European industrial relations, national industrial relations, industrial relations, crisis, social dialogue, social partners, wage-setting, collective bargaining, employers, trade unions, extension of collective agreements, opt-out, opening clause, commodity, ILO, ECJ, EC, TFEU, competition, anti-trust law, Albany case

1. Eurofound – European Foundation for the Improvement of Living and
Working Conditions
www.eurofound.europa.eu
Impact of the crisis on
industrial relations and wage-setting mechanisms in
the EU
University of Paderborn
Business Law and European Business Law, Masters and PhD Class
Dublin - 20 May 2015
Christian Welz

2. 1. Prologue
2. Actors u n d e r p r e s s u r e
3. Processes u n d e r p r e s s u r e
4. Outcomes u n d e r p r e s s u r e
5. Conclusions
6. Epilogue and discussion
Table of content

3. • “By viewing labour as a commodity, we at once get rid of the
moral basis on which the relation of employer and employed
should stand, and make the so-called law of the market the
sole regulator of that relation.”
• (Dr John Kells Ingram, address to the British TUC in Dublin 1880)
1. Prologue

4. • Treaty of Versailles (article 427)
first principle of the new ILO pro- claimed ‘ that
labour should not be regarded as a commodity
or article of commerce
introduced by British delegation
 Gompers > personal defeat
• ILO DECLARATION OF PHILADELP
 labour is a commodity
1. Prologue

5. 2. Actors
Impact Member State
successful tripartite negotiation (8-10) BE, BG, CZ, EE, FR, LT, LV, NL, PL, PT
breakdown of tripartite negotiations (10---) BE(2011/12), ES, FI, GR, HR, HU, IE, IT,
LU, PL(2011/12), SI
reorganisation of public actors and bodies ES, GR, HR, HU, IE, LU, RO
decline in trade union density CY, BG, DK, EE, IE, LT, LV, SE, SI, SK, UK
halt in trade union density decline/increase in
trade union density
AT, CZ, DE, EE (for transport), LT
changes to membership of employer bodies CY (increase), DE (increase in members not
bound by CA), LT (first decline then
increase)

6. 2. Actors
Impact MS
decreasing influence and visibility BE, DK, EE, HU, IE, LV, NL
increased cooperation between the social
partners
DE, HU, LT, NL
emergence of new social movements ES, GR, PT, SI
increase government unilateralism BE, BG, EE, ES, GR, HR, IE, PL, PT,
SI
new power balance among actors BG, EE, ES, GR, LT, LV, PT

7. Trade union density _ 2011 v 2012
EIRO/ETUI 2013
FR LT PL EE HU LV CZ SK ES NL DE PT BG UK SI EU IE AT HR RO LU IT BE MT DK SE FI
2011 8 10 12 11 11 12 16 16 15 21 22 20 18 26 27 31 34 34 35 40 37 36 52 59 67 70 68
2012 8 9 10 11 11 12 14 15 16 17 18 20 22 26 27 29 31 33 35 35 37 37 50 57 67 70 74
0
10
20
30
40
50
60
70
80
% of workforce 2011 2012

8. Employer density _ 2012 v 2013
EIRO 2013/14
LT PL EE HR SK LV UK CZ BG EU DK IT IE FR FI BE LU SI SE NL AT
2011 15 20 25 28 33 34 35 41 42 54 58 58 60 60 70 76 80 80 87 90 100
2012 15 20 25 28 30 41 35 49 0 56 58 0 60 75 71 80 80 80 86 85 100
0
20
40
60
80
100
120
% of employees in companies members of an EO
2011 2012

9. 3. Processes
PROCESSES -
SUMMARY
Type of change MS
Main level(s) of bargaining:
Decentralisation AT BG CY EL ES FR IE IT RO SI
Recentralisation BE FI
Horizontal coordination across bargaining
units
AT ES HU IE RO SE SK
Linkages between levels of bargaining
Ordering between levels EL ES PT
Opening and opt-out clauses AT BG CY DE EL ES FI FR IE IT NO PT
SE SI
Extending bargaining competence EL FR HU PT RO
Reach and continuity of bargaining
Extension procedures EL IE SK PT RO
Increased / changed use of existing
procedures
BG DE IT
Continuation beyond expiry EE EL ES HR PT
Minimum wage setting and indexation

10. Trade Unions
Intersectoral
level
Government
Employers
Intersectoral level
Sectoral level Sectoral level
Company level
Levels of CB - wages
Company level
Belgium
Finland
Austria
Denmark1
France1
Germany
Greece
Ireland1
Italy
Luxembourg1
Netherlands
Portugal1
Spain1
Sweden1
Denmark2
France2
Ireland2
Luxembourg2
Portugal2
Spain2
Sweden2
UK

11. Trade Unions
Intersectoral
level
Government
Employers
Intersectoral level
Sectoral level Sectoral level
Company level
Levels of CB - wages
Company level
Slovenia 1
Bulagaria1
Cyprus 1
Slovakia 1
Slovenia 2
Bulgaria2
Croatia
Cyprus 2
Czech Rep.
Estonia
Hungary
Latvia
Lithuania
Malta
Poland
Romania
Slovakia 2

12. 2008 2011
Austria MEB MEB
Belgium MEB MEB
Bulgaria Mixed Mixed
Croatia MEB MEB
Cyprus Mixed Mixed
Czech Republic SEB SEB
Denmark MEB MEB
Estonia SEB SEB
Finland MEB MEB
France MEB MEB
Germany MEB MEB
Greece MEB MEB
Hungary SEB SEB
Ireland MEB SEB
Italy MEB MEB
Latvia SEB SEB
Lithuania SEB SEB
Luxembourg MEB MEB
Malta SEB SEB
Netherlands MEB MEB
Norway MEB MEB
Poland SEB SEB
Portugal MEB MEB
Romania MEB SEB
Slovakia Mixed Mixed
Slovenia MEB MEB
Spain MEB MEB
Sweden MEB MEB
United Kingdom SEB SEB

13. Company level
Sector level
National level
AT
CY
EL
IT
BG
ES
FR
FI
LT
RO SI
IE
Trends in main levels of CB
BE
PT

14. • continental Western, central Eastern and Nordic IR regimes apply the
favourability’ principle to govern the relationship between different levels of CB
 CAs at lower levels can only on standards established by higher levels
 exceptions: IE and the UK > reflecting their different legal tradition based on voluntarism
• FR
 FR made changes already in 2004 (loi Fillon)
• ES
 2011 law inverted the principle as between sector or provincial agreements and company
agreements
EL
 2011 law inverts the principle between the sector and company levels for the duration of
the financial assistance until at least 2015
• PT
 2012 Labour Code inverts the principle, but allows EOs and TUs to negotiate a clause in
higher-level CA reverting to the favourability principle
Ordering / favourability principle

15. opening clauses in sector/cross-sector CAs provide scope for
further negotiation on aspects of wages at company level
opt-out clauses permit derogation under certain conditions from
the wage standards specified in the sector/cross-sector CA
changes in opening clauses  6 MS
AT, DE, FI, IT, PT, SE
changes in opt-out clauses  8 MS
BG, CY, EL, ES, FR, IE, IT, SI
•
Changes in opening/opt-out clauses

16. • changes: EL, FR, HU, PT and RO
• EL
 under 2011 legislation, CAs can be concluded in companies with
fewer than 50 employees with unspecified ‘associations of persons’
 these must represent at least 60% of the employees concerned
• RO
 legislation (2011) introduces harder criteria for trade TU
representativeness
 where TUs do not meet the new criteria at company level, EOs can
now negotiate CAs with unspecified elected employee reps
Extension of CB competence

17. Extension mechanisms
of the 28 MS
> 23 MS have extension mechanisms or a functional
equivalent (IT)
 no legal procedure for extending collective agreements in
CY, DK, MT SE and UK
changes to either extension procedures or in their use
in 8 MS
BG, DE, EL, IE, PT, RO, SK, IT

18.  clauses providing for agreements to continue to have
effect beyond the date of expiry until a new agreement
is concluded are intended to protect workers should
employers refuse to negotiate a renewal
 they are found in a 9 MS at least
 AT, DK, EE, EL, ES, HR, PT, SE, SK
 changes have been made to such provisions in 5 MS
 EE, EL, ES, HR, PT
Continuation of CAs beyond expiry

19. 4. Outcomes
Impact MS
inconclusive outcomes BG, CY, CZ ES, MT, NL
decrease in number of agreements CY, CZ, EE, LV, MT, PT, RO, SI
increase in duration of agreements AT, DE
decrease in duration of agreements BG, CY, DK, GR, LV, ES, SE
decrease in the level of pay increases AT, ES, FI, NL
pay cuts or freezes AT, BE, BG, DE, DK, ES, FI, GR,
HU, IE, IT, LT, LU, LV, NL, PL, PT,
SI, SK, UK
working time reduction/short-time working AT, BE, BG, DE, FR, HU, IT, LT,
NL, PL, SI, SK
non-renewal of agreements BG, CY, EE, ES

20. No. of CAs
EIRO 2014
AT BE BG CY CZ DE DK EE EL1 EL2 ES FR IT LT LU LV MT NL PL PT RO SE SK UK

21. 2008 2009 2010 2011 2012 2013 2014
sector CA
194
164 166 115 46 46 72
company
CA
97 87 64 55 39 49 80
total CA 291 251 230 170 85 95 152
extension 137 102 116 17 12 9 +/_15
coverage /
in 1000
pers.
1,895 1,397 1,407 1,237 328 243 246
No. of CAs in PT

22. • change has been concentrated amongst 6 MS, whose WSMs
have each undergone multiple changes
 CY, EL, ES, IE, PT, RO
 been in receipt of financial assistance packages from the ‘troika’
 changes in WSMs were required in all except ES
• in a further 4 MS there have been some changes to WSMs
 HR, HU, IT and SI
 change primarily driven by domestic actors > governments or SP
• in a majority of 18 MS WSMs have seen few or no changes
since 2008
5. Conclusions

23. • impact of the ‘troika’ in inducing changes to WSMs
amongst those countries receiving financial
assistance packages is clear
• government-imposed measures in these countries
have substantially reconfigured WSMs
• impact of the new European Economic
governance  less clear
5. Conclusions

24. • ILO DECLARATION OF PHILADELP
 labour is not a commodity
• wage setting in the crisis and the new economic
governance …..
• towards a marketisation of wages (Marginson)
•  towards a re-commodification of labour ???
6. Epilogue and discussion

25. •  towards a re-commodification of labour ?
• Labour is not a commodity > clause not in the Treaties
• yet  Albany case (1996)
• Albany used the competition rules in Article 81(1) EC (now
Article 101(1) TFEU) claiming that mandatory pension
scheme compromised their competitiveness
•
6. Epilogue and discussion

26. • ECJ
• “ social policy objectives pursued by CAs would be seriously
undermined if management and labour were subject to
Article 81(1) EC (now 101(1) TFEU) “
• Advocate General Jacobs
• “ CAs enjoy automatic immunity from antitrust scrutiny”
• Art. 153 (5) TFEU
• The provisions of this Article shall not apply to pay, the right of
association, the right to strike or the right to impose lock-outs.
6. Epilogue and discussion

27. Crisis vs. megatrends
Trend Origin
Restructuring of actors Megatrend
Decline in trade union density Megatrend
Public Sector Reform Megatrend
Decentralisation of collective bargaining Megatrend (crisis
accelerated)
Increase in opt-out clauses Crisis-induced trend
Increase in opening clauses Crisis-induced trend
Decrease of extensions Crisis-induced trend
Shorter duration of collective agreements Crisis-induced trend
Drop in volume of bargaining Crisis-induced trend
Drop in quality of bargaining Crisis-induced trend
Shorter continuation of CAs upon expiry Crisis-induced trend
Reforms in wage-setting mechanisms Crisis-induced trend
More adversarial industrial relations Crisis-induced trend

28. Trade Union density rates 2013 in %

29. Further information
www.eurofound.europa.eu
christian.welz@eurofound.europa.eu
slideshare  Welz_
European industrial relations dictionary