A lockout which only involved 16% of the unionised employees was sufficient to release an employer from a collective agreement. So held the Danish Labour Court.  

The General Agreement between the Confederation of Danish Employers and the Danish Confederation of Trade Unions provides that the parties to a collective agreement can only be released from the collective agreement by entering into a new one or by taking industrial action for the specific purpose of being released. But how intensive and extensive should such industrial action be? And what to do if there is a strike/lockout clause which only allows for small-scale strikes or lockouts?  

A Danish IT company and a Danish trade union for IT professionals had agreed to terminate their collective agreement with a view to entering into a new one. But the parties were unable to reach agreement. The IT company therefore decided to pull out of the collective agreement altogether.  

Like the above-mentioned General Agreement, the collective agreement contained a provision that the parties could be released from the collective agreement by taking industrial action for that purpose. The IT company therefore began a lockout in February 2011.  

Only the chosen few

But only about 16% of the unionised employees were locked out because of a strike/lockout clause agreed by the IT company and the trade union at an earlier point in time for the very purpose of limiting industrial action. According to the clause, only 20% of the unionised employees could be locked out and only 50% of the unionised employees could go on strike. Moreover – because the IT company handled critical IT systems for public authorities – unionised employees involved in operations and necessary maintenance could not be locked out .

When the lockout began in February, the trade union filed a strike notice with effect from May. The trade union also gave notice to terminate the strike/lockout clause, but it could not be terminated until with effect from 1 June 2011.  

When the unionised employees went on strike in May, things became difficult for the IT company. For now a much larger part of its employees were involved in the dispute. And the problems would only increase after 1 June, when the strike/lockout clause would terminate. Six days after the strike began, the IT company therefore notified the trade union that it considered itself released from the collective agreement because of the strike.  

But the trade union disagreed, and the IT company brought the dispute before the Labour Court. There it argued that the trade union should acknowledge that the IT company was no longer bound by the collective agreement.

The trade union, on the other hand, submitted that a lockout involving only 16% of the unionised employees was neither intensive nor extensive enough to qualify under the collective agreement as a dispute which could release the IT company from the collective agreement. In addition, it argued that the strike/lockout clause made it near impossible to take industrial action which was intensive and extensive enough to qualify as a dispute which could release either party from the collective agreement.  

Release not impossible

In its decision, the Labour Court noted that there was no indication that when the strike/lockout clause was agreed, the parties had intended to make it impossible to take industrial action for the purpose of being released from the collective agreement. The Court further noted that the lockout had been going on for 14 weeks and the employees had begun a strike before the IT company notified the trade union that it considered the collective agreement to have terminated.

On those grounds, the Labour Court ruled in favour of the IT company, holding that the dispute had been sufficiently extensive and intensive for the IT company to be released from the collective agreement.  

Norrbom Vinding notes:

  • that the decision confirms that industrial action initiated for the purpose of being released from a collective agreement may be sufficiently extensive and intensive in scope even if it does not involve a majority of the unionised employees, at least if it is not possible to involve a large part of the employees in the industrial action.