collective bargaining, crisis, European Union, industrial relations, IR, social dialogue, wage-setting mechanisms, représentativité des partenaires sociaux européens interprofessionnels, les partenaires patronaux,European social dialogue, European Union, social dialogue, industrial relations, IR, European industrial relations, social policy, Val Duchesse, employers, trade unions, collective bargaining union, European works councils, European framework agreements, European company statute, représentativité, partenaires sociaux européens interprofessionnels, syndicats

1. Eurofound – European Foundation for the Improvement of Living and
Working Conditions
www.eurofound.europa.eu
Industrial relations and wage-setting under
pressure
Academy on National Tripartite Social Dialogue
Turin - 19 September 2014
Christian Welz

2. 1. Overview
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. Crisis vs. megatrends
6. Conclusions / discussion
Table of content

3. • Karl Marx
 1867, Capital, vol. 1
 chapter 6: The Buying and Selling of Labour-Power
• “labour-power can appear upon the market as a commodity,
only if, its possessor, the individual whose labour-power it is,
offers it for sale, or sells it, as a commodity
prologue

4. • “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)
• Clayton Anti-Trust Act 1914 (section 6)
• 'that the labor of a human being is not a commodity or article
of commerce'.
 Samuel Gompers – leader of the American Federation of Labour for
20 years was inspired by Dr. Ingram
prologue

5. • Treaty of Versailles (article 427)
 first principle of the new ILO pro- claimed ‘ that labour should not
be regarded merely as a commodity or article of commerce
 introduced by British delegation
 Gompers > personal defeat
• ILO DECLARATION OF PHILADELPHIA (10 May 1944)
 labour is not a commodity
prologue

6. 1. Overview
• reorganisation of
• public IR
actors
• social
partners
• developments in
density rates
• abolishment of old
actors
• emergence of new
actors
• government
unilateralism
• new balance of
power
• changes
• CB levels
• wage setting
mechanisms
• opening
clauses
• extensions
• indexation
• expiry of CA
• minimum pay
• industrial action
• dispute resolution
• no. and length of
agreements
• inconclusive
outcomes
• pay provisions
• working time
• work organisation
ACTORS OUTCOMESPROCESSES

7. 2. actors
Impact Countries
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, 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)
Source: EIRO national reports 2013.
ACTORS - SUMMARY

8. 2. actors
Impact Countries
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
Source: EIRO national reports 2013.
ACTORS - SUMMARY

9. 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
M
T
DK SE FI GR CY
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 28 50
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 0
0
10
20
30
40
50
60
70
80
% of workforce 2011 2012

10. Employer density _ 2012 v 2013
EIRO 2013/14
LT PL EE HR SK LV UK CZ BG EU DK IT FR FI BE LU SI SE NL AT
2011 15 20 25 28 33 34 35 41 42 54 58 58 60 70 76 80 80 87 90 100
2012 15 20 25 28 30 41 35 48.6 0 56 58 0 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

11. 3. processes
PROCESSES -
SUMMARY
Type of change Countries
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

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
IE
LT
RO
SI
Trends in main levels of CB
Source: Eurofound 2014
BE
PT

14. • changes in EL, ES, PT
• continental Western, central Eastern and Nordic IR regimes have applied the ‘favourability’
principle to govern the relationship between different levels of CB
 CAs concluded at lower levels can only improve 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 as 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 and/or cross-sector CAs provide scope
for further negotiation on aspects of wages at company level
whereas opt-out clauses permit derogation under certain
conditions from the wage standards specified in the sector and/or
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 in: 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 from 2011 introduces tougher criteria for trade TU representativeness
 where unions do not meet the new criteria at company level, employers 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 Countries
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
OUTCOMES –
SUMMARY

20. Statutory minimum wage and indexation
EIRO 2014
AT BE BG CY CZ DE DK EE EL ES FI FR HR HU IE IT LT LU LV MT NL PL PT RO SE SI SK UK
m-wage

change
indexat.

change
existing
 no
change
existing
 no
change

21. 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

22. 2008 2009 2010 2011 2012 2013
sector CA
200
164 166 115 46 46
company
CA
95 87 64 55 39 48
total CA 295 251 230 170 85 94
extension 137 102 116 17 12 9
coverage /
in 1000 pers.
1,894 1,397 1,407 1,236 327 242
No. of newly concluded CAs in PT

23. 5. 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
Source: EIRO 2013

24. • 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
6. Conclusions

25. • 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
6. Conclusions

26. • influence of Country Specific Recommendations (CSRs) under the
European semester is variable
 12 MS have been issued with CSRs on wage setting or wage policy
 in some of the 12 MS changes seem consistent with the respective CSR
 in others, changes fall somewhat short of the respective CSR
 in yet other countries, CSRs would seem to have had no discernible
effect
6. Conclusions

27. • amongst the programme MS the broader effect of multiple,
government-imposed changes has been to reconfigure WSMs
by weakening or removing key state support for MEB
 favourability principle
 extension procedures
 continuation of agreements beyond expiry
• capacity of MEB to comprehensively regulate wages has been
weakened
•
6. Conclusions

28. • EU’s new economic governance regime seems primarily to be
aimed at ‘marketising’ collective wage setting
 involves WSMs becoming more sensitive to the market circumstances of
companies through (further) decentralisation
• CSRs have mostly been targeted at countries with MEB rather
than SEB bargaining regimes
6. Conclusions

29. • EU Member States with the tripartite systems
 more scope for a joint response to the crisis
• IR systems of Nordic and Central countries contain more
potential flexibility in terms of the actors and the processes
 enabling them to adapt more readily to changes
 more solid linkages between IR levels and overall less adversarial IR
 may well have contributed to their resilience during the crisis
• IR systems of Mediterranean MS have changed them most
• “East Europenisation of IR”
6. Conclusions

30. • Clayton Anti-Trust Act 1914 (section 6)
• 'that the labor of a human being is not a commodity or article
of commerce'.
• wage setting in the crisis and the new economic governance
 towards a re-commodification of labour ?
epilogue

31. •  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
•
epilogue and discussion

32. • ECJ
• “ social policy objectives pursued by CAs would be seriously
undermined if management and labour were subject to
Article 85(1) “
• 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.
epilogue and discussion

33. thank you !
for further information:
http://www.eurofound.europa.eu/eiro/studies/tn1301019s/index.htm
http://www.eurofound.europa.eu/eiro/
http://www.eurofound.europa.eu/areas/industrialrelations/dictionary/
christian.welz@eurofound.europa.eu