ESRC Regulation Seminar

1. JOINT REGULATIONAND LABOUR
MARKET POLICY IN EUROPE DURING
THE CRISIS: A SEVEN-COUNTRY
ANALYSIS
A. Koukiadaki, I. Tavora and M. Martinez-Lucio
ESRC seminar series: Regulation of Work and Employment
Newcastle, 5 June 2015

2. The issues
• Transmission of the economic crisis to the labour market via the
adoption of policies of ‘internal devaluation’ (Armingeon and
Baccaro 2012)
• Process of labour market reforms: transfer of policy-making
processes from national to international actors (Dahan 2012,
Meardi 2012)
• Reforms centred on employment protection legislation and
national systems of collective bargaining (Deakin and Koukiadaki
2013)
• Debate around the implications of the reforms for the systems of
collective bargaining emerging but also the future of EU social
policy (e.g. Marginson, 2014; Meardi 2012)

3. Research focus
• What are the implications of the reforms for collective
bargaining arrangements at cross-industry, sectoral and
company level?
• What are the government and social partner strategies and
approaches towards the reforms in collective bargaining?
• What is the extent and nature of changes in management
policy and practice and trade union approach at sectoral
and company level concerning the process and character
(conflictual or consensual) of bargaining?
• What are the implications of the reforms for the content and
outcome of collective bargaining at sectoral and company
level, especially on wages and working time?

4. Research methodology
• 7-country comparative study: Greece, Ireland, Italy, Portugal,
Romania, Slovenia and Spain
• Focus on the manufacturing sector: characterised by
enduring institutions and good practices of multi-level
bargaining but also important for the production systems of the
countries in question
• Collection and analysis of primary and secondary data on
the social partners’ approach and strategies to the labour
market reforms and conduct of company case studies
• One common sub-sector across all countries (metal) plus
additional ones (e.g. chemicals, food and drinks, textiles)

5. Bargaining systems pre-crisis and the
emergence of the crisis
• EU Member States: IR systems in crisis (e.g. Italy, Greece,
Portugal) vs systems in growth/stability (e.g. Ireland, Slovenia and
Romania)
• Most multi-level bargaining systems but differences in the degree of
articulation/coordination (cf. Italy and Slovenia with Greece, Spain
and Portugal) and the degree of voluntarism (cf. Italy and Ireland
with Greece and Spain)
• Crisis as having a shock effect (Ireland, Romania and Slovenia),
accelerating effect (Italy, Greece, Spain, Portugal) and/or
revealing effect (Italy, Greece, Spain, Portugal) (Gazier, 2012)
• Absence of social dialogue (e.g. Romania, Slovenia, Greece),
absence of due regard to outcomes of social dialogue (e.g. Greece
and Spain), substantial involvement (e.g. Portugal, Italy)

6. The role of supranational institutions
• Financial assistance programmes:
• Non-eurozone programmes: Romania
• Eurozone programmes:
• Bilateral agreements between Member States complemented by IMF stand-
by arrangements: Greece I
• European Financial Stabilisation Mechanism (EFSM) based on Article
122(2) TFEU: Ireland and Portugal
• European Financial Stability Facility (company under the control of the
Eurozone Member States): Ireland, Portugal and Greece II
• European Stability Mechanism (ESM) (inter-governmental mechanism):
financial sector in Spain
• New set of rules on the EU economic governance regime:
European Semester affecting all EU Member States (i.e. Italy
and Slovenia)
• Promotion of ‘internal devaluation’ policies to restore national
competitiveness, targeting wage determination and collective
bargaining institutions

7. Labour market reforms in 7 countries
Country/
topic
Wage-
determination
& national CB
Company-
level
derogations/
favourability
Changes
in
extension
rules
Agreements’
duration/
after-effect
Other
representation
channels
EPL
Greece X X X X X X
Ireland X X X X
Italy X X
Portugal X X X X X X
Romania X X X X X
Slovenia X X
Spain X X X X X

8. The impact of the austerity measures on
bargaining structure (1)
• Decentralisation trends but differences between
disorganised forms of decentralisation vs organised forms
of decentralisation
• Greece, Ireland and Romania: process of disorganised
decentralisation
• Portugal, Spain and Slovenia: elements of both organised and
disorganised decentralisation
• Italy: process of organised decentralisation
• Differences in the character of collective bargaining: in
most cases, antagonistic at higher levels but cooperative
at company level (with exceptions, e.g. Greece)

9. The impact of the austerity measures on
bargaining structure (2)
• Three types of collective bargaining systems in light of the
reforms (see also Marginson, 2014):
1. Systems in collapse: Greece and Romania
2. Systems in corrosion: Ireland, Spain, Portugal, Slovenia
3. Systems in continuity: Italy
• Key factors explaining the different state of the systems
1. Extent of labour market measures (cf. Greece and Portugal with
Slovenia and Italy)
2. Pre-existing strength of the bargaining systems (i.e. in terms of
articulation/coordination) (e.g. cf. Italy and Slovenia with Greece
and Spain)
3. Scope for social dialogue in the process for the adoption of the
reforms or in coordinating attempts to contain unilaterally
imposed reforms (e.g. Greece and Romania with Italy and
Portugal)

10. The impact of the austerity measures on wage
determination
Decentralization
Reduced
coverage
Negative impact
on workers not
covered
Suspension of
favourability principle,
opt-outs and derogations
Negative impact
on wages even for
covered workers
Weakened bargaining
position of unions
Negative impact on
wages even for
covered workers
Cuts/freezes to the
NMW
Negative impact on
wages of the most
vulnerable

11. The impact of the austerity measures
on working time
• Short time working schemes : Greece, Portugal, Ireland and Romania
• Increasing use of part-time workers: Greece
• Cut to overtime pay: major strategy in Portugal; also observed in Greece
along with reducing the use of overtime
• Time banks: used by some Slovenian employers; major response in
manufacturing in Portugal
• Working time flexibility was introduced via sector agreements: Italy,
Portugal and Slovenia
• Still informal arrangements widespread in Portugal and Slovenia
• Even though working time decreased in most countries, management
flexibility to raise them increased, particularly in Spain
• Lower employee control and predictability of working hours, with
negative consequences for work-life balance

12. Growing divisions in the workforce
• Pay differences between existing and new workers (Greece
and Ireland)
• Age inequalities enabled by national policies, namely in
Greece where NMW is much lower for younger workers
• Temporary agency workers not covered by CB in Slovenia,
so they are paid below the sector standard
• Gender pay inequalities in Portugal due to a NMW freeze
and blockages in bargaining in sectors with high female
labour market participation
• Increasing numbers of workers not covered by collective
bargaining and in non-standard arrangements

13. The approach of employers and unions
• Employers:
• Fast in taking up the new options under the reforms to reduce labour standards and
undermine the nature and form of the labour movement (e.g. Greece, Romania, Spain
and Ireland); cf. evidence of some legacy of social dialogue in Portugal, Slovenia and
Italy
• Signs of an emerging demand for the preservation of sector level bargaining and its
remit (e.g. Greece, Italy, Portugal and Spain) for reasons including burden on smaller
firms and politisation of labour relations
• Trade unions:
• Difficult position balancing the defence of their core representatives and the structures
of joint regulation on the one hand and the need to create some kind of bridgehead for
the more excluded workforce outside of those structures
• Adoption of a more realistic strategy within the trade union movements, especially those
from a social democratic and centrist heritage: objective of maintaining agreements
even if not applicable to all workers and including significant wage cuts
• The state:
• Withdrawal of support by the state in certain areas (e.g. extension of collective
agreements) but greater intervention in other areas (e.g. setting of minimum wage
levels). Questions over resources in terms of labour enforcement

14. Concluding remarks
• Shift of regulatory space from joint regulation between the
industrial relations actors to state and employer unilateralism
• Question over the cognitive resources/capabilities of the
actors for responding to the growing decentralisation of
bargaining and re-politicisation of employment relations at
company level
• Wider implications: collective bargaining reduction,
dualisation of labour market, increase of informal economy,
juridification of bargaining and introduction of new actors
(e.g. consultancy firms, lawyers, non-independent employee
representation structures) with uncertain outcomes
• How will political developments, e.g. rise of leftist parties in
Southern Europe, will affect regulation and policy at
domestic but also European levels?

15. The need for re-orientating
the policy objectives
• Move away from ‘regulated austerity’ under the current
EU institutional arrangements
• Development of better links between wage and
productivity growth and fairness, whilst sustaining
domestic demand is essential
• Promotion of a European ‘solidaristic’ wage policy and
equitable wage developments based on strong bargaining
institutions (Deakin and Koukiadaki, 2013; Schulten and
Muller, 2014)
• Role of multi-employer bargaining in acting as ‘beneficial
constraint’ (Streeck, 1997, Marginson, 2014) minimising
the externalities of market and policy-driven adjustments

16. The need for re-orienting
the decision-making processes
• Establishment of more rigorous impact assessments,
especially in the context of macroeconomic adjustment
programmes and bail-outs
• Involvement of a wider set of EU actors and institutions in
the design, implementation and monitoring of assistance
programmes and other forms of supranational intervention
(e.g. through Council-Specific Recommendations) in
national social policy issues
• Promotion of participation of all key actors and social
partners at national level and greater attention to the
social dimension and capacities of the social partners

17. Thank your for your attention!
• For further details see:
https://research.mbs.ac.uk/european-
employment/Ourresearch/Currentprojects/Socialdialogued
uringtheeconomiccrisis.aspx