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Denmark

Denmark

3. Employment & Entrepreneurship

3.2 Administration and governance

On this page
  1. Governance
  2. Main non-public actors
  3. Cross-sectoral cooperation

Governance

The Ministry of Employment

The Ministry of Employment has the overall responsibility for measures in relation to all groups of unemployed persons, i.e. both unemployed persons on social assistance as well as unemployed persons receiving unemployment benefits.

In addition, the Ministry of Employment is responsible for the framework and rules regarding employment and working conditions, safety and health at work and industrial injuries, financial support and allowances to all persons with full or partial working capacity as well as placement activities, services in relation to enterprises, and active employment measures.

The Ministry of Employment works towards a healthy, dynamic and secure labour market with as many as possible in job.  The ministry is responsible for measures in relation to all groups of employed and unemployed persons, i.e. unemployed persons on social assistance as well as unemployed persons receiving unemployment benefits.

The Ministry of Employment has exclusive competence for legislation and programmes in relation to:

  • Labour/employment law
  • Safety and health at work
  • Compensation in connection with industrial injuries

 

The National Employment Council (BER)

  • The National Employment Council (BER) has been set up to advise the minister of employment.
  • The National Employment Council comprises one chairman and 26 representatives from among social partners (trade unions and employers associations), the municipalities, Danish Regions, and the Danish Council of Organisations of Disabled People. The National Employment Council convenes for eight meetings per year.
  • The council advises the minister of employment regarding major employment policy initiatives as well as the minister’s annual goals for employment policy. The council also advises on test projects and proposals for new legislation.

 

The Danish Agency for Labour Market and Recruitment (STAR)

The Danish Agency for Labour Market and Recruitment (STAR) is a national agency responsible for implementing and following up on employment policy in Denmark, including recruitment of necessary foreign labour. STAR supports the minister for employment in the work of policy formulation, legislation, and in relation to the Danish parliament (Folketinget).

STAR prepares and implements political initiatives and reforms, and supports the achievement of the goals of these reforms through efficient management. Moreover, STAR generates and disseminates knowledge to support the minister for employment and efficient employment efforts. STAR plays a crucial role in the implementation of reforms and employment policies by supporting municipalities and unemployment insurance funds. The latter are responsible for the direct implementation of reforms and policies.

The goal of STAR is to contribute to moving as many people as possible from unemployment into employment or education and to ensure that enterprises have access to the labour they need.

 

The Danish Working Environment Authority

The Danish Working Environment Authority is a government agency. It works to promote health and safety at Danish workplaces. This is done by:

  • Carrying out inspections of companies
  • Drawing up rules on health and safety at work
  • Providing information on health and safety at work

The Danish Working Environment Authority is authorised to issue penalties in cases of non-compliance with the working environment rules. In cases of violation of the rules of the Working Environment Act, the Danish Working Environment Authority has the authority to issue administrative fines. In cases of extreme danger, the Danish Working Environment Authority may also order the work to be suspended.

 

National Research Centre for the Working Environment (NFA)

National Research Centre for the Working Environment (NFA) is a government research institute that conducts research in the area of working environments. (See section 1.6)

NFA tasks are research and public sector counselling regarding (list not complete):

  • Psychological working environment
  • Physical work load
  • Industrial injuries
  • Chemical work environment

 

Labour courts

Denmark has four state institutions that assist social partners in relation to collective negotiations and in other labour conflicts.

  • The Labour Court (Arbejdsretten): The Labour Court tries cases related to breaches of the Main Agreement (Hovedaftalen).
  • The Courts of Civil Servants: (Tjenestemandsretterne): The courts try cases related to wages and terms of employment for civil servants.
  • The Conciliation Board (Forligsinstitutionen): The Conciliation Board assumes command of the collective negotiations when the social partners are unable to reach a compromise in due time. The official conciliator can postpone strike action and lockouts for a maximum of two periods of 14 days each, and strike/lockout action can begin on the fifth day after the deadline.
  • Professional Court of Arbitration (Faglig Voldgiftsret): The Professional Court of Arbitration is the final court instance pertaining to labour legislation. Negotiation and conciliation must have been tried prior to the Court of Arbitration, and in general a court decision cannot be appealed.

 

Municipalities

There are 98 municipalities in Denmark. Denmark has municipal rule, which means that acts passed in parliament are implemented locally. Each municipality has its own council elected by the municipal population. As previously mentioned, the municipalities are responsible for designing an individualised and personal measurement within the scope of the laws.

Municipal youth guidance units (kommunal ungeindsats):

The Consolidation Act on Municipal Provision for Young People Under 25 (Lov om kommunal indsats for unge under 25 år,LBK nr 1301 af 04/09/2020) obliges municipalities to establish municipal youth guidance units that are responsible for establishing a coherent and cross-sectoral youth measure that coordinates educational, employment and guidance initiatives. The municipal youth guidance units offer broad and cross-sectoral initiatives to young people so that they meet a coordinated and coherent effort.

The act implies that the municipality has the responsibility for all young people below the age of 25 years; however, the measures imply a special focus on young people not in education or employment.

 

Municipal job centres

The municipal job centres are the crux of the active labour market measures. The municipal job centres manage the measures regarding unemployed citizens and citizens at the risk of dropping out of the labour market.

The job centres are charged with procuring jobs for jobseekers and ensuring that companies find the labour they need. The job centres assist all applicants in finding help and guidance on recruitment, job hunting, or general information on the labour market.

For young people under the age of 30 without an education, the aim of the measures is to ensure that the young person completes an education.

Regions

Since 2007, Denmark has been divided into five regions. Among other things, the regions are responsible for regional growth and commercial development. Each region develops a growth and development strategy in close collaboration with municipalities, the regional business community, education institutions, and other regional partners.

 

Regional labour market councils (RAR)

At a regional level, the minister of employment has appointed eight regional labour market councils (RAR), each with 21 representatives drawn from among social partners, the municipalities, the Danish Council of Organisations of Disabled People, and other regional actors, including education institutions and growth forums.

The general objective of the eight regional labour market councils is to improve coordination and dialogue between different municipalities and between municipalities and unemployment insurance funds, enterprises, and other actors, including VET centres and growth forums.

As a rule, the regional labour market councils do not have any specific authority over local municipalities. Since 2015, the eight councils have had the power to decide what kind of short vocational training programmes job centres can receive subsidies for from the additional annual funding pool of DKK 100 million, which municipalities can use to fund short vocational training programmes for the unemployed. This is to ensure that these short vocational training programmes are tailored to the demands of businesses.

The three regional divisions, located in Roskilde, Odense, and Aalborg, serve as secretariats for the eight regional labour market councils.

 

Main non-public actors

Unemployment insurance Funds

There are 24 unemployment insurance funds (a-kasser) in Denmark. These funds are responsible for the payment of benefits to their members. The unemployment insurance funds provide sector-specific guidance on job seeking and careers to the members. A number of unemployment insurance funds go further by locating job openings and establishing matches between job seekers and enterprises based on their network of union representatives in the enterprises.

 

The trade association of unemployment insurance funds (Danske A-kasser)

Danske A-kasser represents the unemployment insurance funds vis-à-vis politicians and public authorities.

As of January 2019, a new unit was established in KL – Local Government Denmark, which is the association and interest organisation of the 98 Danish municipalities. The new unit, Unit for Educational and Vocational Guidance in Municipalities (EUK), supports the development of quality educational and vocational guidance, and supports networking among practitioners, and the exchange of experience across municipalities.

 

Trade unions and federation of unions

Trade unions in Denmark organise employees within the same trade. Local trade unions organise in larger federations. Trade federations organise in central organisations.

Denmark has three central organisations that negotiate on behalf of the trade federations and local trade unions:

  • FH, the Trade Union’s Central Organisation (Fagbevægelsens Hovedorganisation). FH was established in 2019 as an amalgamation between LO and FTF. FH organises 1.4 million members.
  • AC, the Danish Confederation of Professional Associations. AC was established in 1972. AC organises approximately 369 000 members. See list of members of AC here)
  • Lederne, the Leaders. Established in 1991. Organises 108 000 members. The leaders does not organise a federation of unions and is thus different from the other central organisations.

 

Main employers’ associations

Denmark has five employers’ associations, two main organisations in the private sector labour market and three in the public sector labour market.

The private sector labour market:

  • Dansk Arbejdsgiverforening (DA), Danish Employers’ Association. Represents 14 employers’ associations. Established in 1896.
  • Finanssektorens Arbejdsgiverforening (FA), the Danish Employers’ Association for the Financial Sector. Represents approximately 170 member companies. Established in 1989.

The public sector labour market:

  • Kommunernes Landsforening (KL), Local Government Denmark. Represents the 98 municipalities in Denmark. Local Government Denmark is the interest group and member authority for the Danish municipalities. Established in 1970.
  • Danske Regioner, Regional Denmark. Represents the five regions. Established in 2006.
  • Finansministeriet, Ministry of Finance.

 

The general distribution of responsibilities

The Ministry of Employment is the top-level authority for employment policies in Denmark. The ministry established the overall framework, but the regional and municipal actors mentioned above have the freedom to decide how local employment measures are designed. The municipalities are responsible for implementing the employment policy locally. The municipal rule in Denmark entails lots of room for manoeuvre for the municipalities as long as they comply with the legislation and ministerial objectives.

 

Cross-sectoral cooperation

Measures for unemployed young people under 30 years old, as well as general employment measures in Denmark, are handled through a partnership-based approach. Depending on the need of the person, public and non-public actors mentioned above cooperate in partnership-based approaches in order to make sure that the right efforts regarding education or employment are carried out. The cash benefit reform, for example, reinforced the cooperation between job centres and education institutions in order to make the transition between unemployment and education easier. Furthermore, act on municipal youth guidance units (KUI) requires municipalities to establish a cross-sectoral youth measure.