However, the government plays only a minor role as most labour market regulations are based on agreements reached by collective bargaining between unions and employers federations.
The labour market constitution is thus primarily regulation-based rather than law-based. The system ensures that industrial relations are highly organised and that major disputes and strikes in the labour market are very rare. A two-week strike in certain areas of the labour market in 1998 was the first serious conflict in the Danish labour market for 13 years .
The flexibility of the Danish labour market can also be attributed to the fact that the system provides for negotiations at multiple levels. While the principal labour market guidelines are established at senior level, negotiations at industrial level enable adjustments to be carried out in line with industrial conditions. In addition, negotiations at company level provide room for creation of a work environment, which meets the needs of the individual company.
1.2 Economic Background.
Before the discovery of oil and natural gas in the Danish sector of the North Sea in the 1970s, Denmark had almost no major natural resources apart from farmland. As a result, industrial development occurred later than in most other European countries.
During the 1960s industrial development accelerated, and production industry became the primary export sector.
Manufacturing remains a key factor in the Danish economy, but in recent yaers the service sector has become increasingly important and currently employs more than half the workforce. The Danish economy is based on private ownership, except for public utilities. In part because of its extensive social welfare system, Denmark has a relatively large public sector. However in recent years the government has begun to privatize some state-owned enterprises, such as telecommunications and airports.
