industrial relations, collective bargaining, crisis, state

1. Eurofound – European Foundation for the Improvement of Living and
Working Conditions
www.eurofound.europa.eu
Key Influences on Bargaining Approaches:
is state support for the work-wage bargain
vanishing?
Resolve Symposium
Cork - 19 November 2014
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. Epiloque 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 )
• Clayton Anti-Trust Act (section 6)
• 'that the labor of a human being is a commodity or article
of commerce'.
 Samuel Gompers – leader of the American Federation of Labour for
20 years was inspired by Dr. Ingram
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
Prologue

5. 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. 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. 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

8. 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

9. 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 49 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

10. TU developments in 2013
• membership
• organisational change
increase DK (1), FR (1), LU, MT, NL, RO(1)
decrease AT, BE, CZ, DE, DK (2), EL, ES, HR, IE, IT, LV, MT, NL, RO(2), SI, SK, UK
stable BE, BG, DE, DK (3), FI, FR(2), IE, IT(1), NO, PL, SE
no data EL, FR(3), HU, IE(2), LT, MT, NO, PT, RO(3)
merger BE, FR, HU, UK
fragmentation NL
other EL, FR, IE, IT, LU, NL, RO, SI, UK

11. Employers developments in 2013
• membership
• organisational change
merger FR, LT
fragmentation NL
other EL, FR, HU, IE, IT, LU, NL, RO, SI
increase EL, LV, MT(1), NO
decrease AT, LU, MT (2), RO(1), SI, SK
stable BE, BG, CY, CZ, DE, DK, EE, FI, HR, IE, MT (3),IT, SI, UK
no data ES, FR, HU, LT, MT, NL, MT (4), NO, PL, RO(2), SE

12. Collective bargaining coverage _ 2011 v 2012
EIRO/ETUI 2013/14
LT LV HU PL BG EE CZ SK UK RO IE DE CY LU EU HR DE MT GR DK ES IT NL PT SE FR FI SI BE AT
2011 15 17 23 25 33 33 34 35 37 38 44 49 52 54 56 60 61 61 65 65 68 80 84 90 90 90 90 96 96 100
2012 15 16 23 29 29 33 33 35 29 38 44 36 0 59 51 60 53 61 0 65 58 80 80 12 88 92 93 75 96 97
0
20
40
60
80
100
120
% of workforce 2011 2012

13. 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

14. Average hourly labour costs (2012)
EIRO 2014
BG RO LV LT PL HU SK EE CZ PT GR SI CY EU UK ES IT IE DE AT FI NL SE FR LU BE DK
2012 3 4.4 5.3 5.8 7.4 7.5 8.3 8.4 11 12 15 15 18 20 20 21 28 29 30 31 31 32 33 34 35 37 38
0
5
10
15
20
25
30
35
40
45
EUR

15. Monthly minimum wage _ 2011 v 2012
EIRO 2013/14
BG RO LV LT CZ EE SK HU HR PL PT GR EU ES MT SI CY UK FR BE IE NL LU
2011 128 158 285 232 310 290 327 338 385 345 485 585 661 641 685 748 855 109014251415146114461757
2012 145 157 287 290 312 320 337 372 372 393 485 683 712 753 763 763 870 126414301443146114851874
0
200
400
600
800
1000
1200
1400
1600
1800
2000
EUR 2011 2012

16. Real labour productivty (2012)
EIRO 2014
EE SI LV LT PL CZ MT CY EU IT BE AT FI DE SE FR NL IE
2012 1.7 2.4 8.2 10.3 10.4 13.2 14.5 21.5 27 32.2 37.2 39.5 39.5 42.6 44.9 45.4 45.6 50.4
0
10
20
30
40
50
60
EUR per h worked

17. Number of working days lost _ 2013
EIRO 2014
BG CZ HU LT LU LV MT PL RO SK HR NO AT SE IE FI DE BE DK UK CY ES
2013 0 0 0 0 0 0 0 0 0 0 2 3 3 9 15 26 150 174 379 444 605 1099
0
200
400
600
800
1000
1200
in 1000 days

18. 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

19. 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

20. • 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

21. 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

22. • 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

23. 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

24.  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

25. 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

26. 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 CAs in PT

27. • 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

28. • 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

29. • ILO DECLARATION OF PHILADELP
 labour is not a commodity
• wage setting in the crisis and the new economic
governance …..
•  towards a re-commodification of labour
Epilogue and discussion

30. • Labour is not a commodity
> clause not in the EU Treaties
• Albany case (1996)
Albany used the competition rules in article
101(1) TFEU) claiming that mandatory pension
scheme compromised their competitiveness
Epilogue and discussion

31. • CJEU
• “ 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 ,
Epilogue and discussion

32. 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

33. • http://www.eurofound.europa.eu
• christian.welz@eurofound.europa.eu
Further information