The deal, termed a “working environment agreement” (arbejdsmiljøaftale), specifies social dumping as a major area of focus.

“This is an agreement of historic level. I am happy that everyone is part of it,” employment minister Ane Halsboe-Jørgensen said following the conclusion of negotiations on Thursday.

Social dumping is the practice by which foreign workers are used to circumvent Danish collective bargaining agreements, saving employers money by hiring staff on wages and working conditions inferior to those set by the Danish labour model.

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Some 673 million kroner of the total 1.3 billion are earmarked for prevention of social dumping.

“This is an anti social dumping effort that acts against labour crime and cheating the system. So that people who actually play by the rules get fair competition,” Halsboe-Jørgensen said.

Other elements of the spending will aim to address industrial accidents and mental health at workplaces.

“Work should not make you sick. Neither physically or mentally.  That’s why we’re also proud that we’re tackling psychological working environments,” Socialist People’s Party (SF) representative Astrid Carøe said.

The money provided by the deal will be spent over a four-year period from 2024 until 2027.

The signatory parties describe it as a “historically large grant” to the agency Arbejdstilsynet, which is responsible for ensuring acceptable working environments.

Increased inspection frequencies, introduced in a prior 2019 agreement, continue under the new deal.