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GB.273/6/2
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SIXTH ITEM ON THE AGENDA
312th Report of the Committee on Freedom of Association
Contents
Case No. 1958 (Denmark): Definitive report
The Committee's recommendation
Introduction
1. The Committee on Freedom of Association, set up by the Governing Body at its 117th Session (November 1951), met at the International Labour Office, Geneva, on 5, 6 and 12 November 1998 under the chairmanship of Professor Max Rood.
2. The Committee examined a representation for the non-observance by Denmark of the Freedom of Association and Protection of the Right to Organise Convention, 1948 (No. 87), and the Right to Organise and Collective Bargaining Convention, 1948 (No. 98), made under article 24 of the ILO Constitution by the Dansk Magisterforening (DM).
3. The Committee submits a report on this case for the Governing Body's approval.
Case No. 1958
[Definitive report]
Allegations: Government interference in the application of collective
agreements and restrictions on the subject-matter for
negotiations for certain categories of workers
4. By a communication dated 25 August 1997, the Dansk Magisterforening, referring to article 24 of the ILO Constitution, sent the Director-General a representation alleging non-observance by the Government of Denmark of the Freedom of Association and Protection of the Right to Organise Convention, 1948 (No. 87), the Right to Organise and Collective Bargaining Convention, 1949 (No. 98) and the Employment Policy Convention, 1964 (No. 122).
5. At its March 1998 session, the Governing Body declared this representation receivable and decided to refer the aspects concerning trade union rights to the Committee on Freedom of Association for examination (Case No. 1958) [see GB.271/18/2].
6. The Government sent its comments on this case in a communication dated 18 September 1998.
7. 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 complainant's allegations
8. The complainant indicates that this representation firstly relates to the statutory wage level (the wage ceiling) introduced in public job-training schemes by Act No. 929 of 27 December 1991, and secondly to the corresponding wage ceiling provision applicable to job pools introduced by Act No. 1059 of 20 December 1995. The wage ceiling applicable in public job-training schemes has already been the subject of a complaint submitted by the Danish Confederation of Professional Associations (AC) (Case No. 1641). The new wage ceiling introduced in the new system of job pools on 20 December 1995 has, however, not yet been examined by the Committee.
Act No. 929 of December 1991
9. The complainant recalls the subject at issue in Case No. 1641, the conclusions by the Committee on Freedom of Association and the subsequent consideration of the matter by the Committee of Experts on the Application of Conventions and Recommendations.
10. In particular, the complainant recalls that, on 27 December 1991, the Danish Parliament, by Act No. 929, amended Consolidated Act No. 556 of 17 July 1991 on Employment Opportunities for Unemployed Members of the Workforce. A new provision (section 1a) was introduced into the Act whereby persons employed in the public sector as part of the employment opportunity scheme could not earn more than 80 Danish kroner per hour.
11. It appeared from the Act and from the preparatory work that the maximum wage limit should be applicable to that part of the employment opportunity scheme which operates within the public sector. Within the private sector, persons employed as part of the scheme should still receive pay according to existing collective agreements within each area of employment. Thus, the Act only amounted to an interference in collective agreements and in collective bargaining as regards the public sector.
12. According to the complainant, this Act interfered with a collective agreement of 23 September 1991 between the regional authorities and the municipalities and a number of organizations, including Dansk Magisterforening, which governs employment conditions and pay scales in the regional and local administration.
13. The complainant considers that a decisive factor in the determinations of Case No. 1641 was the view expressed by the Government that employment under job-offer schemes was not ordinary work in the national sense of the term falling within the scope of collective bargaining and collective agreements. The complainant therefore draws the attention of the Committee to a number of Danish court decisions which it considers support its view that Danish job-offer schemes are within the scope of collective bargaining and applicable collective agreements in Danish law.
14. Generally, these cases concerned the applicability of collective agreements to temporary work in respect of arbitrary and unfair dismissal, as well as the applicability of collective agreements to job-offer-type situations in respect of wages. Translated copies of the judgement were attached to the complaint. The complainant considers that these judgements demonstrate that the applicability of collective agreements in Danish law is not affected by the fact that an employment is for a fixed term, such as job-training schemes.
15. One of the court cases presented in the complaint concerned the specific job-training scheme which was the subject of Case No. 1641 and the present complaint. In this case (No. 91.323 of 6 May 1993), which was initiated by the Danish Confederation of Trade Unions (LO) on behalf of the General Workers' Union in Denmark (SiD) against the Copenhagen Youth Centres, the plaintiff raised a claim for sleep-in staff to be paid in accordance with the collective agreement of the General Workers' Union in Denmark. The defendant argued that sleep-ins constituted a job creation activity, which is wholly governed and financed by the municipality of Copenhagen and that the Copenhagen Youth Centres had no influence on the running of the scheme.
16. This argument was rejected by the Labour Court which held:
As Copenhagen Youth Centres must, therefore, be considered to be the employer of the staff paid by the hour as well, the project pay agreements cannot be applied to these employees, and the Court therefore agrees with the plaintiffs that payment must be based on the agreement with the defendant.
17. For the complainant, this decision shows that the fact that there is a job creation activity which is publicly financed does not necessarily imply that collective agreements do not apply to such situations.
18. By way of another example (No. U 1992 625), a number of young people were employed by a local authority with job placements in various local theatres. The local authority paid the people in question in accordance with the municipal agreement with the Danish Skilled Workers' Union. The Union had no collective agreement with the local authority but rather with the organizations of theatres, and demanded that remuneration be paid in accordance with this collective agreement as the work carried out fell within the professional scope of this agreement. The judgement of the High Court of the Eastern Circuit held:
The appellants' employment at the mentioned theatres, which are publicly supported enterprises, took place in accordance with section 3(3) of the Danish Act on Job Offers to Long-term Unemployed Person for seven-month periods.
As stated in the judgment, the question concerning the placing under a collective agreement of long-term unemployed persons who had been assigned to work at the small theatres by the respondent under a job offer scheme has been the subject of correspondence between the Union of Theatrical Technicians in Denmark and the respondent in 1983 and again since 1987.
As in the judgment, it is found that the appellants have performed work which by its nature is covered by the collective agreement between the Union of Theatrical Technicians in Denmark and the Association of Children's Theatres as well as the Association of Small Theatres in Denmark.
Against this background, the Danish High Court finds that, according to the provision of section 11(1) of Executive Order No. 403 of 30 May 1989, the appellants are entitled to pay in accordance with the above collective agreement.
19. The complainant also refers to the Personnel Guidelines of the Ministry of Finance (annexed to the complaint) and recalls a number of prerequisites to the use of job-training schemes which were raised in Case No. 1641, such as the net increase in employees and balance between subsidized and non-subsidized jobs.
20. The complainant emphasizes that job training is described in these Guidelines as an employment relationship under an employment contract and that part-time employment is stated to presuppose a provision in the applicable collective agreement. According to the complainant, this clearly indicates that the collective agreement in question is directly applicable. This is also evident from the coverage of special benefits provided for in the applicable collective agreements, as well as payment for extra work and pension regulations.
21. Furthermore, the complainant asserts that it is also indicated that the employment must be limited in time according to an agreement before the employment relationship/job training may be initiated. Otherwise, the employment will continue after the expiry of the job-training period. According to the complainant, this means that the employment under the job training after the expiry of the period continues as an ordinary place of employment.
22. The complainant also refers to a new development in 1995 concerning the inclusion of "social chapters" in collective agreements. Among the collective agreements concluded in 1995 is an agreement of 3 July 1995 signed between the Ministry of Finance and, among others, the complainant. The agreement regulates the conclusion of local agreements on jobs on special conditions, including special conditions on wage and other conditions of labour. The local agreements which can be signed can thus derogate from the normal conditions in applicable collective agreements.
23. Subsequently, the Ministry of Finance issued Circular No. 32/95 on social chapters, to which the agreement is annexed. The Circular refers to negotiations between the Ministry of Finance and the central organizations whereby the parties agreed to make a common effort in order to increase the employment in state institutions and undertakings for persons who have difficulties in obtaining placement on the labour market.
24. According to the complainant, the above agreement and the Circular demonstrate that participation in public job-offer schemes is ordinary work comprised by collective bargaining and collective agreements. They query how the above agreement could be entered into if the employment performed under the job-offer schemes was not ordinary work falling within the scope of collective bargaining.
25. The complainant also makes reference to a book written by a Danish lawyer explaining the job-offer schemes in relation to the law of Danish salaried employees and to a report by a ministerial commission concerning "protective jobs", including the use of job training under the Act on Active Labour Market Policy. The complainant argues that a statement in the commission's report that collective agreements have, in some circumstances, proven to be a barrier to the use of jobs on special conditions clearly means that collective agreements are directly applicable to employment in job training under the Act.
Act No. 1059 of December 1995
26. The complainant then refers to the amendments to the Act on Active Labour Market Policy which were adopted by the Danish Parliament at the same time as the new state budget in Act No. 1059 of 20 December 1995.
27. The new job pools established under the Act imply occupation of long-term unemployed persons in such pools for up to a period of three years and may be used both in the private and the public sector.
28. According to the complainant, there is no doubt that the new job pools are ordinary work and, therefore, the fact that the new job pools are financed by the transfer of a number of job-training schemes into job pools is clear evidence that the job-offer schemes are also ordinary work.
29. In conclusion, the complainant alleges that Act No. 929 and Act No. 1059 interfere in applicable collective agreements and remove wages from the subjects for negotiation for persons working in public job training and job pools covered by the Act, thus violating both Conventions Nos. 87 and 98.
30. In the view of the complainant, it is clear from Article 2 of Convention No. 87 that unemployed workers participating in job-offer schemes (and now also in job pools) are performing work, and thus are workers within the meaning of Article 2 of Convention No. 87 having the right to freedom of association and other rights under relevant ILO Conventions. Furthermore, the wage ceiling as it is applied in the Danish legislation in question implies that unemployed workers who are activated in job-offer schemes and job pools are deprived of the fundamental right to collective bargaining on their level of wage under Article 4 of Convention No. 98.
B. The Government's reply
31. In its communication dated 18 September 1998, the Government first refers to its earlier replies in respect of Case No. 1641, which concerned the wage ceiling in Act No. 929 of 27 December 1991 on job offers with public employers.
32. At that time the Government stated that it was not a matter of ordinary jobs. The Government then cites its previous communications concerning Case No. 1641 wherein it indicated the elements in the job-offer scheme which meant that job offers were not ordinary work and therefore not covered by collective agreements.
33. The Government reiterates that the characteristic features of job-offer schemes are: that the job-offer scheme was introduced for the purpose of bringing down unemployment; that public subsidies are granted to employers who recruit long-term unemployed persons; that the measure is a temporary measure; that the scheme is an element of a general system of activation offers and unemployment benefits; that the work is not taken away from the ordinary employees; and that the usual wage approval procedures on the employer side do not apply -- all factors which underline that it is not a matter of ordinary work.
34. Furthermore, the Government recalls that detailed guidelines were drawn up in connection with the introduction of the job-offer scheme in general agreement with the social partners. These guidelines state, inter alia, that "if an employment relationship is concluded, an employment contract shall be drawn up in which pay and working conditions shall be laid down" (where appropriate, by reference to an existing collective agreement). Furthermore, the guidelines state that "any other terms and conditions applying to similar jobs shall also apply to this employment relationship". The reference to collective agreements had therefore taken place in agreement with the social partners on the assumption that the existing collective agreements did not cover this type of employment project.
35. The Government reiterates its previous position that job offers, by their nature, are not ordinary work. That it is a matter of work of a quite specific character is, among other things, reflected by the fact that a wage subsidy is granted in connection with these employment activities in order to compensate for the reduced working capacity of these unemployed persons.
36. The Government maintains its opinion that in the case of job offers -- now job training and pool jobs -- it is not a matter of ordinary jobs in relation to ILO Conventions Nos. 87 and 98. The usual market conditions have been suspended, since the agreements with the enterprises on employment are only concluded because public subsidies are offered.
37. The Government does not contest that the actual activity, which is carried out by persons in job training or pool jobs according to its nature, may be compared to what is categorized as the usual collective agreements' professional sphere of application. However, it finds that factors other than the actual activities performed are decisive of whether it is a matter of an ordinary job in relation to ILO Conventions Nos. 87 and 98. First of all, whether the qualifications of the (long-term unemployed) persons who are offered job training or pool jobs correspond to those presumed by the parties when concluding the collective agreement. The necessity of offering public subsidies demonstrates, according to the Government, that this is not the case.
38. Nor does the Government contest that it is possible for the social partners to agree on special conditions for unemployed people who are covered by the employment legislation. There is contractual freedom in Denmark as long as such agreements respect the legislation. Whether or not these agreements are called collective agreements by the partners or by others is not a decisive factor for the evaluation in relation to Conventions Nos. 87 and 98.
39. Likewise, the Government considers that the definition of the activity, which is performed according to the employment schemes, is not of decisive importance in relation to the evaluation of the application of Conventions Nos. 87 and 98. The decisive factor must be a general evaluation as regards the content of all conditions in the employment schemes in relation to the purpose of those Conventions.
40. The Government then refers to the provisions on job training and pool jobs in the Act on an active labour market policy, the Consolidation Act No. 533 of 8 July 1998, and in the Order on an active labour market, No. 1015 of 17 December 1997, as subsequently amended.
41. As concerns job training, unemployed people may be offered job training with private or public employers if this has been decided in the individual action plan. The action plan describes the unemployed person's employment goals and is drawn up with a starting-point in respect of the unemployed person's wishes and qualifications, and with due consideration to the needs of the labour market.
42. The maximum job-training wage with public employers is presently set at 88 Danish kroner (DKK) per working hour excluding holiday allowance, etc. The fixed hourly wage gives an income in job training when working 37 hours per week, which corresponds to the maximum daily cash benefits for unemployment plus approximately 15 per cent. By way of comparison, the minimum wages in a number of collective agreements are between DKK 75 and 85 per hour, and a little more for highly skilled workers. The working conditions must match the contractual ones or the ones which usually apply to similar work. People in job training are furthermore covered by the legislation which applies to employees.
43. On the assumption that a net expansion in the number of employees takes place, a wage subsidy in job training is granted to public employers for the hourly wage. The duration of the subsidy period is laid down by agreement between the employment service and the employer. With public employers the subsidy period for unemployed people during the first two years of the unemployment period (the so-called daily cash benefit period) may as a maximum be agreed for one year, and for unemployed people in the activation period (i.e. after two years of unemployment) the subsidy period may cover the entire activation period, which is three years.
44. The average duration of job training terminated in 1997 in the government and county administrations is assessed at approximately eight months, while the duration of job training in the municipal sector is approximately seven months on average.
45. In the Order on an active labour market policy, it has been laid down that when an employment relationship is established, a contract of employment or a letter of employment must be drawn up, in which wage and working conditions and the expected subsidy period are stated. The employment relationship may in all cases only be brought to a stop in agreement with existing collective agreements and legislation.
46. The job-training offer shall contribute to retraining of the unemployed person with a view to achieving employment in the ordinary labour market. The Labour Market Council may lay down general guidelines for the requirements to be made for a job-training place in order for it to meet the demand for rehabilitation of the individual. The content of a job-training offer must be organized with due consideration to the nature of the workplace and the unemployed person's qualifications. Finally, it has been laid down that there has to be a reasonable ratio between the number of subsidized persons and the number of non-subsidized employees.
47. The Government then goes on to explain pool jobs. Unemployed benefit claimants may during the activation period (i.e. after a total period of two years' unemployment) receive an offer of employment in the special pool jobs which have been established in public service fields according to the existing conditions. The Act lays down that the wage must correspond to the contractual wage or the one applying to similar work; however, the wage per hour, excluding holiday pay, etc., may not amount to more than DKK 88 from 1 April 1998.
48. The Act lays down that the working conditions must match the contractual ones or the ones which usually apply to similar work, and that persons who are employed in a pool job are furthermore covered by the legislation which applies to employees.
49. Provided that an expansion of the net number of employees takes place, a subsidy is paid when hiring somebody in a pool job to the employer with whom the pool job is established. Unemployed persons who are employed in the same pool job for more than one year have the right and duty to guidance on the possibilities of achieving ordinary employment.
50. Pool jobs were launched from 1 January 1996 and so far only figures for the average duration of pool jobs terminated in 1997 are available. These figures show that unemployed people were in pool jobs for approximately eight months on average.
51. The situation is thus that the legislation on offers to unemployed people in the term of job training or pool jobs in connection with public subsidies to the employer, in some fields lays down special rules -- for instance wage, the content of job training, the number of job-training places in the individual workplace -- but as far as possible leaves it to the existing agreements to regulate the conditions and leaves the persons to be covered by the legislation which applies to employees, where such an equality does not undermine the employment and labour market purpose of the schemes.
52. In response to the analysis made by the complainant, the Government stresses that the decisive factor concerning whether such situations could be considered to be normal employment was not dependent on the terminology used, sometimes taken from a totally different context, but rather upon the real content of the schemes which need to be evaluated.
53. As concerns the court judgements referred to by the complainant, the Government indicates that they are of no relevance to the present case. The Government refers to the use of citations out of context, as well as the frequent reference to cases referring to situations other than job offer and job-pool schemes and failing to mention the distinguishing factors. For example, the Government states that the complainant omitted to indicate in respect of the case concerning Copenhagen's Youth Centres that these centres were considered to be independent institutions which were not part of the municipality of Copenhagen and since the agreement on project wages was made with the municipal authorities and not the centres, the agreement could not be used by them.
54. Furthermore, as concerns Case No. U 1992 625, reference was made to an earlier Act (Act No. 122 of 24 February 1989 on job offers to unemployed persons) and Executive Order No. 403 of 30 May 1989, issued pursuant to this Act, according to which contractual remuneration should take place. The question in the case was which of several agreements was the relevant one in respect of wage determination. For the Government, this merely confirms its previous statements in Case No. 1641 that persons covered by employment projects were previously paid contractual wages precisely because this was laid down in the legislation. Where there is a dispute as to which agreement applies, the logical starting-point is to look at the nature of the work.
55. As concerns the complainant's reference to the Personnel Guidelines of the Ministry of Finance and the fact that employment after the expiry of the job-training period is considered to be ordinary employment, the Government indicates that this is a natural consequence of the fact that the special provisions for employment in job training -- wage subsidies, maximum remuneration, net expansion for the number of employees, general requirements to the job-training place, individual conditions of the job-training offer -- come to an end.
56. As concerns the inclusion of "social chapters" in collective agreements, the Government draws a distinction between agreement-based jobs on special terms and the publicly supported employment promoting measures. The purpose of the social chapters (which correspond to the former) has mainly been to make room on the labour market for persons with reduced working capacity, e.g. as a result of an industrial accident or as a result of physical attrition. With the social chapters, the social partners have made an agreement on the creation of jobs on special conditions, in relation to which the ordinary demands of the collective agreement on working hours, remuneration and tasks may be deviated from. Previously the employer's only option would have been to dismiss the persons in question -- either because their reduced productivity did not match the wage claims of the collective agreements or because the collective agreements did not allow for planning the working hours so that they matched the groups in question.
57. This is clear from the report by the Committee on jobs on special conditions referred to by the complainant, wherein it is stated:
The goal is for the demand for jobs on special conditions for persons already employed to be met via agreements between the employer and the individual workplace and without public subsidy. Where the employee's capacity for work is reduced to an extent that calls for public subsidisation, it should be granted only subject to public approval.
58. The social protocols have thus been necessary in order to promote employment for the groups in question. That is what is meant when it was mentioned that the existing collective agreements have been an obstacle to the development of jobs on special terms.
59. This does not include, however, persons who are covered by the employment schemes mentioned in this complaint. Persons in job training do not have permanently reduced working capacity, but only a need for rehabilitation as a result of unemployment. The job training is meant to correct a temporary reduction of the capacity for work and is thus only of a temporary nature as opposed to jobs on special terms (flex jobs), which as a starting-point are of a permanent nature.
60. Apart from this it has been agreed in connection with several of the social chapters that in order to promote employment, attempts should be made to open up the workplaces to persons who need rehabilitation in job training within the existing public schemes.
61. The Government refers in this respect to Chapter 4.2.5 of the above-mentioned report which concerns unemployed persons, insured as well as uninsured, who due to, for example, long-term unemployment or lack of education, have difficulty finding employment on normal pay and working conditions, or are receiving job training in the ordinary labour market. The report goes on to indicate that this group can be characterized as having minor, temporary reduction of capacity for work, and thus need a job that entitles them to a special wage subsidy as well as a special job area, in order to maintain their ties to the labour market. The report indicates that the only condition is that the unemployed person is prevented through lack of education or other relevant work qualifications from getting a job on normal pay and working conditions, or under a job-training arrangement.
62. The Government can only approve that there is consensus between the social partners on participation in vocational rehabilitation of the unemployed people by using the existing employment schemes. The success of the employment schemes depends on the positive cooperation from employers and employees. When the social partners in the social chapters have committed themselves to using them, it is completely in accordance with the Government's employment policy and such agreements are therefore of no relevance to the problems which are raised in this complaint. Furthermore, as indicated in section 2 of the agreement referred to, the specific agreement does not cover persons in job training.
63. Furthermore, the Government affirms that pool jobs -- like job training -- are not ordinary work. The previously mentioned special features of job training also apply to pool jobs and, moreover, the Act on pool jobs lays down special rules to govern the situation when a person in a pool job obtains (part-time) ordinary employment.
64. In conclusion, the Government finds that the schemes covered by the complaint are not in contravention of ILO Conventions Nos. 87 and 98 on the basis of the following considerations:
- The schemes have not had any negative effect on the existing collective agreements or on the parties' negotiation possibilities. No Danish employers have had their contractual rights changed as a result of the Danish job-offer legislation as it has constantly been a requirement that it must be a matter of additional employment.
- The unemployed people in question can only be occupied in job training or in pool jobs because public subsidies are offered. If they were able to find employment without public subsidy, they would not be unemployed. The people in question receive under all circumstances a higher wage than they would if ordinary market conditions applied (i.e. without public regulation).
- The unemployed people are free, at any time, to enter into an ordinary employment relationship with the enterprise where they receive job training or any other enterprise. The people in question are therefore not deprived of the possibility of using the ordinary market conditions. The only consequence is that public regulation lapses and the people in question step out of the action plan which applied to them when unemployed.
- The Government finds that the examples brought forward by the complainant are of no relevance to this case.
65. The Danish Government therefore maintains its view that no ILO Conventions were violated when Act No. 929 of 27 December 1991 and Act No. 1059 of 29 December 1995 were adopted. The reason is that job offers/job training/pool jobs, according to their nature, are not ordinary work and thus not covered by any existing Danish collective agreements.
C. The Committee's conclusions
66. The Committee notes that this case concerns allegations of government interference in the application of collective agreements and restrictions on the subject-matter for negotiations in respect of workers hired through job offer, job training or job-pool schemes established under Act No. 929 of 27 December 1991 and Act No. 1059 of 20 December 1995. According to the complainant, this legislation violates the principles of freedom of association and free collective bargaining by placing a ceiling on the hourly wage rate for work done under these schemes.
67. The Committee would first recall that the first of these pieces of legislation (Act No. 929) was already examined by the Committee in 1994 (294th Report, Case No. 1641). At that time, the Committee had noted that opinions differed concerning the status of temporary job-offer employees in relation to regular employees under collective agreements. In these circumstances, the Committee was unable to make a pronouncement on this complex and novel issue on the basis of the information available in this specific case and went on to conclude that the case did not call for further examination [see 294th Report, paras. 74 and 77].
68. The present case differs from Case No. 1641 in two respects. Firstly, a new Act was adopted in 1995 which extends the use of job-offer schemes (now called job pools or job training) both in terms of sector (now such schemes can be offered in both the public and private sector) and in terms of overall duration (depending on the period, such offers can be made for up to three years in total). Secondly, the complainant in this case has furnished a number of court cases which, it is maintained, clarify the national understanding of the status of temporary job-offer employees and their coverage under collective agreements.
69. The new legislation is similar to the Act of 1991 in that it is aimed at strengthening active labour-market measures and improving educational and training opportunities both for young people and adults. The explanatory notes to the Bill indicate that: "the unemployed are granted the possibility of obtaining long-term meaningful employment which will serve as inspiration for getting a job in the ordinary labour market or for undergoing education/training in the sector in which they are employed. It is the intention that employment in pool jobs should help the unemployed gaining points that will ease their admission to certain education, and it may be decided in certain situations that a completed pool job could replace periods of practical training." According to the report submitted by the Committee on Jobs on Special Conditions, the only condition for an unemployed person to benefit from the Act on Active Labour Market Policy is that such person is prevented through lack of education or other relevant work qualifications, from getting a job on normal pay and working conditions or under a job-training arrangement.
70. Pool jobs are subsidized by the Government on the condition that the net number of people employed in the undertaking is increased and there should be a reasonable ratio between the number of subsidized persons and the number of non-subsidized employees. There appear to be two phases of unemployment in which such pool jobs may be subsidized. During the first two years of the unemployment period (phase 1), the subsidy period for unemployed people may be agreed to a maximum of one year. During the "activation period" (after two years of unemployment (phase 2)), the subsidy period may cover the entire activation period, which is three years.
71. The Committee notes that, as in Case No. 1641, it is not disputed that the contents of current collective agreements continue to apply to regular employees, including the members of the complainant union, and that the bargaining machinery itself continues unaffected. The only question in this case, therefore, is whether the wage ceilings imposed on subsidized jobs for long-term unemployed persons amount to an interference in the right to bargain collectively one's terms and conditions of employment.
72. The Committee notes that the Government maintains its position that, whether it be under the 1991 Act or that of 1995, such job-offer schemes cannot be considered to be ordinary work covered by existing collective agreements. The special characteristics of such schemes which are aimed at combating unemployment through subsidized job offers of limited duration without placing in jeopardy the posts of current employees are sufficient to assure the Committee that such positions do not constitute ordinary work. The arguments made by the complainant on the basis of Danish jurisprudence have not convinced the Committee to the contrary. The Committee finds itself obliged to agree with the Government that the judgements cited are not relevant to the present case. Only one out of the four cases referred to actually concerned the applicability of collective agreements in respect of wages to workers employed under job-offer schemes and that case appears to be distinguished by the fact that the workers concerned were hired under the terms of the 1989 Act and corresponding Executive Order under which (unlike the case at hand): "work shall be offered at an ordinary workplace on pay and working conditions provided for by collective agreement".
73. Furthermore, as concerns the "social chapters" referred to by the complainant, the Committee notes that such chapters demonstrate a consensus between the social partners to participate in vocational rehabilitation of the unemployed by means of the existing employment schemes and merely demonstrates a commitment to the approach already used in the Government's employment policy which is at issue in this complaint.
74. The Committee does however take due note of the characteristics which distinguish the present scheme from that of the 1991 Act which was examined in Case No. 1641. While the previous job-offer scheme appeared to be limited to seven months, the current job pools can be offered for a period of up to three years during the second phase activation period of unemployment. In its examination of Case No. 1641, the Committee had expressed the hope that the Government would ensure that job offers remained of limited duration and did not become an opportunity to fill permanent posts with unemployed persons, restricted in their right to bargain collectively in respect of their wages. The Committee takes due note of the statistics provided by the Government concerning the duration of job training and job pools in 1996 and 1997 which were assessed at an average of seven to eight months and further notes from the Government's reply that unemployed persons working in the same job pool for more than one year have the right and duty to guidance on the possibilities of achieving ordinary employment. Furthermore, the Committee notes that the duration of job pools must be set out clearly in a contract and that employment beyond this period can be expected to be considered ordinary employment covered by the relevant collective agreements.
75. Given the above indications and the absence of any information concerning the actual risks of abuse of such schemes to fill regular jobs or further statistics on the frequency of recourse to such schemes, the Committee does not consider that it has sufficient information to determine that such abuse has or is likely to occur under the present scheme. The Committee stresses, however, that the Government should ensure, in practice, that job pools are not resorted to on a successive basis in order to fill regular jobs with unemployed persons restricted in their right to bargain collectively in respect of wages. The Committee urges the Government to set up tripartite procedures in order to prevent any abuse.
76. In conclusion, the Committee considers that there are no new elements introduced by the complainant in the present case to indicate that the use of job pools of a limited duration to facilitate the integration of long-term unemployed persons into the labour market should be considered to be ordinary employment which would necessarily benefit from the wages established in relevant collective agreements. The Committee therefore considers that this case does not call for further examination.
The Committee's recommendation
77. In the light of its foregoing conclusions, the Committee invites the Governing Body to decide that this case does not call for further examination.
Geneva, 12 November 1998.
Max Rood, Chairman.
Point for decision: Paragraph 77.