AGREEMENTS ON FEES AND WAGES

In principle, the fixing of labour wages in Danish construction companies is based on the supply and demand situation on the labour market. This means no upper limit to the wages, whereas the minimum level is negotiated by the parties' organisations. The wages for blue collar workers are either based on an hourly payment or on a contract rate (piece rate /"lump sum"). The wages are fixed as a result of a partly central negotiation process between the employer and employee organisations and a partly local agreement directly between the construction company and the site workers (typically organised in gangs). The local agreement is determined in relation to specifications for the particular operation to be undertaken (see also Bonke & Gøtz 1982). Thus the employer and employee organisations set the framework within which the local negotiations on wages can be conducted. This payment by performance system combines the minimum hourly rate with a catalogue of prices listed for each operation. A contract rate agreement could be considered an important tool for control and motivation, giving the construction worker an incentive to plan his own work and performance in order to maximise his payments. In this way a substantial part of the responsibility for an effective work planning is in fact transferred from the management level to the operation level. On the other hand payment by the piece-agreements are not applicable to all types of operations. Especially some types of renovation works are characterised by high degree of technical uncertainty, which makes it impossible to fix unit prices for each type of operation. In such cases wages are determined on a pure hourly basis. Prior to the beginning of a particular piece of work the payment is agreed between the employer and the leader of the gang. As indicated the price book forms the basis for this negotiation but the agreement also includes specific conditions under which the work is done as well as the general supply and demand situation on regional labour market. Traditionally the relationship between the employer and his employees has been quite loose allowing labour to migrate between different companies. This gives the possibility to the worker of changing company if better salaries are offered typically in periods of shortage in supply of labour. On the other hand the employer quite easily can lay off the work-force in times of low activity.