industrial relations in Europe, labour relations, employment relations, social dialogue, trade, unions, crisis, cross-sector, employers, european company, european framework agreements, european works council, industrial action, industrial action, industrial relations, law, minimum wage, sectoral social dialogue, social dialogue, trade unions, wages, working time, bargaining in the shadow of the law, collective agreements, European commission, EU law, EU treaties, decentralization of collective bargaining, single employer bargaining, multi-employer bargaining, extension of collective agreements, favourability principle, opt-out, opening clause, erga omnes, commodity, ILO, dispute settlement, varieties of capitalism, coordinated market economy, liberal market economy, bi-partite, tri-partite, Val Duchesse, macro-economic dialogue, tri-partite social summit, social dialogue committee, working time, labor productivity, labor cost, trade union density, collective bargaining coverage, pay, autonomous agreements, telework, parental leave, BUSINESSEUROPE, ETUC, CEEP, UEAPME, mega trends, information and consultation, open method of coordination, mutual learning,

1. Certificate of Achievement Course in
Industrial and Employment Relations
Varieties of Industrial Relations (IR) in the
European Union
Turin, ITCILO, 22 February 2016
Christian Welz
christian.welz@eurofound.europa.eu

2. Outline
A. Varieties of national IR regimes
B. Impact of the crisis on IR regimes
C. Discussion

3. A. Varieties of national IR regimes

4. Definition of industrial relations
industrial relations (IR)
“the focal point of the field (…) is the employee-employer
relationship.” (US Social Science Research Council 1928)
 “(…) the consecrated euphemism for the permanent conflict, now
acute, now subdued, between capital and labour.”(Miliband,1969,
80, cited by Blyton/Turnbull, 2004, 9)
 “The central concern of IR is the collective regulation
(governance) of work and employment.” (Sisson 2010)

5. environment
political
legal
economic
societal
actors
employers
trade unions
governments
processes
collective
bargaining
participation
industrial
action
settlement of
disputes
outcomes
collective
agreements
labour
legislation
outputs > impacts > inputs
pay, WT, productivity,
employment, job security,
labour peace…
inputs outputs
System of Industrial Relations

6. Industrial relations regimes
• Liberal market vs. coordinated market economies
 Peter Hall and David A. Soskice, 2001,
Varieties of Capitalism: the institutional foundations
of comparative advantage,
Oxford University Press.

7. Liberal Market Economies
• UK
– corporate governance: outsider shareholder dominated;
performance represented by current earnings and share prices
– employee relations: short term, market relations between employee
and employer; top management has unilateral control of the firm
– industrial relations: employer organisations and unions relatively
weak; decentralised wage setting; insecure employment (“hire and
fire”; fluid labour markets)
– vocational training / education: vocational education offered on
market; labour force has high general skills
– inter-firm relations: market relations, competition; use of formal
contracting and subcontracting relationships.

8. Coordinated Market economies
• DE
– corporate governance: long-term bank-dominated insider systems;
cross-directorships; cross-shareholding;
– employee relations: long term, formalised participation of
employees; consensus decision-making with management
– industrial relations: trade unions and employers organised;
industry-wide collective bargaining and pay determination;
employment relatively secure
– vocational training: elaborate industry-based training schemes;
labour force has high industry-specific and firm-specific skills
– inter-firm relations: development of collaborative networks;
cooperation among firms in diffusing technologies

9. Industrial relations regimes
• 5 geographical clusters
 Visser, Jelle, 2008, in: EC, Industrial Relations in Europe Report, Brussels,
DG EMP.

11. IR regime
Centre–West
social
partnership
North
nordic
corporatism
West
liberal
pluralism
South
polarised
pluralism
Centre–
East
transition
economies
MS Austria
Belgium
Germany
Netherlands
Luxembourg
Slovenia
Denmark
Finland
Sweden
Cyprus
Malta
Ireland
United
Kingdom
Greece
Italy
France
Portugal
Spain
Bulgaria
Czech
Republic
Estonia
Latvia
Lithuania
Hungary

12. 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

13. 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

18. Statutory minimum wage

19. Monthly minimum wage _ 2011 v 2016
EIRO 2013/14
BG RO LV EE LT HU CZ PL SK HR PT EL ES SI MT EU CY DE IE FR BE NL UK LU
2011 128 158 285 290 232 338 310 345 327 385 485 585 641 748 685 661 855 146114251415144610901757
2016 214 276 287 430 350 353 360 430 405 407 530 580 655 763 792 805 870 1460146414661501152417291922
0
500
1000
1500
2000
2500
EUR 2011 2016

20. 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

21. 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

22. Coordinating the Network of EU Agencies 2015
Different concepts
of representativeness
different concepts examples
mutual recognition UK, Ireland
capacity to negotiate Germany, Austria
industrial democracy (elections) France, Luxemburg
organisational strength (membership) Poland, Romania

23. Coordinating the Network of EU Agencies 2015
ILO

24. Coordinating the Network of EU Agencies 2015
Thresholds:
elections (p=peak/s=sectoral/c=companty)
Country Trade Unions votes in %
peak sector company
Spain 10% national working delegates
15 % regional working delegates
10% national working delegates
15% regional working delegates
France 8% 8% 10%
Italy 5% / 51% > ext. of CAs
Luxembourg 20% 50%

25. Coordinating the Network of EU Agencies 2015
Thresholds: membership

26. Cross-sector social partners in the EU
• 108 trade unions
• 134 employers associations

27. Coordinating the Network of EU Agencies 2015
Cross-sector social partners in the EUEIRO 2014
1 1 2 3 3 2 3 3 3 2 2 3 3 4 5
3 3 3 4 4 4 4
7 6 7 6 5
12
2 3
3 2 2 4 3 3 3 5 5 4 4 3 2 5 5 5 4 5 5 6
4 6 5 7
14
15
0
5
10
15
20
25
30
LV
IE
AT
CY
SK
CZ
LT
MT
NL
BG
EE
PL
PT
GR
HR
DE
FI
LU
UK
BE
DK
SE
SI
FR
ES
HU
RO
IT
TU EO

28. cross - industry
Employers
- BUSINESSEUROPE
- European Centre of Employers and Enterprises
providing Public Services (CEEP)
- European Association of Craft, Small and Medium-Sized
Enterprises (UEAPME)
Trade Unions
- European Trade Union Confederation (ETUC)
- CEC-European Managers
- EUROCADRES (Council of European Professional and
Managerial Staff)

29. B. Impact of the crisis on IR
regimes

30. 1. Actors u n d e r p r e s s u r e
2. Processes u n d e r p r e s s u r e
3. Outcomes u n d e r p r e s s u r e
4. Conclusions
5. Epiloque and discussion

31. 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)

32. 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

33. 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

34. Trade Union density rates 2013 in %

35. Employer density rates 2013
Eurofound 2015
Membership of employers’ organisations participating in collective bargaining
(%)

36. Collective bargaining coverage
2002 - 2013

37. 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

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

39. • 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

40. 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

41. • 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

42. 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

43.  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

44. 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

45. 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

46. 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

47. • 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
Conclusions

48. • 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
Conclusions

49. C. Discussion

50. • “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)
Discussion > labour = commodity?

51. • 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 Ingram
Discussion

52. • Treaty of Versailles (1919: 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
Discussion

53. •  towards a re-commodification of labour ?
• Labour is not a commodity > clause is not in the EU 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
•
Discussion

54. • 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.
Discussion

55. 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 crisis-induced trend
Reforms in wage-setting mechanisms crisis-induced trend
More adversarial industrial relations crisis-induced trend
Discussion: crisis vs. megatrends

56. • http://www.eurofound.europa.eu
• christian.welz@eurofound.europa.eu
• European industrial relations dictionary
Further information

57. thank you!