly endorses the LO's request that a mission visit Denmark to discuss this case. It also calls for action so that the Government understands the essence of the ILO Conventions as applied to the concrete case; that it understands the essence of the principles of workers' organisations' free right of negotiation as contained in the Conventions; that the Government realises that the interpretation of the Conventions is carried out by the ILO; and that the Government realises that the ILO's interpretations of the Conventions are binding on the member States that have ratified them.
14. 49. In a subsequent communication dated 7 October 1988, the Danish Seamen's Union states that after the adoption of section 10 of the Act, the largest association of shipowners (the Danish Shipowners Association) has now concluded collective agreements with shipping organisations from the Philippines and Singapore. Under these agreements, the employers agree to pay hourly wages to able-bodied seamen from these two countries at the rate of 20 kroner and 27 kroner respectively. By comparison, the employers are obliged to pay Danish seamen 54 kroner per hour. It adds that other terms of wages and employment have been correspondingly depreciated for seamen from the Philippines and Singapore, a difference in treatment which is, according to this complainant, motivated solely by the nationality of the persons concerned.

B. The Government's reply

1. 50. In its communication of 17 January 1989, the Government explains the background to the adoption of the Act as follows: in recent years a growing number of Danish ships have been registered in international shipping registers (such as exist in Great Britain, France, the Netherlands and Norway), aprocess called "flagging out". A consequence of this is that all collective agreements automatically lapse and the ships are no longer subject to Danish legislation. According to the Government, if the flagging out of Danish ships continued at that rate, by 1990 Denmark would no longer have a role to play as a shipping nation. The Act in question is therefore an alternative to flagging out to international ships' registers.
2. 51. The Government points out that under its Act ships registered in the Danish International Ship's Register will still be subject to Danish legislation, for example the social security rules laid down in the Danish Seamen's Act shall apply to all persons employed on board these ships.
3. 52. It states that, before the Act, in order to ensure the employment of Danish seamen on board Danish ships, it was necessary to improve the competitiveness of Danish shipowners without deteriorating the employment situation and the standard of living of Danish seamen. The only realistic solution was to set up a Danish International Ship's Register for big ships engaged in foreign trade in combination with tax reliefs for seamen serving on board such ships. If this had not been done, Danish shipowners would have been ousted by the international competition or they would have adopted flags of convenience.
4. 53. When the Government was preparing the Bill on this matter it provided that one of the effects of registration in the Danish International Ship's Register is tax exemption for seamen employed on such ships, as they are paid at terms which are competitive. According to the Government, such a tax exemption would not have been compatible with a continuation of the collective agreements in force because it would have meant enormous wage increases for the employees and no improvement in the competitiveness of the shipowners. It claims that, according to general principles of law, the tax exemption has in itself changed the basis upon which the collective agreements were concluded. The Act should thus not be seen as an intervention in existing agreements, but as a necessary prerequisite for the tax exemption and as an alternative to other existing international registers of ships. The shipowners may free themselves from the collective agreements by transferring their ships to one of these registers.
5. 54. The Government maintains that the Act does not prejudice the right of organisations to negotiate collective agreements for ships in the Danish International Ship's Register. On the contrary, section 10(1) presupposes that pay and working conditions on these ships should be fixed on the basis of collective agreements following voluntary negotiations. The Act does not interfere in the recruitment of employees, their terms of employment or the collective agreement applying to them. The aim of the Act is not directed against organisations or employees, but is solely of an economic nature. It is the Government's opinion that the Act is absolutely necessary in order to secure employment on board Danish ships in accordance with Danish standards and it adds that it has committed itself to work to promote employment.
6. 55. Turning to the specific elements of the complaint, the Government denies that the Minister of Industry did not comply with the LO's request for discussion and points out that, prior to the presentation of the Bill in Parliament, meetings were held concerning the Government's work to set up a Danish International Ship's Register between the Minister of Industry and representatives of both parties. It adds that the Bill was sent to the seamen's organisations for their opinion on 2 December 1987 at the same time as it was introduced in Parliament. In response to this consultation the Minister of Industry received a letter of 26 February 1988 from the LO in which the question of the relation of the Bill to ILO Conventions was raised. In his reply, by letter of 14 March 1988, he stated:
   • I have consulted the Ministry of Labour and the Ministry of Foreign Affairs about the question of the relation of the Bill to international Conventions. The Ministry of Foreign Affairs has stated that its legal department which has scrutinised them (Conventions Nos. 98, 87, the European Human Rights Convention, ...) finds that there is no conflict between these commitments and the provisions concerning pay and working conditions contained in the Bill on the Danish International Ship's Register. (...) The present Bill is in compliance with these international Conventions as it gives trade unions the right to demand negotiations concerning the conclusion of collective agreements and the right to take industrial action in support of such claims in accordance with the normal principles of collective labour law, also in relation to shipowners with ships registered in the Danish International Ship's Register.
7. 56. The Government adds that the Minister's reply told the LO that these international Conventions, etc., do not prevent the passing of legislation laying down certain general rules concerning collective agreements: for example, the Working Environment Act and the Holiday Act lay down binding rules which it is not possible to deviate from to the detriment of the employees. Likewise the legislation of many other countries frequently contains rules concerning the conditions under which a trade union may call for the conclusion of a collective agreement. According to the Government, in a letter of 7 April 1988 the LO reiterated its views and did not request further discussions. Consequently, it was deemed unnecessary to reply to this last letter. The Government adds that the organisations were also able to express their views on the Bill through the Parliamentary Trades Committee.
8. 57. As regards the allegation that under this Act Danish employees on ships are faced with the choice between concluding a collective agreement containing poor conditions or leaving jobs on ships to foreign workers, the Government notes that the aim of the Act is the contrary, viz. to ensure the employment of Danish seamen on board Danish ships under Danish terms fixed by collective agreements between employers and employees. All persons covered by a Danish collective agreement shall continue to be paid the wages fixed by this agreement, irrespective of nationality. It adds that new agreements have already been concluded between the relevant shipping organisations on exactly the same terms as earlier with the only change that the wages have been reduced by amounts corresponding to the tax relief. This means that Danish seamen are guaranteed the same standard of living as earlier and at the same time their employment situation has been improved. Moreover, according to the Government's information, the organisations have agreed that in ships with "mixed" crews, all crew members shall be paid wages in accordance with the Danish collective agreement for the same work. It adds that section 10(2) of the Act expressly provides that Danish collective agreements may apply to persons who are to be treated on an equal footing with Danish citizens by virtue of international commitments or who reside in Denmark.
9. 58. As regards the allegation that the Act interferes in already concluded collective agreements, the Government recalls that the Act was adopted as an alternative to already existing international ships' registers. When looked at in the context of the above-mentioned tax exemptions for persons employed on ships which are registered in the new Register, the situation is, in the Government's opinion, different from that existing when the collective agreements concerned were concluded. Ships which are not registered or which do not qualify for registration in the new Register will still be bound by the collective agreements in force.
10. 59. As regards the alleged excessively long effect of the Act, the Government states that if this Act had not been adopted, Denmark would not have been able to survive as a shipping nation after 1990 because of flagging out. The explanatory comments on the Bill (referred to by the LO) note this serious development and its consequences for foreign-exchange earnings and employment on board the ships and in related occupations.
11. 60. As regards the allegation that this form of legislative intervention was not necessary since other methods could have resolved the flagging out phenomenon, the Government replies that the alternatives proposed by the LO are not realistic. The risk of abuse and unintended side-effects is very real and there is no guarantee against flagging out to foreign registers of ships. The instruments mentioned by the LO have been applied for a long period of time without the desired effects.
12. 61. The Government states that the LO's allegation that the Government could have achieved its objectives by conclusion of voluntary agreements is questionable and of a hypothetical nature. The Government is of the opinion that the introduction of the Danish International Ship's Register was absolutely necessary and that the situation could quickly develop into chaos if the Government awaited negotiations with a number of organisations having differing degrees of incentive. This is why the legislation was introduced as a general regulation for ships registered in the Danish International Ship's Register and it was foreseen that the more detailed conditions of employment in this special field be agreed upon by the conclusion of collective agreements.
13. 62. The Government denies that the Act infringes Articles 2 and 3 of Convention No. 87 since its aim is not to curtail the right of workers to join organisations or the right of such organisations to safeguard and protect their members' interests. It is correct that due to the special conditions in the international shipping trade there may be competing organisations from many nations. However, all organisations are equal as regards rights and duties in connection with collective bargaining, industrial action and conclusion of agreements. The Government refers in this connection to section 10(4) which expressly states that the Industrial Court Act shall apply in cases where a foreign organisation is involved.
14. 63. In denying the alleged infringement of Article 4 of Convention No. 98, the Government reiterates that the aim of the Act is that working conditions should be regulated through collective agreements following voluntary negotiations between the parties. As regards the agreements with organisations from the Philippines and Singapore mentioned by the Danish Seamen's Union, the Government notes that these are agreements concluded following voluntary negotiations and have nothing to do with discrimination. It repeats that the Act was a necessary alternative which preserved jobs on board Danish ships on Danish terms of employment. Moreover, the Act lays down general guide-lines in a quite new and very special field in response to the developments in international shipping. It is based on the assumption that this field is regulated by conclusion of collective agreements. Current developments have confirmed that the field is regulated by collective agreements which do not entail deterioration in the living standards and employment opportunities for seamen. It claims that this legislative intervention does not go further than what is absolutely required in this case.
15. 64. Lastly, the Government states that the present case has been sufficiently elucidated and it is thus unnecessary to call for direct contacts between the ILO and the parties to the case.

C. The Committee's conclusions

1. 65. The Committee notes that this case involves three basic allegations relating to the Act to set up a Danish International Ship's Register of 23 June 1988: (1) that the Act was adopted without negotiations or consultations; (2) that its section 10 violates Articles 2 and 3 of Convention No. 87 by dissuading workers from joining a union of their own choosing and by limiting the free functioning of workers' organisations; and (3) that its section 10 violates Article 4 of Convention No. 98 on two counts, namely that it cancels already concluded collective agreements and disallows future negotiations.
2. 66. The text of section 10 reads as follows:
3. (1) Collective agreements on wage and working conditions for employees on vessels in this register shall explicitly state that they shall be applicable for such employment only.
4. (2) Collective agreements as mentioned in subsection (1) which have been concluded by a Danish trade union organisation, may only comprise persons who are considered to be residents of Denmark, or who by virtue of incurred international obligations shall be put on an equal footing with Danish citizens.
5. (3) Collective agreements as mentioned in subsection (1) which have been concluded by a foreign trade union organisation, may only comprise persons who are members of the organisation concerned, or persons who are citizens in the country where the trade union organisation is domiciled, in so far as they are not members of another organisation with which an agreement as mentioned in subsection (1) has been concluded.
6. (4) The Industrial Court Act shall also be applicable in cases to which a foreign trade union organisation is a party.
7. 67. Firstly, as regards the consultation question, the Committee notes that the text of the Bill was communicated by the Government to the seamen's organisations in December 1987 and that an exchange of correspondance in February-March 1988 fully aired both sides' views on the draft legislation. The Committee also notes that, according to the Government, the workers' organisations were able to express their views on the Bill through the Parliamentary Trades Committee. It accordingly considers that on this aspect of the complaint there was no infringement of trade union rights.
8. 68. The alleged violation of Article 2 of Convention No. 87 is also, in the Committee's opinion, not proven in this case. A reading of the text of section 10 as well as the explanatory comments cited by the LO shows that freedom to join an organisation of one's own choosing is not the issue. The Committee has in the past examined cases where government pressure or favouritism allegedly influenced the trade union membership of workers and in specific factual situations - such as the unequal distribution of subsidies or granting of facilities - has found that such discrimination jeopardises the right of workers to establish and join organisations of their own choosing. Only one complainant in the present case puts forward information on this aspect of the Act in practice - according to the Seamen's Union about 400 of its members now cannot be covered by agreements entered into by the Union. However, this complainant does not allege that this situation has led the workers concerned to change unions. The Committee accordingly considers that there has been no infringement of Article 2 of Convention No. 87.
9. 69. The law and the facts of the case present themselves differently, however, when compatibility with Article 3 of Convention No. 87 and Article 4 of Convention No. 98 is examined.
10. 70. The Committee understands the effect of section 10 to be that the rules regarding the coverage of collective agreements - both those already in force until 1 March 1991 and future agreements which might be concluded for example when foreign ships transfer to the Danish International Register or when new ships are launched - have been changed in so far as workers who do not reside in Denmark may no longer be covered by agreements made by Danish workers' organisations. The information supplied by the Danish Seamen's Union bears this out: the employers' association has recently concluded agreements covering Filipino and Singaporean seafarers with foreign workers' organisations notwithstanding the fact that these workers are employed on Danish-flag ships and continue to be covered by Danish legislation (such as the social security laws).
11. 71. The Committee observes that the Government justifies its legislative intervention on the following grounds: a crisis had arisen because of flagging out (characterised by loss of tonnage, foreign-exchange earnings and employment of Danes on ships and in related occupations); the competitiveness of Danish shipowners needed to be improved; other methods to redress this crisis had been applied for some time without effect; the standard of living of Danish seamen is guaranteed by the legislative package since any reduction in wages they might have to accept is balanced by tax relief (a fiscal equilibrium which has already worked in newly concluded agreements); the Act is by nature a general regulation allowing negotiation on more detailed conditions of employment; other countries already had similar legislation allowing shipowners to free themselves of collective agreements. In addition, the Government denies that all already concluded collective agreements are cancelled (e.g. they remain in force for ships which do not qualify for registration under the Act) and maintains that those agreements which have been cancelled suffered this fate because the tax relief amendments would have otherwise involved enormous wage increases for the employees and no improvement in the competitiveness of the shipowners. In the Government's own words "the tax exemption has in itself changed the basis upon which the collective agreements were concluded".
12. 72. The Committee takes note of the Government's arguments that compelling reasons of national economic interest existed such as to justify this sort of intervention in private-sector collective bargaining which, in particular, results in the automatic cancellation of certain previously concluded agreements leading in turn to the necessity, for the Danish workers' organisations involved, of re-negotiating terms and conditions of employment for a more limited group of employees, i.e. those resident in Denmark.
13. 73. Nevertheless, the Committee would stress in this connection the importance it has always attached to the principle of the independence of the parties to collective bargaining. This is a principle which was generally recognised during the preparatory discussions leading up to the adoption by the International Labour Conference of the Collective Bargaining Convention, 1981 (No. 154), and which the ILO supervisory bodies have relied on in many different cases of legislative intervention in bargaining. According to this principle, the state bodies should refrain from intervening with a view to changing the tenor of freely concluded collective agreements unless these are cogent reasons of general interest (see Digest, 1985, para. 593 and General Survey, 1983, para. 312). It draws the Government's attention to the fact that many circumstances change during the life of a collective agreement (change of governments, currency fluctuations, tax reforms, oil prices), but it is for the parties themselves to debate the effects of such circumstances when the agreement is due for renewal. The Committee thus considers that the Act, in cancelling already concluded collective agreements, is not in conformity with the spirit of Conventions Nos. 87 and 98.
14. 74. As regards the other arguments put forward by the Government to justify the contents of the Act, the Committee would recall that it is aware that in a period of economic and financial crisis a government has to act and to find solutions. But at the same time it stresses its opinion that if, for compelling reasons of national economic interest, a government considers that terms and conditions of employment could not be fixed by collective bargaining, such a restriction should be imposed as an exceptional measure and only to the extent necessary, without exceeding a reasonable period and it should be accompanied by adequate safeguards to protect workers' living standards (see Digest, para. 641, and General Survey, para. 315).
15. 75. In the present case the change in the scope of future coverage of collective agreements does not meet these criteria. It is not an exceptional measure in that the Government admits that it had already tried other methods to overcome the crises; it goes beyond the extent necessary in that recent agreements concluded under the new Act have adopted exactly the same terms as existed previously (except for the wage reduction corresponding to the tax exemptions) and there is an apparent understanding to apply this wage rate to ships having mixed nationality crews; the Act is permanent and yet is not of the same character as minimum labour standards legislation which sets a basic level upon which collective bargaining can build up more favourable terms and conditions of employment; lastly the Act - when read together with the tax exemptions - appears to preserve Danish resident seafarers' standard of living, an assumption borne out in practice by the Government's description of some newly concluded agreements. However, the possibility remains that future agreements will not respect the above-mentioned understanding and that, on one ship, several agreements may be concluded - applying different wage rates, work timetables, etc., depending on the citizenship of the seafarers on that ship - which do not preserve the standard of living of all the workers concerned by the measure. The information supplied by the complainant on new agreements covering Filipino and Singaporean seafarers proves this point.
16. 76. The problem of restrictions on trade union rights based on nationality has been addressed by the ILO in a variety of instruments (see, in particular, Article 6, para. 1(a)(ii) of the Migration for Employment Convention (Revised), 1949 (No. 97), Article 10 of the Migrant Workers (Supplementary Provisions) Convention, 1975 (No. 143) and Article 2 c)of the Merchant Shipping (Minimum Standards) Convention, 1976 (No. 147)), the basic principle being that equal treatment must be applied in the enjoyment of benefits of collective bargaining. The Committee accordingly rejects the Government's contention as regards this criterion as well.
17. 77. The Committee, having carefully examined the facts of the present case and aware that this is not the first time in recent years that it has been called on to examine the Danish Government's intervention through legislation in private (and public) sector collective bargaining processes (see 243rd Report, Case No. 1338, paras. 209 to 247, approved by the Governing Body in March 1986, followed up in the 1987 observation on Denmark's observance of Convention No. 98 made by the Committee of Experts on the Application of Conventions and Recommendations; 254th Report, Case No. 1418, paras. 200 to 227, approved in February-March 1988 and 259th Report, Case No. 1443, paras. 163 to 197, approved in November 1988, both also referred to the Committee of Experts), calls on the Government to take measures to amend the Act so as to ensure that full and voluntary collective bargaining applicable to all seafarers on Danish-flag ships is once again a reality. It draws this case to the attention of the Committee of Experts on the Application of Conventions and Recommendations in the context of Denmark's observance of Conventions Nos. 87 and 98.

The Committee's recommendations

1. 78. In the light of its foregoing conclusions, the Committee invites the Governing Body to approve the following recommendations:
   • a) The Committee takes note of the explanations given by the Government on the economic difficulties facing the Danish Merchant Marine. However, it considers that section 10 (2) and (3) of the Act of 23 June 1988 to set up a Danish International Ship's Register constitutes interference in the seafarers' right to voluntary collective bargaining and amounts to government interference in the free functioning of organisations in the defence of their members' interests which is not in conformity with the spirit of Conventions Nos. 87 and 98.
   • b) The Committee calls on the Government to take measures to amend the Act so as to ensure that full and voluntary collective bargaining open to all seafarers employed on Danish-flag ships is once again a reality.
   • c) It draws this case to the attention of the Committee of Experts on the Application of Conventions and Recommendations.