Industrial Relations in Europe 2010

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ISSN 1680-3515

European Commission Directorate-General for Employment, Social Affairs and Inclusion Unit B1

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Luxembourg: Publications Office of the European Union, 2011

ISBN 978-92-79-17861-0 doi:10.2767/1416

Printed in Luxembourg

Pr i n t e d o n e l e m e n t a l c h l o r i n e -f r e e b l e a c h e d p a p e r (e c f ) Foreword by the Commissioner

The turmoil The distribution of the full cost unions are worrying. In countries that hit finan- of the crisis and the current eco- like Romania, Bulgaria and my own cial markets nomic outlook continue however to country Hungary, limitations in insti- and the econ- raise serious concerns among social tutional capacity translate into limita- omy in 2008 partners. Public debt has risen and tions in the industrial relations system. led to the fiscal consolidation programmes are The EU helps by supporting capacity deepest reces- underway throughout the EU. In building of social partners through sion in the some countries they carry the risk the European Social Fund or through history of the of undermining recovery. Social dia- co-financing of transnational projects. European Union, bringing unprec- logue and collective wage bargaining But I call on Member States and social edented challenges. Employment have been especially challenging in partners to step up their efforts fur- rates across Europe suffered greatly, countries under pressure from finan- ther and reinforce support for social but the involvement of employers, cial markets. Yet it is precisely in this dialogue and collective bargaining. trade unions and governments in difficult climate that social dialogue negotiations and consultation has can play its fullest role. This year’s At European level, social dialogue helped to minimise job losses and we report shows that in countries where continues to deliver tangible results have weathered the crisis better than social partnership is strongest - like and improvements to European work- feared. This report shows how the Austria, Belgium, the Netherlands ers and companies. The report con- social partners have helped workers and Poland - they are managing to firms that collective bargaining is and companies adapt to the dramatic get through challenging times. The very much present in the EU with two economic situation over the past two participation of their employers and thirds of workers in Europe covered years. Strong social dialogue has led workers in shaping concrete policy by collective agreements. Although to effective responses like, for exam- responses to the crisis is one of their there is still room for improvement, ple, the introduction or extension important recovery tools. This is why concrete results have been achieved of short-time working schemes in I believe we need to emerge from with EU cross-industry social dia- Germany or the Netherlands and other this crisis with more, not less social logue leading to a number of consul- countries and across various sectors. dialogue. tations, joint actions and successful It has also seen genuine progress on negotiations. All of this shows that issues like the transition to the low- At the same time, the dynamics of both cross-industry and sectoral social carbon economy with social partners social dialogue are very uneven across dialogue have an important contribu- in countries like Spain and Belgium Member States. In many of the Mem- tion to make to the EU’s Europe 2020 contributing to proposals for invest- ber States that joined in 2004 and strategy, helping to put our economy ment in green technologies and skills 2007 for example, the weaknesses of firmly on the path to smart, sustain- to their national recovery plans. employers’ organisations and trade able and inclusive growth.

March 2011

László Andor Commissioner for Employment, Social Affairs and Inclusion

Contents

Foreword by the Commissioner...... 3 Executive summary...... 7 Chapter 1: Variations and trends in European industrial relations in the 21st century’s first decade...... 17 1.1. Introduction...... 17 1.2. Trade unions...... 18 1.3. Employers’ associations...... 29 1.4. Collective bargaining...... 34 1.5. Employee representation in the enterprise...... 42 1.6. Industrial conflict...... 46 1.7. State and government intervention...... 48 1.8. Conclusion...... 50 Chapter 2: The crisis: challenges and social partner perspectives...... 55 2.1. Introduction...... 55 2.2. Economic and employment dimensions of the crisis...... 55 2.3. Perspectives of the social partners on public policy responses to the crisis...... 66 2.4. Conclusion...... 79 Chapter 3: Negotiating the crisis: social partner responses...... 85 3.1. Introduction...... 85 3.2. Cross-sector level...... 86 3.3. Sector and company levels...... 97 3.4. Conclusion...... 116 Chapter 4: Wage flexibilisation and the minimum wage...... 127 4.1. Introduction...... 127 4.2. The level of collective wage bargaining: a trend towards decentralisation?...... 129 4.3. Variable pay systems...... 134 4.4. The minimum wage...... 139 4.5. Conclusions...... 143 Chapter 5: Industrial relations and the transition to a low-carbon economy...... 149 5.1. Introduction ...... 149 5.2. Policies for a low-carbon economy and their employment consequences...... 149 5.3. The roles of social partners in labour market governance — the analytical framework...... 152 5.4. Social partners’ activities related to the transition to a low-carbon economy at national level...... 153 5.5. European social partners’ activities related to the transition to a low-carbon economy...... 161 5.6. Conclusions...... 168 Chapter 6: European social dialogue developments 2008–10...... 173 6.1. Introduction...... 173 6.2. The crisis and European social dialogue...... 174 6.3. Other themes in European social dialogue...... 184 6.4. Conclusion...... 197 Chapter 7: Review of European legislation 2008–10...... 205 7.1. Introduction...... 205 7.2. Labour law...... 206 7.3. Health and safety of workers...... 214 7.4. Equality rights in employment...... 218 7.5. Conclusion: future perspectives...... 219

Executive summary

The Industrial Relations in Europe 2010 report reviews determining whether compromise and agreement between trends and developments in the collective relationships social partners was possible. Consequently the degree of between workers, employers and their respective represent- consensus or disagreement varied widely between countries atives over the past two years. It is the sixth such report by and between economic sectors, with conflicts emerging in a the European Commission and builds on the 2008 edition. number of Member States. Lately these disagreements have As the period under review coincided with the onset and centred on the necessity and extent of austerity measures spread of the worst economic crisis in recent history, this to reduce public deficits, the reform of social security and report looks closely at the way industrial relations systems pension systems and future wage policy. While a general across the European Union coped with the crisis, affected consensus has emerged on the need for long-term reforms its course and influenced outcomes. and forward-looking responses to the crisis, the disagreements on specific policy measures may stem from a more The report illustrates that the economic crisis presented fundamental divergence of views between the two sides of industrial relations actors and institutions across the Euro- industry about the root causes of the crisis. pean Union with unprecedented challenges. On the whole, industrial relations in Europe have been shown to be robust Nonetheless the social partners have often been influential in under strain and have been vital in mitigating the effects of bringing new ideas to the attention of policymakers at all lev- the recession, although not to the same extent in all coun- els, as they are the interlocutors who know best the world of tries. Trade unions and employers’ organisations were recog- work. Throughout the crisis and despite a fair share of con- nised as being major interlocutors for several governments flict, they have forged a remarkable degree of coordination seeking to respond to the crisis. Together with monetary and and solidarity across Europe, largely resisting the temptation fiscal stimulus policies, negotiation and consultation involv- to call for protectionist national responses. This has also dis- ing the social partners have played a significant role in limit- tinguished this recession from similar events in the past. At ing negative social consequences. However, the importance European level, several agreements concluded by the social of this has varied considerably across the Member States. partners make a real difference for all workers in the Euro- pean Union, addressing issues such as parental leave, health The recession produced its most severe initial impact in and safety at work or inclusive labour markets. countries that were most vulnerable to the financial origins of the crisis, leading to early tensions between social part- In addition, social partners at both national and European ners there. As the crisis spread and affected more Mem- level are paying increasing attention to the transition to a ber States in 2008 and early 2009, a consensus developed low-carbon economy and they have contributed concrete between social partners in many countries on the need for proposals for investment in green technologies and skills to rapid action to preserve employment and to stimulate the the recovery plans of several Member States. In the long run, economy. This went hand in hand with a better coordinated social dialogue will be crucial for a well-managed and socially response to the crisis at European level. Social dialogue led just transition to a low-carbon economy. This will also have to innovative responses in many Member States and sec- a positive impact on the awareness of the need for increasing tors, such as the introduction or extension of short-time specific research and innovation addressing these challenges. working schemes. The success of these measures is evident: Besides contributing to climate change related policy- the overall rise in unemployment has been less severe than making, social partners are introducing a green dimension had been feared relative to the dramatic drop in economic into their dialogue, in particular at company level. They con- activity. Many companies across the European Union har- tribute directly to the transition through awareness-raising, nessed the benefits of social dialogue and accompanying labels or research, albeit to different degrees depending on government measures, which enabled them to absorb the the quality of industrial relations in the Member States. shock of the recession through internal flexibility, such as reducing the hours worked, rather than being forced to use As this report indicates, the recession has important conse- external flexibility and having to dismiss workers. quences for the role of the state and public policies in society and the economy. The economic crisis heightens the pressure The picture is not uniform across the European Union, to modernise public services, which is accentuated by the however. Some Member States were particularly hard hit need to consolidate public finances and reduce deficits. The and experienced massive increases in unemployment, while success of policy measures in the public sector will therefore in others there was hardly a recession at all. Variations in be crucial to Europe’s ability to exit the crisis permanently. the traditional role and strength of different countries’ Important choices need to be made by governments and social dialogue institutions were also an important factor in social partners in the process of modernisation and structural

7 Industrial Relations in Europe 2010

change in public services. For this reason, the next edition of The final two chapters of the report provide an overview of the Industrial Relations in Europe report will look in more developments at European level. Chapter 6 outlines the activ- detail at industrial relations in the public sector. ities of the European social dialogue committees, many of which are actively addressing the consequences of the crisis. For the foreseeable future, the social partners have a vital It reports on the many instruments that are used in the Euro- role to play in the implementation of the Europe 2020 strat- pean social dialogue, from binding agreements to guidelines, egy for smart, sustainable and inclusive growth. Europe which help to make real improvements in the daily lives of needs to make full use of the problem-solving potential of the vast majority of workers and companies in the European social dialogue at all levels if it is to realise its objectives. Union. Finally, Chapter 7 details employment-related legisla- The crisis has shown that the European industrial relations tive developments in the EU, focusing on labour law, health system, in all its diversity and at all levels (company, sec- and safety legislation and equality rights in employment. tor, cross-industry, national, European), is crucial to the success and stability of the European social model and will continue to be of importance as the European Union exits Chapter 1: Variations and Trends in European the crisis and enters a renewed period of growth. industrial relations in the 21st century’s first decade Structure of the report Earlier trends towards declining union density, decentralisation of collective bargaining and greater employee par- The report comprises seven chapters. Chapter 1 gives an ticipation continued, and the company level has become overview of the main characteristics of industrial relations more prominent. Continuity can be seen in the high levels institutions. It reports on the organisation of workers and of employer organisation, bargaining coverage, and a slightly employers, collective bargaining, industrial action and state less pronounced role for government in industrial relations. involvement in industrial relations, reviewing variations and trends since the turn of the century. The picture of industrial relations systems in the EU is one of diversity. The organisation of the social partners, collective bar- The second and third chapters analyse social dialogue gaining over pay and primary working conditions, and indus- developments in the face of the economic crisis. Chapter 2 trial action remain varied. Only where there is scope for EU sets the scene by outlining the main economic parameters intervention — as on employee representation within the enter- of the recession and the policy debates amongst social prise — is some tendency towards convergence apparent. partners in the Member States and at EU level. It examines the views of social partners on the crisis and their differ- The power and presence of trade unions is determined by var- ing analysis of its nature and exit strategies, showing where ious factors. The level of membership is an important determi- consensus developed and where disagreement predominant of trade union power, while the structure of membership nated. Chapter 3 presents the concrete actions agreed on by influences the extent to which unions can legitimately claim social partners to address the challenges identified in the to be representative of workers or even of those currently out- previous chapter, their innovations in procedure and the side the labour market. Other factors are the support to trade outcome. In some cases, persistent blockage and conflict unions given by the legal framework; unity and cooperation rather than consensus were the order of the day. The analy- inside and outside the union movement; the relationship with sis focuses both on the cross-industry dimension and on other actors; leadership, internal organisation and member- sectoral and company-level developments. ship participation; a coherent value system; and the standing of the unions and their leaders in the eyes of the public. Chapter 4 covers wage bargaining and minimum wages in the Member States, with a particular focus on the continu- Trade unions at European level demonstrate a high degree ing decentralisation of collective bargaining and the increas- of unity. The European Trade Union Confederation (ETUC) ing use of wage flexibility in the form of variable payment brings together 64 national confederations. The ETUC is systems. Chapter 5 explores the effect that the transition to represented in each country of the EU-27 and its market a low-carbon economy will have on industrial relations sys- share at the European level is close to 88 %. tems and the extent to which the topic already features on the social partners’ agenda. The chapter also shows how social Overall, trade union membership continued to decline but partners themselves contribute to the necessary greening of there are large variations between countries. The proportion the economy and the corresponding restructuring. of union members among all workers across today’s EU-27

8 Executive summary

fell from 27.8 % in 2000 to 23.4 % in 2008, with unions losing such as national and transnational mergers of firms, a greater nearly 3 million members. This is the result of lower and emphasis on company as opposed to sector bargaining, and declining unionisation rates among young people, and the pressure for greater effectiveness in European and global difficulty of recruiting and retaining members in the services representation. sector, in small firms, and among those with flexible and fixed- term employment contracts. Consequently, unions are ageing The role, coverage and effectiveness of collective bargaining and increasingly reliant on the public sector. Announced job differs widely across EU Member States. A large two thirds losses in the public sector are therefore a threat to the unions, majority of European employees are covered by collective as this is where they have the highest membership numbers in agreements, but decentralisation of actual pay setting has nearly all countries. Within this general trend, there are still continued and sector agreements are increasingly being huge differences across countries. In 2008, union density var- amended by company-level agreements and arrangements. ied from 68.8 % in Sweden to 7.6 % in Estonia. Trade unions in Lithuania, Estonia, Slovakia, the Czech Republic and Poland As indicated in the Industrial Relations in Europe 2008 have experienced the largest decline in membership since 2000 report, it is the rate of employer organisation rather than in percentage terms, while union membership has increased the rate of unionisation that determines collective bar- in Spain, Cyprus, Greece, Belgium and Italy. However, only gaining coverage. High bargaining coverage occurs under in Belgium has there been no decrease in the share of union multi-employer bargaining, and requires the existence of members among all workers. organisations of employers with a mandate to negotiate agreements with the representatives of employees. For employers’ associations, discipline and cohesion rather than membership are the key issues. National confedera- Statutory employee representation at company level is a key tions of employers in the EU outnumber national union feature of European industrial relations systems. Legal pro- confederations. At the sector level employers’ associations visions are based on Directive 2002/14/EC on information tend to be more differentiated and numerous than the and consultation. Some convergence towards a broader trade unions. Collective bargaining is often no longer their range of rights is apparent, yet there is concern that cross- main role. Services and lobbying have become much more border mergers and increased financial risk-taking have prominent. The organisational centralisation of employ- made works councils and other employee representation ers is lower than union centralisation in all Member States bodies less powerful than they once were. as a result of both the lower authority and the greater fragmentation of employers’ organisations. The state is involved in industrial relations in various ways. The state can influence decisions regarding wages, hours and Three organisations represent employers at the European working conditions. Government intervention is associated level. Businesseurope is the general organisation for businesses with statutory minimum wages, the extension of collective in all sectors of the privately owned economy. The European agreements and the negotiation of pacts with social partners. Association of Craft, Small and Medium-sized Enterprises Direct government intervention tends to be a substitute for (UEAPME) represents small and medium-sized businesses coordination by the social partners themselves. in Europe. The European Centre of Enterprises with Public Participation and of Enterprises of General Economic Interest (CEEP, Centre européen des entreprises publiques) represents Chapter 2: The crisis: challenges and social enterprises and organisations with public participation or partner perspectives carrying out activities of general economic interest. The economic crisis was an unprecedented challenge for At the sectoral level, there is even more diversity among European industrial relations systems. The economic and European employers’ organisations. However, only a minor- financial crisis presented industrial relations actors and insti- ity of these are employers’ organisations in the strict sense. tutions across the EU with formidable challenges. In central Such organisations are mainly found in those sectors where and south-eastern Europe, the worst crisis since the transition a sectoral social dialogue has developed (see Chapter 6). to a market economy two decades ago proved a hard test for the industrial relations institutions established since then. The density of employers’ organisations is more than double that of trade unions, but while the level of employer While the magnitude and timing of the recession dif- organisation in the EU appears stable and high, employers’ fered between Member States, EU GDP declined by over associations are challenged by changes in their environment, 5 % between the first half of 2008 and the first six months

9 Industrial Relations in Europe 2010

of 2009. Growth only resumed at the beginning of 2010. There were important sectoral differences in the impact of the The severity of the crisis varied between countries, ranging recession. The industrial sector was the hardest hit, although from a GDP decline of 15 % in the Baltic states to small a reduction in hours worked offset some of the decline in growth in Poland. The onset of the recession and the timing activity, so that the fall in manufacturing employment was of renewed growth also differed between Member States. considerably smaller than the decline in output. During the worst of the crisis, public services contributed to sustaining In most countries, private consumption declined less than economic activity but budgetary austerity measures are likely GDP, so that purchasing power was an important factor in to put a halt to this role for the public sector. sustaining economic activity. The trend in consumption reflected wage developments up to the end of 2009, with Social partners agreed at the outset on the need for pub- real wage growth of 1.4 % in the EU in 2009. Contrary to lic stimulus measures, albeit with differences in emphasis. this trend, wages declined, sometimes steeply, in the Baltic Employers’ organisations gave priority to ensuring access states, Ireland, Greece and Hungary, and they essentially to credit for companies, measures to reduce labour costs stagnated in Germany, France, Sweden and the UK. and reductions in taxation. Trade unions urged a larger fiscal stimulus, and measures to sustain purchasing power Growth in nominal labour costs in the EU was lower in 2009 and to boost public investment. than in 2008, but was 1.5 times above growth in nominal wages. Productivity fell by 2.5 % in 2009 across the EU, and unit labour The degree of consensus and conflict between the social costs rose by 3.0 % in real terms in 2009. The crisis had a dra- partners has differed widely between the Member States. In matic effect on the public finances of Member States. 12 countries, consensus was dominant. Amongst these are EU-15 Member States with robust social dialogue institutions. Across the EU, public deficits grew from 2.3% of GDP In others, policy consensus has also dominated at least partly, in 2008 to 6.8 % in 2009; in 11 Member States, deficits where tripartite structures have been mobilised and/or joint increased by over 5 % of GDP. platforms forged between the social partners. In 11 countries, disagreements prevailed. Neither the severity of the crisis nor In general, the employment consequences of the crisis in the the differences in industrial relations systems can explain the EU have not been as severe as might have been expected. dominance of consensus or conflict. These include Member Employment dropped by 2.5 % across the EU between States with comparatively weak social dialogue institutions, the second quarters of 2008 and 2010, less than half of the but also countries with traditionally more robust industrial decline in GDP. Unemployment increased to a record 9.6 % relations systems. In terms of institutional effects, the lines of in each of the first three quarters of 2010. To a significant similarity and difference between countries therefore reach extent, the recession has been tackled through the internal across the distinction between ‘old’ and ‘new’ Member States. flexibility of companies, by a decline in hours worked rather than through redundancies. Short-time working schemes and other collectively agreed adjustments to working time Chapter 3: Negotiating the crisis: played a considerable part in this outcome (see Chapter 3). social partner responses

The magnitude and timing of the employment decline have Through the processes of social dialogue, employers and varied between countries, with the Baltic states, Ireland and trade unions have played a prominent role in countering the Spain being particularly hard hit, with a fall in employment impact of the crisis. There is, however, considerable variation which mirrored or exceeded the drop in GDP. Workers across countries and sectors. It appears that differences in the employed on temporary contracts have been more exposed to economic situation have influenced the pattern of negotiated job loss than those on open-ended or permanent contracts. responses more at sectoral levels than between countries. The influence of industrial relations institutions is significant The different outcomes in economic and employment as are public policy and the extent to which social partners developments are due to two main factors. Economies are involved in it. In a majority of Member States, the cross- underwent different types of recessions, either originating industry social partners attempted to reach agreement on in the construction and real estate sector, causing immedi- measures to address the crisis. Explicit attempts to negotiate ate job losses, or caused by a collapse in business confidence bipartite or tripartite national agreements aimed at addressing and trade, affecting primarily manufacturing. Reactions of the crisis were made in 16 Member States. While some focused social partners and public authorities to the crisis differed principally on employment issues such as short-time work and and may explain the outcomes (see Chapter 3). wage moderation, others dealt with a wider range of measures.

10 Executive summary

The magnitude of the crisis in the Member States did not Particular strategic choices of the social partners account determine whether attempts at negotiation were success- for much of the cross-country variation observed. This is ful but public policy has played an important role. Exist- apparent in the instances of those new Member States where ing social protection systems and active inclusion policies agreements had not previously been concluded and in those provided a baseline of support during the crisis on which EU-15 countries where agreements have not been concluded social partner solutions could be built. In addition to the even though institutional capacity to do so exists. evident role of governments in the conclusion of tripartite agreements, they have frequently played an important role The pattern of agreements at sector and company level in supporting bipartite ones. suggests that social partner strategies have been shaped by institutional arrangements for industrial relations as well Crisis response agreements at sectoral level were influ- as by public policy intervention in the form of statutory enced by traditional practices and company-level short-time work schemes. agreements were more widespread. Sector-level negotiations are confined to a group of countries with well- In several Member States, the crisis led for the first time to established multi-employer bargaining arrangements. social partner agreements at a cross-industry level. Insofar as They also occur mainly in manufacturing sectors, with the crisis has provoked negotiated or concerted responses, relatively little evidence of negotiations in the private where governments or employers might otherwise have service sectors. At company level, agreements address- acted alone, an issue is the sustainability of such agreements, ing the consequences of the crisis are spread across a particularly in several central and east European countries wider range of countries. where they were hitherto unknown. There is no indication at present that the parties envisage further negotiations or While real wages increased considerably in 2009, average agreements, but neither can the parties unlearn the process. earnings grew much more slowly. In most Member States At sector level, a striking feature is provisions which enhance the crisis depressed average agreed pay increases in 2009, competence for wage setting at company level. The crisis but rarely to a great extent. Declining inflation meant higher may thus prove to have further accelerated the long-running increases in real wages. But the effects were felt more deeply trend towards decentralisation. in actual earnings than in the basic pay rates set by collective agreements, owing to reduced working hours and/or cuts in elements of remuneration. Chapter 4: Wage flexibilisation and the minimum wage In the manufacturing sector, measures have been introduced both in specific sector agreements aimed at tack- Wage flexibility has been an important element of debate dur- ling the employment effects of the downturn and as part ing the economic crisis. The degree of wage flexibility depends of ‘regular’ agreements dealing with pay and conditions to a large extent on factors such as the level and coverage of col- of employment. The main theme was short-time work, lective bargaining, the power relations between trade unions but other innovative responses such as ‘employee leasing’ and employers, the use of performance-related pay systems were also observed. Many agreements related exclusively and the minimum wage. It refers to the extent to which wages or partly to short-time work. Others involved ‘conces- respond to market forces. This debate about wage flexibility sion bargaining’, with trade-offs between some form of took on extra importance during the economic crisis. employment guarantee in return for employee flexibility in terms of pay and conditions. The degree of centralisation of wage bargaining varies widely between Member States. In many countries, the Company-level agreements in the services sector focused recent trend towards decentralisation of wage-setting on concessions on pay and working conditions, while short- arrangements and towards company and single-employer time work featured relatively little. Agreements were mainly bargaining accelerated during the economic crisis. In gen- concentrated in the civil aviation and post and telecommu- eral, bargaining is more centralised in the public than in the nications sectors. Over a third of the agreements related to private sector. More centralised bargaining leads to more company cost-reduction programmes and provided for a equal wages and working conditions. In addition, the per- range of employee sacrifices without employment guaran- centage of employees covered by a collectively bargained tees in return. Half of the remaining agreements also pro- agreement in countries with more centralised bargaining is vided for pay cuts or freezes, but in return for guarantees in markedly higher than in the countries where company-level respect of employment. bargaining is dominant.

11 Industrial Relations in Europe 2010

Variable pay systems are increasingly used to provide also put in place its own domestic mix of policies. These additional elements of wage flexibility. More than half of efforts accelerated with the adoption of the European workers in the EU have some form of variable pay system climate change package in 2008. Europe 2020 confirms (VPS), facilitated by the decentralisation of wage bargain- these commitments and provides an integrated set of poli- ing. While employers are generally positive about VPS, cies to achieve smart, sustainable and inclusive growth. trade union attitudes differ. Some unions see it as a way to give workers a share in company performance, whereas Not only new green jobs but above all the greening of the others fear that it may create greater wage inequality and whole economy will involve structural change. It should undermine the principle of equal pay for equal work. have a small but slightly positive impact on the overall employment level, albeit with different effects across Low pay affects one out of every 10 workers in the EU and sectors, skill types and regions. Anticipation of future in general, low pay is a bigger problem in countries with skills needs, responsive lifelong learning systems and well- more decentralised bargaining structures and low collec- managed restructuring processes are important. tive bargaining coverage. The low-carbon economy has come onto the social dialogue In many countries, the statutory minimum wage has had agenda but remains marginal. Social partner involvement only a limited impact on the incidence of low pay. Twenty with the low-carbon economy differs from country to coun- Member States have a statutory minimum wage. While the try depending on the organisation of industrial relations and level differs widely between countries, the gap between the on the number of years that climate change has been of inter- central and eastern Member States and the EU-15 has nar- est to public authorities, the social partners and the public. rowed slightly in the past few years. Nevertheless, the seven countries with the highest incidence of low pay all have Social partners mostly act by influencing policymaking, includ- statutory minimum wages. In addition, in more than half ing their own policy proposals. Standard tripartite social dia- the countries, the minimum wage lost value compared to logue bodies rarely address low-carbon economy issues in a the average wage during the past decade. systematic manner. But, in many Member States, social partners participate in advisory bodies, such as sustainable develop- In those countries that do not have a statutory minimum ment councils, together with other stakeholders. Some address wage, the wage floor is set by collective bargaining. In most directly the employment consequences of a low-carbon future. of these countries, low pay is not a widespread problem. The main exception is Germany, where the incidence of low Collective bargaining rarely addresses issues related to the pay is above the EU average, although the government can low-carbon economy. But social dialogue at company level on make a collectively agreed minimum wage binding for an environment and energy matters seems to be slowly develop- entire sector, and such statutory minimum wages now exist ing. Some workers’ representatives have information, consul- in a number of sectors. tation and sometimes negotiation rights in this respect.

In addition, social partners contribute to the implementa- Chapter 5: Industrial relations and the tion of low-carbon policies and practices. In most Member transition to a low-carbon economy States, this direct contribution occurs through training and counselling, awareness-raising campaigns and research and Climate change represents one of the greatest threats facing innovation, often in cooperation with public authorities. the planet. More and more, the transition to a low-carbon economy has been recognised as a necessity that involves The transition to a low-carbon economy is being ‘main- social and economic opportunities and costs. streamed’ into social partners’ sphere of competence, notably restructuring and skills policies. The state is the main Social dialogue can help to create consensus for the tran- actor in the transition to a low-carbon economy and mobi- sition to a low-carbon economy and contribute to a well- lises regulatory, market and financial instruments. It is in managed and socially just transition. Social partners can the management of the employment implications where facilitate innovation and negotiate solutions for change social partners have direct competence. which are to the benefit of workers and businesses. At the EU level, there is clear commitment by social partners The European Union is committed to local and global to dialogue on the economic and employment implications action to control climate change. Each Member State has of the transition to a low-carbon economy.

12 Executive summary

European social partners influence policymaking and crisis and the measures needed to address it. A number of have started to explore the employment consequences and sectoral social dialogue committees agreed on joint state- related best practices. The European cross-industry social ments, including those for the chemical industry, construc- partners have expressed a keen interest in climate-change- tion, road transport, commerce, live performance, regional related policies and have recently taken a stance on their and local government, woodworking and furniture sectors. employment implications. The ETUC advocates a ‘just transition’ that is based on tripartite social dialogue, green Many European and national social partners at both cross- and decent jobs, investment, green skills, with an emphasis industry and sectoral level contributed to the public con- on anticipation and management of change, and extended sultation on the Europe 2020 strategy. In June 2010, the rights relating to the protection of health and of the envi- Cross-Industry Social Dialogue Committee adopted a joint ronment at work. BusinessEurope advocates more flexible contribution, which expressed their belief that a number labour markets accompanied by efficient public employ- of objectives will be crucial for successful economic recov- ment services, active labour market policies and training. ery: reform of the global financial system, restoring and Anticipation of future skills needs must be improved, and improving growth dynamics to create more and better science, technological, engineering and mathematical skills jobs, promoting skills and entrepreneurship, revitalising fostered. CEEP and UEAPME focus more on the areas of the single market, developing an integrated EU industrial energy (efficiency) and transport, and have also contrib- policy, supporting new means of financing for investment, uted to the debate on employment and skills in the low- and combating poverty and inequality, among others. They carbon economy. European social partners in six sectors identify social cohesion as a precondition for a dynamic — encompassing gas and electricity, wood, and the extrac- and sustainable economy. tive industries — have adopted joint opinions in order to draw attention to the specific concerns of their sectors. In the European social dialogue, work on the management of change took on special importance. The cross-industry European social partners have also started to study the con- social partners finalised a five-year project examining sequences of the transition to a low-carbon economy and their role in economic restructuring in the EU. The Social related best practices in their autonomous bipartite dia- Dialogue Committee for the Chemical Industry studied logue. The ETUC, Businesseurope, CEEP and UEAPME restructuring in the sector, while the Electricity Social Dia- have launched joint research on the employment dimension logue Committee published a toolkit for socially responsi- of climate-change-related policies and intend to develop ble restructuring. a common view on this topic in order to assess the role of social partners and to draw conclusions on the consequences The cross-industry European social partners signed an for employment and skills. European social partners in eight autonomous agreement on inclusive labour markets. The sectors (e.g. electricity) have launched similar activities. aim of the agreement, which will be implemented under the responsibility of national social partners within three Some transnational company agreements address envi- years, is to make full use of Europe’s labour force potential, ronmental protection and climate issues but as yet there improve job quality and increase employment rates in the are no instances of bipartite autonomous regulation at Euro face of demographic ageing. It covers persons who encoun- pean level. ter difficulties in entering, returning to or integrating into the labour market and those in employment who are at risk of losing their job. Chapter 6: European social dialogue developments 2008–10 Skills and training continue to be a core area of European social dialogue. European social dialogue committees in 16 The economic crisis was the dominant subject of discussion sectors were active in this area. In particular, in 2009 the in many European social dialogue committees. social partners in the personal services sector signed an autonomous agreement facilitating comparison of quali- The past two years were anything but ‘business as usual’ in fications and cross-border mobility. The agriculture and European social dialogue. Discussions about the crisis led hospitality sectoral social dialogue committees are working to a number of joint actions but also to disagreements. In on initiatives to enhance the transparency and compatibil- March 2009, the Cross-Industry Social Dialogue Commit- ity of skills and qualifications. Five sectoral social dialogue tee failed to agree on a joint declaration due to fundamen- committees have expressed interest in setting up European tal differences of opinion about the causes of the economic sector councils for jobs and skills.

13 Industrial Relations in Europe 2010

The European social partners have a key role to play in the The Commission took stock of more than 10 years of Euro- second phase of the flexicurity agenda. They are committed pean sectoral social dialogue. After more than a decade of to jointly monitoring the implementation of the flexicurity experience with European sectoral social dialogue, the Com- principles, evaluating the role and involvement of the social mission published a staff working document assessing the partners, and drawing joint conclusions. functioning of the sectoral social dialogue committees and proposing possible improvements. The Commission intends Health and safety remained an important area of activ- to encourage the European and national sectoral social part- ity for many European social dialogue committees. The ners to fully use their area of negotiation, reinforce their European social partners in the hospitals and healthcare administrative capacity and create synergies between sectors. sector successfully negotiated an agreement on protection Within this framework, the Commission also encourages the from sharp injuries, aiming to prevent injuries to work- integration of new players as well as better participation of ers caused by all types of sharp medical objects (including representatives from the new Member States. needle sticks). For this purpose an integrated approach to assessing and preventing risks, as well as to training and Three new European sectoral social dialogue commit- informing workers, is envisaged. The Personal Services tees were launched during 2010 at the joint request of the Social Dialogue Committee launched negotiations on a respective European social partners. The first meetings of framework agreement on the prevention of health risks in the committees in the metal, paper and education sectors the hairdressing sector. have taken place, while the European social dialogue for central (government) administrations may soon be formal- Mobility remained an important topic for the Cross- ised following a two-year test phase. Social partners in the Industry Social Dialogue Committee and for sectors with agro-food industry and sports sector are currently explor- a highly mobile workforce. The Cross-Industry Social ing the possibility of sectoral social dialogue committees. Dialogue Committee carried out joint work on the consequences of the Court of Justice of the European Union’s rulings in the Viking, Laval, Rüffert and Luxembourg cases Chapter 7: Review of European relating to economic freedoms and fundamental social legislation 2008–10 rights of workers. While they agreed on the identification of key issues, they expressed clear differences of opinion The adoption of a directive on temporary agency work and regarding the consequences of the rulings or the actions the recast European works councils directive were major ahead. Discussions on mobility were held in the Inland achievements. Waterways, Construction, Hospitals, Agriculture, Private Security and Temporary Agency Sectoral Committees. In the area of labour law, a number of important directives were adopted during the past two years. A major break- In the field of equality, the European cross-industry social through was achieved with the adoption of a new directive partners successfully negotiated a revised EU framework on temporary agency work, which provides for a signifi- agreement on parental leave. The revised framework agree- cant increase in the legal protection afforded to temporary ment was implemented as Directive 2010/18/EU, which workers while recognising the role of temporary agencies provides that each parent will be able to take off four months in promoting greater flexibility in the labour market and per child, with one month non-transferable between par- providing job opportunities. ents. The rights will apply to all workers regardless of their type of contract, and employees returning from parental Another success was the adoption of the recast European leave will have the right to request changes to their work works councils directive. The joint opinion of the EU social schedules for a set period of time. partners expressed during the co-decision process facilitated swift agreement on the final text. The new directive Five sectors signed guidelines on third-party violence. clarifies and strengthens the previous legislation from 1994 Following the signature of the cross-industry social part- in several respects, particularly regarding the information ner framework agreement on harassment and violence at and consultation rights of workers on transnational mat- work in 2007, the European social partners in the hos- ters. In the context of the economic crisis, this legislation pitals, regional and local government, commerce, private became particularly relevant. security and education sectors adopted multi-sectoral guidelines to tackle third-party violence and harassment In addition, the Commission is undertaking an evalua- related to work. tion of existing directives in order to review their effects,

14 Executive summary

notably Directive 98/59/EC on collective redundancies, and safety at work directives such as those dealing with Directive 2001/23/EC on transfers of undertakings and noise, construction and artificial optical radiation. Directive 2002/14/EC establishing a general framework relating to information and consultation of workers in Equality rights in employment are being monitored the EU. and strengthened. The Commission continues to place great emphasis on monitoring the correct transposition Three agreements between European social partners and application of directives in the field of equality. This were implemented by Council directives. The adoption includes Council Directives 2000/43/EC and 2000/78/EC, of Council Directive 2010/18/EU implementing the 2009 which prohibit discrimination based on race and ethnic framework agreement on parental leave concluded by the origin, religion or belief, disability, age and sexual orien- European social partners demonstrated the capacity of the tation in employment and occupation across the EU. In social partners — and the EU institutions — to build on the October 2008, the Commission presented a proposal to previous 1995 agreement, which was also implemented as a amend the current provisions of Directive 92/85/EEC on directive. The new legislation strengthens and further clari- maternity protection. The aim of this proposal is to pro- fies the rights of working parents to take leave. vide for better reconciliation of private, professional and family life and thus allow more women to enter or stay in Council Directive 2010/32/EU implemented the framework the employment market if they have children. In another agreement on the prevention of injuries from sharp instru- important development, the application of the principle ments in the hospital and healthcare sector, concluded by of the right to equal treatment between men and women the European social partners in the sector. The incorpora- will be strengthened for those working in a self-employed tion of this agreement into EU legislation constitutes a sig- capacity, through Council Directive 2010/41/EU. nificant contribution to creating the safest possible working environment in the sectors concerned. Major setbacks and difficulties were encountered in two fields: The failure of the amended working time directive Following a consultation of the European social partners and the interpretation and enforcement of the posting of in maritime transport by the Commission, they decided to workers directive. negotiate and subsequently agreed on the incorporation into EU legislation of a substantial number of provisions A major setback occurred when the Commission proposal contained in the 2006 ILO Maritime Labour Convention. to amend the working time directive (2003/88/EC) was The agreement was implemented by Directive 2009/13/EC, withdrawn, after the failure of the Council and Parliament which completes or amends existing EU provisions apply- to agree on a compromise. The proposal sought to identify ing to the working conditions of seafarers, including a solution to the difficulties in implementing Court of Jus- working time. tice (CJEU) rulings on the SIMAP and Jaeger cases, as well as to address stakeholders’ claims in regard to extension In line with the Commission’s better regulation agenda, of the reference period for averaging weekly working time work continued on the implementation of the EU strat- and the individual opt-out. The Commission responded to egy for health and safety at work 2007–12. In this area the failed conciliation by launching a review of the direc- the developments during the period aimed to ensure a tive including an extensive evaluation exercise and a first regulatory framework capable of continuously adapt- consultation of the European social partners. ing to change while respecting the principle that legislation should be coherent, simple and effective and Another source of difficulties was the interpretation and also meeting the objective of reducing the administra- enforcement of the posting of workers Directive (96/71/EC), tive burden on companies. An example of this was the including respect for collective social rights. In the wake adoption of a third list of indicative occupational limit of the CJEU rulings on Laval, Rüffert and Commission v values for chemical agents (Directive 2009/161/EU), Luxembourg, the Commission decided to step up its efforts which shows the determination of the Commission to keep to facilitate administrative cooperation among Member the EU health and safety at work acquis in line with the most States, and promote debate with stakeholders. With such recent scientific data available. Two ‘codification’ Direc- difficulties in mind, the Commission is reviewing the imple- tives 2009/104/EC on work equipment and 2009/148/EC mentation and interpretation of the legal framework on post- on asbestos stem from the better regulation agenda. Good ing of workers and has already launched (or commissioned) practice guides have been developed, aiming at facilitating several external studies of the legal aspects and economic and improving the practical application of certain health effects of the directive. These studies are still ongoing.

Chapter 1: Variations and trends in European industrial relations in the 21st century’s first decade

Trends in industrial relations institutions show a mix of continuity and diversity. thirdly, what the impact of the crisis on Rates of trade union density, decentralisation of collective bargaining, employers’ industrial relations might be. organisations and collective bargaining have remained relatively stable. National industrial relations regimes remain diverse — mainly between the EU-15 and the 12 The chapter starts with a portrait of the new Member States, but also within them in different country groupings. The effect of main collective actors in industrial rela- the crisis on industrial relations arrangements is not yet clear. tions: trade unions (Section 1.2) and employers’ associations (Section 1.3), This chapter is based on a draft by Jelle Visser of the Amsterdam Institute for Advanced respectively. For each, the main organi- Labour Studies (AIAS, University of Amsterdam) sational features and representation of members (individual workers and firms) will be highlighted. A key insti- 1.1. Introduction the contribution of trade unions and tution in the relation between unions employers. Today, at the end of the dec- (workers) and employers (firms) is the This chapter presents an overview of ade, the agenda is overwhelmed by the collective labour agreement. Section industrial relations in the European challenge of the economic crisis: rising 1.4 discusses main features and trends, Union (EU) during the 2000s. This was unemployment; increased competitive such as coverage, centralisation and the first decade in which economic and pressures in the private sector; finan- coordination, in collective bargain- monetary union (EMU) was in full cial problems in the public sector; and ing. As important for the management operation. In 2004 the biggest enlarge- finding a new path towards sustainable of change and the settling of conflict- ment in the history of the EU took growth, greater productivity, real wage ing interests are the structures and place, adding 10 Member States, fol- improvements and more jobs. The next practices of employee representation lowed in 2007 by two more, bringing the chapters report on the industrial rela- in the enterprise or workplace. This total to 27 Member States. The decade tions’ response to the crisis at different is addressed in Section 1.5, followed started with the EU’s ambitious Lisbon levels (EU, national, sector and com- in Section 1.6 by a description of the Agenda of 2000, it ended with the deep- pany). This chapter reports, firstly, on trends and variations in industrial con- est economic crisis since the 1930s. In the current state of industrial relations; flict. The role of the government is the 2009 the economy of the EU contracted secondly, on the main developments subject of Section 1.7. The chapter ends by 4 % and by early 2010 average unem- during the decade; and indicates, with a brief analysis of the likely effects ployment in the EU reached 10 % of the labour force. In 2010, under pressure Box 1.1: Data sources of rising public debts and government The main source used for this chapter is the ICTWSS — Institutional Characteristics of deficits incurred during the crisis, many Trade Unions, Wage Setting, State Intervention and Social Pacts — database, which con- countries are preparing austerity meas- tains data on some 100 variables from 1960 to 2009 in 34 countries. The database was ures that include pay cuts or freezes and developed by Jelle Visser and can be consulted at the website of the Amsterdam Insti- tute for Advanced Labour Studies AIAS (http://www.uva-aias.net/). An updated version significant job loss in the public sector. (ICTWSS, version 3.0) is now available (Visser, 2010). Integrated in the database is information from national surveys, the European Social Survey (http://www.europeansocialsur- In short, the beginning and end of vey.org), administrative data obtained from the unions and from the European Industrial this first decade present different sets Relations Observatory (EIRO) of the European Foundation for the Improvement of Living of conditions, expectations and chal- and Working Conditions, in particular the EIRO country profiles (http://www.eurofound. lenges. In the early 2000s the three key europa.eu/eiro/). Also used for this chapter are the two reports on trade union membership in 1993–2003 and 2003–08 (…/eiro/2004/03/update/tn0403105u.htm; eiro/studies/ issues were the design of national and tn0904019s/tn0904019s.htm), written for the Foundation by Mark Carley, as well as his sector wage policies adapting to a cen- recent report on ‘Development in social partnership — employer organisations’ (…/eiro/ tralised European monetary policy; the studies/tn0910049s/tn0910049s.htm). Another invaluable source on employer organisa- promotion of labour market participation in Europe is the 2004 study by Franz Traxler and Martin Behrens, also for the Foun- tion and social inclusion; and the polit- dation (…/eiro/2003/11/study/tn0311101s.htm). The data on employee representation are ical, social and economic integration of from the ICTWSS database and from the 2009 European Company Survey, released by the European Foundation in March 2010 (http://www.eurofound.europa.eu/surveys/com- the new Member States, especially the panysurvey/2009/index.htm). The data on industrial conflict are from the ILO’s Laborsta post-Communist countries of central database, combined with Carley’s report for the Foundation on ‘Developments in indus- and eastern Europe (CEE countries). trial action 2005–2009’ (…/eiro/studies/TN1004049S/TN1004049S.htm). The employ- Earlier reports on industrial relations ment data in the ICTWSS database are from the OECD’s Labour Force Statistics (‘Wage in Europe, especially in 2006 and 2008, and salary earners in employment’) and, for non-OECD members, from Eurostat and the Commission’s annual Employment in Europe reports. have reported on these issues and on

17 Industrial Relations in Europe 2010

of the crisis on industrial relations. As developments at EU and national level to 23 % in France; and the number far as possible, the chapter presents will be indicated. of affiliated unions in the main or recent data and developments, usually largest union confederation varies relating to 2008 or 2009. The year 2000 from eight in Germany to more than or, to avoid outliers, an average for 1.2.1. Union confederations a hundred in Poland. There is not a 1997–99, is taken as the benchmark for and divisions in national particular north–south or east–west comparison with recent years. union movements gradient in these variations. In view of the varied pattern of union organisation it is hard to dis- 1.2.1.1. General and specialised 1.2. Trade unions cern any general EU model of trade confederations unionism. Across Member States, The power and presence of trade the number of confederations or Table 1.1 highlights the main divi- unions is determined by various fac- peak associations of trade unions sions. A first distinction can be made tors. The level of membership, in abso- varies from one to nine; the mem- between ‘general’ confederations, lute terms and relative to employment, bership share of the largest confed- which organise throughout the econ- is an important but not the only deter- eration varies from 100 % in Austria omy in all sectors of the economy minant of trade union power. Other factors are the unity and cooperation Table 1.1: Number of union confederations, inside and outside the union move- domains and key divisions in 2010 ment; the relationship with employers, governments, political parties and Total General Divisions Public Services Reli- Occu- # # Political Regional # # other social organisations; leadership, gious pational internal organisation and member- AT 1 1 ship participation; sound finances; IE 1 1 a coherent value system or ideology; LV 1 1 and the standing of the unions and UK 1 1 their leaders in public opinion (see EL 2 1 1 Hyman, 2001; Visser, 1995). The com- EE 2 1 1 position of unions and union mem- MT 2 2 X bership, their representation among SK 3 2 x 1 different categories defined by skill, BG 3 2 X 1 sector, gender, sector, age, national- BE 3 3 X X x ity and status in the labour market is DE 3 2 x 1 relevant for understanding the policy LT 3 3 X x choices of unions, for instance regard- PL 3 3 X ing employment protection, pension NL 3 3 x X x reform, incomes policy or wage set- FI 3 3 X ting (Iversen, 1999; Ebbinghaus and SE 3 3 X Visser, 2000). DK 4 4 x X CY 4 3 X x 1 LU 4 2 X X 1 1 The present section discusses, firstly, PT 4 4 X the organisational make-up of the CZ 5 4 X x x 1 union movement in EU Member States; RO 5 5 X secondly, tendencies towards concen- ES 6 5 X x x 1 tration or fragmentation, thirdly, issues HU 6 6 X of leadership, in particular related to SI 7 5 X x 1 1 the role and authority of the main IT 7 6 X 1 confederations and largest (sector) FR 9 5 X x x 4 unions and, fourthly, the membership Source: J. Visser, ICTWSS database 3.0, 2010. basis and composition of the unions. NB: X = major or primary demarcationline; x = minor or secondary. For each issue, where appropriate,

18 Chapter 1: Variations and trends in European industrial relations in the 21st century’s first decade

(including the public sector), and ‘spe- formed minority confederations, for the DGB and ÖGB respectively. Simi- cialised’ confederations with members example in Denmark, the Netherlands, lar attempts in Italy and France failed. in the public sector or some special- France and Cyprus (1). In many other The Netherlands is a rare case where, in ised sector (e.g. commerce; financial countries, for instance Belgium or Aus- the 1970s, a general and Catholic union services, healthcare). Of the 98 con- tria and in a more varied way also in federation merged to become the FNV, federations counted in January 2010, Ireland and the UK, occupational sta- which is the country’s dominant union nine are limited to the public sector, tus is the source of divisions between confederation. In nearly all countries eight to services, and 81 are general. unions within the same confedera- in which free unions were suppressed, tion. In some of these cases blue- and or unionisation was allowed only in white-collar workers negotiate differ- a ‘united’ organisation, the return to 1.2.1.2. Political, religious and ent collective agreements and/or have democracy expressed itself in union regional divisions different social insurance provisions pluralism, with ‘old’ and ‘new’ centres and employment protection rights. In competing with one another. This hap- Politics as a source of disunity is the industrial unions of Germany, the pened in Spain and Portugal in the late present in 15 of the 27 EU Member Netherlands, Spain or Italy, and also in 1970s and in Poland, Hungary and the States (Table 1.1). It is absent in Scan- most CEE countries these distinctions other CEE countries after the fall of dinavia, Finland, Estonia, Latvia, Ger- are absent, and blue- and white-collar communism. The process of experi- many, Ireland and the UK. In Austria staff in the private sector tend to be mentation and differentiation has not and Greece party-political differences covered by the same collective agree- stopped yet, although some consoli- are ‘internalised’ as factions within the ments and legal statutes. Recent union dation has taken place, for instance in main confederations, ÖGB and GSEE mergers and labour market reforms in Hungary where two confederations respectively. Religious differences are Austria and Belgium go in the same merged. Compared with 2000, the usually a minor or secondary demar- direction of lowering or removing the number of union confederations in the cation, or they overlap with political distinctions between blue- and white- EU-27 has risen from 93 to 98; in the differences, as is the case in Belgium, collar staff. In the Nordic countries, the 10 post-Communist CEE countries the Luxembourg and the Netherlands. decline in manual work is a long-term number rose from 29 to 38, with fur- Small, minority organisations based threat to the historically dominant con- ther splits and new union federations on religious identity exist in Ger- federations of blue-collar workers. in Slovenia, the Czech Republic, Slova- many, Denmark, France, Spain, Hun- kia and Romania. gary, Slovakia and Lithuania. Finally, confederations of unions limited to 1.2.1.4. Unity or pluralism? a particular language community or 1.2.1.5. Organisational fragmentation region exist in Spain (Basque area), In the history of (western) European and recognition rules the Czech Republic (Bohemia, Mora- trade unions, the political, religious and via and Silesia) and Slovenia (coastal occupational demarcations between Union pluralism tends to go together area). Within the Belgian confedera- trade union confederations emerged with competition over members, tions, unions have sometimes a dis- relatively early, before or around the influence, bargaining rights and seats tinct regional (and linguistic) identity, First World War. They have proved in national, sector or company consul- especially those for white-collar staff very stable (Ebbinghaus and Visser tation councils. This competition may and in the public sector. 2000). Only in Germany and Austria, be intense when confederations are under allied occupation, was it possible ideologically and politically opposed to overcome pre-war differences and to one another, or muted when their 1.2.1.3. Divisions by occupational organise all or most unions under the membership is demarcated by occupa- class or status common roof of the German and Aus- tion, region or religion and they have trian Confederation of Trade Unions, reached a cooperation agreement. Occupational demarcations between 1 There are also separate unions, federations or blue- and white-collar employees, with forums for managers with executive functions in Changes in recognition rules may put separate organisations for (academic) Austria, Belgium, Germany, Greece, Italy, Poland, pressure on trade unions and confed- Portugal, Slovenia, Spain, Sweden and the UK, but professions and managers, are the they are usually very small, not recognised and not erations to seek a merger with larger main dividing line in the Nordic coun- involved in collective bargaining — if known, their organisations. Not reaching the repre- tries. In a few other countries, higher- membership is included under ‘independent or sentativeness threshold may shut the unaffiliated’ unions, but they are not included in the ranking white-collar employees have list of confederations in Table 1.1. confederation and its member unions

19 Industrial Relations in Europe 2010

out from participation in consultation small unions in professions and occu- creation of mega unions, for instance and bargaining. For instance, in Poland pations in the public or state-subsidised in Finland, Germany, the UK, Austria a recognition threshold of 10 % applies sector as well as associations represent- and Denmark. In the early 2000s, union to unions claiming representation in ing managers. As mainstream public mergers were often broadcast as a solu- companies; increasing this threshold, sector unions have increasingly come tion to problems of membership decline as was debated in the Tripartite Com- under pressure to accept change in the and union renewal, freeing resources bot- mission in 2008, would probably hurt employment status of civil servants and tled up in unions organising in declining all unions, but especially those affiliated moderation in wage settlements, some industrial sectors for recruitment drives with the smallest confederation. In Italy, powerful and well-organised profes- in services. But mergers are costly opera- since the late 1990s bargaining rights in sional groups have tried to defend their tions in themselves and the high expecta- the public sector depend on reaching a privileges by splitting off from the main tions associated with some subsequently threshold of 5 %, based on membership unions. Examples of this development gave way to disillusionment (Wadding- and electoral data. Even this low thresh- go back to the 1980s in Italy and France ton, 2006). In early 2008 three white-col- old has triggered a spate of union merg- and the 1990s in the Netherlands. In lar employee unions merged in Sweden, ers in the public sector. In France, under the 2000s, train drivers, air pilots, and but in Finland a merger of six unions, new legislation applying from 2012, in physicians in Germany won separate decided in 2006, was reversed. Another order to take part in collective bargaining bargaining rights, often after a strike group of Finnish unions is poised to at the sector or cross-sector level, trade (Schroeder and Greef, 2008). create a mega union in 2010 or 2011. In union organisations must obtain 8 % of January 2010, the construction union the votes in workplace elections across There appears to be no relationship of the Dutch Christian National Union the sector or nationally, while participa- between the number of unions or Confederation (CNV) integrated into the tion in company-level bargaining will union confederations and the size of union for manufacturing industries. In require 10 % of the votes in the relevant the country (the correlation coefficient the FNV the industry union had merged enterprise elections. The Confederation is close to zero). The country with the 10 years earlier, with unions in transport of Professional and Managerial Staff largest population in the EU, Germany, and services, but the construction union (CFE-CGC) and the National Federa- has one of the most concentrated union has retained its independence. Union tion of Independent Unions (UNSA), movements, whereas small countries mergers do not necessarily make union neither of which currently reaches the like Slovenia, Hungary or Portugal have structures more similar. threshold, have broached the possibility many confederations and many unions. of a merger, but no conclusion has yet A relatively strict application of the sec- Until recently union mergers have been reached. In Luxembourg, a change tor principle of demarcation between respected the boundaries of confed- in the representation criteria set by the affiliated unions reduces the number of erations and nations, but in July 2008 law in 2004 triggered a regrouping of unions, whereas occupational demar- UNITE, the largest ‘general union’ in the union confederations and their overall cations raise the number, as the com- UK, signed an agreement to merge with reduction from seven to four. parison between Germany and Britain the North American United Steelwork- shows, although mega unions strad- ers union, adopting as its name Work- dling the boundaries of many sectors ers Uniting and claiming more than 1.2.1.6. Number of unions and occupations now exist in both 3 million members in the UK, Ireland, countries. The relationship between the the USA, Canada and the Caribbean. The total number of unions affiliated to number of unions and bargaining units Unions operating cross-border are a the largest confederation in each coun- no longer exists, as some large unions well-known phenomenon in the USA try decreased from 829 in 2000 to 758 negotiate many contracts in different and Canada, and between the United in 2008, which represents an average of parts of the economy. Kingdom and the Irish Republic, but in 29 per country (Table 1.2). A cautious continental Europe it is rare. The nearest estimate and considering that smaller example is the European Cockpit Asso- confederations may also have a smaller 1.2.1.7. Union mergers ciation (ECA), which represents 38 650 number of affiliates, suggests that the pilots and flight engineers in 38 national total number of national unions in the The process of consolidation through flight crew associations in Europe and EU might be in the order of 2 000. Not mergers of separate unions has contin- operates at the EU level. All of ECA’s included in this count are the inde- ued, but at a much reduced pace than at member associations are also members pendent or unaffiliated unions; they the beginning of the decade when there of the International Federation of Air probably add another 1 000 mostly very was a flurry of activity resulting in the Line Pilots (Ifalpa). Since 2003 ECA

20 Chapter 1: Variations and trends in European industrial relations in the 21st century’s first decade

has been mandated to act as IFALPA’s reliable membership figures are absent The variation is considerable and goes European voice in bodies such as the the market share can be gauged on the from a market share of 100 % for the European Aviation Safety Association basis of the voting results in elections largest confederation in Austria to 23 % and the European Organisation for Air for works councils or other bodies in in France (Table 1.2). The EU average traffic Navigation Eurocontrol. which unions compete for seats and is 60 % for the largest and 22 % for influence. In France this has become the second-largest confederation. The the main way of adjudicating the rela- position of the Austrian Confederation 1.2.2. Associational monopoly tive importance of the different union of Trade Unions (ÖGB) is unique and or membership shares currents, but such elections also play in no other country has one confedera- an important role in Belgium, Luxem- tion an absolute monopoly. The main The 98 union confederations currently bourg and Spain. In Italy workplace confederations in Ireland, the UK, Ger- existing in the EU are quite differ- elections became re-institutionalised many, Latvia and Slovakia approach ent in who and what they represent; through the 1992–93 pacts; and they this situation but must in each case tol- they differ in size, internal organisa- are used to assign or withhold recog- erate rival, independent unions. tion and ideology and in the tasks nition rights to independent minority they fulfil. To grasp these differences unions in the public sector. In Austria Between 2000 and 2008 relative mem- we look at the relative size or ‘market works council elections determine the bership shares have been fairly stable, share’, i.e. how many of all unionists in weight of different political currents with a continued decline of the market a particular country does the confed- within the united confederation and its share of confederations, like the LO in eration represent? Sometimes, where affiliated unions. Sweden and SAK in Finland, which

Table 1.2: Major union confederations, market shares and effective number of unions Largest confederation Second confederation Effective number of unions No affiliation Market share No affiliation Market share 2000 2008 AT ÖGB 9 100.0 % 8 7 IE ITUC 43 95.3 % 5.5 5.1 LV LBAS 23 91.0 % .. 9 SK KOZ SR 35 88.0 % 20 17 UK TUC 60 83.0 % 15 10 DE DGB 8 77.8 % DBB 40 15.6 % 10 6 EE EAKL 17 75.1 % TALO 12 24.9 % 23 20 LT LPSK 26 74.9 % LDF 10 19.1 % 21 17 BG CITUB 35 69.8 % CL Pokreba 24 19.5 % 26 29 PT CGTP 60 64.2 % UGT 53 25.1 % 19 17 NL FNV 14 63.2 % CNV 9 17.7 % 10 9 EL GSEE 70 60.3 % ADEDY 46 39.7 % 32 29 DK LO 17 59.6 % FTF > 50 17.4 % 14 14 CZ ČMKOS 33 55.5 % ASO .. 22.4 % .. 8 BE CSC/ACV 11 52.3 % FGTB/ABVV 7 40.3 % 22 19 RO Cartel Alfa .. 52.0 % C. Frăţia .. 25.7 % .. .. SI ZSSS 21 51.3 % KSJSS .. 19.7 % 30 50 MT GMU 32 49.0 % CMTU .. 37.7 % .. 26 PL NSZZ Solid. 102 48.0 % OPZZ 36 43.0 % 46 47 FI SAK 22 46.8 % STTK 20 28.6 % 26 22 ES CC.OO 12 44.2 % UGT 10 31.4 % 26 25 SE LO 15 43.3 % TCO 16 35.3 % 14 16 LU CGT-L 16 43.1 % LCGB 16 26.1 % 22 24 IT CGIL 16 41.4 % CISL 22 32.5 % 33 31 CY PEO .. 39.6 % SEK .. 34.8 % .. .. HU SZEF 36 28.6 % MSzOSz .. 26.1 % 42 48 FR CGT 18 23.0 % CFDT 15 22.7 % 71 67 Source: J. Visser, ICTWSS database 3.0, 2010.

21 Industrial Relations in Europe 2010

organise mainly blue-collar workers and have their strongest membership Box 1.3: Index of union authority basis in industry. Once dominant, The ICTWSS database constructs an index of union (i.e. confederal and affiliate) authority they now represent less than half of based on the following set of propositions. all union members. This undoubtedly Confederal authority is higher if: has a limiting effect on their coordi- (a) the confederation represents the affiliates politically and is routinely involved in consultation with government through bipartite or tripartite contacts; nating abilities in wage bargaining (b) the confederation has (political) control or influence over the appointment of the and on their political influence. Most leaders of its affiliates; confederations define their domain (c) the confederation negotiates national agreements with employers; more broadly and they follow the skill (d) the confederation runs a ‘joint resistance or strike fund’ from which affiliates are or status upgrading of their members. reimbursed in case of ‘approved’ strikes; and (e) strikes of affiliated unions need prior approval from confederation and/or the confedera- Competition may come from inde- tion can end strikes through central procedures of conflict settlement and arbitration. pendent unions in the public sector Affiliate authority increases if: and in some occupations that enjoy (f) affiliate unions negotiate enforceable contracts at sector level; special protection, consultation or (g) affiliate unions have control or influence over the appointment of workplace bargaining rights, or some unique representatives; market powers. Transport sectors are (h) affiliate unions do not depend on local or workplace branches for their finances; generally those with most, and the (i) affiliate unions run a central strike fund; and most powerful, independent unions. (j) affiliate unions can veto local strike or end strikes through sector settlement or arbitration procedures. Each of the variables (a) to (j) is measured on a three-point scale, with (2) as the highest score, (1) as the intermediate score and (0) as the condition being absent. Dividing by 10 1.2.2.1. Union concentration (5 × 2), produces a range from 1 to 0 for each of two subscales (confederal authority and union authority). In Germany only a handful of unions The measure for union centralisation reflects not only the degree of authority or verti- determine the direction and terms cal integration but also the degree of unity and concentration. The centralisation index is of union politics and collective bar- an additive measure obtained by dividing the level of authority at each level (confedera- gaining. IG Metall, the large union tion, union) by the effective number of confederations (unions) at that level. At each level weights are applied to reflect the intensity of divisions between confederations (unions), in engineering, Ver.di, which organ- with a 2 for political and ideological conflict, 1.5 for occupational and religious demarca- ises employees and workers in public tions, and 1 for no or only minor divisions. The centralisation scale is adjusted by taking and private services, and IG Chemie, the root square, which serves to increase the differences at the lower end of the scale. For the union in chemical and extraction further details see ICTWSS database, 3.0; see also Iversen 1999. industries, represent almost two thirds of all union members between them. movements are the most concentrated, Taking into account the actual number after the merger wave of recent times Box 1.2: Herfindahl index of unions and their relative member- the Irish, British and Dutch unions of union concentration ship size as a proxy of their weight are also in this category. So too are the The effective number of unions is the in bargaining and policymaking, we Czech and Latvian union movements. inverse of the Herfindahl (H) index, can calculate the effective number of In general, union movements in south- which measures the degree of concentra- unions (see Box 1.2). ern and in central and eastern Europe tion. The Herfindahl (H) index is defined are more fragmented, whereas the Nor- as ∑ n (p 2), where p is the proportion i i i The effective number of unions — or dic union movements, and Belgium, of total membership organised by the ith union and n is the total number of equal sized unions — varies greatly occupy a position in the middle. One unions. The maximum of this index is 1, across countries, from 5 in Ireland to implication is that the few large unions obtained if all union members belong to 67 in France (Table 1.2, right-hand in Ireland, or in Germany and the just one union; the minimum approaches column). France’s high number is the Netherlands, must be taken very seri- 0, if each union member organises in a result of both a relative large number ously in the event of national discus- separate union. Thus, in the case of Ire- land one large union (SIPTU) represents of unions (‘federations’) within each sions of wages and/or reform policies, 36 % of all union members, the following confederation and the large number of and that they are able to coordinate four another 40 % and the next 30 unions confederations. The opposite applies even if the confederation is not. In any the rest. This results in a H-index of to Ireland: one main confederation case, their vote will be decisive in any 0.190 and an effective number of unions and a few very large unions. Histori- agreement or pact entered into by the of 1/0.190 = 5.3. cally, the German and Austrian union confederation. In the opposite case of

22 Chapter 1: Variations and trends in European industrial relations in the 21st century’s first decade

many small unions, policy direction and coordination can only be realised Table 1.3: Union authority and union centralisation, averages through the confederation. In short, Confederal authority Affiliate authority Centralisation index union concentration may be a substi- 1997–99 2007–09 1997–99 2007–09 1997–99 2007–09 tute for the confederation’s authority. Averages EU-27 254 .259 306 .300 319 .324 Although a more concentrated union EU-15 341 .332 – 411 .387 – 384 .388 EU-10 movement can be more cost-efficient 144 .167 + 175 .192 + 238 .243 in its services to members and recruit- +EU-2 ment, there seems to be no relation- Coefficient of variation EU-27 .686 .642 – .679 .642 – .475 .444 – ship between the effective number of EU-15 .534 .533 – .523 .533 .432 .415 unions in a country and the level of EU-10 .493 .498 .528 .498 .308 .208 unionisation. In fact, the causal arrow +EU-2 may point in the other direction as Source: J. Visser, ICTWSS database 3.0; 2010. many mergers tend to be motivated by employment and membership decline (Waddington, 2006). great deal in the Member States of the Ranking the countries by degree of EU and that the diversity in the EU-15 union centralisation (Chart 1.1), we is as large, and as constant, as that in find that the five most centralised 1.2.3. Union authority the 12 new Member States. union movements are in Austria, the and centralisation Netherlands, Germany, Ireland and Overall, measuring the centralisation Sweden. The position of Germany Authority can be defined as the chance of trade unions as a combination of and Ireland is remarkable, since the that decisions by the leaders of an union authority and union concentra- authority of the German and Irish organisation will be followed by their tion (see Box 1.3), we observe neither confederations (DGB and ICTU) is members. Applied to trade unions, this centralisation nor decentralisation. rather limited. But both union move- can be studied at two levels: 1. Will the The small decline in union and con- ments are highly concentrated; in Ger- affiliated unions follow the confederal federal authority in some countries in many, the power of unions over their leadership in its decisions? 2. Will the the EU-15 is compensated by further branches is formidable; in Ireland members, individually or organised in concentration, whereas the opposite the participation in seven consecu- branches and workplace or enterprise — rising authority amidst further frag- tive social pacts with the government units, follow the directions of their mentation — is found in some coun- and central employers’ associations union leaders? To address these ques- tries in the 12 new Member States. since 1987 has caused an upward shift tions, an index of union authority has been constructed (see Box 1.3). Chart 1.1:Chart Union 1.1: Union centralisation, centralisation, 2000s 2000s 0.9 As shown in Table 1.3, the average Central 2000 0.8 Central 2008 degree of union authority, both of confederations over their affiliates 0.7 and of national unions over their 0.6 branches and members, is twice as high in the EU-15 as in the 12 new 0.5

Member States. Between 2000 and Index 0.4 2010 the two groups of Member States 0.3 began to converge, however. In the 12 new Member States union authority 0.2 increased in some countries, start- 0.1 ing from a very low level, whereas in 0.0 the EU-15 developments went in the AT NL DE IE SE BE DK ES EU-15 FI IT SI EU-27 LV LU EL SK EE PT BG EU-10 CZ LT CY RO MT HU PL FR UK + opposite direction. The coefficients EU-2 of variation reveal that the authority of unions and confederations varies a Source: J. Visser, ICTWSS database 3.0, 2010.

23 Industrial Relations in Europe 2010

in authority, as the Irish Congress of Trade Unions (ICTU) has increased Table 1.4: Affiliation and membership in the ETUC, 1993–2008 its role in relation to affiliates. 1973 1983 1992 2003 2008 Total membership (million) 36 41 45 59 56 Judged in terms of union centralisa- Number of national affiliates 17 34 46 77 82 tion, the UK, France, Poland and Hun- Number of countries 14 20 22 35 36 gary occupy the bottom positions. The European industry federations 6 10 15 11 12 weakness of the Trade Union Con- Source: Ebbinghaus and Visser, 2000, Chapter 19, updated with ETUC reports and website. gress (TUC) vis-à-vis its affiliates is well-known. In the absence of regular national consultation with employers executive managers, the Confédéra- Turkish Cyprus, Croatia, Andorra, and governments over the past three tion Européenne des Cadres (CEC, Monaco, Liechtenstein and San decades, and with the replacement founded in 1989), which claims 1.5 Marino, bringing the total number of of sector by company bargaining, the million members in 16 national organ- national affiliates to 82. Five confeder- national unions are left with limited isations from 15 countries (mostly in ations, from Bosnia and Herzegovina, authority. The French union confed- the EU-15). Since 2009, Eurocadres Serbia and the former Yugoslav erations have a centralised outlook and CEC are recognised, in addition Republic of Macedonia have observer and policies are decided in relatively to the ETUC, as official ‘social part- status in the ETUC. centralised fashion, but local or sec- ners’ by the EU. tional interests wield significant con- Starting with 36 million members in trol on the ground, in particular in About 8 million employees in the EU 1973 from 14 countries (Table 1.4), the public sector. The Polish trade join independent unions and confed- all in western Europe, the ETUC’s union movement, in particular NSZZ erations that are not affiliated with the combined membership has increased Solidarność, is decentralised, with its ETUC. Some of these organisations, to nearly 56 million in 36 coun- basis in company unions, even though with an estimated total of about 4 mil- tries, spanning the whole European its key political stance tends to be lion members, are represented in the (sub)continent. Also affiliated to the based on centralised decisions. Hun- European Confederation of Independ- ETUC are 12 European industry gary is characterised by an extreme ent Unions (CESI, reflecting its French federations (see Table 1.5), grouping degree of fragmentation between and name: Confédération Européenne des almost all major EU trade unions in within confederations. Syndicats Indépendents, founded in their respective sectors. 1990). CESI has member organisations in 15 EU Member States, mostly Should the ETUC be ranked in terms 1.2.4. Affiliation and in the EU-15 (2). of ‘union concentration’, ‘union organisation at the authority’ or ‘union centralisation’, European level The ETUC is represented in each and the organisation would score high on every country of the EU-27 and its concentration and low on authority In spite of massive diversity at the associational monopoly at the Euro- and centralisation. In other words, the national level, trade unionism at the pean level, measured as its share in ETUC would find itself somewhere European level is characterised by a the total membership, is close to 88 %, between the TUC in Britain and the high degree of unity. The European with majorities in each Member State, ICTU in Ireland. The ETUC does rep- Trade Union Confederation (ETUC) varying from 51 % in Slovenia to 100 % resent its member organisations in con- brings together all major confedera- in Hungary and Austria. Beyond the sultations with the Commission, the tions. Of the 98 confederations iden- EU-27 the ETUC has 18 affiliates in Council, the European Parliament and tified in Table 1.1, 64 are member Norway, Iceland, Switzerland, Turkey, the European Central Bank, and it has organisations of the ETUC, with a a mandate from its members for nego- combined membership of 56 mil- 2 The estimate of 4 million union members of CESI tiating with BusinessEurope and CEEP. must be interpreted with caution, since only few of lion people. This includes the 5 mil- these organisations publish membership numbers and Occasionally it does reach agreement lion members claimed by Eurocadres, no independent check of published data is possible. with these organisations on matters of The four Italian confederations (CISAL, CISAS, Conf. the European federation of mana- ILL and Conf.S.A.L) are estimated to have a combined labour market regulation, which subse- gerial staff, which is an associated membership of 1.8 million, which is 15 % of total quently requires implementation at the member organisation of the ETUC. membership in Italy. The German Civil Servants’ national level. The European frame- Federation DBB, with almost 1.3 million members in There is another organisation for 2008, is the dominant organisation in CESI. work agreements on stress at work

24 Chapter 1: Variations and trends in European industrial relations in the 21st century’s first decade

unions lost terrain and 2008 was no Table 1.5: European industry federations, different from earlier years. At the affiliated with the ETUC, 2010 time of writing, mid-2010, we have not yet comparative membership and Sector European industry federation Website employment data for 2009, the first European Federation of Trade Unions Food, agriculture, year in which the effect of the crisis on in the Food, Agriculture and Tourism http://www.effat.org tourism sectors and allied branches unemployment and union member- Chemicals, mining, European Mine, Chemical and ship can be observed. From scattered http://www.emcef.org energy Energy Workers’ Federation data, there is no reason to believe Metal, engineering European Metalworkers’ Federation http://www.emf-fem.org that the trend has turned — the Textile, clothing, European Trade Union Federation — http://www.etuf-tcl.org main confederations in for instance leather Textiles Clothing and Leather Germany, Austria, Denmark, Sweden Construction and European Federation of Building and http://www.efbww.org and Finland had fewer members in wood Woodworkers January 2010 than a year earlier, and European Transport Workers’ Transport http://www.itfglobal.org/ETF Federation it appears that most losses are due to Services Union Network International http://www.uni-europa.org unemployment and came from the Arts and European Arts and Entertainment unions in construction and manu- http://www.uniglobalunion.org entertainment Alliance facturing. For the near future, the Journalism, media European Federation of Journalists http://www.ifj.org announced cuts in staff numbers in European Federation of Public Public services http://www.epsu.org the public sector are a threat to the Service Unions unions, as this is where they have Police European Confederation of Police http://www.eurocop-police.org the highest membership numbers in European Trade Union Committee Education http://www.csee-etuce.org nearly all countries. for Education Source: ETUC website (http://www.etuc.org/). 1.2.5.1. Absolute and relative (2004) and inclusive labour markets employment as a proportion of all membership gains and losses (2010) are examples (see Chapter 6). employed wage and salary earners Although far from a full-fledged fed- — in the EU-27 fell from 27.8 to 23.4 During the 2000s unions in about eral structure, by relying on majority (Chart 1.2). half of the EU Member States lost voting the ETUC can and occasion- members; in the other half there ally does overrule the veto of its largest Chart 1.2 shows that the decline were small gains. Of the total losses, members and contributors, such as the was fairly linear; each year the trade 2 million occurred in CEE countries, British TUC and German DGB. Chart 1.2.: Union density, membership Chart 1.2.: Union density, membership and non-membership, EU-27, 2000-08 1.2.5. Union membership and non-membership, EU-27, 2000-08 160 36 and density 34 140 The trend of union decline that 32 120 began in the 1980s and became more 30 widespread in the 1990s continued. 100 On aggregate, between 2000 and 28 2008 union membership among the 80 26 employed salaried workforce in the 24

60 Union density (%) EU fell by nearly 3 million people, (million) Employees 22 from 46 to 43 million, whereas the 40 20 number of non-unionised employees Non-members 20 Union density rate (right axis) 18 increased with more than 20 million Union members from 120 million to 140 million 0 16 2000 2001 2002 2003 2004 2005 2006 2007 2008 people. As a result, aggregate union density — union members with paid Source: J. Visser, ICTWSS database 3.0, 2010.

25 Industrial Relations in Europe 2010

1 million in the EU-15. The biggest losses, in absolute terms, happened Chart 1.3:Chart Union 1.3: Union density density by by country, country, 2000-08 2000-08 in Germany (nearly – 1.5 mil- 100 lion members), Poland (– 650 000) 2000 2008 and Romania (– 424 000); the 80 biggest gains took place in Italy (+ 555 000), Spain (+ 317 000) and Belgium (+ 205 000). In percentage 60 terms, the biggest losses happened in Lithuania (– 47.7 %), Estonia 40 (– 43.6 %), Slovakia (– 43.4 %), EU-27 2000 EU-27 2008 the Czech Republic (– 27.9 %) and

Poland (– 25.5 %); trade unions in labour force dependent % of employed 20 Spain (+ 15.4 %), Cyprus (+ 14.6 %), Greece (+ 13.9 %) and Belgium 0 (+ 11.5 %) made the largest gains. SE DK FI CY BE MT SI LU EU-15 IT RO IE AT UK EU-10 EL PT CZ BG DE NL SK HU LV PL ES LT FR EE + EU-2 These gains and losses must be com- Source: J. Visser, ICTWSS database 3.0, 2010; the averages for the EU-27, EU-15 and 12 new pared with developments in employ- Member States are weighted. ment. For instance, the decline in membership in the Czech Republic 1.2.5.2. Union density rates 2005) and differences in union organ- or Romania is partly explained by ising strategies (Frege and Kelly, 2003; the lack of growth in employment, Within a general trend of decreasing Kaminska and Kahancová, 2011). whereas the strong growth in union density rates, the differences across membership in Spain reflected, and countries have remained as large as ever To assess possible future developments lagged considerably behind, the (Chart 1.3). In 2008 union density var- it is necessary to decompose these very strong increase in employ- ied from 68.8 % in Sweden and 67.6 % aggregate figures on unionisation. ment. The general trend in these in Denmark to 7.6 % in Estonia and With the help of the European Social years is that increases in employ- 7.7 % in France. In general, the lowest Survey (ESS) and national survey ment were not matched by increases density rates are currently found in the data, differences according to selected in union membership. Two exam- post-Communist countries — Slovenia aspects of three types of characteristic ples of this development over a and Romania are the exceptions — and are reviewed: individual (gender, age, longer period are Ireland and the in southern Europe — where Italy, etc.), employment status (unemploy- Netherlands: both have experienced Malta and Cyprus are the exception. In ment, type of contract, working hours, rapid employment growth, small the EU-15 the highest rates are found etc.) and employment situation (sec- increases in membership and a fall- in Sweden, Denmark, Finland and Bel- tor, workplace, size, etc.). ing union density rate. In a recent gium. For explanations of these differ- study Roche (2008) concludes that ences, authors have pointed to political the rapid increase of the ‘pool of and institutional conditions that vary 1.2.5.3. Individual characteristics potential members’ and the inability across countries, such as coordinated of unions to organise in new sectors and multi-employer bargaining, at sec- The feminisation of unions has contin- and among (migrant) workers with tor level or higher, versus uncoordi- ued through the 2000s, although at a less than standard contracts ‘exerted nated and single-employer bargaining; slower pace than in the preceding dec- a drag on density’. Something similar the general acceptance and recognition ade. This is the result of two contrasting occurred in the Netherlands. Often of unions in national and workplace trends — a small decrease of the female driven to defend the employment consultation; and union involvement presence in unions in CEE countries, protection rights of the incumbent in unemployment insurance (Ebbing- starting from very high levels, and con- workforce and membership, unions haus and Visser, 1999, for a summary). tinued progress of the share of female clearly suffer from the expansion of In recent times, scholars have drawn members in the EU-15. Overall, the a labour market built on flexibil- attention to variations in union coali- number of female (employed) union ity and the dualism of two types of tion building and legacies of the past, members was stable at 18 million, employment status. especially in CEE countries (Avdagic, whereas male (employed) membership

26 Chapter 1: Variations and trends in European industrial relations in the 21st century’s first decade

Chart 1.4: Men and women union density, 2008

in Scandinavia, report a lower inflow Chart 1.4: Men and women union density, 2008 and decreasing unionisation of young 80 people (Pedersini, 2010). As fewer Men young people join, European trade 70 Women unions are ageing and more union 60 members near retirement age. A triple effect is at work: smaller birth cohorts 50 are entering the labour market; entry

40 into the labour market is later, due to EU-27 men longer education and a longer school- 30 EU-27 women to-work transition via temporary jobs;

20 and the unionisation propensity among younger generations is lower. 10 % of employed dependent labour force of men/women labour force dependent % of employed 0 SE DK FI CY BE MT SI LU EU-15 IT RO IE AT UK EU-10 EL PT CZ BG DE NL SK HU LV PL ES LT FR EE + 1.2.5.4. Employment status EU-2 Source: J. Visser, ICTWSS database 3.0, 2010, with estimates for the male and female union Almost a quarter of all trade union density rates based on survey data (ESS, ISSP) and national surveys for FR, NL, SE and UK. The averages for the EU-27, EU-15 and 12 new Member States are weighted. members in the EU are without paid employment: 13.6 million of the total of 56.6 million union members in decreased from 28 million in 2000 to 25 rates of young people, between 15 and 2008 (they are excluded from calculat- million in 2008; as a result the female 34 years (Chart 1.5). In many coun- ing density rates). The average share of share rose from 42.8 to 44.1 %. The tries young people reach only half the members without paid employment variation across countries is still large. unionisation rate of workers aged 35 varies per country and is almost five There are now more female than male years and older. Moreover, unionisa- times higher in the EU-15 than in the union members in Estonia, Latvia, tion rates in the oldest age group, over 12 new Member States. The highest Lithuania, Poland, Hungary, Finland, 55 years of age, tend to be highest. For share, in particular of pensioners Sweden, Denmark and the UK. The the future of trade unionism the devel- but also members in (temporary or lowest share of female members, no opment of unionisation rates among partial) unemployment, is found in doubt reflecting their weaker position young people and the comparison with Italian unions (52 %), followed by in the labour market, is observed in earlier generations is of great interest. Belgium (37 %) and Finland (34 %). the southern countries (Spain, Italy, Nearly all trade unions,Chart including 1.5: Union those density by age group, mid-2000s Greece, Cyprus, Malta, Romania, but not Portugal and Bulgaria) and in the Chart 1.5: Union density by age group, mid-2000s Netherlands, Luxembourg, Germany and Austria. 100

55–64 35–54 Age-related density rates can be esti- 80 15–34 mated with the help of ESS and ISSP surveys (3). From these estimates a clear picture emerges of much lower density 60

3 Van Gyes in Industrial Relations in Europe 40 2006; also based on the European Social Survey (ESS), waves of 2002/03: Ebbinghaus et al 2008 use the same waves, but show different results. 20 Yet different are the estimates from the same waves published by Schnabel and Wagner, of each age labour force dependent % of employed

2007. Blanchflower (2006) and Checchi and 0 Visser (2009) use data from the International SE FI DK BE SI LU IE IT AT UK EL DE NL PL HU ES FR Social Science Program (ISSP) which has the advantage of longer time series, but the Source: J. Visser, ICTWSS database 3.0, 2010, based on estimates from ESS and ISSP surveys. disadvantage of fewer EU countries.

27 Industrial Relations in Europe 2010

Results from the ESS suggest that in most European countries only a minor- Chart 1.6: Union density, employees in standard ity of the unemployed are union mem- Chart 1.6: Union density,and temporary employees in standardjobs, mid-2000s and temporary jobs, mid-2000s bers. In the Netherlands, Germany 80 Temporary and Ireland around 10 % of the unem- 70 Standard ployed retain membership, in Finland and Belgium about 50 %, and in Den- 60 mark and Sweden about 70 %. Recent 50 legislation in Sweden has weakened the incentives for unemployed workers 40 to combine union membership with membership of a voluntary unemploy- 30 ment insurance fund, and this is one 20 reason why in 2007 and 2008 there has been a sharp drop in union mem- 10 % of employed dependent labour force in each group labour force dependent % of employed bership (Kjellberg, 2009). In Finland 0 and Denmark, the creation of general SE FI DK BE SI LU IE IT AT UK EL DE NL PL HU ES state-sponsored unemployment funds, Source: J. Visser, ICTWSS database 3.0, 2010, based on estimates from ESS and ISSP surveys. at greater distance from the unions, has been associated with a decline in Europe, are a huge challenge for In southern and eastern Europe, part- unionisation, especially among the unions in Malta, Spain and Italy; Irish time employment is much less present young (Böckerman and Uusitalo, 2006; and Swedish unions have focused on and the unionisation of part-time Lind, 2009). Not relying on voluntary organising migrants from CEE coun- workers has been much less an issue unemployment funds, but with strong tries, Dutch and Italian unions have set for the unions. involvement in the administration up special unions for the self-employed of the compulsory system, Belgian (Pedersini, 2010). unions have continued to grow, with 1.2.5.5. Employment situation high unionisation rates among young Employees working part-time tend to people, industrial and lower-skilled join unions less than those working In all countries, unionisation levels workers, i.e. those with the highest risk full-time, but with the ‘normalisation’ are much higher in the public than of unemployment (Van Rie and Marx, of part-time work, the differences have in the private sector, sometimes by forthcoming). become smaller. They are smallest in a factor two or three. Density rates countries such as Denmark, Finland in the public sector in Scandinavia Employees working on fixed-term and Sweden where part-time work is are well over 75 %; above 55 % or employment contracts are likely to have culturally accepted and distinctions twice the level in the private sector lower probabilities of unionisation. in employment and social security in Austria, the UK and Ireland, Chart 1.6 shows that the gap in unioni- rights, by law and in individual or col- probably also in Italy (if we include sation between workers in standard lective contracts, are absent. However, the membership of the ‘autonomous’ and temporary jobs is still very large employees working in small part- unions); above 40 % in Germany and in Slovenia, Italy, Spain, Poland, the time jobs, of less than 15 hours, tend the Netherlands; and some 15 % in UK, Germany and the Netherlands. to remain outside unions; the preva- France, which is at least three times There are no data for France, Portugal, lence of these jobs in some countries, higher than in the private sector. In Bulgaria, Romania and the three Baltic especially among young people and Belgium, however, the differences states. Various unions in, for instance, married women, explains part of the appear slight. Data for most other the Netherlands, Ireland, the UK, Italy, large gap in unionisation between countries are not comparable or Spain and Hungary have campaigned part-time and full-time workers in the non-existent. The situation in CEE in recent years to recruit temporary Netherlands, Germany and the UK (4). countries seems to be different, with workers. A particular challenge for relatively high unionisation rates in 4 Estimates based on the Dutch Labour Force Survey trade unions is the recruitment of the suggest that the unionisation rate of people working the ‘old’ state-based industries and increasing number of (temporary) between 20 and 35 hours per week is almost twice as firms and rather low unionisation migrants and self-employed workers. high as the rate among people with small part-time rates among central government jobs, of less than 20 hours (22 versus 12 % in 2006), Migrants, many coming from outside and nearly as high as among full-timers (26 %). employees (Bordogna, 2008).

28 Chapter 1: Variations and trends in European industrial relations in the 21st century’s first decade

Unionisation levels rise with estab- 1.3. Employers’ farmers’ organisations, (con)federations lishment size (Visser, 1991), perhaps associations representing cooperatives, organisa- because the benefits of membership tions for the self-employed and agen- rise with size, impersonal manage- cies or associations representing public ment leads to greater alienation and The problems of collective organisa- services (5). The outcome confirms the demand for protection, or because tion of employers differ from those of conclusion of earlier studies that the size proxies unions’ organising workers. For trade unions, the biggest organisation of employers tends to be costs. This is strongly related to problem is to recruit and maintain more fragmented than the organisation workplace-level union organisation members, followed by the problem of of workers (Traxler, 1993; van Waarden, and employee representation, which solidarity and unity among workers. 1995). Of these 111 confederations, 49 tends to be guaranteed, by law or Control over members is usually much are ‘general’ organisations with member national agreement, for establish- less a problem for trade unions than firms throughout the private economy; ments above a particular size. Such for employers’ associations, whose 39 specialise in organising small- and rights may help trade union repre- members are usually not individuals medium-sized firms; and 23 specialise sentatives to organise, although this but organisations (firms). For employ- in organising a particular sector, either is not always the case. ers’ associations discipline and cohe- in industry (6), construction (4), trade sion rather than membership are the and commerce (8), finance (5) or agri- key issues: ‘employers find it a much culture (10). Table 1.7 presents the data 1.2.6. Conclusion greater sacrifice [than workers] to for each country. comply with the decisions and regu- The Achilles’ heel of European trade lations of their organisations, as these There is considerable diversity; on unions is the lower and often decreas- reduce their much cherished freedom the one hand there is a small group of ing unionisation rates of young of enterprise’ (van Waarden, 1995: 75). countries with one or two peak associa- people, the difficulty to recruit and This reluctance to cede control and tions, on the other there is a group with retain union members in the expand- mandate the association, for instance five or more, with Italy and Romania ing services sector, in small firms, in matters of pay bargaining or nego- in a class apart. There is some relation and among those with flexible and tiations with the government, is visible with the number of union confedera- fixed-term employment contracts. at all levels: sector, national and Euro- tions, though the correlation is modest The mirror image of this weakness is pean. As will be seen, for most employ- (r = .46). In some countries there are that unions are ageing and increas- ers associations it is not so difficult to only one or two organisations on either ingly reliant on the public sector. The maintain high levels of membership, side (Austria, the UK, Latvia), whereas strongest unions in Europe in, say, once the association is established and in other countries both sides are very Germany, Sweden, Belgium, Italy, provides services to its members. This fragmented (Italy, Romania, Hungary, Spain or the Netherlands, still have may be different if the association is in Portugal, Slovenia). There are also coun- their basis in industry and in large its initial phase and has yet to demon- tries where labour is fragmented but firms. How these unions weather the strate its usefulness — as in the case in capital relatively united (Luxembourg, current crisis is crucial and the use many CEE countries after 1989, where the Netherlands, Spain, Lithuania); the of short-time working and part-time employers’ associations had to start opposite also occurs (Ireland). Until 2000 unemployment schemes (see Chap- from scratch. Luxembourg had eight national employ- ter 3) may have helped to sustain ers’ associations and the Netherlands employment. Challenges ahead lie had five until 1990, but in both countries in the public sector. Given the high 1.3.1. Employers’ either through creating a joint umbrella proportion of union members in the confederations and the organisation (Luxembourg) or via public sector, austerity programmes main divisions mergers (the Netherlands), this number and job retrenchment threatens to was reduced. translate in membership losses and A total of 111 national confederations 5 Including farmers’ organisations reduces the may push more union members into and peak associations of employers were comparability across countries, since in some (early) retirement. Whether unions counted amongst the 27 EU Member countries (Netherlands, Italy, France) the same organisations are included that are excluded in others can compensate this by recruit- States in early 2010. This is slightly (Belgium, Spain, UK). Organisations representing ing more members in ill-organised more than in 2000, and also more than producers’ cooperatives and associations looking after service sectors is an open question the number of national union confed- the interests of self-employed persons are excluded for the same reason, and since they may just as well be (Pedersini, 2010). erations. This number does not include counted as ‘labour’ organisations.

29 Industrial Relations in Europe 2010

in industry and services. This hap- Table 1.6: Number of employers’ confederations, pened in 2004 in Malta, in 2005 in Fin- domains and key divisions in 2010 land and, in 2008, at the sector level, in Denmark, when Dansk Industri (DI), Total General SMEs Sector Of which the powerful Confederation of Dan- Industry Building Trade Finance Agriculture ish Industries, which negotiates the LU 1 1 (1) main multiannual collective agreement UK 1 1 with a cartel of blue-and white-collar AT 2 1 1 1 unions in manufacturing, merged with FI 2 1 1 1 the main organisation in commerce, LV 2 1 1 transport and service. In some cases, LT 2 1 1 NL 2 1 1 1 confederations, seek more mutual ES 2 1 1 cooperation, whilst stopping short of BE 3 1 2 merger. This is the case in Germany, EE 3 1 2 where BDA and BDI have stepped up ES 3 1 1 1 1 cooperation at home by occupying MT 3 2 1 the same headquarters building and SK 3 2 1 abroad through a joint representation FR 4 1 3 in Europe. In Romania eight employ- SE 4 1 1 2 1 1 ers’ confederations created an ‘alliance’ CZ 4 2 2 in 2007, but stopped short of full inte- DK 4 2 1 1 1 1 gration. In the Netherlands, however, DE 4 2 2 the attempt to merge the general con- CY 5 1 1 3 1 1 1 federation VNO-NCW with the con- IE 5 2 2 1 1 federation for SMEs failed. In central SI 5 2 2 1 1 and eastern Europe, where employer PL 5 4 1 organisations proper have existed for PT 6 1 5 1 1 2 1 2 only two decades, the direction of HU 6 3 3 1 change has been less clear-cut, and the BG 7 5 2 structure of employer representation is IT 10 1 5 4 3 1 4 still in a state of flux in some countries RO 13 8 1 4 3 1 (Carley, 2010). There are both cases Total 111 49 39 23 6 4 8 5 10 of business associations, represent- Source: J. Visser, ICTWSS database 3.0, 2010; Carley 2010. ing special interests, combining their resources, for instance in Bulgaria in 1.3.1.1. Organisational change budgets, scale down or commercialise 2006, and new organisations splitting activities (Streeck and Visser, 2006). As off from existing ones or being created The overall structure of peak-level part of a larger trend of re-integrating new, for example in Poland, Bulgaria employer representation has remained industrial relations and social policy and Slovenia. stable over the past decade (Carley, in general business practice, the once 2010). In the countries that have seen common division between ‘trade’ or Business associations usually organ- change, this has in the majority of cases ‘business’ association on the one hand ise only firms and activities in the been through mergers, usually with the and ‘employers’ association on the other private or market sector. Within the aim of strengthening employers’ collec- has almost disappeared. The separation public sector, the core of government tive voice towards the government and between the employers’ confederation activities, including local and cen- the trade unions and, in some cases, BDA and the industry confederation tral administration, policy, army, and avoiding duplication in activities and BDI in Germany is one of the last exam- most of education remains outside creating more economy of scale, for ples of a dual organisation that was quite the scope of business associations and instance when building up a (national) common in Europe 20 to 30 years ago. the government may have set up spe- representation at European level. cial, quasi-independent agencies or Many if not most peak associations Another trend, also found among coordination bodies for the purpose have been under pressure to cut their trade unions, is to merge associations of representation and negotiations

30 Chapter 1: Variations and trends in European industrial relations in the 21st century’s first decade

with the unions, as in Italy or Cyprus. tions, even university associations are average of 74 per country (no data Under the influence of new public now among the member organisations were available for Austria, Slovenia, management the management and of general business associations (see, Lithuania and Romania). This is more organisation of the public sector has for instance, the European Foundation than twice the average (of 29) counted changed with tendencies towards full study on social partnership organisa- for the main union confederations. or partial privatisation, outsourcing, tions in hospitals (Traxler, 2009)). decentralisation, strengthening of The variation across countries is very the prerogatives of management and large, from 15 affiliates in the Danish management by contract rather than 1.3.1.2. Number of associations employers’ confederation DA and 18 hierarchy, and a reform of personal in the Italian Confindustria, to 134 policies. Generally business associa- At the sector level employers’ associa- affiliates in the British CBI, 150 in tions now also recruit members (firms tions tend to be more differentiated the Dutch VNO-NCW, and 164 in and associations) that were previously and numerous than the trade unions. the Spanish CEOE. The latter three in the public domain. Telecom firms, The main general employers’ con- organisations admit also individual postal services, railway companies, federations have an estimated 1 700 (large) firms as members. This con- energy providers, hospital associa- sector affiliates, which represents an trasts with the practice, for instance of the German BDA or Italy’s Confin- dustria, to admit only associations of Table 1.7: Major employers’ confederations, number firms as member organisations. Often, of affiliates and organisation rates in the private sector there are a few dominant affiliates, sometimes themselves federations All enterprises Small- and medium-sized enterprises with associations as their members, Members of BusinessEurope Members of UEAPME which have more resources than the Name Affiliation Density Name Affiliation Density parent confederation. A case in point AT IV 21 13.0 % WKÖ 130 75.0 % is Dansk Industri (DI), which after its BE FEB/VBO 33 75.0 % UCM, UNIZO ..,100 .. merger with the parallel organisation BG BIA 69 .. NCCB, UPEE .., 24 .. in commerce, transport and services, CY OEB 61 .. KEBE 141 .. covers 62 % of the DA’s total mem- CZ SPŽ ČR 29 .. AMSP-CR, CCC 7,.. .. bership and clearly outstrips DA in DE BDA/BDA 56,34 80.0 % ZDH .. .. resources. The General Employer’s DK DA,DI 13,.. 90.0 % Håndværksrådet .. .. Association (AWVN) in the Nether- EE ETTK 24 23.0 % EVEA .. .. lands, VNO-NCW’s largest member, EL SEV .. .. GSEVEE 26 .. ES CEOE 164 75.0 % CEPYME 100 .. is in a similar position, although it FI EK 34 72.0 % SY 80 .. has left international representation FR MEDEF 85 .. CGPME, UPA, APCM ..,50,.. .. in matters of employment and social HU MGYOSZ 50 20.0 % IPOSZ,KISOSZ,OKISZ ..,22,22 .. policy entirely to its parent confedera- IE IBEC 60 .. ISME,SFA ..,.. .. tion. At home, representing nearly all Cna, Confapi, large firms in negotiations with the IT Confindustria 22 .. ..,9,..,60 .. Confart, Confes. unions and responsible for 70 % of all LT LPK 32 .. LVDK .. .. collective agreements in the country, LU FEDIL .. .. ChdM, FDA ..,51 .. it pays the piper and calls the tune. LV LDDK 47 35.0 % LAK .. .. MT MCCEI .. .. GRTU .. .. NL VNO-NCW 150 85.0 % MKB 120 25.0 % 1.3.2. Involvement in national PL PKPP Lewiatan 28 .. ZRP .. .. PT AIP,CIP ..,40 .. CMPME .. .. bargaining and RO ACPR .. .. CONPMMR .. .. consultation SE SN 50 85.0 % Företagarna .. .. It is not possible to measure the degree SI ZDS .. 35.0 % OZS .. 18.1 % of concentration, authority and cen- SK RUZ 24 .. SZZ .. .. tralisation of employers’ confedera- UK CBI 150 33.3 % tions as was done for trade unions in Source: J. Visser, ICTWSS database 3.0, 2010; Carley 2010. the previous section. Membership in

31 Industrial Relations in Europe 2010

business associations often overlaps, In Luxembourg minimum wage deci- of the industrial relations systems in with firms belonging to more than sions are in the hands of the tripartite Austria, Belgium, Denmark, Finland, one association. Regarding bargain- commission deciding on the applica- France, Germany, Italy, the Nether- ing mandates, there are only lim- tion of price indexation to (minimum) lands, Portugal, Spain and Sweden. In ited, recent data on the division of wages, benefits and pensions. In 2008 Ireland, the UK and Luxembourg there resources, authority and tasks. the central organisations in Romania are hardly any sectoral employers’ reached agreement on the annual rise associations which retain a bargain- Until the 1990s the raison d’être of an of the minimum wages until 2014; a ing role. In the new Member States, employers’ federation was linked to similar agreement, for 10 years, was sector bargaining has failed to become the conclusion and administration of reached in 2006 in Portugal. In Bul- the dominant model, with the notable multi-employer collective bargaining garia, the Czech Republic, Hungary, exception of Slovenia. Some degree of but this is no longer the case. Services Latvia, Lithuania, Poland, Portugal multi-employer bargaining, with the and lobbying in national and interna- and Slovenia and in recent years also involvement of employers’ associations tional arenas have acquired a much in Spain the central organisations are at the sector or national level, is also more prominent place. This went along involved in non-binding consultations found in Bulgaria and Romania. with the merger of functions between over the statutory minimum wage. employer and trade associations and a restructuring of activities in the direc- In France, Belgium and Poland central 1.3.3. European-level tion of smaller ‘industrial relations’ organisations negotiate over the imple- organisations departments and more decentralisa- mentation of European legislation tion in representational structures. before it is implemented in national There are three European organisations Still, many national peak associations law; in the UK, the central organisations representing employers’ interests. Busi- of employers are involved in bargain- of employers and unions, CBI and the nessEurope is the main ‘general’ organi- ing or consultation at the national level. TUC, negotiated a ‘joint statement’ on sation for large and small businesses in However, with fewer binding agree- how to implement the ‘Agency Work’ all sectors of the privately owned econ- ments or with agreements that are in directive. Cross-industry bargaining omy. It has 40 national member organi- reality recommendations, they need over specific issues, sometimes in sations: 30 (of the 111 listed in Table 1.6) less elaborate structures for monitor- preparation of a bargaining round at from the EU, one in each Member State ing, implementation and adjudication. the sector level happens on a regular and two in Denmark, Germany and Por- Probably in all EU countries the organ- basis and with success in Denmark and tugal; and 10 outside the EU, in Croatia, isational centralisation of employers is Spain, and on an irregular basis and in Iceland, Norway, San Marino, Switzer- lower than union centralisation. This 2009 without success, in Sweden. In land and Turkey. BusinessEurope was results both from the lower author- sum, in nearly all countries the central founded in 1957 as the Union des Indus- ity and the greater fragmentation of employers are involved in negotiations tries de la Communauté Européenne employers’ organisations. and consultations at the national level, (UNICE), with eight affiliates from the although it is clear that this nowadays founding Member States of the Euro- At some point between 2000 and 2010 rarely results in a wage agreement that pean Community. It renamed itself as in all countries, except Germany, the binds their member organisations. BusinessEurope. In addition to national UK and the Czech Republic, national Slovenia, Finland and Ireland were member federations, it has formed the employers associations negotiated the last countries where such central Alliance for a Competitive European and signed agreements with the incomes policy agreements detailed Industry with 11 major sector industry unions or the government (Avdagic, wage developments, but in Finland the federations, though this alliance has no Rhodes and Visser, 2011). A minor- employers pulled out in 2007 and in direct role in industrial relations. Busi- ity of these agreements were about 2009 social partners in Ireland failed nessEurope also has an Advisory and wages and wage setting (Belgium, to reach agreement over how the exist- Support Group which brings together Estonia, Greece, Ireland, Finland, the ing social pact had to be revised in 33 major multinational firms. Netherlands, Slovenia, Romania, Spain response to the severe economic crisis and Portugal). In Belgium, Estonia and (see Chapter 3). The European Association of Craft, Greece the central employers organisa- Small and Medium-sized Enterprises tion negotiate the minimum wage with At the industry level, sectoral employ- (UEAPME) represents small- and the central union organisations before it ers’ organisations with a collective medium-sized businesses in Europe. is declared binding by the government. bargaining role are key components UEAPME has 39 national member

32 Chapter 1: Variations and trends in European industrial relations in the 21st century’s first decade Chart 1.7: Organisation rate of employers’ organisations

organisations in the EU (out of the list of 111), with one or more in each Chart 1.7: Organisation rate of employers’ organisations 100 Member State, with the exception 2008 of the UK. UEAPME has associated 2002 members in Croatia, Liechtenstein, 80 Montenegro, Norway, San Marino, Serbia and Turkey. There are also five sector European organisations 60 for SMEs in construction, foodstuffs, % transport, services and healthcare 40 associated with the organisation. Since 1998, UEAPME and Busines- sEurope have cooperated closely in 20 EU-level social dialogue and negotiations with the trade unions. The 0 AT SE NL LU BE FR ES FI SI PT EU-15 CY RO MT DE DK IE IT EU-27 BG EL HU EU-10 UK CZ SK EE LV LT PL European Centre of Enterprises with + EU-2 Public Participation and of Enter- Source: J. Visser, ICTWSS database 3.0, 2010; the averages for the EU-27, EU-15 and 12 new prises of General Economic Interest Member States are weighted. (CEEP, Centre Européen des Entre- prises à Intérêt Publique), which was founded in 1961, represents enter- organisations. The figures available expressed in terms of the share of prises and organisations with public therefore need to be interpreted with employees working in firms joining participation or carrying out activities caution. In few countries membership employers’ associations. After adjust- of general economic interest, irrespec- of employers’ organisations is document for the size of the government tive of their legal or ownership status. mented in official statistics. Unlike sector, this yields a statistic that is com- CEEP has national sections in all EU household or labour force surveys mensurate with union density. Chart Member States, except the three Bal- with questions on union member- 1.7 presents the results. tic states, Cyprus, Malta, the Czech ship, there are no parallel enterprise Republic and Slovakia. surveys with information on a compa- In 2008 approximately 106 million rable European scale on membership employees, or nearly 58 % of the rel- At the European sector level, there are of employers’ associations. Conse- evant European Union total, worked hundreds of organisations represent- quently, the figures on absolute or in firms affiliated with employers’ ing business interests. However, only relative membership are mostly based associations. This is more than double a minority of these are employers’ on self-reported data from the organi- the level of unionisation, illustrating organisations, in the sense that they sations themselves. An additional the point made earlier that maintain- represent their members on employ- problem is the definition of ‘potential ing high membership levels seems ment issues or have relations with the membership’. Unlike trade unions, easier for employers’ associations than trade unions. Such organisations are which with a few exceptions recruit for trade unions. It is not possible to mainly found in those sectors where a and represent individuals throughout make a comparison with 2000 for the sector social dialogue has developed. the economy, the government sector is EU-27, as in a number of CEE coun- The role and development of the EU not within the domain of business and tries there are no comparable data. sector social dialogue is addressed in employers’ organisations. However, in the EU-15 the organi- Chapter 6. sation rate of employers was stable Similar to union density, which is meas- at 63 %. Chart 1.7 confirms that the ured as the proportion of all employees changes over time were rather small 1.3.4. The organisation rate joining a trade union, employer organ- — except in Slovenia where obliga- of employers isation density can be defined as the tory membership of Chambers was proportion of all employers (firms) replaced by voluntary organisation, The organisation rate of employers’ joining an employers’ association. By and the organisation rate dropped organisations is hard to assess, due taking into account the employment from 100 to 70 %. Within the EU-15 to lack of data, difficulties of defini- size of firms, an employment density the organisation rate of employees tion and firms that join two or more rate for employers can be calculated, decreased in Germany and the UK,

33 Industrial Relations in Europe 2010

but increased in Sweden, Denmark, Finland, Belgium, France and Spain. Chart 1.8:Chart Union 1.8: Union and and employer employer density, density, 2008 2008 100 To avoid further membership losses, some German employers’ associations have introduced an option for 80 companies to become associate mem- SE bers, not bound by the collective DK FI CY agreements signed by the association 60 (‘Ohne Tarifbindung’). Gesamtmetall, MT BE the powerful association which coor- 40

Union density (%) SI LU dinates the regional agreements in IT RO UK IE AT metal-engineering with the IG Metall EL CZ PT 20 LV union, did so in 2005. HU BG NL PL SK DE ES LT EE FR The variation in the level of organisa- 0 0 20 40 60 80 100 tion across countries is considerable, Employers' density (%) with the 12 new Member States grouped Source: J. Visser, ICTWSS database 3.0, 2010. towards the lower end, together with the UK. In central and eastern Europe only about one third of all employees (2) low union density and low employer Overall, with 58 % of all employees work in firms organised in employers’ density (in the lower left corner): the working in firms joining employ- associations. However, both Romania UK and most CEE countries; (3) low ers’ federations, the level of employer and Bulgaria appear to have rather high union density and high employer den- organisation in the EU appears stable levels of employer organisation, and the sity (in the lower right corner): coun- and high, albeit with a significant gap same goes for Malta and Cyprus. One tries in western and southern Europe. between the EU-15 and the 12 new of the problems of employers’ organi- The fourth combination of high union Member States. However, as in the sations in CEE countries is that, like density and low employer organisa- case of trade unions, employers’ asso- trade unions, they find it hard to gain a tion does not feature; the upper left ciations are challenged by changes foothold in the newly emerging private corner of Chart 1.8 is empty. The find- in their environment, for instance, sector, either because these firms are ing suggests three hypotheses. First, national and transnational mergers of exceedingly small and rapidly chang- where labour is highly organised busi- firms, a greater emphasis on company ing, or because employers, especially in ness will be highly organised as well, as opposed to sector bargaining, and the international large firm sector, are and through central bargaining each pressures for greater effectiveness in reluctant to join or form associations side will have incentives to maintain European and global representation. for the purpose of collective services cohesion and high levels of organisa- and representation. In addition, these tion (the Nordic trajectory, at least organisations often lack a mandate until recently). Second, where labour from their members and their finan- has a hard time organising and the 1.4. Collective cial position is often too weak to enable state prioritises market liberalisation, bargaining them to provide adequate services to the pressure on employers to organ- member firms. Frequently, this creates ise is limited and both sides will be obstacles to social dialogue, concerta- locked into a relationship at low lev- Voluntary collective bargaining plays tion and collective bargaining. els of organisation and internal cohe- a key role in industrial relations and sion (the post-Communist or CEE is a defining element in social part- Chart 1.8 compares the density rate countries trajectory). Third, where the nership within and beyond the EU. of employers and of workers. Overall, state’s role in social policy is extensive, Across EU Member States there are, there is a positive association between business needs to be highly organised, however, large differences in the role, the two (r = .47). Three combinations but the pressure on labour to organ- coverage and effectiveness of collective are apparent: (1) high union density ise is comparatively less since labour bargaining and in the attitude taken and high employers density (in the may rely on the state and public policy by the authorities. This section first upper right corner): the Nordic coun- instead (the continental, southern and analyses the differences due to varia- tries, Belgium, Malta and Cyprus; western European trajectory). tion in the rate of union and employer

34 Chapter 1: Variations and trends in European industrial relations in the 21st century’s first decade

organisation and discusses the use of comparable with union and employer the bargaining parties may explicitly extension mechanisms by the state. density. While union density is one of exclude certain employee groups. In Second it considers the organisation the indicators of potential bargaining the past, collective agreements often and centralisation of collective bar- strength and solidarity among work- excluded (part-time) employees work- gaining and its coordination across ers, bargaining coverage measures the ing less than a minimum number of different levels (company, sector, real rather than potential extent to hours per week, thereby excluding region or nation). The main findings which employees are subject to union- large numbers of women and young are that a large majority of European negotiated terms and conditions of people — a practice that would now employees are covered by collective employment. contravene the spirit if not the letter agreements, that extension mecha- of the EU’s part-time workers’ direc- nisms based on public law continue to There are a number of reasons why tive and anti-discrimination legisla- play an important role, that decentral- employees may not be covered, even tion. Collective agreements may also isation of actual pay setting has con- if collective bargaining takes place exclude managers or employees above tinued and sector agreements, where (Traxler and Behrens, 2002). First, a certain pay threshold. In such cases, they apply, are increasingly amended unions and employers may be too employment terms are regulated by by company-level agreements and weak to include all employees belong- individual contract. Third, certain arrangements, and that coordination ing to their domain of action. Second, categories of employees may be legally across bargaining units and agents is a distinguishing feature in most EU-15 Box 1.4: Measurement of bargaining coverage rates but not the 12 new Member States. The coverage data used are from the ICTWSS database; in some countries this is based on household surveys, for instance the UK; in others on occasional surveys among enter- The existence of EU-level actors prises and employers’ federations (e.g. Hungary, Italy, the Netherlands, Poland); and in notwithstanding, there is as yet no most countries on administrative data and estimates by the government. The ICTWSS data EU-level competence or capacity to incorporate EIRO data (Traxler and Behrens, 2002), including the annual Industrial Rela- undertake collective negotiations over tions reports of the European Foundation and the country profiles in EIRO. For 2008–09 wages, working hours or other core we have been able to compare the ICTWSS data with data obtained from the European Company Survey, which relies on estimates from management but excludes firms with conditions of employment which mir- less than 10 employees. The ranking is very similar; the correlation coefficient between the ror collective bargaining at national, ICTWSS data and the ECS data is r=.94. The ICTWSS data have the obvious advantage that sector or company level. Unlike the it allows a comparison through time, in many cases since 1960. previous sections, therefore, there are As in the case of calculating union density and employers’ organisation rates, there are no paragraphs devoted to EU develop- many data and measurement problems. Comparing across countries it seems useful to ments. The capacity to engage in EU- take account of the fact that some groups of employees may be excluded from collective level agreement-making exists under bargaining (and from the right to strike). In that case it is necessary to calculate an adjusted coverage rate, i.e., to calculate the number of employees covered by a collective agreement the social dialogue at cross-sector and as a proportion not of all employees but only of those with the right to bargain. In most sector level, and is addressed in Chap- Member States the difference is slight, since only very few are excluded. In some Member ter 6. It has also emerged in some mul- States, however, such as Austria, Germany, Hungary, Luxembourg or Spain, it does make tinational companies, and Chapters 3 a difference when public employees without bargaining rights are taken out. Besides these and 6 touch on this. adjustment difficulties, a problem of comparability may also arise due to the fact that, under multi-level bargaining, many employees are covered by two (or more) agreements. This may cause double counting in statistics on coverage. Confusion may also derive from multiannual agreements and missing specification of the date when agreements expire. 1.4.1. Bargaining coverage Sometimes collective agreements are only reported in their first year of validity, thus excluding still valid multi-year agreements from an earlier year. In the statistics reported, The bargaining coverage rate is an every effort has been made to include all collective agreements that are (still) valid dur- indicator of the extent to which the ing the year under consideration and calculate adjusted rates. Finally, the data refer only terms of employment are negotiated to the formal coverage of collective agreements, as demarcated by their scope. Hence the informal application of the terms of the agreement by firms not formally bound by the by trade unions. Operationally, the agreement is not considered, though this may give collective bargaining additional repre- coverage rate is defined as the number sentation and influence. Formal coverage does, however, include those employees covered of employees covered by a collec- by extension procedures. tive agreement as a proportion of all A measurement problem that remains is that bargaining coverage is measured only for wage- and salary-earners in employ- the formal sector or registered employment. OECD and Eurostat estimates of the infor- ment. This definition renders the mal sector, including self-employed and family workers, vary from 5 % in some northern measurement of bargaining coverage economies to 35 % in Greece.

35 Industrial Relations in Europe 2010

excluded from the right to collective and Portugal, but this increase came of the 1990s saw a noticeable erosion bargaining. This sometimes applies to a halt or reversed after 2000. In of bargaining coverage. According to to civil servants or particular groups Portugal there was a large decline in the IAB enterprise panel the coverage such as the police and the armed coverage in response to a change in the rate of firms fell from 72 to 63 % in forces, whose employment terms are law in 2004, which ended the practice, the ‘old’ Federal Republic and from regulated unilaterally by the state. common in many countries, that col- 56 to 44 % in the five new eastern lective agreements remain valid even states (Kohaut and Schnabel, 2003). An estimated 121.5 million of the 184 after they expire, until a new agree- Coverage slipped further to 56 % of million employees in employment in ment is reached. Although employers the firms in the western and stabi- the EU were covered by a collective and unions reached a central agree- lised around 41 % in the eastern part agreement in 2008. This translates ment restoring the practice in 2006, between 2003 and 2008 (Ellguth and into an adjusted bargaining coverage the coverage rate — although recover- Kohaut, 2008). Most defections came rate of 66 %, or two-thirds of all EU ing somewhat — has not returned to from small- and medium-sized firms employees. Over the first decade of the its previous level. and were related to the difficulty faced 21st century the number of employ- by employers’ associations in binding ees covered increased by more than In the 1990s the two countries with employers to standardised collective eight million, but since employment the largest decline in bargaining cov- agreements with the unions. With increased much faster, the coverage erage were the UK and Germany, but moderate pay settlements and allow- rate slipped by 2 percentage points. developments after 2000 were less dra- ing ‘hardship clauses’ and settlements The most striking feature of Chart matic. In the UK, bargaining coverage emphasising investment, employ- 1.9 is the huge cross-national varia- shrank from 54 % in 1990 to 32.3 % in ment stability and flexibility in work- tion, ranging from virtually 100 % in 1998, but has since stabilised and was ing time arrangements, the main Austria to less than 20 % in Lithuania. 33.6 % in 2008. This may reflect the German unions, especially in chemi- There was a small decrease in cover- effect of legal changes in 1999, intro- cals and metal, have tried to stem age rate in many countries, and some ducing a statutory mechanism for the decline and strengthened their larger declines in Portugal, Slovenia, workers to secure union recognition cooperation with the main employ- Slovakia, Cyprus, Malta and Poland. and thereby bargaining representa- ers’ federations. This seems to have The erosion of collective bargaining tion. Nonetheless, bargaining cover- curtailed the tendency towards ‘disor- coverage in Germany between 1995 age in the UK is the lowest amongst the ganised’ decentralisation and contrib- and 2005 appears, however, to have EU-15 — a striking expression of the uted to some degree of re-regulation slowed. During the 1990s bargaining consequences of the near absence of (Haipeter, 2009). coverage increasedChart in 1.9: Denmark, Bargaining Fin coverage- significant rates, 1997–99 sector-level and 2007–09 collective bar- land, Sweden, the Netherlands, Spain gaining. In Germany, the second half Collective bargaining structures and practices remain fragile in central Chart 1.9: Bargaining coverage rates, 1997–99 and 2007–09 and eastern Europe and coverage is 100 low — the average of 43 % around

1997-99 the end of the decade is 4 percent- 2007-09 age points below that in 2000. There 80 was a decline in Estonia, Poland, Slovakia, Slovenia and Bulgaria, and

60 a small rise, from very low levels, in Latvia and Lithuania. The rate was % broadly level in Hungary and the 40 Czech Republic. Low coverage rages and weak collective bargaining structures amongst the CEE countries 20 tend to go together with a still considerable role for the state in private 0 sector wage setting, mostly through AT BE SI SE FR FI ES DK NL IT EU-15 RO PT EL DE EU-27 IE LU CY CZ EU-10 SK MT PL HU UK BG LV EE LT + EU-2 the mandatory minimum wage — a feature which is returned to below Source: J. Visser, ICTWSS database 3.0, 2010. (see also Chapter 4).

36 Chapter 1: Variations and trends in European industrial relations in the 21st century’s first decade

Chart 1.10: Bargaining coverage, union and employer density, 2007–09

1.4.1.1. The relation between bargaining coverage, Chart 1.10: Bargaining coverage, employer organisation and union and employer density, 2007–09 union density 100

Bargaining coverage Employer density There appears to be a weak albeit signif- 80 Union density icant association between union density and bargaining coverage (r = .45; 27 countries). Chart 1.10 shows that 60 coverage rates exceed union density % rates in all EU Member States except 40 Cyprus and Malta. Often the ‘excess’ of coverage over density is by a very wide margin, for instance in France, 20 Spain, Portugal, Austria, Germany and the Netherlands. A much stronger 0 AT BE SI SE FR FI ES DK NL IT EU-15 RO PT EL DE EU-27 IE LU CY CZ EU-10 SK MT PL HU UK BG LV EE LT association exists between bargaining + coverage and the employers’ rate of EU-2 organisation (r = .84; 26 countries). Source: J. Visser, ICTWSS database 3.0, 2010. High bargaining coverage occurs under multi-employer bargaining, Table 1.8: Extension of collective agreements and requires the existence of organi- and minimum wage legislation sations of employers with a mandate Mandatory to negotiate agreements with the rep- Extension Enlargement Functional equivalents resentatives of employees. minimum wage AT widespread other sectors membership Chamber almost BE widespread yes The level of employer organisation BG limited/not used yes exceeds bargaining coverage, by a large CY no partial degree in Bulgaria, Luxembourg, Malta CZ limited yes and Cyprus, and by a small margin in DE limited public procurement rules partial the Netherlands, the UK, Hungary, DK no no Estonia and Lithuania (Chart 1.10). EE limited yes These differences could arise for at EL widespread national covering agreement yes least two reasons: some employers’ ES widespread other sectors yes associations may not seek negotia- FI widespread public procurement rules no tions with trade unions; where they do FR widespread other sectors yes have a mandate to negotiate they may, HU limited yes however, fail to identify an appropri- IE no joint labour committees yes ate union capable of signing an agree- IT no courts no ment. The standard case, found in most LT limited/not used yes countries, is that bargaining coverage LU widespread yes exceeds the rate of employer organisa- LV limited yes tion. The main explanation for this is MT no yes the extension of agreements to non- NL limited yes organised employers, either voluntary PL limited/not used yes (and perhaps under union pressure, PT widespread other regions yes as is customary in Scandinavia) or RO no national covering agreement yes through extension mechanisms under SE no no SI limited yes public law. SK limited yes UK no yes Source: J. Visser, ICTWSS database 3.0, 2010; Traxler and Behrens, 2002, and EIROnline.

37 Industrial Relations in Europe 2010

1.4.2. Extension of collective the mechanism to raise the minimum used to assure compliance have been agreement and sector wage in a particular sector, a practice challenged by the Court of Justice 2007 organisation which has expanded from construc- ruling in the Laval case (Davies, 2008; tion to other sectors in the context Malmberg and Sigeman, 2008). As reported in the 2002 Industrial Rela- of regulating minimum conditions tions in Europe report, most EU Mem- for posted workers in Germany. In Finally, although important for ‘excess ber States have availed themselves of Ireland, although the formal scope coverage’ above the level of union and a legal technique allowing the public for extension is wider, in practice it employer organisation, extension does authorities, usually the Ministry of applies only in construction. not correlate strongly with the rank- Labour, to extend the collective agreeing of countries in terms of bargaining ments reached by unions and employ- Of the eight countries without extension coverage. There are too many other ers, or clauses from agreements, to laws, five have a mandatory minimum factors that play a role, e.g. employer similar employers who are not mem- wage (Ireland, the UK, Romania, Malta organisation, bargaining centralisa- bers of the relevant employer asso- and Cyprus for some occupations) and tion and/or union pressure. Far more ciation (Traxler and Behrens, 2002). in one, Italy, the courts tend to enforce important is the organisation of col- Usually, extension applies to similar minimum wages in similar occupa- lective bargaining and, in particular, firms in the same sector or branch of tions. The annual national collective the dominance or absence of the sec- economic activity. In some countries agreements in Greece and the five-year tor as the key organising device for the mechanism is used to include all agreement in Romania, concluded in trade unions, employers’ associations firms under a national agreement, for 2006, can also be counted as functional and collective bargaining. Chart 1.11 instance in Belgium with regard to the equivalents of public extension in so far shows a clear pattern. Where sector minimum wage. In a few countries as they cover all occupations and sec- organisation is the dominant principle extension mechanisms are used to tors in the formal economy. This leaves in collective bargaining (score = 2), apply the agreement outside the sec- only two EU Member States, Denmark bargaining coverage, employer organ- tor by means of a procedure termed and Sweden, with neither the possibil- isation and union density rates are ‘enlargement’ (see Table 1.8). ity of legally extending the collective higher. Where sector organisation is agreement nor a mandatory minimum weakly or partially applied (score = 1), The possibility of legal extension of wage or some functional equivalent for coverage rates as well as organisa- collective agreements exists in 19 out either of the two. In both countries the tional levels of employers and unions of 27 EU Member States. In eight trade unions see it as their task to assure are lower. Where the sector is absent (Austria, Belgium, Luxembourg, Fin- that all employers, organised or not, as an organising principle (score = 0), land, France, Spain, Portugal and pay the going rate, though the methods coverage and employer organisation Greece) the practice of extension is Chart 1.11: Sectoral organisation, bargaining coverage, employer and union density, 2007–09 widespread and quasi-automatic, and Chart 1.11: Sectoral organisation, bargaining coverage, in four of these countries agreements employer and union density, 2007–09 can be applied in other sectors or 100 regions. In 11 countries extension is Bargaining coverage more restricted through the require- Employer organisation ment that the agreement meets a 80 Union density threshold of representation, that both unions and employers agree, or that 60 the agreement promotes some pub- % lic policy objective or at least does not contradict it. In some countries 40 extension is legally possible but hardly practiced because few sector agree- 20 ments are reached; Poland, Lithua- nia and Bulgaria, in recent years also 0 Slovakia and Hungary, are cases in 2 1 0 point. In Germany extension is little Source: J. Visser, ICTWSS database 3.0, 2010. used because employers hold an effec- NB: ‘2’ = AT, BE, DE, DK, ES, FI, IT, NL, SE and SI; ‘1’ = EL, FR, HU, LU, PL, PT, RO and SK; tive veto and tend to oppose use of ‘0’ = BG, CY, CZ, EE, IE, LT, LV, MT and UK.

38 Chapter 1: Variations and trends in European industrial relations in the 21st century’s first decade

rates, though not union density, are been discussed in the 2006 Industrial industry have incorporated provisions lowest. Finally, ‘excess coverage’, i.e. Relations in Europe report. for local pay review and opportuni- the distance between bargaining cov- ties for individuals to negotiate their erage and the rate of union organisa- own wages (Granqvist and Regnér, tion, is largest in countries where the 1.4.3.1. The level of bargaining 2008). In Denmark, recent agreements sector principle applies. in industry detail general conditions The distinction between levels (i.e. and procedures, as well as minimum, national or regional, sector and youth and entry wages, and leave the 1.4.3. Decentralisation company bargaining) is only a first allocation and division of pay rises and organisation of approximation of the reality in each to firm-level negotiations. In Austria collective bargaining country. First, in no country does bar- since 1997 some industrial agreements gaining take place exclusively at one include a distributional pay component The main trend in industrial relations level. The extreme cases are, at one that can be decided at company level. in the past two or three decades is end, Lithuania, where according to the In the Netherlands, most sector agree- decentralisation. This means that the European Company Survey’s managements detail pay increases, but there is centre of gravity in decision-making ment respondents, 94 % of all bargain- now a staggering diversity in types of on employment contracting, wages ing activity, in terms of coverage, is agreements. In the private sector area and human resources has moved based on company bargaining and, at of FNV Allies and the employers’ fed- closer to the firm. In countries with the other, Finland where 76 % of those eration AWVN, which covers some 700 sector bargaining, single-level bar- covered rely on sector or national of the country’s 1 000 agreements, 36 % gaining tends to make way for multi- bargaining (ECS, 2010). In many of all agreements are multi-level, 55 % level bargaining. These developments countries, bargaining over wages and have à la carte provisions which allow put pressure on collective organisa- working hours takes place at two or employees to make a choice between tions outside the firm, such as trade more levels: the company and the sec- types of working hours arrangements unions and employers’ organisations, tor (metal, textile, construction, bank- and between pay and working hours, and also the state and the law to make ing, etc., or in some cases the entire and the building up of ‘personal budg- room for derogation, for firms, groups manufacturing or private sector). It ets’ for training, paid leave and early or individuals, from general and col- may be that the level of bargaining retirement (Zielschot, 2010). Since the lective standards set for the entire alternates between levels in different 2004 ‘Pforzheim’ agreement in metal sector, or wider economy. To this end, years, especially when national or sec- engineering in Germany and a similar, different techniques are being used, tor agreements set terms for several earlier agreement in chemicals, ‘open- from individual opt-outs to company years, to be detailed in subsequent ing’ and ‘hardship’ clauses in sector social pacts and agreements negoti- firm-level negotiations, as is the case agreements have been tied to com- ated by works councils, union work- the Nordic countries and Italy. pany negotiations over employment, place representatives or designated investment and, in some cases, advan- staff members. Over the years 2007–09, the sector tages for union members (Ellguth and was the main level at which wage Kohout, 2008; Haipeter, 2009). In Italy, A further component of decentralisa- negotiations took place in 11 EU ever since the 1993 social pact, bargain- tion is procedural, allowing more flex- Member States: Austria, Belgium, ing over wages takes place at two levels ibility in the application of legal norms Denmark, Finland, Germany, Italy, the — sector, over cost-of-living increases and collective standards. Rather than Netherlands, Portugal, Spain, Sweden and firms, over performance- or standard terms, collective agreements and Slovenia. According to the ECS, productivity-based increases. In prac- tend to set minimum conditions; or in for more than half of all employees tice, firm-level negotiations cover only some cases, the terms set by collective covered by collective agreements in employees in large firms. In a recent agreements allow deviation both above these countries, there was no addi- pact, signed in 2009 by two of the three and below the norm, if some proce- tional firm-level bargaining. This is main confederations — but not the dural conditions — for instance, fair a situation which characterises serv- CGIL union, Confindustria and the negotiations involving representatives ices and smaller firms, rather than government, this structure was reaf- from the group of workers making manufacturing and larger compa- firmed, but with sector pay increases concessions — have been met. Some nies, where multi-level bargaining is tied to actual (past) rather than pre- of the implications of these develop- becoming increasingly widespread. In dicted (future) inflation and greater ments for collective labour law have Sweden recent collective agreements in scope for firm-levelnegotiations.

39 Industrial Relations in Europe 2010

In France, Ireland, Greece, Romania and additional company negotiations completely disappeared, but with and Luxembourg, too, a majority of all are therefore rare. the end of such agreements and employees were covered by agreements pacts in Finland in 2007, in Ireland that set standards above the level of In 11 countries the main and for most in 2009 and in Slovenia in 2010 they firms in 2007–09, but in each of these workers the only bargaining activ- have become few and far between. cases the sector plays a less prominent ity, if there is bargaining at all, is in the In Greece the national agreement role. Sector agreements play a role in company: Bulgaria, Cyprus, the Czech for 2008–09 faces a difficult renewal. France, especially in setting minimum Republic, Estonia, Hungary, Latvia, National agreements continue to be standards in sectors with many small Lithuania, Malta, Poland, Slovakia and an important feature in Belgium, the firms. They do so with the help of the the United Kingdom. With the excep- Netherlands and Spain, and the most public authorities, through extension tion of Malta and Cyprus these are recent agreements concluded since or, if no bargaining takes place or agree- precisely the countries with the lowest the onset of the crisis are reviewed in ment is not reached, through impos- coverage rates. According to the ECS, Chapter 3. In the absence of national ing the rules of another, similar sector. in these countries for more than 50 % of agreements, pattern setting between However, the most vibrant element in the (relatively few) employees who have sectors is, or has become, prominent recent times has been company bargain- their pay packages decided through col- in some countries. ing. This has been stimulated by nego- lective bargaining, company bargaining tiations over working time reduction, is the only source. Higher-level bargain- In Finland, which since 1968 has had with tax concessions and incentives ing, at the level of sectors or groups, a history of central incomes policy tied to productivity and work organisa- does occur in some of these countries, pacts, the last such pact expired in tion issues. In Ireland sector bargaining including Bulgaria, the Czech Republic, September 2007. Bargaining has sub- never played an important role, except Hungary, Poland, Romania and Slova- sequently shifted to sector level, with in construction, but since 1987 pay kia. But it is unstable and fairly limited employers pressing for flexibility at bargaining had been determined by a in coverage and/or in the scope of the company level. Accordingly, the sec- series of triennial social pacts or ‘part- regulation specified. tor agreements concluded in 2008 nership programmes’, the last of which and 2009 introduced some measure was negotiated in 2006 with a pay of flexibility, especially regarding clause for 24 to 35 months, depending 1.4.3.2. National pay agreements and working hours and overtime. It seems on the economic sector. When nego- pattern setting that Finland is moving closer to the tiations over an adjustment of the pay situation of its Nordic neighbours. In clause to the economic crisis broke National pay agreements or cross- both Sweden and Denmark, national down in 2009 and employers pulled industry social pact have not pay agreements have long since out, Ireland braced itself for a return to company bargaining. Company nego- Box 1.5: Index of bargaining centralisation tiations prevail in Luxembourg and cover many employees, but the adjust- and dominant level of bargaining ment of the cost-of-living index, based In the ICTWSS database there is, in addition to the indicator on union centralisation, discussed on consultation with social partners, earlier, an indicator of bargaining centralisation based on the dominant level at which bargaining takes place. This is scored on a five-point scale: 5 = national (cross-sectoral) bargaining; has remained a very important source 4 = national (cross-sectoral) bargaining with derogation and additional sector or company of wage regulation. In contrast, in bargaining; 3 = sector- or industry-level bargaining; 2 = sector- or industry-level, with addi- Greece, unions and employers, assisted tional local or company bargaining; and 1 = local or company bargaining. Bargaining centrali- by the government, negotiate each sec- sation tends to increase with union centralisation, but the correlation is modest (r = .52). With ond year a biennial national agreement, union and confederal authority the correlation is .62. though a new agreement for 2010–11 The coordination index in the ICTWSS database is derived from Kenworthy (2001) and has has not yet been reached. In Romania the following values: 5 = economy-wide bargaining, based on (a) enforceable agreements between the central organisations of unions and employers affecting the entire economy or the central social partners are used to entire private sector, or on (b) government imposition of a wage schedule, freeze, or ceiling; signing a national agreement on mini- 4 = mixed industry and economy-wide bargaining: (a) central organisations negotiate non- mum conditions. In both countries, for enforceable central agreements (guidelines) and/or (b) key unions and employers associations most workers the national agreement, set pattern for the entire economy; 3 = industry bargaining with no or irregular pattern setting, together with the law, is the only source limited involvement of central organisations, and limited freedoms for company bargaining; of regulation of wages and working 2 = mixed or alternating industry- and firm-level bargaining, with weak enforceability of industry agreements; 1 = none of the above, fragmented bargaining, mostly at company level. hours, since few large companies exist

40 Chapter 1: Variations and trends in European industrial relations in the 21st century’s first decade

Chart 1.12: Bargaining centralisation, 2000s 1.4.3.3. Centralisation and Chart 1.12: Bargaining centralisation, 2000s coordination of (wage) 5 bargaining 2007-09 1997-99

4 With more decentralisation, multi-level bargaining and the larger space for company or even individual bargaining, 3 coordination across bargaining units (or bargaining agents, be they firms or Index

2 unions) in a horizontal sense or within bargaining units (or agents) in a vertical sense tends to become more rather than 1 less important. Some of the national agreements or trend setting arrangements described in the previous section 0 SI FI BE EL IE PT ES NL IT DE SE AT RO EU-15 DK BG EU-27 LU FR EU-10 SK UK MT CY HU PL LV EE CZ LT + have exactly that function. EU-2 J. Visser, ICTWSS database 3.0, 2010. The first main message from Chart 1.12 is that there is a large divide between Chart 1.13: Bargaining centralisation and coordination, 2007–09 the EU-15 and the 12 new Member Chart 1.13: Bargaining centralisation and coordination, 2007–09 States. In the EU-15 sector some other 5 form of multi-employer bargaining NL prevails, the main exception being IT DE IE EL BE SI the UK. In the 12 new Member States 4 AT company bargaining prevails, albeit ES DK EU-15 mixed with some element of multi- FI 3 SE employer bargaining, although usu- PT EU-27 RO ally not at the sector level; here there HU SK appear to be three exceptions, i.e. 2 CY LU CZ EU-10 FR BG Slovenia, Romania and Bulgaria The + EU-2 Bargaining coordination Bargaining second main message is that there is UK 1 MT a clear tendency towards decentralisa- PL LV tion and that sector bargaining with EE LT the possibility of additional company 0 0 1 2 3 4 5 bargaining has become the main- Bargaining centralisation stream in the EU-15. Source: J. Visser, ICTWSS database 3.0, 2010. Finally, bargaining centralisation and coordination are nicely aligned, as is disappeared, though in Denmark the had usually been the case. In Germany shown in Chart 1.13. There are two agreement between DI and a cartel of and Austria the collective agreement main groups in the European Union: unions for the entire industrial sector in the metal industry has long acted the economies of CEE countries plus usually sets the trend for the subse- as the pattern setter for other sectors Malta, Cyprus and the UK, where on quent private sector agreements under (Traxler, Blaschke and Kittel, 2001). average decision-making over wages the umbrella of the national union and is taking place in the company, with employers’ confederations LO and Finally, the involvement of unions and less coordination among bargaining DA. In Sweden, conflict has arisen employers in agreements and consul- agents or units (lower left corner); and over which sector should set the trend tations over the minimum wage can the continental European countries of — the retail and commercial services play a similar, though clearly less influ- north and south Europe, plus Ireland sector, as some unions wanted, or the ential role, in coordinating national and Slovenia, where decisions over industrial export sector — which has wage developments, especially in cen- wages are also influenced by bargain- been hit hard by the recession — as tral and eastern Europe. ing agents above the level of firms and

41 Industrial Relations in Europe 2010

these agents coordinate among them- enterprises, through European works with employers. Member States in selves (upper right corner). Within councils and the provisions for which such ‘single channel’ representa- each group, however, there is con- employee involvement in European tion dominates include Sweden, Fin- siderable variation, with for instance Companies (SEs), are also reviewed. land, Denmark, Ireland, the UK, Malta, France much lower on coordination Italy, Poland and the Czech Republic. than Germany, Italy or Spain, and a Workplace representation based on more coordinated wage bargaining 1.5.1. National variations in works councils, as in a pure ‘dual chan- approach in Romania compared to employee representation nel’ model, exists in addition to and is the rest of the new Member States. in the enterprise independent from unions. It is usually elected by and from all employees (with Forms of employee representation at some restrictions on those with tempo- the workplace have been legally estab- rary or part-time contracts, etc.); is held 1.5. Employee lished and institutionalised in most of accountable to union and non-union representation in the EU Member States (6). In recent members alike; and operates within history, EU directives have fostered powers and competences defined by the enterprise the formation and revision of insti- the law. Dual channel representation tutional arrangements for workplace based on works councils is found in Employee representation in enterprises representation, not least in the 12 new Germany, Austria, the Netherlands, for the purpose of information and Member States. Directive 2002/14/ Belgium, Luxembourg, France, Spain consultation is a key feature of Euro- EC establishing a general framework and Hungary. pean industrial relations. Legal provi- for informing and consulting employ- sions for employee representation exist ees in the European Community has In reality various mixed forms are in all countries and are required by EU been an important landmark in this found and in many countries both law, based on Directive 2002/14/EC context. A great variety of institu- structures exist alongside each other. In on information and consultation. The tional structures exists among the many countries trade union and works ways of organising employee organi- Member States with regard to the for- council representation are treated as sation; the rights and activities of rep- mal organisation of employee repre- being complementary, with a division resentatives; their reliance upon the sentation in the enterprise. The basic of tasks between them. Negotiating unions; independence from manage- differentiation is whether employee and strike rights tend to be ‘invested’ ment; formal and informal involvement representation proceeds through the in the union and denied to the works in grievance handling and negotiations union or is based on a construction council, but this is not universally so in the workplace or enterprise differ that is formally independent from the and in firms where unions are absent widely across the EU. In the Industrial union, i.e. the works council. This dif- councils can sometimes take over the Relations in Europe reports of 2002, ference has various consequences, i.e. union’s role. The opposite is also pos- 2004 and 2006 various descriptions how representatives are elected; whom sible and in some countries the works and categorisations have been offered. they represent; what powers they hold; council ceases to exist when a trade and what competences they have. union is established at the workplace. This section takes stock of the situation It is important to note that several in 2008 or 2009 and of developments Workplace representation through the countries have separate regulations for since 2000. First, we discuss the pattern union, as in the pure ‘single channel’ the public sector, although these often of employee representation, including model, is based on election by and or amount to nominal differences only. the relation with trade unions. Next, appointment from union members. Institutional differences also exist in an attempt at ‘measuring’ the formal It does not pretend to represent the the powers assigned to works coun- or organisational strength of employee interests of non-union members and cils, in particular whether the works representation in the enterprise by inte- derives its powers and competences council has only consultation rights, as grating four different pieces of informa- from the union, though this may be established through the EU directive, tion (see Box 1.6) is presented. Third, specified by the law or in agreement or co-determination rights — that is, with help of the European Company the right to decide jointly with man-

Survey, the focus shifts to the incidence 6 This section draws heavily on a contribution agement. Works council regulations in of employee representation in the from the European Foundation for the Improvement Austria, Germany and the Netherlands, enterprise. Developments in transna- of Living and Working Conditions, based on the for instance, include co-determination summary findings of the 2009 European Company tional representation in (multinational) Survey issued in March 2010. powers in specific areas.

42 Chapter 1: Variations and trends in European industrial relations in the 21st century’s first decade

The ESC data confirm that in most Chart 1.14: Workplace representation Member States works council mem- Chart 1.14: Workplace representation bers are also active in the trade union. 10 1997-99 Based on the response of employee 2007-09 representatives, the survey indicates 8 that in 84 % of the works councils there are trade union representatives and in 56 % of the councils union members 6 are in the majority. Compared with the Index much lower average for union mem- 4 bership in the EU — around 25 % — and considering that works councils are elected, this might be seen as a vote 2 of confidence in the unions.

0 DK FI SE LU BE NL IT DE AT FR ES SI RO PL SK HU IE UK CZ BG CY EE LT LV MT PT EL 1.5.2. The organisational basis and formal power of Source: J. Visser, ICTWSS database 3.0, 2010. employee representation France, Spain and Slovenia — each representatives have become more Combining various pieces of infor- with strong works councils but with powerful as against other stakehold- mation including formal rights, different arrangements concerning the ers in the firms. In fact, works councils involvement in co-determination cooperation between unions and coun- and other employee representation and firm-level negotiations, as well cils. At the other are the Baltic states, bodies often express concern that they as the nature of the relationship with Cyprus and Malta, Bulgaria and Greece, in practice have lost influence in the the union(s), the formal strength of with weakly institutionalised bodies of recent past. employee representation in the enter- employee representation, alongside or prise can be assessed (see Box 1.6). instead of trade unions, and with weak Chart 1.14 summarises the variation rights vis-à-vis management. The other 1.5.3. The incidence and between EU Member States and the message from Chart 1.14 is that EU coverage of employee developments since 2000. Member States have to some extent representation in the converged on this issue, with more The picture that emerges is, again, one rights accruing to employees in coun- enterprise of diversity. At one end are the three tries where employee representation According to the ECS, in 2009 about Nordic countries, with the strong- was weakly founded. The convergence 37 % of all establishments with 10 or est workplace representation rights, is clearest in the area of formal rights more employees had an institutional based on integration between union where, before the introduction and form of employee representation. This and employee representation, backed application of Directive 2002/14/EC, translates into a ‘representation cover- by basic agreements and legal rights. few existed amongst the 12 new age rate’ of about 60 % of the employ- This is followed by a group of conti- Member States or in Ireland and the ees in these establishments. With a nental European countries — Benelux, UK. It would, however, be wrong to correction for the employees work- Germany, Austria and Italy, then infer from Chart 1.14 that employee ing in small firms — including them would yield a lower coverage rate, Box 1.6: the organisational strength somewhere near 50 % — a compari- of employee representation in the enterprise son can be made with union density and the bargaining coverage rate. The The ICTWSS database contains information on (a) whether a provision for information and consultation in the workplace exists (0–2); (b) whether it can rely on strong or weak employee representation coverage rate powers delegated to it by the unions, or acts independently from the unions (0–4); (c) has is almost twice as high as union density. strong or weak rights of intervention against management in a narrow or wide range of In other words, due to institutional- issues (0–3), and (d) is directly involved in negotiations over (aspects of) pay, working ised forms of enterprise representation hours and conditions of the firm’s workforce (0 or 1). With this information an additive, unions can extend their audience and 10-point scale has been constructed. influence. Butrepresentation coverage

43 Industrial Relations in Europe 2010

Chart 1.15: Workplace representation — rights and coverage rate is lower than that for bargaining coverage. The main reason is that Chart 1.15: Workplace representation — rights and coverage most national regulations and Direc- 100 10 Workplace representative coverage tive 2002/14/EC contain thresholds, (left axis) usually 50 employees, above which Workplace representative rights 80 8 representation becomes mandatory. (right axis) There are pronounced differences in incidence and coverage of employee 60 6 representation by company size and % sector. The highest coverage rate — up Index 4 to 90 % — is reached in large firms 40 and in the public sector, followed by industry. Coverage is noticeably lower 20 2 in private services, and lowest in firms with 20 to 49 employees. 0 0 DK FI SE LU BE NL IT DE AT FR ES SI RO PL SK HU IE UK CZ BG CY EE LT LV MT PT EL As shown in Chart 1.15 there are significant differences across the EU in Source: J. Visser, ICTWSS database 3.0, 2010; ECS data. the incidence and coverage of employee representation. These differences are European-level employee in 2009 as Directive 2009/38/EC somewhat related to union density representation within the (see Chapter 7). Second, European (r=.41), but more strongly to bargaining enterprise Companies (SEs) established under coverage (r=.57). In one group of coun- the 2001 regulation on the statute for tries, a majority of the establishments There are two main forms of Euro- a European Company (Council Regu- have an institutional form of employee pean-level employee representation lation (EC) No 2157/2001), have to representation at the workplace, with within multinational enterprises. First, comply with provisions for employee more than 70 % of the employees being European works councils (EWCs) are involvement, including board-level covered. The group is led by the Nordic standing bodies providing for the infor- representation and/or European- countries and also includes Belgium, mation and consultation of employees level works councils under Directive Spain, France, Luxembourg, Romania in Community-scale undertakings and 2001/86/EC (see Box 1.7). and the Netherlands, all countries with a groups of undertakings as required high bargaining coverage rate, although by the 1994 European works council The thresholds required for an enter- some (Spain, France, the Netherlands) directive (Directive 94/45/EC), recast prise to be covered by the European have a rather low unionisation rate. Countries with a low incidence and cov- ChartChart 1.16: 1.16: European European works works councils councils erage are situated in CEE countries and 100 1 000 in southern Europe, with Portugal and Greece revealing the lowest rates. 80 900 Chart 1.15 further compares the coverage rate, based on the ECS, with EWC ceased 60 EWC founded 800 the ICTWSS indicator of ‘representa- Total number of EWCs (right axis) tion strength’. The two are aligned: it seems that coverage is highest where 40 700 employee representation has a stronger organisational basis, independent from management, can rely on union 20 600 support, workplace representatives are routinely involved in negotiations, 0 500 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 and have strong information and consultation rights regarding major com- Source: ETUI, database on works council agreements (http://www.ewcdb.eu/). pany decisions.

44 Chapter 1: Variations and trends in European industrial relations in the 21st century’s first decade

Box 1.7: Employee involvement in European Companies (SEs) A European Company (Societas Europaea (SE)) is a European legal form established by Council Regulation (EC) No 2157/2001 on the statute for a European Company. The Regulation introduces a set of rules directly applicable in all Member States, in particular on the formation and the structure of the SE. The legal regime of the SE in completed with cross-references to the national legislation applicable to public limited-liability companies. Council Directive 2001/86/EC supplementing the SE Statute stipulates employee involvement rules in SEs in the form of information and consultation of employees and, in some cases, board-level participation. Both the Regulation and the Directive were adopted on 8 October 2001 and were to be implemented in the Member States by 8 October 2004 (however, the Directive was transposed by all Member States only at the beginning of 2007). EU-based companies may form an SE in four ways (the first three involve more than one company): merger; creation of a joint holding company; creation of a subsidiary; or when a Single EU-based company is transformed into an SE, provided it had a subsidiary governed by the law of another Member State for at least two years. A company based outside the EU may (if individual Member States so decide) participate in the formation of an SE on condition that it is created under the law of a Member State, has its registered office in that Member State and has a real and continuous link with a Member State’s economy. An already existing SE may also itself set up one or more subsidiaries in the form of SEs. For the first time ever, the SE directive introduces into and defines ‘participation’ in Union law, i.e. the influence of the body representative of the employees and/or the employees’ representatives in the affairs of a company by way of the right to elect or appoint some of the members of the company’s supervisory or administrative organ, or the right to recommend and/or oppose the appointment of some or all of the members of the company’s supervisory or administrative organ. Though in a manner that leaves significant space for the self-regulation of practical arrangements at company level, the SE accepts the fact of employees’ interest representation where applicable. Where this right was conferred by national statue and used before the creation of the SE, employees have the guarantee that this will remain in the corporate bodies of an SE. As regards the date on existing SEs, as of July 2010, some 595 SEs had been registered in the EU/EEA Member States. Around a quarter (151) were known to be ‘normal SEs’, i.e. operating and with 5 or more employees. Around 6% (43) of all SEs were known to be ‘micro SEs’, i.e. operating with between 1 and 4 employees. Many of the SEs (77) are so-called ‘shelf’ companies which are for sale, with most of them in the Czech Republic (44), ‘empty’ SEs (83), operating but apparently without any employees yet, and a rather large number of SEs (around 241) which were known or seemed to be operating but for which the information on the number of employees were not available. This implies that to date a large number of SEs is operating but without actively employing people (or only employing few people). This diverse picture of different types of SEs is replicated also with regard to the geographical coverage: in eight EU Member States (BG, FI, EL, IT, LT, MT, RO, SI) no SE had been registered by summer 2010 and the diffusion of ‘normal’ SEs, operating and with 5 or more employees, in the remaining countries is quite unequal with Germany being the most important country (74 out of 151), followed by the Czech Republic (25), France (9), Netherlands (8) and Austria (7) (1). At least 30 of the ‘normal’ SEs have employee representatives on the company’s supervisory or administrative body, and over 60 have transnational arrangements for employee information and consultation through SE works councils (2). In reviewing the interim results of the case studies of the Eurofound project (3), the influence of SEs on any ‘Europeanisation of industrial relations’ should not be overestimated. Two other preliminary findings from the fieldwork are of note. First, initial results of the case studies confirm that the negotiation and implementation of practical arrangements of employee involvement follow company specific requirements and paths. In the long run SEs could turn out to be a factor in the emergence of supranational, enterprise specific industrial relations which are different from the respective national IR environments. Second, there are indications that in some cases the new legal form of an SE may have been used to circumvent existing national regulations for employee participation rights. Yet, the analysis of 10 company cases demonstrates that employee involvement is widely regarded as an integral part of corporate governance in the EU.

1 The figures are taken from the Commission Staff Working Document, SEC(2010) 1391, accompanying the Report on the application of the Regulation on the Statute for a European Company, of 17.11.2010. 2 ETUI (2010), European Company (SE) Factsheets, http://ecdb.worker-participation.eu/ 3 In July 2009, the European Foundation for the Improvement of Living and Working Conditions in Dublin launched a research project on the European Company Statute. The aim of this research is to gather information about the practical functioning of European Companies (SEs). The project was completed in summer 2010, consisting of an analytical report and 10 separate company case studies. The contactors were Wilke, Maack and Partner, Hamburg, in consortium with IRES, Paris. The consortium was supported by the Seeurope network of ETUI. The analytical report and the company case studies are available online at http://www.eurofound.europa.eu works council directive are, for a Com- the introduction of EWCs is not auto- 16 million workers (7). This represents munity-scale undertaking, ‘at least matic but requires either the initiative a coverage rate of around 40 % of the 1 000 employees within the Member of central management or ‘the writ- multinationals, and 60 % of the work- States and at least 150 employees in ten request of at least 100 employees force, estimated by the Institute to be each of at least two Member States’ or their representatives in at least two covered by the directive. Since 2000, (Article 2(1)(a)). Essentially, the aim undertakings or establishments in each year some 40 EWCs have been of the directive is to promote volun- at least two different Member States’ newly established, whereas 14 ceased tary agreements on the constitution (Article 5(1)). According to the EWC to exist — largely due to mergers and operation of EWCs. Not all of the database of the European Trade Union and acquisitions. Cumulatively, the multinational companies covered have Institute, 938 EWCs were active at the 7 The ETUI’s database on European works council established an EWC. This is because beginning of 2010, representing some agreements can be found at http://www.ewcdb.eu/

45 Industrial Relations in Europe 2010

number of EWCs has increased by 255 since 2000 (Chart 1.16). Box 1.8: strike statistics Statistics in this area are notoriously difficult, especially when comparing across countries. Practice amongst EWCs has varied Methods, definitions and thresholds for recording differ greatly, despite efforts to- har monise statistics by the International Labour Organisation. Eurostat has collected strike widely. In some instances, they have data since 1960 and since 2005 has a data-sharing arrangement with the ILO, using the played an extremely limited role and same international definitions. The data include an annual series on the number of strikes were often a simple recipient of infor- and lockouts; the number of working days lost (1 000); the number of working days lost mation about a restructuring exercise, per 1 000 workers; the number of workers involved (1 000); and the number of workers sometimes even after the decision had involved per 1 000 workers. Below we have used the national data collected by EIRO (M. been taken. More rarely, they have been Carley, ‘Developments in industrial action, 2005–09’, document TN10040495), with additional data from Eurostat and the ILO Laborstat database for earlier years. One reason fully involved participants, becoming for this choice is that Carley also reports data on the sectors involved, the reasons for a site for collective bargaining in some industrial action and strike threats that are not carried out. Unfortunately, despite the title, multinational enterprises (8). the EIRO data cover the year 2009 for very few countries. Since 2009 is neither covered by Eurostat nor by the ILO, it is not possible to assess the impact of the current crisis on industrial action. For all years, data for the Czech Republic are absent. In strike statistics it is common to make a distinction between the frequency of strikes (number of strikes and lockouts), the duration and size of strikes (number of says lost) 1.6. Industrial conflict and participation (number of workers involved). This section focuses on participation, i.e. strikes per 1 000 employees. Industrial or social conflict is an inherent part of industrial relations. The right to bargain for better conditions implies the right to strike Chart 1.17:Chart Relative 1.17: Relative strike strike involvement, involvement, 2000–08 2000–08 as a means to exert pressure should 80 negotiations reach an impasse or fail. 70 This is recognised in Article 28 of the

Charter of Fundamental Rights of 60 the EU: ‘Workers and employers, or their respective organisations, have, in 50 accordance with Community law and national laws and practices, the right (EU average) 000 workers 40 to negotiate and conclude collective 30 agreements at the appropriate levels Strikers per 1 and, in cases of conflicts of interest, to take collective action to defend their 20 interests, including strike action.’ The 10 exercise of this right, notably strikes 2000 2001 2002 2003 2004 2005 2006 2007 2008 or lock-outs, constitutes a high-profile Source: Own calculations from Carley 2010, Eurostat and ILO Laborstat. aspect of industrial relations in terms of public impact and media coverage.

Considering the period 2000–08, a ‘strike prone’ countries like Greece, the ‘equilibrium’ level, with 20 work- wave-like pattern in the EU average of Italy, France and Romania. Generally, ers involved in industrial conflicts per strike participation is observed with strike activity was up in most coun- 1 000 workers, is lower than the long- a peak in 2002–03 (Chart 1.17). In tries and it is tempting to view this in term average in the 1970s and 1980s these two years some particularly large the context of wage and job conflicts in (Shalev, 1992) and also the 1990s (9). strikes took place in ‘low strike’ coun- the wake of the 2001–02 ‘Dotcom’ and The EU average is also lower than the tries like Austria, Slovenia and Sweden, 9/11 recession. Some conflicts in cen- average of the non-European OECD whilst large-scale mobilisation affected tral and eastern Europe were related countries. to reforms preparing for accession 8 M. A. Moreau and J. J. Paris, ‘Le role du comité to the European Union and satisfy- d’entreprise européen au cours des restructurations, ing conditions for future participation 9 According to data analysed by the UK Office experiences et prospectives’, Semaine sociale Lamy, for National Statistics, as reported in Economic and 2008. suppl. No 1376. in the EMU. Setting aside this peak, Labour Market Review, April 2008.

46 Chapter 1: Variations and trends in European industrial relations in the 21st century’s first decade

(3) countries where industrial action Chart 1.18:Chart Relative 1.18: Relative strike strike participation, participation, average average 2000–08 2000–08 was at relatively high levels, with in 100 Corrected an average year more than 50 workers Uncorrected per 1 000 involved in conflict: Greece, 80 Spain and Italy.

Carley (2010) offers an interesting 60 discussion and some data on the causes of conflict, the sectors where

40 most conflicts occur and strike

per 1000 employees threats. Pay is the most common source of conflict, together with lay- 20 offs, restructuring and redundancies, followed by government reform plans

0 and working time issues. There is also EL IT ES BG FR FI EU-15 RO DK AT CY EU-27 MT UK EU-10 BE PT IE EE HU NL DE SE PL SI LT SK LV + some evidence that the trend, dating EU-2 from the 1980s, of industrial conflict Source: Own calculations from Carley 2010, Eurostat and ILO Laborstat. migrating from industry to public services, is continuing. Manufactur- The EU average hides large variations unduly influenced by what happened ing is where most strikes occur, but across Member States (Chart 1.18). To in one particular year, the adjusted the largest conflicts, with most par- begin with, there appears to be more average simply replaces the year with ticipants, tend to occur in the public labour acquiescence in the 12 new the highest strike involvement by sector. Large conflicts, triggered by Member States than in the EU-15. the average for the other years. The government public sector and/or wel- This may reflect the weaker position resulting corrected average, without fare reform plans, occurred in recent of trade unions and the harsher eco- the outlier year, better reflects the years in Bulgaria, Greece, Hungary, nomic conditions faced by workers in long-term trend in countries’ level of Malta, Poland and Spain. Italy, too, the CEE countries. This is not to say conflict. By definition, this procedure has seen substantial conflicttriggered that high rates of conflict, expressed reduces the average in all countries by such reform plans. in the number of strikes, the dura- (see Chart 1.18), and the difference tion of strikes, working days lost or is particularly large in Austria, where Strikes may be called or threatened, but relative involvement, is necessarily the ‘unadjusted’ average was strongly not materialise, either, because they are an indicator of union strength. It has influenced by the huge conflict in meant as a ‘warning’ and an accom- long been noted that strong unions 2003 over pension reform. modation is subsequently reached, or may call strikes only rarely and judi- because unions are unsuccessful when ciously, whereas weaker unions have On the basis of the adjusted averages, balloting members. Some countries very limited control over the strike the 25 EU Member States (no com- have statistics on balloting outcomes. weapon. Moreover, the strike par- parable data for Luxembourg and the In Italy public sector strikes must be ticipation data used here are strongly Czech Republic) can be divided in announced in advance and they are influenced by the use of so-called 24 three groups: (1) countries with, in an monitored by an independent Guar- hours strikes — a practice currently average year, less than 10 workers per antee Authority, which can sanction a used by the unions in Greece in their 1 000 involved in industrial action: union which breaks the rules. In 2008, mobilisation against the government’s Estonia, Latvia, Lithuania, Poland, there were 2 195 strike notifications, of austerity package. Generally, these are Hungary, Slovakia and Slovenia, as which 39 % were called off. In the UK a more widespread practice in France well as Austria, Germany, Sweden, it is possible to compare the number and the southern Member States than the Netherlands, Belgium, Ireland of disputes involving industrial action elsewhere in the EU. and Portugal; (2) countries where with the number of successful strike industrial action is at moderate levels, ballots, which are obligatory before In order to show the variations with an average of 10–30 workers per taking industrial action. In 2008 across countries, an ‘adjusted’ aver- 1 000 involved in conflicts: Denmark, there were 658 successful ballots, age for the years 2000–08 has been Finland, the UK, Malta, Cyprus, with industrial action subsequently calculated. Since the average can be France, Bulgaria and Romania; and taking place in 144 instances (22 %),

47 Industrial Relations in Europe 2010

suggesting substantial use of ballots as a ‘warning’. National strikes which Chart 1.19:Chart Government 1.19: Government intervention intervention in in wage wage setting setting 5 are threatened but subsequently called 1997-1999 off are part and parcel of industrial 2007-2009 relations in some countries. In Swe- 4 den, for example, two national strikes where cancelled in 2009, while LO’s affiliates called 16 regional strikes but 3

called them all off. Unfulfilled strike Index threats were also reported in 2009 in 2 Austria, Belgium, Bulgaria, the Czech Republic, Estonia, Finland, France, Germany, Hungary, Latvia, Malta, 1 Portugal and Romania. Carley (2010) gives some examples of the issues over 0 BE SI IE PT FI RO LT SK EL LU HU FR ES BG NL EU-15 EU-27 IT EU-10 PL EE DK DE SE CZ AT MT LV CY UK which collective action was threatened + but did not take place. These include EU-2 pay and job cuts, government reform Source: J. Visser, ICTWSS database 3.0, 2010. plans and company restructuring, and suggest at least some of the unfulfilled 1.7. State and place and many have procedures for threats are related to the worsening government extending collective agreements to economic situation. It is not clear, non-organised employers. Govern- however, whether the phenomenon intervention ments can influence the outcomes of has increased as compared to previous wage bargaining, directly or indirectly, years. Such conflicts tend to be more There are various ways in which the in various ways; by prescribing con- intense and the unions’ position more state is involved in industrial relations flict settlement and arbitration pro- constrained in times of recession. and directly or indirectly influences cedures; issuing or negotiating wage decisions regarding wages, hours and guidelines; using public sector wage There appears to be no correlation working conditions. All EU Member setting as an example and pace-setter between relative strike involvement States lay down basic legal guarantees for the private sector; by imposing a and any of the industrial relations on association, collective bargaining ceiling on outcomes, raising taxes or indicators discussed earlier in this and strike action, and all are bound by even suspending collective bargain- chapter (union density, coverage, a considerable body of EU law in mat- ing temporarily. The last mentioned coordination, centralisation). There is ters of non-discrimination, heath and technique has not been used in recent some indication that under company safety in the workplace, maximum years, although it was not uncommon bargaining the incidence of conflict is working hours, parental leave, employ- in the 1970s and 1980s. All the other higher but that each dispute is smaller ment contracting and employee rights methods have featured in the years with relatively fewer workers involved; of information and consultation. As since 2000. Based on a measure of where bargaining takes place at higher noted above, most EU Member States government intervention in wage set- levels relatively more workers are have minimum wage legislation in ting (see Box 1.9), Chart 1.19 portrays involved, but conflicts are fewer. But these associations are weak and further analysis is needed in which it is Box 1.9: government intervention in wage bargaining necessary to model economic and Using a scale developed by Hassel (2006), with a slight modification, the ICTWSS database political variables in addition to the distinguishes the following grades of government involvement in collective bargaining: institutional ones portrayed here. the government imposes a settlement or ceiling on the private sector and/or suspends bargaining (= 5); the government participates directly in private sector wage bargaining and provides norms or ceilings, or tax-based compensation to achieve particular outcomes (= 4); the government influences wage bargaining outcomes indirectly through minimum wage setting, wage setting in the public sector, through compulsory arbitration and/or by withholding extension or recognition (= 3); the government provides the institutional framework for national or sector collective bargaining (legal protection of agreements, extension) (= 2); and, finally, no role of government in wage setting (= 1).

48 Chapter 1: Variations and trends in European industrial relations in the 21st century’s first decade

Table 1.9: Issues negotiated in social pacts, 2000s

Wage Wage Tax Working Jobs Social Union Social EPL** Pension Training procedure max budget hours ALMP* security rights dialogue EU-27 44 15 11 4 12 10 25 10 20 9 8 EU-15 28 13 8 3 8 7 20 8 18 7 2 EU-12 16 2 3 1 4 3 5 2 2 2 7 + EU-2 Source: J. Visser, ICTWSS database 3.0, 2010, multiple issues per pact. *Active labour market policy. ** Employment protection legislation. the cross-national variation in the EU intervention in matters of wage setting do not end in an agreement is the and compares the situation in 2007–09 can combine with either a coordinated same, at one third. Compared to the with 10 years earlier. approach — as in Germany, Austria or 1990s fewer governments turned to Sweden — or with an uncoordinated, this instrument. One potential rea- Overall, it appears that the intensity market-based one — as in the UK, the son, discussed in a recent collection of government intervention in wage Czech Republic or Poland. of studies (Pochet, Keune and Natali, setting has decreased, albeit by a small 2010) is that social pacts were espe- amount and not in all Member States. cially popular in the run up to EMU. Generally, we note a convergent trend, 1.7.1. Social pacts Even so, since 2000 governments with the averages for the 12 new Mem- tried to negotiate a social pact at ber States and EU-15 moving close to In various EU Member States gov- some point in 18 of the 27 EU Mem- each other. In particular, CEE coun- ernments have tried to engage trade ber States, and in 14 some agreement tries economies have moved away unions and employers’ organisa- was reached. No pact negotiations from restrictive government controls. tions in tripartite social pacts on took place during this period in Aus- while maintaining influence over wage moderation and reform on tria, the Czech Republic, Cyprus, general wage developments through issues such as pensions, early retire- Denmark, Estonia, France, Sweden minimum wage setting and related ment, employment protection, active and the UK, whilst in Germany the procedures of consultation. There are labour market policies, unemploy- Alliance for Jobs, Competitiveness no strong regional differences within ment insurance and training. Social and Training, begun in 1998, ended the EU as a whole and this variable — pacts are defined as tripartite bar- at some point in 2001. In four coun- the index of government intervention gains, more precisely as ‘publicly tries — Belgium, Greece, Malta and — does not seem to correlate with announced formal policy contracts Poland — one or more attempts to any of the indicators (unionisation, between the government and social negotiate a social pact occurred but employer organisation, bargaining partners over income, labour market these were never successful. coverage, centralisation, coordina- or welfare policies that identify policy tion) discussed in this Chapter. issues and targets, means to achieve Of the pacts that were signed Table 1.9 them, and tasks and responsibilities shows that the number one issue was Government intervention is associ- of the signatories’ (Avdagic, Rhodes wage setting, including conflict regu- ated with minimum wage legislation and Visser, 2011). Such bargains can lation (‘wage procedure’) and the use and the practice of extending collec- take different forms, have a different of inflation targets (‘wage max’). Social tive bargaining and it has centralising content or scope in terms of issues security (in particular unemployment effects as it tends to raise the level at and policy domains and they differ in insurance) is the next most important which bargaining takes place. But, as their duration or period of applica- issue, followed by vocational training, has been noted in the Industrial Rela- tion and in their potential effects. active labour market policies, employ- tions in Europe 2004 report, direct ment protection and pension reform. government intervention tends to be In the years 2000–09, 44 attempts to Social dialogue procedures, together an alternative, or substitute, for coor- negotiate a social pact were identified. with consultations over minimum dination by the trade unions and the This is half the total over the preced- wage decisions, are relatively frequent employers’ associations themselves. ing decade. In both decades the fail- issues in social pacts in the 12 new However, the absence of government ure rate i.e. of pact negotiations that Member States.

49 Industrial Relations in Europe 2010

Many of these issues can (also) Chart 1.20: Social pacts and agreements, 2000s be subject to bilateral agreements Chart 1.20: Social pacts and agreements, 2000s between the central union and 12 employers’ associations, without the Autonomous agreements Agreements dependent on legislation participation or intervention of the 10 Signed pacts government. Two types of agree- Failed pact attempts ment can be distinguished, simi- 8 lar to the two procedures specified under Article 136 of the EU Treaty. 6 Sponsored agreements depend for their implementation on subsequent legislation by the government. They 4 can be seen as a form of preparation for legal intervention, similar to 2 the European social partner agreements in the 1990s (on parental 0 ES EE PT EL NL RO SI BE IE FR FI IT SK DK LU PL HU AT BG LT LV MT SE CY CZ DE UK leave, fixed-duration contracts and Source: J. Visser, ICTWSS database 3.0, 2010. part-time work) that were implemented by means of an EU directive. Autonomous agreements are imple- 1.8. Conclusion bargaining coverage and, a contin- mented by the unions and employers ued, albeit slightly less pronounced themselves, by means of collective This chapter has offered a ‘bird’s eye’ role for government in industrial bargaining or guidelines and do not overview of recent trends and vari- relations, including through public seek or require subsequent legisla- ations in industrial relations in the extension of collective agreements to tion. Autonomous agreements often European Union. To that end, it has non-organised firms, the institution pre-empt legislation and surely one presented a demography of national of a mandatory minimum wage and motive for employers and unions variations on the six major variables the negotiations of social pacts. to conclude such agreements is that that, arguably, make up the institu- they exert more influence over the tional fabric of industrial relations: Amidst such common trends and content of regulation than if it were trade unions, employer organisation, developments, the chapter has also done through the law. The parallel is collective bargaining, workplace rep- highlighted the continued diversity found in the European framework resentation, industrial action and of national industrial relations in the agreements on telework, work- government intervention. The result EU. Some of this diversity is between related stress, sexual harassment, can be summarised as follows: on the EU-15 and the CEE countries and each concluded since 2000. most variables the years since 2000 flows from the enlargements of 2004 have seen a continuation and devel- and 2007. But the diversity within As can be seen from Chart 1.20, opment of trends started earlier, these two groups of countries is large autonomous central agreements are without major breaks. This is true, as well; and other plausible ‘quasi- relatively rare; most agreements rely for instance, for the decline of union regional’ groupings are detectable on subsequent legislation. Some of density, decentralisation of collective (see Industrial Relations in Europe the agreements in Portugal after 2005, bargaining, lower levels of industrial 2008 report). On many ‘hard core’ in an attempt to repair the damage of action and more employee participa- variables where EU competences are prior legislation on collective bargain- tion in the enterprise (at transnational limited — the organisation of the ing, can be classified as autonomous as well as national and sub-national social partners, collective bargain- and the same applies to the seven levels). The combined effect of the ing over pay and primary working procedural wage agreements and one second and fourth of these trends conditions and industrial action — further agreement in Spain. The other has been to further augment the diversity around common trends has examples are found in Denmark, the prominence of the company level in persisted. Only where there is scope Netherlands and Sweden. Sponsored the institutional fabric of European for EU intervention — as on employee agreements, some related to EU legis- industrial relations. Continuities are, representation within the enterprise lation, are frequent in France, south- moreover, noted in the continued — is some tendency toward conver- ern and eastern Europe. high levels of employer organisation, gence apparent.

50 Chapter 1: Variations and trends in European industrial relations in the 21st century’s first decade

How the trends outlined in this in the administration of unemploy- to take defensive industrial action in chapter will be affected by the cur- ment insurance). Longitudinal studies circumstances which threaten them rent crisis, with the prospect — at of union membership and business with large losses in membership and the time of writing in mid-2010 — cycles tend to conclude that increases in influence. of severe public sector cuts and aus- in unemployment are associated with terity measures in many Member membership decline, sometimes Finally, it is hard to foretell whether States, cannot be foreseen with any with a delay of one or two years. To the increased coordination of fiscal certainty. Will unions gain mem- the extent that a number of countries policies and financial regulation in bers, industrial action go up, govern- have been able to contain the effects the EU, and in the euro area in par- ments rush to negotiate social pacts? of the crisis on unemployment with ticular, will trigger joint responses Or will the opposite happen, with special measures, in particular by from unions and employers, autono- further union decline, more labour using short-time working arrange- mously or in concert with the public acquiescence, unilateral government ments, any consequent reduction in authorities, in the domain of indus- measures? Scattered evidence from union membership will be less. These trial relations and wage policy. Such various countries indicates tenden- measures have been particularly effec- initiatives would seem vital for retain- cies in both directions. tive in manufacturing and agreements ing some influence over how the crisis between unions and employers have will unfold. In crisis conditions the For instance, the data for union mem- been a key tool in implementing such tendency to negotiate social pacts is bership and union density in 2009, schemes (see Chapter 3). Come 2010, stronger, but the combination with where available, variously show con- the crisis has moved on to the pub- other conditions — in particular the tinued but not excessive union decline lic sector, with most Member States position of the government and the (Austria, Germany, Denmark, Fin- now announcing severe austerity pro- strength of the unions — is crucial land, Sweden), no change (the Neth- grammes with a standstill or cut-back (Avdagic, Rhodes and Visser, 2011). erlands) or an increase (Belgium, in wages and/or employment. Unions Economic crises as such are poor pre- related to the continued role of unions in many countries will be propelled dictors of concerted, joint action.

51 Industrial Relations in Europe 2010

References Ebbinghaus, B. and J. Visser (2000), Trade unions in western Europe since 1945, Palgrave-Macmillan, London. Avdagic, S. (2005), ‘State-labour relations in east central Europe: Explaining variations in union effectiveness’,Socio- Ellguth, P. and S. Kohaut (2008), ‘Ein Bund fürs Überleben? Economic Review 3(1), pp. 25–53. Betreibliche Vereinbarungen zur Beschäfigungs- und Standortsicherung’, Industrielle Beziehungen 15, pp. 209–232. Avdagic, S., M. Rhodes and J. Visser, (2011), Social pacts in Europe: Emergence, evolution and institutionalisation, Frege, C. M. and J. Kelly (2003), ‘Introduction: Union Oxford University Press, Oxford. revitalisation and strategies in comparative perspective’, European Journal of Industrial Research 9(1), pp. 7–24. Blanchflower, D. G. (2007), ‘International patterns of union membership’, British Journal of Industrial Relations Granqvist, L. and H. Regnér (2008) ‘Decentralized wage 45(1), pp. 1–28. formation in Sweden’, British Journal of Industrial Relations 46(3), pp. 500–520. Böckerman, P. and R. Uusitalo, (2006), ‘Union membership and the erosion of the Ghent system: Lessons from Finland’, Haipeter, T., (2009), ‘Kontrollierte Dezentralisierung? British Journal of Industrial Relations 44(2), pp. 283–303. Abweichende Tarifvereinbarungen in der Metall- und Ele- ktroindustrie’, Industrielle Beziehungen 16(3), pp. 207–231. Bordogna, L., (2008), ‘Industrial relations in the public sector’, Dublin (http://www.eurofound.europa.eu/eiro/ Hassel, A. (2006), Wage setting, social pacts and the euro: studies/tn0611028s/tn0611028s.htm). A new role for the state?, Amsterdam University Press, Amsterdam. Carley, M. (2004), ‘Trade union membership 1993–2003’, Dublin (http://www.eurofound.europa.eu/eiro/2004/03/ Hyman, R. (2001), Understanding European trade unionism update/tn0403105u.htm). — Between market, class and society, Sage, London. — ‘Trade union membership 2003–2008’, (2009), Dublin (http://www.eurofound.europa.eu/eiro/studies/ Iversen, T. (1999), Contested economic institutions — The tn0904019s/tn0904019s.htm). politics of macroeconomics and wage bargaining in advanced — ‘Developments in industrial action 2005–2009’,(2010a), democracies, Cambridge University Press, Cambridge, Mass. Dublin, (http://www.eurofound.europa.eu/eiro/studies/ TN1004049S/TN1004049S.htm). Kaminska, M. E. and M. Kahancová (2011), ‘Emigra- — ‘Developments in social partnership — employer tion and labour shortages: an opportunity for trade unions organisations’, (2010b), Dublin (http://www.eurofound. in new Member States?’ European Journal of Industrial europa.eu/eiro/studies/tn0910049s/tn0910049s.htm). Research 17 (forthcoming).

Davies, A. C. L. (2008), ‘One step forward, two steps back? Kjellberg, A. (2009), ‘The Swedish Ghent system and trade The Viking and Laval case in the CJEU’, Industrial Law unions under pressure’, Transfer 15(3–4), pp. 481–504. Journal 37(2), pp. 126–148. Kohaut, S. and C. Schnabel (2003), ‘Zur Erosion Ebbinghaus, B. and J. Visser (1999), ‘When institutions des Flächentarifvertrags: Ausmasz, Einflussfaktoren matter: Union growth and decline in western Europe, 1950– und Gegenmaßnamen’, Industrielle Beziehungen 10(2), 1995’, European Sociological Review 15(2), pp. 135–158. pp. 93–218.

52 Chapter 1: Variations and trends in European industrial relations in the 21st century’s first decade

Lind, J. (2009), ‘The end of the Ghent system as trade union Traxler, F. and M. Behrens (2002), Collective bargaining recruitment machinery?’ Industrial Relations Journal 40(6), coverage and extension procedures, Dublin (http://www. pp. 510–523. eurofound.europa.eu/eiro/2002/12/study/tn0212102s.htm). — ‘Employers’ organisations in Europe’, (2004), Dub- Malmberg, J. and T. Sigeman (2008), ‘Industrial actions lin 2004 (http://www.eurofound.europa.eu/eiro/2003/11/ and economic freedoms: the autonomous collective bargain- study/tn0311101s.htm). ing model curtailed by the Court of Justice of the European Union’, Common Market Law Review 45, pp. 1115–1146. Van Guyes, G. (2006), ‘The social partners as membership organisations: an overview of forms and trends in the McKay, S. (2008), ‘Sindacati e nuava immigrazione: le Member States’, in European Commission (ed.), Industrial sfide organizzative nell’ UE allargata’, Economia & Lavoro Relations in Europe 2006, Office for Official Publications of XLII(3), pp. 181–192. the European Communities, Luxembourg.

Pedersini, P. (2010), ‘Trade union strategies to recruit new Visser, J. (1991), ‘Trends in union membership’, OECD groups of workers’, Dublin (http://www.eurofound.europa. Employment Outlook, Organisation for Economic Coop- eu/eiro/studies/tn0901028s/tn0901028s.htm). eration and Development, Paris. — ‘Trade unions from a comparative perspective’, in J. Van Pernicka, S. (2006), ‘Organizing the self-employed: theo- Ruysseveldt, R. Huiskamp and J. van Hoof (eds), European retical considerations and empirical findings’, European Industrial and Employment Relations, Sage, London, 1995. Journal of Industrial Research 12(2), pp. 123–140. — ‘The institutional characteristics of trade unions, wage setting, state intervention and social pacts — ICTWSS data- Pochet, P., M. Keune and D. Natali (eds), (2010), After base, version 3.0’: Amsterdam: Amsterdam Institute for the euro and enlargement: social pacts in the EU, European Advanced Labour Studies, 2010 (http://www.uva-aias.net). Trade Union Institute, Brussels. Visser, J. and D. Checchi (2009), ‘Trade unions and ine- Schnabel, C. and J. Wagner (2007), ‘Union density and quality’, in W. Salverda, B. Nolan and T. Smeeding (eds), determinants of union membership in 18 EU countries: The handbook of economic inequality, Oxford University evidence from micro data, 2002/03’, Industrial Relations Press, Oxford. Journal 38(1), pp. 5–32. Waarden, F. van (1995), ‘Employers and employers’ Schroeder, W. and S. Greef (2008), ‘Industrie- under associations’, in J. Van Ruysseveldt, R. Huiskamp and Spartengewerkschaften im Konflikt’, Industrielle Beziehun- J. van Hoof (eds), Comparative Industrial and employment gen 15(4), pp. 329–355. relations, Sage, London.

Streeck, W. and J. Visser (2006), ‘Conclusions: organized Waddington, J. (2006), ‘The trade union merger process in business facing internationalisation’, in J. G. W. Streeck, V. Europe: defensive adjustment or strategic reform?’ Indus- Schneider and J. Visser (eds), Governing interests: business trial Relations Journal 37, pp. 630–651. associations facing internationalisation, Routledge, London. Zielschot, E., (2010), ‘Decentralisering in collectieve Traxler, F. (1993), ‘Business associations and labour unions arbeidsovereenkomsten’, AWVN, Haarlem. in comparison: theoretical perspectives and empirical findings on social class, collective action and associational organisability’, British Journal of Sociology 44, pp. 673–91.

Chapter 2: The crisis: challenges and social partner perspectives

The economic and financial crisis presented industrial relations actors and institutions The chapter concludes that variation across the EU with formidable challenges. There appears to be no obvious association across countries in the extent of pol- between the magnitude of the crisis in terms of its employment or fiscal impact and icy consensus between the social part- the development of consensus and divergence in the policy perspective between social ners is associated with the influence partners. On the one hand, where the crisis has been most severe, policy disagreement of two kinds of ‘input’ factor. One is has predominated. On the other hand, a degree of policy consensus has developed not ‘economic’ and concerns the scale and only in some EU-15 countries with well-established social dialogue traditions, but also timing of the crisis in different coun- in some new Member States where tripartite structures have been exploited. tries. The other is ‘institutional’ and relates to institutional arrangements This chapter is based on a draft by Paul Marginson and Mark Carley of the Univer- for bi- and tripartite social dialogue. It sity of Warwick’s Industrial Relations Research Unit. finds that both exercise a partial influence, but that neither is determining. 2.1. Introduction Accordingly, the first section of the chapter briefly reviews the main eco- The effects of the financial and economic and employment dimensions 2.2. Economic nomic crisis have permeated national of the crisis. It does so by focusing and employment borders as a form of international on trends in output, employment and contagion, underlining the height- unemployment and, in addition, on dimensions ened interdependence of national those indicators which are of particu- of the crisis economies, their labour markets and lar interest to employers’ organisa- their national industrial relations tions and trade unions, respectively. This section has three main aims. The systems. The crisis has presented, and Employers’ organisations tend to pay first is to establish the scale of the cri- continues to present, industrial rela- attention to developments in labour sis in terms of the main economic tions actors and institutions across costs (including wages), flexibility and employment indicators identified the EU with formidable challenges. and productivity, whilst trade unions above, and the relationship between For the countries of western Europe, tend to be concerned with purchas- trends in economic activity and those these are unprecedented in their ing power, as reflected in expenditure in employment. The second is to magnitude in the post-war era. For on private consumption and wage highlight similarities and differences those of central- and south-eastern developments. The second section of between Member States in the scale and Europe, the transition to a market the chapter surveys the perspectives timing of the economic and employ- economy 20 years ago was accom- of national and EU-level social part- ment dimensions of the crisis. Cross- panied by major economic upheaval. ner organisations on the main policies country differences in the economic The present challenges lie in the test- required to address the effects of the and employment context are likely to ing nature of the crisis for the indus- crisis. It pays attention to the extent be one source of variation in the policy trial relations institutions established to which there are commonalities and responses advocated by the social part- during and since that transition. differences in the policy prescriptions ners at national level, reviewed in the of employers’ organisations and trade second section of this chapter. These The chapter establishes the broader unions. In broad terms, it finds that cross-country differences context are economic, employment and policy substantial consensus on the need for also a potential source of variation in context for Chapter 3, which focuses on emergency measures to stimulate eco- the concrete actions taken by the social negotiated and concerted responses by nomic activity and maintain employ- partners, which are the focus of Chap- the social partners which address the ment in the early phase of the crisis ter 3. The third is to identify sectoral effects of the crisis. After first establish- has tended in some, but not all, coun- differences in trends in output and ing the varying scale and nature of the tries to be followed by tensions over employment, differentiating between economic and employment challenges the distribution of costs and the tim- broad economic sectors. The rationale that confront the public authorities ing and content of measures to reduce for doing so is similar. Sectoral varia- and social partners across the Member public deficits. At the same time, dif- tion in the economic and employment States, the chapter then addresses the ferences are apparent across countries impact of the crisis is also likely to be perspectives of the social partners on in the presence, and degree, of bipar- important in accounting for the secto- the public policy responses required tisan consensus between employers’ ral pattern of negotiated responses to to deal with the effects of the crisis on organisations and trade unions on the the crisis by the social partners, which economic activity and employment. measures advocated. are the central concern of Chapter 3.

55 Industrial Relations in Europe 2010

2.2.1. Economy-wide trends Chart 2.1 shows (Table 2.A1 reports pared to growth of 2 % in the 12 pre- changes in GDP for all Member vious months. Growth only resumed The recession sparked by the finan- States). GDP across the EU fell by in the first half of 2010, when GDP cial crisis has seen sharp reductions over 5 % between the opening Chart half 2.1.: forRecent the developments EU-27 rose in GDP,1.3 % as compared employment and productivity, Germany in levels of economic activity, as of 2008 and the first of 2009, as com- with the first half of 2009.

Chart 2.1.: Recent developments in GDP, employment and productivity, EU-27 Chart 2.1.: Recent developments in GDP, employment and productivity

EU-27 Germany

3 4

2 3 2 1 1 1.5 0 0

- 1 - 1 0.5 - 2 - 2 Chart 2.1.: Recent developments in GDP, - 3 - 0.5 employment and productivity, the United Kingdom - 3 - 4

- 4 Productivity - 5 - 1.5 % change relative to 12 months previously previously 12 months to % change relative Employment Chart 2.1.: Recent developments in GDP, previously 12 months to % change relative - 6 Productivity - 5 GDP Employment employment and productivity, France - 7 GDP - 2.5 - 6 - 8 2008Q1 2008Q2 2008Q3 2008Q4 2009Q1 2009Q2 2009Q3 2009Q4 2010Q1 2010Q2 2008Q1 2008Q2 2008Q3 2008Q4 2009Q1 2009Q2 2009Q3 2009Q4 2010Q1 2010Q2 - 3.5 France The United Kingdom

2 2 DGP Employment 1 Productivity 1

0 - 1

- 1 - 2 Chart 2.1.: Recent developments in GDP, employment and productivity, Italy - 3 - 2 Chart 2.1.: Recent developments in GDP, employment and productivity, Spain - 4 Productivity Productivity Employment % change relative to 12 months previously previously 12 months to % change relative - 3 Employment previously 12 months to % change relative - 5 GDP GDP - 4 - 6 2008Q1 2008Q2 2008Q3 2008Q4 2009Q1 2009Q2 2009Q3 2009Q4 2010Q1 2010Q2 2008Q1 2008Q2 2008Q3 2008Q4 2009Q1 2009Q2 2009Q3 2009Q4 2010Q1 2010Q2

DGP Spain Italy Employment Productivity

4 2 3 DGP 1 2 Employment Productivity 0 1 - 1 0

- 1 - 2

- 2 - 3

- 3 - 4 - 4 - 5 - 5 Productivity Employment - 6 Productivity % change relative to 12 months previously previously 12 months to % change relative % change relative to 12 months previously previously 12 months to % change relative - 6 GDP Employment - 7 - 7 GDP

- 8 - 8 2008Q1 2008Q2 2008Q3 2008Q4 2009Q1 2009Q2 2009Q3 2009Q4 2010Q1 2010Q2 2008Q1 2008Q2 2008Q3 2008Q4 2009Q1 2009Q2 2009Q3 2009Q4 2010Q1 2010Q2

DGP DGP Employment Employment Productivity Productivity

56 Chapter 2: The crisis: challenges and social partner perspectives

Chart 2.1.: Recent developments in GDP, employment and productivity, Latvia

Chart 2.1.: Recent developments in GDP, employment and productivity, Poland

Latvia Poland

10 8

7 Productivity 5 Employment 6 GDP

0 5 Chart 2.1.: Recent developments in GDP, 4 - 5 employment and productivity, Romania 3

- 10 2

Productivity 1 % change relative to 12 months previously previously 12 months to % change relative - 15 EmploymentChart 2.1.: Recent developments in GDP, previously 12 months to % change relative GDP employment and productivity, Sweden 0

- 20 - 1 2008Q1 2008Q2 2008Q3 2008Q4 2009Q1 2009Q2 2009Q3 2009Q4 2010Q1 2010Q2 2008Q1 2008Q2 2008Q3 2008Q4 2009Q1 2009Q2 2009Q3 2009Q4 2010Q1 2010Q2

Sweden Romania DGP Employment 5 10 Productivity 4 8 Productivity 3 Employment DGP 6 2 GDP

1 4 0 2 - 1 - 2 Chart 2.1.: Recent developments in GDP, 0 - 3 employment and productivity, Ireland - 2 - 4 Chart 2.1.: Recent developments in GDP,

- 5 - 4 employment and productivity, Finland % change relative to 12 months previously previously 12 months to % change relative % change relative to 12 months previously previously 12 months to % change relative - 6 Productivity Employment - 6 - 7 GDP - 8 - 8 2008Q1 2008Q2 2008Q3 2008Q4 2009Q1 2009Q2 2009Q3 2009Q4 2010Q1 2010Q2 2008Q1 2008Q2 2008Q3 2008Q4 2009Q1 2009Q2 2009Q3 2009Q4 2010Q1 2010Q2

DGP Ireland Employment Finland Productivity

6 4

4 2 DGP

2 0

0 - 2

- 2 - 4 - 4 - 6 Productivity - 6 Productivity Employment % change relative to 12 months previously 12 months to % change relative Employment previously 12 months to % change relative - 8 GDP - 8 GDP

- 10 - 10 2008Q1 2008Q2 2008Q3 2008Q4 2009Q1 2009Q2 2009Q3 2009Q4 2010Q1 2010Q2 2008Q1 2008Q2 2008Q3 2008Q4 2009Q1 2009Q2 2009Q3 2009Q4 2010Q1 2010Q2

Source: Eurostat.

Within this overall picture, the tra- of some 7–8 %, between 2008 and sion in the fourth quarter of 2008. jectory of individual countries dif- 2009. At the other end of the spec- GDP had started to fall, however, fers in two respects. The first is the trum, GDP grew in Poland, albeit by the second quarter of 2008 in degree of severity of the decline in more slowly than the year before, Ireland, Italy, Estonia and Latvia. economic activity. The Baltic states whilst the decline in GDP was com- In contrast, GDP did not start to each experienced a decline in GDP paratively small in Cyprus, France, decline until the first quarter of of the order of 15 %, whilst Fin- Greece and Malta. The second is the 2009 in Bulgaria, Greece, Malta, land, Ireland, Romania and Slov- timing of the onset of recession. The Romania and Slovakia and until the enia experienced declines in GDP majority of countries entered reces- second quarter in Cyprus.

57 Industrial Relations in Europe 2010

Chart 2.2.: Changes in consumption, wage, labour cost and productivity indicators in EU-27 in 2007, 2008 and 2009

nominal wage declines of the order Chart 2.2.: Changes in consumption, wage, labour cost of 10 % (with even larger declines and productivity indicators in EU-27 in 2007, 2008 and 2009 in real wages); nominal wages also

4.0 declined in Ireland (by 4.1 %), Esto- 3.5 nia (by 3.0 %) and Greece (by 1.6 %) 3.0 (although real wages fell by less in all 2.5 three). In Hungary, nominal wages 2.0 fell marginally and real wages fell 1.5 by over 4 %. In Germany, there was 1.0 no growth in nominal wages and in 0.5 France, Sweden and the UK nomi- % change 0.0 nal wage growth was not much more - 0.5 Private consumption expenditure than 1 %; real wages fell or stagnated Nominal wages - 1.0 Real wages in all but France. Overall, there is - 1.5 Labour costs considerable similarity with the Labour productivity - 2.0 Real unit labour cost cross-country variation evident for - 2.5 private consumption. 2007 2008 2009

Source: Eurostat. Growth in nominal labour costs, at 2.7 % for 2009 was down from the 4.0 % of 2008, but was nonetheless There are also differences over when Private consumption has declined by above that in nominal wages (1.8 %) countries began to move out of reces- less than GDP in most Member States, by a factor of 1.5 (Chart 2.2). The sion. By the middle of 2009 some indicating that purchasing power has gap between nominal wage growth economies began moving out of been an important factor sustaining and changes in labour costs was rela- recession. Member States registering economic activity. For the EU-27, tively large in Austria, Belgium, Ger- quarterly GDP growth in the second private consumption fell by 1.7 % many and Greece. The rate of change quarter included France, Germany, between 2008 and 2009 (Chart 2.2), as in labour productivity had already Portugal, the Czech Republic, Slova- compared to a 4.3 % decline in GDP slowed down in 2008, when it stood kia and Slovenia, as well as Poland. (Chart 2.1). The Baltic states, Hun- at 0.4 % for the EU-27, as compared to In the third quarter they were joined gary, Romania and Spain, where the the 2007 figure of 1.6 %. In 2009 it fell by the majority of the other Member decline in private consumption was by 2.5 % (Chart 2.2). This is consist- States, when aggregate quarterly GDP even steeper than that in GDP and ent with the gap between the scale of growth figures for the EU-27 moved Ireland, where it was of similar mag- the decline in GDP and the lesser one into positive terrain for the first time nitude, stand out as exceptions to this in employment (Chart 2.1). Particu- since the first quarter of 2008. Quar- overall pattern. larly steep falls in labour productivity terly growth in the aggregate EU-27 occurred in the Baltic states, Finland, figures for the third quarter of 2009 The trend in private consumption Romania and Slovenia, all countries onwards was positive, although small reflects developments in wages up experiencing some of the sharpest in magnitude, indicating the tentative until the end of 2009. Although declines in GDP. Ireland, where pro- nature of recovery in many countries. growth in nominal wages slowed dur- ductivity rose by 1.2 % in 2009, was an Seven countries remained in recession ing 2009, they nonetheless increased exception in this respect. Elsewhere, in the final quarter of 2009: Greece, by 1.8 % for the EU-27 during 2009 Germany — where employment has Ireland, Spain, Cyprus, Latvia, Bul- as compared to 3.3 % in 2008. The held up (see below) despite a 4.9 % garia and Romania. By the second figures for real wages indicate that decline in GDP — experienced an quarter of 2010, this was still the case real wage growth actually increased, equivalent (4.9 %) decline in labour for Greece, whilst Ireland had slipped from 0.2 % for the EU-27 during productivity. back into recession after registering 2008 to 1.4 % in 2009 (see Chart growth for a single quarter (1). 2.2. for both). Against this overall Continued labour cost growth during trend, wages declined or stagnated 2009, combined with declining pro- 1 GDP quarterly change data, not shown in Table 2.A1, in a few Member States during 2009. ductivity, meant that unit labour costs accessed at Eurostat PEEIs: http://epp.eurostat.ec.europa. eu/portal/page/portal/euroindicators/peeis/ Latvia and Lithuania experienced rose. Real unit labour costs, which

58 Chapter 2: The crisis: challenges and social partner perspectives

Chart 2.3.: Public sector de cits or surplus in the EU-27 and selected Member States 2007, 2008 and 2009

had declined in earlier years, rose by 0.5 % in 2008 and then by 3.0 % in Chart 2.3.: Public sector deficits or surplus in the EU-27 2009 (Chart 2.2). Rises in real unit and selected Member States 2007, 2008 and 2009 labour costs were particularly sharp, 15 at more than 5 %, in Bulgaria, Cyprus, 2007 12 2008 Finland, Greece, Luxembourg, the 2009 Netherlands, Romania, Slovakia and Slovenia. Only Latvia, Hungary and 9 Poland experienced a decline (of 1 % 6 or more) in 2009.

% GDP 3 The extent of the impact of the financial and economic crisis on the public 0 finances of Member States is indicated in Chart 2.3 (Table 2.A2 reports - 3 changes in the position of the pub- - 6 lic finances for all Member States). EU-27 ChartDE 2.4.:ES ChangeFR in employmentIT UK forIE EU MemberSE LV States,RO PL

Whereas across the EU-27 public second quarter 2008 to second quarter 2010 sector deficits amounted to less than Source: Eurostat. 1 % of GDP in 2007, by 2008 this had already grown to 2.3 %. The situation deteriorated rapidly during 2009 by Chart 2.4.: Change in employment for EU Member States, which time public sector deficits stood second quarter 2008 to second quarter 2010 at 6.8 % of GDP. Sharp increases in 6 the public sector deficit were already 2008 Q2 evident in 2008 (as compared with 3 2009 Q2 2010 Q2 2007) in some countries, notably Ire- land, Spain and Estonia. In 2009, this 0 became the case for many more coun- - 3 tries. Increases in the deficit equivalent to at least 5 % of GDP occurred in - 6 Bulgaria, Cyprus, Denmark, Greece, Spain (for a second successive year), - 9 Finland, Ireland (also for a second successive year), Latvia, Lithuania, previously 12 months to % change relative - 12 Portugal and the UK. - 15 EU-27 LU MT AT DE BE SE FR IT PL UK CY RO PT EL NL CZ HU FI SK ES SI DK IE BG LT EE LV The decline in GDP has only- par Note: 2008,2009: annual average; 2010: average of rst and second quaters tially been reflected in employment Source: Eurostat. which, as Chart 2.4 shows, fell by just under 2 % between the second quarters of 2008 and 2009 and by a previous recessions (Hurley et al., by the data on average hours worked, further 0.6 % over the next 12 months 2009), which is confirmed by the reported below (Table 2.1). (Table 2.A3 reports 12 monthly continued decline in employment changes by quarter for each Member reported in most countries in the sec- As with GDP, the magnitude of the State). In proportionate terms the ond half of 2009 and through into the decline in employment varied across decline in employment was less than first half of 2010. The second is the countries (see Chart 2.1). Steep half that in GDP between 2008 and impact of measures taken to preserve declines in employment were evident 2009. Two influences are potentially jobs, for example through short- in the Baltic states, Ireland and also at work. One is the lagged effect of time working schemes, which are Spain. In contrast, employment growth a downturn in economic activity on reviewed in Chapter 3. The relevance continued into 2009; and subsequent levels of employment, observed in of this second influence is indicated declines were modest in Germany,

59 IndustrialChart 2.5.: Relations Unemployment in Europe rates for EU 2010 Member States, 2008, 2009 and 2010

the Benelux countries, Cyprus, Malta, Chart 2.5.: Unemployment rates for EU Member States, Poland (where employment did not 2008, 2009 and 2010 (first half) decline until the final quarter and

20 then only marginally) and Slovenia

2008 (where subsequent declines have been 2009 comparatively greater). There are two 2010 15 main exceptions to the general trend for the decline in GDP to be markedly greater than that in employment: Ireland and Spain, where the fall in 10 employment paralleled or exceeded that in GDP. Both countries were dis- % active population tinctive in that recession was initially 5 triggered by a sharp drop in activity in construction associated with a slump Chart 2.6.: Employment rates by gender and for young people, EU-27, rst quarter 2007 to second quarter 2010 in the housing and property markets. 0 In addition, in Estonia and Latvia, the EU-27 ES LV EE LT SK IE HU PT EL FR SE FI PL BE IT UK DE MT BG RO CZ DK SI CY LU AT NL steep falls in employment are close in Source: Eurostat.Note: 2008,2009: annual average; 2010: average of rst and second quaters magnitude to those in GDP. At the other end of the spectrum, Germany and the Benelux countries stand out Chart 2.6.: Employment rates by gender and for young in terms of the magnitude of the gap people, EU-27, first quarter 2007 to second quarter 2010 between GDP decline and the trajec- 80 tory of employment.

Declines in employment contin- 70 ued into 2010, despite the upturn in quarterly GDP by the third quarter

60 of 2009 in most countries. The rate of quarterly decline in employment had, however, slowed by this point Men, 15 - 64 50 Total, 15 - 64 in most countries. Even so, Ireland, % age group Women, 15 - 64 Denmark, Bulgaria and the Baltic Young people, 15 - 24 40 states reported further substantial falls in employment in the third and fourth quarters, and Bulgaria and the 30 Baltic states again in the opening two 2007Q1 2007Q2 2007Q3 2007Q4 2008Q1 2008Q2 2008Q3 2008Q4 2009Q1 2009Q2 2009Q3 2009Q4 2010Q1 2010Q2 quarters of 2010 (2). Source: Eurostat. Unemployment rates have risen since 2008, when the percentage of the Table 2.1: Fixed-term contracts and actual hours worked EU-27’s workforce who were unem- in the EU-27 2007, 2008 and 2009 ployed was 7 %. By the first half of 2010 Chart 2.5 shows that the figure 2007 2008 2009 stood at 9.6 %. Large increases in the EU-27 14.5 14.0 13.5 unemployment rate between the first Fixed-term contracts (% on total employees) EU-15 14.8 14.4 13.7 half of 2008 and the first half of 2010 were recorded in those countries EU-27 39.9 39.8 39.5 Actual hours worked (full-time employees) EU-15 39.6 39.5 39.2 2 Employment change quarterly data, not shown in Table 2.A3, accessed at Eurostat PEEIs: Source: Eurostat Labour Force Survey (a) [tps00073],(b) [lfsq_ewahana, lfsq_ewhan2]. http://epp.eurostat.ec.europa.eu/portal/page/portal/ euroindicators/peeis/

60 Chapter 2: The crisis: challenges and social partner perspectives

where the decline in employment 2009 in a few countries, including activity, amounting to a 12 % decline was steepest: Ireland, Spain and the Greece, Hungary, Luxembourg and in value-added for the EU-27 in 2009 Baltic states — where unemployment Malta. as compared with 2008. Construc- rates have tripled. Over the same tion experienced a 6 % decline over period, the unemployment rate did Reductions in hours worked would the same period. Private services have not rise at all in Germany despite the seem to have cushioned the impact been less affected, although there are fall in GDP. Elsewhere, the smallest of the recession on employment differences within the broad sector. proportionate rises were in Austria levels. Actual hours worked by full- Value-added fell by over 4 % in 2009, and the Benelux countries, each of time employees fell by just under 1 % in distribution, transport, communi- which also experienced a sizeable (from 39.8 to 39.5 hours per week) cation and hotels and catering, taken fall in GDP. on average across the EU-27 in together. The decline was only half 2009 as compared with 2008 (Table this, at around 2 %, in finance and Employment rates have declined 2.1). Larger falls, approaching 2 %, other business services. The role of the faster for men than for women occurred in Austria and Germany, public services in sustaining economic (Chart 2.6). Whereas the female both countries where statutory activity is underlined by the contin- employment rate stood at 59.1 % short-time working schemes have ued increase in activity in 2009. Given in the second quarter of 2008, and been widely taken up. Reductions the scale of the public sector deficit in declined only marginally to 58.4 % in average hours worked seem to be many countries (Chart 2.3) and the by the second quarter of 2010, that particularly focused on the industrial spread of austerity measures to reduce for males decreased by 2.8 percent- sector, where they have been propor- deficits, this is unlikely to persist. age points from 73.0 % to 70.2 % over tionately larger (see below). the same period. Young people under As at the aggregate economy level, 25 have been particularly affected by sectoral developments in employment the recession. Youth employment 2.2.2. Sector and company- in 2009 as compared to 2008 show rates have slumped by 3.4 percent- level trends declines which are noticeably less age points from 37.4 % in the second than those in output (Chart 2.8 and quarter of 2008 to 34.0 % in the sec- The impact of Chart the 2.7.:crisis Change has in differedvalue-added Chart 2.7).by broad The sector steep decline in ond quarter of 2010 (Chart 2.6). markedly betweenin thethe EU-27, main rstsectors quarter of 2007activity to second in industry quarter 2010 has been accom- the economy, as Chart 2.7 shows. The panied by a more modest fall in Workers employed on temporary industrial sector, including manufac- employment, of some 5 %. In con- contracts have been more exposed turing but excluding construction, struction, however, the decline in to job loss than those on open- has experienced a steep decline in employment was broadly equivalent ended or permanent contracts. Table 2.1 shows that the proportion of the workforce on fixed-term contracts Chart 2.7.: Change in value-added by broad sector in the shrank by 0.5 percentage points in EU-27, first quarter 2007 to second quarter 2010 both 2008 and 2009. Although the 10 trajectory in the majority of countries corresponds with this aggre- 5 gate development, there are also some sharp contrasts between par- 0 ticular countries. Spain, where use of temporary contracts is easily the - 5 most widespread amongst Mem- ber States, registered a fall in 2009 - 10 Agriculture of almost 4 percentage points from Public and other services the 2008 level of 29.4 % (indicating previously 12 months to % relative Finance and business services - 15 Construction that workers on fixed-term con- Distribution, HORECA, transport tracts have borne the brunt of rising Industry - 20 unemployment). In contrast, the 2008Q1 2008Q2 2008Q3 2008Q4 2009Q1 2009Q2 2009Q3 2009Q4 2010Q1 2010Q2 proportion of workers on fixed-term Source: Eurostat. contracts rose between 2008 and

61 IndustrialChart Relations2.8.: Change inin employment Europe 2010 by broad sector in the EU-27, first quarter 2007 to second quarter 2010

In contrast, over the 18 months cov- Chart 2.8.: Change in employment by broad sector in the ered by the 2009 ERM Report (Hur- EU-27, first quarter 2008 to second quarter 2010 ley et al., 2009), from the start of 2008 5 up to the end of June 2009, total job 4 losses arising from company restruc- 3 turing totalled over 900 000 across the 2 EU as compared to 400 000 new job 1 announcements. Job losses started 0 rising in the first quarter of 2008, - 1 peaking in the first quarter of 2009 - 2 before declining somewhat in the - 3 second quarter. Job losses outnum- - 4 Agriculture Public and other services bered jobs created from the second

% relative to 12 months previously previously 12 months to % relative - 5 Finance and business services quarter of 2008 onwards, coinciding - 6 Construction Distribution, HORECA, transport with the onset of recession. - 7 Industry - 8 2008Q1 2008Q2 2008Q3 2008Q4 2009Q1 2009Q2 2009Q3 2009Q4 2010Q1 2010Q2 Analysis of the sectoral pattern of job losses over the 18-month period Source: Eurostat. reported by the European Restruc- turing Monitor indicates that 49 % occurred in manufacturing and to that in output. In private services, compared to reductions in employ- other production industries and the decline in employment in distri- ment: Austria, Finland and Germany. 47 % in services (Hurley et al., 2009). bution, transport, communications, The balance was accounted for by hotels and catering was noticeably Box 2.1 provides a more detailed pic- agriculture, forestry and fishing and less, at 1.7 %, than that in output, ture for the EU-15 only of develop- construction, which because of the whilst that in finance and other ments in production and employment small-scale of many businesses and business services was of equivalent in selected sectors. high incidence of self-employment magnitude. In the public services, often fall beneath the ERM report- employment rose slightly. Job losses and newly created jobs ing thresholds. Given that service announced by companies, which sector employment accounts for over In manufacturing, Hurley et al. involve at least 100 jobs or more than 65 % of total EU employment and (2009) indicate the extent to which 10 % of the workforce at sites employ- manufacturing for less than 20 %, a reduction in average hours worked ing at least 250, are recorded by the the extent to which the latter has has ameliorated the deterioration in European Restructuring Monitor been hit harder by the crisis is again employment. Average hours worked (ERM). It relies on systematic moni- apparent. This is underlined by the 7 in manufacturing in 15 Member toring of reports in the media in each percentage point increase in the pro- States fell by some 7 % between the of the EU’s Member States (and Nor- portion of job losses accounted for first quarters of 2008 and 2009 as way) to identify these. Although the by manufacturing over the 18-month compared to a reduction in employ- data are neither comprehensive nor period as compared to the six years ment of 5 %. There were marked necessarily representative, their value up to 2008. The increase was more differences between countries. In lies in indicating trends and patterns marked in higher-technology indus- Denmark, France, Spain and the UK, in company restructuring and dif- tries, such as automotive, than in the percentage reduction in employ- ferentiating between different types lower-technology industries such ment exceeded that in hours worked, of restructuring (Hurley et al., 2009). as food processing. Amongst the whereas the reverse was the case in The impact of the crisis on trends in service sectors, retail accounted for Austria, Germany, Finland, Portugal, job creation and job loss amongst a markedly higher proportion of job Greece, the Czech Republic, Slova- companies is clear. During 2007, prior losses over the 18-month period than kia, Poland, Bulgaria, Romania and to the onset of the crisis, job gains in the previous period. In contrast Latvia. In three countries the burden from company restructuring — total- public administration accounted of adjustment was heavily weighted ling over 450 000 — exceeded those for a smaller proportion of job loss, towards reduced working hours as from job losses — at around 330 000. reflecting the role of central and

62 Chapter 2: The crisis: challenges and social partner perspectives

Box 2.1: Contrasting trends in production and employment in selected sectors An examination of developments in selected sectors confirms that the manufacturing and construction sectors in the EU-15 have been particularly hard hit by the economic crisis, and that some private service sectors have also experienced sharp declines in economic activity whilst others have been much less affected. Table 2.2, reproduced from Hurley et al. (2009), shows that within manufacturing, steep declines were experienced in textiles and clothing and across metalworking — particularly in the automotive sector, which saw a 41 % decline in output between the first quarters of 2008 and 2009. One of the least affected industries within manufacturing was food processing where output fell by just 2 % over the same period. Only pharmaceuticals saw an increase in output. An aggregate figure for the service sectors was not available. In general the declines in turnover reported by individual service industries over the same period were smaller than those experienced by manufacturing industries, although reductions of some 10 % were reported in retail and the transport industries. No data were available for financial services, although reported job losses have been substantial (Glassner, 2009). Of the service sectors covered only computing showed an increase in output between the first quarters of 2008 and 2009.

Table 2.2: Changes in production and employment by selected sectors in the EU-15, 2007–09 (%) Production Employment Q1 2007–08 Q1 2008–09 Q1 2007–08 Q1 2008–09 Manufacturing (all) 2.9 – 16.7 1.0 – 4.0 Food products 1.2 – 1.9 1.4 – 1.3 Textiles – 3.9 – 23.0 – 3.6 – 10.4 Chemicals 1.8 – 19.0 – 0.2 – 3.8 Pharmaceuticals 0.4 3.4 1.0 – 4.0 Metal products 3.9 – 26.1 2.8 – 4.2 Motor vehicles 5.7 – 41.4 0.1 – 5.6

Electricity, gas 3.2 – 5.1 0.5 1.1 Construction 0.1 – 11.4 1.8 – 8.0

Retailing, wholesaling 8.7 – 9.8 2.0 – 1.5 Land transport 12.9 – 7.4 2.3 – 2.4 Postal services 3.3 – 3.9 – 0.2 – 2.0 Hotels, restaurants 3.9 – 4.5 2.7 – 1.9 Telecommunications – 0.4 0.8 – 2.1 – 2.7 Computing 6.4 2.2 4.7 2.6

Source: ERM 2009 Report (Eurostat, Short-term business statistics).

Reflecting the economy-wide pattern, Table 2.2 also indicates that falls in employment in manufacturing were modest when compared to the scale of the decline in output. Employment had fallen by 4 % between the first quarters of 2008 and 2009 as compared to the 17 % loss of output. The same applied to the service sectors for which data were available. Construction, however, registered a much sharper drop in employment, of 8 % compared to output loss of 11 %, probably reflecting the project-based nature of much employment in the sector. local government employment as a attributed to ‘internal restructur- to 2008, when they stood at 14 % (see stabilising factor during recession. ing’ by companies, which includes Box 2.2). In contrast, the relatively all those forms of restructuring not small proportion of restructurings The ERM database also differenti- falling under other headings. Bank- attributed to offshoring (or delocali- ates job loss according to the type ruptcy or closure was the next most sation) declined, from 6 % to 3 % of of restructuring involved. The larg- prevalent, accounting for 21 %. the total. Job loss associated with est proportion of job losses over the Restructurings of this kind increased mergers and acquisitions remained 18-month period — 70 % — were sharply as compared to the years prior steady at around 4 % of the total.

63 Industrial Relations in Europe 2010

Chart 2.9.: Cases of bankruptcy and closures Box 2.2: Fromrecorded boom by to the bust: ERM a by surge quarter in 2008–09bankruptcies The number of cases of bankruptcies or closures reported by the European Restructuring Monitor (Chart 2.9) climbed from a quarterly total of some 10 000 in the opening quarter of 2008 to over 60 000 in the final quarter. By the second half of 2009 it had declined to just under 25 000 per quarter, although this level was still substantially above that prevailing during before the summer of 2008.

Chart 2.9.: Cases of bankruptcy and closures recorded by the ERM by quarter 2008–09 150 70000

60000 120

50000

90 40000

30000 60

20000 % relative to 12 months previously previously 12 months to % relative 30 Number of cases (left axis) Job losses announced (right axis) 10000

0 0 2008 Q1 2008 Q2 2008 Q3 2008 Q4 2009 Q1 2009 Q2 2009 Q3 2009 Q4 Note: ERM is the European Restructuring Monitor maintained by the European Foundation in Dublin

Source: Eurostat.

Data on bankruptcies for Member States indicated a surge in many countries, more marked in some than others (Coughtrie et al., 2009; Glassner and Keune, 2010). For example, in Belgium, the total for the first four months of 2009 was three-and-a-half times higher than the equivalent period in 2008, and in Spain the total was more than two-and-a-half times higher over the same period. In the Netherlands, the number of bankruptcies doubled between mid-2008 and mid-2009. In Denmark the number rose by 85 % over the 12 months up to May 2009, whilst in Sweden the total was up by 45 % comparing the first quarters of 2008 and 2009. Bankruptcies doubled in Bulgaria comparing the first four months of 2009 and 2008, whilst in Romania the total was up by almost 60 % comparing the first quarter of 2009 with that of 2008. The Baltic states all saw sharp increases in numbers of bankruptcies, with the upwards surge commencing earlier in 2008 than elsewhere. In a few countries, the increase in bankruptcies has been modest or no increase had been recorded by mid-2009. Austria reported a 9 % increase between the first half of 2008 and the same period a year later. The Czech Republic reported no increase over the same period, although a sharp increase was anticipated over the second half of 2009.

2.2.3. Assessment The decline in manufacturing output ness confidence take time to recover; has been much sharper than that in and aggravated levels of private and The steep falls in output have, in services, with the probable effect of public debt remain to be dealt with many but not all Member States, been further accelerating the shift in eco- (Hurley et al., 2009; Eurofound, 2009). followed by a period from mid-2009 nomic activity from the former to the Whilst activity in financial markets onwards where output has stabilised latter (Hurley et al., 2009). appears to be picking up, and there and a gradual recovery commenced. are signs that business confidence Cross-country variation is, however, In considering the possible trajec- is recovering, the debt problems evident in the severity of the decline tory of economic recovery, account seem unlikely to be resolved rap- in economic activity experienced, needs to be taken of the origins of the idly. Unemployment and short-time the timing of the onset of the reces- current recession. Historical experi- working arrangements will continue sion and the point at which eco- ence, for example from the Nordic to depress earnings levels, and hence nomic recovery commenced. The countries in the early 1990s, shows constrain the capacity to pay off pri- sectoral pattern of restructuring that that recovery from a recession trig- vate debt, until well after a recovery in the recession has unleashed appears gered by a financial crisis tends to be output is underway. The levels of pub- to reinforce longer-run structural slower than otherwise. This is for two lic debt incurred, in the first instance, changes in the European economy. reasons: financial markets and busi- to address the immediate financial

64 Chapter 2: The crisis: challenges and social partner perspectives

Box 2.3: Work inequalities exacerbated in the crisis (1) Inequalities in the world of work have been affected by the crisis, although in a differentiated way, depending on individual countries — and their policy responses to the crisis — and the area under study. The first source of inequality unleashed by the crisis was due to the differentiated impact of employment adjustments among workers. Employment adjustments to the crisis have differed not only between countries, but also between different categories of workers. The high percentage of temporary workers in countries such as Germany and Spain and also Hungary has led to employment adjustments without these being accompanied by a significant increase in unemployment rates. This also means, however, that temporary workers were the first category to be affected by the crisis, as in Spain, where they account for 95 % of employment adjustments. Short-term work contracts in France have also served as a sort of buffer during the crisis, with 53 % of job losses affecting interim agency workers, with not only low-skilled and young workers, but also older workers being severely hit. Self- employed and family workers have also been particularly hard hit in Bulgaria, where the employment loss was also higher among temporary workers (– 10 %) compared to workers on a permanent contract (– 3 %). Part-time contracts have also been reduced twice as often as full-time contracts. Discriminatory practices have also been on the rise, as shown in Spain, where differentiated employment practices have multiplied on the basic of ethnic origin (reflected in a relatively higher growth in unemployment), or in Estonia where job losses have been much higher for non-nationals. Younger groups have been severely affected everywhere — often because overrepresented among temporary workers — together with those with only basic or no qualifications, as in Spain and the UK — where long-term unemployment increased significantly among young people (16–17 and 19–24 years of age). In Spain, workers aged 20–29 have absorbed 75 % of the employment decrease. In the Netherlands, even young workers (below 25) in full-time jobs with permanent contracts have been hit hard, accounting for almost half of the total decline in employment. Low-skilled youth employment fell by more than 25 % between 2008 (second quarter) and 2010. Targeted programmes for young people, as implemented in Sweden, have immediately helped. Regional differences also seem to have increased, with a greater impact being felt in, for instance, the south than the north of Italy, leading to a sharp fall in living standards and purchasing power in 2008–09 and a general increase in wage and income inequalities. Certain sectors have suffered more than others, such as manufacturing and construction — which are dominated by men, and also — in the case of construction — migrant workers. This partly explains why men have so far been hardest hit by the crisis. Italy is an exception, with female — especially young (under 25) — workers so far being most affected by employment adjustments in the crisis. The crisis has also hurt categories of employees not particularly affected in earlier recessions, such as those in middle-income jobs or in the public sector, or employees from the financial sector. Business failures have also multiplied, leading to a new source of vulnerability and exclusion. There is also some evidence that the quality of work has significantly declined during the crisis. Intensity at work has often increased, together with the harassment and bullying of regular employees — as witnessed in Spain — while social dialogue and workers’ rights became harder to implement. There has also been a reallocation of work from large firms to smaller firms with lower quality jobs as reported in France in the care sector and in other countries in manufacturing. The rate of undeclared work may also have increased in the current crisis. In most EU countries, quality of work has declined not only for those who remain in work, but also from the perspective of those who lost their job in the crisis and had to — or will have to — take another job but of lower quality. The replacement of permanent jobs by temporary jobs (to promote future external flexibility), as observed in Bulgaria, France, Italy and the Baltic states may also have a long-term impact on employment quality. Inequalities have also increased on the wage front. During the crisis, wage disparity (measured by the first over the last wage decile) has increased in Italy, but also in the Baltic states and other countries, while in Spain the proportion of workers on low incomes has increased — despite massive employment adjustment among the low skilled — together with increasing pressure from employers to renegotiate collective agreements. Government policy of freezing the minimum wage in Estonia and Lithuania has also contributed to this. Similarly, in the UK, France and also Bulgaria, wage disparity seems to have increased due to the fact that the minimum wage has not been raised during the crisis. This is in contrast to countries such as Poland or Portugal where the minimum wage has been raised to protect the most vulnerable workers. Non-payment of wages has also been observed, for example in Bulgaria, notably in railways. Violations of labour law, for instance with regard to the proper payment of working hours and overtime, have been reported in France, but also in other countries. Alongside wage moderation, enterprises have also adapted through shorter working hours. Government intervention seems to have been decisive in Germany, with an average reduction of working time of 3.5 % or 50 hours per employee, but also in Sweden and France to promote work-sharing and avoid lay-offs in the crisis. In the UK, 20 % of interviewed companies also reported shorting working hours because of the crisis. Enterprise data in Hungary also show a reduction of working hours both in the public and the private sectors. We must report, however, that such avoidance of job losses through working time reduction has been concerning mainly the core labour force that is permanent employees. In Estonia, working time reduction mainly occurred for a middle-aged, trade-unionised labour force.

1 Compiled on the basis of the preliminary findings of an ongoing EC–ILO project on this topic covering 30 countries (EU-27; Croatia, the former Yugoslav Republic of Macedonia and Turkey), forthcoming in Vaughan-Whitehead (ed.), Work inequalities in the crisis, Edward Elgar, 2011.

65 Industrial Relations in Europe 2010

Trends in social dialogue have also had some impact on inequalities during the crisis. In several countries, sectors covered by collective bargaining seem to have benefited from the negotiation of alternatives to employment cuts (see Chapter 3). In contrast, where social dialogue was weaker — as in several central and east European countries — there seems to have been no alternative to immediate employment adjustments and wage cuts have been immediate and more severe. Labour disputes have increased — for instance in 2009 their number doubled in Estonia — mainly because of claims for unpaid wages, bonuses and paid holidays, as well as the unlawful termination of employment contracts and abuses of some work contracts. The impact of the crisis on other labour areas has also contributed to increase inequalities. The decrease in training programmes in the crisis, as witnessed in Estonia, Spain and also other countries, seems to have put unskilled workers in an even more vulnerable position. Short-term effects should also be distinguished from longer-term effects. While women so far may have suffered less from employment adjustments, this may be changing — with, for instance, current job cuts in the public sector and services. Moreover, it does not mean that women may not have suffered more from other types of pressure, for instance on the wage front, or from a deterioration of other working conditions and work and family arrangements that have been radically curtailed in the crisis. Cuts in training expenditure but also work and family services within the crisis may have weakened even further the potential for employees to shift toward better quality and better paid jobs, an effect that will only be visible after a long time. It might therefore be expected that, beyond the most obvious increases in inequalities in the crisis, other sources of inequality will become more evident over the years to come. crisis and, in the second, to sustain Different patterns in the relationship explanation, another, to be addressed economic activity through the worst between output and employment are, in Chapter 3, is the actions of the of the downturn mean that the con- however, apparent across countries. social partners and public authorities sequences of the crisis for the public Taking the countries that differ the aimed at mitigating job loss. finances are now the focus of signifi- most, in Ireland and Spain the decline cant retrenchment measures across in employment has been at least as the EU. Major measures to restore great as that in output. In contrast, in 2.3. Perspectives of and stabilise the public finances have Germany and the Benelux countries the social partners already been implemented in several employment levels have been broadly countries, including Greece, Ireland, sustained despite falls in GDP of on public policy Spain, Portugal and the Baltic states. varying magnitude. One explanation responses to the for the contrast advanced by com- The employment consequences of mentators (3), is that economies have crisis the crisis have not been as severe as undergone different types of reces- might have been expected given the sion. One was initially triggered by The aims of this section are threefold. experience of previous recessions. a sharp drop in construction activity First, to identify the perspectives of The decline in output has not, in associated with a slump in the hous- employers’ organisations and trade the majority of Member States, been ing and property markets, as occurred unions respectively on the public pol- mirrored by an equivalent fall in in Ireland and Spain. Decreasing out- icy responses required to address the employment, or rise in unemploy- put in construction rapidly translates crisis and its consequences. Second, to ment. Employment effects are well- into job loss. The other originated establish the extent to which there are known to lag those in output during through a collapse in consumer and points in common between the social a recession, and half-way through business confidence and in trade, and partners as well as differences. Third, 2010 the employment situation was corresponds to the experience of Ger- to try and account for cross-country continuing to deteriorate in most many and the Benelux countries, and variation in the extent to which the countries, albeit at a slower rate a range of other economies including social partners have reached similar than in 2009, even though output France and the UK. In these coun- or common positions according to the had begun to rise in many. None- tries, the downturn is focused more magnitude of the crisis and/or insti- theless, job loss has — to some sig- on the manufacturing sector, where tutional arrangements for social dia- nificant extent — been mitigated by strenuous efforts have been made to logue in different countries. a decline in average hours worked. sustain employment levels. If the dif- The role of the short-time work- fering nature of the economic crisis in Surveying the perspectives of national ing schemes implemented in many different countries offers one possible social partner organisations towards countries, and of collectively nego- addressing the effects of the crisis, tiated adjustments to working time, 3 For example, Stefano Scarpetta of the OECD cited two main phases can be distinguished in the Financial Times’ feature ‘At the sharp end’, 22 are addressed in Chapter 3. January 2010. (Freyssinet, 2009; Hethy, 2009). In

66 Chapter 2: The crisis: challenges and social partner perspectives

the first, from the onset of the crisis of the crisis from its inception elimi- • Such proposals have invoked wide- in mid-2008 through until early 2009, nated the scope for any stimulus spread trade union opposition (see the adoption by governments of anti- package, essentially confronting Box 3.7 in Chapter 3), but have been crisis packages aimed at sustaining these countries from the outset with urged by, or received open or tacit economic activity and employment the distributional issues that were to support from, employers’ organi- received broad, if qualified, support subsequently emerge elsewhere. sations, who are concerned to see from employers’ organisations and public deficits brought down. trade unions. In the second, from Under the second phase, two kinds mid-2009 onwards, tensions and con- of disagreement have become appar- • Further disagreement between flicts between employers’ organisa- ent (Freyssinet, 2009; Hethy, 2009; employers’ organisations and trade tions, trade unions and governments Rychly, 2009). The first, between unions over austerity measures has emerge in some, but not all, countries employers’ organisations and trade focused on the balance between over the distribution of costs and unions, is over the conditions reduction in public services and uncertainties associated with two required for business activity to be increases in taxation, with trade main aspects of measures paving the restored. unions favouring the preserva- way towards recovery. One concerns tion of public services at the cost the conditions for restoring business • Employers’ organisations place of higher taxation and employ- activity. The other involves growing priority on measures to restore ers tending to advocate the con- recourse by governments to austerity competitiveness, including tight verse (Demetriades and Kullander, measures to tackle the impact of the control of labour costs — evi- 2009). crisis on public finances. denced in calls for freezing wages and/or wage moderation — and Around this overall trajectory, there The first phase was marked by con- measures to further enhance is variation across countries in the siderable consensus across coun- flexibility in the labour market extent to which there has been con- tries on the urgency of governments and workplace. sensus between the social partner intervening with measures to stimu- organisations on the public policy late the economy, even if there were • Trade unions prioritise employ- measures required to address the cri- differences over the magnitude of ment security — for example sis. A broad three-way distinction can the stimulus required and the means through extension of short-time be drawn (see Table 2.3) between: by which it should be achieved. working schemes, social protection Trade unions tended to call for a — for example by extending the • countries where a considerable larger-scale stimulus than employ- reach of welfare systems and the degree of bi-partisan consensus has ers’ organisations, and emphasised maintenance of purchasing power been forged and for the most part increases in public investment, — through increases in wages suf- sustained; including infrastructure and edu- ficient to maintain them in real cation and training, and measures terms and protection of the real • countries characterised by a lesser to maintain purchasing power and value of unemployment and social degree of bi-partisan consensus, thereby consumption. Employers’ benefits. They fear that measures including some where it has been organisations, whilst also advocat- to increase flexibility will nega- confined to specific issues and some ing measures to promote education tively impact further on employ- where disagreements have prevailed and training, tended to favour meas- ment security. over part of the period; and ures which reduced labour costs and taxes, thereby facilitating private Governments are at the centre of the • countries where disagreements investment as well as consumption second, where proposed austerity between the social partners pre- (Demetriades and Kullander, 2009; measures have major implications vailed throughout, of for part of, Rychly, 2009). Nonetheless, bipartite for public sector employment, and, the period. consensus and/or explicit tripartite in some countries (the Baltic states, agreement over anti-crisis measures Hungary, Bulgaria, Romania and The extent to which governments was evident across a range of coun- also Ireland and Greece), involve were receptive to social partner tries. The main exceptions were cuts or the freezing of public sector proposals and involved social part- those, such as Ireland, Hungary and pay and/or cuts in benefit entitle- ners in the framing of packages of the Baltic states, where the severity ments and/or levels. measures has also varied.

67 Industrial Relations in Europe 2010

In order to gauge the extent and support for short-time working, apparent from the start of the crisis, nature of these two kinds of varia- but criticised the magnitude of the whilst in Finland bi-partisan support tion, the perspectives of employers’ stimulus as being insufficient. They for government anti-crisis measures organisations and trade unions on called for a further stimulus package in the early phase has given way to the measures required to address the at the April 2009 summit, includ- tensions between trade unions and crisis, and their involvement in framing education and infrastructure government over distribution of the ing the policies implemented by gov- investments. In December 2009, the burden in the medium-term. ernments, in the Member States are short-time work scheme was fur- briefly reviewed. The perspectives of ther extended as part of an ‘employ- The Danish government had set up a the two main cross-sector European ment pact’ tabled by the government tripartite committee in early 2008 to social partners are summarised in and endorsed by the social partners consider labour market reforms. Fol- Box 2.5 (BusinessEurope) and Box 2.6 (Planet Labor, 2009). The scale and lowing the onset of the crisis recom- (ETUC). The account focuses on composition of austerity measures mendations were submitted in the developments from the onset of the proposed by the government in the autumn. However, the subsequent crisis, in the summer of 2008, up spring of 2010 have, however, been proposals put forward by the govern- until April 2010. strongly criticised by trade unions. ment failed to win the support of the social partners and the initiative was deferred. The social partners called 2.3.1. Panorama of national Box 2.4: on the government to take measures social partner policy Information sources to strengthen the labour market, perspectives The data on the perspectives of national notably making the state-supported employer and trade union organisa- short-time work (‘work-sharing’) In Germany and Austria, there tions are, unless otherwise indicated, scheme more flexible. In March has been a significant degree of drawn from: Eurofound’s European 2009, the government launched a bi-partisan support for measures Industrial Relations Observatory; and four-pronged package of measures two private-subscription based online introduced by government, although services, European Employment to simulate the labour market. Three some disagreements have emerged Review and Planet Labor. elements, boosting support for train- over proposed austerity measures. ing; introducing an early-warning Germany’s social partners were con- system for pending job losses; and sulted — and exerted a degree of In Austria, a government package improvements to labour market influence — over the two economic of measures aimed at stimulating monitoring, were welcomed by both stimulus packages brought for- the labour market, introduced in employers’ organisations and trade ward by the federal government in July 2009, drew support from both unions. The fourth element intro- November 2008 and January 2009, employers’ organisations and trade ducing more flexible rules for work- and participated in two economic unions, which had both been criti- sharing was, however, criticised by summits convened by the govern- cal of an unsuccessful earlier set of both social partners as not going far ment in December 2008 and April measures adopted in January (Adam, enough (Jørgensen, 2009). 2009, respectively (Zagelmeyer, 2009). The social partners also 2009). They also recommended suc- made a joint proposal to make the Responding to the Swedish govern- cessfully that the duration of statu- statutory short-time work scheme ment’s draft budget bill published tory short-time work benefit should more flexible, which was enacted in in September 2008, employers’ be extended. Employers’ and trade February 2009. organisations welcomed the empha- associations welcomed the stimu- sis on tax cuts and a reduction in lus packages and have repeatedly The picture amongst the Nor- social contributions as the princi- called for a reduction in employers’ dic countries varies. In Denmark, pal means of implementing a fiscal social security contributions and broad consensus has been apparent stimulus. Unions, whilst welcom- non-wage labour costs, measures between the social partners, but ing the stimulus, were sceptical over to ease companies’ access to bank there have been differences with the efficacy of tax cuts and called loans and investment in education the government. In Sweden, differ- instead for larger cuts in employee and infrastructure. Trade unions ences between employer organisa- contributions to unemployment have welcomed aspects of the stimu- tions’ and trade unions on policy benefits and measures to boost lus packages, such as the additional responses to the crisis have been employment and training through

68 Chapter 2: The crisis: challenges and social partner perspectives

more active labour market interven- impact on public debt. By February launched in January 2009. However, tion. Responding to the 2009 finance 2010, however, agreement could be controversy between the social part- bill, introduced in April, employers’ reached on only one of two linked ners erupted in the summer over organisations criticised measures sets of proposals. Trade unions have proposals from the employers’ con- providing extra support for local subsequently criticised the govern- federation to curtail the possibility authorities and the welfare system, ment’s draft 2010 budget on the of early retirement and recalibrate advocating instead further stimulus grounds that the stimulus envisaged pension entitlements. Further disa- measures directed towards public is insufficient to impact on unem- greement emerged later in the year investment and incentivising private ployment and — like their Swedish over the emphasis of government investment. Trade unions, however, counterparts — invoked the risk of plans to reduce public expenditure, considered the further support for a return to the high level of long- with employers favouring cuts in local authorities and the welfare sys- term unemployment experienced public employment and opposing tem to be insufficient, and raised the 20 years ago. Unions were generally higher taxation and trade unions spectre of a return to the high levels more favourable to a government calling for a fair sharing of cuts and of long-term unemployment expe- proposal not to increase income tax the protection of social security rienced in the early 1990s, unless if unions agreed moderate pay rises budgets. In January 2010, the three further action was taken. In July, in 2010 (Jokivuori, 2009). main union confederations mounted the social partners again disagreed a joint demonstration in support of over measures required to tackle ris- Belgium and the Netherlands have their position (Van Gyes, 2010). ing youth unemployment. Unions seen a considerable measure of con- also criticised the government’s sensus between the social partners Whilst the social partners in Luxem- employment policy programme for in the course of sustained bipartite bourg supported government meas- 2010–11, issued in August 2009, as discussions and tripartite concerta- ures, introduced in March 2009, being inadequate for dealing with tion with government over policy providing support for purchasing the rising level of unemployment. In responses to the crisis, although power and businesses, employers’ the autumn, further disagreement with some strains appearing as 2009 organisations regretted that they did between the social partners emerged progressed. In Luxembourg, how- not go further in terms of structural over wage policy for 2010 onwards ever, whilst the government devel- reforms to boost company competi- (Lovén, 2009). oped its initial anti-crisis measures tiveness. Subsequent tripartite talks in close concertation with the social in the opening months of 2010 col- Both employers’ organisations and partners, further tripartite talks in lapsed over employers’ central pro- trade unions broadly welcomed early 2010 broke down. posal for a two-year freeze in the the January 2009 stimulus pack- indexation of wages and pensions, age introduced by the Finnish In Belgium, the social partners pre- which received some support from government, although employers sented a set of joint anti-crisis meas- the government but was fiercely expressed concern at the possibil- ures to the government in December rejected by trade unions (Planet ity of offsetting increases in com- 2008, in the context of the inter- Labor, 2010a). pany taxation to fund reductions in sector agreement concluded by social contributions. Trade unions the employers’ and trade union In the Netherlands, the government particularly welcomed the positive confederations for 2009–10. The and the social partners discussed employment impact of measures measures proposed bolstering pur- the impending problems as early as to boost infrastructure investment. chasing power by improvements to March 2008. Cooperation intensified Subsequently, government plans to fringe benefits (travel to and meals with the onset of the crisis, with the raise the retirement age (from 63 at work) and increases in pensions parties agreeing in their autumn con- to 65) and eliminate the possibil- and unemployment benefits and the sultation that they should proceed by ity of early retirement were fiercely reduction of taxes on labour costs. consensus in addressing the effects. opposed by trade unions and, fol- Together the measures were aimed lowing the threat of a general strike, at achieving a balance between Trade unions emphasised the need were withdrawn in March. The sustaining purchasing power and for measures to sustain purchas- issue was passed to the social part- improving companies’ competi- ing power, but agreed to moder- ners to identify an alternative solu- tiveness, were incorporated by the ate wage demands in exchange for tion which would have the desired government in a stimulus package other measures, including reduced

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Box 2.5: European social partner perspectives: BusinessEurope The European economic recovery plan, presented by the Commission in November 2008 and adopted by the European Council the following month, contained two main elements: a fiscal stimulus equivalent to 1.5 % of the EU’s GDP; and short-term action to strengthen the long-term competitiveness of the European economy, including fostering a more rapid shift towards climate friendly business activity. BusinessEurope broadly welcomed the Council’s recovery plan (BusinessEurope, 2008). It underlined the need for short-term crisis response measures to sustain economic activity, to ensure access to finance for companies and to maintain employment, to be accompanied by the speeding up of structural reforms. BusinessEurope stressed that short-term measures should not be to the detriment of necessary, longer-run, structural reforms. Neither should they undermine the functioning of the single market, through invoking forms of protection. An effectively functioning and well-enforced single market is seen as integral to the resumption of economic growth and the creation of jobs. BusinessEurope called for macroeconomic coordination, viewing uncoordinated national responses as potentially damaging to the process of economic integration and, relatedly, called for a strengthening of the role of the ECB (Busi- nessEurope, 2009b, 2009c). It also proposed a series of measures aimed at improving availability of corporate finance and reducing its sharply increased cost (BusinessEurope, 2009a). In its spring 2009 European reform barometer (BusinessEurope, 2009b), BusinessEurope described the absence of a visible structural reform strategy as ‘a vital flaw in the European response to the crisis’. Structural reforms in three areas were highlighted: improving the business environment for companies; cost-saving reforms to public finances, to ensure sustainability; and labour market reforms. On the last, BusinessEurope proposes further measures to increase flexibility in the labour market, including investment in skills, to facilitate the recovery. It views measures to reduce non-wage labour costs as necessary to the achievement of a more inclusive labour market, as well as to improving competitiveness (BusinessEurope, 2009c). More generally, BusinessEurope has emphasised the cen- trality of flexicurity principles as providing the appropriate policy framework for responding to the crisis (BusinessEurope, 2010c). BusinessEurope’s autumn 2009 economic outlook (BusinessEurope, 2009d) noted the emerging signs that the economic situation was stabilising and renewed its call for accelerated structural reform to facilitate recovery. Further action to stabilise financial markets and alleviate continuing restrictions on companies’ access to finance, was urged. And steps to secure the long-term stability of public finances were advocated, through reform of the public sector and changes to social welfare systems aimed at placing them on a sustainable footing. Also in the autumn, BusinessEurope published a strategy for European economic growth and jobs over a five-year period beyond 2010 (BusinessEurope, 2009e). This calls for EU policies to be strengthened around five pillars, seen by BusinessEu- rope as mutually reinforcing: • deepening economic integration and restoring financial stability, with particular priority given to completing the internal market for services. • strengthening governance arrangements for the euro area; • enhancing innovation, entrepreneurship, education and skills, thereby augmenting the EU’s productivity potential and external competitiveness; • modernisation of social protection and employment systems, involving reforms which reduce public expenditure commitments (and therefore deficits), promote labour mobility and enhance labour market participation. Employment policies should stimulate the education and training required to significantly enhance the quality and quantity of skills available; • an integrated approach to energy, environmental and competitiveness policies, to simultaneously address the challenges of energy security, mitigating climate change and enhancing competitiveness; • shaping globalisation and combating protectionism through external policies aimed at promoting trade and balanced and sustainable international growth, and reinforcing the international financial system. In its spring 2010 economic outlook (BusinessEurope, 2010a), BusinessEurope observed that although severe, the recession was seemingly relatively short-lived and that business confidence was improving. Nonetheless daunting challenges remained and three priorities were identified in order to consolidate the recovery. First, action to restore the viability of the public services, otherwise currently unsustainable levels of public debt would soon impede the recovery. Second, companies needed to be assured that the external financing required for new investment would be available from the currently weakened banking sector. Third, the temporary schemes which had supported employment through the recession needed to be complemented by long-term structural reforms to the labour market to ensure future employment growth. Ahead of the March European Council, BusinessEurope published its own growth agenda (BusinessEurope, 2010b) which called for an ‘exit strategy’ to cap and reduce public debt, including tighter fiscal rules to ensure long-term budgetary discipline, ‘credible’ measures to cut public expenditure, efficiency improvements in public administration and healthcare, a greater role for the private sector in public service and public infrastructure provision and the reform of pension systems. These measures needed to be coupled with an ‘entry strategy’ aimed at doubling the EU’s growth potential by 2014, including measures to better anticipate future skill requirements, improve the returns from R & D and innovation and boost public infrastructure investment (BusinessEurope, 2010c).

70 Chapter 2: The crisis: challenges and social partner perspectives

unemployment insurance contri- the social partners failed to agree the government to make a renewed butions and a reduction in VAT. over wage policy and labour mar- attempt in February to reach a tri- Employers’ organisations empha- ket reform. After almost a year the partite agreement on labour market sised actions aimed at competitive- social partners re-established bipar- reform, largely focused on promot- ness, including reduction of taxation, tite consensus over pay. Measures ing stable employment (European wage moderation and reform of dis- to address the crisis were discussed Employment Review, 2010). How- missal laws. Agreement was reached within Spain’s tripartite social dia- ever, the initiative was partly over- in October on a compromise pack- logue process in the spring of 2008. shadowed by government proposals age of measures to be introduced Employers’ organisations and trade to increase the retirement age, which by the government. By the spring of unions gave broad support to the elicited fierce protests from trade 2009, both employers’ organisations measures launched by the govern- unions (Sanz de Miguel, 2010). and trade unions were critical of the ment to bolster economic activity, government’s emergency economic which included improving compa- France presents a mixed picture, plans as being too cautious, taking nies’ access to credit, a stimulus to exhibiting both disagreements the view that a more substantial fis- business activity and employment, between trade unions and govern- cal stimulus was required. Following and promotion of training and life- ment, and between trade unions extensive tripartite deliberations, long learning. By early 2009, the and employers’ organisations, on the a consensus was reached in April social dialogue process was dead- measures required to address the cri- between the government and the locked as employers’ organisations sis, and also government-instigated social partners on a further pack- and trade unions differed over cooperation between the social part- age, aimed at providing a stimu- apportioning the costs of the crisis. ners over employment measures. lus to economic activity through Employers’ organisations and trade The government convened tripartite until 2011. This package comprised unions had failed to make progress ‘social summits’ in February and July measures in four areas: actions to on negotiations for their usual 2009, set up a tripartite committee to promote employment, training and annual multi-sector agreement to monitor the crisis and in April 2009 education; maintenance of the pur- frame wage negotiations and no launched a joint government–social chasing power of unemployment agreement could be reached for partner ‘social investment fund’ to benefit; a boost to public investment 2009. Further disagreement focused coordinate action on training and in infrastructure; and measures to on the renewal by the main employ- reskilling for those workers most foster innovation and sustainable ers’ organisation of its long-standing affected by the crisis. In January 2009 economic activity. As in Finland, call to reform dismissal law, so as the social partners — at the behest of there was disagreement between the to improve labour market flexibil- the government — agreed on boost- government and trade unions over a ity (Freyssinet, 2009). In February ing training opportunities for less- proposal to raise the retirement age; it proposed an ‘anti-crisis’ employ- well-qualified people as part of an and the social partners were handed ment contract, which would have employment action plan. They also the responsibility of coming up with reduced severance payments and reached a cross-sector agreement in an alternative proposal. They sub- eliminated administrative require- July on managing the employment sequently failed in their attempt to ments to notify public authorities consequences of the economic crisis, do so and in October the govern- of redundancies. Trade unions (and many of whose provisions (such as ment announced that it would act the government) rejected the pro- amendments to the short-time work unilaterally (Grünell, 2010). As posals. Further government meas- scheme) were implemented by the in Belgium, tripartite consensus ures introduced in March 2009, government. Meanwhile, a govern- on the package was accompanied aimed at combating unemployment, ment stimulus package, announced by a bipartite agreement between were, as a result, introduced within February 2009, which focused employers’ organisations and trade out the views of the social partners on providing public aid for compa- unions to moderate wage increases being sought. The social partners nies, bolstering the welfare system in the 2010 bargaining round. eventually succeeded in overcoming and public investment to modern- their differences over the conduct of ise infrastructure, was welcomed by In Spain, a broad measure of con- wage bargaining in 2009, in Novem- employers’ organisations but strongly sensus between the government and ber, and subsequently signed a new criticised by trade unions. Trade social partners in the early phase of cross-sector agreement in February unions organised a series of nation- the crisis gave way to deadlock, as 2010. The breakthrough encouraged wide demonstrations on four dates

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between mid-March and mid-June, package and have continued their dia- to government. There was common to reinforce their call for government logue with government and employ- ground in the calls of both social action to sustain purchasing power, ers’ organisations, CGIL was strongly partners for support to sustain activ- to abolish taxation privileges for the critical. It presented a six-point plan ity in hard-sit sectors, including wealthy and to make reductions in of measures to address the crisis, construction and tourism, and for employers’ social contributions con- including support for employment by public investment in infrastructure. tingent on employers taking compen- extending the scope and duration of Employers’ organisations emphasised sating measures to enhance training temporary lay-off benefit, incentives measures to reduce the cost of social and/or preserve employment (Robin, for innovation and investment, pub- welfare and tax incentives to promote 2009). The extent to which France’s lic investment aimed at greening the investment. Trade unions called for traditionally fractious union con- economy and enhanced welfare sup- measures to support purchasing federations have mobilised around ports for those on low incomes. CGIL power, particularly for low earners a common platform is noticeable, unilaterally called a general strike in and those in receipt of unemploy- and contrasts with the situation in April 2009 in protest over the per- ment benefit. Differences emerged Italy. The employers’ confederation, ceived inadequacy of the government’s as the Greek government moved to Medef, has criticised trade union tac- response to the crisis, and a further address the rising public deficit from tics of instigating large-scale protests, one in support of similar demands in mid-2009 onwards, with public sector as well as advancing its own policy March 2010 (Tajani, 2010). trade unions staging a general strike proposals focused on improving against measures to freeze public sec- adaptability and employability in the Consensus between the social part- tor pay and pensions, whilst employ- labour market and improving com- ners in Portugal and Greece has ers’ organisations acknowledged petitiveness. been limited and in neither country the necessity for such measures. As have the social partners been closely the economic and financial situa- In Italy, the picture is also mixed. A involved in the development of gov- tion deteriorated, further govern- measure of consensus has been appar- ernment measures responding to the ment moves to drastically cut public ent between the main employers’ con- crisis. As the debt crisis has escalated, spending, with cumulative effects federation, Confindustria and two this limited consensus has broken on social benefits and public sector of the trade union confederations, down in Greece. In Portugal, trade pay and pensions, triggered renewed alongside sharp differences with the unions have pressed government to and large-scale protests by private third (and largest) union confedera- introduce more ambitious measures as well as public sector trade unions tion, CGIL. The former gave a cau- than those undertaken to maintain throughout the opening months of tious welcome to the government’s employment, sustain business activity 2010 (Planet Labor, 2010b). anti-crisis package announced in (through enhancing the short-term November 2008, which was mainly working scheme) and boost train- In Cyprus and Malta, there has been aimed at boosting demand for con- ing opportunities throughout 2009. considerable consensus around the sumer industries, with a particular The main employers’ organisations response to the crisis. In Cyprus, gov- focus on the automotive sector and called for measures to improve com- ernment initiatives to stimulate the increasing support for the poorest panies’ competitiveness and facilitate economy and protect jobs, launched households. Confindustria called, in restructuring including reductions in November 2009, received a gen- addition, for support to be broadened in the burden of taxation, improved erally positive response from the to other sectors and to SMEs. The access to credit, special assistance for social partners, while some trade three main trade union confedera- SMEs and public investment in edu- unions decided to moderate their tions each called for the social part- cation and training. Autumn 2009 2010 pay demands in the light of ners to be consulted over this and saw sharp differences between the the economic situation (Soumeli, subsequent measures, but in contrast social partners over wages policy for 2009). In early 2009, a number of to most other countries characterised 2010 and the government’s decision Maltese social partner organisations by multiple union confederations, to raise the minimum wage (da Paz made joint proposals for improv- display divisions. CGIL has proposed Campos Lima, 2009). ing the economic situation, such as different measures to those called for reducing companies’ costs and fiscal by the other two confederations (Watt The Greek employers’ and trade burden and supporting employees and Nikolova, 2009). Whereas CISL union confederations have pre- on short-time working. The social and UIL welcomed the government’s sented their own, separate proposals partners subsequently supported and

72 Chapter 2: The crisis: challenges and social partner perspectives

cooperated with government efforts In the UK, consensus between the those being brought into use in other to prevent job losses and support social partners has been confined EU countries. They have also made crisis-hit sectors. However, there to specific issues. Trade unions and repeated calls for an increase in statu- were areas of disagreement. Employ- employers’ organisations have been tory redundancy pay (which is below ers called for the statutory cost-of- involved in informal and ad hoc dis- the levels of comparable countries). living wage increase for 2010 to be cussions with the public authorities The employers’ confederation, CBI, awarded only to lower-paid employ- on the direction of economic and subsequently proposed an ‘alternative ees, or subsidised by the government, labour market policy. In autumn to redundancy plan’, partially financed given the economic situation. This 2008, trade unions unsuccessfully by the state, under which employ- was opposed by the government and called for the implementation of a ees could be placed on temporary trade unions (Rizzo, 2009). short-time working scheme similar to leave for up to six months, but this

Box 2.6 European social partner perspectives: the ETUC In the lead-up to the November and December 2008 Council meetings, the ETUC called for a major fiscal stimulus for Europe’s economy. It welcomed the fiscal stimulus contained in the European economic recovery plan (see Box 2.5), but drew attention to the absence of a European framework for implementing it, which it regarded as a major flaw. Uncoordinated national measures risked dangers of competition between Member States and, relatedly, the spread of protectionism. In emphasising the need to police the single market, the ETUC underlined the disruptive social consequences of failing to do so. It saw a real risk of Europe being pulled apart economically, socially and politically (ETUC, 2009a). In a resolution adopted just ahead of the December 2008 Council meeting, the ETUC called for a series of further measures. These included proposals for a ‘new social deal’, which would focus recovery measures on investments leading to the creation of more and better (including ‘greener’) jobs, a strengthening of social welfare systems and strengthened workers’ rights. The new social deal, formalised in May, covers five main action points (ETUC, 2009b): • investment in an augmented European recovery plan aimed at creating more and better jobs. The ETUC called for an additional 1 % of the EU’s GDP for an investment programme, including accelerating the ‘greening’ of the European economy which were presented as proposals for a ‘New green deal’ (see Box 5.7 in Chapter 5); • strengthening of social welfare systems to enhance social protection, and equality, and to mitigate against social exclusion; • strengthening of workers’ rights, particularly at transnational level, in order to eliminate disruptive social effects of the single market; • better pay, seen as vital to sustaining purchasing power, to be achieved through the strengthening of collective bargaining and wage formation institutions, and thereby the wage floors that they entrench; • effective re-regulation of financial markets and actions to secure distributive justice through fair taxation systems. Amongst the measures specified is the creation of a level playing field for tax regimes on sources of income, such as profits and capital gains, which are mobile across borders. May also saw coordinated protest actions in support of a new social deal in Madrid, Brussels, Berlin and Prague. In its autumn report on the European economy (ETUC, 2009c), the ETUC warned European and national public authorities against a premature exit from the fiscal stimulus strategy at the heart of the European economic recovery plan. Incipient recovery, according to the ETUC, is based on factors that are temporary in nature: re-stocking, as companies bring inventories up to levels consistent with current demand; the fixed-term nature of elements of the fiscal stimulus undertaken by national governments; and the cushioning of household consumption from the worst effects of the recession by short-time working schemes and the legacy of wage agreements concluded before the crisis broke. Against this, the spectre of public, and private, debt-induced deflation threatens economic recovery in the medium term. For these reasons the ETUC considered that the fiscal stimulus needed to be maintained. The ETUC’s growing concerns at signs that (some) national governments were preparing to exit prematurely from the fiscal stimulus packages which have sustained economic activity and employment were reiterated in its December memorandum to the incoming Spanish Presidency (ETUC, 2009d) and in a March 2010 message to the European Council (ETUC, 2010). According to the ETUC, premature exit would cause more economic and social harm than a further short-term deterioration in public finances, with any budget cuts threatening to choke off recovery, undermine social protection (when it needed to be strengthened) and lead to a spike in unemployment. Winding down of the stimulus packages needed to be synchronised with an upturn in private sector activity, when that arrived. In its message to the European Council, the ETUC declared that ‘Social Europe is under pressure’ and underlined in particular the need for measures to reduce high levels of youth unemployment. It renewed its call for an augmented recovery plan and a new social deal. It also proposed a strengthening of European economic governance in two respects. First, to enable a recovery programme to be agreed with Greece, and any other Member State in difficulty, which would protect essential public services and the interests of workers. Second, to enable the introduction of new means of raising the funds required to support recovery and return Europe’s economy to growth, such as a financial transactions tax.

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was not taken up either. Employers’ companies’ economic circumstances social partners have been engaged by organisations have repeatedly called (IBEC formally pulled out of the government. Social partner organi- on government to place more focus agreement at the end of 2009 — see sations complained at their lack of on providing support for companies, Chapter 3). The union confederation, involvement in, and consultation including access to credit, which ICTU, opposed the government’s over, the preparation of government would have the effect of preventing overall approach on the grounds that measures, whilst differing in their unemployment. Ahead of the 2009 the pain of fiscal adjustment needed policy prescriptions. However, as the budget in April, both social partners to be shared by other groups in society economic situation worsened govern- called for measures aimed at main- and not focus on a particular group. ments moved to engage social part- taining employment and mitigating It criticised the March 2009 emer- ner and other civic organisations in the rise in unemployment, although gency budget, which incorporated dialogue to varying degree on aspects they differed in the preferred means the measures, as well as reductions in of the response to the crisis. Govern- to achieve this. They also differed welfare payments and an increase in ments in all three countries have pro- over the balance of measures aimed employers’ social charges; and proposed cuts or freezes in public sector at stimulating the economy and those posed a reform of the taxation system wages, as part of stringent measures which addressed the mounting pub- towards a fairer set of arrangements, aimed at sharply reducing public lic sector deficit (Carley, 2009). By with implied increases in taxation and expenditure. early 2010, the CBI was increasingly measures to maintain employment, as critical of the absence of government part a broad ‘social solidarity pact’ to In Latvia, at the time of the prepara- action to tackle the deteriorating tackle the crisis. IBEC welcomed the tion of the state budget in the autumn public finances. The union confeder- budget’s remedial action to address of 2008, trade unions opposed the ation, TUC, however, was concerned the public finances and emphasised freeze on public sector wages and that premature action could jeopard- its preference for measures which proposed instead taxation increases ise the fragile economic recovery and reduced public expenditure over to fund the public deficit. Employers’ exacerbate unemployment. those which increased taxes. Fur- organisations supported reductions ther talks over a possible tripartite in public expenditure, but urged that In Ireland the magnitude of the cri- national recovery agreement in sum- these be achieved through ‘efficiencies’, sis from the outset, and its impact mer 2009 again failed, with unions and opposed tax increases. Amend- on public finances, immediately con- unable to accept the government’s ments to the budget in June 2009, fronted government and the social planned cuts in public expenditure. decreasing expenditure on health and partners with major policy decisions Public sector trade unions held a expenditure, prompted trade unions on the distribution of the burden. one-day national strike in November to organise protest demonstrations. Disagreements between government, 2009, and subsequent talks between Although the government did involve employers’ organisations and trade the government and unions over fur- the social partners in dialogue over unions have tested Ireland’s long- ther reductions in the public sector its 2010 budget plans, the measures standing national partnership to, and paybill failed, with the government announced in December 2009 — seemingly beyond, the limit. In Janu- rejecting union plans to achieve sav- which included wide-ranging tax ary 2009, the government convened ings through unpaid leave and going increases — were sharply criticised by emergency tripartite consultations to on to impose pay cuts of 6 % to 8 % employers as damaging competitive- identify measures to secure an imme- in its 2010 budget (Sheehan, 2010). ness and trade unions as weakening diate and lasting reduction in public However, renewed talks led to a draft domestic demand (Curkina, 2010). expenditure in the face of the rapidly agreement between the government In Lithuania, sustained opposition escalating public deficit. Talks col- and public services unions in March by trade unions to government pro- lapsed in February over the govern- 2010, which provided for no further posals to cut the public sector wage ment’s introduction of a 7 % pension pay cuts before 2014 and no com- fund culminated in a broader national levy on all public sector workers and pulsory redundancies, in exchange protest action in January 2009 against proposed public sector pay freeze. for union commitments on public the government’s anti-crisis plans. At the same time, the employers’ sector reform. Unions called for strengthened social confederation, IBEC requested that The economic context in the three protection arrangements, an increase implementation of the national wage Baltic states is even more acute but in the minimum wage, the intro- agreement concluded in Septem- there was a sharp difference with duction of a property tax, as well as ber 2008 be deferred in the light of Ireland in the extent to which the no cuts in public sector pay. A trade

74 Chapter 2: The crisis: challenges and social partner perspectives

union-initiated hunger strike in June measures. Substantial differences Nonetheless, agreement on a set of finally forced the government to aban- between the social partners have, measures was reached by the social don proposed public sector wage cuts. however, continued to be apparent. partners in March. The government The government stepped up efforts to Employers’ organisations have sup- based its June anti-crisis package on find consensus over its crisis response, ported austerity measures, questioned the agreement, although there was and a multi-partite agreement on eco- the sustainability of prevailing levels subsequent disagreement between nomic and social policies during the of wages and opposed addressing the trade unions and employers over the downturn was eventually signed in public deficit through tax increases, balance of measures included. Trade October 2009 (Blažiene, 2009). The preferring expenditure reductions. unions objected to the general scope of agreement was subsequently criticised Trade unions criticised the auster- the flexible working time arrangements by unions organising in the public ity measures and the associated job introduced, whilst employers’ organi- sector. In Estonia, the positions of the cuts proposed in public services and sations welcomed them. At the start of social partners on responses to the called for a fiscal stimulus and action 2010, the social partners, concerned at crisis differed sharply in autumn 2008. to promote employment. Further the low take up of public assistance to The employers’ confederation called disagreements emerged in June 2009 companies to protect jobs, jointly pro- for reductions in public expenditure, over proposed government amend- posed that the qualifying thresholds be including benefit levels, a reduction in ments to labour laws proposed as an reviewed (Czarzasty, 2009). social charges and further measures anti-crisis measure, responding to to promote labour market flexibility. employer organisation calls for more The Slovakian social partners were Trade unions opposed these proposals flexibility in working time regulations. also involved in intensive consul- and called for measures to maintain These were strongly opposed by trade tations with government over the purchasing power, including avoiding unions (Fodor and Neumann, 2009). elaboration of anti-crisis measures in any cuts in public sector wages or wel- the opening months of 2009, which fare benefits. There was also disagree- The other three Visegrad countries included the establishment of a tripar- ment over the review of the minimum present a varied picture. In Poland, tite economic crisis council. In a mem- wage for 2009, with employers oppos- significant common ground has orandum on solving the impact of the ing an increase on competitiveness been established between the social crisis on society, concluded between grounds and trade unions advocating partners, providing the basis for the government and trade unions in one to sustain purchasing power (it meaningful engagement with the March, unions undertook to moder- remained frozen during 2009). None- government. In Slovakia also, the cri- ate their wage demands in exchange theless the social partners reached sis has prompted intensive consulta- for government measures to maintain agreement with government in March tions between the government and employment. The government also 2009 over a set of measures aimed at social partners, and broad consensus agreed a memorandum with the main preserving employment and improv- between employers’ organisations and employers’ organisations, whereby ing employability. Consensus appears trade unions. In the Czech Republic the government undertook to avoid to have been fragile, however, since the social partners have forged com- imposing new legislative or admin- disagreements again emerged over a mon positions, but were not involved istrative burdens on employers and further package of employment meas- in the development of anti-crisis the employers not to use the crisis as ures introduced in October (Osila and measures until the autumn of 2009. a pretext for worsening employment Nurmela, 2009). conditions. Tripartite discussions in Discussions between Poland’s social late 2009 over further measures to The onset of the crisis found Hungary partners in the early months of 2009 mitigate the employment effects of the in a similar economic position, with identified common ground on meas- crisis revealed differences between the the government initiating an auster- ures to promote economic recovery, social partners, with trade unions in ity package in the summer of 2008 to including public aid to companies to favour and employers’ organisations address the rapid deterioration in the preserve jobs, improving the avail- concerned about the costs to the pub- public finances — already in a - par ability of loans to businesses and sub- lic finances (Cziria, 2009). lous state. The government convened sidies to supplement low incomes. a series of national summits between Differences focused on the extent to Employers’ organisations and trade October 2008 and January 2009, in which flexibilisation of working time unions in the Czech Republic the hope of securing social part- was a necessary measure and whether addressed joint proposals to govern- ner support for further unpalatable this required changes to labour law. ment in February 2009, including an

75 Industrial Relations in Europe 2010

economic stimulus equivalent to that sations and trade unions. Bulgaria’s unemployment benefits, short-time urged by the European recovery plan, employers’ organisations and trade working, training and public sec- a further boost to purchasing power unions framed joint proposals in late tor pay. The social partners were not through reduction of utility prices 2008, which were presented to the entirely happy that the measures and introduction of a car scrappage government at a meeting in Decem- reflected their own proposals and scheme, action to improve compa- ber. These stressed the importance later expressed dissatisfaction with the nies’ access to finance and measures of concentrating initiatives on pre- implementation of the package. Both to boost training and skills available serving existing jobs and mitigating social partners considered the gov- to companies. The social partners also the rise in unemployment, including ernment’s stimulus measure insuffi- called for their full involvement in provision of public aid to companies, cient, with trade unions criticising the the development of anti-crisis, meas- additional support for those being lack of stimulus for purchasing power ures stating that this had not hith- made unemployed and the introduc- whilst employers criticised the absence erto occurred. A tripartite working tion of a short-time working scheme. of incentives for investment and funds group was set up in August 2009 to By mid-2009, however, differences for public infrastructure projects. May formulate a new short-time working emerged over government austerity and June brought protest actions by scheme. In early 2010, tripartite dis- measures and the distribution they trade unions focusing on measures to cussions on a wider agenda resulted entailed of the burden of the crisis. maintain purchasing power and pro- in agreement, in February, over a Trade unions withdrew from the main mote employment. Employers’ organ- package of measures to deal with the national tripartite institution, partly isations and trade unions combined in effects of the crisis. Prior to the onset because of the government’s perceived a further joint call to the government of the crisis, government measures to lack of consultation on its anti-crisis in June for a package of measures suf- reform public finances had met with measures. They mounted a national ficient to stimulate economic activity. substantial trade union opposition protest action in June, opposing the Further joint pressure from the main including a large-scale national pro- austerity measures and calling for pro- social partner organisations resulted, test in June 2008. Further cuts in pub- tection of domestic production, jobs in February 2010, in the government lic sector employment and the paybill and incomes, maintenance of public extending its measures on temporary announced for 2010 again drew trade service expenditures and increases in unemployment (Ciutacu, 2010). union opposition (Verveková, 2010). welfare and pension benefits. Employ- ers’ organisations urged further action Slovenia has seen a shift from con- to tackle the public deficit, supporting 2.3.2. Assessment sensus to disagreement between the the proposed pay freeze and reduc- social partners. In the autumn of tions in public expenditures. How- The early phase of the crisis was marked 2008, changes proposed by the social ever, a change of government in July by a broad consensus on the need for partners to anticipated government was followed by renewed tripartite governments to implement measures measures to tackle the crisis were discussions aimed at developing and providing a significant fiscal stimulus integral to the outcome of tripartite agreeing a new package of measures. in the face of the steep decline in eco- consultations. This included broad This did not materialise immediately, nomic activity. Nonetheless, there were agreement over measures to reduce and the austerity measures in the new differences in emphasis. Employers’ public spending. By the end of 2009, government’s draft budget for 2010 organisations gave priority to ensuring however, disagreement between the again divided the social partners. access to credit for companies, meas- social partners over minimum wage Nevertheless, in March 2010 tripartite ures which reduce labour costs and policy led employers to suspend their agreement was reached on a package reductions in taxation. Trade unions participation in the main tripartite of measures to support employment, tended to urge a larger fiscal stimulus forum (Stanojevič, 2010). households, businesses and the state and measures to sustain purchasing budget (Lyuben, 2009). power and to boost public investment. In Bulgaria, differences between the A parallel difference in emphasis, social partners emerged as the cri- In Romania, the government set up around a broad consensus between the sis progressed, before a degree of a tripartite process to draw up an two main social partners, is evident at consensus was reached in 2010, whilst anti-crisis programme, resulting in the EU level (see Box 2.7). As atten- in Romania a considerable degree the publication of a package in Febru- tion shifted to facilitating recovery and of common ground has been main- ary 2009. This included measures on dealing with consequences of the crisis tained between employers’ organi- investments, tax, support for SMEs, for the public finances tensions and

76 Chapter 2: The crisis: challenges and social partner perspectives

disagreements have emerged (Freyssi- enhance flexibility being resisted by net, 2009; Hethy, 2009). In particular, trade unions, with differing degrees Box 2.7: Common ground sharp differences are apparent on three of success, in Hungary, Poland and and differences issues. The first is wages policy, where Spain. Disagreements and incipient in the perspectives of the employers’ organisations see tight conflicts have surfaced over proposals European social partners control of labour costs, and therefore to raise the age of retirement, as part There is some common ground in the wages, as essential to competitiveness, of government austerity measures, in policy prescriptions proposed by Busi- whereas trade unions view increases in Ireland, Finland, France, the Nether- nessEurope and the ETUC. Both called wages as vital to sustaining purchasing lands and Spain. early on for a substantial economic power and therefore economic activ- stimulus, and for fiscal and other public ity. The second are measures to fur- Although there are differences on policy interventions to be coordinated across Member States. In the absence of ther increase labour market flexibility, these and other policy measures effective coordination, the cross-sector favoured by employers as also enhanc- between employers’ organisations and social partners also warned of the dan- ing competitiveness but seen by trade trade unions, a degree of consensus gers of slipping towards protectionism. unions as potentially further under- on the measures required to address Both BusinessEurope and the ETUC mining employment security. The the effects of the crisis is appar- have highlighted the need to address the third is austerity measures to address ent across a majority of countries. challenge of mitigating climate change as an essential element to successful rising public deficits, where employers’ Table 2.3 summarises the picture European economic recovery. Differ- organisations are urging early action, across countries, according to the ences are apparent also. In respect of including reform of social welfare broad three-way distinction in the the single market, BusinessEurope reaf- systems, whereas trade unions stress degree of bi-partisan consensus intro- firms the virtues of market principles, the need in current circumstances to duced above. In 12 countries a consid- the further steps needed to complete the process in the market for services maintain public services and employ- erable degree of bi-partisan consensus and the need to pursue further struc- ment and, if anything, to strengthen has been obtained throughout, since tural reform in a range of areas, whereas social welfare systems. The differences the onset of the crisis in 2008. A the ETUC underlines the disruptive between the social partners at EU level lesser degree of consensus character- social consequences of not effectively again reflect those at the national level ises four further countries. In another policing the single market and the need (see Box 2.7). four countries disagreements have for strengthened workforce rights in the face of some of its consequences. predominated. In seven countries, Differences over the continuation of In some countries, two further issues disagreements prevailed for some of the fiscal stimulus, the priority to be are also a source of contention. the period, but were preceded by and/ given to tackling deteriorating public Labour law has become the object of or gave way to consensus between the finances and over social welfare sys- controversy in a few, with employer social partners. The 12 countries char- tems have also emerged as the crisis and/or government proposals to acterised by a considerable degree of has unfurled. By late 2009 and into 2010, BusinessEurope was calling for action to reduce rapidly rising deficits in public finances, including expendi- Table 2.3: Pattern of consensus and disagreement ture-reducing reform of social welfare between social partner organisations in the EU-27 systems. The ETUC warned against early removal of the fiscal stimulus to Considerable degree Lesser degree economic activity (which has increased Disagreements of bi-partisan of bi-partisan deficits) and called for a strengthening predominate consensus consensus of social welfare systems. France, Italy, Portugal, Hungary, Ireland, Latvia, Austria, Belgium (*), Despite some commonalities in the United Kingdom. Sweden. Czech Republic (*), policy prescriptions of BusinessEurope Cyprus, and the ETUC, the cross-sector Euro- Part of the period since Part of the period since Denmark, Finland, pean social partners have not as yet Countries summer 2008: summer 2008: Germany, Malta (*), (end October 2010) adopted any joint Bulgaria, Estonia, Bulgaria, Estonia, Netherlands (*), statement on crisis responses. Joint Greece, Lithuania, Greece, Lithuania, Poland (*), Romania (*), statements on the crisis have, however, Luxembourg, Luxembourg, Slovakia been a feature in some sectors at Euro- Slovenia (*), Spain Slovenia (*), Spain pean level (see Chapter 6). (*) Joint proposals framed by the social partners. Source: Own compilation.

77 Industrial Relations in Europe 2010

consensus include six of the seven such as Poland, France and Cyprus, or hardly mobilised at all, such as (Slovenia is the exception) in which a degree of bi-partisan consensus has Italy, Greece and Portugal. The third the social partners concluded joint prevailed, albeit the extent of consen- column also includes countries with platforms on measures to address sus varies. The relative magnitude of hitherto robust institutional arrange- the crisis. the crisis does not, however, seem to ments for social dialogue, such as clearly differentiate between the coun- Ireland and Sweden and, for part of In a rapidly evolving situation where, tries in the first and second columns, the period Slovenia and Spain. Insti- at the time of writing (summer 2010) respectively. In addition, amongst tutional arrangements for social dia- austerity measures to address pub- those countries where disagreements logue, therefore, also account for only lic sector deficits are being framed predominate are some where the cri- part of the pattern in Table 2.3. by governments in a number of sis has not been exceptionally severe, countries, the picture reported in such as Sweden and Bulgaria (for part Drawing together both considerations Table 2.3 may well change, as sub- of the period). Countries’ economic suggests two provisional conclusions. stantial policy disagreements emerge situation, therefore, accounts for only First, faced with a crisis of extreme between the social partners where part of the pattern in Table 2.3. severity, robust institutional arrange- there has previously been consensus ments for social dialogue may not or common ground is established On the second, there is some ten- be able to withstand the centrifugal after a prolonged period of disagree- dency for differences in institutional pressures at play, with the social part- ment between employers’ organisa- arrangements for social dialogue to be ners being unable to forge common tions and trade unions. reflected in Table 2.3’s cross-country ground over public policy responses. pattern. Countries with robust insti- This has been the case in Ireland and Two factors help account, each par- tutional arrangements are to some latterly Greece and Slovenia. Going tially, for the pattern which Table 2.3 extent clustered amongst those in forward this situation may extend presents. The first is the scale of the the first column. This group includes to further countries where emer- crisis in particular countries, which many, but not all, of those EU-15 gency austerity measures to tackle might be expected to make consensus countries which have long-estab- the public deficit have the effect of more difficult to reach the larger its lished arrangements for cross-sector prolonging the economic recession. magnitude. The second is institutional social dialogue (see Chapter 3). But Second, amongst the larger number arrangements for industrial relations, it also embraces several central-east of countries where the magnitude and specifically the presence or oth- European countries where tripartite of the crisis has not been so severe, erwise of robust institutional arrange- social dialogue structures have been institutional arrangements for social ments for bipartite and/or tripartite mobilised and/or bipartite initia- dialogue have been mobilised by the social dialogue. Consensus might be tives launched. Conversely, countries social partners in several central and expected to be more likely, and more where there are no national arrange- east European countries, including extensive, in the presence of well- ments for social dialogue, such as the the Czech Republic, Poland and Slo- established arrangements. UK, and those where social dialogue vakia, as well as amongst a number, arrangements are widely seen as being but by no means all, of those EU-15 On the first, there is a marked ten- weak, such as Hungary and the Baltic countries with long-established dency amongst countries where the states (Meardi, 2007), are found in the arrangements. The reasons why four crisis has (up to the spring of 2010) second and third columns. Although EU-15 countries with established been most severe, and its impact tripartite arrangements exist in Hun- institutional arrangements — Italy, from the outset on public finances gary and the Baltic states, bipartite Portugal, Spain and Sweden — are precluded any recourse to a fiscal arrangements between the social not amongst those countries in stimulus, for disagreements to pre- partners are noticeably absent and which joint crisis response actions dominate throughout the period or it is perhaps unsurprising that disa- have been elaborated are addressed for part of it. Such countries include greements between the social part- in Chapter 3. Ireland, Hungary, Slovenia, the Bal- ners tend to predominate. Yet, the tic states and latterly, as a result of its second column also includes EU-15 The extent to which social partners escalating debt crisis, Greece. At the countries with established institu- have been involved in the framing other end of the spectrum, amongst tional arrangements for social dia- of government measures also var- countries where the crisis has (up to logue which have been mobilised on ies across countries and seems to the spring of 2010) been least severe, specific issues only, such as France, shape their evaluations of the policy

78 Chapter 2: The crisis: challenges and social partner perspectives

outcomes. Watt and Nikolova (2009) partners over measures proposed by involving compromise, between the report that trade union views on the the public authorities has increased social partners on measures to be measures taken by governments to in several countries. A necessary taken or the emergence of tensions address the effects of the crisis dur- pre-condition for this to occur is the and conflicts over the distribution of ing its early phase (up until April capacity of the social partners to forge costs brought by the crisis. Consist- 2009) were strongly associated with and sustain a common policy plat- ent with Hay (2004), convergence (or the extent of social partner, and in form, since major differences between divergence) in economic and insti- particular trade union, involvement social partner organisations force or tutional ‘inputs’ does not necessarily in the elaboration of anti-crisis meas- leave governments to act alone. It is give rise to convergence (or diver- ures. Drawing on a survey of national not, however, a sufficient one, since gence) in policy perspectives. Some unions they conclude that ‘Where governments can choose to act alone tendencies are, however, apparent. unions have had a voice in the design even though, as in the Czech Republic of packages, governments have ben- and Romania, the social partners suc- First, amongst countries where the efited from their political support ceeded in framing joint proposals. effects of the crisis have been most for the package as a whole, even severe, the economic ‘input’ factor though they may be critical of spe- seems to have overwhelmed sub- cific measures or would have wanted 2.4. Conclusion stantial divergence in ‘institutional’ a greater level of ambition [in the arrangements, and policy disagree- scale of the fiscal stimulus provided] Translated into the debates on con- ment has predominated. This is (Watt and Nikolova, 2009: 30). Con- vergence and divergence which have underlined by the contrast between versely, where governments have not featured prominently in the literature Ireland, which has robust institutional involved the social partners, unions on the Europeanisation of industrial arrangements for social dialogue, and were strongly critical of the anti- relations (Hoffman et al., 2002; Mar- the Baltic states, where such arrange- crisis measures taken. Equivalent ginson and Sisson, 2004; Vos, 2006), ments are weak. Second, a consid- data are not available for employ- this chapter has highlighted the erable degree of policy consensus ers’ organisations, although amongst influence of two kinds of ‘input’, eco- between social partner organisations the central and south-eastern Euro- nomic and institutional, in shaping has been evident not only amongst a pean Member States Hethy (2009) social partners’ policy perspectives, number of those western European observes that employers’ organisa- and in particular the extent to which countries with long-established trations have become more active, and consensus or disagreement prevails ditions of social dialogue, but also in more influential, in bi- and tripartite between them. The economic one parts of central and eastern Europe discussions in several countries. concerns the magnitude of the cri- — the Czech Republic, Poland and sis in terms of its economic, fiscal Slovakia — where tripartite struc- A related outcome, which anticipates and employment impact. The insti- tures have been mobilised and/or Chapter 3’s review of the negotiated tutional one relates to arrangements joint platforms forged between the or concerted outcomes of national for bipartite and tripartite social dia- social partners. In terms of institu- social dialogue, is that insofar as gov- logue. The chapter shows that there is tional effects, the lines of similarity ernments have been concerned to no straightforward pattern of associ- and difference between countries secure broad support for unpalatable ation between these two input factors reach across the distinction between measures, the influence of the social and either the forging of consensus, ‘old’ and ‘new’ Member States.

79 Industrial Relations in Europe 2010

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80 Chapter 2: The crisis: challenges and social partner perspectives

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81 Industrial Relations in Europe 2010

Appendix

Table 2.A1: GDP growth in EU Member States (% on previous 12 months by quarter)

2008 2009 2010 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 EU - 27 2.2 1.4 0.3 -2.1 -5.1 -5.1 -4.3 -2.2 0.7 2.0 AT 2.8 3.0 2.2 -0.4 -3.9 -5.1 -4.0 -2.1 0.2 2.3 BE 1.6 1.9 1.1 -1.3 -3.7 -4.1 -2.7 -0.1 1.6 2.4 BG 6.9 6.4 6.5 4.8 -3.3 -4.6 -6.0 -6.7 -0.8 -0.3 CY 4.6 4.4 3.4 2.1 0.2 -1.9 -2.6 -2.7 -1.2 0.2 CZ 3.1 3.5 2.2 0.5 -3.6 -4.7 -4.4 -3.2 1.0 2.4 DE 2.7 1.7 0.5 -2.0 -6.6 -5.5 -4.4 -2.0 2.0 3.7 DK -0.6 1.3 -0.7 -3.5 -3.9 -6.9 -5.3 -2.9 -0.4 3.8 EE -1.1 -2.5 -5.5 -11.2 -14.2 -16.5 -15.4 -9.0 -2.7 3.0 EL 2.7 2.7 1.9 0.7 -1.0 -1.9 -2.5 -2.5 -2.3 -3.7 ES 2.7 1.9 0.3 -1.4 -3.5 -4.4 -3.9 -3.0 -1.3 -0.1 FI 3.6 2.5 1.0 -3.0 -8.8 -9.8 -8.4 -5.2 0.6 3.4 FR 1.8 0.7 -0.2 -2.0 -3.9 -3.1 -2.7 -0.5 1.2 1.7 HU 1.9 1.6 0.3 -2.3 -6.1 -7.1 -6.7 -4.7 -1.2 0.1 IE -1.3 -2.1 -1.6 -9.1 -9.2 -7.7 -7.7 -5.6 -0.7 -1.8 IT 0.3 -0.5 -1.8 -3.3 -6.5 -6.2 -4.7 -2.8 0.5 1.3 LT 8.8 3.5 1.2 -2.2 -15.8 -15.6 -14.6 -12.9 -2.9 0.6 LU 5.0 4.0 1.4 -4.4 -5.3 -8.0 -3.3 2.1 2.9 5.3 LV 2.7 -2.4 -5.3 -10.2 -18.1 -17.5 -19.3 -16.8 -5.1 -2.9 MT 2.8 3.5 3.0 0.7 -2.3 -3.3 -2.2 0.1 3.5 3.7 NL 3.9 3.1 1.6 -1.0 -4.0 -5.0 -4.2 -2.4 0.5 2.7 PL 6.7 5.8 5.2 2.6 1.6 1.3 1.3 2.9 3.1 3.8 PT 1.0 0.9 0.3 -2.0 -3.8 -3.1 -2.3 -1.0 1.8 1.5 RO 9.3 9.6 8.3 2.6 -5.2 -8.0 -7.6 -6.9 -3.2 -1.5 SE 1.6 0.8 0.2 -4.9 -6.6 -6.2 -5.9 -1.5 2.8 4.5 SI 6.3 5.2 3.4 -0.8 -8.4 -9.5 -9.4 -6.1 -0.1 1.5 SK 8.9 8.2 6.8 1.2 -4.5 -5.1 -5.2 -3.9 4.6 5.0 UK 1.9 1.0 -0.4 -2.7 -5.5 -6.0 -5.4 -3.0 -0.3 1.7

Source: Eurostat National Accounts [teina 011].

82 Chapter 2: The crisis: challenges and social partner perspectives

Table 2.A2: Public sector deficits (-) or surplus (+) in EU Member States, (% of GDP)

2007 2008 2009 EU - 27 -0.8 -2.3 -6.8 AT -0.4 -0.4 -3.4 BE -0.2 -1.2 -6.0 BG 0.1 1.8 -3.9 CY 3.4 0.9 -6.1 CZ -0.7 -2.7 -5.9 DE 0.2 0.0 -3.3 DK 4.8 3.4 -2.7 EE 2.6 -2.7 -1.7 EL -5.1 -7.7 -13.6 ES 1.9 -4.1 -11.2 FI 5.2 4.2 -2.2 FR -2.7 -3.3 -7.5 HU -5.0 -3.8 -4.0 IE 0.1 -7.3 -14.3 IT -1.5 -2.7 -5.3 LT -1.0 -3.3 -8.9 LU 3.6 2.9 -0.7 LV -0.3 -4.1 -9.0 MT -2.2 -4.5 -3.8 NL 0.2 0.7 -5.3 PL -1.9 -3.7 -7.1 PT -2.6 -2.8 -9.4 RO -2.5 -5.4 -8.3 SE 3.8 2.5 -0.5 SI 0.0 -1.7 -5.5 SK -1.9 -2.3 -6.8 UK -2.8 -4.9 -11.5

Source: Eurostat National Accounts [teina 200].

83 Industrial Relations in Europe 2010

Table 2.A3: Change in employment for EU Member States (% on previous 12 months by quarter)

2008 2009 2010 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 EU-27 1.7 1.3 0.7 0.1 -1.2 -1.9 -2.1 -2.1 -1.5 -0.6 AT 2 1.9 1.6 1.3 -0.4 -1.1 -1.1 -1 0.3 0.7 BE 1.9 1.9 1.8 1.3 0.5 -0.2 -0.9 -0.9 -0.2 0.3 BG 3.6 2.9 2.4 1.5 -0.2 -1.8 -3.7 -5.2 -6.5 -6.8 CY 2.4 2.7 3.5 1.9 1.4 -0.5 -2 -1.6 -1.3 -0.2 CZ 1.8 1.2 1 0.9 0 -1 -1.8 -1.9 -2.1 -1 DE 1.6 1.5 1.4 1.1 0.4 0 -0.2 -0.3 -0.2 0.2 DK 2.1 1.9 2.1 1.6 -1.1 -2.5 -4.3 -5.5 -4 -2.4 EE 1 -0.1 -0.3 -0.4 -6.1 -10.1 -11.2 -12.1 -9 -5.5 EL 0.5 0.1 0.1 -0.3 -0.6 -0.7 -1.2 -2.2 -1.8 -2.5 ES 1.7 0.5 -0.7 -3 -6 -7 -7.3 -6.2 -3.7 -2.4 FI 2.4 2.1 1.1 0.7 -0.9 -3 -3.4 -4 -2.3 -0.5 FR 1.2 0.9 0.4 -0.2 -0.9 -1.4 -1.5 -1.3 -0.7 -0.1 HU -1.4 -1.9 -0.8 -1 -2.2 -2.4 -3.9 -2.8 -2.1 -0.6 IE 1.6 -0.1 -2 -4 -7.5 -8.3 -8.7 -8.2 -5.3 -4.1 IT 1 0.9 -0.3 -0.5 -1.1 -1.5 -2 -2.1 -0.9 -0.7 LT 1.2 -0.2 -1.3 -2.3 -5.3 -6 -7.5 -8.6 -7.4 -6.6 LU 5.3 4.9 4.9 4 2.4 1.1 0.2 0.2 0.8 1.5 LV 5.2 3.4 0.4 -5.3 -8.5 -13.2 -16.1 -14.4 -12.8 -7 MT 2.7 3 2.6 2.1 0.8 -0.5 -1.5 -0.9 1.6 0.4 NL 1.9 1.8 1.3 0.8 0.1 -1.2 -1.9 -1.7 -1.6 -0.6 PL 4.9 3.8 3.6 3.1 1 0.7 0.2 -0.4 -0.6 0.6 PT 0.8 1.3 -0.2 -0.1 -1.7 -2.7 -3.1 -2.9 -1.7 -1.5 RO 1.3 -0.1 -1.1 0 -3.2 -2.8 -1 -1.3 -1.6 -2.2 SE 1.7 1.3 0.7 0 -1.2 -2.2 -2.6 -2.1 -0.5 0.8 SI 3.3 3.2 2.6 1.8 0.2 -1.4 -2.4 -3.2 -2.9 -2.4 SK 2.2 3.2 3.7 1.9 -0.7 -1.6 -3.7 -3.4 -1.9 -2.2 UK 1.5 1.2 0.5 -0.2 -1.1 -2.1 -1.7 -1.5 -1.2 0.4

Source: Eurostat National Accounts [teina 300].

84 Chapter 3: Negotiating the crisis: social partner responses

While negotiations and concertation between the social partners have played an Chapter 1 has established. Four insti- important role in tackling the effects of the crisis, there is considerable variation across tutional aspects are central to theme countries and sectors in their extent and character. Differences in economic situation of this chapter. First, the presence and are more clearly reflected in the differences between and within sectors than between nature of institutional arrangements countries. The influence of industrial relations institutions is notable, although the for tripartite or bipartite concertation presence of institutional capacity for concertation and/or negotiation at national, and/or negotiation at cross-sector level, cross-sector level is less significant. Public policy and social partners’ involvement in whose relevance is considered in the it are found to exercise a distinct influence on the pattern of negotiated responses. first main section of the chapter. Second, whether structures for collective bar- This chapter is based on a draft by Mark Carley and Paul Marginson of theUniversity gaining are multi- or single-employer in of Warwick’s Industrial Relations Research Unit. nature. Under multi-employer bargaining arrangements, the possibility exists of higher levels establishing frame- 3.1. Introduction employment through work-sharing, works which can facilitate and govern thereby retaining skills — and even further negotiation at company level. This chapter explores the responses of enhancing them through using down- Third, is collective bargaining cover- employers and trade unions to the cri- time for training (ILO, 2009). age i.e. the percentage of the workforce sis at the different levels of economic covered by collective agreements? This activity: cross-sector, sector and com- Four main sets of influences can be is strongly associated with bargaining pany. A central focus is the incidence, identified as framing the extent to which arrangements: it is well established that pattern and character of negotiated responses to the crisis have been negoti- collective bargaining coverage under and concerted responses between the ated or concerted between the social multi-employer bargaining is markedly social partners. Attention is also paid partners, and the character of the agree- higher than under single-employer bar- to unsuccessful attempts to negotiate ments reached (Glassner and Keune, gaining (Traxler et al., 2001). Accord- responses and instances of conflict. 2010), as shown in Figure 3.1 below. ingly, negotiated responses to the crisis In terms of the character of the agree- are more likely to cover a greater pro- ments concluded at the different levels, As Chapter 2 has shown, the economic portion of the workforce where multi- the balance between their distributive situation during the course of the crisis employer arrangements prevail. Under and integrative elements is of inter- at national, economy-wide level and in single-employer bargaining, minority est (1). In a context of economic crisis, different sectors has varied. This varia- coverage means that unilateral, man- the distributive element of agreements tion shapes the need for and magnitude agement responses will be widespread. involves measures aimed at immedi- of policy responses and also the scope Fourth, whether under multi-employer ate cost reductions, such as redundan- open to governments and social part- bargaining arrangements there are pro- cies, wage freezes or cuts and enhanced ners to take action. Industrial relations visions which closely articulate negotia- flexibilities including working time. institutions across the Member States tions at the higher and company levels, The integrative element entails display Figure some 3.1: important In uences commonali shaping social- respectively. partner responses Higher-level to the crisis agreements measures which frame short-term ties, but also considerable variation, as can only frame and constrain company responses in ways which can provide medium-term benefits for both parties, Figure 3.1: Influences shaping social partner responses to the crisis such as those aimed at maintaining

1 The distinction between distributive and Industrial relations institutions Social partner integrative bargaining was first drawn by Walton and involvement in McKersie (1965). Traditionally, collective bargaining government’s had been viewed as dealing with issues of distribution, policy response such as wages and the length of the working week. Employer and Negotiated/concerted response? Outcomes of distributive bargaining are zero-sum: one trade union strategies Integrative or distributive character? party’s gain corresponds to the other party’s losses. But collective bargaining can also engage with integrative Speci c public agendas, under which outcomes are positive sum: both support measures parties can secure gains. Restructuring agreements Economic situation: which aim both to reduce costs and enhance flexibility, economy-wide, sectoral, company and to enhance the skills and earnings capacity of the workforce, are an example. In practice, the distributive and integrative aspects of collective negotiations are intertwined, with the balance of outcomes tending in Source: Based on Glassner and Keune (2010). one direction or the other.

85 Industrial Relations in Europe 2010

negotiations in the presence of effective multi-level governance arrangements Box 3.1: Information sources (Marginson and Sisson, 2004; Nergaard The data on specific developments at cross-sector, sector and company level in this chapter et al., 2009). The second, third and fourth are, unless otherwise indicated, based on reporting in: Eurofound’s European Industrial Relations Observatory and European Restructuring Monitor; the ETUI’s Collective Bar- aspects shape social partner actions at gaining Newsletter; two private-subscription based online services, European Employ- sector and company level, as the second ment Review and Planet Labor; EWC News, published by the euro-betriebsrat.de training main section will demonstrate. and consultancy network; in the cases of several company and sector-level agreements, the websites of the companies or trade unions involved; and an ILO Working Paper by Two aspects of public policy shape Glassner and Keune (2010). the extent, and character, of negotiated responses. The first, considered at national level. Developments at responses. In practice, fully assessing in Chapter 2, is the involvement of the regional level have been significant in the influence of socialpartner strategies social partners in the framing of anti- several countries, and some of these requires in-depth data of a kind which crisis packages measures introduced are reviewed in Box 3.4. The second was not available. At best inferences by governments. The second are spe- section addresses the sector and com- can be drawn, and these are strongly cific public policy measures aimed at pany levels, focusing in turn on the suggestive of their relevance. maintaining employment, notably the production and private service sectors. short-time working schemes that have Developments in the public service been mobilised or newly introduced in sector are briefly reviewed in Box 3.6. many Member States, which support The section also reviews social partner 3.2. Cross-sector level the earnings of those affected, through actions at European level, which have partial unemployment benefits. These mainly revolved around European This section examines specific bipartite schemes, which are briefly surveyed works councils. The chapter has been and tripartite action taken or attempted in this chapter, can prompt employers compiled at a time when the devel- in the EU Member States at cross-sector and trade unions to negotiate further opments with which it is concerned level by the social partners (along with measures responding to the effect of are moving rapidly and sometimes in the government in the case of tripartite the crisis and/or require negotiations unpredictable directions. Its assess- action) directly in response to the eco- for their implementation. In short, ment rests on data from the onset of nomic crisis. More general consultative there is potentially an important inter- the crisis up until April 2010. and dialogue processes, and the social action between specific public policy partners’ perspectives, are dealt with measures and the incidence and char- The chapter concludes that whilst nego- in Chapter 2. Up to the end of April acter of negotiated responses, with the tiations and concertation between the 2010, bipartite or tripartite national former enhancing the scope for the lat- social partners have played an impor- cross-sector agreements framing the ter. For their part, employers’ and trade tant role in tackling the effects of the approach, or on some specific actions, unions’ responses are conditioned but crisis, there is considerable variation in response to the crisis were concluded not determined by the economic situ- across countries and sectors in their in 10 countries: Belgium, the Nether- ation, industrial relations institutions extent and character. In accounting lands, France, Spain, Poland, Estonia, and government actions. Responses for this variation according to the four Latvia, Lithuania, Bulgaria and the are also the product of employers’ sets of factors identified in Figure 3.1, Czech Republic. In an 11th, Slovakia, and trade unions’ respective strate- it finds that differences in economic trade unions and employers’ organisa- gies (Glassner and Keune, 2010). Each situation are more clearly reflected tions concluded parallel, but separate exercises choices, has the potential to in the varying pattern of negotiated accords with the government. In five advocate innovative solutions and/or responses between and within sectors countries there were unsuccessful talks to rely on the tried and tested ones, to than between countries. The influ- over agreements: Ireland, Slovenia engage in compromises in the face of ence of industrial relations institu- Spain (in the case of a possible tripar- differences and/or to test their relative tions is found to be generally marked, tite agreement), Finland and Hungary. strength through conflict. although least so for the presence of In terms of the countries involved, two institutional capacity for concertation related features stand out. First, exist- The chapter has two main sec- and/or negotiation at national, cross- ing tripartite and bipartite institutions tions. Cross-sector developments sector level. Both aspects of public for negotiation and/or concertation are addressed in the first, principally policy are found to exercise a distinct were not mobilised, successfully or actions taken by the social partners influence on the pattern of negotiated unsuccessfully, to address the crisis

86 Chapter 3: Negotiating the crisis: social partner responses

in all the countries in which they are for 2009–10 (such agreements are • In March 2009, the Polish social available. Second, agreements were normally signed every two years), partners reached a bipartite agree- concluded in a number of countries in concluded in December 2008, ment on a package of anti-crisis central and eastern Europe where there which aimed to achieve a balance measures, including greater work- is no established tradition of the social among companies’ competitiveness, ing time flexibility, the introduction partners and/or government doing so. workers’ purchasing power and of a short-time working scheme and employment levels. It included mod- limits on fixed-term employment, erate increases in purchasing power, as well as the minimum wage, social 3.2.1. Crisis response reductions in taxation of income security and tax measures (see agreements from night and overtime work, Box 3.3 for further details). increases in short-time work ben- The bipartite or tripartite national cross- efits and tax reductions to encour- • A tripartite accord reached in Esto- sector agreements in six countries, and age employer to recruit long-term nia in March 2009 set out principles the parallel accords in Slovakia, were unemployed people (Perin, 2009). for maintaining employment levels, concluded at a relatively early stage in for example through lifelong learn- the crisis. In the other four countries, • In the traditional autumn consulta- ing and flexible employment, and the agreements were concluded more tions in October 2008, the Dutch gov- providing more effective assistance recently. In Lithuania, the tripartite ernment and social partners reached for unemployed people (Nurmela agreement came only after protracted wide-ranging agreement on issues and Karu, 2009). conflict, while the Spanish bipartite such as moderate wage demands, agreement came at the second attempt, reduced unemployment insurance • In June 2009, a tripartite accord after a one-year interregnum in nego- contributions, reform of dismissals concluded in Latvia, which aimed tiations. The tripartite agreements in law, assistance for low-paid and to reduce the public sector deficit, Bulgaria and the Czech Republic were vulnerable groups, job creation and embraced both revenue-raising not concluded until the early months training. In March 2009, the bipar- measures and public expenditure of 2010 and followed calls by the social tite Labour Foundation reached an cuts, including reductions in the partners for greater involvement in the agreement on dealing with the crisis, public sector paybill and in pensions response to the crisis. In the cases of covering 2009–10, which promoted and benefits (Cabinet of Ministers the Belgian and Spanish cross-sector employment, wage moderation, of the Republic of Latvia, 2009). and the Dutch tripartite agreements, training, assistance for redundant the initiatives in question were an workers and flexible employment A different type of concerted approach, adaptation and shaping of normal, reg- (Labour Foundation, 2009). involving parallel governmental ular negotiating processes to address accords with the social partners, was the current economic conditions. The • In July 2009, the French social forged in Slovakia. In early 2009, the accords in France, Poland, Slovakia, partners reached a national cross- Slovak government signed both: Estonia, Latvia, Lithuania, Bulgaria sector agreement on managing the and the Czech Republic were ad hoc employment consequences of the • a ‘memorandum on cooperation and free-standing responses to the cri- economic crisis. This included: the in solving the impact of the finan- sis. In Poland, the Baltic states and the extension of the statutory short- cial and economic crises on Slovak Czech Republic, the agreements were, time work scheme to new groups of society’ with the main trade union it seems, the first of their kind. The Slo- employees; an increase in the dura- confederation, whereby the gov- vak accords followed an earlier agree- tion of short-time benefit; a frame- ernment would seek to maintain ment anticipating effects of entry in work for ‘employee leasing’ between employment levels and protection the euro area. companies; the promotion of and the unions would pursue mod- employees’ geographical and occu- erate wage demands and a dialogue- In summary, the six agreements con- pational mobility; improvements to based approach (Cziria, 2009); and cluded relatively early into the crisis schemes to help redundant workers were as follows. back into employment; and assist- • a similar memorandum with the ance targeted at groups such as main national employers’ organi- • The Belgian social partners expli the long-term unemployed, older sations, whereby the government citly responded to the crisis in their workers and young people (see would avoid imposing new legisla- cross-sector collective agreement Box 3.2 for further details). tive or administrative burdens on

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employers and the employers would compensate workers for a rise in infla- measures to avoid and mitigate job not use the crisis as a pretext for tion which exceeded wage increases losses, promote open-ended employ- reducing employment conditions over the three-year period; and hard- ment, develop workforce flexibility, (Planet Labor, 2009). ship clauses in sectoral agreements deal with restructuring and improve which could be triggered by compa- training provision. Linked to the conclusion of these nies facing financial difficulties. The accords, the Slovak government estab- accord also recommends that collec- In the Czech Republic, following calls lished an Economic Crisis Council, with tive agreements include a range of by unions and employers’ organisations social partner representation, to make proposals for dealing with the crisis. Box 3.2: French cross-sector agreement on managing the employment consequences of the crisis In Lithuania, the conclusion of an With unemployment rising rapidly, social partner organisations decided in May 2009 to agreement in October 2009 was open negotiations over a national cross-sector agreement on the ‘social management of the preceded, as Chapter 2 indicated, consequences of the economic crisis for employment’. The talks resulted on 8 July in an by months of sustained trade union agreement on ‘emergency’ employment measures, signed by all the main social partners opposition to government austerity except the CGT trade union confederation (European Employment Review, 2009). Further measures culminating in a hun- negotiations were to be held on ‘structural’ measures to facilitate and accompany a future ger strike in July which successfully economic recovery. prompted the government to change The July agreement built on various crisis response labour market and training initiatives taken by the government and social partners during 2008 and 2009, providing for sup- tack. The tripartite national agree- plementary measures aimed at ‘limiting the employment consequences of the economic ment on economic and social policies crisis to the greatest extent possible’. These measures aimed to: help ‘maintain the contrac- during the downturn covers areas tual link’ between employers and employees during periods of reduced activity; provide such as tax, public spending, public more secure paths back into employment for redundant workers who have lost their jobs; sector pay, cuts in social security ben- mitigate the effects of the economic crisis on the most vulnerable groups; and enhance efits, public sector reform, economic qualifications and skills. All of the agreed measures were temporary in nature and were due to expire on 1 January 2011, and many required implementation by the government, which stimulus measures, energy policy, indicated that it would issue the necessary regulations as soon as possible. education and training, healthcare Key provisions of the agreement include: and combating the illegal economy • the extension of the statutory short-time work scheme to new groups of employees (Blažienė, 2009). (especially in the services sector); • measures to promote the training of employees on short-time work and make their In Spain, the social partners were future career paths more secure; unable to reach for 2009 their usual • an increase in the general maximum duration of short-time benefit from 800 to cross-sector framework agreement 1 000 hours per employee per year; providing guidelines for lower-level • simplification of administrative procedures that companies must observe in applying for bargaining, mainly because of differ- short-time benefit; ences over pay increases (see below). • a framework of rules and procedures to govern ‘employee leasing’ — this arrangement, However, they were able to resume the whereby a company temporarily places a number of its employees at the disposal of practice in 2010, taking the unprec- another company, is permitted by French law but lacks detailed regulation; edented step of reaching a three-year • the promotion of employees’ geographical and occupational mobility by companies, for framework deal (European Employ- example through internal ‘job exchanges’ or allowing employees to try out other jobs; ment Review, 2010). The ‘agreement • improvements to schemes to help redundant workers back into employment, such as for employment and collective bar- opening them up to people who formerly had fixed-term contracts or were temporary gaining’ sets out recommendations for agency workers; and sector- and company-level bargaining • assistance targeted at groups, such as, the long-term unemployed, older workers and in 2010, 2011 and 2012. Its central pri- young people, mainly by adapting the use of various existing schemes that seek to keep these groups in employment, find them new jobs, or help them enter the labour market ority is protecting and creating jobs, for the first time. including through wage moderation The social partners also reached a national cross-sector agreement on vocational training and by promoting open-ended rather in January 2009, which was negotiated at the government’s behest. The negotiating process than temporary employment. On pay, was not directly linked to the crisis but the final agreement’s content was influenced by the agreement recommends moderate the deteriorating employment situation. The accord includes measures aimed at providing increases each year and the inclusion training for an extra 700 000 low-skilled or unemployed workers each year and provides of: wage revision clauses, which would funding for urgent training measures to tackle the effects of the downturn.

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in 2009 for greater involvement in the examine the possibility of introducing union discontent with the programme government’s response to the crisis, a more ‘German style’ short-time work then led to negotiations with employers’ and their participation in work in scheme and speeding up the payment organisations over potential additional drawing up a new short-time work of pensions and sickness benefit. measures, resulting in a set of joint scheme (Box 3.5), serious engagement proposals to government and finally on broader issues began in early 2010. In Bulgaria, trade unions withdrew to a tripartite agreement on a package This resulted in tripartite agreement in from the main national tripartite of 59 anti-crisis measures in March February on a set of ‘short-term’ crisis institution in late 2008, at least partly 2010 (Daskalova, 2010). These wide- response measures (Verveková, 2010). because of lack of consultation over ranging measures sought to support These related to a range of economic government anti-crisis measures, and employment, households, businesses and social issues. Directly, employ- organised protests against the govern- and the state budget. The employment-related points concerned train- ment’s policies over the spring and ment measures included: a mechanism ing programmes, possible greater tax early summer of 2009. However, fol- for increasing the minimum wage; harmonisation between employees lowing a change of government, tripar- increases in unemployment benefits; and the self-employed, and measures tite dialogue resumed in August 2009, schemes to support employment in to address misuse of unemployment with agreement to draw up a joint anti- companies facing difficulties (such as benefits. Additional measures were crisis package. Nevertheless, there was support for workers placed on unpaid agreed in April. In employment terms, no consensus on the new government’s leave); employment subsidies; and pro- the government made commitments to initial anti-crisis programme. Trade motion of labour mobility.

The degree to which the various agree- Box 3.3 Polish social partner agreement ments were bipartite or tripartite was on anti-crisis package not in all cases straightforward. The Following talks on crisis response measures within the main national tripartite consulta- accords reached in Estonia, Bulgaria tive body, the Tripartite Commission for Social and Economic Affairs, trade unions and and the Czech Republic were clearly employers’ organisations opened bipartite talks on the issue and in March 2009 agreed on tripartite, the Spanish agreement was a package of anti-crisis measures (Czarzasty, 2009). bipartite, and the parallel accords The main points (many of which were of a time-limited nature) included the following: concluded in Slovakia neither bi- nor • the introduction of a form of short-time working, whereby employers facing economic dif- tripartite. In the other countries there ficulties may, in order to avoid redundancies, place employees on short time or lay them off was a more complex interplay between temporarily, with the workers concerned receiving a limited public wage subsidy; the social partners and the govern- • an extension of the maximum reference period for averaging weekly working time from three ment. While the Belgian intersectoral months to 12 and an amended statutory definition of ‘working day’ to allow more flexibility; agreement was formally bipartite, it • the introduction of working time flexibility in order to facilitate the reconciliation of was negotiated in conjunction with work and family life; the government (which mediated in • promoting the creation and use of company training funds; the talks), relies on government fund- • a limitation of the duration of fixed-term contracts, with the aim of making employment ing for some of its measures and forms more stable; part of the government’s response to • a gradual increase in the national minimum wage to 50 % of the average wage; the deteriorating economic situa- • increased social security benefits for redundant workers and support for families hardest tion. The Netherlands saw a mixture hit by the crisis; of tripartite and bipartite cross-sector • tax exemptions for allowances and benefits paid by companies and trade unions to work- agreements, with a broad tripartite ers facing financial difficulties; crisis response accord in October • recognition of company collective agreements as a source of labour law; and 2008 and a bipartite agreement in • repealing legislation capping the pay of senior executives in state-owned firms. March 2009, though the latter appar- Many of the agreed measures required implementation through legislation. The govern- ently emerged largely from work in a ment committed itself to introducing the necessary legislation and issued draft laws in June 2009, which were adopted in August. The legislation omitted some of the points agreed tripartite ‘crisis team’. In France, the by the social partners (such as the increase in the national minimum wage) and amended July 2009 agreement on managing others, drawing heavy criticism from trade unions (which accused the government of pur- the employment consequences of the suing its own agenda and of failing to consult properly on the legislation) and to a lesser economic crisis relied on government extent from employers. In early 2010, the social partners criticised the effectiveness of approval and legislation for much of some of the measures introduced by the legislation and called for amendments. its enactment. The Polish agreement

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was negotiated on a bipartite basis fol- (notably spending cuts), in return for Poland); wage moderation (Belgium, lowing tripartite talks and many of its some compensating measures. the Netherlands, Slovakia and Spain); points required legislative implemen- and training/lifelong learning (the tation, which occurred in August. As The most common employment- Czech Republic, Estonia, Spain and well as some measures in most of the related issues dealt with in the vari- the Netherlands). agreements requiring implementa- ous agreements were: short-time tion through legislation, in the case work (Belgium, the Czech Republic, of Belgium, Spain and to some extent France, Spain and Poland); employ- 3.2.2. Unsuccessful talks the Netherlands, implementation was ment-related tax/social security and pressure on existing also predicated on further collective measures (Belgium, the Netherlands arrangements negotiations at lower levels. and Poland); employment incentives, schemes and assistance aimed In six countries, negotiations were The agreements in Latvia and Lithuania at unemployed people and vulnerable held over a specific tripartite or bipar- were multipartite, involving accords groups (Belgium, Bulgaria, the Czech tite agreement or accord aimed at between the government and a range of Republic, France, Spain and the Neth- tackling the effects of the crisis, but interest organisations. As well as trade erlands); flexibility in employment without success by the end of April unions and employers’ organisations type and/or working time (Bulgaria, 2010. Five of the countries concerned the accords were also signed by organi- Estonia, the Netherlands, Spain and have established traditions of suc- sations representing businesses (other than employers’ organisations as such) and pensioners, with various other Box 3.4: Regional cross-sector agreements to address parties being involved in each case. the crisis in Italy and Spain However, in Lithuania, the agreement In several Member States, national political structures devolve important responsibilities was not signed by a number of (mainly in the employment field to the regional level. This is notably the case in Italy and Spain. public sector) trade unions and rel- Since the crisis took hold, agreements on dealing with aspects of its employment effects have been signed in a number of regions in both countries. evant interest groups (such as associa- In Italy, legislation adopted in January 2009 increased resources for the country’s system of tions representing older and disabled ‘social shock absorbers’ — measures that cushion the effects of redundancies and restruc- people), and these organisations criti- turing, including special unemployment benefits and other forms of income support for cised the accord, claiming that it served workers who have lost their jobs or are temporarily laid off — and provided for the system the interests only of the signatories and to be extended and adapted during the 2009–10 period. The national government reached not of the wider public. agreement with the authorities at regional level on implementing the law. The operational details were then determined by agreements signed by the social partners and authorities in each region. These regional tripartite accords typically extended support measures to In terms of their content, all of the cover types of company and worker normally excluded from the social shock absorbers, agreements constituted ‘packages’ of and some included training obligations for the workers concerned, or provided for social measures aimed at tackling the eco- partner involvement in administering the scheme. nomic crisis, rather than addressing In at least one case, the regional social partners also signed a bipartite anti-crisis accord. single issues. The agreements in Bel- An agreement reached in the Rome/Lazio region in June 2009 sought to boost the local gium, Estonia, France, the Nether- economy and increase employment levels. It provided for employers to use enhanced lands, Poland, Slovakia and Spain dealt social shock absorbers, while also introducing a new joint regional training fund and calling for a range of initiatives to promote ‘green’ and high technology industries, along with centrally with employment-related investments in research and infrastructure. matters. The other agreements were In Spain, tripartite agreements were signed in a number of regions during 2009 to promote more wide-ranging, covering a variety employment and stimulate the economy in the context of the crisis. For example, a ‘pact of economic, fiscal, public and social for development and competitiveness’, signed in Castilla-La Mancha in August, provided policy matters, including some labour for: major public investments in public works, infrastructure, housing, research and new market elements (only marginally so technologies; support for small businesses, vocational training measures; and subsidies for in the case of Latvia, where the accord the recruitment of unemployed people. Similarly, a ‘social agreement for productivity and employment’ reached in La Rioja in March provided for public investment in innovation, addressed only austerity measures export industries, renewable energy, the environment, competitiveness, infrastructure aimed at restoring the public finances). and tourism. The accord also focused on improving training, public employment services To varying extent, this second group of and working conditions. An ‘agreement for competitiveness and employment generation’ agreements seemed to be exercises in signed in Madrid in December aimed to create 30 000 ‘high-quality’ jobs directly and obtaining social partner consensus for 50 000 indirectly in strategic industrial sectors, through investments in innovation and governments’ crisis response measures new technologies.

90 Chapter 3: Negotiating the crisis: social partner responses

cessfully concluding cross-sector measures to support employment, of the transitional pay agreement and agreements: Ireland, Luxembourg, maintain and enhance competitiveness the degree of government support for Slovenia, Spain and Finland (until very and address the deterioration of the employment preservation and crea- recently). In the sixth, Hungary, there public finances. The negotiations broke tion. Unions argued unsuccessfully is no previously successful initiative. down towards the end of April, with for a wide-ranging pact covering eco- Of these, Ireland, Slovenia and Spain the principal focus of disagreement nomic, fiscal and social policy. saw a collapse (at least temporary) of being the employers’ key proposal to long-standing cross-sector bipartite/ freeze the automatic indexation of Bipartite relations between IBEC and tripartite arrangements as a result of wagers and pensions for a two year the ICTU trade union confederations the crisis and differences over how to period. This was fiercely resisted by the have not, however, broken down com- react to it. Tripartite arrangements trade unions, although supported by pletely. In March 2010, they signed also came under pressure in Bulgaria, the government (Planet Labor, 2010). a ‘national protocol for the orderly as reported above. conduct of industrial relations and Since 1987, Ireland has been covered local bargaining in the private sector’ The Hungarian government held tri- by an unbroken series of tripartite aimed at ensuring that company-level partite discussions in late 2008 and national social partnership agree- collective bargaining is conducted in 2009 over a possible ‘social pact’ on ments, regulating a range of employ- an orderly fashion in the absence of a its reform measures in response to the ment, social and economic matters, national pay agreement, with efforts to crisis, but without success. As indi- and including multi-year pay deals avoid industrial action. The protocol cated in Chapter 2, substantial dif- between unions and both private states that bargaining in 2010 should ferences persisted between the social sector employers and the govern- serve the primary purpose of protect- partners and amongst the rival trade ment. The current 10-year partner- ing jobs. In the public sector too, there union confederations, both over each ship agreement, ‘Towards 2016’, was was some rapprochement between the others’ respective perspectives on the signed in 2006 and within its frame- government and unions, with a draft measures required to successfully work a ‘transitional agreement’ was agreement on public sector pay, jobs address the crisis and over the gov- negotiated in September 2008, which and reform reached in March 2010 ernment’s proposals, and particularly included a two- to three-year pay deal. (see Box 3.6). those concerning labour law reform In early 2009, with the economy in (Tóth, Edelényi and Neumann, 2009). deep recession, the IBEC employers’ In Slovenia, where cross-sector agree- The parties would seem to be ‘going confederation called for a deferral of ments have been a recurring feature through the motions’ rather than being the agreed pay increases for at least a since the 1990s, tripartite dialogue engaged in a search for compromise. year. In practice, many employers did over responses to the crisis was not pay the wage increases due in 2009, marked by considerable consensus in In Finland, a long period of bipartite/ and IBEC formally withdrew from the 2008 but problems emerged in 2009. tripartite national incomes policy deal at the end of the year, after the Major disagreement focused on mini- agreements had come to an end in 2007 failure of talks with unions over an mum wage policy and late in the year and the EK employers’ confederation alternative pay accord. The public sec- employers’ organisations started to had indicated that it no longer wanted tor pay agreement also broke down, boycott the main national tripartite a role in such cross-sector bargaining. with the government not paying the forum following the government’s However, linked to the late 2009 secto- wage increases due under the transi- adoption of a new minimum wage law ral bargaining round, EK and the trade tional agreement and introducing pay (Stanojevič, 2010). union confederations held secret talks cuts, following the failure of talks with over a possible overall framework for unions (Sheehan, 2009). Discussions In Spain, the social partners were pay increases in sectoral agreements, were held during 2009 over a form of unable, in 2009, to reach their usual with the aim of promoting employ- tripartite national economic recov- annual cross-sector framework agree ment. The talks ended without success ery plan, but failed. The main stum- ment laying down recommendations in December 2009 when EK withdrew bling blocks were government plans for lower-level bargaining, mainly (Jokivuori, 2009). to cut public expenditure and public because of differences over pay sector pay, which proved unaccept- increases in the recession. Such agree- Tripartite negotiations during March able to trade unions (and were subse- ments had been signed every year from and April 2010 in Luxembourg were quently implemented unilaterally by 2002 to 2008. The lack of a national aimed at reaching agreement on the government), along with the fate framework contributed to a difficult

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bargaining round in 2009, with nego- a pension reform announced by the 3.2.3. Specific public policy tiations over many collective agree- government at the end of January, measures: short-time ments deadlocked or delayed, and which would raise the age of retire- working arrangements disputes about the payment of wage ment, and by trade union discon- increases due in 2009 under multi- tent over public sector pay cuts (see In a number of cases, consensus annual agreements signed in previ- Box 3.6). (bipartite or tripartite) was reached ous years. However, in November the social partners agreed a joint approach to resolving the problems that were Box 3.5 Short-time work and the social partners affecting bargaining, thereby opening Many Member States amongst the EU-15 already had short-time work schemes in place the way for them to conclude a three- and responded to the crisis by amending them, as occurred in Austria, Belgium, Denmark, Finland, France, Germany, Greece, Italy, Luxembourg and the Netherlands. The main year national framework agreement changes included: in February 2010 (see 3.2.1 above). • increasing the duration of the benefits paid to employees (or subsidies paid to employers), as in Austria, France, Germany and Luxembourg; While bipartite cross-sector rela- • increasing the level of income replacement for the employees concerned, as, for example, tions between Spanish unions and in Belgium and France; employers’ organisations moved • extending the scheme to new categories of companies and/or employees, as in Belgium, from disagreement to agreement, France, Germany and Italy; the opposite was true of tripartite • linking state subsidy to commitments by the employer not to make the workers con- dialogue over the crisis. In July 2008, cerned redundant for a certain period, as in France and the Netherlands; and the government and social partners • making the arrangements more flexible and/or easier to access, as in Austria, Denmark, signed a ‘declaration of principles for Finland, Germany and Luxembourg. stimulating the economy, employ- Several of the Member States in central and south-eastern Europe — such as Bulgaria, the ment, competitiveness and social Czech Republic, Hungary, Poland, Romania, Slovakia and Slovenia — introduced state- progress’, which expressed support supported short-time work schemes for the first time. for the government’s diagnosis of the A key feature of all the short-time work schemes referred to here is that they are heavily problems facing the country and the dependent on state financial support for their operation. financial measures adopted to bol- In many cases, the social partners were involved in the adaptation or introduction of short- ster the economy. During 2009, the time work schemes in response to the downturn. The partners jointly initiated change in government made repeated efforts several countries, for example: to engage the social partners in a tri- • the introduction of a short-time work scheme in Poland was based on the social partners’ March 2009 anti-crisis agreement (see Box 3.4); partite pact to boost employment and tackle the effects of the crisis. These • France’s statutory scheme was extended to new groups of employees and the duration of benefit was increased as a result of calls made in the social partners’ cross-sector agree- efforts foundered mainly because ment on managing the employment consequences of the economic crisis, signed in July employers wanted to discuss more 2009 (see Box 3.3); radical employment law reforms and • the Austrian social partners issued a joint proposal to make the statutory short-time deeper cuts in employers’ non-wage work scheme more flexible, which was enacted by parliament in February 2009; labour costs than those proposed • the Danish social partners made a joint call to the government to take measures to by the government or acceptable to strengthen the labour market, notably adaption of the state-supported short-time work trade unions. After the social part- scheme, which was partially taken up by the government in March 2009; ners signed their renewed cross- • the German social partners made a joint recommendation that the duration of statutory sector agreement in February 2010, short- time work benefit should be extended, which was enacted in May 2009; and the government reopened tripar- • the Dutch social partners made joint requests in 2008 and 2009 for enhancing the state tite social dialogue, and presented short-time work scheme, which were largely taken up by the government. a series of proposals to the social Elsewhere, social partner involvement was more tripartite and/or consultative. Following partners for labour market reform the failure of bipartite talks on the issue, the Belgian government issued proposals for temporarily extending short-time work measures (which normally apply only to blue-collar aimed at increasing adaptability and workers) to white-collar workers, which were endorsed by the social partners and enacted flexibility. The dialogue was still in April 2009. The introduction of a new scheme was reportedly agreed by the Bulgar- under way at the end of April, but ian government and social partners. A tripartite working group was set up in the Czech with little sign of consensus, and the Republic in August 2009 to formulate a new short-time working scheme, and the Slov- talks were to some extent overshad- enian social partners were consulted on a new short-time work scheme, though in these owed by sharp differences over the cases no information is available on the degree of social partner influence exerted.

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on measures that were subsequently states, Bulgaria, the Czech Republic, implementation and/or amendment enacted by the government, or the and, in the form of parallel accords, of standing schemes or the intro- social partners endorsed government Slovakia. Negotiations, or short of this, duction of new ones in at least eight plans. The most common measure to talks, were unsuccessful in Finland, countries: Austria, Belgium, Bulgaria, which this applied was the modifi- Hungary, Ireland, Luxembourg and Czech Republic, Denmark, Germany, cation, extension or introduction of Slovenia. They have reopened in Spain the Netherlands and Slovenia. In state-supported short-time work and (in the case of a tripartite accord) after some countries, short-time work- temporary lay-off schemes (known a considerable interregnum. The aim ing has been addressed as part of a by other terms, such as partial unem- in all cases was to reach a multi-issue wider package of measures, includ- ployment, in some countries). These package of crisis response measures, ing Belgium and the Netherlands. schemes allow employers temporarily with one exception: the failed bipartite Elsewhere, as in Austria, the Czech to reduce employees’ working time, talks in Finland over a pay framework Republic, Denmark, Germany and partially or fully, with compensa- for sectoral bargaining. Slovenia, social partner accord or tion, funded wholly or partly by the endorsement has focused on this spe- state, for some of the income lost by The multi-issue nature of the agree- cific issue. Integrative outcomes in this the employees. Such arrangements ments concluded, involving a package instance have flowed from the interac- allow the employment relationship of measures, is indicative of an inte- tion between public policy measures to be maintained through periods of grative dimension to the bargaining and social partner actions. reduced demand, protecting workers process. Addressing a wide-ranging from unemployment and excessive agenda better facilitates a positive-sum For both types of intended interven- income loss, while enabling employers outcome through scope for trade-offs tion, some procedural innovation was to retain skilled and experienced staff. in which each of the parties is able to in evidence. New tripartite or bipartite secure gains, albeit that they also have processes or structures were estab- The social partners have been vari- to make compromises and even con- lished specifically to address aspects ously involved in the adaptation and cessions (Marginson and Sisson, 2004; of the crisis in several countries. This introduction of state-supported short- Walton and McKersie, 1965). Beyond would appear to be the case, for exam- time work schemes. The schemes have this, it is difficult to establish with any ple, with the Czech tripartite work- also prompted, and in some cases precision the balance between dis- ing group on short-time working and require, further negotiations between tributive and integrative elements of the Dutch tripartite ‘crisis team’ on employers and trade unions at inter- the agreements. Because the scope of addressing the employment effects of sector level, as in Belgium, and at the negotiation, and the subsequent the crisis. Other innovations included sector and company levels in a number agreement, was wider in, for example, the launch in France, in April 2009, of countries (see below). Box 3.5 out- the Netherlands and Poland, the pos- of a joint government–social partner lines the incidence of, changes to and sibilities for integrative outcomes were ‘social investment fund’ to coordinate introduction of state-supported short- greater than in, for example, Estonia their action on training and reskilling time work schemes, and the nature of and Latvia, where the agenda was nar- for those workers most affected by the social partner involvement. rower. In some instances, for example crisis; and the establishment by the in Bulgaria and France, distributional Slovak government of an Economic conflicts have been a precursor or Crisis Council, with social partner 3.2.4. Assessment accompaniment to negotiations which representation, to make proposals for have resulted in integrative outcomes. dealing with the crisis. Such proce- To summarise, up until the end of dural innovation, aimed at facilitating April 2010, explicit attempts to nego- In addition, the social partners have ‘problem solving’, is characteristic of tiate a form of bipartite or tripar- exercised a clear influence on the integrative bargaining processes. tite national cross-sector agreement specific issue of short-time work- involving a package of measures ing. A close interaction between the There were few cases of conflict aimed at addressing aspects of the action of the government and that specifically relating to bipartite/ economic crisis were made in 16 of of the social partners is a striking tripartite negotiations about crisis the 27 Member States. Agreements feature of most of the countries con- response measures, or their absence were concluded in Belgium, France, cerned. Bipartite or tripartite con- or failure. The main exception was the Netherlands, Poland, Spain (in the sensus has been reached on, or the probably in Ireland, where the case of a bipartite accord), the Baltic social partners have endorsed, the breakdown of social partnership

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was reflected in significant conflict, including a one-day public Table 3.1: Established institutional capacity for cross-sector sector strike in November 2009. negotiation and social partners’ crisis response actions More broadly, trade unions organised protests over government crisis Established Negotiations over multi-issue SP intervention Neither institutional capacity crisis response agreement on STW scheme development response measures, and especially BE, NL (successful) austerity measures aimed at the 1. Regular bi/tripartite BE, LU, NL, BG, ES (successful/unsuccessful) public sector services (see Box 3.6), concertation BG, SI IE, LU (unsuccessful) in a range of countries — includ- 2. Periodic bi/tripartite FR (successful) FR, IT EL, PT ing Belgium, France, Italy, Spain, concertation Greece, Ireland, Portugal, the 3. Sector bargaining, SPs FI (unsuccessful) AT, DE, DK, FI SE Czech Republic, Estonia, Latvia, involved in LM policy Lithuania, Romania and Bulgaria. 4. Bi/tripartite dialogue CZ, PL, SK, EE, LT, LV structures; little (successful) CZ, PL MT, RO concertation tradition HU (unsuccessful) 5. No cross-sector Categorising national responses CY, UK dialogue structures The countries where attempts have Source: Own compilation. been made to conclude a cross-sector, multi-issue crisis response agreement Table 3.1 combines this classifica- case in France, but not in Greece, Italy does not correspond closely to the tion with the actions of the social or Portugal. Such negotiations would presence or absence of an established partners in (a) attempts, successful not be expected amongst the third institutional capacity for negotiation or unsuccessful, to conclude a multi- group of countries, given the sector and concertation at cross-sector level, issue crisis response agreement and focus of negotiating arrangements, as Table 3.1 shows. In terms of estab- (b) intervention on the specific issue although social partner intervention lished institutional capacity, Table of short-time working. The final col- on short-time work schemes is antici- 3.1 classifies countries in five groups umn indicates those countries where pated given established involvement (Freyssinet, 2009; Hethy, 2009; Natali neither development has occurred. in labour market policy. This is the and Pochet, 2009): case for Austria, Denmark and Ger- In accounting for the cross-country many, but not for Finland (unsuccess- 1. those with an established tradition pattern in Table 3.1, two of the factors ful cross-sector negotiation) or Sweden of regular bipartite or tripartite identified in Figure 3.1 seem influen- (neither development). Although there negotiation or concertation; tial: industrial relations institutions, is little tradition of successful concerta- in the form of established institutional tion amongst the fourth group, agree- 2. those with an established tradition capacity for cross-sector negotiation; ments have been concluded in six of of periodic bipartite, sometimes and both aspects of public policy. Cir- the nine countries and an unsuccessful government prompted, or tripar- cumstantial evidence points to the rel- attempt made in a seventh. Consistent tite negotiation or concertation; evance of a third factor also, employer with the absence of cross-sector dia- and trade unions strategies. In contrast, logue structures, neither development 3. those with sector-focused bipartite countries’ economic situation seems to has featured in the two countries in the negotiating arrangements along- exercise less influence. Institutional fifth group. side social partner involvement in arrangements for industrial relations labour market policy; partially account for the placement of Considering further the second group the countries in each group across the of countries, the reasons why institu- 4. those with tripartite or bipartite three columns of Table 3.1. Amongst tional capacity for cross-sector nego- social dialogue structures but no the first group, negotiations over a tiation or concertation has not been tradition of negotiation or concer- multi-issue crisis response agreement mobilised are partly conjunctural (Frey- tation; and have indeed taken place, successfully ssinet, 2009). In Italy, arrangements had and/or unsuccessfully, in all of the encountered problems before the onset 5. those with no institutional struc- countries concerned, with the excep- of the crisis with differences opening up tures for cross-sector social diation of Slovenia. Amongst the second between the main union confederations logue. group of countries, this has been the (see Chapter 2) and attempts by the

94 Chapter 3: Negotiating the crisis: social partner responses

government to play on these differences in the other two countries, whatever accords involving not only the social by reaching non-inclusive agreements. the strategic preferences of employ- partners but a wide range of other In Greece and Portugal, the social part- ers’ organisations and trade unions interest groups. ners have not been able to reach com- might have been. In contrast to the mon positions on responses to the crisis ‘path dependency’ apparent in other In general, the economic situation, (see Chapter 2). The significance of the countries in the group, Finland rep- as reflected in the magnitude of the strategic choices exercised by employ- resents an attempt at ‘path recovery’ crisis, does not seem to have a strong ers’ organisations and trade unions (and and underlines the scope for employ- bearing on the successful or unsuc- also governments) in these instances ers’ organisations and trade unions to cessful outcome of cross-sector nego- is apparent. In addition, the extent to exercise choices, albeit the initiative tiations. Amongst the first group of which institutional arrangements for was unsuccessful. countries, the magnitude of the crisis tri/bipartite negotiation and concerta- and its impact on the public finances tion are stable differs. Natali and Pochet The fourth group also underlines the sets Ireland apart from the others, but (2009) contrast institutional dynamics scope that exists for strategic choices. unsuccessful outcomes also feature over the past 20 years in Ireland and The conclusion of agreements in five elsewhere. Amongst the fourth group Spain, where institutionalised capac- central and east European Member of countries, whilst the impact of the ity has been stabilised, with Italy and States with little or no previous history crisis, and the consequences for the Portugal, where it has not. Extending of doing so, and the parallel accords public finances, in Poland, and to this concept of ‘uneven institutionalisa- in Slovakia, suggests that the crisis lesser extent the Czech Republic and tion’ to other countries in the first two may have acted as a ‘moment’ spur- Slovakia, has been milder than in groups, Belgium, Luxembourg and the ring innovation in industrial relations Hungary, the comparison does not Netherlands also have a stable institu- at cross-sector level, and therefore extend to the Baltic states where, tional capacity for agreement-making ‘path change’, in a manner similar to as noted above, accords have been across a wide agenda, whereas France the effect that the conditions required concluded in the face of much more resembles more the situation in Italy for economic and monetary union severe economic conditions. and Portugal. had in prompting the negotiation of social pacts in several EU-15 Member The role of public policy emerges Turning to the third group of coun- States during the 1990s (Fajertag and as important in both of the respects tries, a combination of conjunctural Pochet, 2000). The implication is identified in Figure 3.1. In addition and institutional considerations more relevant to the Visegrad coun- to the evident role of governments in helps account for the positions of tries, where cross-sector social dia- the conclusion of tripartite accords, Sweden and Finland. Current disa- logue structures are well established, they have frequently played an impor- greements and tensions between the than the Baltic states, where they are tant role in supporting bipartite ones. social partners in Sweden (see Chap- widely regarded as weakly embedded This in underlined a contrario by the ter 2) are at odds with the role that (Meardi, 2010). In Poland, there have case of Romania, where although the they have long exercised in labour been previous attempts to negotiate social partners were able to reach market policy. Historically, all three agreements — none of which have compromises on a package of crisis Nordic countries featured bipartite been successful, whilst in Slovakia response measures (see Chapter 2), cross-sector collective agreements. an accord anticipating the effects of the government chose not to engage These central arrangements had been entry into the euro area had previ- with them. Public intervention to sup- abandoned much earlier in Denmark ously been concluded. Such initiatives port employment in the specific from (late 1980s) and Sweden (early 1990s) have not previously been a feature in of short-time intervention has been a than in Finland (2007). It was poten- the Baltic states, where the extremity focus for social partner interventions tially feasible for institutional capac- of the crisis seems to have eventually in most of the countries where such ity to be revived in Finland, but not pushed governments into concluding schemes operate.

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Box 3.6: Public sector services In the public sector services, the consequences of the economic crisis for the public finances, and therefore for public services, have become apparent more quickly in some countries than others. As Chapter 2 shows, the scale of the problem with the public finances also varies across countries. The impact of the crisis, in employment terms, has largely manifested itself in government attempts to reduce expenditure on pay and jobs and to secure ‘efficiency savings’. The means for determining pay and major conditions in public sector services vary across countries. In some, pay is determined by government decree or other statutory means, including Greece, Luxembourg and the Baltic states. Tripartite structures play an important role in pay determination in Hungary and Poland. Elsewhere, collective bargaining over pay ranges in coverage from some groups of the public sector workforce, with pay being determined for other groups by statutory or other means, to most or all workforce groups. Where collective bargaining arrangements exist, these are generally multi-employer in nature (Bordogna, 2007; Broughton, 2009). The involvement of government in determining pay, either directly through decree or via their role in collective negotiations or indirectly through setting state budgets, means that trade unions are more inclined to turn to forms of political mobilisation to press home their demands than is the case in the private sector. In 2009, freezes or cuts in public sector pay and/or pensions, job cuts or recruitment freezes featured mainly (though not exclusively) in countries hit by the crisis deeply and early. For example, total or selective pay freezes were applied in Belgium, Bulgaria (where the government cancelled a planned 10 % rise), Estonia, Greece (except for one-off payments for low-paid workers), Hungary (with an effective pay cut for higher-paid employees), Ireland (with take-home pay cut by a 7 % ‘pension levy’) and Slovenia, while pay was cut in Latvia and Lithuania. In Belgium and Slovenia, the pay freezes were based on collective agreements. This was not the case in the other countries where, if negotiations were held, they were unsuccessful, with measures subsequently being imposed by governments. For example, in Ireland the government imposed a pay freeze (in breach of an earlier agreement on wage rises), following the breakdown of negotiations with trade unions. In other countries, agreements were not sought by the public authorities before imposing pay freezes or cuts. Examples include Greece and the Baltic states, where pay is set by government decree. In Lithuania, the government subsequently relented somewhat on its proposed public service pay cuts after mounting trade union protests (see 3.2.1). Such protests also occurred, with less success, in countries such as Bulgaria, Estonia, Greece, Ireland and Latvia, including national strikes in the cases of Greece and Ireland. The year 2009 also saw considerable levels of protest against other aspects of government public sector policy in some countries. For instance, French unions organised protests throughout the year against public sector spending and job cuts, and in support of wage increases, while Romanian unions mobilised, including a one-day national strike in October 2009, against government plans to reform public sector pay. In the latter part of 2009, as governments started to announce their public spending plans for 2010, it became apparent that more countries were intending to freeze or cut public sector pay and/or jobs, and in the early months of 2010, further countries joined the list or issued more detailed proposals. The main instances included: • plans for a 10 % cut in paybill across ministries and publicly funded organisations in Bulgaria in 2010, to be implemented through reductions in pay or employment levels; • a three-year freeze in public spending in France, with a pay freeze, workforce reductions and the non-filling of vacant posts, along with changes to public sector pensions; • public sector pay cuts of 7 % in Greece in 2010, along with reductions in bonuses, allowances and pensions, and a recruitment freeze, or only limited filling of vacant posts, in most areas; • public services pay cuts of 6 % to 8 % in Ireland in 2010; • a three-year public sector pay and recruitment freeze in Italy, plus the non-renewal of fixed-term contracts; • a pay freeze for 2010 in local and provincial government in the Netherlands; • a public sector pay freeze and cuts in allowances and pensions in Portugal in 2010, along with a recruitment freeze; • a 25 % cut in public sector paybill in Romania (partly to be achieved through compulsory hours cuts) in 2010, plus a 15 % reduction in pensions and major job losses; • a 5 % cut in the pay of Spanish public employees in 2010, followed by a freeze in 2011, along with the non-filling of many vacant posts and a pensions freeze; and • the announcement of a pay freeze over 2010–11 in local government in the UK. These measures and proposals, generally imposed rather than negotiated, led to major protests by public employees in almost all the countries concerned. By the end of April 2010, these included public sector strikes held, or called for the coming months, in France, Greece, Ireland, Italy, Portugal, Romania and Spain. The situation in these countries is still developing at the time of writing, while it seems likely that further Member States will take similar steps in the near future. As in 2009, collective bargaining over the various pay and employment measures appears (at the time of writing) to have been largely absent in 2010. Indeed, in the case of Spain, the pay cuts announced have overridden an agreement signed in September 2009, providing for a 0.3 % wage increase for 2010. A partial exception is Ireland. Here, following the government’s imposition of public sector pay cuts for 2010, it reached a draft agreement with public services unions in March 2010. This provided for no further pay reductions before 2014 and the possibility of some reimbursement of cuts already made, along with a commitment to no compulsory redundancies, in exchange for union commitments on public sector reform. The deal was subsequently ratified by a majority of unions.

96 Chapter 3: Negotiating the crisis: social partner responses

In other countries not yet marked by very deep inroads into public sector pay and jobs, collective bargaining has in some cases enabled wage moderation to be introduced in a relatively consensual manner. For example: • an agreement signed in October 2009 in Slovakia provided for an increase of 1 % in civil service and public service pay in 2010, considerably lower than in previous years, in the light of the economic downturn; • an agreement for the Finnish state sector, running from March 2010 to February 2012, provides — despite the government’s initial calls for a two-year pay freeze — for a total wage increase of nearly 1 % in 2010 (partly to be negotiated locally), with the 2011 rise to be negotiated later, along with protection of the employment status of civil servants; • an agreement for (non-civil servant) employees of the German federal government and local authorities, signed in March 2010, provides for pay increases of around 2.3 % over two years, and introduces a flexible working scheme and scope for phased retirement for older employees, aimed primarily at those in areas of the public services subject to restructuring or workforce reductions; • agreements signed in 2010 (after long and difficult negotiations, marked by industrial action) for local and provincial government employees in the Netherlands, provide for increases of 2 % (local government) and 1.9 % (provincial government, where workers also receive a lump sum worth 0.5 %) over two years, along with measures on job security; and • agreements signed in Swedish local government in 2010 provide for increases over two years of 4.65 % for blue-collar workers and 3.5 % for white-collar workers.

3.3. Sector and Box 3.7: Institutional arrangements for collective bargaining company levels The fundamental difference between multi-employer (MEB) and single-employer (SEB) bargaining arrangements conditions whether or not sector-level negotiations take place: where they do negotiations at both sector and company levels are potentially relevant, This section examines the response where they do not, only the company level is relevant. to the economic crisis of the social In the private sector, the relevance of the two levels of bargaining varies between countries. partners at sector and company Sector-level bargaining covers a relatively high proportion of economic sectors, and MEB level, in terms of agreed actions and is therefore the predominant arrangement, in Austria, Belgium, Denmark, Finland, France, Germany, Greece, Italy, Portugal, Slovakia, Slovenia, Spain and Sweden. In Bulgaria and unsuccessful negotiations, up until Romania, manufacturing and other industrial sectors are characterised by multi-employer the end of April 2010. It is based arrangements, whilst the service sectors have single-employer ones. Elsewhere sector-level on an examination of the evidence bargaining is even more limited in its coverage in Cyprus and the Czech Republic, and available from the sources listed in marginal or almost non-existent in Estonia, Hungary, Ireland, Latvia, Lithuania, Luxem- Box 3.1 above, and seeks to identify bourg, Malta, Poland and the UK. In these countries SEB is the predominant arrangement and the company is the key collective bargaining level. Company-level bargaining of vari- attempts to conclude agreements, ous types is present in most countries with MEB arrangements, often but not always within successful or otherwise, that are, or frameworks of varying rigidity set by sector (or cross-sector) agreements. appear to be, linked to the economic Amongst countries and sectors with MEB arrangements, the relevance of sector agreements recession or aimed at dealing with its for what happens at company level in the private sector is determined by the procedural consequences. The information and provisions governing the articulation of the two levels (Arrowsmith and Marginson, 2008; analysis are for the most part pre- Traxler et al., 2001). Broadly speaking these tend to be comprehensive in nature, equipping sented separately for two broad eco- the sector with the capacity to govern de jure if not always de facto developments at company level, in the Nordic countries, Germany, Austria, Slovenia, the Netherlands, Belgium nomic sectors: the production and and France. In Italy such procedural provisions are more recent, and remain contested. manufacturing industries (includ- Elsewhere amongst the EU-15, the relationship between sector- and company-level nego- ing construction and utilities) and tiations is only incompletely governed by procedural arrangements in Spain, Portugal and private services. However, wage Greece. The same applies to greater extent in those central and south-eastern Member bargaining is dealt with differently: States which have MEB arrangements, with the exception of Slovenia. cases of clear links or trade-offs Whether MEB or SEB arrangements prevail exercises a strong influence on collective bar- between pay and other outcomes are gaining coverage. In part because the use of legal extension arrangements is widespread examined in the sectoral analysis, amongst countries with MEB arrangements (Traxler et al., 2001), whilst being unknown amongst those where SEB arrangements prevail, collective bargaining coverage is consid- while the overall effect of the cri- erably higher under MEB than it is under SEB, as Chapter 1 has shown. sis on wage bargaining outcomes is Attempts to negotiate responses are likely to be more widespread under MEB than under dealt with separately (under 3.3.1 SEB arrangements since collective bargaining coverage is much higher in the former. Con- below). Within the two broad sec- versely, the scope for and incidence of unilateral management action is likely to be consid- tors, social partner actions at sec- erably greater under SEB than under MEB arrangements. Amongst countries and sectors tor and company (or establishment) with MEB arrangements, unilateral management actions at company level also seem more level are reviewed separately. likely in the absence of effective governance arrangements articulating the two levels.

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The analysis finds that the incidence 3.3.1. Wage bargaining role in overall pay setting, owing to of crisis response agreements, and outcomes its low coverage, and no information unsuccessful negotiations, at sec- is available on the outcomes of the tor and at company level varies both In most countries, the onset of the eco- wage bargaining that does occur. An between countries and between (and nomic downturn rom mid-2008 had indication of pay trends is, however, within) broad economic sectors. Sec- little effect on collectively agreed pay provided by national data on aver- tor-level negotiations are confined increases during that year (according to age earnings/wages, and these reveal to a group of countries with well- data from the European Industrial Rela- substantial falls in 2009, of between established multi-employer bargain- tions Observatory, on which this section minus 8.7 % in Lithuania and minus ing arrangements which also have is largely based). In many cases these 4 % in Estonia. The moderation in pay the governance capacity to exercise had been negotiated before the reces- bargaining in 2009 was not, however, influence, by simultaneously prompt- sion began, at a time when the economy universal. In several countries, nota- ing and constraining the scope of fur- was growing, inflation relatively high bly Austria, Hungary and Romania, ther negotiations at company level. and unemployment falling. The gen- the average collectively agreed pay rise They are also mainly evident amongst eral tendency was for agreed pay rises was higher in 2009 than in 2008, while manufacturing sectors, with relatively to be higher in 2008 than in 2007, with the rate of increase was unchanged in little evidence of negotiations in the the exceptions mainly central and east Malta and Slovakia. private service sectors. At company European countries such as Bulgaria, level, negotiations and agreements Hungary, Romania and Slovakia. In respect of most western European addressing the consequences of the Member States and those central and crisis are spread across a wider range The effects of the crisis were much east European countries where collec- of countries, although they are more more widely felt in 2009, though some tive bargaining has significant cover- apparent amongst the EU-15 than countries, such as Denmark, Finland, age, the general picture is thus that the amongst the Member States of central Greece (with regard to minimum rates) crisis depressed average agreed pay and south-eastern Europe. As with and Sweden, were still largely covered increases in 2009, but rarely to a great sector-level negotiations, agreements by ‘pre-crisis’ collective agreements extent. Moreover, while nominal pay are concentrated in manufactur- signed in previous years. In most other increases agreed in 2009 were often ing and particularly in metalwork- Member States for which information lower than in 2008, sharply declining and within that the automotive is available, the average collectively ing inflation in many countries (the sub-sector. In private services, the agreed pay increase in 2009 fell from overall EU inflation rate, according to majority of the smaller number of 2008 levels. However, the decline was Eurostat, fell from 3.7 % in 2008 to 1 % agreements has been concluded in the rarely dramatic. For example, the aver- in 2009) meant considerably higher transportation and communication age rate of increase dropped: from increases in real wages in 2009 than in sectors. In accounting for these dif- 3.4 % to 2.5 % in Belgium; 5.4 % to 2008. This did not carry over to aver- ferences between countries and sec- 4.4 % in the Czech Republic (enter- age earnings. In virtually all Member tors, three of the sources of variation prise-level agreements); 2.9 % to 2.6 % States, the fall in the average earnings identified in Figure 3.1 are significant. in Germany; 3.5 % to 3.1 % in Italy; increase from 2008 to 2009 was much The first is institutional differences in 3.3 % to 2.9 % in the Netherlands; sharper than the fall in the average collective bargaining arrangements 3.1 % to 2.9 % in Portugal (private collectively agreed pay increase. This (see Box 3.7). The second is the dif- sector); 3.6 % to 2.6 % in Spain; and suggests that the effects of the crisis ferential impact of the crisis between 3.9 % to 3 % in the UK. The most sub- were felt more deeply in actual earn- (and within) broad economic sec- stantial falls were in Slovenia (7 % to ings than in the basic pay rates set tors, shown in Chapter 2. Negotiated 3.5 %) and Ireland. In the latter case, a by collective agreements, owing to responses, and unsuccessful attempts national pay agreement provided for a reduced working hours (short-time to do so, feature more prominently in 4.8 % rise in the private sector in 2008, working or reduced overtime) and/ sectors which have been hit hard by the but with the collapse of the agreement, or cuts in elements of remuneration recession as compared to those which which had stipulated an increase of (such as bonuses and premiums). have remained relatively unaffected. 2.5 % to 3 % for 2009, survey evidence The third is the implementation of suggested that the majority of employ- The early signs from the 2010 collec- specific public policy measures, nota- ers froze or (less commonly) cut tive bargaining rounds in countries bly short-time work schemes, which wages. In the Baltic states, collective such as Austria, Denmark, Finland, can act to prompt negotiations. bargaining does not play a significant Germany and Sweden are that pay

98 Chapter 3: Negotiating the crisis: social partner responses

Beyond short-time work, a common Box 3.8: European joint declaration theme in French and German met- on avoiding redundancies in chemicals alworking and German chemicals At EU level, the sectoral social dialogue produced a number of joint positions and opin- was ‘employee leasing’, an innovative ions on the crisis and its effects (see Chapter 6). In most cases these did not provide for alternative to short-time work and specific actions by the signatories or their national member organisations. However, a joint redundancy, whereby employers with declaration adopted in March 2009 in the chemicals and pharmaceuticals industry by the surplus staff may loan them to other European Mine, Chemical and Energy Workers’ Federation (EMCEF) and the European Chemical Employers Group (ECEG) provided for at least some broad principles to be fol- companies that have a staff short- lowed by members in respect of (temporary) lay-offs, short-time work and similar meas- age. The leasing company retains its ures aimed at avoiding redundancies. The declaration stated that: employees in the longer term, recall- • lay-offs and short-time working should be introduced only after consultation with the ing them when activity picks up, workforce and their representatives; and the user company has access to • where lay-offs and short-time working occur, every effort should be made to use ‘the opportu- skilled and immediately available nities of this available time’ for improving employees’ skills through training and education; workers without having to recruit or • training that takes place during lay-offs and short-time work (and indeed all training) train them. The agreements promote should be accredited to ensure that ‘intrinsic skills’ are maintained so that, when the eco- this arrangement and/or lay down nomic situation improves, the sector does not lose vital human resources for the future. the conditions to be observed. Other specific points agreed in French and moderation is more marked than in unworked hours. A two-year regular German metalworking included: var- 2009 and that decentralisation and collective agreement for manufactur- ious measures to develop employees’ flexibility in pay setting are frequently ing signed in April 2010 prolonged skills and maintain the recruitment of on the agenda (see 3.3.2 below). local short-time work agreements in young people during the recession in companies still facing difficulties until France; and an extension of the maxi- the end of October 2010. mum duration of fixed-term contracts 3.3.2. Production and in Germany (Baden-Württemberg), to manufacturing industries The agreements in French chemicals allow employers to continue employ- and French and German metalworking ing the staff involved without facing (Baden-Württemberg) provided for a choice between dismissal and open- 3.3.2.1. Sector level training during periods of short-time ended recruitment. The agreements work. The April 2009 agreement in in German chemicals: stressed the Crisis response measures have been German metalworking’s Baden-Würt- need for employers to explore the full concluded both in specific sector agree- temberg region modified the compen- range of previously agreed options ments aimed at tackling the employ- sation for short-time working to reduce to maintain employment, includ- ment effects of the downturn, and as the burden on employers. The February ing the use of opening clauses that part of ‘regular’ agreements dealing 2010 agreement in the North Rhine- allow company-level deviations from with pay and conditions of employ- Westphalia region — which is expected the terms of the national agreement; ment. Specific sectoral collective agree- to be extended, with adaptations, to and created a EUR 25 million fund, ments include instances in France, other bargaining regions — intro- financed by employers, to encourage Germany, Italy and Sweden — see duced further cost-reduction measures firms affected by the economic crisis Table 3.2. The main theme was short- for employers. It also provided for an to recruit trainees when they complete time work. The March 2009 agreement optional short-time working scheme their apprenticeships, by subsidising covering the whole Swedish manufac- (with some employer-funded pay com- these employees’ wages. turing sector was particularly notable, pensation) to be applied — with the as it allowed for the introduction of agreement of the sectoral bargaining While the other specific agreements short-time working, which is normally parties — in companies where employ- focused largely on preventing redun- not permitted in Sweden, to prevent ees have exhausted their entitlement to dancies, the accord in Italian phar- redundancies during the downturn. state short-time benefit. The agreement maceuticals dealt with assistance for The use of short-time work required accompanied a pay agreement (also those faced with redundancy, creat- a local agreement. The employees due to be extended to other bargaining ing a scheme to retrain and outplace affected received at least 80 % of nor- regions) which provided for a degree them (in the pharmaceuticals indus- mal pay and the local agreements of wage moderation over 23 months try or elsewhere) and an observatory could provide for training during the (see Table 3.3). to oversee the process.

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The public authorities played either a arrangements. Specifically, it envisages (negotiated with their works council), direct or indirect role in several of these the provision of state support for train- to deviate from the sectoral agree- agreements (Glassner and Keune, 2010). ing programmes within the framework ments’ provisions on pay rises. The The German metalworking agreements of the inter-sector agreement concluded metalworking agreement already on short-time working were predi- in January 2009 (see Box 3.2). provided for a range of pay flexibility cated on the measures already available options, notably allowing for employ- under the statutory scheme, whilst the Examples of specific crisis response ers and works councils to agree to observatory established under the Ital- actions in ‘regular’, periodically negoti- deviate from sectorally agreed pay ian pharmaceuticals agreement is a ated collective agreements on pay and and working time provisions as part tripartite initiative. In addition to the conditions can be identified in Bel- of a wider business-recovery plan. The union-employer short-time agreement gium, Denmark, Finland, Germany, 2008 agreement added the possibil- in the French chemicals sector, Glassner Italy, the Netherlands and Sweden ity for works agreements to postpone and Keune report an accord concluded — see Table 3.3. The most common for six months a sectorally agreed pay between the industry’s employers’ response was to introduce greater rise of 2.1 % due in May 2009 (a sub- organisation and the ministry for flexibility and/or decentralisation in sequent 2010 agreement allowed for economy, industry and employment, pay setting. In German metalworking, the award of a pay increase of 2.7 % with strong support from the CFDT’s textiles and chemicals, this took the due in April 2011 to be delayed or chemical federation, which addresses form of new opening clauses, allowing brought forward by two months, on the opportunity for training activi- companies facing economic difficul- the basis of a works agreement). The ties brought by shorter working time ties, on the basis of a works agreement 2009 textiles agreement allows for all

Table 3.2 Specific sectoral crisis response agreements in manufacturing

Country Sector Date Details Agreement updating existing accord on short-time work in light of recession and changes to legisla- September France Chemicals tion. Increased compensation for employees, promoted employment maintenance and provided for 2009 training and skills development during short-time work. Agreement on preserving jobs and developing employees’ skills during the recession. Promoted use of various training and development measures to help prevent short-time working and, May France Metalworking where short-time working occurs, provided for the employees affected to receive training during 2009 unworked hours. Also promoted the use of employee leasing and young people’s access to jobs through the use of work/training contracts. Revision of agreements on employment and training. Called on employers to explore full range of previously agreed options to maintain employment, April including opening clauses (including cuts in remuneration). Provided for establishment of regional Germany Chemicals 2010 networks to promote employee leasing. Subsidised hiring of trainees on completion of apprenticeships in firms that cannot afford to do so because of economic crisis, through central fund financed by employers. Agreement on dealing with the effects of the economic crisis. Introduced new models for compensat- Germany April ing employees on short-time work, aimed at cutting employers’ costs and delaying redundancies as Baden- Metalworking 2009 long as possible. Also provided for training during short-time work and allowed companies to employ Württemberg staff on fixed-term contracts for up to four years — double the statutory maximum duration. Agreement on employee leasing. Set out the conditions for companies to lease employees temporar- Germany December ily to other employers in the sector, while maintaining their employment contracts, as an alternative (North Rhine- Metalworking 2009 to short-time work or redundancy. The agreement of the employee and companies’ works councils Westphalia) is required. Germany ‘Future in work’ agreement, creating a range of options aimed at maintaining employment, though February (North Rhine- Metalworking lowering the costs to employers of placing employees on state short-time working scheme and 2010 Westphalia) allowing a form of agreed short-time work when entitlement to the state scheme expires. Agreement on assistance, retraining and outplacement for redundant workers, along with the crea- Pharmaceu- November Italy tion of an observatory to monitor the labour market situation and geographical distribution of the ticals 2008 workers concerned. Manufacturing Agreement allowing for short-time working and temporary lay-offs to prevent job losses, based on March Sweden (blue-collar local agreements. Employees receive at last 80 % of normal pay and may receive training during 2009 workers) unworked hours. Sources: See Box 3.1.

100 Chapter 3: Negotiating the crisis: social partner responses

or part of the sectorally agreed pay While opening clauses of various level of increase (0.5 %) set only in the increase (a moderate 2.85 % over types are common in Germany, more first year and subsequent annual rises two years, taking the form of a con- innovative crisis response pay pro- based on the prevailing economic sit- solidated 1.5 % increase plus various visions were agreed in Dutch light uation. Increases may be deferred or one-off payments) to be withheld by engineering (metaal en techniek) and nil if a company’s economic situation works agreement in crisis-hit compa- the Finnish technology sector. The is sufficiently poor. nies, but only in exchange for employ- Dutch agreement provided for a very ment guarantees (by contrast, the moderate general pay increase (1.5 % Beyond pay, the three-year agreement one-off payments may be increased after a 14-month pay pause) in return signed in Italian metalworking in Octo- in better-performing companies). In for employment guarantees. Further, ber 2009 introduced a special income- German chemicals, the 2010 sectoral employees were granted 3.5 addi- support fund for workers affected by agreement froze basic pay rates for 11 tional ‘crisis’ days of holiday during temporary lay-offs or short-time work months and provided only for a one- 2010, to reflect reduced production. due to the economic crisis. Employers off payment, normally of EUR 550. However, employers may cancel these contribute EUR 2 per employee per The payment could be reduced to days off if their situation improves and month to the fund in 2011 and 2012. EUR 300 on economic grounds, sub- instead make one-off payments to the From 2013, employees who wish to be ject to a works agreement. Further, employees. The Finnish agreement, covered by the fund must make their in establishments not ‘substantially’ which runs for three years, provides own monthly contribution of EUR 1, affected by the recession, an additional for pay bargaining to be decentralised and employers will be obliged to make lump sum of EUR 200 could be paid. to company level, with the general the EUR 2 monthly contribution only

Table 3.3: Crisis response measures in regular sectoral agreements in manufacturing

Country Sector Date Details April Inclusion in 2009–10 agreement of provisions on employment security (e.g. info on mass Belgium Metalworking 2009 redundancies) and maintenance of early retirement schemes. February Inclusion in 2010–11 agreement of new redundancy payments scheme, increasing workers Denmark Manufacturing 2010 unemployment benefits to nearer former pay for up to three months. Inclusion in 2009–12 agreement of provisions decentralising pay bargaining to company level August Finland Technology and linking it to the economic situation in each year, with the possibility of no wage increases in 2009 especially poor circumstances, in order to secure employment. Inclusion in 11-month agreement for 2010–11 of company-level flexibility in award of one-off April payment (the agreement froze pay scales and provided only for a one-off payment). The pay- Germany Chemicals 2010 ment can be cut by works agreement on economic grounds, or increased in firms not ‘substantially’ affected by the recession Germany (Baden- Inclusion in 19-month agreement for 2008–10 of additional pay flexibility provisions for November Württemberg pilot Metalworking companies facing economic difficulties: by works agreement, the second stage of the sectorally 2008 agreement) agreed wage rise can be postponed. Germany (North Pay rate freeze in 2010, with small lump sum payment, followed by a 2.7 % increase in 2011. Metalworking February Rhine-Westphalia Timing of payment of 2011 increase can be varied by local agreement. Parallel agreement on 2010 pilot agreement) employment security and training (see Table 3.1). Inclusion in 2009–11 agreement of provisions allowing companies facing financial difficulties March Germany (west) Textiles to reduce or withhold some sectorally agreed pay rises, on the basis of a works agreement, in 2009 return for employment guarantees. December Inclusion in 2010–12 agreement of special training schemes for workers who have been made Italy Chemicals 2009 redundant or temporarily laid off, aimed at promoting re-employment. October Inclusion in 2010–12 agreement of provisions on the creation of a special income-support fund Italy Metalworking 2009 for workers affected by temporary lay-offs or short-time work due to the economic downturn. Metalworking Inclusion in 2009–11 agreement of provisions severely limiting pay increases in exchange for October Netherlands (light engi- employment guarantees and additional days off (which may be converted into wage increases if 2009 neering) the economic situation improves). Manufacturing First (of two) pay increases in 22-month agreement can be delayed by up to 12 months through March Sweden local negotiation. New provision giving priority to employees laid-off ahead of recourse to (blue-collar 2010 workers) temporary employment agencies, backed up by sanctions. Sources: See Box 3.1.

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in respect of those employees that join • the introduction of short-time • measures aimed at mitigating the fund. The agreement also con- work, usually based on statutory planned job losses, avoiding com- tained provisions promoting training schemes, and the conditions for the pulsory redundancies through and established a bipartite observatory employees affected; ‘softer’ alternatives; and on training and labour market issues. Support for redundant and laid off • the use of other working time • compensation and assistance for workers also featured in the 2010–12 arrangements to prevent or reduce redundant workers. agreement in Italian chemicals, in this redundancies, or avoid short- case through new vocational training time work, notably forms of time Table 3.4 indicates the main categories measures aimed specifically at these accounts or banks, or adjustments which apply in each of the 76 agree- groups. In the case of Danish manu- to annual leave schemes; ments. facturing the two-year agreement signed in February 2010 supports • trade-offs, involving sacrifices in Much company-level bargaining redundant workers by introducing a terms of pay and employment con- focused on the application of short- new form of employer-funded benefit, ditions in return for employment time working and temporary lay-off which tops up their unemployment guarantees; schemes (see Box 3.5). State-funded benefit closer to their former wage for up to three months (dependent on service). Improvements to parental leave and pension entitlement were Box 3.9: Europe-wide crisis response agreements further measures offsetting a low wage increase. The two-, as compared in multinationals to the previous three-, year duration There are three known examples of specific European-level crisis response agreements in multinational companies. of the agreement enabled the parties to address uncertainties about future • ArcelorMittal, the Luxembourg-headquartered steel multinational, signed a Europe- wide agreement with the European Metalworkers’ Federation (EMF) on managing and developments. In Belgian metalwork- anticipating change in November 2009. As well as longer-term policies aimed at antici- ing, the 2009–10 agreement followed pating changes in jobs and skills needs, training and developing employees to improve the general crisis response guidelines their employability and on social dialogue, the agreement dealt with the economic crisis. of the country’s cross-sector accord, It committed ArcelorMittal to maintaining and reopening in future European plants that for example on pay moderation and were then closed, providing that market recovery allowed this. Compulsory redundancies would be avoided as far as possible and workers would be trained during periods of training, along with measures such short-time working, while there was to be dialogue over limiting employees’ loss of pay as enhanced employment security during short-time working. provisions and the maintenance of • General Motors Europe (US-based, automotive) signed with its EWC in January 2009 early retirement arrangements. This a ‘framework agreement on common minimum standards on working time reductions agreement may be considered as rep- for all European sites’. This provided for the use of working time reductions (without full resentative of 2009–10 accords across maintenance of pay), short-time work and sabbaticals to adjust production capacity in Belgian manufacturing, which imple- the most cost-efficient and socially responsible way. It laid down minimum standards for group companies to compensate employees for part of their resulting loss of earn- mented and adapted the cross-sector ings, on top of the state benefits available under national schemes. Where employees agreement. were placed on state short-time work benefit, the company would top this up by at least 12.5 %. Where working hours were cut in other ways, employees would be compensated for at least 50 % of their lost pay. Management and employee representatives were to 3.3.2.2. Company level continue to work together to find ways of achieving cost savings. • General Motors EWC reached an agreement with management, in May 2010, on the Table 3.4 provides summary informa- implementation of a major restructuring plan for Opel/Vauxhall, which involves 8 300 tion on 76 cases of specific agreements job losses across Europe and substantial cost reductions, along with new investments. Following a series of national-level agreements on the workforce reductions and cost sav- concluded at company or establishment ings, the four-year European agreement lays down detailed investment and production level, from autumn 2008 to the end of commitments, and provides for labour-cost savings of EUR 265 million a year, which will April 2010, which seek to deal with the be returned to employees if the company does not introduce its planned new products. effects of the crisis (fuller details are After the current restructuring, there will be no compulsory redundancies before 2015. provided in Appendix, Table 3.A1). In some other multinationals pre-existing agreements which anticipate restructuring and Actions agreed at this level mainly fall specify a framework for handling the issues arising (see Chapter 6) may have been invoked into the following broad categories: to help address effects of the crisis.

102 Chapter 3: Negotiating the crisis: social partner responses

schemes of this sort have long existed agreements’ (contratti di solidarietà), Sindelfingen plant in Germany, the in the majority of EU-15 Member a statutory arrangement whereby, in quid pro quo for a long-term guaran- States, and many have been extended companies facing economic difficulties, tee of no compulsory redundancies or adapted during the crisis, while a employees’ collective working time may involved measures to improve com- number of central and east European be reduced (with state compensation petitiveness and efficiency, such as Member States have introduced such for half of the income loss) in order to internal transfers and job flexibility, schemes for the first time (as has the avoid redundancies (which are prohib- while increased flexibility and mobil- Swedish manufacturing sector, by ited during the agreements’ term). ity also formed part of the trade-off at agreement). Company agreements Renault in Spain. The employer side of may be required for the implementa- Aside from short-time work, some the trade-off may include promises or tion of the schemes, as in Denmark agreements provide for the use of intentions to keep plants open or allo- and Germany, for example. other working time arrangements to cate them production in future, as at prevent or reduce redundancies, nota- Ford, Renault, Seat and Sony in Spain. The simplest form of agreement on bly forms of time accounts or banks, short-time work essentially sets out the as at STMicrolectronics in France, Agreed measures to cushion the effects details of the arrangements and the pay ThyssenKrupp Nirosta in Germany of planned workforce reductions and guarantees for the employees involved, and Michelin in Spain. In a number of avoid compulsory redundancies com- often providing for additional payments French cases, such as Airbus, Bosch, monly include one or more of the fol- from the company. Examples of such Michelin and Snecma, such arrange- lowing: agreements can be found at: Danfoss ments were agreed specifically to and Grundfos in Denmark; STX in prevent or reduce recourse to the stat- • incentives for voluntary departures, France; BASF, BMW in Germany; Ast utory short-time work scheme. as at Electrolux and Whirlpool in ThyssenKrupp and Ilva and Case New Italy, Nokia in Finland, Ford in Holland in Italy; and Sandvik, Scania A number of company agreements Spain, and Schaeffler in Germany; and Volvo in Sweden; Dacia-Renault in provided for a pay trade-off, whereby Romania; Hyundai in the Czech Repub- employees make wage sacrifices in • early retirement (full or partial), lic; and Opel in Hungary. An interesting exchange for a management commit- as at Schaeffler and ThyssenK- example from Italy was the negotiation ment to maintain employment lev- rupp Nirosta in Germany, and Ford at Gima and Verlicchi of additional pay- els or reduce the number of planned and Michelin in Spain; ments to workers on short-time work or redundancies. The pay sacrifice may temporarily laid off, to compensate for involve a cut in hours and accompa- • non-renewal of fixed-term con- the psychological, emotional and social nying loss of wages, a pay freeze, a tracts, as at E.ON in Germany, problems caused. Agreements on short- wage cut, a low increase or forgoing Indesit and Whirlpool in Italy, and time work may also provide employ- bonuses. Examples of this approach Opel in Spain; ment guarantees, as at DAF Trucks include agreements at Honda, JCB, in Belgium and the Netherlands and Jaguar Land Rover, Toyota and Vaux- • internal and/or external redeploy- Renault in France, or deal with train- hall in the UK, Bosch, Carl Zeiss, ment, as at E.ON in Germany and ing during unworked hours, as at Manz Schaeffler and ThyssenKrupp Nirosta the Netherlands, and Michelin in Automation, Salzgitter Flachstahl and in Germany, ISD Dunaferr in Hun- Italy; and Schott in Germany, Embraco in Italy gary, Corus in the Netherlands, and Dassault Aviation PSA Peugeot Seat in Spain and Lotos in Poland. • natural wastage, as at E.ON in Ger- Citroën, Renault and Renault Trucks in Employee concessions may also relate many and the Netherlands and France. Short-time work may be used as to other matters in addition to pay, ThyssenKrupp Nirosta in Germany. part of a package of measures to prevent such as working time arrangements or mitigate job losses, as at MAN Nut- at Coca-Cola, Daimler (most plants) Where redundancies occur, company zfahrzeuge and Schaeffler in Germany in Germany and Opel and Sony in agreements may provide for measures and Indesit in Italy. Spain, or the termination of tempo- such as increased redundancy com- rary contracts at Siemens in Spain. pensation, income support for redun- Several of the Italian cases — Anto- dant workers, training, outplacement, nio Carraro, Embraco, Fincibec, The employee side of the trade-off may help for redundant workers to set up IMER International, Piaggio Aprilia not in all cases directly involve pay their own businesses, and priority and Rimor — relate to ‘solidarity and hours. For instance, at Daimler’s for re-recruitment at the company

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Table 3.4 Company-level crisis response agreements in manufacturing Company Country Sector Date work Short-time (introduction/ conditions) Other working adjustments time Employee (pay, concessions etc.) hours, Employment/ production guarantees Alternatives compulsoryto redundancies Redundancy assistance DAF Trucks BE Automotive 6/2009 X X X Stomana Industry BG Steel 11/2008 X Hyundai CZ Automotive 1/2009 X Transport Siemens CZ 8/2008 X equipment Danfoss DK Engineering 2/2009 X Grundfos DK Pumps 3/2009 X Vestas DK Wind turbines 2009 X Mobile phone Nokia FI 2/2009 X manufacturing Airbus FR Aerospace 12/2009 X Bosch FR Auto parts 11/2008 X Dassault Aviation FR Aerospace 6/2009 X Michelin FR Tyres 2/2009 X X PSA Peugeot Citroën FR Automotive 9/2009 X Renault FR Automotive 4/2009 X Renault Trucks FR Automotive 2/2009 X Rhodia FR Chemicals 4/2009 X X Snecma FR Aerospace 11/2008 X STMicrolectronics FR Electronics 4/2009 X STX FR Shipbuilding 2/2009 X BASF DE Chemicals 1/2009 X BMW DE Automotive 1/2009 X Bosch DE Auto parts 12/2009 X X Optical Carl Zeiss DE 6/2009 X X equipment Coca-Cola DE Soft drinks 3/2010 X X X Erfrischungsgetränke Daimler DE Automotive 4/2009 X X DE (Sindelfingen Daimler Automotive 12/2009 X X plant only) E.ON DE Energy 8/2009 X InBev DE Beverages 6/2009 X X X MAN Nutzfahrzeuge DE Automotive 1/2009 X X X Automation Manz Automation DE 4/2009 X technology Salzgitter Flachstahl DE Steel 1/2009 X X Schaeffler DE Ball-bearings 5/2009 X X X Schott DE Glass 2009 X Siemens DE Electronics 2/2009 X X ThyssenKrupp Nirosta DE Stainless steel 9/2009 X X X X ISD Dunaferr HU Steel 11/2008 X X Opel HU Automotive 4/2009 X Tractor Antonio Carraro IT 1/2010 X X production Ast ThyssenKrupp IT Steel 4/2009 X

104 Chapter 3: Negotiating the crisis: social partner responses Company Country Sector Date work Short-time (introduction/ conditions) Other working adjustments time Employee (pay, concessions etc.) hours, Employment/ production guarantees Alternatives compulsoryto redundancies Redundancy assistance Bosch IT Auto parts 12/2009 X X Agricultural Case New Holland IT 9/2009 X machinery Domestic Electrolux IT 9/2008 X X X appliances Embraco IT Compressors 2009 X X Fincibec IT Ceramics 4/2009 X X Automation Gima IT 4/2009 X systems Ilva IT Steel 4/2009 X Construction IMER International IT 2/2010 X X machinery Domestic Indesit IT 7/2009 X X X appliances Michelin IT Tyres 12/2008 X X Piaggio Aprilia IT Automotive 1/2010 X X Rimor IT Automotive 9/2009 X X Verlicchi IT Automotive 4/2009 X Domestic Whirlpool IT 12/2008 X X appliances Villeroy & Boch LU Ceramics 7/2009 X Corus NL Steel 4/2010 X X DAF Trucks NL Automotive 6/2009 X X X EO.N NL Energy 12/2009 X Lotos PL Oil 2/2009 X X Telecoms Alcatel-Lucent RO 12/2009 X equipment Dacia-Renault RO Automotive 2008 X Ford ES Automotive 10/2009 X X X 11/2008 and Michelin ES Tyres X X X X 12/2009 Nissan ES Automotive 2/2009 X X Opel ES Automotive 3/2010 X X X X Renault ES Automotive 9/2009 X X Seat ES Automotive 3/2009 X X Sony ES Electronics 1/2009 X X Sandvik SE Engineering 6/2009 X X 3/2009 and Scania SE Automotive X X 12/2009 Sony Ericsson SE Electronics 9/2008 X Volvo SE Automotive 3/2009 X X Honda UK Automotive 5/2009 X X Jaguar Land Rover UK Automotive 3/2009 X X Construction JCB UK 10/2008 X X equipment Toyota UK Automotive 3/2009 X X Vauxhall UK Automotive 10/2009 X X X Sources: See Box 3.1, plus Zagelmeyer (2009) for Carl Zeiss, Daimler and InBev.

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in future. Examples of agreements 3.3.2.3. Disputes and unsuccessful source of contestation — conflicts on these issues include Whirlpool in negotiations preceded a number of the agreements Italy, Alcatel-Lucent in Romania, Sto- identified above, for example — and mana Industry in Bulgaria, Villeroy The sectoral and company agreements not all negotiations ended in agree- & Boch in Luxembourg, InBev and outlined above represent, of course, the ment. Amongst the agreements in Schaeffler in Germany, Siemens in the successful outcome of negotiations. Table 3.3, Glassner and Keune (2010) Czech Republic and Sony Ericsson in They will have involved disagreements report that industrial action was taken Sweden. and, in some cases, conflicts before by the workforce prior to agreements their conclusion: as Glassner and Keune being concluded at Case New Holland Three of the seven cases where agree- (2010: 19) observe, ‘disagreement and and Indiset in Italy, and at Siemens in ments have been concluded in dif- conflict are in many cases key elements the Czech Republic. The protracted ferent countries within the same of the process that leads to negotiated negotiations at InBev’s operations multinational company exhibit a responses’. Unsuccessful negotiations in Germany saw a warning strike degree of similarity. Those at DAF are, however, harder to quantify. (Zagelmeyer, 2009), while planned job Trucks’ operations in Belgium and the losses resulted in a longer strike at the Netherlands both address the use of At sector level, instances of failure same company’s Belgian operations the state short-time working scheme to agree, and even conflict, over cri- (ended by an agreement to suspend the and provide employment guarantees. sis response measures are difficult to restructuring pending further nego- The 2009 Michelin agreements in Italy identify. In German printing, the 2009 tiations). Elsewhere, disagreements and Spain both envisage mobilising bargaining round was conflictual, fea- stopped short of actual conflicts. For a range of measures to secure work- turing a number of warning strikes, and example, Danish unions were reported force reductions, including financial resulted in employers failing to obtain to be critical of the absence of training assistance for those affected (while an opening clause for companies with measures for workers laid-off tempo- the Michelin agreement in France financial difficulties, or an extension of rarily under the agreements at Danfoss focuses more on preserving jobs and working hours. In Austria’s metalwork- and Grundfos. The parties may also employees’ incomes through working ing sector deadlock in the 2009 nego- manage to agree on one set of meas- time adjustments). The agreements tiations — accompanied by threats of ures, but subsequently fail to agree on at E.ON in Germany and the Neth- industrial action — was overcome by others. At ISD Dunaferr in Hungary, erlands derive from the same corpo- concluding an agreement on wages and after successful agreement in 2008 on rate cost-reduction programme; both referring employer proposals for more trading cuts in pay and benefits for envisage a range of measures to avoid flexible working time arrangements employment guarantees the parties compulsory redundancy, including to further negotiations. These subse- failed to agree in 2009 on working time maintenance of pay and job security quently failed to reach agreement by reductions and further pay cuts, as a for employees moving to outsourced the deadline of March 2010. Early 2009 result of which the company imple- operations. At Renault, however, the saw a high-profile dispute in UK engi- mented redundancies. An example of objective of maintaining employ- neering construction (which is covered an unresolved negotiation, involving ment is addressed through differ- by a sector agreement) over issues that conflict, comes from Goodyear Dun- ing mechanisms: short-time work were exacerbated by the recession. lop in France, where the court ruled in France, but wage concessions and Several hundred workers employed by that the company had not properly increased flexibilities in Spain. There construction contractors at the Lindsey informed the works councils over its was also little similarity between the oil refinery, owned by Total, started an restructuring plan, and ordered that it agreements at: Bosch in France, Ger- unofficial strike. The dispute centred be re-negotiated. Lasme, an automotive many and Italy; Siemens in the Czech on the award of a contract to an Italian component supplier in Italy, is an exam- Republic and Germany; or Opel in company, which planned to use its exist- ple of a negotiation with an unsuccess- Hungary and Spain (2). ing workforce on a posted basis (about ful outcome. Following management’s whose pay and conditions there was lit- closure announcement in September tle transparency), and consequent loss 2009, an agreement was concluded 2 However, the Opel agreement in Spain was of employment opportunities for the which envisaged relocation of half of the followed, after this report was completed, by similar agreements on cost-cutting and workforce reductions UK workforce. workforce to another company. This, in Opel/Vauxhall operations in countries such as however, was rejected by the workforce Germany and the UK, as part of the implementation of At company level, crisis-induced who called for the relaunch of Lasme a Europe-wide restructuring plan, which also involved a European-level agreement in May 2010 (Box 3.9). restructuring has frequently been the (http://www.ildiariodellavoro.i t).

106 Chapter 3: Negotiating the crisis: social partner responses

More generally, the effects of the crisis European-level trade union federa- redundant workers was a common have prompted new forms of action tions to organise Europe-wide pro- theme in Danish manufacturing and together with the (re)appearance of tests against restructuring and job several sectors in Italy. The agreements older forms of conflict. In disputes losses in multinationals, and to inter- in Finland, Germany, the Netherlands surrounding proposed site closures, vene in national cases (see Box 3.10). and Sweden introduced innovative instances of ‘bossnapping’, in which Amongst the multinational compa- ways of permitting greater flexibility senior managers (including from the nies where EWCs mounted protest and/or decentralisation in pay setting. parent company) are taken hostage actions, sometimes in conjunction A different kind of procedural inno- on company premises by the work- with European industry federations, vation characterised the agreement in force, and threats to blow-up pro- were: Alcaltel-Lucent, AreclorMit- Italian pharmaceuticals, with a new duction facilities, gained prominence tal, Areva, Bosch, Continental, E.ON, company-level process for accessing in France during the course of 2009. General Motors Europe, Hewlett assistance, retraining and outplace- In Italy, as part of a factory occupa- Packard/EDS, Saint-Gobain, Siemens, ment measures for redundant workers. tion at Insee opposing the proposed Thyssen-Krupp and Valeo. closure of the plant in the spring The only apparent link to any EU- of 2009, workers climbed up and level social partner initiatives in remained on the company’s crane for 3.3.2.4. Summary a particular sector concerns the several days. This novel action was chemical sector, where measures in followed by similar ‘rooftop’ protests Within the production and manu- the French and Italian sector agree- by the workforce at other companies facturing industries, instances of ments on using the time available threatened with redundancies and/ the mobilisation of sector negotia- under short-time work, or temporary or closure. Also in Italy, a successful tions to respond to the crisis, either lay-off, to improve workforce skills four month mobilisation against the in the form of additional, specific through training build on one of the closure of Alcoa’s production opera- agreements or through the inclu- key points in the EMCEF–ECEG tions in Sardinia, and near Venice, sion of crisis response measures joint declaration (see Box 3.8). Links saw the island’s main airport occu- in regular collective agreements, between different levels of negotia- pied and road blockades, as well as were identified in eight countries: tion nationally were more apparent, other actions. 2009 also saw the re- Belgium, Denmark, France, Finland, including between the cross-sector appearance of factory occupations Germany, Italy, the Netherlands and and sector level in the three countries in the UK, a tactic rarely used in Sweden. These are all countries in where this is relevant. The Belgian the past quarter century. Instances which multi-employer bargaining metalworking agreement (as was included the occupation of two of the arrangements generally contain pro- generally the case in 2009–10 sectoral three UK sites of automotive compo- cedural provisions which effectively agreements in Belgium) reflected the nents manufacturer Visteon, spun- govern the relationship bargaining provisions of the national cross-sec- off from Ford in 2000 and which filed at the sector and company levels. In tor agreement for 2009–10 (see 3.2.1 for bankruptcy, and the UK wind- terms of industries, metalworking above), the agreement in the Dutch turbine manufacturing facility of predominates (combined with other light engineering sector reflected the Danish-based Vestas. A common fea- manufacturing sectors in the cases of pay moderation approach agreed at ture of the cases involved would seem Denmark and Sweden), with some cross-sector level (see 3.2.1 above) to be the remoteness of the corporate representation from chemicals. and the French chemicals sector managers taking closure decisions. accord between employers and the Local management were no longer There was a degree of cross-border public authorities, supported by the a relevant interlocutor for the work- convergence in the measures envisaged unions, mobilised the inter-sector force, who through these new kinds in either kind of agreement. Amongst framework agreement on training of action aim to raise the profile of the specific crisis response agreements, (see Box 3.2). Public intervention the dispute with the authorities and cases in France, Germany and Sweden in the form of statutory short-time public opinion (Marginson, 2010; dealt with short-time work, including work schemes directly or indirectly Pernot, 2009). training for the workers concerned, prompted the relevant negotiations in and cases in France and Germany dealt some countries. The role of the secto- A notable development during with employee leasing. Concerning ral agreements in triggering further the crisis has been the apparently the crisis response measures included negotiations at company level was increasing propensity of EWCs and in regular agreements, support for also apparent. Such company-level

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agreements were required to imple- of compensation introduced by the metalworking; and the company- ment: the short-time work scheme agreements on short-time work in level measures assisting redundant introduced by the agreement in Swed- German metalworking; the employee workers in the Italian pharmaceuti- ish manufacturing; the new models leasing scheme agreed in German cals sector.

Box 3.10: The response to the crisis of European-level workers’ representatives in multinational companies Given the scale of company restructuring caused or accelerated by the economic crisis over 2008–09, it would be surprising if most of the 900 or so multinational companies with a European works council (EWC) were not affected. As transnational restructuring is an essential part of the remit of EWCs, a high volume of information and consultation (I & C) on the issue might be expected during the crisis. However, as there is no systematic monitoring of the day-to-day activities of EWCs, information tends to emerge only when some notable agreement or dispute arises, rather than on less dramatic I & C exercises. Bearing this caveat in mind, information from the sources listed in Box 3.1 and from the websites of various trade union European industry federations (EIFs) provides some indication of the response to the crisis of EWCs and European-level union bodies in multinational companies. Information and consultation The information available provides numerous examples of I & C over crisis-related restructuring, at both ordinary and extraordinary EWC meetings. A notable proactive initiative in this regard occurred in the finance sector where, in September 2008, UNI europa Finance called for immediate meetings of all 51 EWCs in banking and insurance multinationals to discuss the impact of the crisis in the industry. There were, however, many cases where EWCs complained of inadequate I & C over restructuring, for example at Alcoa (USA, aluminium), Cytec (USA, chemicals), Hewlett Packard/EDS (USA, information technology), PPR (France, retail), Saint Gobain (France, glass) and Schering Plough (USA, pharmaceuticals). Many of the protests organised by EWCs and/or EIFs (see below) included demands for proper I & C. Faced with company restructuring plans, a relatively common response of EWCs was to adopt a statement or opinion setting out their concerns, opposition or counter-proposals. For example: • the Schering Plough EWC issued a statement to management in April 2009 requesting better information and proper consultation on the transfer of production from an Irish site to plants in other European countries and over a forthcoming merger with Merck and planned job losses; • the Deutsche Post DHL (Germany, postal services and logistics) EWC agreed in June 2009 a statement calling on management to focus on employee interests during restructuring, for example by avoiding redundancies and involving the EWC and national representative bodies at an early stage in planning; • faced with restructuring at ThyssenKrupp (Germany, steel), the EWC, the German IG Metall unions and national works councils issued a joint statement in April 2009 calling for no compulsory redundancies, no pay cuts and maintenance of co-determination; and • the EWCs of Hewlett Packard and EDS, which were in the process of merging, adopted a joint resolution in March 2009 opposing pay cuts proposed by management. Protests In a number of multinationals, opposition to restructuring plans and job cuts led to EWCs and/or EIFs calling European ‘days of action’ in protest. Examples included the following. • Alcatel-Lucent (France, telecoms equipment). In November 2009, the EWC called a European day of action to support the maintenance of employment levels during restructuring. • ArcelorMittal (Luxembourg, steel). The EWC and EMF organised a European action day over planned job cuts in February 2009. • Areva (France, nuclear power). The EWC and unions organised a day of action in eight European countries in September 2009 against the planned sale of the energy transmission and distribution division. • Bosch brakes division (Germany, auto parts). In February 2009, the EMF coordinated a European action day, involving workers in France, Spain, Italy, Portugal and Germany, demanding reassurances and dialogue over the future of the division. • Continental (Germany, tyres). In protest at a French plant closure and job losses in Germany, the EWC organised a demonstration by French and German workers at the annual shareholders meeting in April 2009. • E.ON (Germany, energy). The EPSU supported an action day against a company cost-reduction and outsourcing programme organised by German unions in June 2009, and union representatives from E.ON companies in the UK, the Netherlands, France, Belgium, Italy, Hungary and Romania participated. • General Motors/Opel (USA, automotive). The EWC and EMF helped organise a demonstration in September 2009 against the closure of an Opel plant in Belgium, involving workers and union representatives from Germany, the UK, Spain, Poland, the Netherlands, Austria and Hungary. • Hewlett Packard/EDS. The Hewlett Packard and EDS EWCs and unions organised action days in November 2008 and January 2009 over post-merger job cuts and a pay freeze.

108 Chapter 3: Negotiating the crisis: social partner responses

• Saint Gobain. The EMCEF and member unions, with EWC support, organised a demonstration at company headquarters in May 2009 in protest at restructuring and job cuts. • Siemens (Germany, electrical). In May 2009, the EMF organised a meeting of EWC and union representatives to coordinate opposition to the company’s planned worldwide job cuts and demand more I & C. The meeting called for Europe-wide protests in support of a German demonstration and strike. • ThyssenKrupp (Germany, steel). In April 2009, the EMF called a Europe-wide demonstration, supporting a German union initiative, to oppose job losses and closures. • Valeo (France, auto parts). The EWC organised Europe-wide protests, including brief stoppages in some countries (Germany, Czech Republic, Italy, Spain) in September 2008, against a restructuring plan and the partial closure of a German site. EWC intervention at national level There was some evidence of EWCs intervening in national restructuring cases. For example: • following the announcement of the merger of Polish subsidiaries of EDF (France, energy), with job losses, the EWC was consulted and delivered a negative opinion in October 2009. It decided to follow up the implementation of the merger and its impact on employees, including in health and safety terms; • in response to threats of relocation of production from Spanish to French plants, in February 2009 the EWC at Renault (France, automotive) expressed support for the Spanish workforce and stated that production sites must not be played off against each other, calling for a ‘level playing-field’ approach for all plants; • at Federal Mogul (USA, auto parts), the EWC expressed opposition to a plant closure in Italy and called for national I & C and negotiations; and • at an extraordinary meeting held to discuss a French restructuring plan, including job losses, in March 2009 the PPR EWC adopted an opinion rejecting the plan and called on employees in Europe to mobilise against it. These interventions sometimes had positive outcomes. For instance: • after the announcement by Whirlpool (USA, domestic appliances) of redundancies across Europe, in October 2008 the EWC and Euro- pean trade union representatives called on management not to begin unilateral collective procedures for the planned redundancies, but rather to engage in talks in the countries concerned in order to find non-traumatic solutions. Whirlpool reportedly responded positively to the request and accepted the approach proposed. An agreement was reached in December to accompany redundancies in Italy; • at Mahle (Germany, auto parts), following the announcement of the closure of an Italian plant, local management was reportedly unwill- ing to negotiate a severance plan. Following EWC intervention, a social plan avoiding compulsory redundancies was signed in December 2009, and it was agreed that the EWC would monitor any further similar procedures; and • following an announcement by Corus (Netherlands/UK, steel) in December 2009 that it would mothball a UK steelworks, the EWC (which had criticised the fact that no alternative plans had been discussed) reportedly contributed to a decision to set up a joint management-union taskforce in UK to examine alternative solutions. At British Airways (UK, civil aviation), the EWC agreed with management in July 2009 on principles to guide I & C on national-level business reorganisation. These allow the EWC’s select committee to attend local meetings with staff in European countries subject to restructuring. The EWC representatives have an advisory role, in order to seek to mitigate the impact of any foreseen redundancies. The aim was to safeguard workers’ I & C and representation rights in those countries where BA has only small numbers of employees, who are often not represented by works councils or trade unions. Evaluation Dealing with transnational restructuring is, or should be, one of the central roles of EWCs. The economic crisis has tested their ability to function as forums for meaningful I & C on restructuring and as a significant actor in defence of employees’ interests in such circumstances. The patchy nature of the data means that it is not yet possible to assess the extent to which they have measured up to this test. However, a number of observations can be made on the basis the information that is available. The perennial complaint that many EWCs are not provided with full and timely I & C — an issue addressed in the framing of the 2009 recast EWCs directive (see Chapter 7) — was underlined in a number of cases (and was the subject of several court cases, notably at Continental and Dunlop in France). However, irrespective of the quality of I & C, there are indications that many EWCs have been taking on a more active role. There seems to have been a tendency for more EWCs to adopt joint positions on restructuring and, in particular, to organise or coordinate (often in conjunction with EIFs) Europe-wide protests and actions. Further, a number of EWCs have shown an increased capacity to intervene at national level, especially in terms of promoting I & C and negotiation over restructuring. What has clearly not occurred to any significant degree is the negotiation of European-level agreements dealing with crisis-related restructuring. The only known examples are the agreements between ArcelorMittal and the EMF and between General Motors Europe and its EWC — see Box 3.9 for details. Finally, the vast majority of known cases of EWCs taking on an active role in response to restructuring come from the manufacturing sector and within manufacturing predominantly from metalworking. The services sector is very weakly represented.

109 Industrial Relations in Europe 2010

There was considerably more evi- reduce redundancies, or avoid short- the provisions on this issue set out in dence of agreed crisis response actions time work. Another substantial body the sectoral collective agreement for at company and establishment level of agreements — found largely in retail). Further, the accord promotes (though little at the European level in Italy, Germany and Spain — provided timely information on emerging com- multinational companies). Of the com- for measures to cushion the effects pany problems and commits the par- pany agreements identified, the EU-15 of planned workforce reductions ties to joint monitoring of the progress predominate, accounting for around and avoid compulsory redundancies. of the crisis. 90 % of the agreements, with Spain and The fifth and smallest category of the UK prominent as well as the eight agreed actions was compensation and The two Dutch agreements focus countries in which sector agreements assistance for redundant workers. mainly on preventing or mitigating are also found (notably Germany, Italy job losses. The agreement covering and France). Around 85 % of these car dealerships focused on keeping agreements were in the metalworking 3.3.3. Private services vulnerable workers in employment (including steel) sector, and nearly half during the crisis by deploying sec- of these were in the automotive seg- toral funds. If companies continued ment. The role of sector agreements in 3.3.3.1. Sector level to employ older workers threatened prompting further negotiation at com- by redundancy until they qualify for pany level is again apparent. There was Specific sectoral collective agreements early retirement, they would receive a clear link between company agree- intended to tackle the employment a subsidy of EUR 10 000, along with ments on short-time work and sectoral effects of the crisis were identified in EUR 5 000 as a contribution to their agreements on the topic in countries two countries: Italy and the Nether- future pension, Further, the accord such as Belgium, Denmark, Germany, lands — see Table 3.5. Both of the Italian provided support for trainees threat- the Netherlands and Sweden. At com- agreements included provisions aimed ened with losing their position pany level, Zagelmeyer (2009) observes at supporting redundant workers and before completing their training. In that where agreements cover opera- those on short-time work or temporar- road haulage, the agreement sought tions at two or more sites, then cen- ily laid off because of the recession. The to avoid compulsory redundancies tral bargaining structures have been banking agreement related to an exist- among drivers in the face of reduced established for the first time, as at Carl ing employer-funded sectoral ‘solidar- demand for labour during the reces- Zeiss, or strengthened, as at Daimler ity fund’, which finances benefits and sion. It provided for older workers and InBev. training for workers temporarily laid faced with redundancy to be guaran- off or on short-time working and early teed access to early retirement, and A majority of the agreements related retirement for redundant workers. The allowed for greater working time flex- exclusively or in part to short-time accord increased benefits for workers on ibility and a right for employers to work, either subsidised under state- or short time and added a new scheme to decide when days off are taken (these social partner-supported schemes or, provide benefits to redundant workers provisions required a company-level less commonly, largely uncushioned not covered by the usual state income- agreement for implementation). The (as in the UK cases). Such agreements support measures, along with train- parties also agreed to set up a ‘mobil- were identified in many countries, ing. The new benefits are co-financed ity centre’ to redeploy surplus drivers but seemed particularly common by the fund and individual employers. within the sector. in France, Germany and Italy. The In the event of a company recruiting second largest category of company the workers concerned, it is allocated The inclusion of specific crisis agreements involved ‘concession bar- the benefits. The retail agreement also response actions in regular collective gaining’, with trade-offs under which provided for the possibility of a secto- agreements on pay and conditions employers provide some form of ral top-up to state benefits for workers featured in agreements was identi- employment guarantee in return for temporarily laid off or on short-time fied in just three sectors, one each employee sacrifices in terms of pay and working. However, it was essentially a in Belgium, Italy and Sweden — see conditions. This approach appeared procedural agreement, promoting ini- Table 3.6. The Swedish case relates particularly prominent in Germany, tiatives aimed at preventing job losses, to two agreements, for white-collar Spain and the UK. The next largest notably through the creation of special and professional staff respectively, in category, most frequent in France local committees and company/local engineering and architectural consul- and Germany, covered other work- bargaining on issues such as train- tancies, which provide for flexibility ing time arrangements to prevent or ing and work organisation (adapting and decentralisation in pay setting.

110 Chapter 3: Negotiating the crisis: social partner responses

The one-year white-collar agreement provided for a general 2.3 % pay rise, Table 3.5: Specific sectoral crisis response but local agreements could reduce agreements in private services this increase in the light of company circumstances, while the accord (for Country Sector Date Details the first time) provided no individual Agreement on new fund to provide income support (with employer contribution) for redundant workers pay rise guarantee for employees. The December not entitled to state schemes, plus training, and Italy Banking two-year agreement for professional 2009 changes to existing ‘solidarity fund’, including staff provided for the same pay provi- increased benefits for workers on short-time work sions as the white-collar agreement in or temporarily laid off. the first year, but left all pay bargain- Agreement on a ‘pact for work’ to become part of the regular sectoral agreement. Provides for promotion ing to the company level in the second of initiatives to prevent job losses, e.g. through the year, with no sectoral guideline. The creation of special local committees, and the pos- June sible use of sectoral resources, in addition to those agreement in Belgian banking, which Italy Retail along with others in private service 2009 available at national level, to support short-time work and temporary lay-offs. Also promoted company sectors observed the pay moderation and local bargaining to respond to recession, e.g. on guidelines specified in the 2009–10 work organisation and training, plus information on cross-sector agreement (see 3.2.1 company problems and monitoring of situation. above), introduced additional crisis Agreement on package of measures to keep vulnerable Car April workers in employment during the crisis, through Netherlands response measures. It provided for: dealerships 2009 temporary measures financed by the sector, including increased training activity, especially incentives to retain older workers and training. for older and vulnerable workers; out- Agreement on avoiding compulsory redundancies placement support for all redundant through access to early retirement for some groups Goods of older workers facing redundancy and working workers (previously just those aged Netherlands 2009 haulage time organisation/flexibility. Also provided for over 45); enhanced severance pay- future creation of a ‘mobility centre’ to promote ments in cases where companies do redeployment of surplus staff. not observe redundancy procedures; Sources: See Box 3.1. the maintenance of early retirement schemes; and a higher limit on the proportion of the workforce that can Table 3.6: Crisis response measures in regular take a full or part-time career break. sectoral agreements in private services Further, reflecting the financial crisis, the agreement provides for the Country Sector Date Details development of better information Inclusion in 2009–10 agreement of provisions on and consultation for works councils employment security (e.g. higher severance payments October where employers fail to observe redundancy over banks’ activities, especially those Belgium Banking 2009 procedures), outplacement, maintenance of early entailing risk. The relevant provisions retirement schemes, training and information of the agreement in Italian tourism for works councils on financial risks. (like the specific agreements in bank- Inclusion in 2010–13 agreement of a commitment ing and retail) seek to support redun- for the sector’s national joint employment fund to spend 30 % of its funds on supporting the income dant workers and those on short-time February Italy Tourism of workers in enterprises in financial difficulty or 2010 work or temporarily laid off because being restructured. Also a provision extending of the recession, in this case using an support during lay-offs and short-time work, or on existing national joint fund. redundancy, to seasonal workers. Inclusion in one-year 2009–10 agreement for white-collar staff of provision allowing downward Engineering divergence from sectoral pay increase by local and September agreement in firms facing difficulties, and omitting Sweden architectural 2009 usual individual pay rise guarantee. The two-year consultancies agreement for professional staff contains same provisions in the first year, but leaves all pay increases to local negotiations in the second year. Sources: See Box 3.1.

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3.3.3.2. Company level • trade sacrifices in pay and employment Seven of the agreements, all at air- conditions for employment guaran- lines, provided for employee sacri- Table 3.7 provides summary infor- tees, as at TNT in the Netherlands, fices aimed at cutting costs, and at mation on 20 cases of specific crisis Loxam in France, G4S Cash Services ensuring the survival of the com- response agreements concluded at in the UK, Arcandor and Deutsche pany, but without the ‘trade-off ’ of an company or establishment level (fuller Post in Germany (where guarantees explicit employment guarantee. The details are provided in Appendix, Table on outsourcing were included in the sacrifices included: pay cuts at Ali- 3.A2). The measures used correspond employer side of the trade-off); talia, Austrian Airlines, British Air- largely to those in manufacturing ways, Czech Airlines, LOT and SAS; (though there seems to be an absence • mitigate planned job losses, avoiding job losses at Aer Lingus, Alitalia, of special working time arrangements compulsory redundancies through Austrian Airlines, British Airways to prevent or reduce redundancies, or voluntary departures (as at Commerz- and LOT; changes in terms and con- avoid short-time work). Thus, there are bank in Germany, Italtel in Italy and TP ditions of employment at Alitalia and cases of agreements that: in Poland), early retirement (as at Aer Aer Lingus (for staff required to reap- Lingus in Ireland and Commerzbank), ply for their jobs); increased working • provide for the use of a form of redeployment (as at Telecom Italia and hours at British Airways; and short- short-time work, as at Italtel and TP) or natural wastage (as at Austrian time work at Austrian Airlines. An Telecom Italia in Italy (in both cases, Airlines and Commerzbank); and unusual agreement at Dublin Airport to reduce planned job losses), Aus- Authority provided that employees trian Airlines (to cut costs), Brus- • provide assistance for redundant would be reimbursed for their pay sels Airlines in Belgium, Lufthansa workers (as at Alitalia in Italy, Dub- sacrifices if variouscompany recovery Cargo and TUI in Germany; lin Airport Authority and TP). targets were met.

Table 3.7: Company-level crisis response agreements in manufacturing

Short-time Employee Employment/ Alternatives work (intro- concessions Redundancy Company Country Sector Date production to compulsory duction/con- (pay, hours, assistance guarantees redundancies ditions) etc.) Austrian Airlines AT Civil aviation 1–6/2009 X X X Brussels Airlines BE Civil aviation 10/2009 X Czech Airlines CZ Civil aviation 2009 X SAS DK/NO/SE Civil aviation 2009–10 X Loxam FR Machinery hire 12/2008 X X X Tourism and Arcandor DE 10/2008 X X retail Commerzbank DE Banking 7/2009 X X Deutsche Post DE Postal services 10/2009 X X Lufthansa Cargo DE Civil aviation 2/2009 X TUI DE Travel 3/2009 X X Aer Lingus IE Civil aviation 11/2008 X X Dublin Airport IE Civil aviation 2010 X X X Authority Alitalia IT Civil aviation 9/2008 X X Italtel IT Telecoms 6/2009 X X X Telecom Italia IT Telecoms 7/2009 X X TNT NL Postal services 3/2009 X X LOT PL Civil aviation 10/2009 X TP PL Telecoms 10/2008 X X British Airways UK Civil aviation 6/2009 X G4S Cash UK Cash transit 2009 X X Services Sources: See Box 3.1 plus Zagelmeyer (2009) for Arcandor.

112 Chapter 3: Negotiating the crisis: social partner responses

3.3.3.3. Disputes and unsuccessful of additional, specific agreements identified in multinational compa- negotiations or through changes or additions to nies. Over a third of the agreements, regular collective agreements, were all in civil aviation, related to com- An example of an unsuccessful negotia- restricted to Belgium, Italy, the Neth- pany cost-reduction programmes and tion is provided by the French IT serv- erlands and Sweden. Two of the agree- provided for a range of employee sac- ices sector, where employers and trade ments were in the banking sector. rifices — on jobs, pay, conditions and unions failed to agree in 2009 on the working time — without, it appears, introduction of a sector-specific form The agreements in Italy dealt with employment guarantees in return. of short-time work, owing to differences similar themes, as did those in the Half of the remaining agreements also over issues such as remuneration for Netherlands, but unlike manufactur- provided for pay cuts or freezes, but in unworked hours and the circumstances ing there was little evidence of any return for guarantees of employment. in which the scheme could be used. common cross-border themes. The Other than employee concessions, one exception is the agreements in the most common specific theme in There was considerable conflict around Swedish architectural and engineer- the agreements was the avoidance of many of the agreements at airlines, ing consultancy, where the provision compulsory redundancies in planned including Alitalia, Aer Lingus, British in the two-year agreement for profes- workforce reductions through volun- Airways, LOT and SAS. The agreements sional staff to decentralise bargain- tary departures, early retirement, etc. at British Airways and SAS cover some ing to company level resemble those Short-time work featured relatively groups in the workforce only; nego- in the Finnish technology sector (see little (and then mainly as a form of tiations over similar crisis response Table 3.3). Procedural innovation workforce reduction) perhaps because measures involving other groups were was also in evidence with the Italian in many countries state schemes do unsuccessful or remain unresolved. banking agreement, overhauling an not apply to, or are not appropri- Agreement could not be reached at all existing bipartite fund, and the Ital- ate for, the services sector (or white- in similar negotiations at Finnair, whilst ian retail agreement, with new joint collar workers). Measures to support at Olympic Airways government plans monitoring activities of the initiatives redundant workers were rare. to restructure and privatise the com- involved. The agreements in Dutch pany were the focus of extensive protest road haulage required implementa- action by trade unions. In the postal tion through company agreements. 3.3.4. Assessment sector, restructuring plans announced The latter accord also provided for a by Österreichische Post were the focus new structure to redeploy surplus staff, The cases examined here have been of trade union protest action and in the whilst the Belgian banking agreement identified from a range of transna- UK management plans to restructure envisaged new information and con- tional secondary sources (see Box the Royal Mail were the focus of rolling sultation methods for works councils. 3.1). The picture they present is of a strike action in late 2009, with a negoti- fairly limited agreed response to the ated settlement finally being concluded None of the agreements had any crisis at sector level, with few agree- in March 2010. known link to EU-level social partner ments reached and these mainly initiatives in the sector concerned. At found in Belgium, France, Germany, In contrast to manufacturing, there national level, the Belgian banking Italy, the Netherlands and Sweden, is, however, little indication of novel agreement was expressly linked to the and in the manufacturing industries forms of conflict becoming a feature cross-sector agreement, but this was (especially metalworking). Company- in the private service sectors. Europe- not the case with the two Dutch agree- level agreements are more numerous, wide protests organised by EWCs ments. The Belgian, Italian (banking but again concentrated in a relatively and/or European-level trade union and retail) and Swedish agreements small number of countries — princi- federations were also little in evidence all entailed subsequent company-level pally Italy, Germany, France, Spain, in private services (see Box 3.10). negotiation for the measures envisaged Denmark, Sweden, the UK, Poland to become effective. and the Netherlands — and in manufacturing (again, particularly metal- 3.3.3.4. Summary At company level, crisis response working). At both levels, there seem agreements were mainly concentrated to have been few agreements in the The few instances of sector agree- in the civil aviation and posts and Member States of central and south- ments identified as containing crisis telecommunications sectors. No rele- eastern Europe or in some of the response measures, either in the form vant European-level agreements were Mediterranean countries.

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Is this picture an accurate reflection of cut benefits. As in Germany, short- In accounting for differences across the social partners’ response to the cri- time working schemes of various types countries, two of the factors identi- sis, or more a result of imbalances in require a company-level agreement for fied in Figure 3.1 are influential: the the sources of data used? With regard their introduction in countries such nature of industrial relations insti- to the scale of the response, there are as Austria, Belgium, Denmark, Italy tutions; and the presence of spe- indications from a number of countries and Sweden: the generally high level cific public policy measures aimed that in reality there have been consid- of short-time work in these coun- at maintaining employment, in the erably more agreed crisis response tries during 2009 implies a consider- form of short-time work schemes. actions than the specific cases identi- able number of such agreements. For The countries in which sector- fied above. At sector level, inBelgium, example, in Sweden more than 170 bargaining arrangements have been many of the sectoral collective agree- new local agreements on temporary mobilised include nearly all of those ments signed within the framework lay-offs were reported to have been where there are procedural provisions of the cross-sector agreement for reached within six weeks of the con- which effectively frame and constrain 2009–10 included specific crisis- clusion of the manufacturing sector subsequent company-level negotia- related provisions on matters such as short-time work scheme (Eurofound, tions. Conversely, where tightly spec- short-time work and training, as well 2009). Another potential source of ified articulation provisions are not as following the cross-sector agree- agreements during the recession is the a feature of multi-employer bargain- ment’s general ‘anti-crisis’ approach statutory requirement or encourage- ing, as in Spain, Greece and Portugal (e.g. in terms of pay moderation) ment in a number of countries, such and some central and south-eastern (http://www.eurofound.europa.eu/ as Austria, Finland, France, Germany, Member States, sector-level arrange- eiro/2009/10/articles/be0910019i. Italy, Poland, Spain and Sweden, to ments have not been mobilised. The htm). An analysis of the recent round negotiate over ‘social plans’ or similar incidence of company-level agree- of multiannual sector negotiations agreements on measures to accom- ments would appear to have been concluded in Denmark, finds that pany or mitigate planned collective higher amongst countries with multi- many mirror the innovative provi- redundancies. In addition, a number employer bargaining arrangements sions in the manufacturing sector of company agreements concluded than those with single-employer agreement (Table 3.2) (Due and Mad- during the 2000s have addressed the arrangements. One reason is that sec- sen, 2010). Many agreements signed anticipation and management of tor (or inter-sector) agreements may in the Netherlands in 2009 included restructuring and change. Pre-exist- specifically promote, or even require, an increased focus on training, often ing agreements of this kind may have further negotiation at company level, in relation to short-time work. At the helped the companies concerned to as is the case with short-time work company level, there is evidence that deal with the crisis. schemes in several countries. A sec- crisis response agreements have been ond is that by providing a framework much more prevalent than indicated Overall, agreed crisis response actions for negotiation at company level, the by the cases presented here, at least are likely to have been somewhat more success or otherwise of a negotia- in some countries. For example, the common than the cases presented tion and the nature of the agreement findings of a representative survey of above: at sector level in at least Bel- concluded at company level becomes companies with 20 or more employ- gium, Denmark, Germany, Italy and less dependent on specific power bal- ees and a works council conducted by the Netherlands; and at company level ances within the company (Glassner the Institute of Economic and Social in at least Austria, Belgium, Denmark, and Keune, 2010). Amongst those Research (Wirtschafts- und Sozialwis- France, Germany, Ireland, Italy, Lux- countries with single-employer bar- senschaftliches Institut, WSI), pub- embourg, Spain, Sweden and the UK. gaining arrangements it is noticeable lished in November 2009, indicated However, there is little to suggest that that the incidence of agreements is a widespread use of crisis response there are significant numbers of agree- highest in the UK, where collective measures in German firms, many of ments that have not been captured by bargaining coverage is also compara- which require a works agreement. For the information sources consulted tively higher. Turning to the interac- instance, 30 % had used working time in most of the post-2004 Member tion between public policy measures accounts to reduce effective working States — which in many cases have and social partner actions, the role of time, 20 % had introduced short-time low bargaining coverage and/or a nar- short-time work schemes in prompt- work, 14 % had redeployed employees, row bargaining agenda — or in EU-15 ing or requiring the conclusion 13 % had adjusted schemes for paid Member States such as Greece and of agreements has evidently been leave, 11 % had cut pay and 5 % had Portugal. important, as noted above.

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In sectoral terms, the considerable company negotiations in the sector post and telecommunications. In con- variations between, and within, the (Marginson and Sisson, 2004). In trast, the agreements in civil aviation production and private service sectors terms of public policy measures, the focus on cost-reduction measures are also attributable to the influence key crisis-management tool of short- entailing employee concessions, with of a third factor, namely the economic time working, which has been an no offsetting guarantee on employ- situation (see Figure 3.1) in addition to important impetus to negotiations, ment, and seem designed to ensure that of industrial relations institution is largely a manufacturing-specific the company’s survival. The distribu- and of specific public policy measures. phenomenon; in many of the relevant tive dimension is predominant in The impact of the crisis on manufac- countries, schemes do not extend to these ‘survival’ agreements. turing has been more severe than on the service sectors. private services, as Chapter 2 showed. The counterpart of divergence in Within manufacturing, metalworking Sector differences are evident in the social partner actions between sectors and the automotive segment of the issues dealt with by agreements at is a measure of convergence across sector in particular, has been espe- both sector and company levels. At countries within them (Katz and Dar- cially hard hit. So too, however, have sector level, agreements on short-time bishire, 2000). The sectoral pattern of the chemicals and textiles sectors, in work, pay decentralisation/flexibil- incidence and issues addressed simul- both of which social partner actions ity and employee leasing are mainly taneously signify common tendencies at sector and company level seem less found in manufacturing, while most across countries within sectors. For widespread than in metalworking. agreements on employment main- example, the company agreements Given the considerable impact of the tenance/security and redundancy concluded in the automotive industry crisis on construction, the absence of support are found in private serv- and in civil aviation bear consider- agreements is noticeable and suggests ices. Training, however, is a frequent able similarity in the respective provi- that there have been few attempts ‘transversal’ theme (e.g. for employees sions they contain. Such convergence to mitigate the employment conse- on short time, or redundant workers) was particularly noticeable in the quences in the sector. Amongst the in agreements in both broad sectors. local agreements concluded in differ- service sectors, transport — which At company level, there are wide dif- ent countries in four multinational accounts for the largest proportion of ferences between manufacturing and companies. From the information agreements — is amongst the hardest private services. Short-time work available, it is difficult to establish the hit. Given, however, the impact of the is dealt with by a majority of agree- extent and nature of any coordination crisis on financial services, and bank- ments in manufacturing, but by only between companies, the trade unions ing in particular, more activity might a handful of those in private services and works councils representing have been anticipated; likewise with reflecting the differential application workforces, within industries. Most retail distribution, which was also of statutory short-time work schemes plausible would seem to be a form of hard hit. between the two (see above). In man- pattern setting which reaches across ufacturing, agreements on employee borders (3). The outcomes, if not the Turning to industrial relations institu- concessions are frequently accompa- processes involved, are suggestive of tions, collective bargaining coverage nied by an employment guarantee of a ‘horizontal’ Europeanisation of col- is generally higher, and trade union some description, including contin- lective bargaining within particular organisation stronger, in manufac- ued production at the site in ques- industrial and service sectors. turing than in services. These also tion in some cases. Agreements which help account for the variation evident entail employee concessions, includ- The evidence of any ‘vertical’ Euro- within manufacturing and services, ing short-time working, in return peanisation of collective negotia- respectively. In services, for instance, for employment guarantees are par- tions and social dialogue, in which transport and communications are ticularly prevalent in the automotive national and local social partner sectors where collective bargaining industry. This kind of trade-off sug- actions are framed by European- coverage is comparatively high and gests that the agreements concluded level agreements, recommendations trade union organisation strong. A have an integrative dimension to the or guidelines, is mainly confined further institutional consideration outcomes specified (Sisson, 2001). In to company level. Just one instance within manufacturing is the extent services the picture is more mixed, was identified where national sector to which sector agreements in met- with employment guarantees featur- agreements (in two countries) have alworking had already been progres- ing in only a minority of agreements, 3 See Traxler and Brandl (2009) on cross-border sively opened up to create scope for mainly those concluded in banking, pattern setting in wage determination.

115 Industrial Relations in Europe 2010

a seeming link to an EU-level social endorsed by the social partners at institutions is, however, marked. That partner initiative in the industry con- national level, as in Germany and of the strategic choices of the social cerned, namely chemicals. Although several other countries. partners is — at sector and company there have been significant develop- levels in particular — difficult to deter- ments in institutional capacity and mine, given the nature of the data on activity at European sector level in which the chapter has mainly drawn. recent years (Pochet et al., 2009), this 3.4. Conclusion would not seem to (yet) extend to The magnitude of the crisis at exercising an influence on the fram- Through the processes of social dia- economy-wide level does not appear ing of agreements at national level. logue, concertation and collective to have conditioned whether the social The three European-level agreements negotiation, employers and trade partners have attempted to conclude identified in multinational compa- unions have played a prominent role in bipartite or tripartite agreements at nies implied subsequent negotiations addressing the impact of the crisis at the the cross-sector level. Neither does it at national or local level to implement cross-sector, sector and company levels. seem to have greatly affected whether some of their provisions. Several The chapter has also found considerable the outcome was successful or unsuc- cases in which EWCs had intervened cross-country and cross-sector varia- cessful. Sectorally, the contrasting in national-level developments were tion in the incidence and nature of these economic situation of the production also identified. Links between the negotiated and concerted responses. and private service sectors, and of indi- European and lower levels of indus- Conversely, this indicates that unilateral vidual sectors within them, is, however, trial relations in multinationals were employer responses have most likely broadly consistent with the observed most evident in examples of EWCs been widespread in a range of countries. pattern of negotiated responses. Both (and/or European-level trade union These include most of the countries with aspects of public policy identified exer- federations) organising Europe-wide single-employer bargaining arrange- cise a distinct influence on the pattern. protests against restructuring. ments, i.e. most of the central and east Whether or not, and how far, govern- European Member States, Cyprus, ments have involved the social partners At national level, amongst the coun- Malta and the UK, and those coun- — or the social partners have sought to tries with multi-employer bargain- tries whose multi-employer bargaining be involved — in the framing of anti- ing arrangements, ‘vertical’ links arrangements do not specify a clear link crisis measures acts as a necessary but between negotiations at cross-sector between the sector and company levels, not a sufficient condition for attempts (where relevant), sector and company such as Spain, Portugal, Greece, Bul- at tripartite cross-sector agreements. levels were apparent amongst those garia and Romania. Unilateral employer Specific public policy measures, in the countries in which there are com- responses are almost certainly consider- form of the massive intervention repre- prehensive provisions governing the ably more prevalent in private services sented by the short-time work schemes relationship between negotiations at than in the production sectors. implemented in many Member States different levels. Between the cross- (including some for the first time), sector and sector levels, this was most Towards accounting for the pattern of have been both a focus for social part- apparent in Belgium but less so in the variation, the respective influence of ner involvement at national level and a Netherlands, though the Dutch agree- the four sets of factors, identified at trigger for negotiating activity at sector ments could be argued to reflect the the outset (see Figure 3.1), framing the and company levels in manufacturing broad crisis response approach agreed extent to which responses to the crisis (although not services where they do in bipartite and tripartite national have been negotiated or concerted can not generally apply). accords. Sector agreements in Fin- now be assessed. Overall, the economic land, Germany, Italy, the Netherlands situation at economy-wide level and The first of the two public policy con- and Sweden required implementation the presence of institutionalised capac- siderations also points to the role of by company-level agreements or pro- ity for concertation and/or negotia- strategic choices at cross-sector level, moted bargaining at company level. tion at cross-sector levels seem not to by governments and by the social part- Of the company agreements identi- have exercised clear-cut influence. The ners. Further indication of the influence fied, a number were clearly negoti- influence of the economic situation of the strategic choices exercised at this ated wholly or in part to implement between and within broad sectors, of level by employers and trade unions is short-time working schemes agreed public policy — in both the broad and apparent in the instances, first, of those at sector level, as in Swedish manu- specific aspects identified in Figure central and east European countries facturing, or to implement schemes 3.1 — and of other industrial relations where agreements have not previously

116 Chapter 3: Negotiating the crisis: social partner responses

been concluded and, second, those effect of prompting further negotiated evidence. First, the package nature western European countries where actions at company level in several of most of the cross-sector accords is agreements have not been concluded, EU-15 countries. As a result, the inci- indicative of an agenda of sufficient even though institutional capacity to dence of company agreements seems scope to enable the parties to engage do so exists. At sector and company lev- to have been higher under multi- in the trade-offs which underpin the els, the pattern of agreements suggests employer than under single-employer inclusion of integrative as well as dis- that social partner strategies have been bargaining arrangements. Amongst tributive elements to the outcome of shaped, although not determined, by the countries with single-employer negotiations. Likewise, the majority institutional arrangements for indus- bargaining arrangements, the UK — of crisis response sector agreements trial relations (see below) as well as by which has the highest level of collec- also entail a package of measures. Sec- large-scale public policy intervention in tive bargaining coverage — stands ond, there is nonetheless considerable the form of statutory short-time work out has having a comparatively higher variation in the mix between elements schemes. Beyond this, the role of the incidence of negotiated response at across sectors. A key indicator of an strategic choices exercised by employ- company level. Fourth, as between integrative element to the outcome ers and trade unions is illustrated by countries with multi-employer of crisis response negotiations is the the finding that company-level agree- arrangements, the presence of effective inclusion of some form of employ- ments can also be reasonably promi- multi-level governance arrangements ment guarantee against cost-reduction nent in the absence of one or both of specifying the relationship between measures. This was evident amongst these supportive factors, as in Spain or agreements concluded at different lev- the majority of agreements in the pro- the UK. els, emerges as crucial. Sector crisis duction sector, but not amongst those response agreements are concentrated in private services — where in civil Of the institutional dimensions of amongst those EU-15 countries where aviation in particular outcomes were industrial relations identified at the procedural provisions articulating the more straightforwardly distributive. beginning of the chapter, the influ- outcomes of collective negotiations at Variation in the mix is also appar- ence of one is not clear-cut whereas different levels are found. Where they ent amongst companies concluding that of the other three is much more are absent, as in Spain, Portugal and agreements within the same industrial apparent. The first is the presence and Greece and those central and south- sector. nature of institutional arrangement eastern Member States where sector- for cross-sector arrangements for level bargaining takes place, sector Insofar as the crisis has invoked nego- negotiation or concertation. As noted crisis response agreements are notice- tiated or concerted responses, where above, cross-sector accords have been able by their absence. The incidence of otherwise governments or employ- concluded, or talks commenced but company agreements is also lower. The ers might have acted alone, a final were unsuccessful, in some, but not implication is that unilateral employer issue is the sustainability of recent all, EU-15 countries where such insti- responses are correspondingly more developments. On this too it is dif- tutional capacity already existed. But widespread. The crucial institutional ficult to reach a definitive answer. At they have also been concluded in distinction may not be between cross-sector level, the most notice- some central and east European coun- multi-employer and single-employer able development has been the con- tries where there is little or no history bargaining arrangements per se, but clusion of accords in several central of doing so. Second, the distinctions between multi-employer bargain- and east European countries where between multi-employer and single- ing arrangements which ‘organise’ they were hitherto unknown. These employer arrangements and, third, bargaining at the different levels and accords are ad hoc; there is no indica- the level of collective bargaining those which do not — together with tion at present that the parties intend coverage (which is related) are both single-employer arrangements (Trax- further negotiations, or agreements, confirmed as salient. The workforce ler et al., 2001; Nergaard et al., 2009). to follow. Yet, neither can the parties coverage of sector crisis response unlearn the process that they have for agreements, where they have been A thorough assessment of the balance the first time successfully engaged concluded, will have greatly exceeded between the integrative and distribu- in. Amongst the Visegrad countries those of the company agreements tive elements of the crisis response at least, where social dialogue insti- which have been the focus of activ- agreements surveyed requires an tutions are more robust than in the ity in countries with single-employer analysis of greater depth than that Baltic states (Meardi, 2010), the likeli- arrangements. Moreover, sector (and undertaken here. Two main infer- hood of their attempting to conclude cross-sector) agreements have had the ences can be drawn from the present an agreement again is greater than it

117 Industrial Relations in Europe 2010

was before. At sector level, a striking their impact in prompting further press for agreements to be re-opened, feature in several of the crisis response negotiation on measures to main- so as to recuperate earlier sacrifices. agreements in Finland, Germany and tain employment. At company level, Either way, the problem is likely to be Sweden is provisions which trans- as the crisis prolongs, the successful less acute where company negotia- fer to, or enhance, competence for renewal of agreements which have tions arise as a result of agreements at wage setting at company level. In this already been concluded cannot be higher level than when they are free respect, the crisis may prove to have assured. The basis for the trade-offs standing. The institutional security further accelerated the long-running which they entail can be eroded: the provided under organised decen- trend towards ‘organised’ decentrali- economic situation may preclude tralisation to company-level nego- sation (Traxler et al., 2001). At sec- the renewal of an employment guar- tiators leaves them less exposed to tor and company levels, the expiry antee, for example. Alternatively, a asymmetric outcomes to such ‘down- of the short-time work schemes is more rapid recovery in output than side’ and ‘upside’ risks than where likely to have a marked effect, given anticipated may lead the workforce to single-employer bargaining prevails.

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European Employment Review (2010), ‘Spain: Social part- Nergaard, K., J. Dølvik, P. Marginson, B. Bechter and J. ners sign three-year framework agreement’ (http://www. Aransz Dias (2009), ‘Engaging with variable pay’, European xperthr.co.uk/article/100498/.aspx) (subscription required). Journal of Industrial Relations 15, pp. 125–146.

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Nurmela, K. and M. Karu (2009), ‘Tripartite agree- Stanojevič, M. (2010), ‘The Europeanisation of Slovenian ment on measures to maintain jobs’, EIROnline (http:// corporatism’, Paper presented at 2010 IREC Conference, www.eurofound.europa.eu/eiro/2009/05/articles/ Oslo, September 2010. ee0905019i.htm). Tóth, A., M. Edelényi and L. Neumann (2009), Perin, E. (2009), ‘Social partners and government ‘Series of national summits called to tackle economic agree plan to boost economy’, EIROnline (http:// crisis’, EIROnline (http://www.eurofound.europa.eu/ www.eurofound.europa.eu/eiro/2009/01/articles/ eiro/2009/01/articles/hu0901019i.htm). be0901019i.htm). Traxler, F., S. Blaschke and B. Kittel (2001), National Pernot, J.-M. (2009), ‘Workers resort to hard-hitting indus- labour relations in internationalised markets, OUP, Oxford. trial protest action’, EIROnline (http://www.eurofound. europa.eu/eiro/2009/11/articles/FR0911049I.htm). Traxler, F. and B. Brandl (2009), ‘Towards Europeanisation of wage policy’, European Union Politics 10, pp. 177–201. Planet Labor (2009), Report No 090297, 19 March 2009. Van Gyes, G. (2010), ‘Crisis in social dialogue due to Planet Labor (2010), Report No 100384, 12 May 2010. anti-crisis measures’, EIROnline (http://www.eurofound. europa.eu/eiro/2010/02/articles/be1002019i.htm). Pochet, P., A. Peeters, E. Léonard and E. Perin (2009), Dynamics of European sectoral social dialogue, European Verveková, S. (2010), ‘Tripartite agreement on short-term Foundation for the Improvement of Living and Working anti-crisis measures’, EIROnline (http://www.eurofound. Conditions, Dublin. europa.eu/eiro/2010/02/articles/cz1002039i.htm).

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Appendix

Table 3.A1: Company-level crisis response agreements in manufacturing

Company Country Sector Date Details Agreement on use of state short-time working scheme, plus early retirement, DAF Trucks Belgium Automotive June 2009 along with partial guarantee on no redundancies. Agreement on social package to accompany 300 redundancies, including: November training; severance payments of four to 10 months’ pay; additional financial Stomana Industry Bulgaria Steel 2008 support for redundant workers; and a commitment to rehire redundant workers if the company’s situation improves. Czech January Agreement on application of state short-time working scheme at Nosovice Hyundai Automotive Republic 2009 plant, providing for higher than statutory pay compensation for employees. Czech Transport August Agreement on enhanced redundancy package in case of plant closure or Siemens Republic equipment 2008 special bonus payments in case of transfer of ownership. February Agreement on introduction of short-time working (‘work-sharing’), based on Danfoss Denmark Engineering 2009 publicly funded scheme regulated by sectoral agreement. March Agreement on introduction of short-time working (‘work-sharing’), based on Grundfos Denmark Pumps 2009 publicly funded scheme regulated by sectoral agreement. Wind turbine Agreement on three-week summer shutdown, with compulsory holiday and Vestas Denmark 2009 manufacturing abolition of Sunday shifts, to deal with fall in orders. Mobile February Scheme developed with unions and employee representatives to promote Nokia Finland telephone 2009 voluntary departures through financial incentives and avoid redundancies. manufacturing December Airbus France Aerospace Agreement on using annual leave to avoid recourse to short-time work. 2009 November Agreement on reducing recourse to short-time work through use of accumu- Bosch France Auto parts 2008 lated time off, recalculation of annual leave and training. Agreement on application of state short-time working scheme, dealing with Dassault Aviation France Aerospace June 2009 pay guarantees (partly compensated through ‘solidarity’ contribution from unaffected employees) and training. Agreement on collective working time account, whereby workers were granted February Michelin France Tyres paid days off during period of low demand in 2009 and work off the days owed 2009 in future years, with short-time work only used if this scheme is insufficient. PSA Peugeot September Agreement on application of state short-time working scheme, dealing with France Automotive Citroën 2009 pay and training for the workers affected. ‘Crisis social contract’, which aims to maintain employment levels through Renault France Automotive April 2009 the widespread use of short-time work, with guarantees on pay and training provision. Agreement on application of state short-time working scheme, dealing with February Renault Trucks France Automotive pay (partly compensated through employee ‘solidarity’ fund) and training for 2009 the workers affected. Agreement on pay during short-time work and flexibility measures to deal Rhodia France Chemicals April 2009 with crisis. Agreement on employees taking accumulated time off and advance annual November Snecma France Aerospace leave entitlement during period of low demand to avoid short-time work and 2008 loss of pay. Agreement on ‘employment plan’ to maintain job during crisis through STMicrolectronics France Electronics April 2009 measures including incentives to work part time, long-term training leave, sabbatical leave and external postings. February Agreement on application of state short-time working scheme, dealing with STX France Shipbuilding 2009 pay for the workers affected. January Agreement on use of state short-time working scheme, with additional pay- BASF Germany Chemicals 2009 ments for employee on short time. January Agreement to secure jobs through use of short-time working, with additional BMW Germany Automotive 2009 payments for employees on short time.

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Company Country Sector Date Details December Agreement providing for pay cuts of 1 % to 1.5 % in 2010 in exchange for Bosch Germany Auto parts 2009 employment guarantees, in context of extensive short-time working. Optical Agreement on deferring wage increase and suspension of bonus payments in Carl Zeiss Germany June 2009 equipment exchange for a no redundancy guarantee. [Zagelmeyer, 2009] Agreement providing guarantees of no compulsory redundancies before 2012, Coca-Cola Erfrisc- March Germany Soft drinks no enforced geographical mobility and an effective end to outsourcing, in hungsgetränke 2010 return for working time flexibility and pay moderation. Agreement on cost-cutting package, with workers making concessions on Daimler Germany Automotive April 2009 working time and pay in return for a limited job guarantee. Germany Agreement providing long-term guarantee of no compulsory redundancies in December Daimler (Sindelfingen Automotive return for measures to improve plant’s competitiveness and efficiency, such as 2009 plant only) internal transfers and job flexibility. Agreement on implementation of cost-reduction programme, including guar- August antee of no compulsory redundancies with workforce reduction to be achieved through phased and full early retirement, non-renewal of fixed-term contracts, E.ON Germany Energy 2009 voluntary departures with compensation, natural wastage and redeployment. Also provided for maintenance of pay and conditions for employees in outsourced services, and contained measures on training and apprenticeships. Agreement over enhanced severance terms in case of compulsory redundancy, InBev Germany Beverages June 2009 increased compensation for short-time work, preceded by a moratorium on employment reductions. [Zagelmeyer, 2009] Job security agreement, introducing short-time work accompanied by mora- MAN January Germany Automotive torium on redundancies, additional payments and training (with incentives) Nutzfahrzeuge 2009 for those on short time, plus sabbaticals and employee leasing. Automation Agreement on use of state short-time working scheme, with training during Manz Automation Germany April 2009 technology unworked hours. Salzgitter January Agreement on use of state short-time working scheme, with training during Germany Steel Flachstahl 2009 unworked hours and use of working time accounts to reduce income losses. Job security agreement preventing compulsory redundancies before 30 June 2010 (up to 4 500 job losses had been mooted) if personnel cost reductions of Ball-bearings EUR 250 million can be achieved through a range of agreed measures. These Schaeffler Germany May 2009 manufacturing included cuts in working hours and pay, expanded use of short-time work, voluntary redundancies, partial retirement, cuts in one-off payments and the establishment of ‘transfer companies’. Agreement on use of state short-time working scheme, with additional pay- Schott Germany Glass 2009 ments and obligatory training during unworked hours. Agreement on use of state short-time working scheme, with additional pay- February Siemens Germany Electronics ments for employee on short time, use of accumulated time off before resort 2009 to short time and internal transfers between plants. Agreement on ‘future security’ providing for pay freeze, mitigating job losses ThyssenKrupp September Germany Stainless steel through partial early retirement and natural wastage, guarantees on appren- Nirosta 2009 ticeship and long-term time savings accounts. November Agreement on cuts in pay and benefits in exchange for no redundancies dur- ISD Dunaferr Hungary Steel 2008 ing 2009. Opel Hungary Automotive April 2009 Agreement on short-time working, with partial pay compensation. Tractor January Antonio Carraro Italy ‘Solidarity agreement’ providing for short-time work to prevent redundancies. production 2010 Agreement on wage and rights guarantees for employees affected by short- Ast ThyssenKrupp Italy Steel April 2009 time work and temporary lay-offs. Italy Agreement guaranteeing employment levels (with temporary lay-offs and short- December Bosch (Modugno Auto parts time work used where necessary) and production until end of 2011, despite the 2009 plant) recession, and introducing pilot scheme to reduce CO2 emissions at the plant. Agricultural September Agreement on introduction of short-time working and future negotiations on Case New Holland Italy machinery 2009 restructuring. Agreement on cushioning effects of restructuring through rotating use of Domestic September Electrolux Italy state income-support measures, incentives for voluntary redundancies and appliances 2008 part-time working.

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Company Country Sector Date Details ‘Solidarity agreement’ providing for short-time work for half of workforce, Compressor Embraco Italy 2009 with company organising training for employees during unworked hours, manufacturing aimed at enhancing their multi-skilling. Fincibec Italy Ceramics April 2009 ‘Solidarity agreement’ providing for short-time work to prevent redundancies. Automation Agreement on additional payments to workers on short time or temporarily laid Gima Italy April 2009 systems off, to compensate for the psychological/emotional/social problems caused. Agreement on wage guarantees for employees affected by short-time work Ilva Italy Steel April 2009 and temporary lay-offs. IMER Construction February Italy ‘Solidarity agreement’ providing for short-time work to prevent redundancies. International machinery 2010 Agreement (with involvement and support of regional authorities) on pre- Domestic appli- Indesit Italy July 2009 venting planned plant closure through short-time working, mobility, training ances and early retirement. Framework agreement on restructuring of Italian sites, providing for internal December or external redeployment of redundant workers, including re-employment in Michelin Italy Tyres 2008 new operations, internal mobility (with financial assistance), plus income support, outplacement and help for workers to set up businesses. January ‘Solidarity agreement’ providing for short-time work to prevent redundancies, Piaggio Aprilia Italy Automotive 2010 with skills maintenance. September Rimor Italy Automotive ‘Solidarity agreement’ providing for short-time work to prevent redundancies. 2009 Agreement on additional payments to workers on short time or temporarily laid Verlicchi Italy Automotive April 2009 off, to compensate for the psychological/emotional/social problems caused. Agreement on measures to mitigate planned job losses, through non-renewal Domestic appli- December Whirlpool Italy of fixed-term contracts, incentives for voluntary redundancies and income ances 2008 support for redundant workers. Agreement on ‘employment maintenance plan’ to accompany the closure of a plant. The plan involves training, guidance and re-employment assistance Villeroy & Boch Luxembourg Ceramics July 2009 (externally and within the company), including the creation of a ‘qualification centre’, ‘employment exchanges’ and a ‘professional coaching cell’. Agreement guaranteeing no compulsory redundancies before October 2012, in Corus Netherlands Steel April 2010 exchange for low pay increases in 2010 (increases for 2011 to be negotiated later). Agreement on application of state short-time working scheme, dealing with DAF Trucks Netherlands Automotive June 2009 issues such as maintenance of full pay (in return for giving up some holiday entitlement) and employment guarantees for workers involved. Agreement on implementation of cost-reduction programme, including guarantee of no compulsory redundancies, with workforce reduction to be December E.ON Netherlands Energy achieved by various alternative means including moving employees to sub- 2009 contractors. Maintenance of pay and conditions for employees in outsourced services for five years. February Agreement on anti-crisis cost-reduction plan, including pay freeze to help Lotos Poland Oil 2009 avoid job losses. Telecoms December Inclusion in company agreement (first at firm) of redundancy compensation Alcatel-Lucent Romania equipment 2009 scheme and specific payments for employees affected by restructuring. Inclusion in company agreement of provisions on pay guarantees during Dacia-Renault Romania Automotive 2008 short-time working. Inclusion in company agreement of measures to mitigate planned job losses October at Almussafes plant, through voluntary redundancies (with possible re- Ford Spain Automotive 2009 employment) and retirements, plus moderate pay increases, with company guarantees on future production. November Agreement in 2008 on avoiding redundancies during 2009, mainly through 2008 and working time cuts and use of hours banks. Agreement in 2009 to implement Michelin Spain Tyres November planned workforce reduction in 2010 through early retirements with financial 2009 assistance. Agreement on a feasibility plan which entailed the termination of a substan- February Nissan Spain Automotive tial number of temporary workers’ employment in exchange for the future 2009 allocation of production to the Catalan operation.

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Company Country Sector Date Details Agreements to implement 900 planned job losses (as part of Europe-wide restructuring plan) in a ‘socially responsible’ way, targeting them at workers March Opel Spain Automotive on fixed-term contracts and providing re-employment opportunities for those 2010 who lose their jobs. Agreement also reached on moderate wage increases over four years and greater working time flexibility. Four-year ‘pact for employment and competitiveness’ in Spanish operations, September which provides for low pay increases, increased flexibility and mobility, and Renault Spain Automotive 2009 lower wages for new recruits, in exchange for the future allocation of production to the sites. March Agreement on two-year pay freeze aimed at guaranteeing employment by Seat Spain Automotive 2009 attracting new allocation of production. Agreement on a two-year pay freeze and a 40-hour increase in annual work- January Sony Spain Electronics ing time, in return for company commitment to keeping the site open at least 2009 until the end of 2010, and cutting planned redundancies by two-thirds. Agreement to avoid planned redundancies through short-time working Sandvik Sweden Engineering June 2009 (applying national scheme), with some pay compensation. March and ‘Crisis’ agreement to avoid redundancies through short-time working (apply- Scania Sweden Automotive December ing national scheme), with some pay compensation (increased to full compen- 2009 sation by December agreement). Agreement on social plan to accompany redundancies, including increased September Sony Ericsson Sweden Electronics notice periods, time off to find new jobs, specific measures for older workers, 2008 outplacement support and priority recruitment. March Agreement to avoid redundancies through short-time working (applying Volvo Sweden Automotive 2009 national scheme). Agreement reducing pay for 10 months in return for a company guarantee Honda UK Automotive May 2009 preserving jobs. March Jaguar Land Rover UK Automotive Agreement on working time cuts and wage freeze to avoid redundancies. 2009 Construction October Agreement on cutting working time and pay in order to prevent some JCB UK equipment 2008 two-thirds of planned job losses. manufacturing March Toyota UK Automotive Agreement on cuts in working time and pay to save jobs. 2009 October Agreement on pay freeze and voluntary redundancies to secure future of Vauxhall UK Automotive 2009 plants.

124 Chapter 3: Negotiating the crisis: social partner responses

Table 3.A2: Company-level crisis response agreements in private services

Company Country Sector Date Issues Series of agreements on cost-reduction measures aimed at enabling takeover January to Austrian Airlines Austria Civil aviation by Lufthansa. Measures include job losses (mostly through outsourcing and June 2009 natural wastage), pay cuts and short-time work. October Agreement on introduction of short-time working, with compensation based Brussels Airlines Belgium Civil aviation 2009 on sectoral scheme. Czech Agreements on cost-reduction measures affecting various groups of staff, Czech Airlines Civil aviation 2009 Republic including cuts in pay. Denmark/ Agreements on cost-reduction measures affecting various groups of staff, SAS Norway/ Civil aviation 2009–10 including pay cuts. Sweden December Agreement on working time and pay cuts to maintain employment, plus Loxam France Machinery hire 2008 incentives for voluntary departures. ‘Pact for the future’, providing no-redundancy guarantee in return for Tourism and October Arcandor Germany cost-reduction programme, including cuts in bonuses and holiday pay. retail 2008 [Zagelmeyer 2009] Agreement in July (post takeover of Dresdner Bank) providing guarantee of no compulsory redundancies before 2013, if sufficient workforce reduction Commerzbank Germany Banking July 2009 achieved through voluntary departures (with incentives), phased early retirement and natural wastage. October Inclusion in regular agreement of pay freeze in exchange for guarantees on Deutsche Post Germany Postal services 2009 outsourcing and redundancies. February Agreement on introduction of short-time working for ground staff, with Lufthansa Cargo Germany Civil aviation 2009 partial pay compensation. March Agreement on introduction of short-time working, with partial pay compen- TUI Germany Travel 2009 sation, and senior staff not affected by short time taking ‘solidarity’ pay cut. Agreement on cost-reduction measures, including workforce reduction November through early retirement or voluntary redundancy, while half of ground Aer Lingus Ireland Civil aviation 2008 operations staff had to leave the company and reapply for positions on lower terms and conditions. Agreement on pay cuts averaging 5.5 % (except for low-paid staff) and reduc- Dublin Airport tions in benefits, plus job cuts (with enhanced severance payments) as part of Ireland Civil aviation 2010 Authority company recovery plan. Pay cuts will be restored in future if recovery targets are met. Agreements on post-takeover restructuring plan, including state financial September Alitalia Italy Civil aviation support for redundant workers, changes in terms and conditions of employ- 2008 ment, and reductions in pay for some groups of staff. Agreement to avoid a number of planned redundancies through the use of Italtel Italy Telecoms June 2009 short-time work (partly based on ‘solidarity agreements’) and temporary lay- offs, plus incentives for voluntary departures. Agreement to avoid a number of planned redundancies through redeploy- Telecom Italia Italy Telecoms July 2009 ment, training and the use of short-time work (based on ‘solidarity agreements’) with pay and service guarantees. March Agreement providing for pay cuts for some grades in exchange for three-year TNT Netherlands Postal services 2009 guarantee of no compulsory redundancies. October Agreement on cost-reduction measures, including cuts in bonuses and job LOT Poland Civil aviation 2009 losses. November Inclusion in regular ‘social pact’ for 2009–11 of incentives for voluntary TP Poland Telecoms 2008 departures (with outplacement assistance), plus internal mobility measures. Agreement on cost-reduction measures affecting pilots, including cuts in pay British Airways UK Civil aviation June 2009 and allowances, increased working time and a number of job losses. G4S Cash Services UK Cash transit 2009 Agreement on reduced pay rise in return for redundancy mitigation measures.

125

Chapter 4: Wage flexibilisation and the minimum wage

Setting wages is one of the key functions of industrial relations systems. In the has been accompanied by growing context of the economic crisis and the debate about wage flexibility, the decen- wage inequality and the wages of tralisation of collective wage bargaining has continued to advance in most EU the low skilled have been particu- countries. At the same time, variable pay systems are providing an additional larly affected (ibid.). element of wage differentiation. In this environment, minimum wages could have an important role in providing a wage floor, yet the evidence shows that statutory In this context, there has been ongo- minimum wages have had little effect on the incidence of low pay and growing ing debate in Europe over whether wage inequality. more wage flexibility is needed and/ or desirable. Wage flexibility con- This chapter is based on a draft by Maarten Keune of the Amsterdam Institute for cerns the extent to which wages Advanced Labour Studies (AIAS, University of Amsterdam). respond to market forces, that is the extent to which they can vary in response to changes in labour 4.1. Introduction Concerning wage setting and demand and supply, or accord- its objectives, since the 1970s, ing to individual, collective or firm The context in which wages in solidaristic and productivity-ori- performance, or following changes Europe are negotiated has under- ented wage bargaining has gradually (shocks) in the macroeconomic gone important changes in the last been replaced by competition-ori- environment. The degree of wage decade. The ongoing globalisation ented wage bargaining (Schulten, flexibility depends to a large extent of the economy, the deepening of 2002; Marginson and Sisson, 2004). on the prevailing wage-setting insti- the internal market and its expan- This has involved a shift of emphasis tutions, including the level and sion to the 12 new Member States in wage bargaining from the pursuit coverage of collective bargaining, that joined the EU between 2004 of more egalitarian wage structures the power relations between trade and 2007 have intensified competi- and the decoupling of wages from unions and employers, the presence tion in product and service markets the specific circumstances of the and prominence of performance- and increased cross-border mobil- individual company in favour of related pay systems, the minimum ity. As a result, countries and work- industrial and/or occupational soli- wage, etc. These institutions may ers are increasingly in competition darity, towards a stronger role for set limits to the influence of market with each other for jobs and invest- the market and for the competitive forces, for example by compressing ment, creating pressure on labour requirements of individual compa- wage structures, constraining wage costs and modifying the power rela- nies. It has also resulted in a wide- differentiation according to skills tions between employers and work- spread practice of wage moderation or to region, preventing downward ers (Keune, 2008). in which real wage growth is kept wage adjustments, or reducing the below productivity growth. Wage responsiveness of wages to price and The European monetary union moderation has been a consistent productivity developments. (EMU) was also deepened and feature of wage setting in the past expanded during the 2000s. By creat- two decades and, since its incep- It is often argued that wage-setting ing a common currency and common tion, in the euro area in particular institutions in many European monetary policy EMU has created (Keune, 2008; Ebbinghaus, 2004). countries are too rigid, and that monetary stability in the euro area, One manifestation has been the this results in insufficient wage evidenced during the present eco- continuous decline of the labour’s differentiation, lower cost competi- nomic and financial crisis. However, share of total income in the EU. In tiveness for firms involved in glo- it has also limited the range of adjust- the EU-15, the labour income share bal competition, lower workforce ment mechanisms available to coun- of GDP fell from 69.9 % in 1975 to motivation and productivity, an in tries to adjust to asymmetric shocks, 57.8 % in 2006; amongst the 12 new the end to higher unemployment and placed increasing reliance on Member States, the labour income (in particular for the low skilled wage adjustments (Dyson, 2006). In share has been on a downward by pricing them out of the labour addition, through its requirements trend since the mid-1990s, with market) and/or lower economic as regards public expenditure and the exceptions of the Czech Repub- growth (e.g. OECD 2006; Arpaia public debt criteria it creates pressure lic, Cyprus, Malta and Romania and Pichelman 2007). Others, how- on wage levels, in particular in the (European Commission, 2007). The ever, call for caution, pointing to public sector. decline of the labour income share the potential detrimental effects of

127 Industrial Relations in Europe 2010

increased wage inequality on the make radical changes to bargaining labour market. Depending on its quality of work and fairness, on structures. They fear that the effect level, the minimum wage can limit collective wage-setting structures, would be increased wage differen- wage inequality as well as the inci- on equality and social cohesion or tiation or that company bargain- dence of low pay. This is especially on principles such as equal pay for ing would place too big a burden relevant since trade union density equal work (e.g. Vaughan-White- on small- and medium-sized com- and the level and coverage of col- head 2010; ILO 2008). panies. The chapter finds that in lective agreements, factors that are most countries where higher-level negatively correlated with wage ine- The ambition of the present chapter (sector and/or inter-sector) wage quality (e.g. European Commission is not to settle the wage flexibility bargaining dominates there has 2008, Chapter 3), are under pres- debate. Rather, the intention is to been little change in bargaining sure. The chapter establishes that review developments concerning arrangements for wages during the low pay affects one out of every six three important institutional aspects 2000s. Exceptions are Sweden, Fin- workers in the EU and its incidence of wage setting that are closely related land, Denmark and Germany where is higher in the countries where to the debate on wage flexibility: (i) decentralisation of wage bargaining company bargaining dominates and the extent to which collective wage arrangements has been a prominent coverage of collective agreements is bargaining has been decentralised; feature. There has, however, been a low. Yet a statutory minimum wage (ii) the extent to which variable pay more generalised decentralisation is no guarantee against low pay: systems are used; and (iii) the role of across the EU concerning negotia- a further finding is that the coun- the minimum wage. tions over additional pay elements, tries with the highest level of low including the (increasing) use of pay all have a statutory minimum The decentralisation of wage bar- variable pay systems. wage. There are some possible con- gaining, from (inter-) sectoral, or nections and interactions between multi-employer, level to company, Variable pay systems (VPS) increase these three institutional aspects of or single-employe, level has for wage flexibility by linking wages wage setting. VPS almost always many years been proposed as one more closely to individual, group or operate at company, or establish- of the measures to increase the company performance. VPS are fre- ment, level and have hence added responsiveness of wages to local quently expected to increase moti- to the pressure to open up scope for conditions, to strengthen the inter- vation, productivity and innovation, company bargaining within sector national competitiveness of firms while for some they are an instru- agreements. The weakened capacity and to improve macroeconomic ment to improve the redistribution of of sector-level collective bargain- performance (OECD 1994, 2006). wealth and the strengthening of eco- ing arrangements in some coun- The rationale for multi-employer nomic democracy. Although the evi- tries, notably Germany, to provide bargaining has been questioned fol- dence on these issues is mixed, this comprehensive workforce coverage, lowing the increase of international has not detracted from the interest together with the growing use of competition in particular, which, it is in VPS. There are major differences opening clauses in collective agree- argued, makes it less feasible to take in the incidence of VPS between ments in several countries, have wages out of competition within the countries and also between sectors heightened attention on the need relevant product market (Arrow- and companies of different sizes. for other e.g. statutory means to smith and Marginson, 2008). At the Whilst employers have tended to provide a minimum wage floor. This same time, the evidence concerning embrace VPS, the views of employee attention is further strengthened by the impact of collective bargain- representatives and of trade unions the low and declining coverage of ing structures on macroeconomic towards them are mixed with differ- collective bargaining in countries performance in general and on ences apparent between and within with single-employer arrangements, aggregate employment and unem- countries. The use of VPS seems to a group that has been significantly ployment in particular remains be increasing over time, representing augmented as a result of the 2004 fragile and inconclusive (OECD, a specific form of flexibilisation of and 2007 enlargements. The chapter 2006; European Commission, 2006; wage setting. concludes, however, that the capac- Aidt and Tzannatos, 2005). Also, ity of statutory minimum wages to trade unions and in many cases The minimum wage is a key fac- counter the effects of growing wage employers’ organisations and gov- tor that constrains wage flexibil- inequality and the problem of low ernments as well, are reluctant to ity by setting a wage floor in the pay is limited.

128 Chapter 4: Wage flexibilisation and the minimum wage

4.2. The level of collective Box 4.1: The European Company Survey wage bargaining: The European Company Survey (ECS) is a large-scale establishment survey carried out a trend towards by the European Foundation for the Improvement of Living and Working Conditions. The first ECS was carried out in 2004–05 and the second in 2009. The ECS 2009 covers decentralisation? 30 countries: the EU-27 plus Croatia, the former Yugoslav Republic of Macedonia and Turkey. The ECS is based on interviews with management and employee representatives in companies with 10 or more employees. In total, interviews were carried out in 27 160 establishments. The number of interviews per country ranges from almost 350 4.2.1. The importance in Malta, the smallest EU economy, to around 1 500 in the EU’s larger economies. In all establishments, a management interview was carried out. In addition, an interview of different bargaining was sought with the chairperson of the employee representative body — if one existed. levels This resulted in 6 569 interviews, which represents about 50 % of all companies in the sample that had employee representatives. The survey data are representative of The main distinction that is generally establishments with 10 or more employees from all sectors of activity, except for agri- made when considering the levels culture, fishing, activities of households and extraterritorial organisations. The survey at which collective bargaining takes covers organisations from both the private and public sectors. place is between single-employer The ECS 2009 covers different forms of working time flexibility (flexitime and work- bargaining at the company or local ing time account systems, part-time work, overtime work and work at unusual hours), the application of non-permanent employment contracts (external flexibility), aspects (establishment) level and higher- of wage flexibility as well as modes of enhancing the employability of staff for different level, multi-employer bargaining, tasks (functional flexibility). Moreover, the survey investigates the general structures often at the level of a sector or branch. and practices of collective bargaining and company-level employee representation The two levels can also combine, in Europe, shedding light on the different channels of representation, on available resources and on the impact of social dialogue on company decisions in different when the multi-employer agreement Chart 4.1: Employees falling under different levels of collective areas. The findings provide a unique insight into company strategies as well as into sets out a framework that is further agreements, 2009 (establishments with 10 or more employees) workplace social dialogue structures and practices. The ECS is also a unique source developed at company level, or when of European-wide comparative company-level data on the use of variable pay systems at company level derogations from (VPS). higher-level standards are possible, Source: European Foundation for the Improvement of Living and Working Conditions (2010). for example in times of economic difficulties. Recent cross-country data charting the relative importance of Chart 4.1: Employees falling under different levels of collective the various bargaining levels come agreements, 2009 (establishments with 10 or more employees) from the 2009 European Company 100 Survey (ECS), a representative survey of establishments with 10 or more Higher level 80 Higher level with derogation employees in 30 European countries Local or company and higher level Local or company (see Box 4.1) (1). According to the ECS, of all employees in Europe covered 60 by any type of agreement, 61 % fall under a higher (sector and/or inter- sector) level agreement (Chart 4.1). 40 This includes 7 % where there is a company-level agreement as well as 20 the higher one (so-called ‘two-tier bargaining), and 5 % where the type of agreement falling under any employees % of total 0 higher-level agreement contains All LT CZ RO EE LV PL SK CY HU MT BG UK FR EL SI IE DE ES NL SE BE LU DK PT AT IT FI scope for derogations at company Source: J. Visser, ICTWSS Database 3.0, 2010; the averages for EU-27, EU-15 and EU-12 level. For 38 % of employees, the com- are weighted. pany is the sole level of bargaining.

1 Thanks to Gijs van Houten of the European Foundation for the Improvement of Living and Working Conditions for providing the ECS data used in this chapter.

129 Industrial Relations in Europe 2010

Table 4.1: Employees falling under different levels of collective agreements, private and public sector, 2009 (% of total employees covered by any type of agreement, establishments with 10 or more employees) Local or company and Local or company Higher level with derogation Higher level higher level Private Public Private Public Private Public Private Public EU-27 44 26 6 8 6 5 44 62 AT 17 37 12 7 1 6 69 51 BE 29 11 8 7 9 2 55 80 BG 77 58 4 12 2 9 17 22 CY 76 56 3 4 1 7 20 33 CZ 86 90 5 2 1 1 7 7 DE 38 4 4 1 13 10 45 86 DK 31 5 21 9 6 8 42 78 EE 85 n.a. 0 n.a. 0 n.a. 14 n.a. ES 28 27 4 5 4 1 63 67 FI 17 6 7 8 2 3 73 83 FR 52 23 5 5 1 2 42 69 EL 46 21 7 2 1 3 45 74 HU 72 67 6 6 2 6 20 21 IE 44 8 1 1 26 16 29 74 IT 18 15 19 40 1 1 63 44 LT 94 95 0 1 0 0 6 3 LU 28 3 17 3 5 4 51 90 LV 69 79 4 6 16 7 11 9 MT 82 n.a. 0 n.a. 1 n.a. 17 n.a. NL 36 20 0 4 14 7 49 69 PL 95 55 0 3 1 2 3 40 PT 22 4 5 4 2 0 71 92 RO 91 71 2 4 0 1 6 25 SE 33 17 15 21 4 3 48 59 SI 55 10 10 3 4 1 32 86 SK 87 58 5 7 3 11 5 23 UK 69 26 4 7 4 5 23 62

Source: ECS 2009.

There is great diversity across and higher-level agreements with agreements which contain deroga- Europe, however. Company-level derogation clauses, is dominant in tions (see also below) (2). bargaining is dominant (i.e. covers the EU-15 (except for the UK) and above 50 % of the total of employees Slovenia. Two-tier bargaining fea- 2 In Ireland, there are only few sectoral collective covered by any type of agreement) tures most prominently in terms of agreements and they do not tend to include derogations. However, in the survey respondents in the UK and 11 of the 12 new employees covered in Italy, Sweden probably refer to the national social pacts which have Member States (the exception being and Denmark; while Ireland and Ger- included an inability-to-pay clause since 2003, which Slovenia). Higher-level bargain- many have the highest percentage of also includes key conciliation and dispute-settling functions for the Labour Relations Commission (LRC) ing, including two-tier bargaining employees covered by higher-level and the Labour Court (van Klaveren forthcoming).

130 Chapter 4: Wage flexibilisation and the minimum wage

Important differences also emerge of employees covered by collective linking wages more closely to the when comparing the public and the agreements. The coverage of col- competitive position and require- private sector, with bargaining being lective bargaining in the countries ments of individual companies. In noticeably more decentralised in the where company-level bargaining is terms of the process involved, Traxler latter (Table 4.1). On average, for the dominant is markedly below that of (1995) distinguishes between organ- private sector, of those employees cov- the countries where higher-level bar- ised decentralisation — increased ered by any type of agreement, bargaining is dominant (the only excep- scope for company-level bargaining gaining is exclusively at company or tion being Romania). In the former but within the framework of rules establishment level for 44 %. In con- group coverage falls between about 15 and standards set by higher-level trast, this is the case for only 26 % in and 55 %, while in the second group agreements — and disorganised the public sector. In some countries, it ranges from about 60 to 100 %. decentralisation, that is, the replace- single-employer bargaining hardly Multi-employer agreements by them- ment of higher-level bargaining by features at all in the public sector; selves already cover large numbers of company bargaining. 5 % or less if public sector employ- companies or establishments that are ees are covered by local agreements directly part of the agreement. In addi- Amongst the EU-15, the UK under- in Portugal, Denmark, Germany and tion, in a number of countries collec- went a process of disorganised decen- Luxembourg. The main exceptions tive agreements can also be extended tralisation during the 1980s and to the broad picture are Austria and to cover entire sectors or branches, 1990s, as sector-level, multi-employer Latvia where there is substantially substantially increasing their coverage agreements were almost entirely dis- more local bargaining in the public in this way (see Chapter 1). placed by single-employer, company than in the private sector. Conversely, or local-level, bargaining arrange- higher-level bargaining is much more ments in the private sector. As a widespread in the public sector than 4.2.2. Developments over time result, bargaining coverage declined in the private sector: of all public sec- and across countries from 70 % in 1980 to 34.8 % in 2007. tor employees covered by any type of To some extent developments in agreement 75 % fall under a higher- As discussed in Chapter 1, decen- the central and east European (CEE level agreement as compared to 56 % tralisation has been an important countries) Member States in the early of private sector employees. feature of developments in industrial 1990s can also be viewed as a rapid relations in Europe in recent decades. process of disorganised decentralisa- The differences in the importance of The most extreme form of decentrali- tion. Although before 1990 sectoral the various bargaining levels between sation follows from a decline in the bargaining never played an impor- countries and between the public and coverage of collective agreements, tant role in most of CEE countries private sector have important implica- resulting in more individual bargain- and collective bargaining has always tions. Two issues are of major signifi- ing between employer and employee taken place mainly at company level, cance here. One is that higher-level or to the unilateral definition of wages the central state had an important bargaining leads to more equal wages and working conditions by employ- influence on wage setting and cov- and working conditions in the com- ers. Chapter 1 showed, however, that erage rates were high. After 1990, in panies or organisations falling under across the EU collective bargaining most CEE countries central elements such agreements, taking a number of coverage has been relatively stable disappeared from the wage-setting standards out of competition in the over the 2000s, with only a slight process (with the important excep- respective sector. Conversely, com- decline. More commonly decentrali- tion of the minimum wage) and pany-level bargaining allows for the sation takes the shape of a shift in coverage rates declined rapidly. The definition of wages and working con- emphasis between bargaining levels, main exception was Slovenia, where ditions in line with the specific cir- with the importance of company- a continuous series of inter-sector cumstances of the respective company or local-level collective bargaining social pacts and extensive sectoral or organisation, leaving more space gaining at the expense of sectoral bargaining have played a key role in for tailored competitive strategies, collective bargaining, or of sectoral wage setting (Stanojevic, 2010) (3). which foster wage inequalities. bargaining gaining at the expense 3 Sectoral bargaining plays a substantial role as well of inter-sectoral bargaining. Decen- in Slovakia; however, its significance has been declining The other is that there is a clear tralisation of collective bargaining recently as the number of multi-employer agreements link between the dominant level towards company level is seen as a concluded declined from 53 in 2004 to 37 in 2008 and the number subject to legal extension fell from eight to of bargaining and the percentage way of flexibilising wage setting and two in the same period (Cziria 2008; 2010).

131 Industrial Relations in Europe 2010

Organised decentralisation is largely tradition of central agreement look- and investment (ibid.). Hence, open- an issue for the EU-15, where (inter) ing to have come to an end following ing clauses are now not only accessi- sectoral bargaining continues to play the expiry of the most recent accord ble for companies in acute economic a major role. However, developments in 2009 (see Chapter 1). difficulties but also for companies in the 2000s have not extended to that more generally suffer from com- all of these countries, and in those Germany has also experienced a petitive pressures. As a result, the use where a measure of (further) decen- marked decentralisation of bargain- of such clauses rapidly rose from 70 tralisation has taken place, the extent ing in the past decade, resulting in company-level derogation agree- of any change differs. Most profound a significant shift of responsibilities ments in 2004 to 730 agreements in has been the process of organised from the sectoral level to the level of early 2009 (Chart 4.2); around 70 % decentralisation of wage bargaining the company (Bispinck, 2008). The of these agreements include deroga- in the Nordic countries, and further organised dimension to this process is tions concerning wages (Bispinck organised decentralisation, but also driven by several mechanisms. First is and Schulten, forthcoming). Simi- the appearance of a disorganised the increased use of variable pay sys- larly in the chemical industry deroga- dimension, in Germany. In Sweden, tems and in particular profit-related tions concerning wages have been on until the late 1980s private sector bonuses (see next section). Second the increase, from 6 in 1997 to 28 in wage bargaining was undertaken at is the increased use of opening and 2003 to 115 in 2009 (ibid.). Thirdly, the central level, moving down to the hardship clauses which allow com- the number of sectoral collective sectoral level in the 1990s. In recent pany agreements to derogate from agreements that have been legally years, however, wage bargaining has collectively agreed standards. Tradi- extended has fallen steadily, from continued to take place at the sector tionally such clauses were designed 408 in 1991 to 242 in 2005 (Bispinck, level in only a minority of sectors; for companies suffering from acute 2008). Fourthly, the coverage of col- more and more actual pay levels are but temporary economic difficulties. lective agreements has fallen sharply determined at the local level within In recent years, however, this has since the mid-1990s also because of the context of sectoral guarantees changed. The key agreement in this the growing propensity of employers concerning e.g. the minimum pay respect was the Pforzheim Agree- to leave, or not join, employers’ asso- rise (Stokke, 2010). Similarly, in ment concluded in the metalworking ciations (see Chapter 1). In combina- Denmark, following a process of and electricalChart industry 4.2: Number in 2004, of which company-level tion, these deviations two factors from sectoral have reduced decentralisation which started in the allowed deviationsagreements from collectively in metalworking the significance by quarter, 2004–09of the sectoral agree- early 1990s, most employees are cov- agreed standards in certain cases in ments and brought a disorganised ered by sectoral agreements that now order to maintain and improve com- element to the process of decentrali- only set the sectoral minimum wage, petitiveness, innovative capability sation in Germany. leaving the rest up to local bargaining (Stokke, 2010; Ilsøe et al., 2007). Chart 4.2: Number of company-level deviations from sectoral In both countries wages can vary agreements in metalworking in Germany by quarter, 2004–09 substantially between enterprises in 800 the same sector. In Finland a tradition of 40 years of centralised wage 700 agreements came to an end in 2007 as the Confederation of Finnish 600

Industries decided not to participate 500 further in central negotiations. As a result, wage bargaining moved down 400 from the central level to the sectoral 300 level. One of the key rationales for Finnish employers to press for such 200 sectoral agreements in metalworking sectoral agreements decentralisation was to enlarge the from deviations Number of company-level 100 scope to introduce variable pay systems (Arrowsmith and Marginson, 0 Sept. Dec. March June Sept. Dec. March June Sept. Dec. March June Sept. Dec. May Apr. 2008). In Slovenia too, bargaining 2004 2004 2005 2005 2005 2005 2006 2006 2006 2006 2007 2007 2007 2007 2008 2009 seems to be moving down from the Source: Bispink and Schulten (forthcoming). inter-sector to sectoral level, with the

132 Chapter 4: Wage flexibilisation and the minimum wage

In other EU-15 countries there has indeed lead to more decentralisation is provided by the so-called ‘distribu- not been such a pronounced trend of collective bargaining, as the oppo- tion option’, part of the metalwork- towards decentralisation of wage sition of the largest trade union may ing collective agreement since 1997 bargaining over the past decade. In prove to be a major obstacle to its (Adam, 2009a). Under this provision, Italy the picture has not changed implementation. the works council and the employer much over the past 15 years. Since can redistribute a certain amount of the conclusion of the July 1993 Pact, In France, the so-called 2004 Fillon the total wage bill at company level. cost of living related wage increases law enacted a reform intended to For example, in 2007, 0.3 % of the have been negotiated at the sectoral further the decentralisation of col- actual wage increase could be dis- level while company-level bargain- lective bargaining. The law reversed tributed flexibly, in line with certain ing has dealt with additional pay ele- the traditional favourability princi- criteria (e.g. compensation for espe- ments linked to productivity, quality ple, which stated that lower-level col- cially low incomes or high perform- and competitiveness improvements, lective agreements could not deviate ance, reduction of the gender-related or company economic performance from higher-level agreements to the pay gap, etc.) to be agreed upon by (Pedersini and Coletto, 2009). The detriment of the employee. It pro- the parties to the works agreement. incidence of such company bargaining vides that lower-level agreements More recently, an obligatory ‘distri- has not, however, extended beyond can deviate from higher-level agree- bution pot’ (Verteilungstopf) was 30 % of the private sector workforce ments unless this is specifically included in the metalworking collec- and the take-up of the territorial alter- forbidden. In doing so, it explicitly tive agreement, effective as of 2010, native (potentially more attractive aims to promote company-level under which the employer is obliged than company-specific negotations to bargaining. Nonetheless, under the to distribute a fixed amount of the small- and medium-sized enterprises) Fillon law the favourability prin- total wage bill among the employees has been low. This may change in the ciple remains in force in respect of based on three criteria: work per- near future, however. In January 2009, four themes which are exempted formance (including social skills); a number of employers’ organisations from derogation at company level: improvements of the company’s pay including the main Confindustria minimum wages; job classifica- structure in favour of low pay; and confederation, concluded the frame- tions; supplementary social protec- equal treatment of female and male work agreement for the reform of the tion measures; and multi-company workers (ibid.). Compared to the collective bargaining system with two and cross-sector vocational training Nordic countries and Germany, how- of the three main trade union organi- funds (Ramos Martin, forthcom- ever, this amounts to a highly limited sations, UIL and CISL. The agreement ing). As a result, the possible effects form of decentralisation; the basic was sponsored by the government of on wage bargaining are limited wage is still firmly set at the secto- which also signed it as the employer in to additional wage elements which ral level. Similarly, in Belgium, the the public sector. It promotes certain are not exempted, such as perform- Netherlands and Spain decentralisa- types of decentralisation of collective ance-related pay, shift allowances tion has hardly affected the predomi- bargaining. Most importantly, it pro- child-birth allowances, seniority nant role of sector and intersectoral vides the possibility to introduce open- payments, etc., the basic features of wage bargaining in determining the ing clauses permitting company-level which have been commonly agreed basic wage. collective bargaining — or territo- at sectoral level. An evaluation of rial-level bargaining — to change in the impact of the reform published This does not mean, however, that in pejus the standards of sectoral agree- by the Ministry of Labour Social the latter countries no decentralisation ments, including wages, in order to Relations and Solidarity in 2008 of wage setting has taken place. deal with situations of economic cri- finds that there have been no notable As discussed in the following section, sis and restructuring, or to promote changes in the levels at which bar- variable pay systems regulating addi- economic and employment growth. gaining takes place and that employ- tional pay elements related to indi- The largest trade union confederation, ers and trade unions continue to vidual or company performance are CGIL, refused to sign the agreement follow well-established practices growing in importance across Europe. considering that it would break the (Dufour, 2008). Similarly, in a number of countries integrity of the national bargaining cafeteria-type arrangements under structure and weaken workers’ protec- In Austria the sector level remains which employees can exchange a tion (Pedersini, 2009). For the moment firmly established and decentralisa- defined part of their wages for addi- it is not yet clear if the agreement will tion is limited. Some wage flexibility tional free time or additional pension

133 Industrial Relations in Europe 2010

contributions play an increasing role at the company level. The basic fea- Box 4.2: The Austrian wage bargaining tures of such types of flexible wage system under strain because of the crisis setting may still be defined in sectoral In Austria, the Federation of Austrian Industry (Industriellenvereinigung, IV) recently collective agreements, but their actual called for Austria’s common practice of multi-employer agreements to be replaced by outcomes depend on the performance company-level settlements. Such a change would signify a breach of Austria’s traditional sys- of companies or individuals and in the tem of annual sectoral collective bargaining. IV argued that any wage increases concluded at sectoral level would substantively threaten those enterprises currently operating at a loss case of cafeteria plans also on the pref- due to the economic crisis. IV’s demand was strongly rejected by the trade unions, which erences of the latter. called for the conclusion of sector agreements providing for decent increases in wages as a means of sustaining domestic purchasing power and therefore economic activity (at a time The present economic and finan- of sharp decline in exports and investment expenditure). After a series of unsuccessful cial crisis has intensified the debate negotiating rounds in several sectors of the economy during April and May 2009, the trade on the decentralisation of wage unions accused the employers of apparently adopting a concerted strategy of obstruct- ing wage negotiations. As of mid-May, talks in about 10 sectors employing some 400 000 bargaining in some countries (see workers were deadlocked, including electronics, textiles, road haulage, paper, chemicals, Chapter 3).The fact that the impact information technologies and graphic design. Five of the strongest trade unions organised of the crisis differs strongly between a demonstration on 13 May, involving some 25 000 participants, with the aim of pressuris- companies even within the same ing the employer side to return to the negotiating table. sector has brought current sector For the moment, it seems that the Austrian system of sectoral wage bargaining will survive wage-setting arrangements under this crisis. In November 2009 the pattern-setting metalworking industry concluded a new renewed pressure, as in Austria for sectoral agreement, after protracted negotiations. The agreement sets a real wage increase for the sector of about 1 %, similar to previous years. It also includes a commitment from the side example (see Box 4.2). In the Nor- of the trade unions to enter into negotiations with the employer side on working time flex- dic countries and Germany there ibility and to present proposals on how to render working time more flexible in the sector. are a number of examples of crisis- Source: Adam (2009b, 2010). induced organised decentralisation, with sectoral agreements providing for additional opt out possibilities of the basic wage, workers receive ownership to the redistribution of related to the crisis (see Chapter 3; performance-related variable pay ele- wealth and the strengthening of eco- also Glassner and Keune 2010). In ments that are dependent on the per- nomic democracy (e.g. Gold, 2003; Ireland, a long tradition of national- formance of the company as a whole, Standing, 1999). Finally, there are an level pay agreements has come to of the team to which a worker belongs, increasing number of studies trying an end as government, unions and or of the individual worker. VPS have to map and explain the emergence employers’ organisations could not for many years been a hotly debated of VPS from a more institutional- come to agreement on wage policy issue. The classical economics ques- ist perspective and to understand during the crisis (see Chapter 3). For tions in this debate are to what extent the respective roles of public policy, the moment voluntary coordination monetary incentives can improve firm workers’ representatives and man- of wage bargaining between unions performance and workers’ productiv- agement (Pendleton et al., 2002; Ner- and employers governs wage setting, ity, skills, motivation and involvement gaard et al., 2009; Kabst et al., 2006; which may point to a return to cen- in process and product innovation, Vaughan-Whitehead et al., 1995). tralised pay agreements at some point and what the role of such incentives is in the future. Elsewhere amongst the in attracting and retaining core staff The debates on variable pay, and in EU-15, however, the crisis does not (e.g. Lazear, 2000; Blinder, 1990; Cox, particular on the efficiency-based seem to have led to, or created pres- 2005; Robinson and Wilson, 2006; approaches, are rather inconclusive: sure for, further decentralisation of Marsden and French, 1998). Closely whereas many studies point to a pos- wage bargaining. related is the question to what extent itive relationship between VPS and VPS are an instrument of flexibilisa- productivity or firm performance, tion in terms of adjusting wage costs others shed doubt on these results, 4.3. Variable pay systems to firm performance and in particu- finding that there is no or even a lar in reducing wage costs in times of negative relationship, whilst yet oth- A second issue which is of paramount economic hardship. An alternative to ers identify factors conditioning any importance for wage flexibility is these efficiency-based approaches are relationship. There is also a lack of that of variable pay systems (VPS). those dealing with the contribution comprehensive comparative data Under variable pay systems, on top of profit sharing and employee share and research.

134 Chart 4.3: Types of VPS, EU-27, 2009

Chapter 4: Wage flexibilisation and the minimum wage

This section draws on new comparative data from the European Company Chart 4.3: Types of VPS, EU-27, 2009 Survey (ECS) on the use of various 60 types of VPS in Europe across the International weighting by number of companies 50 EU. It identifies differences between International weighting by number of employees countries, sectors and enterprises of different sizes and considers some 40 of the factors which might account for cross-country differences in par- 30 ticular. The ECS data also throw light on the motives management has 20 for implementing VPS and on the

respective position of employee rep- employees with 10 or more % of companies 10 resentatives towards these schemes. The focus is on the use of three 0 major types of VPS: individual and PRP PS ESO (except Portugal) No VPS team-based performance-related pay (PRP), profit sharing (PS) and Source: ECS 2009. employee share ownership (ESO) (4). Since the ECS provides data only for is by far the most frequently used: country, sector and size (a fourth fac- one point in time, reference will be Chart 4.3 shows that 37.2 % of tor concerns the public–private sector made to other sources to gain some companies employing 47.5 % of divide, see Box 4.3). Large differences indication of developments over time employees have some form of perin the use of VPS can be observed in the use of VPS. The discussion is formance-related pay. This reflects between countries (Chart 4.4). largely confined to the private sec- the widespread belief that perform- For example, while in the Czech tor since PS and ESO, with Box 2.1 ance pay leads to higher productivity Republic as many as 71 % of com- briefly comparing the situation in the and improved company perform- panies use PRP schemes, in Hun- public sector. ance, even though, as noted above, gary only 19.8 % of companies do there is no consensus on this rela- so. Similarly, profit sharing is used tionship amongst the many stud- in 35 % of French companies but 4.3.1. The incidence of VPS ies undertaken. Much lower is the only in 2.9 % of Italian companies, in the private sector incidence of employee financial whilst employee share ownership is participation through profit shar- found in 12.9 % of Danish compa- Variable pay systems (VPS) are ing schemes (14.0 % of companies, nies but only in 0.9 % of Lithuanian a widespread, although far from employing 20.9 % of employees) and ones. The main factor explaining universal, feature of contemporary employee share ownership schemes these differences may concern dif- pay systems in the EU. Across the (4.6 % of companies, employing ferent institutional contexts, i.e. EU-27, one of more types of VPS are 7.9 % of employees). Set against different rules and regulations that found in 44.5 % of companies with the initiatives from the European govern the use of VPS. For example, 10 or more employees, employing Commission to promote employee the high level of PRP in the Czech 56.6 % of employees. Conversely, this financial participation, these latter Republic is likely to be linked to the means that just over half of compa- figures seem low (5). fact that the Czech Labour Code, nies, employing just under half of the unique in the EU in this respect, relevant workforce, do not use any The occurrence of VPS in the EU is specifically encourages performance from of VPS (Chart 4.3). Of the three closely related to three key factors: pay. Indeed, it stipulates that ‘wages types of VPS distinguished above, and pay shall be provided according performance-related pay, based on 5 As early as 1989, the European Commission to the complexity, responsibility and individual or team performance, included employee financial participation among the strenuousness of work; according to priority objectives of its action programme for the implementation of the Community Charter of Basic the difficulty of working conditions; 4 Unfortunately, for performance-related pay, Social Rights of Workers, followed by a Commission according to work performance and the ECS did not differentiate between traditional recommendation on this issue (1992) and a achieved work results’ (Arrowsmith output-based schemes and more recent appraisal- Commission ‘Framework for promoting employee based schemes. financial participation’ in 2003 (Lowitzsch 2006). and Marginson, 2008: 20). It also

135 Industrial Relations in Europe 2010

provides for binding rules regarding wages to productivity (ibid.). benefits serve to promote employee ing extra pay and personal bonuses Similarly, the high level of profit share ownership and ESO schemes whereby consistently high levels of sharing in French companies results are increasingly subject of collective performance may be rewarded with from the fact that the country has bargaining. Through such statutory an individual bonus ofChart up 4.4: to Types 50 % of VPSa mandatory by country, 2009 profit sharing scheme or collectively agreed regulations of the pay tariff of the highest wage for companies with a workforce of and promotional measures the state level in the particular pay grade over 50 since the 1960s. This scheme and the social partners can play a (ibid.). In Slovenia, where the inci- requires companies to set aside a stat- decisive role in promoting the use dence of PRP schemes is also high, utorily defined percentage of their of VPS. it is the social agreement between profits for distribution to employees the national social partners for the (van het Kaar and Grünell, 2001). In There are also clear differences in the period 2007–09 that advocated relat- Denmark, multiple options and tax use of variable pay schemes between sectors (Chart 4.5). The three types of Chart 4.4: Types of VPS by country, 2009 PRP VPS are most prevalent in financial PS 80 ESO intermediation followed by real estate and business services, and by trade 70 PRP PS and repair. Conversely, in health and Health60 and social work ESO social work, public administration Public administration and defense, and education, only lim- 50 Education ited use of VPS is evident. The sectors Other community, social+personal40 services with a high incidence of VPS often Hotels and restaurants have a long tradition of individual 30 Construction and collective financial incentives.

Transport and communication 20

Manufacturing employees with 10 or more % companies and energy* In addition, financial intermedia- 10 0 10 20 30 40 50 60 All sectors tion and business services have faced Wholesale and retail trade, Chart 4.5: VPS by sector, 2009 a tight labour market for highly repair0 of goods Real estate and businessHU activitiesIT LV IE FR BE AT SE EL NL CY MT EE BG UK LU ES RO DE DK LT PL SK FI SI CZ educated labour in many countries in recent years, leading to the use Financial intermediation Source: ECS 2009. of bonuses to attract employees and rewards improvements in education and training (van het Kaar and Grünell, 2001). Chart 4.5: VPS by sector, 2009

Health and social work Turning to size, the use of all three types PRP Public administration of VPS increases continuously with PS Education ESO the employment size of establishments Other community, (Chart 4.6). Comparing companies social+personal services Hotels and restaurants with 10-19 employees to those with

Construction 500 or more employees, the inci- Transport and dence of PRP schemes in the largest communication Manufacturing establishments is twice that in the and energy* smallest. For PS and ESO schemes, All sectors Wholesale and retail the respective differences are 2.3 trade, repair of goods and 3.6 times. Amongst enterprises Real estate and business activities with 250 or more employees, over Financial intermediation 60 % apply PRP schemes, some 27 % 0 10 20 30 40 50 60 use PS schemes and some 13 % have % companies with 10 or more employees ESO schemes, all far above average. Note: 0.4% (or 69) of companies reported being classi ed to NACE sector public administration and defence. * This might be a misclassi cation (the manufacture of defence equipment is classi ed elsewhere) This is not surprising: designing and or the companies might provide support services. implementing VPS schemes often Source: ECS 2009. requires substantial management

136 Chapter 4: Wage flexibilisation and the minimum wage

4.3.2. Management motives Box 4.3: comparing VPS in the public and private sector and employee VPS are by no means the prerogative of the private sector. In the public sector more than one-third (36 %) of establishments use at least one type of VPS. This is well below the representatives’ attitudes respective figure for the private sector (44.6 %) but still important. The major difference from the private sector is that VPS in the public sector is largely confined to performance The ECS gives some insight into the related pay (PRP). PRP schemes are used in 33 % of public sector establishments, close motives management has for the to the 37.2 % figure for the private sector. Forms of financial participation by employees introduction of VPS. In particular it are scarce, reflecting the different ownership and non-profit status of many public sector has identified the reasons why man- ogranisations. Even so, almost 6% of public sector establishments reported profit sharing agements decide to introduce such (PS) schemes and 2 % employee share ownership (ESO) schemes. schemes. Chart 4.7 reports the findings for profit sharing schemes (6). VPS in public and private establishments, The most important management EU-27, 2009 (% establishments) motive for the use of profit sharing is to increase staff motivation: more Public Private than 60 % of managers see this objec- PRP 33.0 37.2 tive playing a large role in the decision to adopt profit sharing schemes PS 5.7 14.0 and over 20 % see it playing at least SO Chart 4.6: VPS by company2.0 size, EU-27, 20094.6 some role in this respect. Between 40 No VPS 63.9 55.4 and 50 % of managers see profit sharing as an important instrument to Source: ECS 2009. boost employee productivity, improve employee involvement in process and product improvements, and Chart 4.6: VPS by company size, EU-27, 2009 attract and keep well-qualified staff. 70 Another 20 to 30 % see these three PRP objectives play some role in adopting 60 PS ESO profit sharing schemes. Cost contain-

50 ment does not emerge as a salient rationale: some 60 % of managers

40 say that the reduction of wage costs in periods when economic activity 30 slackens plays little role in adopting profit sharing schemes. Hence, 20 from the perspective of management, such schemes are primarily oriented % of companies with 10 or more employees with 10 or more % of companies 10 towards improving the functioning of human resources and assuring the 0 10 - 19 employees 20 - 49 employees 50 - 249 employees 250 - 499 employees 500 or more employees continued availability of personnel of the appropriate quality. Source: ECS 2009. Trade unions have varying positions involvement, administrative capac- These differences by size also point to on VPS, both between and within ity, expertise in HRM techniques, etc. the fact that the percentage of com- countries. Concerning between- (Cox, 2005). Larger companies are panies using such schemes says little country differences, in some coun- more likely to have these resources about the percentage of employees tries (e.g. Ireland or Italy) unions than smaller ones. This is also consist- covered by them. Because VPS are see VPS as a way to give employees a ent with findings that multinational more widespread amongst larger com- share in favourable company results, companies have, in many countries, panies, the percentage of employees with the Irish unions seeing vari- been among the main promoters of covered is consistently higher than the able pay also as a way of broadening variable pay schemes (Marginson and percentage of companies (as shown in 6 Comparable data on the other two types of VPS Meardi, 2009). Chart 4.3). were not available.

137 Industrial Relations in Europe 2010

employee ‘stakeholding’ in the enter- east European Member States trade The position of company-level prise; while in others (e.g. Belgium unions accept VPS elements as long employee representatives varies and France), unions believe that as long as they are paid on top of both across and within countries, workers should not have to shoul- collectively agreed wages; although with responses ranging from cau- der the burden of corporate risk in the Czech Republic (where the tious cooperation to confrontation through variable pay (van het Kaar incidence of PRP schemes is the with management, depending on the and Grünell, 2001). Trade unions highest in the EU) the policy of the type of VPS in question, the institu- also fear that VPS may affect basic main trade union confederation, tional context and the local power wages, lead to greater wage inequal- ČMKOS, is to increase base wages as relations (Nergaard et al., 2009). As ity andChart potentially 4.7: Management’s undermine motives soli- fora proportionintroducing profitof earnings sharing and schemes thereby Chart 4.8 shows, in the central and darity and principles like equal pay to reduce the variable proportion east European Member States 50 % for equal work. In most central and (Arrowsmith and Marginson, 2008). or more of company-level employee representatives are supportive of Chart 4.7: Management’s motives VPS, while — with the exception of Hungary — the percentages oppos- for introducing profit sharing schemes 7 100 ing VPS are low ( ). At the other end of the spectrum, in the Netherlands, Belgium and Finland the percentage 80 of employee representatives supporting VPS is below 30, while in

60 particular in Sweden and Denmark the positions of employee repre- % sentatives are rather polarised with 40 a substantial share supporting and a DK/NA substantial share opposing VPS. Hardly any role Some role 20 A large role Chart 4.8: Attitude of company-level employee 4.3.3. Developments over time representatives towards VPS, by country, 2009 0 Boost work Increase sta Attract Increase employee Reduce wage costs Other productivity motivation and keep involvement in time of low reasons The ECS presents a picture of the well-quali ed sta in process and product order volume improvements situation concerning VPS at one

Source: ECS 2009. moment in time and does not allow for comparisons over time. The consensus in the literature is that the use Chart 4.8: Attitude of company-level employee of VPS has been increasing in recent representatives towards VPS, by country, 2009 years (Arrowsmith and Marginson, 100 2008; Kersley et al. 2004; Welz and Fernándes-Macías 2008), including appraisal-based forms of PRP and 80 forms of profit sharing and profit- related pay. Not all types of VPS are, 60 however, on the rise; in particular, % the use of piecework, one of the most traditional forms of perform- 40 ance pay, is in decline. This follows changes in job requirements, which DK/NA 20 Opposing increasingly emphasise quality, flex- Neutral ibility and teamwork (Arrowsmith Supporting

0 and Marginson, 2008). RO LT CY SI LV EE BG IT PL PT CZ HU GR SK ES SE UK DK DE FR LU IE FI NL BE

Source: ECS 2009. 7 The data available did not allow a differentiation according to the different types of VPS.

138 Chapter 4: Wage flexibilisation and the minimum wage

Chart 4.9: Wage inequality and low pay, full-time employees in enterprises with 10 or more employees, 2006

Growth in the use of VPS reflects the growing interest in variable pay Chart 4.9: Wage inequality and low pay, full-time employees arrangements on the part of employ- in enterprises with 10 or more employees, 2006 ers (see above). In some countries, 7 35 institutional factors have also been important, as indicated earlier. The 6 30 growth of VPS has prompted, and 5 25 been facilitated by, the decentralisation of pay setting. As Arrowsmith 4 20 and Marginson (2008) show, VPS % are only to a limited extent regu- 3 15 lated by multi-employer agreements, through general recommendations 2 10 or procedures, and are more usually 1 Wage inequality (ratio 90th/10th decile, left axis) 5 left to company-level negotiation Low pay (equal or below 2/3 of the median wage, right axis) or determination. The result, the 0 0 authors argue, has been unilateral DK FI BE MT SE IT FR NL CZ SI AT LU ES SK IE GR DE UK EE PL CY HU BG LT PT RO LV implementation of schemes by com- Source: Eurostat. panies, more marked in some countries than others, as well as their introduction through negotiations 2008, Chapter 3), make the mini- wage inequality is highest, low pay is with local trade unions or works mum wage all the more relevant in also most widespread. Low pay, here councils. The increasing use of vari- this respect. Other factors too are referring to full-time employees in able pay may then undermine the leading to increasing concern about enterprises with 10 or more employ- relevance of sector-wide collective wage inequality and low pay, includ- ees who are paid at, or below, two- agreements, while also contributing ing the rise of non-standard flexible thirds of the median wage, averages to the further individualisation of employment contracts and the grow- 17.2 % for the EU-27. This repre- employment relations. ing use opening clauses in collective sents one out of every six employees. agreements in certain countries, If part-time employees and employ- in particular Germany (see above). ees in small enterprises were to be 4.4. The minimum wage Worries concerning low pay are fur- included in the calculation, this ther strengthened by the increased percentage would most likely be mobility of labour within the EU substantially higher. Low pay affects 4.4.1. Low pay and wage (Vaughan-Whitehead, 2008). In more than a quarter of employees inequality countries receiving migrants from in four countries: Bulgaria, Roma- central and eastern Europe, it is nia, Lithuania and Latvia, reaching The minimum wage is relevant to often feared that these workers will 30.9 % in the latter. The propor- the issue of wage flexibility as it sets be forced to accept low pay and that, tion affected is below 15 % in the limits to wage flexibility by estab- in turn, this will result in downward Nordic countries, Belgium, France, lishing a wage floor in the labour wage pressure for domestic workers. Austria, the Netherlands and Italy, market. Depending on the level at In sending countries, low pay is seen all countries where multi-employer which the minimum wage is set it (or this was the case at least until bargaining dominates and/or exten- may also play an important role the onset of the crisis) as a motive sions of collective agreements by the in containing wage inequality and for outward migration, resulting in state play a crucial role. With only low pay. The generalised decline of shortages of workers and skills. a few exceptions low pay and wage trade union density across Europe, inequality are higher in countries combined in some countries with a The incidence of low pay and the where company-level bargaining declining coverage of collective wage extent of wage inequality vary sub- dominates and coverage of collec- bargaining and/or the decentralisa- stantially across the EU, as Chart 4.9 tive agreements is low, while both tion of wage bargaining, factors that shows. The chart also shows a clear are lower in countries where higher- are negatively correlated with wage positive correlation between the two level bargaining dominates and inequality (European Commission, indicators. In the countries where coverage rates are high. The most

139 Industrial Relations in Europe 2010

striking exception here is Germany where, at 19.6 %, low pay is above Table 4.2: The statutory minimum wage the EU average and only just below in 20 EU countries, per hour, 2002–09 (euro) the level in some of the countries where company bargaining domi- 2002 2009 Growth Real growth nates, including the UK and Poland. BG 0.3 0.71 1.37 0.52 This may well result from the disor- RO 0.19 0.83 3.37 1.12 ganised element that has emerged in LT 0.71 1.4 0.97 0.47 Germany where collective bargain- HU 1.03 1.47 0.43 – 0.03 ing has been further decentralised (see the first main section). LV 0.49 1.47 2 0.86 PL 1.02 1.7 0.67 0.43 Wage inequality, here defined as the SK 0.88 1.7 0.93 0.47 ratio between the 90th and the 10th EE 0.7 1.73 1.47 0.8 decile in the distribution of wages, CZ 1.28 1.82 0.42 0.19 is lowest in Denmark (ratio of 2.3) and highest in Latvia (ratio of 6.0). PT 2.1 2.71 0.29 0.14 Again, wage inequality tends to be SI 2.28 3.41 0.5 0.11 greatest where company bargaining MT 3 3.67 0.22 0.05 dominates and collective bargaining ES 2.68 3.78 0.41 0.14 coverage is lower. Conversely, it is EL 2.83 4.05 0.43 0.18 lowest where higher-level bargaining UK 4.6 6.43 0.4 0.2 dominates and collective bargaining coverage is higher. In contrasting BE 7.05 8.41 0.19 0.02 ways, the Czech Republic and Portu- NL 7.4 8.47 0.14 0 gal would seem to be the main excep- IE 5.97 8.65 0.45 0.19 tions to this pattern (see Chart 4.9). FR 6.67 8.71 0.31 0.15 LU 7.46 9.49 0.27 0.06

4.4.2. The statutory Source: ECS. minimum wage The hourly minimum wage is calculated in different ways, depending on the country. In the countries where it exists, the statutory hourly minimum wage for adults is used. Minimum wages can be set by law or Where this is not available, the statutory monthly minimum wage for adults and the average collectively agreed weekly working time provided by the European Industrial Relations by collective agreements. Statutory Observatory is used to calculate the hourly minimum wage (see http://www.eurofound. minimum wages are the most common europa.eu/eiro/studies/tn1004039s/tn1004039s.htm#hd1). In case the latter is not available mechanism. Twenty out of 27 Member the statutory working week is used. For further details see: http://www.boeckler.de/pdf/ States have a statutory minimum wage ta_mindestlohndatenbank.pdf. and in some of the other seven there is debate over the desirability of intro- factors determining the extent to lowest. In 2009, the hourly minimum ducing a statutory minimum wage or which minimum wages provide an wage ranged from EUR 0.71 in devising, or strengthening, functional effective floor in the labour market. Bulgaria and EUR 0.83 in Romania equivalents. Table 4.2 and Chart 4.10 respectively to EUR 8.71 in France and EUR 9.49 show the levels of the hourly and in Luxembourg. Monthly mini- The presence of a statutory minimum monthly minimum wages for the 20 mum wages, range from EUR 122.7 wage does not, however, necessarily EU countries with a statutory mini- in Bulgaria, to EUR 1 641.7 in lead to a lower incidence of low pay: mum wage for the years 2002 and Luxembourg. In purchasing power the seven countries with the highest 2009. The large differences in the parity the range becomes smaller level of low pay all have a statutory level of the minimum wage across because of price differences but the minimum wage. The absolute level of countries are striking, with the high- highest monthly minimum wage is the statutory minimum wage, its rela- est minimum wage in euro terms still almost six times as high as the tive value as compared to the average (both hourly and monthly) being lowest minimum wage. The repercus- wage and its enforcement are the key more than 10 times higher than the sions are important: the six countries

140 Chapter 4: Wage flexibilisation and the minimum wage Chart 4.10: Monthly minimum wage in 20 EU counties, 2002 and 2009 (euro and PPP)

real terms minimum wage growth is Chart 4.10: Monthly minimum wage in 20 EU counties, higher in central and east European

2002 and 2009 (euro and PPP) Member States than in the EU-15. 1 750 Over the period 2002–09, the real minimum wage per hour increased 1 500 PPP2002 Euro 2002 by 80 % in Estonia, by 86 % in Latvia PPP 2009 and by 112 % in Romania. The excep- 1 250 Euro 2009 tion was Hungary, where real growth

1 000 over this seven-year period was just below zero. Amongst the EU-15 the 750 highest real growth over this period was in the UK (20 %), well below 500 that in most of central and eastern Europe, while in Belgium, Luxem- 250 Chart 4.11: Monthly minimum wage as a percentage of average monthly earnings, industry and services, 2002 and 2008 bourg and the Netherlands there was hardly any growth. Over time, then, 0 BG RO LT LV HU EE PL SK CZ PT SI MT GR ES UK FR NL BE IE LU the gap between the two groups of Source: Eurostat. Member States has been reducing, albeit slowly.

Chart 4.11: Monthly minimum wage as a percentage of average Following the onset of the crisis, this monthly earnings, industry and services, 2002 and 2008 trend would seem, however, to have 60 come to a halt. It might have been expected that the real value of statu- 2002 50 2008 tory minimum wages would have been maintained or even increased

40 so that they could effectively perform their protective function in particular

% 30 in the countries with the lowest minimum wages (and where low pay is

20 most widespread). However, data from WSI’s minimum wage database show that in 2009 the hourly minimum 10 wage saw its real value decline in nine countries. In some cases this decline 0 RO EE LV SK CZ LT HU UK PL PT IE ES BG SI BE NL FR EL LU MT was quite substantial (e.g. 5.6 % in Note: EE, SK: 2006; FR, NL: 2007; BE: no data 2008, FR, EL: no data 2002. Romania and 4.2 % in Lithuania). Source: Eurostat. These countries include eight of the central and east European Member with the lowest hourly minimum enous. Amongst the EU-15, the States (the exceptions being Slovenia wage are also the six that have the Portuguese minimum wage of 2009 and Slovakia), whilst the ninth is the highest incidence of low pay and they amounts to only 28.6 % of that of UK. With the exception of the Czech are among the eight countries where Luxembourg, whilst amongst the Republic, these are all countries where wage inequality is highest. central and east European Mem- low pay is already relatively high. ber States the Romanian minimum In general the central and east Euro- wage amounts to only 24.3 % of the Turning to the relationship between pean Member States have lower Slovenian one. When observing the the statutory minimum wage and minimum wages than the EU-15, growth over time of the minimum average wages, in 2008 the level of with Slovenia being somewhat of wage, a clearer difference emerges the statutory minimum exceeded an exception. Nonetheless, the two between the two groups of Mem- 50 % of the average wage only in groups of Member States should not ber States in the pattern of growth Luxembourg and Malta, whereas in be considered as internally homog- over time. Both in nominal and in 10 countries it amounted to less than

141 Industrial Relations in Europe 2010

40 % of the average wage (Chart 4.11). This underlines that in a significant Box 4.4: A European minimum wage policy group of countries the level at which to guarantee decent wages? the statutory minimum is set most In recent years there has been a growing debate on whether or not minimum wages likely means that it has only a lim- should also become a focus of EU-level policy (Schulten, 2008, Vaughan-Whitehead, ited impact on low pay. Moreover, 2010). Several prominent EU policymakers, such as Luxembourg Prime Minister and the minimum wage seems unable to President of the Eurogroup, Jean-Claude Juncker and the former European Com- mission President Jacques Delors have called for a European minimum wage policy, keep up with average wage develop- according to which every employee should be entitled to a decent wage. ments in the labour market. Between The idea of a European minimum wage policy was discussed for the first time in the 2002 and 2008 the minimum wage 1970s when the Council of Europe tried to define the ‘right to a fair remuneration’ lost some terrain to the average which was laid down in the Council’s European Social Charter from 1961. At that wage in 11 countries, most strongly time the Council proposed a definition according to which a fair wage had to be at in Ireland (a decline of 8 percentage least 68 % of the national average gross wage. The Council developed a new threshold points), Hungary (– 5.4 percentage in the 1990s which determined that a fair wage has to be at least 60 % of the national average net wage. points) and the Netherlands (– 5.1 percentage points). Conversely, the At EU level the first debate on a European minimum wage policy came with the adoption in 1989 of the Community Charter of Fundamental Social Rights for Workers. minimum wage increased by more This states that ‘workers shall be assured of an equitable wage, i.e. a wage sufficient to than the average wage in only five enable them to have a decent standard of living’. In 1993 the European Commission countries, in particular in Spain published an ‘opinion on an equitable wage’ in which it demanded the Member States (6.9 percentage points) and Poland to ‘take appropriate measures to ensure that the right to an equitable wage is protected.’ (6.1 percentage points). Recent It emphasised that ‘the problem of low pay is an issue in all countries of the European Community’ and that ‘the persistence of very low wage levels causes problems of equity reductions in the real value of the and social cohesion, which could be harmful to the effectiveness of the economy in the statutory minimum wages in some long term’ (European Commission, 1993). In reaction to the Commission’s activities countries (see above) suggest that the European Parliament demanded more binding European guidelines for national the dominant tendency for mini- minimum wages and encouraged all Member States ‘to establish a minimum wage that mum wages to fall behind average amounts to a certain proportion of the national average wage’ (European Parliament, wages may be further spurred by 1993). More recently, the European Parliament returned to the issue in 2008 and called ‘on the Council to agree an EU target for minimum wages … to provide for remunera- the present crisis. As a result, in tion of at least 60 % of the relevant … average wage’ (European Parliament, 2008). a number of countries the statu- Considering the large differences in the absolute value of the minimum wages, a tory minimum wage may see its European minimum wage policy is not about the harmonisation of minimum wages key role as a protective floor in the towards a single European rate. Instead it aims to set up common standards at EU labour market decline, or cease to level, which, for example, might guarantee that national minimum wages are not fixed be of significance at all, with all the below a certain percentage of national average wages. As noted by the European Parlia- associated consequences for low pay ment, in many EU countries ‘the minimum wage is set very low or at below subsistence level’ (European Parliament, 2007: 469), as relative minimum levels wage are often and wage inequality. well below 50 % of average wages. There is also growing awareness in many Member States of the problem of low pay, and several have started to develop strategies for more substantial increases of minimum wages in a mid-term perspective. A European mini- 4.4.3. Minimum wages through mum wage policy might be able to support such policies in order to make sure that all collective agreements employees in Europe receive a decent wage. This box was contributed by Thorsten Schulten, Institute of Economic and Social Research In Germany, Italy, Denmark, Austria, (WSI) in the Hans-Böckler Foundation Sweden, Finland and Cyprus there is no general statutory minimum wage. In Cyprus, a statutory minimum minimum wages in collective agree- by a sectoral collective agreement. wage exists for a limited number of ments, mainly at the sectoral level. Such minimum wages exist now for a occupations only (sales staff, cleri- In Germany the Minister for Labour, limited number of sectors, including cal workers, auxiliary healthcare staff under the Arbeitnehmer-Entsend- construction, but remain controver- and auxiliary staff in nursery schools, egesetz (Postal Workers Law), can sial as shown by the case of the postal crèches and schools). Elsewhere, the make a collectively agreed minimum sector. Collectively agreed minimum setting of minimum wages has tra- wage binding on all employment in wages for the postal sector, set in a ditionally been left largely to trade a sector, irrespective of whether or collective agreement between Ver.di unions and employers who define not the employer is directly bound and the Postal Services Employers’

142 Chapter 4: Wage flexibilisation and the minimum wage

Association (in which Deutsche Post (Chart 4.9). The Nordic countries 4.5. Conclusions is the largest and most influential have among the lowest levels of low member), were legally extended by pay in the EU and in Italy and Austria Wage flexibility and the role of wage- the government to the entire sector low pay is also below the EU aver- setting institutions in fostering or in late 2007. However, the competi- age. High trade union membership, limiting such flexibility have been at tors of Deutsche Post challenged the combined with extensive coverage the core of the European economic sectoral minimum wage in court. The of collective agreements, results in and labour market debate for some court ruled against the government’s relatively low level of wage inequal- time. This chapter has reviewed three action, on the grounds that parties ity and discourages the emergence types of wage-setting institutions to other collective agreements in the of very low wages. The major excep- that are important in determining sector had not had access to the pro- tion is Germany where, as discussed the extent of wage flexibility: the level cedure adopted, leaving the sector above, the incidence of low pay and at which collective wage bargaining without a generally applicable mini- wage inequality are above the EU takes place and the extent to which mum wage (Vogel, 2010). average. In response, German trade it has been decentralised over the unions have been campaigning for last decade; the use of variable pay One consequence of collectively a national, cross-sectoral statutory systems (VPS); and the minimum agreed instead of statutory minimum minimum wage of EUR 7.50 intended wage and its relation to low pay and wages is that minimum wages may to provide workers not covered by wage inequality. not be uniform, but differ by sec- collective agreements with a decent tor and possibly also by type of job minimum wage level, which would Company-level bargaining domi- or by region. For example, in Ger- also set a floor for sectoral mini- nates in the UK and the new Member many, in 2009, the relevant collec- mum wage negotiations (Bispinck, States which entered the EU between tive agreement set a minimum wage 2008). The minimum wage has been 2004 and 2007, with the exception of EUR 863 for a salesperson with- a concern elsewhere too. In Austria of Slovenia. Higher-level bargaining out experience in the bakery sector unions and employers have been dominates in the EU-15 (except in eastern Germany, while agree- concerned that a substantial group of the UK) and Slovenia. Amongst ment concerned set a minimum of the employed workforce had a gross the countries where higher-level EUR 1 844 for a skilled steelworker wage below EUR 1 000 per month, bargaining dominates, the 2000s without experience in both eastern with estimates varying from 20 000 have seen significant decentralisa- and western Germany (WSI, 2010). to 100 000 employees (Hofbauer tion of wage-setting arrangements And in sectors where trade unions and Adam, 2009). To tackle this in Sweden, Finland, Denmark and are weak, collectively agreed mini- problem, the Austrian Trade Union Germany. In Finland, the main mum wages may be low as compared Federation and the Austrian Fed- development concerns a move from to similar countries with a statutory eral Economic Chamber concluded central-level bargaining to sector- minimum. For example, the mini- an agreement which establishes a level bargaining, while in the other mum wage of EUR 863 in the bak- minimum wage of EUR 1 000 as of three countries the scope for com- ery sector in eastern Germany is 1 January 2009, and which covers pany bargaining has been enhanced well below the statutory minimum almost the entire private sector. The at the expense of the sector level. wages of more than EUR 1 300 in number of private sector employees This decentralisation has largely France, Belgium and the Nether- earning below EUR 1 000 is reported been ‘organised’ since the increased lands. Moreover, those parts of the to have fallen to a few hundred as a role for company-level bargaining labour market not covered by collec- consequence (ibid.). The minimum remains within a framework of rules tive agreements may lack any mini- wage has been an issue of debate in and minimum standards set at the mum standard. Sweden as a direct result of the rul- sectoral level. However, in Germany ing of the Court of Justice (CJEU) elements of disorganised decentrali- Nonetheless, collective agree- in the Laval case. Finally, and going sation are also present, as the cover- ment would seem to be an effective beyond the divide between statutory age of collective agreements declines mechanism for establishing mini- and collectively agreed minimum with falling level of employers’ asso- mum wages in most of the countries wages, in recent years there has been ciation membership and decreased concerned. Compared to the EU a lively debate about the possibility use of extension arrangements. average, the incidence of low pay is to introduce a European minimum The process of decentralisation in low in five of these seven countries wage policy (see Box 4.4). these countries seems to have been

143 Industrial Relations in Europe 2010

accelerated during the present eco- The use of VPS seems to be increas- value compared to the average wage nomic and financial crisis. ing over time, representing a specific during the 2000s. This suggests a form of flexibilisation of wage set- declining capacity to prevent low pay In most other countries where higher- ting. For managers, VPS schemes are from emerging. level wage bargaining dominates, little attractive as a means to improve the change can be observed in the bargain- functioning of human resources and In the seven countries without a ing arrangements for basic wages over to attract and retain good quality per- general statutory minimum wage, the 2000s. In these countries the social sonnel. Employee representatives have minimum wages are largely set partners would seem to prefer stability mixed opinions about VPS, differing in sectoral collective agreements. in collective bargaining systems and strongly across countries. In the cen- Amongst these countries low pay is to continue with practices that have tral and east European Member States not widespread, with the important proven their value. In some of them, a majority of employee representatives exception of Germany. Here, in cer- such as Italy and France, changes have supports VPS, while in some of the tain sectors, the minimum wage is been made to the regulations govern- EU-15 less than one third do so. set at comparatively low levels and ing collective bargaining with the aim Low pay remains a serious problem decline in the coverage of collective of promoting decentralisation, but in the EU and affects one out of every agreements is leaving large groups as yet this has not led to significant six workers in enterprises with 10 or of workers without the protection changes to wage bargaining in prac- more employees. The level of low pay of a minimum wage. As a result, the tice. An exception is Ireland, where is closely related to the level of wage desirability of a statutory minimum the long tradition of national-level inequality. In general, both are higher wage has become the subject of con- pay agreements has been broken as in the countries where company bar- siderable debate. the government, unions and employ- gaining dominates and coverage of ers’ organisations could not come to collective agreements is low; they are Finally, although major differences agreement on wage policy in the face both lower in countries where higher- between countries exist, the general of the crisis (see Chapter 3). The above level bargaining dominates and cover- tendency across countries is towards concerns the setting of basic wages. age rates are high. The most noticeable wage-setting arrangements that pro- There has, however, been more gener- exception to this is Germany. vide for more wage flexibility. Where alised decentralisation across the EU change takes place in bargaining in negotiations concerning additional In 20 of the 27 Member States a systems it results almost invariably pay elements, including the various statutory minimum wage exists, in further decentralisation of wage types of VPS. with its value in 2009 ranging from bargaining. There is a marked ten- EUR 122.7 in Bulgaria to EUR 1 641.7 dency towards flexibilisation of wage Today, more than half of the EU work- in Luxembourg. A statutory minimum systems through more extensive use force falls under some form of VPS. wage is, however, no guarantee against of VPS. At the same time, there has The most frequently used type of VPS low pay: the countries with the high- been a parallel tendency for the inci- is performance-related pay, with profit est level of low pay all have a statutory dence of low pay to increase, partly sharing and employee share owner- minimum wage. It is the level of the as a result of declining collective ship schemes being substantially less minimum wage that determines the bargaining coverage. The efficacy widespread. There are large differ- extent to which it constitutes an effec- of statutory minimum wages — and ences in the incidence of VPS schemes tive wage floor in the labour market. in Germany collectively agreed sec- between countries, in part according to In particular in a number of the new toral minima — to counteract this country-specific rules and regulations Member States its level is too low to tendency has been shown to be in promoting VPS through specific pro- perform this function. While in the doubt. While these developments visions in labour legislation, tax regu- long run, the level of the minimum may have certain advantages from lations or agreements between social wage in the central and east European an efficiency point of view, they partners. VPS are utilised more widely Member States is slowly getting closer may also lead to undesirable social in certain sectors (financial interme- to that of the EU-15, in 2009, in the consequences. Searching for the diation, business services, wholesale midst of the crisis, the real value of right balance between, on the one and retain) than in others (health and the minimum wage declined in many hand, efficiency and, on the other social work, education). They are also of these countries. More generally, in hand, equity and solidarity is one of more widespread amongst larger than over half of the countries concerned, the core dilemmas of the European smaller enterprises. the statutory minimum wage lost social model.

144 Chapter 4: Wage flexibilisation and the minimum wage

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Vaughan-Whitehead, D. (2010), Vaughan-Whitehead, D. et al. Welz, C. and E. Fernándes-Macías ‘Towards an EU minimum wage (1995), Workers’ financial participa- (2008), ‘Financial participation of policy?’, D. Vaughan-Whitehead tion: East–West experience, Inter- employees in the European Union: (ed.), The minimum wage revisited national Labour Office, Labour Much ado about nothing?’, European in the enlarged EU, IL0, Geneva, Management Relations Series No 80, Journal of Industrial Relations, Vol. pp. 509–530. Geneva. 14, No 4, pp. 479–497.

Vaughan-Whitehead, D. (2008), Vogel, S. (2010), ‘Court rul- WSI in the Hans Böckler Stif- ‘Minimum wage revival in the enlarged ing abolishes minimum wages in tung (2010), Informationen zur EU: explanatory factors and devel- postal services sector’, EIROnline Tarifpolitik , Düsseldorf. opments,’ in D. Vaughan-Whitehead (http://www.eurofound.europa. (ed.), The minimum wage revisited in eu/eiro/2010/02/articles/ the enlarged EU, ILO, Geneva. de1002049i.htm).

147

Chapter 5: Industrial relations and the transition to a low-carbon economy

The transition to a low-carbon economy is likely to involve structural changes across the This chapter will start with an over- whole economy. Social consensus and coordinated strategies will be crucial to grasp the view of the most important EU cli- opportunities and alleviate the potential social costs in some sectors or regions. Social mate change policy developments and dialogue plays an important role in this and — despite large differences between coun- research on their consequences on tries — the transition to a low-carbon economy is coming onto the agenda of social employment and skills. The second partners at national and EU level. They draw attention to the business and employment section will introduce the conceptual consequences of policy choices and they have often pushed for a green recovery from the framework for analysing social partners’ crisis. Workplace social dialogue on low-carbon economy issues is spreading although roles in policymaking in order to lay the collective bargaining addressing such issues remains rare. Finally, social partners them- ground for a review of their activities at selves contribute to the transition through training initiatives, campaigns, research and national and European level, in section innovation, and the promotion of quality and environmental labels. three and four respectively. Given the emphasis on the EU level, the chapter 5.1. Introduction through autonomous social dialogue, also provides an overview of the posi- in particular at company level, and tions taken by European social partners The Europe 2020 strategy confirms through concrete initiatives involving on climate change policies. that the reduction of greenhouse gas training, campaigns or research and emissions, the increase in the share of innovation projects. renewables in final energy consumption and energy efficiency are among The chapter focuses on social partners’ 5.2. Policies for a the key policy priorities of the EU. activities concerning policies on, and low-carbon economy More and more, the move to a low- contributing to, greenhouse gas emis- carbon economy has been recognised sion reduction, renewable energies and and their employment as an environmental, social and eco- energy efficiency, i.e. measures that are consequences nomic necessity. The whole economy directly linked to the de-carbonisation faces far-reaching changes, and policies of the economy and which are likely to and restructuring related to climate have a very big impact on the economy change will impact on employment, in the years to come. However, social 5.2.1. EU climate change skills composition and working condi- partners do not always distinguish policies tions. Therefore, they have come onto between environmental protection, the agenda of social partners across general resource efficiency and climate Climate change represents one of the Europe. This chapter will review how change mitigation measures. In reality greatest environmental, social and social partners at national and EU level they are intertwined. In addition, the economic threats facing the planet. are addressing employment and social challenges posed by the adaptation to The European Union is working issues related to climate change through the changing climate are important for actively for a global agreement to their different roles in policymaking: policymakers and social partners alike. control climate change and is taking influencing policy, autonomous regu- For example, workplaces will have to be domestic action to achieve substan- lation and promoting implementation. adapted to changing climate conditions tial reductions in its own contribution and working practices in some sectors, since the early 1990s. It is also devel- It will show that climate change poli- for example agriculture, will undergo oping a European strategy for adapt- cies and the transition to a low-carbon significant change. Green jobs are also ing to climate change. The European economy not only represent new topics high on the political agenda and many Union has long been at the forefront for social dialogue, but that they can- new companies and jobs are being cre- of international efforts to combat cli- not be readily compared to dialogue ated. The chapter is concerned with mate change and was instrumental in over traditional employment issues. the broader process of greening the the development of the two United Nonetheless, they are increasingly economy that involves important shifts Nations climate treaties, the 1992 UN being taken into account in social in the economy and the labour market. Framework Convention on Climate partners’ core activity, in particular Activities aimed at mitigation and the Change (UNFCCC) and the Kyoto concerning restructuring and profes- industrial relations of green jobs — for Protocol, agreed in 1997. sional skills development. In addition, example whether they are covered by social partners not only try to influence social dialogue and collective agree- In 2000 the European Commission policymaking, but can also contrib- ments — are, however, beyond the launched the European climate change ute directly to the transition required scope of the chapter. programme (ECCP) which has led to

149 Industrial Relations in Europe 2010

the adoption of a wide range of new buy or sell emission allowances puts from renewable resources; (3) a 20 % policies and measures. Each Mem- a price on emissions and ensures that reduction in primary energy use, to be ber State has also put in place its own cuts can be achieved at least cost. achieved by improving energy efficiency. domestic actions. Countries develop This commitment is being implemented their own mix of policies, through a In 2007 the European Council endorsed primarily through the EU climate and combination of regulation, taxation an integrated approach to climate and energy package of 2008, which com- and other national policy. The pro- energy policy. EU leaders set a series of prises a revised EU ETS, a framework gramme’s pioneering instrument is demanding climate and energy targets for national actions in the sectors not the EU Emissions Trading System (EU to be met by 2020, which are known covered by the ETS and binding targets ETS). The EU ETS is a ‘cap and trade’ as the 20/20/20 targets: (1) a reduction for renewable energies (see Box 5.1). system that helps to reduce greenhouse in EU greenhouse gas emissions of at gas emissions in a cost-effective way. least 20 % below 1990 levels; (2) 20 % The EU has also offered to increase its Allowing participating companies to of EU energy consumption to come emissions reduction to 30 % by 2020, on condition that other major emit- ting countries in the developed and Box 5.1: EU climate and energy package 2008 developing worlds commit to do their In January 2008 the European Commission proposed binding legislation to implement the fair share under a future global climate 20/20/20 targets. This ‘climate and energy package’ was agreed by the European Parliament agreement. This agreement should and Council in December 2008 and became law in June 2009. The core of the package take effect at the start of 2013 when comprises four pieces of complementary legislation. the Kyoto Protocol’s first commitment 1. A revision and strengthening of the Emissions Trading System (EU ETS): a single EU- period will have expired. The Copen- wide cap on emission allowances will apply from 2013 and will be cut annually, reducing the number of allowances available to businesses to 21 % below the 2005 level in hagen Accord reached in December 2020. The free allocation of allowances will be progressively replaced by auctioning, 2009 represents only a step towards and the sectors and gases covered by the system will be somewhat expanded. such an agreement. The EU is press- 2. An ‘Effort Sharing Decision’ governing emissions from sectors not covered by the EU ing for a global deal that is ambitious, ETS, such as transport (except aviation, which will join ETS in 2012), farming, waste comprehensive and legally binding. and housing: under the decision each Member State has agreed to a binding national emissions limitation target for 2020 that reflects its relative wealth. With Europe 2020, the EU’s strategy 3. Binding national targets for renewable energy which together will lift the average for jobs and smart, sustainable and renewable share to 20 % by 2020 (more than double the 2006 level of 9.2 %): at least inclusive growth for 2010 to 2020, the 10 % of transport fuel must be renewable (biofuels, hydrogen, ‘green’ electricity, etc.). Biofuels must meet agreed sustainability criteria. European Council confirmed the EU’s 4. A legal framework to promote the development and safe use of carbon capture and commitment to a low-carbon economy. storage (CCS): CCS is a promising family of technologies that capture the carbon diox- Europe 2020 is a framework for the EU ide emitted by industrial processes and store it in underground geological formations to mobilise all of its instruments and where it cannot contribute to global warming. The technical and economic viability of policies and for the Member States to its use as an integrated system has, however, yet to be shown. The EU therefore plans to take enhanced coordinated action. In set up a network of CCS demonstration plants by 2015 to test its viability, with the aim particular the up-coming flagship ini- of commercial uptake of CCS by around 2020. tiative ‘resource efficient Europe’ will Further elements: support the shift towards a resource effi- • a regulation requiring a reduction in CO emissions from new cars to an average of 120g 2 cient and low-carbon economy through per km, to be phased in between 2012 and 2015 and further to 95g per km in 2020; and a Regulation requiring a reduction in CO emissions from vans. the EU 2050 roadmap for a low-carbon 2 economy, EU financial instruments, a • revised EU guidelines on state aid for environmental protection. framework for the use of market-based • A decision to fund the large-scale demonstration of low carbon energy technologies from the sale of 300 million emission allowances held in the New Entrants Reserve (NER) of instruments, a series of EU initiatives the EU Emissions Trading System. mainly in the energy and transport field, Energy efficiency and recommendations for coordinated The climate and energy package creates pressure to improve energy efficiency but does national measures. It will highlight a not address it directly. This is being done through the EU’s Energy Efficiency Action Plan more efficient use of resources includ- 2007–12. It provides for the adoption of measures to improve the energy performance of ing raw materials such as fuels, minerals products (eco-design), buildings and services, to improve the yield of energy production and metals but also food, soil, water, air, and distribution, to reduce the impact of transport on energy consumption, to facilitate biomass and ecosystems, which has to financing and investments in the sector, and to change behaviour. be addressed coherently.

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5.2.2. Employment the supply chain consists largely of tra- The Commission’s impact assessment and climate change ditional industries like iron and steel on its proposal for the climate change and manufacturing of installations. package estimated net employment There is much talk about green jobs. effects of 0.05 % (creation of 110 000 Indeed, jobs that contribute to pre- The overall employment balance will jobs) to – 0.09 (loss of 200 000 jobs) serving and restoring the quality of depend on how many jobs are created by 2020 (European Commission, the environment are both necessary and lost in a wider range of sectors, 2008a). The most complete study on for the sustainable development of such as energy, transport or construc- renewable energies for the EU pre- the planet and promising in terms tion, agriculture, manufacturing and dicts that reaching the 20 % target for of employment potential. Defining services (direct effect), the balance of the deployment of renewable energies such jobs is difficult (see for example jobs in sectors contributing inputs to will have a net employment impact Employment in Europe, 2009, p. 109f; these sectors (indirect effect) and on — depending on the model used — Box 5.2 on UNEP/ILO definition). employment gained or lost throughout of either 400 000 additional jobs until the economy from higher or lower con- 2020 and 545 000 to 656 000 until More widely the transition to a low- sumer spending (relative price effect) 2030, or more than 400 000 in 2020 carbon economy is likely to involve and from productivity gains related and just 59 000 to 128 000 until 2030 structural change across the whole to lifting barriers to innovation or to under a model that makes a conserv- economy. There are four main employ- investments (macro-economic effect). ative assumption about the reaction ment shifts: new jobs will be created, to increased energy cost (European for example in manufacturing pollu- The Employment in Europe 2009 report Commission, 2009a). An ETUC-led tion-control devices; some jobs will provides an overview of research on study demonstrates how impacts be substituted, for example in shifting climate change and employment (Euro- differ depending on the sector. For from fossil fuels to renewable sources, pean Commission 2009, Chapter 3). example, it estimates that reaching or waste incineration to recycling; It concludes that economic modelling the 20/20/20 targets will mean that some jobs may be eliminated without shows that the transition to a low-carbon 175 000 jobs will be lost in the steel replacement; and a large share of jobs, economy should have no, or a slight posi- sector by 2020, but that net employ- such as plumbers, electricians, con- tive, impact on the overall employment ment in the machinery and electrical struction workers, will evolve (UNEP level (at least in the long run). It will, equipment sector could rise by up to et al., 2008: 43). In addition, not all jobs however, have different effects across 670 000 and by about 250 000 in its that contribute to the low-carbon econ- economic sectors, skill types and regions. supplier industries (ETUC, 2009a). omy would be considered as green in In addition, the transition to a low carbon the first place, for example in upstream economy is likely to stimulate innova- Therefore, the important question supplier industries. Even in the case of tion, boost employment in fast develop- about the future of employment is less new industries and technologies, such ing “green technology” sectors and open the gross creation of new, green jobs, as wind and solar power generation, up new export opportunities. but the incremental and broad greening of the whole economy including the transformation of many profes- Box 5.2: Green jobs description by UNEP and ILO sions that will need a new skills com- ‘Green jobs reduce the environmental impact of enterprises and economic sectors, ultimately position. This is a complex affair and to levels that are sustainable. (…) ‘Green jobs’ (means) work in agriculture, industry, services and administration that contributes to preserving or restoring the quality of the environ- available research provides too little ment. Green jobs are found in many sectors of the economy from energy supply to recycling information on the likely distribu- and from agriculture and construction to transportation. They help to cut the consumption tion of employment effects. But in of energy, raw materials and water through high-efficiency strategies, to de-carbonise the contrast to other structural drivers of economy and reduce greenhouse gas emissions, to minimise or avoid altogether all forms change some anticipation is feasible of waste and pollution, to protect and restore ecosystems and biodiversity. Green jobs play a since climate change related poli- crucial role in reducing the environmental footprint of economic activity. This reduction is gradual and the different jobs contribute to different degrees. Workers manufacturing fuel- cies result from political decisions. efficient or hybrid cars, for example, contribute less to reducing emissions from transport More knowledge needs to be built than those working in public transport systems. Moreover, what is considered fuel-efficient up in understanding the dynamics. today will no longer qualify in 10 years’ time. The notion of a green job is thus not absolute, In particular, there will be specific but there are ‘shades’ of green and the notion will evolve over time.’ consequences for each sector which UNEP et al. (2008a), Green jobs: Towards decent work in a sustainable, low-carbon world — makes the sector the prime level of Policy messages and main findings for decision-makers. intervention.

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Policymakers and social partners have upgrading, matching and anticipation. comparison with the recent Lisbon- turned their attention to the role of One element will be the network- related entries on the social dialogue skills in the low-carbon transition. In ing of so-called sector skills councils agenda, and even more so with the tra- fact, skills shortages could become bot- or observatories through which the ditional bargaining issues of pay and tlenecks impeding the rolling out of actors on the ground (national and working time, the shift to a low-carbon new technologies and the ‘first mover’ regional authorities, social partners economy is of a different nature. advantage that this could bring. A and education and training institu- mismatch of existing skills and new tions) try to anticipate skills needs Social partners act first and foremost demand could cost both firms and developments. Bottom-up initiatives where they have direct competences, i.e. workers dearly. There is a consider- will provide particularly important the distributions of benefits, rights and able debate about how job profiles will responses to the need for adjustments obligations of workers and employees. change (Ecorys 2008; Cedefop 2009; such as filling skills gaps. Social dia- They can directly influence them by GHK, 2009). Most likely some skills logue is a key element in the develop- committing their members to certain will become obsolete, for example util- ment of these initiatives (Medhurst, actions. The issues concerned relate ity meter reading services due to ‘smart’ 2010). directly to the functioning of the labour household meters that automatically market. Trade unions and employers relay data to utility companies. Many organisations are the main actors on occupations will see their skills mix some issues and interact strongly with change, for example learning to use 5.3. The roles of social the state on further issues such as labour new, sustainable materials, installing partners in labour market policy and social security. new materials and devices in construction, or learning to assess the environ- market governance — In contrast, the transition to a low- mental impact or the ‘carbon-footprint’ the analytical framework carbon economy concerns the impact in production processes. Lastly, new of the economy (and of society as a occupations will also emerge, such as whole) on the climate. Policies are solar energy technician, eco-designer Social partners play an important mostly driven from outside the work- or biofuels technician. Often these role in the economy as a whole and in place and industrial relations but ‘green-collar’ occupations require labour market governance in particu- impact on them. In some respects, it is higher levels of qualification, particular. They have also demonstrated that about the distribution of benefits and lar related to STEM subjects (science, they have the capability to engage with costs between conventional economic technology, engineering and math- new policy issues. The Industrial Rela- growth and the current generation, on ematics). The shortage of these skills tions in Europe 2008 report showed the one side, and the global climate and and the general decline in take-up of how high-quality industrial relations future generations, on the other. The training in technical areas in the EU is provided a key resource for the Lisbon state is the main actor involved and of great concern. Strategy over the last decade by adding mobilises regulatory, market-based flexibility to its implementation and and financial instruments. The whole The European Commission launched by mobilising support for bottom-up of society is directly affected by this in 2008 a joint policy initiative, ‘New solutions in several areas: active labour policy field, which is thus characterised Skills for New Jobs’, that offers support market policies, training and the entry by a larger number of actors, including to EU Member States, regions and of young people in the labour market, environmental NGOs amongst others. social partners to develop more effec- lifelong learning, working hours and It is in the management of the employ- tive ways to analyse and predict which time flexibility, reconciliation of work ment consequences where industrial skills will be required in tomorrow’s and private life and working condi- relations play a prime role. labour markets and, with this knowl- tions. It concluded that these issues edge, develop and adapt education have become part of the social partners’ Nonetheless, in analysing the role of and training so that workers gain the agenda at various level and that various social partners, the Industrial Rela- skills required. It provides the oppor- instruments, often based on an interactions in Europe 2008 report provides tunity for countries to learn from each tion between collective bargaining and a useful starting point with its three- other and share solutions by pooling law, but also information exchange, fold schema of the broad functions of their efforts at the European level, as best-practice diffusion, benchmark- social partners (1). well as with other international organ- ing or joint administration and fund 1 Based on a scheme by Jelle Visser, Amsterdam isations on the themes related to skills management were being utilised. In Institute for Labour Studies.

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1. Social partners can act, alone Activities concerning the low-carbon 5.4. Social partners’ or jointly, as special interest economy might not fit neatly into activities related groups and influence policymak- this schema. In particular, the finding through lobbying activities, ings presented below suggest that, to the transition responses to consultations, exer- as institutions comparable to labour to a low-carbon economy cising political influence or enter- market boards do either not exist in ing into negotiations with the the climate change policy field, or at national level government. One specific form of that social partners have no specific influencing policy is the conclu- role to play in them, the third cat- This section provides an overview of sion of a social pact, i.e. a tripartite egory should be recast as ‘activities how social partners address the transi- agreement between government promoting implementation’ through tion to a low-carbon economy accord- and the social partners. which the social partners contrib- ing to the three-way schema of the ute to the implementation of poli- roles of social partners in economic 2. Trade unions and employers can cies or the achievement of objectives and social governance. It is based on regulate employment relations of public interest (e.g. energy effi- reports (2) from all Member States (and themselves either through bind- ciency improvements), for example Norway) for a comparative analytical ing agreements or ‘softer’ guide- by organising training or campaigns. report of the European Foundation for lines. This can happen at company, These activities may be developed in the Improvement of Living and Work- sector, or national level. This is an autonomous way or in coopera- ing Conditions on the industrial rela- well established in the domain tion with public authorities. tions implications of the greening of of wages, working hours and the economy (Eurofound, 2009) and working conditions, but has also Social dialogue has an important on other sources, including the first expanded to other areas. There is role to play: it helps to create con- seminar of the cross-industry Euro- also interaction between collec- sensus for climate change related pean social partners’ project on the tive bargaining and public policy policies that are often unavoidable, employment consequences of climate which can take different forms: but which can create opposition. A change policies (see Section 4.2.1.). (a) autonomous agreements/ stable and reliable policy framework The comprehensiveness of the availa- guidelines implemented without is essential for investment decisions ble information varies from country to interference of public authori- and the preparation of the work- country. Accordingly, this section iden- ties; (b) sponsored agreements the force. In addition, a shared analysis tifies the main trends up to 2009 and implementation of which depends of employment opportunities and provides examples, rather than giving on the support and intervention challenges by social partners can an exhaustive pan-European account of the government or legislator; contribute greatly to a well-managed or mounting a comparative analysis. (c) dependent (implementation) and socially just transition. agreements which follow, and Given the nature of the issue of climate implement, a particular law, reform, Anticipating and managing restruc- change in relation to industrial rela- government policy, or higher-level turing processes and skills devel- tions, it is not surprising that lobbying agreement/guidelines. opment have already become an is an important part of social partners’ important part of industrial relations work, and that self-regulation remains 3. Trade unions and employers (orga in Europe. The challenge arising from rare, except for the company level. nisations) can be involved, alone the transition to a low-carbon econ- However, social partners initiated, and or jointly, in the implementation of omy is to ‘mainstream’ it into restruc- contributed to, a wide range of activities policies. This may happen through turing and skills policies. Social in support of the transition to a low- the co-management of policies with partners also have the possibility to carbon economy, including training public authorities, by joining labour facilitate innovation and negotiate and counselling, campaigns, research, market boards, training councils solutions for change which are to the environmental labels and others. or insurance funds under public benefit of workers and businesses. supervision. This involvement may The transition to a low-carbon econ- also take an advisory character, omy also raises questions about social without assuming the responsibil- justice between those who benefit 2 The study aimed to not only map social partners’ ity for the adopted decisions and and those who might lose out in the activities and climate change related policies, but also national policies and institutions, also on their execution. short term. environmental policy in general.

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5.4.1. Influencing policy to opposition, as in the case of trade intensive sectors and those produc- unions in Poland’s coalmining and ing traditional sources of energy that In almost all countries social partners power sectors. In general, trade unions often find themselves in opposition deal with low-carbon economy issues insist on a just transition that includes to climate change mitigation policies, at the stage of policy formulation dialogue, skills adaptation and invest- unless there are compensating meas- where they express their positions ment in green job creation and infra- ures. Social partners in services sec- on policy proposals either through structure. Most trade union lobbying tors are much less vocal, except maybe institutionalised tripartite bodies or initiatives support policies for a low- in the IT sector, although an impact ‘multipartite’ bodies dealing with sus- carbon economy unless there is a risk can also be expected there (Dupres- tainable development, or by direct of job losses. On several occasions, soir, 2009). lobbying on draft legislation. Exam- trade unions went further than their ples of own-initiative policy propos- employers’ counterparts, for example Joint lobbying activity by social partner als economy can also be found and in the German metal workers union, IG organisations is the exception rather particular trade unions have driven Metall, issued a joint statement with than the rule and was reported only in the debate on a green recovery from the Federal Ministry of Environment Germany and Austria. Many elements the crisis. Various forms of lobbying in 2008 calling for an ambitious regula- of the Austrian environmental and were reported in all Member States tion on CO2 emissions from new cars economic action plans originate from with the exception of Cyprus, Greece, and recently Spanish trade unions sup- joint social partner proposals, such Latvia, Lithuania and Malta. ported the adoption of a more ambi- as the implementation of the Mas- tious EU emission reduction target terplan Sustainable Energy and the It is difficult to draw general conclu- of 30 %. Trade unions often prefer reg- Energy and Climate Protection Fund. sions on the content of lobbying as it ulation and are wary of ‘greenwashing’ The Confederation of German Trade differs depending on the country and (Eurofound, 2009: 11). Unions (DGB) and the Federation of also on the sector. Employer repre- German Industries (BDI, the inter- sentatives are, in principal, in favour Observers of some Member States est organisation of German business) of policies aimed at a low-carbon draw attention to the fact that, both issued a joint declaration on energy economy, but they insist on cost- within the employer and trade union policy in 2006 in which they noted effective policy options, investment in camps, some divergence of position their disagreement on nuclear energy infrastructure, the promotion of green can be found, in particular between policy, but declared a common inter- technology exports, a level playing sectors. At one extreme are groups est in strengthening a national energy field internationally, voluntary com- with an interest in an accelerated tran- mix policy, promoting the export of mitments, CSR, or incentive meas- sition towards a low-carbon economy renewable energy technology and of ures. In some Member States, such as (e.g. renewable energy technologies or investments in power stations and Poland, employers’ organisations ask technologies improving energy effi- energy networks. In 2008 they issued government to intensify domestic cli- ciency). At the other end are energy a joint call for an EU climate change mate change policies and better coordinate them in a coherent strategy. There are also examples of opposition Table 5.1: Examples of collective lobbying activities due to fears of cost increases and com- Bulgaria: in a 2009 joint declaration of five (out of six) nationally representa- Employers’ petitive disadvantages, for example, tive employer associations. Alternative energy is considered to be the key organisations expressed by the Confederation of priority of the economy and must be part of the future social agreement. Portuguese Industry (CIP) in its criti- Denmark: the United Federation of Danish Workers (3F) and the Danish cism of governmental measures for Metalworkers Union (Dansk Metal) appealed to government to invest in renewable energies and energy effi- alternative energy, collective transport, or renovation of old public buildings in order to reduce the impacts of the crisis. ciency (Naumann, 2009). Italy: the General Confederation of Italian Workers (CGIL) and Legambiente — a joint document putting forward proposals on how to cope with the crisis, Trade unions The same problems of generalisation by using the employment potential of the green economy (2009). apply to the views of trade unions. The Netherlands: the Dutch Trade Union Federation (FNV), Christian Trade These range from a strong commit- Union Federation (CNV) and Federation for Managerial and Professional Staff ment to the low-carbon economy to (MHP) published a Social and Green Investment Plan to cope with the crisis. Economy should be stimulated by investments among others in greener pro- rather indifferent approaches, com- duction, reduction of energy use, increase in wind energy, green VAT rates, etc. mon amongst the new Member States,

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package that balances climate and and to grant subsidised interest loans for During the recent economic crisis, industrial policy consideration. renewable energy investments (Ciutacu, the government granted additional 2009). The Slovenian Chamber of resources (Kraemer, 2009). Unilateral lobbying is far more wide- Commerce and Industry included the spread; with individual or sectoral low-carbon economy as part of its white Crisis-driven initiatives more often fea- initiatives outnumbering those involv- paper on competitiveness in 2008. tured on the lobbying agenda of trade ing coalitions of different employers’ unions than employers’ organisations. organisations or of trade unions. Indi- Trade unions also developed their green In many countries, social partners called vidual lobbying initiatives of employers’ policy proposals, with unions in Scan- for public investment to be channelled associations outnumber those by trade dinavian countries being particularly into energy saving, green technology unions. The economic crisis has driven active. For instance, the Swedish Trade promotion and renewable energies in the majority of recent lobbying initia- Union Confederation (LO Sweden) has order to stimulate employment (see also tives (see Table 5.1 for examples). Trade been promoting investments in CO2 Table 5.1). For example, of the Spanish unions, especially, called for more green reduction and supporting green invest- trade union confederation CCOO’s investments as a part of anti-crisis meas- ments mainly in technology develop- proposals for a stimulus package, a ures. In many social partner anti-crisis ment for a long time and formulated its EUR 500 million fund for incentives for action plans some green proposals can own energy policy programme in 2007. eco-efficient building renovation was be found even if the main focus of the The Swedish Confederation of Profes- taken up by the government (Nikolova, document is not ‘green’, e.g. the 10-point sional Employees (TCO) did likewise 2009: 4). The Belgian recovery plan took action plan of the Irish Congress of Trade (Olsson, 2009). In the Netherlands, up a proposal from the ABVV/FGTB Unions (ICTU). Another goal of collec- in February 2009, three Dutch trade trade union confederation for an ‘alli- tive lobbying was to shift green issues union federations published an invest- ance work-employment’ (including the higher on the agenda. For instance five ment plan to boost both employment social partners, the building sector and of the six Bulgarian employers’ associa- and sustainability. With regard to econ- public authorities) to develop measures tions signed a joint declaration in 2009 omy greening, they proposed a number to stimulate the green economy in the that alternative energy is an issue which of relevant measures and drew attention long term (van Gyes, 2009). This ini- should become part of the future social to the need for labour market measures, tiative is being followed up at regional agreement. schooling and subsidies for R & D in the level. Czech and Slovak trade unions in context of economy greening. Impor- the construction sector have called for Several organisations formulated their tantly, the plan contains both greening similar initiatives (in line with the EU- own proposals on the transition to a low- and labour market measures (Euro- level social dialogue; see Section 4.1.2). carbon economy. The Confederation pean Commission, 2010). The Spanish of British Industry (CBI) has recently CCOO has developed a national action A specific means of lobbying in the taken a proactive stance in favour of a plan for renewable energies. One of field of climate change is the coopera- fast transition to the low-carbon econ- the few examples of tripartite concer- tion that social partner organisations, omy. It set up a Climate Change Task tation in Germany is the Alliance for and especially trade unions, have Force consisting of senior figures in Work and the Environment, which developed with environmental NGOs British industry, has published reports started as a partnership between the in several Member States. For example, dealing with climate change issues and government, construction employers, in Belgium and Spain trade unions and has actively promoted renewable energy trade unions and non-governmental environmental NGOs advocate jointly (Broughton, 2009). Another issue of organisations during a recession in the agreed solutions, also cooperate in concern to both sides of industry is the building sector in 2001. The idea of campaigns or ‘to take the streets’. need to invest in the right skills for a low- creating jobs through energy-saving carbon economy. For example, the CBI investment in buildings was first pro- also made recommendations on how posed by the DGB. The subsequent Cooperation in tripartite to improve the supply of STEM skills programme helped to retrofit apart- and ‘multipartite’ institutions (Eurofound, 2009: 11). The Employer ments through subsidised loans, while Confederation of Romanian Indus- creating sustainable jobs and improv- It appears that the standard tripartite try (Conpirom) also made a number ing social conditions. Sectoral trade social dialogue bodies have addressed of proposals e.g. to deter imports of unions accompanied the programme the employment consequences of second-hand vehicles, which are pol- with information campaigns on the low-carbon economy in a few luting, to renew the motor vehicle fleet energy-saving home improvements. Member States. Issues related to the

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low-carbon economy are addressed Council (CRB-CCE/NAR-CNT) In contrast, the participation of in tripartite structures when social has responded to a request from the social partners in “multipartite bod- partner competences are at stake, i.e. Employment Minister for a joint anal- ies” is much more widespread, being restructuring of skills needs stem- ysis on ‘green jobs’ in 2009/10 (state reported in half of all Member States ming from climate change policies. of affairs and shared views). Spain has (see Table 5.2). These are mostly But from the evidence available, seen the establishment of a tripartite Sustainable Development Coun- there is little sign of the ‘mainstream- climate change table, established cils or Environmental Councils, or ing’ of the low-carbon economy into in 2005 in order to jointly monitor advisory bodies of governments or ‘standard’ industrial relations. In the National Allocation Plan (NAP) parliaments. Their voice is mostly the majority of cases, then, climate under the first round of the EU ETS, advisory; however, the scope of the change issues are tackled in an ad hoc and to develop proposals on how to issues they address is broad as they and somewhat marginally fashion, in manage the changes that it would often participate in drafting various tripartite structures. bring about. It is complemented by national environmental and/or sus- round tables in seven ETS sectors tainable development programmes There are, however, exceptions. and by one non-ETS sector round and strategies (see Box 5.4 on the For instance, sustainable develop- table. According to trade unions, the Finnish example). Members are usu- ment and environmental policy are round tables have improved transpar- ally representatives of state authori- amongst the themes regularly cov- ency and communication, and also ties and social partner organisations, ered by advisory reports of the Dutch synergies between industrial, climate environmental NGOs, and individual Social and Economic Council (see change and energy policies, although researchers and experts. Less often Box 5.3). The Belgian Central Busi- discussions have not always been suf- there are also representatives of con- ness Council and National Labour ficiently followed up. sumers’ organisations, churches or the media. This underlines that gov- Box 5.3: Social and Economic Council of the Netherlands (SEC) ernments consider a wider range of actors as having legitimate interest in SEC is the main statutory tripartite body in the Netherlands. It consists of equal numbers of employee representatives, employer representatives and independent members appointed this policy field. by the government. Its main function is to advise the Dutch government and parliament on social and economic issues. In the last decade, the Council formulated extensive posi- There are also ad hoc multipartite tion papers on energy policy, agriculture, sustainable development and consumption, and structures in some Member States con- globalisation. Two recent advisory reports deal explicitly with climate change and sustain- vened at different times to help create able energy: Towards a sustainable energy policy (2006) and Advice on nuclear energy and sustainable energy (2008). The SEC also expressed its position on the European climate a consensus around sustainable devel- policy, as part of the 2009 consultation on the Europe 2020 Strategy. The Council believes opment measures. In France, in 2008, that better coordination of environmental, climate and energy policy, as well as rooting the social partners agreed together them in the Lisbon Strategy, would promote ecological innovations. The biggest challenge with the government, local authori- — global warming — requires a solution on the global level. Europe should therefore sup- ties and environmental NGOs in the port extension of the ETS. Grenelle environnement on a series of measures, including greenhouse gas Box 5.4: Finnish National Commission emission cuts and energy efficiency. on Sustainable Development (FNCSD) The follow-up included two legislative The Finnish National Commission on Sustainable Development was established in 1993 by packages, and the sustainable devel- the government in order to coordinate and promote sustainable development. It acts as an opment council was transformed into important forum where different stakeholders present their ideas, goals and programmes. the National Committee for Sustain- Various issues are on the agenda of FNCSD — climate change, renewable energy and eco- able Development and the follow-up efficiency, global poverty and population growth. The commission has played an active of the Grenelle environnement. The role in the preparation of different sustainable development programmes and strategies, forum also resulted in negotiations including the National Strategy for Sustainable Development launched in 2006. to enlarge the competences of Work- Various social actors participate both in the definition of the contents and implementation of the measures, in what is sometimes referred to as the ‘Finnish model’ that combines place Health and Safety Commit- broad-based, multi-stakeholder participation with high-level political leadership. The tees (CHSCT) to include sustainable commission is chaired by the Prime Minister and consists of representatives from all sec- development issues (see Section 3.2). tors of Finnish society, i.e. the parliament, public administration including local authorities, social partners, NGOs, interest groups representing different sectors of society and the media. (Jokivuori, 2009)

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the competence of health and safety Table 5.2: ‘Multipartite’ bodies in EU Member States committees. e.g. in Belgium (Dupres- soir, 2009: 23) and France (see above). Austria Climate summits This constitutes an example of bipar- Belgium Federal Sustainable Development Council tite regulation of questions related Czech Republic Council of the Government for Sustainable Development Germany Council on Sustainable Development to the low-carbon economy at the Denmark Environmental Economic Council workplace level. Finland Finnish National Commission on Sustainable Development National Committee for Sustainable Development and the follow-up of the In Germany, company agreements France Grenelle environnement between management and works Hungary National Sustainable Development Council council on environmental issues Portugal National Sustainable Development Council appeared as early as the late 1980s. Slovenia Council for Sustainable Development at the Government Office for Growth Since then trade unions and compa- Spain National Climate Change Council nies have more systematically concluded sectoral collective agreements that enlarged the information, consul- The management of employment con- Although the recommendation is one tation and co-determination rights of sequences plays a role in the Forum for of the weaker ones in the guidelines it works councils in respect of the cor- a Just Transition that the UK govern- is the first time that such issues were porate environmental management ment established in December 2009. included on the agenda. The Belgian decisions. This rule was generalised by Its remit is to ‘advise and provide over- National Labour Council concluded, the 2001 revision of the Works Con- sight on the rapid economic and social in 2009, a sponsored agreement, i.e. stitution Act. The German IG Metall transition to a low-carbon future.’ It depending on a decision by the state argues that works council members was one of four strands of the govern- for full implementation, on the intro- can rebalance cost-cutting approaches ment’s low-carbon industry strategy, duction of ecocheques as a form of with a one-sided focus on labour costs adopted in July 2009, which brings pay increase in the context of the eco- in favour of cost-cutting on energy stakeholders together to promote new nomic crisis. The ecocheque is a wage and resource expenses (Kristof et al., industrial opportunities across the UK premium, which has been exempted 2009). Because employees and their regions and devolved administrations. from social security contributions, representatives know their workplace, Representatives from industry, the for the purchase of environmentally- the processes and the products, they Energy Intensive Users Group, trades friendly and sustainable consumer can contribute specific knowledge unions, education and skills groups, goods. The basis was the 2009–2010 to management’s efforts to increase and consumers sit on the forum organ- cross-industry agreement that was resource efficiency. ised by the Department for Business, adopted in conjunction with the gov- Innovation and Skills (3). ernment’s plan to relaunch the coun- A 2006 agreement in the Italian chem- try’s economy and maintain workers’ ical industry provides a rare exam- purchasing power at the end of 2008. ple of a collective agreement which 5.4.2. Autonomous regulation However, the scheme’s impact in envi- extends workplace social dialogue to ronmental terms does not seem to be environmental issues. The agreement Collective bargaining on issues related positive and it created administrative enhanced the competences of the rep- to climate change is unusual. But social costs. This experience demonstrates resentative for safety already estab- dialogue at the company level on issues the limits of isolated measures and lished and regulated by law, extending like energy efficiency and emission cuts the advantages of environmental tax the scope of these to environmental seems to be slowly spreading. reforms that shift fiscal burden from issues. The representative is informed labour to energy on the large scale. and consulted on the objectives for Exceptions come from Spain and Bel- environmental improvement and the gium. In Spain, mobility plans and At company level, trade union and/ level and nature of investments, on energy efficiency were included in the or works council delegates, in some various initiatives (for site reclama- national negotiation guidelines for Member States, have information, tion, on energy savings and improv- lower level bargainers for 2010 to 2012. consultation and negotiation rights ing environmental performance, on on the company’s energy and environ- corporate monitoring systems and 3 http://nds.coi.gov.uk/content/Detail.aspx?Release ID=408630&NewsAreaID=2 ment policy, often via the extension of management systems certification)

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by companies and their sectoral organ- Box 5.5: The UK TUC ‘Green Workplaces’ project isations. It can therefore be expected and ‘green reps’ that employers’ organisations are rep- From 2006 to 2008, the TUC ran two ‘Green Workplaces’ projects which focused on energy resented in bodies that define technical saving and reduction of emissions in the workplace and on raising awareness of climate specifications related to climate change change. The TUC was also exploring ‘how environmental action at work could contribute and environmental policy. This is illus- to the potential for a “transformational change” in the organisational efficiency or effec- trated in Section 4.1.3 for the case of tiveness of unions’ (TUC, 2010a: 29). the implementation of the EU ETS at Initially, case studies were carried out in various companies and organisations where trade unions took steps to make the workplaces ‘greener’. Trade unions carried out staff surveys the European level. and organised, together with environmental organisations, open days and events for the public. Training for environmental employees’ representatives, (so-called ‘green reps’) was The active contribution of the social one of the most important parts of the project. Green reps learned how to build new work- partners to implementation takes other place structures (e.g. joint environment committees), to negotiate formal agreements and forms and these can be divided into to conduct own workplace energy audits. During the project, green reps were also sup- three groups: (1) training and counsel- ported to negotiate green matters with management (TUC, Carbon Trust, 2008). Well over one thousand green reps have been trained and a more or less formalised company-level ling; (2) awareness raising; (3) other social dialogue established in a range of organisations. For example, trade union green reps promotional activities, where social signed an agreement with their employers at Bristol City Council about delivering green partners promote research, environ- 1 policies leading to reduction of CO2 emissions of the organisation ( ). mental labels or technical solutions. According to the final report (TUC, 2010a), the projects involved were effective in building capacity of the trade unions to address this agenda. Furthermore, communication between Over the last few years, at least one of trade unions and managements improved. Best practices identified in the projects indicate these activities was identified in virtu- that whilst a joint and consistent union approach towards management is important in order to build good industrial relations, the engagement and support of senior manage- ally every Member State. Activities are ment is crucial for the success of green initiatives. In cases where formal structures of mainly observed in those countries union involvement (e.g. environmental committees) were established and time-off for rep- where green issues are well established resentatives’ activities granted, progress was faster. and trade unions and employers per-

1 http://www.greenworkplacessouthwest.org.uk/?p=705 ceive the transition to a low-carbon economy as both a challenge and an opportunity for business and employ- and on management of health, safety demonstrated by the fact that the Brit- ment. These social partner activities and environmental aspects through- ish employers’ organisation CBI itself often involve cooperation with, or out the product life cycle (Auriemma, produced a guide for companies look- are financially supported by, public D’Ercole, 2008: 66f, 97f). ing to set up employee engagement authorities, as reported in about one programmes focused on sustainable third of Member States. The British TUC has introduced envi- development. It provides practical tips ronmental employee representatives, and case studies in order to inspire com- so-called ‘green reps’. One of the goals pany specific schemes (CBI, 2009). 5.4.3.1. Training and counselling of its Green Workplaces project was the establishment of new represen- When it comes to a smooth transition tation structures which could work 5.4.3. Promoting on the labour market, an adaptable towards energy saving and emis- implementation of policies labour market, vocational education sion cuts in the enterprise. The most and training (VET) and skills fore- important part of the project was Institutions where social partners’ casting play an important role. VET training for environmental employees’ competences are needed in order to has traditionally been part of indus- representatives. Amongst the compa- implement decisions — either for co- trial relations in the Nordic countries, nies where ‘green reps’ were trained, management or advice — exist for Germany, Belgium Luxembourg, social dialogue and collective bargain- labour market policy (labour market Austria and the Netherlands. In addi- ing dealing with energy efficiency has boards), or training (sector councils). tion, social partners’ involvement in developed (see Box 5.5). Climate change related policies do not the occupational training system in an rely on the shared appreciation of the advisory or delivery role has spread in Indeed, the value of employee involve- issue by employers and trade unions. the last years all over the EU (see Euro- ment in company’s environmental But public authorities look to enlist pean Commission, 2009: 58–63). Initial management is widely shared, which is specialist knowledge that is mostly held analysis of the European cross-industry

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social partners’ members survey (see efficiency. The training is part of a pro- strategies in enterprises — based on Section 4.2.1) shows that the skills gramme leading to a certified degree as worker involvement’. It published a dimension of the low-carbon economy ‘efficiency expert’. The concept estab- brochure to encourage bottom-up ini- has entered all activities of guidance lished in the pilot project is expected tiatives. The aim is to motivate work- to workers, training curricula and to be suitable for application in other ers to propose energy-saving initiatives anticipation of skills needs in many areas (Kraemer, 2009). Training for at their workplace. Advice to workers countries. The most active sectors are ‘green reps’ in the UK is also supported includes how to identify areas where construction and renewable energies by government grants (see Box 5.5). In energy efficiency can be improved, and this work is mostly being done in some countries, trade unions take care how to communicate and present new cooperation with public authorities. of further training of their members. ideas to management, define common This means that the transition to a For instance, the Danish Metalwork- targets, prepare action plans, imple- low-carbon economy has made its way ers Union (Dansk Metal) includes in ment and evaluate strategies. The into this traditional field of activity of its educational programmes skills that TUC has launched monthly online social partners. For example, the Bel- are needed in ‘green tech’ (Jorgensen, newsletter and organises an annual cli- gian region Wallonia has established a 2009). The Swedish Association of Sci- mate change conference (Broughton, dedicated environmental training cen- entist (Naturvetarna) organises coach- 2009b). Spanish unions collaborate tre with social partners’ involvement ing for members to be able to sell new with national and regional authorities that includes energy management and green skills on the job market (Olsson, and NGOs on the promotion of renew- renewable energy and has started to 2009). Employer associations often able energy sources which includes include environmental aspects in the offer training programmes and coun- a general awareness campaign, the curricula of all training centres (http:// selling related to climate change, energy promotion of the national renewable www.formation-environnement.be). savings, green technologies, environ- energy research and development plan However, this aspect has not been fur- mental protection and related legal and efforts to increase workers’ aware- ther researched for this report. matters. Employers’ associations which ness on the use of renewables (ETUC, provide training courses on energy sav- 2005: 42). As early as 1990, the Ger- Training for workers and their repre- ings for members include the Austrian man Mining, Chemical and Energy sentatives on issues like energy and Federal Economic Chamber (WKÖ) or Trade Union (IGBCE) established the resource efficiency, pollution pre- Hungarian Association of Craftsmen’s first union environmental founda- vention, new green technologies and Corporations (IPOSZ). Educational as tion in Europe, the Foundation Work green skills is a well-established social well as advisory services are provided and Environment. The foundation has partner measure in Member States for members by others, including Bel- been committed to the promotion of where the issue has been already high gium’s FEB (http://www.energyeffi- humane workplaces and environmen- on their agenda, e.g. in Denmark, ciency.be), the CBI, Ireland’s IBEC, the tal and living conditions in an advanced Belgium or Germany, but also Spain. Swedish SN and GZS Slovenia. industrial society. Since its inception, it Elsewhere, it is in the initial stage of has supported projects, studies, train- development. While training activi- ing and consulting, events and a regu- ties are provided more often by trade 5.4.3.2. Awareness raising lar environmental award to implement union organisations, advisory services these goals (Kraemer, 2009). are a domain of employer associa- Social partners often collaborate with tions. They are usually organised uni- public authorities on various aware- Agoria, one of Belgium’s largest sectoral laterally by individual social partner ness-raising campaigns, including employers’ organisations (metalwork- organisations targeted to specific sec- conferences and workshops, publish- ing and technology industries) has set tors or types of enterprise. ing brochures and leaflets or creating up a ‘green companies’ campaign in special websites. Employers’ organi- order to highlight the job potential of For example, the DGB and the German sations and trade unions seem to be ‘green’ technology (Van Gyes, 2009). Ministry of the Environment, Nature equally active and some initiatives are In order to inform member companies Conservation and Nuclear Safety taken jointly. These campaigns are pri- about climate policy and eco-innova- (BMU) have been running a project marily targeted at members but often tions, the German Association of the called ‘resource efficiency in firms’ also the public at large. Automotive Industry (VDA) published since 2008. Members of work councils a brochure on ‘environmental manage- and employees are trained to recognise The United Federation of Dan- ment in the supply chain of the auto- and implement ways to improve energy ish Workers (3F) advocates ‘energy motive sector’ (Kraemer, 2009).

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Employers’ organisations campaigns employment creation and related skills activities on climate change, evident are often linked to the promotion of the (http://www.istas.ccoo.es). from this review of recent initia- environmental side of Corporate Social tives, can be related to a number of Responsibility (CSR). For example, the The Swedish trade union LO and the influences. First of all, the number Confederation of Finish Industries Swedish National Society for Road of years that climate change policies (EK) coordinates a business network Safety have jointly set up the organi- have enjoyed the attention of social to disseminate business practices and sation QIII ‘Quality of road transport partners, government and the public it has also published a company guide contracts’ which has developed a pro- seems to correlate with the approach on how to self-evaluate CSR perform- curement tool and awards the QIII taken. While in many EU15 Member ance (Jokivuori, 2009). FEDIS, the quality certificate that assesses the sup- States environmental protection and Belgian commerce employers’ organi- ply chain of heavy road transport pro- climate change have been high on sation, was the first sector organisation viders according to three criteria: the the agenda for many years and social which reached an agreement in 2009 working environment; safety and; the partners have been reflecting green with the Federal Minister for Climate environment. Currently used by more issues in their activities for a long and Energy to organise a campaign on than 100 manufacturing and retail time, in other countries the issue is environmentally friendly consump- companies, the scheme’s assessment still rather new. This is mostly the tion. (Van Gyes, 2009) determines which companies may or case in the EU12 and also some of the may not be awarded freight contracts southern European countries. (http://www.q3.se; Dupressoir 2009). 5.4.3.3. Research, environmental The Swedish Confederation of Profes- Second, while some EU Member labels and other promotional sional Employees (TCO) incorporates States and their social partners are activities a company called ‘TCO Development’ pioneers in environmental protection (http://www.tcodevelopment.com) and climate change mitigation policies In addition to training and campaign- which is responsible for the TCO cer- and actions, EU policy has also been ing there is a large range of concrete tification system. It certifies IT equip- important in stimulating the crea- actions that social partner organisa- ment that has been designed for the tion of national policies and conse- tions in Europe take to facilitate the benefit of both the user and the envi- quently on actions of social partners. shift to a low-carbon economy, includ- ronment (Olsson, 2009). The Spanish social dialogue tables on ing research, and quality and environ- climate change, and the lobbying by mental labels. German social partners The Danish social partners organise a social partners in almost all Member appear to be particularly active in so-called ‘Energy camp’ which brings States in relation to the EU’s 2008 cli- research. In order to promote techno- together social partners, researchers mate change package, illustrate this. logical innovations and research, in and company managers. Participants EU climate change policy and its con- 2009 German BDI together with the develop concrete climate change ini- sequences are important drivers for Federal Ministry BMU launched an tiatives to the benefit not only of the shifting the issue higher on the agenda award for technological innovation in participants but also as recommenda- in the majority of EU Member States. climate and environmental protection tions to national policymakers, such as (Kraemer, 2009). This type of activity a regional-level roadmap for biofuels Third, how national social partners can be found also in countries where in local public transport (Jorgensen, deal with the issue depends also on the low-carbon economy is not high 2009). Spanish trade unions (UGT- national industrial relations regimes. on the agenda. For example, the Fed- Aragon) surveyed the way workers Only in Member States where social eration of Greek Industries (SΕV) runs came to work in industrial sites in the partner organisations have a certain the Sustainable Development Council region in order propose to local and degree of operational capacity do which supports research and studies regional authorities to adapt public their activities regularly reach beyond on environmental issues. The Spanish transport to the benefit of workers and reactive lobbying. National traditions trade union confederation CCOO and the climate. are also reflected in this policy area. its Institute for Work, Environment For example, in Germany, a concrete and health (istas) set up a Reference and intense company-level social Centre for Renewable Energies and 5.4.4. Conclusions dialogue is facilitated by numerous, Employment in 2006. Its purpose is the rather disconnected sectoral initia- monitoring and analysis of develop- The considerable variation in the tives. National, cross-industry dia- ments concerning renewable energy, nature and extent of social partner logue and coordination are, however,

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not prominent. In the Netherlands, with or fund social partner organisa- the Green Paper on energy efficiency environmental and energy policy fea- tions in informational and awareness- (2005), revision of the EU Emissions ture high on the agenda of the SEC. raising activities. Second, unilateral trading directive (2007), the climate Conversely, bipartite and unilateral action prevails, which may be due to change and energy package, and its lobbying initiatives are far less impor- the fact that social dialogue has not proposal concerning CO2 emissions tant; social partners usually refer to yet established a consensus on areas from new passenger cars (2008). It SEC positions. Similarly, in Belgium, of common interest and has not yet contributed position papers to sev- the search for consensus and tripar- established procedures and instru- eral Conferences of Parties (COP) of tite cooperation has enabled all actors ments to jointly regulate or promote the Kyoto Protocol, in which it called to address the employment conse- steps to a low-carbon economy. for the addition of a labour and social quences of climate change policies in dimension to the international climate the tripartite social dialogue. In the change regime. UK, the work of green representatives is particularly prominent in the public 5.5. European social In parallel with some national trade sector and in utility companies where partners’ activities unions, the ETUC joined a civil soci- trade union density is strong com- ety coalition, as of 2001, with the pared with most of the private sector. related to the transition European Environmental Bureau to a low-carbon economy (EEB) and the Platform of Euro- An interesting aspect of trade union pean Social NGOs (Social Platform). involvement with the transition to a Each year, the three organisations low-carbon economy is that it some- In parallel with the national level, issue common recommendations times forms part of a trade union influencing policymaking is the most for a social and sustainable develop- renewal strategy. This is most promi- dominant activity of the social part- ment of Europe to the EU Council’s nent in the case of the green trade ners at EU level. The European social Spring Summit. Their 2008 contribu- union representatives of British trade partners in six sectors have issued tion focused on the social and envi- unions and, in several countries, the joint opinions and some have started ronmental dimension of the energy cooperation with environmental to study the consequences of the tran- and climate package. In 2009, these NGOs that can attract the interest of sition to a low-carbon economy and organisations created the Spring employees that might otherwise not related best practices in their autono- Alliance, a broad civil society net- become active, or indeed members. mous bipartite dialogue. As yet, there work that adopted a manifesto on the This is consistent with the embrace are no instances of bipartite autono- Europe 2020 Strategy, which included of ‘social movement unionism’ by mous regulation at European level. At the call for green and quality jobs. some trade unions towards achiev- the company level, however, there are ing renewal. Under this approach a few transnational agreements which The climate change package was also trade unions expand their objectives address climate related issues. the occasion, in 2008, for a joint decla- to include non-work issues (e.g. race, ration with one of the cross-industry ethnicity, gender and environment) European employers’ organisation, and advance positions as independent 5.5.1. Influencing policy CEEP. The ETUC and CEEP warmly stakeholder representing larger social welcomed the package, in particu- interests in democratic politics (Euro- 5.5.1.1. Unilateral activities lar the announced involvement of pean Commission, 2006: 30f). the social partners, and expressed Cross-industry European their willingness to contribute to the Despite the many examples cited in social partners expected transition with their experi- this section, in the majority of Mem- ence, their organisational structures ber States the low-carbon economy The ETUC made the issue of climate and their ability to find solutions for and its employment consequences change a priority of its sustainable undertakings and workers via social appear to remain marginal items on development strategy in 2002. It drew dialogue in order to anticipate and the agenda of social partners. This up a first ‘union proposal for a Euro- avoid negative effects or at least to reflects two things. First, national pean policy on climate change’ in mitigate them. The two social part- authorities are dominant actors in 2004 (ETUC, 2004), followed by the ners also called for a coordinated ini- this field, i.e. they are either addressed adoption of positions on proposed EU tiative by Member Sates on skills for through lobbying or they cooperate climate change legislation, including a low-carbon economy.

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The ETUC’s position is summed up in decent jobs and massive investment in tional competitiveness so as to ensure its resolution ahead of the Copenha- low-carbon technologies’. It advocates that businesses in countries without a gen climate summit (ETUC, 2009) as an ambitious, binding and compre- strong emissions programme do not ‘there is (…) an urgent need to launch hensive international agreement, but receive an unfair advantage. It also sets the third European industrial revolu- insists on strong provisions to safe- out ‘just transition’ principles: tripar- tion based on green, sustainable and guard European companies’ interna- tite social dialogue, green and decent

Box 5.6: European social partners’ positions on climate change policies–ETUC ‘The ETUC demands that workers and their representatives be considered as crucial players with whom the European Union must engage in a dialogue and negotiate the transition to a low-carbon economy that will provide sustainable jobs and social progress. Therefore, in summary, the ETUC demands: • an ambitious, binding and comprehensive international agreement aiming to limit the global rise in temperatures to maximum 2 °C, in accordance with the scenarios laid down by the IPCC, reducing at least 25 % to 40 % by developed countries, by 2020, below 1990 levels; • an enhanced European contribution to finance the global mitigation of climate change; • to improve European governance, support the ambition of the European recovery, specifically by implementing stronger Community policies in the industrial and research fields; • climate change legislation must contain strong provisions dealing with international competitiveness in order to ensure that nations that lack a strong emissions programme do not receive an unfair advantage; • free allocations of quotas to energy intensive industries exposed to international competition, provided that they are based on the best available technologies and are complementary and not alternative to a border compensation mechanism to be activated from 2013 if global distortion of competition is not corrected.; the introduction of genuine carbon traceability (…). The search for international sectoral agreements is the main solution, but carbon traceability constitutes a technical condition for their establishment and a powerful incentive for their implementation; • to create a European agency charged with setting the benchmarks and the generalised carbon traceability of all products. This agency should be open to social partners; • to fix clear rules for the carbon market with appropriate legislative instruments, in order to avoid speculations on rates and excessively erratic fluctuations, and to forge ties between the European market and the other regional markets; (…) • to promote global and coordinated R & D initiatives; (…) • a European low-carbon industrial policy based on a dynamic of Community industrial coordination that will transcend intra-European divisions and the damaging effects of the demands for short-term profitability from industrial investments. Just transition and high-quality jobs A European low-carbon transition strategy must be based on ‘just transition’ principles: dialogue between government, industry and trade unions and others on the economic and industrial changes involved; green and decent jobs; investment in low-carbon technologies; new green skills. • National, regional and sectoral studies on the policies linked to climate change and their impact on employment and labour markets need to be systematically conducted. • At European level the creation of a permanent instrument to ensure the anticipation of socioeconomic transition is urgently needed, to coordinate existing instruments such as sectoral councils and reinforce dialogue between the social partners and public authorities. In this framework the EU must commit itself to the challenges of industrial restructuring with which the new Member States are confronted. • This coordinating instrument would receive sustainable development impact studies and will be able to participate in the definition of the specification of legislation as well as the implementation and follow-up. • European technology platforms developing low-carbon technological products and processes should ensure the participation of trade unions in their governance systems (…). • The creation of an international fund and of a European fund to facilitate the development of technologies producing low-carbon emissions and of technologies based on energy efficiency and renewable energies in the developing countries, as well as to develop employment policies based on social protection, the promotion of decent work and public services. • (…) Skills monitoring and matching policies should be reoriented towards the anticipation of these changes. • A fair transition guaranteeing the creation of bridges designed to help workers in shrinking sectors to find jobs in expanding sectors, while protecting their wages, their working conditions and their trade union organisations. ‘Every workplace can be a green workplace. There is mounting evidence that unions are taking action to tackle climate change. Therefore, we ask for new and extended rights relating to the protection of health and of the environment at work, and for the provision of training and skills related.’ ETUC (2009), Climate change, new industrial policies and exiting the crisis, Brussels.

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jobs, investment, new green skills, with an emphasis on anticipation and Box: 5.7: European social partners’ positions on climate management of change, and new and change policies — BusinessEurope extended rights relating to the protec- In the view of BusinessEurope, for companies it is essential to operate in a predictable EU tion of health and of the environment policy framework which integrates climate protection, energy security as well as competi- at work (see Box 5.6). Following the tiveness concerns. The EU policy agenda should include in particular: onset of the financial and economic • implementation of the revised EU Emissions Trading System (ETS), ensuring that it does crisis, the ETUC linked recovery not hurt the competitiveness of European industry; measures to a green industrial policy • fostering a truly global and balanced climate agreement, including the world’s major emitters; and called for more support for work- • development of an overarching EU energy policy, creating the clear strategic framework ers that are negatively affected by a needed for definition of a coherent and effective climate policy; shift to a low-carbon economy (a ‘low- • strengthening of EU research and capabilities in low-carbon technologies; carbon economy adaptation’ fund). • full exploitation of the cost-effective energy efficiency possibilities that fall within the ambit of business, consumers and the public sector; BusinessEurope has always given • facilitation, reform and expansion of the Kyoto Protocol’s flexible mechanisms (clean develop- detailed input on all aspects of EU ment mechanism and joint implementation) to make a contribution to climate protection. climate and energy policy at political ‘The fight against climate change will remain at the highest level of priorities. European business has made great efforts to reduce CO emissions under the Kyoto protocol rules. and technical level. It broadly supports 2 It is committed to continue doing so. Climate change will not be solved by EU unilateral the EU climate change objectives, but actions and cannot be driven only by rules. If the European Union wants to lead in the fight insists that industry’s international against climate change, it should put a much greater emphasis on technology. European competitiveness and energy security Companies have a lot to offer! But much more could be done with appropriate policies to should not be harmed by unilateral EU address obstacles to innovation, skills shortages, lack of venture capital, and under-devel- action. It is of the view that Europe has opment of entrepreneurship. (…) Renewable energies, nuclear power, carbon capture and storage and other new technologies are essential to meet the challenges of security of sup- the potential to position its economy ply and climate change.’ to take advantage of the global shift to BusinessEurope (2009), ‘Go for growth — An agenda for the EU for 2010–14’, Brussels. a low-carbon economy, but that it also faces major challenges. the maximum amount of free allow- In terms of employment, Business In the field of climate change, Busi- ances permitted in the revised ETS Europe opposes a division between nessEurope acts within the Alliance Directive from 2013 oriented towards a ‘green jobs’ with growth potential on for a Competitive European Industry realistically achievable benchmark (4). the one hand and ‘brown jobs’ on the together with three sectoral European BusinessEurope argues that European other hand. Instead, the intercon- employers’ organisations (Euratex, businesses have already implemented nection between sectors and a wider

Eurelectric, Eurofer) and eight other expensive CO2 emission cuts and that process of the greening of jobs, has industry associations. The declared Europe cannot provide the solution to be taken into account. ‘Conven- objective of this alliance is ‘to pro- alone. This has to include all sectors tional industries enable green sectors mote the competitiveness of European and regions in the world through to develop environmentally friendly industry on a global scale and to help multilateral agreements in order to products whereas ‘green sectors’ address Europe’s radical transforma- avoid carbon leakage. It insists on a facilitate adoption of new innovation towards a sustainable and low- transparent comitology procedure, tive technologies in the production carbon future’. The Alliance regularly i.e. discussions with Member States’ processes of conventional industries’. addresses technical positions to the EU administrations on technical implant- It argues for employment and social Institutions and Member States repre- ing measures, with close consultation policy measures aimed at improving sentatives. with stakeholders. flexibility accompanied by efficient public employment services, active BusinessEurope’s positions on the 4 Under the ETS an exception is made for labour market policies and training. installations in sectors that are found to be exposed ECCP and international climate nego- to a significant risk of ‘carbon leakage’, i.e. the risk Companies and workers must be able tiations (see Box 5.7) are to a large of increased emissions if companies relocated to adapt quickly to new markets, pro- production to areas outside the EU that are not extent similar to those of the ETUC. subject to comparable emission constraints. duction processes and job opportuni- However, it does not advocate border Installations in these sectors receive 100 % of their ties. It warns of a fast developing skills compensation mechanisms, such as a share in the annually declining total quantity of mismatch and observes that European allowances for free, but will be benchmarked against carbon tax on imports, and insists on the best achievers in their (sub-)sector. Companies are already struggling

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with shortages in particular of STEM (see Chapter 6) — should take the needs and related training. For exam- skills, for example electrical engineers low-carbon dimension into account. ple, in particular the EMF advocates in the renewable energy sector. VET Problematic sectors need to be identi- the establishment of European sec- and life-long learning policies should fied and measures to facilitate transi- toral skills councils in order to make be oriented towards adapting mid- tions, training and support services to skills forecasting more specific for the level qualifications to the low-carbon business and innovation put in place. needs of specific sectors, in particular economy, for example in the building Public authorities should inform com- regarding skills needs for the low- sector. In order to improve anticipa- panies and workers about the conse- carbon economy. tion, closer collaboration between quences of climate change in order higher education institutions, schools to enable them to prepare and adapt. and businesses should be fostered Adopting the flexicurity principles 5.5.1.2. Structured social partners’ (BusinessEurope, 2010). should make workers and businesses input in the EU climate fit for transitions. Skills shortages are change policymaking at CEEP commented on the Commis- identified as likely barriers for SMEs technical and political level sion’s initial proposal for the energy investing in expanding activities. and climate package on just one occa- As explained in Section 3.3, climate sion. However, it regularly takes posi- change related policy itself relies rather tions on transport and energy policy. Sectors on technical expertise of business In 2006, it also issued a joint statement associations than on a dialogue with with the ETUC on climate change European organisations representing and among social partners. The ECCP policy and its consequences for social workers and employers in different established the practice of technical partners (see above). industry sectors are prominent in try- working groups for the involvement ing to influence climate change related of stakeholders in the preparation and UEAPME is also less prominent in the policies at EU level. Most of this lobby- implementation of legislation and poli- public discussion on climate change, ing is individual or in coalitions of busi- cies. This included a working group but is very active in influencing poli- ness organisations and trade unions on the ETS review and — following cies with direct relevance for SMEs respectively. On the employer side, the the adoption of the climate change like energy market regulation, energy activities of the Alliance for a Com- package — several working groups on and eco-efficiency, or energy perform- petitive European Industry have been implementing measures that are to be ance of buildings. It also contributed mentioned above. On the trade union taken by the Commission after agree- to the stakeholder consultations in the side, the European Metalworkers’ Fed- ment of the Council (comitology), like run-up to the ETS review and issued eration (EMF) and the European Mine, auctioning of emission allowances, or a position paper for the Copenhagen Energy and Chemical Workers’ Feder- the allocation of free allowances and climate summit that also insisted on ation (EMCEF) are particularly vocal. the definition of benchmarks. The con- ambitious and clear commitments On the whole, European trade union cerned sectoral business organisations, from other industrialised but also organisations tend to be less involved but also BusinessEurope, take an active from emerging and developing coun- in technical working groups in the part in these working groups, whereas tries. In 2009, UEAPME adopted European climate change programme trade unions are hardly engaged in this a position paper on the impact of than their employer counterparts and process. However, different Commis- climate change on employment. In have rarely replied to consultations on sion services regularly consult both its view, SMEs are rarely directly specific legislation. sides of industry in their European affected by the main instrument, the sectoral social dialogue committees on ETS Directive, but indirectly through Sector specific trade union policy climate change, energy, transport and demand and electricity price effects. positions are often similar to indus- other policies. However, SME dominated sectors like try organisations, as demonstrated building or renewables have employ- through the joint statements outlined The Commission acknowledged in ment growth potential, in contrast for in Section 5.4.1.3 below. But in addi- its communication proposing the cli- example to road transport. In order tion, Europe’s trade unions stress the mate change package that ‘the process to realise these transitions, measures need for a just transition that includes of change to a low-carbon economy for the management of change and its dialogue with government and public will also need to be accompanied by social consequences — as also elabo- authorities, investing in green tech- the appropriate involvement of social rated by the European social partners nologies, and anticipation of skills partners, in particular at sectoral level’

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(European Commission, 2008b). The 5.5.1.3. Joint opinions of European binding international agreement, ETUC (once jointly with CEEP), sectoral social dialogue and on the immediate identification UEAPME and the European Social committees of sectors at risk of carbon leakage so Dialogue Committees for the Steel, as to avoid prolonged uncertainty for Gas and Chemicals Sectors have European social partners in eight sectors investment. Other European sectoral asked the Commission to establish a have agreed on joint positions linked to social dialogue committees drew the dedicated consultation mechanism the transition to a low-carbon economy attention of EU institutions to sector in different statements so that the in their official European social dia- specific concerns. The construction employment situation can be moni- logue (see Table 5.3). The proposal for industry pointed out the significance tored and exchanges facilitated with the EU climate and energy package was of energy efficiency of buildings all concerned services of the Com- instrumental in triggering the European and lobbied for measures that will mission. The European cross-industry social dialogue in this field. stimulate the necessary investment. social partners requested jointly to be Social partners in the wood sector systematically consulted by the Com- In 2008, the European social partners warned of the consequences of pref- mission on the employment conse- in the steel, chemicals and extrac- erential treatment of the use of woody quences of climate change related tive industries sectors adopted joint biomass for energy production as policies at the Tripartite Social Sum- positions on the climate and energy against its use as a raw material for mit in October 2008. The Commission package and, in particular, on the wood based products. The European currently works with them on practi- ETS Directive, thus adding weight to social partners in the railway sector cal options for a dedicated consulta- the largely converging positions they jointly called on the Commission to tion mechanism that adds value to had taken individually on different speed up its work on a review of the consultation processes already avail- occasions. Each of these statements Eurovignette Directive that should able under the ECCP, the European points out the specificity of energy- ensure the internalisation of external sectoral social dialogue and other sec- intensive industries and insists on costs to the environment and health tor-specific stakeholder groups. an ambitious, comprehensive and caused by road freight transport.

Table 5.3: Joint opinions of European sectoral social dialogue committees

Steel — EMF and Eurofer • Commission proposal for the revision of the EU Emissions Trading System (EU ETS) (26.6.2008) • EU climate change policy (25.5.2010) EMF and Eurofer called upon the decision-makers in the European Parliament, the Council and the Commission to improve the proposal on the revision of the EU ETS so as to ensure a fair balance between climate change measures and competitiveness and high-quality jobs. They highlighted eight points, which reflect the general stance of industry, for example the immediate identification of sectors at risk of carbon leakage so as to avoid prolonged uncertainty for investments, as well as a few steel industry specific considerations. In the follow-up to the Copenhagen climate summit, EMF and Eurofer warned of a unilateral EU energy reduction target of 30 % and put the focus on an international global verification and monitoring methodology. EU financial support should be conditional on third countries’ participation in monitoring. They also call for border adjustment or other measures as the ultima ratio and increased corporate and private investment. For the first time, both sides of industry call for ‘accompanying measures to manage the social consequences of the EU ETS’. There was a ‘need for a sectoral strategy, developed in concert with the social partners as well as public authorities, to maintain employment and promote training and skills development for workers’. Chemical industry — EMCEF and ECEG • European Union Emissions Trading System (EU ETS) (29.9.2008) The European Chemical Employers Group (ECEG) and the European Mine, Energy and Chemical Workers’ Federation (EMCEF) draw attention to the specificity of the chemical industry, insisted on the risks for energy intensive industries and on the necessity to identify immediately the sectors at risk of carbon leakage. They also state that ‘in case of compensation measures at EU borders, the complexity of most of value chains prevents efficient protection against competitive distortion for all downstream products’. Finally, they also ‘urge the Commission to create a tripartite European body (Administration/Trade Union/Employers) for dialogue and regular monitoring of sectoral evolution and contribution to energy policy’.

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Extractive industries — EMCEF and Euromines, Eurocoal, IMA Europe, APEP • COP 15 and its impact on EU extractive industries (19.11.2009) • EU Commission’s climate package of 23 January 2008 (21.5.2008) The extractive industry social partners argued that location of industry within Europe depends on realistic, achievable and internationally agreed targets and instruments (international agreement), a reliable framework of industrial innovations and investment (speedy identification of sectors at risk of carbon leakage and free allocation based on sector specific benchmarks; no restrictions to joint implementation and clean development mechanism; special treatment of efficient existing installations) as well as competitive prices (measures for electricity prices). Given that European power plant technology is a world leader in efficiency the steady replacement of old coal fired power plants by new ones should not be put at risk. In their joint position on COP 15 the social partners insisted that the goals and objectives of climate policy must also live up to social and economic realities and requirements, as they could otherwise not be achieved. The European extractive industry expressed deep concern about the EU adopting climate change measures unilaterally. They recalled the European extractive industry’s economic, social and environmental contributions and insisted on an EU negotiation position that would help to maintain industry ensure international competitiveness through an international emissions trading system and on transitional measures for European energy intensive industries. Wood — EFBWW and CEI-Bois • European Commission’s proposal for a directive on renewable energy sources (10.6.2008) • Recognition of wood-based products as carbon stores with a positive contribution to climate change (24.10.2006) The first time that a European social dialogue committee made a joint contribution related to the low-carbon economy was a joint statement advocating the recognition of wood-based products like furniture and elements of construction as carbon stores by European Federation of Building and Wood- workers and the European Confederation of Woodworking Industries in 2006. They call for an end of subsidies to energy installations using woody biomass under national biomass action programmes as this would distort the wood raw materials market and jeopardise wood-based industries. The same conflict between the use of woody biomass for energy production and its use as raw material products triggered the latest statement on the Renewables Directive in the EU energy and climate package. The social partners suggested a promotion scheme for products made of renewable materials and speak out in favour of sustainability criteria for biomass, which would be sustainable forest management in the case of woody biomass. Construction industry — EFBWW and FIEC • The global economic crisis and its consequences for the European construction industry • Emerging from the crisis: Fostering growth and jobs for a sustainable construction industry (29.1.2010) Call for quick actions to channel public investment into sustainable construction and support the prompt revision of the framework regulations of the cohesion policy, which allows raising the ceiling of how much Member States can spend from the Regional Development Fund on energy-efficiency improvements in buildings. EFBWW and FIEC encourage the drive towards zero-energy new buildings and underline the need for the emphasis for existing buildings to be put on insulation, heating equipment and the control of heating and air-conditioning systems. They request that the discussion on the Energy-Efficiency of Buildings Directive and the objective of zero-energy should be extended to all existing buildings. In their joint opin-

ion on the crisis they insisted that the construction industry has a major role in reducing CO2 emissions as buildings being currently responsible for 42 % of EU final energy consumption and producing about 35 % of all greenhouse emissions. They give their full support to the EU’s climate change package and insist on proper implementation through the necessary regulatory and application through financial instruments. Rail transport — ETF and CER, EIM • Internalisation of external cost in transport for an acceleration of Community activities (17.4.2007) Call on the Commission to speed up its work on a review of the Eurovignette Directive that should ensure the internalisation of external costs to the environment and health caused by road freight transport. In the view of the European Transport Workers’ Federation (ETF), the Community of European Railway and Infrastructure Companies (CER) and the European Rail Infrastructure Managers (ERM) the Directive does not ensure a level-playing field with rail transport and hampers its development at the expense of social welfare and the environment. During the revision in 2009, the European social partners have not reacted jointly. Gas — EPSU, EMCEF and Eurogas • Joint submission to consultation on: ‘Towards a new energy strategy for Europe 2011–20’ (2010) A joint response on the employment and social dimension of future energy policy. The Commission should devote more attention to this dimension and indicate likely employment consequences of different scenarios. The emerging skills and competency problems should be urgently addressed and the social partners should be involved in Commission impact assessments. While the social partners appreciate information given at their social dialogue committee meetings, they consider that the upcoming challenges require more structured consultation. Electricity — EPSU, EMCEF and Eurelectric • Joint response to public consultation: ‘Towards a new energy strategy for Europe 2011–20’ (23.6.2010) A joint response on the employment and social dimension of future energy policy. The Energy DG and social partners should explore ways to cooperate in addressing the social dimension of future energy policies based on the latter’s toolkits on restructuring and age management. The Commission should also define a process to involve social partners in the impact assessment of new policy measures. Based on their current study on job skills needs and a just transition to a low-carbon economy the social partners want the Energy DG to work together to identify measures to tackle job skills and needs.

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5.5.2. Autonomous European 5.5.2.2. European sectoral social ‘future of miners and the role of social social dialogue initiatives partners partners — climate change and their concerning the impact for employment in the mining Low-carbon economy issues now fea- industry’ (2009/10). The EMF aims low-carbon economy ture on the work programme of eight to improve transnational exchange In addition to their activity aimed at out of 40 European social dialogue among employees’ representatives and influencing policy, European social committees (agriculture, chemicals, trade unions in the European wind partners have started to explore an construction, electricity, extractive energy industry sector through its autonomous sphere of action through industries, steel, furniture and wood), project ‘Stronger workers’ represen- their social dialogue or projects related compared to only one in 2006 (steel). tation in the European wind energy to the low-carbon economy, i.e. they For example, the social partners in the sector’. It wants to organise workers, develop their own social dialogue postal services sector agreed to put create European trade union networks agenda around the issue. ‘environmental issues and impact on and improve transnational informa- jobs’ on the work programme of their tion, cooperation and participation European social dialogue committee of employees. The project was initi- 5.5.2.1. European cross-industry for the first time in 2010. Employers in ated by the German IG Metall and is social partners particular had argued for the impor- executed together with trade unions tance of the topic within the social dia- from France, Spain and Denmark. The ETUC, BusinessEurope, CEEP logue committee. The social partners’ The European social partners in agri- and UEAPME included climate objective is to discuss green solutions as culture, EFFAT and GEOPA-COPA change in their work programme for part of the environmental pillar of CSR. explore the economic, environmental 2009–10. They have launched joint There is an increasing demand for green and social consequences of climate research on the employment dimen- solutions in areas such as the reduc- change in agriculture, in particular in sion of climate change related policies tion of CO2 emissions in operations, the Alpine regions and with regard to (including ‘green’ jobs and impact on the reduction of energy consumption, water supply in Europe (2009/10). skills) and intend to develop a com- responsible paper use, or the depletion mon view on this topic. The objective of natural resources. An overarching The low-carbon economy has thus is to help the European social partner question is how ‘green employment’ in entered the European social dialogue organisations to better understand the the sector will impact on current jobs. over the last five years, even if it remains impact of climate change policies on The committee will subsequently share largely restricted to the influencing of labour markets and to assess what the best practices among companies and policymaking. As mentioned in Part 2, role of the social partners at national trade unions based on a survey. Eure- a low-carbon economy implies transi- level is or could be in this area. The lectric and EMCEF are preparing a tions in all sectors, but in some they idea is to identify positive examples of toolkit on how employers and unions are more immediate than in others. how companies and/or social partners can ensure a just transition through the Of those that are likely to be affected, approach the issue across a range of project ‘Climate change, employment only the European social partners in industries, sectors and/or regions. In impact and just employment transition the transport sectors have so far not addition, they aim to reach conclusions principles for the European electricity made the low-carbon economy a topic on the consequences for employment sector’ (2010/11). The toolkit will be of their social dialogue. (policies) and general and/or specific developed from a report analysing the skills development, which would con- impact of measures to address climate tribute to the EU’s ‘New Skills for New change in the sector on jobs, skills and 5.5.2.3. European company level Jobs’ initiative. Based on this project qualifications. the European social partners intend to A small number of transnational texts develop ‘a joint approach to the social Trade unions in particular seem to use negotiated by trade unions and man- and employment aspects and conse- projects to lay the ground for a more agement at company level include pro- quences of climate change policies substantial social dialogue on the visions on environmental protection with a view to maximising opportuni- transition to a low-carbon future. For and climate change. In the period from ties and minimising negative effects example, a transnational partnership mid-2007 to late 2009 such provisions and to identify possible joint actions’ of mining trade unions around the are found in eight out of the 49 joint (European social partners’ autono- Trade Union of Mining and Energy texts concluded worldwide (Commis- mous work programme for 2009–10). Workers of Hungary explores the sion calculation). These provisions,

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which are usually one aspect among concluded recently that most countries sectors or between the social partners others addressed in the texts, com- lack a strategic direction and an opera- and the legislator. This raises the par- monly refer to the reduction of the tional set of instruments to fulfil this ticular challenge for employer and environmental impact of the com- task (European Commission, 2010). trade union confederations of closing pany’s operations at large. For exam- Social partners have demonstrated the ranks between ‘greener’ and ‘tradi- ple, Statoil Hydro and ICEM/Industri that they can contribute to this transitional’ sectors. The organisational den- Energi (International Federation of tion and they certainly have an impor- sity of employers’ and trade unions is Chemical, Energy, Mine and General tant role to play in the management of stronger in ‘traditional’ industries and Workers’ Unions and its Norwegian the employment consequences. energy intensive sectors, and fears of member) agreed measures to ‘cooper- job loss combined with concerns over ate to ensure that StatoilHydro activities Drawing on the conceptual framework a loss of international competitive- are carried out with the fullest possible used in the 2008 Industrial Relations ness may lead to resistance to climate regard for the environment’ as early as Report to analyse the role of the social change initiatives. In contrast, the 1998. The text also addressed human partners under the Lisbon Strategy, ongoing change is seeing the emer- rights, industrial relations and health the chapter has distinguished, and gence of new companies, and even and safety questions. Union delegates reviewed, three main forms of social new sectors, and raises the challenge from countries where Statoil Hydro has partner intervention on climate change of organising firms and workers and operations receive ‘appropriate train- issues: influencing policy and lobbying; establishing social dialogue in these ing in health, safety and environmental regulation through agreements and companies and sectors. best practices’. Other examples are the ‘softer’ guidelines; and activities to sup- texts concluded at Enel, Arcelor Mittal, port implementation of climate change What distinguishes social partners Lafarge, SCA, or Freudenberg (non- policies and practices. Social partner from other interest groups is their exhaustive list). initiatives have largely focused on the capacity to enter into agreements and first and third of these, with as yet commit their members to implement- The 2009 international framework relatively few examples of the second. ing them. Although collective agree- agreement concerning the social ments addressing climate change issues responsibility of the EDF Group The state remains the main actor pro- are as yet rare, workplace and company addresses also environmental protec- viding the framework through poli- social dialogue on energy efficiency tion, but furthermore includes explic- cies in the areas of climate changes, and saving as well as other green issues itly ‘exemplary actions by EDF Group energy efficiency, transport, state sub- is spreading, including through some companies and employees in the area sidies, taxes, etc. Therefore, first and transnational agreements. To date also, of the environment, in particular in foremost, social partners have drawn climate change tends to be addressed the fight against climate change and attention to the expected business and as one amongst a range of issues within the preservation of biodiversity’ as employment impact of policy initia- relevant agreements. well as ‘the promotion of energy eco- tives and try to shape them. Employers’ efficiency for clients and within the organisations appear to provide more High-quality industrial relations, companies of the Group’. regular and specific input, including characterised by representative organ- of a technical nature. Trade unions isations with strong capacities and tend to concentrate on the main expertise, wide coverage of collective policy issues and insist on the antici- bargaining and social dialogue, strong 5.6. Conclusions pation and management of employ- employee participation at the work- ment impacts. The transition to a place and relationships based on trust The transition to a low-carbon econ- low-carbon economy differs, however, and mutual respect can contribute to omy is both a necessity and an oppor- from sector to sector and it is notice- resolving a range of problems, includ- tunity for business, employment and able that in many sectors both sides ing restructuring, employment transi- the quality of life. It will have a proof industry often reach joint positions tions and skills mismatches. From this found impact on large parts of the which identify their specific concerns. perspective, the challenges thrown labour market and throughout a wide The transition creates winners, losers up by climate change adaptation and range of sectors, in terms of employ- and pressure on many sectors and/or mitigation are similar to those arising ment structures and skills needs, and professions. Therefore, tensions and under other structural changes in the needs to be well-managed. A European conflicts can arise not just between economy, which social partners have Employment Observatory Review management and labour but between successfully addressed over the recent

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period. In this context, the recent and environmental labels. In this autonomous dialogue and in joint examples from Belgium, Spain and respect, trade unions and employers’ statements to the EU institutions. the UK of tripartite or ‘multipartite’ organisations act as partners for pub- At national level, large differences dialogue on the anticipation of the lic authorities and also for civil soci- remain between the social partners’ opportunities and challenges that the ety organisations. The extent to which positions and actions in different low-carbon economy entails signal a they play this role depends clearly on Member States. For many the low- proactive and coherent orientation to their administrative capacities. carbon economy is not yet a priority. the transition. Which role social partners play con- The commitment expressed at the EU tinues to depend on the economic In terms of activities to support the level to dialogue over the economic and social framework conditions in implementation of low-carbon poli- and employment consequences and the country and on the organisation cies and practices, in many Member implications of climate change is of industrial relations. Nonetheless, States the social partners are making striking. European social partners at there is a clear trend towards pay- an impressive contribution through cross-industry level and in a number ing increased attention to the tran- training initiatives, campaigns, of sectors have started to study these sition to a low-carbon economy in research and promotion of quality issues and to address them in their industrial relations in Europe.

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Chapter 6: European social dialogue developments 2008–10

European social dialogue continued to deliver tangible outcomes for workers and employers across Europe in the past two years, with a record number of binding agreements being signed and implemented. The economic crisis was at the forefront of discussions between social partners, leading to a number of joint actions but also to disagreements. With the creation of several new committees, the trend towards increasing coverage of the economy by sectoral social dialogue has continued unabated, showing that the interest among European social partners in this instrument remains high.

6.1. Introduction Box 6.1: Principles of European social dialogue The important role of the social partners as representatives of management and labour The dialogue between the representa- in the governance of the European Union and in the European social model is rec- tives of management and labour is ognised in the Treaty on the Functioning of the EU (Lisbon Treaty), complementing one of the fundamental pillars of the national social dialogue and industrial relations systems. The new Article 152 at the European social model and its promo- beginning of the Treaty’s social policy title makes it incumbent on the European Union tion is enshrined in the Treaty on the as a whole to promote the role of social partners and to facilitate their dialogue. The role of the Tripartite Social Summit, which regularly brings together the cross-indus- Functioning of the European Union try social partners with the European Commission and the Council Presidency at the as an objective of the EU’s social highest levels, is also acknowledged in the Treaty. In addition, according to Article 154 policy. To this end, autonomous dia- (ex Article 138 TEC), the European Commission has a specific duty to promote the logue at the level of the EU between consultation of the social partners and to take measures to support social dialogue. In the social partners — trade unions this context, the Commission must consult the social partners twice on each legislative and employers’ organisations — takes proposal in the social policy field: first on the possible direction of EU action, and in a second stage on the content of the Commission’s proposal. At each of these stages, place within the framework of social in addition to submitting joint or separate opinions and recommendations, the social dialogue committees. These commit- partners have the option to inform the Commission that they wish to start formal tees are the place where both sides of negotiations on the matter under consultation. The social partners then have nine industry are consulted on relevant EU months to reach an agreement, during which time the Commission cannot proceed policy initiatives and impact assess- with its own proposal. ments, and where they can discuss The process of negotiating binding agreements at EU level is laid down in Article 155 issues of common interest, launch of the Treaty (ex Article 139). The cross-industry and sectoral social partners are free to conclude agreements either in response to a Commission consultation or of their joint actions or negotiate binding own initiative, and once a text is adopted at the level of the European social part- agreements that could become EU ners, the Treaty foresees two possibilities for implementation. First, agreements can be legislation. The cross-industry social implemented in accordance with the procedures and practices specific to management dialogue committee is the forum for and labour and the Member States, which means that the responsibility for imple- discussing topics that affect workers mentation falls primarily on the national social partners (autonomous agreements). The European social partners play a primary role in monitoring the implementation and employers across the entire econ- of such autonomous agreements. Second, the social partners can make a joint request omy, while issues concerning specific to the Commission to submit their agreement to the Council for a decision. In prac- sectors of the economy are on the tice, this procedure results in a Council directive containing the social partner agree- agenda of the 40 sectoral social dia- ment and the European Parliament is informed. Just like any other directive, it is then logue committees in existence today. the obligation of the Member States to ensure the implementation of the agreement’s These sectoral committees cover more provisions, and the Commission will monitor the corresponding transposition. As an alternative to national transposing legislation, Article 153 of the Treaty (ex Article than three quarters of the European 137) permits a Member State to entrust national social partners with the implementa- workforce, so that almost 145 million tion of a directive’s provisions. While the European social partners are not prevented employees throughout the EU come from concluding autonomous agreements on any subject matter of their interest, the under their remit. Taken together, option of implementation by Council directive is only possible for agreements in the the cross-industry and sectoral social social policy field as defined in Article 153 of the Treaty (ex Article 137). dialogue committees are vital components of the EU’s governance structure in employment and social policy. increasing coverage of the economy joint request of the respective Euro- by sectoral social dialogue commit- pean social partners. 2010 has thus The past two years have seen a tees. Three new committees have seen the first meetings of the Euro- continuation of the trend towards been launched during 2010 at the pean social dialogue committees

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6.2. The crisis Box 6.2: Commission staff working document on the functioning of European sectoral social dialogue and European social After more than a decade of experience with European sectoral social dialogue, the dialogue European Commission published a staff working document in mid-2010, assessing the functioning of the sectoral social dialogue committees and proposing possible The activities of the European social improvements (SEC(2010) 964). dialogue committees that are related The European sectoral social dialogue committees were set up by the Commission to the economic crisis can be broadly on the basis of the Commission decision of 20 May 1998 in order to strengthen the sectoral dimension of European social dialogue, in accordance with Articles 154 and classified into two categories. First, 155 of the Treaty (ex Articles 138 and 139). Since 1998, the Commission has created brought about by the urgency and 40 sectoral social dialogue committees, which cover 145 million workers in Europe severity of the recession, some social and sectors of crucial importance (such as transport, energy, agriculture, fisheries, partners undertook immediate joint maritime policy, public services, etc.). These committees have issued around 500 texts actions that specifically addressed the of varying legal status — going from joint opinions and responses to consultations, to crisis. Second, in many committees, agreements that have been implemented through European directives and have thus become part of EU legislation. Despite the overall success of these committees, there much ongoing activity assumed paris still room for improvement. Through this document, the Commission intends to ticular relevance in light of the crisis, encourage the European and national sectoral social partners to fully use their area such as joint actions in the fields of of negotiation, reinforce their administrative capacity and create synergies between restructuring, change management, sectors. Within this framework, the European Commission also encourages the inte- labour market and employment issues, gration of new players as well as better participation of representatives from the new training, skills development and flexi- Member States. curity. Besides the activities of the The full text of the Commission staff working document on the functioning and potential of European sectoral social dialogue is available online (http://ec.europa.eu/ European social dialogue committees social/BlobServlet?docId=5591&langId=en). analysed in this chapter, further activity, and measures, to address the crisis at a European level were taken by the in the metal, paper and education European social partners and into social partners within multinational sectors, while the European social many a discussion around the dia- companies through European works dialogue for central (government) logue table. The present chapter will councils (see Box 6.3 and Boxes 3.9 administrations may soon be formal- therefore first review the activities of and 3.10 in Chapter 3). ised following a two-year test phase. the cross-industry and sectoral social Furthermore, social partners in the dialogue committees in response to agro-food industry and sports sec- the crisis and the related topics of 6.2.1. Joint action on the crisis tor are currently respectively explor- restructuring, training and skills. The ing the possibility of a sectoral social second section then summarises the The most severe economic crisis in dialogue committee. activities of the committees in other the history of European integration fields, such as health and safety, cor- has become a topic for discussion in This chapter reports on the main porate social responsibility, sustain- all of the social dialogue committees, developments in European social able development, gender equality although some of the sectors were less dialogue during the past two years. and the reconciliation of personal affected than others and the impacts These were anything but ‘business and professional life. Further infor- differ greatly between industries, as usual’ as a result of the economic mation on recent developments in as Chapter 2 shows. Accordingly, crisis. European social dialogue European sectoral social dialogue is the way in which social partners commonly deals with a wide variety available in the publication ‘Euro- addressed the crisis at the level of of topics, ranging from skills devel- pean sectoral social dialogue: recent European social dialogue has varied opment to health at work and gen- developments — 2010 edition’, which widely since 2008. Some commit- der equality. In the last two years, contains detailed summaries for each tees decided that there was no added however, the economic crisis has of the sectors engaged in social dia- value to be gained from attempting to forced its way onto the agenda of the logue at European level (1). undertake joint actions or analysis in response to the crisis. Despite intensive efforts, in March 2009 the cross- industry social dialogue committee 1 Available online at http://ec.europa.eu/social/Blob Servlet?docId=6008&langId=en failed to agree on a joint declaration

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Box 6.3: European social dialogue at the company level In addition to European social dialogue at cross-industry and sectoral level, dialogue between the representatives of management and labour also takes place at the level of transnational companies, including through European works councils. Since 2000, a rapidly increasing number of texts have been concluded between the management of a company and workers’ representatives on a variety of issues and cover establishments and/or undertakings located in several countries. The Commission’s services have recorded about 200 joint transnational texts in 100 companies employing together 9.8 million employees. The conclusion of transnational company agreements is a key factor in the development of the European actors’ future capacity to conduct a social dialogue in keeping with the increasingly transnational nature of company organisation, and the need to anticipate change and have strategies to deal with it. The 200 or so texts include worldwide international framework agreements on fundamental rights and social responsibility as well as texts addressing specific European issues such as anticipation of change and management of restructuring, development of joint health and safety standards, common strategies on equal opportunities, mechanism for transnational financial participation, rules on cross-border data protection, joint principles on human resources policy, training or mobility. In general, the conclusion of transnational texts appears to be a European-driven process, as the vast majority of companies that have concluded such agreements are headquartered in Europe. European works councils play a key role in concluding these texts, as almost all transnational agreements relating to Europe bear their signatures (see Chapter 7 for legal details and developments regarding the European Works Council Directive). Of the transnational texts addressing specific European issues, the anticipation of change and management of restructuring has not only been prominent but also the focus of innovative measures. Some agreements have addressed concrete restructuring proposals and plans. For example, the series of agreements concluded at General Motors Europe have been instrumental in avoiding plant closures, mitigating redundancies and distributing them more evenly. In the event that closures and redundancies take place, other agreements have provided measures for internal or external employment redeployment and/or guarantees over terms and conditions for employees being transferred. A recent example is the 2010 agreement between the European Metalworkers’ Federation (EMF) and Alstom and Schneider Electric concerning the consequences of the takeover of Areva’s transmission and distribution businesses. Further agreements elaborate a framework of principles for handling, and a range of measures to address, any restructuring that might occur. The broader objective is to realise restructuring in a socially responsible manner. An example is the 2009 agreement between EMF and ArcelorMittal, which also envisages a role for social dialogue in anticipating potential restructuring. An anticipa- tive dimension is foremost amongst another group of agreements, whose objective is to anticipate change and its likely impact on jobs and skills across companies’ European operations. For example, the 2010 agreement between the European Public Services Union (EPSU) and GDFSuez provides, through observatories and social dialogue, for forward-looking management of jobs and skills in every European subsidiary of the group. Against the background of an increasing internationalisation of corporate activity, and given the particular responsibilities of the EU in this regard, there is a need to promote and support the further development of transnational company agreements as a means to anticipate and manage change in a socially responsible manner. Given the absence of any framework for transnational agreements, questions have been raised concerning in particular the transparency of the texts concluded, the actors involved, the legal nature, the effects and the dispute settlement of such agreements, whenever they go beyond the status of general declarations of principle. An expert group was set up in 2009 by the Commission, bringing together representatives of the social partners and Member States, with the aim to look into the questions raised by the development of transnational company agreements and design actions that might help to promote and support further development in this area. Practical, legal and political questions related to the discrepancies between the transnational scope of the agreements and the national norms and references are amongst the questions being considered by this group. The European Commission also commissioned a study on international private law aspects and dispute settlement related to transnational company agreements and launched a study on the legal effects of company agreements. The Commission also provides financial support to related projects by the social partners. In addition, a searchable online database on transnational company agreements is under development. Further information on transnational company agreements can be found online (http://ec.europa.eu/social/main.jsp?catId=707&lan gId=en&intPageId=214). on actions to address the crisis. This social partners achieved consensus the chemical industry, construction, was due to fundamental differences around a joint statement in June 2010 road transport, commerce, live about the causes of the economic cri- (see Box 6.4). performance and regional and local sis, which resulted in equally incom- government sectoral social dialogue patible positions with respect to the At the same time, a number of sectoral committees, each addressing the cri- immediate measures to be adopted. social dialogue committees decided sis and measures to mitigate its effects Within the context of the more that joint action was indeed warranted. and taking account of the specificities medium-term and forward-looking As a result, agreement was reached on of the sectors. In addition, the social Europe 2020 strategy, however, the joint statements or declarations in partners in the banking sector have

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initiated an exchange on the impact of at European, national and regional ensure access to credit, implemen- the financial crisis in an extraordinary levels to adopt a number of concrete tation of employment-preserving meeting between the social partners measures to sustain the sector. These schemes such as short-time working in early 2009. included: accelerating public invest- arrangements in all Member States, ment plans, including those in infra- incentives for additional training, In chemicals, the European Chemi- structure projects; boosting funding investment in clean vehicle tech- cal Employers’ Group and EMCEF to speed up investment in energy-effi- nologies and investment in the road adopted a joint declaration on the glo- cient new building and improvements transport infrastructure. bal economic crisis in May 2009. This in existing buildings; ensuring access highlighted the severe effect of the cri- to loans and mortgages for house In a ‘joint reaction’ to the economic sis on the chemicals sector and called purchase and renovation; boosting crisis formulated in December 2008, for a series of measures to maintain provision of social housing; putting EuroCommerce and UNI europa and restore activity, competitiveness in place temporary unemployment — the social partners in the com- and employment in the sector. These schemes aimed at maintaining work- merce sector — called for action to included: support for companies and ers’ income levels and facilitating sustain consumer purchasing power, employees in facilitating short-time training; and restoring stability to and thereby economic activity in working and temporary lay-offs, so the financial system and bringing it the retail and wholesale distribu- as to avoid permanent job loss; facili- under an effective regulatory system. tion sectors, and to provide access to tating the use of such ‘downtime’ for In January 2010, FIEC and EFBWW credit at affordable cost for compa- training aimed at enhancing work- followed up their earlier declaration nies. They also called for measures force capabilities and adaptiveness; with a ‘joint appeal’ to the EU and aimed at preserving employment ensuring access to adequate credit Member States, ahead of the Spring and improving the skills base in the and finance; stimulating economic European Council, to step up action sector through boosting training. In activity through investment in public to foster the development of a sus- May 2009, the social partners in the infrastructure, support for innovation tainable construction industry. They live performance sector — Pearle consistent with sustainable develop- argued that current economic recov- and EAEA — concluded a joint ment and investment in education ery and stimulus programmes were statement that highlighted the grow- and skills; implementation of health insufficient and did not provide the ing impact of the crisis on the level and safety (REACH) regulations, and long-term flow of public investment of activity in the sector, first through energy and climate change mitiga- needed for the sustainable develop- a reduction in public demand for tion policies, in ways which accord ment of construction. The social live events and second via increasing greater prominence to the competi- partners therefore called for priority indications that EU Member States tiveness of the sector than hitherto; investments in: energy-saving and are contemplating reductions in the securing long-term access to energy –energy-efficient buildings and sys- public financing of culture as part supplies at predictable prices; fur- tems, and green public infrastruc- of austerity measures. The statement ther investment in logistical infra- ture; enhanced vocational training also expressed concern at the nega- structures across Europe; ensuring facilities for the construction sector; tive impact on mobility of perform- the effective functioning of the single R & D and innovation; and access to ers and performances across borders market and combating protectionist credit for companies and individuals. within the EU. Perle and EAEA tendencies amongst Member States called for measures to restore con- and internationally. In road transport, the social partners sumer confidence, improve access — IRU and ETF — concluded a joint to finance and credit for the many The social partners in construction, statement on the impact of the crisis SMEs operating in the sector, sustain FIEC and EFBWW, adopted a joint on the sector in May 2009. This drew public funding support for the per- declaration on the global economic attention to the sharp decline in forming arts and facilitate renewed crisis and its consequences for the activity, up to 50 % in some segments mobility across borders. sector in June 2009. Noting that the of the sector, and associated loss of direct and indirect (amongst supplier employment involving an estimated In the public services, CEMR-EP industries) effects of the recession in 140 000 temporary or permanent and EPSU — the social partners construction activity threatened the lay-offs across the EU. The statement for regional and local government jobs of 26 million workers, the state- proposed a six-point recovery plan — addressed a joint message to the ment called for the public authorities for the sector, including measures to Spring European Council meeting

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in March 2009. Their statement recognised in international negotia- for common points and solutions in drew attention to the social effects tions on climate change. In Novem- the spirit of the ‘Guide to the eco- of the crisis, which increasingly ber of the same year the Committee nomically most advantageous offer confront regional and local govern- in the Furniture Sector approved a in contract catering’ (2006). This ment, as well as to the need to sup- joint declaration about the difficult guide promotes the integration of port local economies and business economic environment, in which the social considerations in public pro- activity. These increased demands social partners called upon Euro- curement in order to avoid that came alongside deterioration in the pean and national authorities to take competition based on costs only finances of regional and local govern- measures improving access to credit has detrimental impacts on employment as a result of business closures and credit insurance particularly ment, training provision and work- and difficulties. The statement called for SMEs and stimulating demand. ing conditions in the sector (2). for adequate financial resources to be They also asked the authorities to made available so that regional and avoid placing unnecessary burdens In November 2009, the social part- local government could meet these on the furniture industry and to ners in the audiovisual sector issued a heightened demands, and stressed the improve and restore the interna- joint opinion on protecting creativity, importance of maintaining employ- tional competitiveness of the EU innovation and jobs. The text stresses ment in the sector. CEMR-EP and furniture industry by imposing the the huge potential of the internet as EPSU sent a further joint statement same social, environmental, health a source of growth — and jobs — for to the European Council in February and safety requirements on imported the audiovisual sector. However, in 2010, reiterating their 2009 message furniture as those that apply to the order to preserve this potential, the and calling on the Member States to sector in the EU. audiovisual industry needs adequate take a long-term perspective when protection against internet piracy. coordinating their responses to the The social partners in the inland The social partners therefore called crisis and to reflect in their recovery waterway transport sector agreed upon the Commission to: under- plans sustainable development in all upon a joint sectoral contribution take a survey quantifying the eco- its dimensions. They underlined that to the Commission’s consultation on nomic effects of misappropriation is was unacceptable that many local the future of transport in November of protected works an performances and regional governments were con- 2009, where they took the opportu- via the internet; formally adopt a fronted with decreasing revenue at nity to highlight the challenges faced strong stance against unauthorised a time when demands were increas- by the sector in the context of the file sharing and of protected works ing, and called for sustainable financ- economic and financial crisis. The and performances; and acknowledge ing through socially just taxation amount of freight transported had the need for effective enforcement of and other revenue streams, sufficient dropped to an alarmingly low level, creator’s rights. to allow local and regional govern- with some commodities seeing their ments to make long-term investment, volumes drop by 70 %. The impact In some committees, discussion is including the capacity to maintain of the crisis was doubled because still ongoing with a view to reach- and develop competent and moti- many new ships were ordered well ing agreement on joint texts. The vated staff. in advance to meet the projected social partners in the textile and increase in demand and were now clothing, tanning and leather and As the crisis deepened and spread being delivered at a moment of over- footwear social dialogue committees throughout 2009, a further number capacity. The result has been a race are preparing a joint, multi-sector of social dialogue committees to the bottom in freight rates. declaration on industrial policy. decided to address the issue. The They wish to highlight that employ- social partners in the woodwork- In a similar vein, the social part- ment in these sectors had been ing sector issued a joint declaration ners in the contract catering sector hit disproportionately hard by the on the economic situation in their decided to act in late 2008 after it 2 Similar guides on social considerations in industry in late 2009, welcoming became clear that the impact of the public procurement had been produced by the concrete measures taken in some economic crisis on the sector was social partners in private security (1999), cleaning services (2002) and textile and clothing (2005). Their Member States such as reduced VAT higher than originally expected. experience was relevant for the work of the European rates for construction and renova- EFFAT and FERCO, the European Commission, which published a comprehensive tion. In addition, they called for the social partner organisation, agreed guidance document to ‘Buying social: a guide to taking account of social considerations in public advantages of wood products to be to exchange information and to look procurement’ (SEC(2010) 1258).

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financial crisis, even if the decline in a critical situation and requires and sectors with a view to develop- in production no greater than the urgent action. ing strategies to address the crisis average for the wider economy. The and its social and employment conse- social partners plan to underline Finally, a number of projects are cur- quences and prepare an exit towards that the social and employment situ- rently being carried out by the social a new era of sustainable growth and ation in these three sectors remains partners in various Member States development.

Box 6.4: Social partner contributions to the Europe 2020 strategy On 24 November 2009, the European Commission launched a public consultation on Europe 2020, a strategy for smart, sustainable and inclusive growth for the years 2011 through 2020. During the consultation period, around 1 400 contributions from interested parties were received, including many European and national social partners at both cross-industry and sectoral level. In general, social partners stressed the need to invest in innovation and upgrade the skills base of the European economy while calling for a broader perspective than that of the consultation document. They recalled in particular that quality education is a public responsibility and that education is not only a tool for the economy, but also has a vital role for social cohesion, equality, active citizenship and cultural diversity. They moreover called upon the Commission to make the exit from the current economic and financial crisis the EU’s number one priority, accompanied by a better regulation of financial markets, a stronger growth-oriented policy coordination, a stronger focus on the qualitative dimension of employment, increased access to finance, reduction of administrative burdens, modernisation of social protection systems, a sound immigration policy, and a more effective fight against increasing inequalities, poverty and social exclusion. More specifically, the ETUC felt that the Commission’s perception of the sustainable dimension of growth is focused on climate change and energy rather than on the labour market. According to the ETUC, the strategy fails to address today’s major concern (making our economy sustainable) and does not address immediate priorities, but rather builds a strategy on a too distant time- frame. In view of the spring meeting of the European Council, the ETUC issued a ‘message to the EU and Heads of Government’ on 18 March 2010, calling upon the summit to address immediate priorities such as a new EU recovery plan with an emphasis on growth, a programme to support Greece, strengthening financial regulation and the social dimension of the EU strategy. BusinessEurope shared the ETUC’s view that 2020 is too long-term focused and calls for a reinforced focus on the urgency of a strategy. Their comprehensive analysis can be found in the ‘Go for growth’ publication available on their website (http://www.businesseurope.eu). Under the 2009–10 work programme of the cross-industry social dialogue committee, the European cross-industry social partners are targeting such issues as active inclusion, the employment dimension of climate change related policies and a joint contribution to the Europe 2020 strategy, which they presented on 4 June 2010. In their joint document, the European social partners agreed that a rapid return to more and better jobs should be Europe’s first short- term objective. They believe the following objectives will be crucial for a successful recovery on a long-term: reforming the global financial system, restoring and improving growth dynamics to create more and better jobs, promoting skills and entrepreneurship, revitalising the single market, developing an integrated EU industrial policy, supporting new means of financing for investment, combating poverty and inequality. They identify social cohesion as a precondition for a dynamic and sustainable economy. As regards employment and social policies, social partners believe that the Europe 2020 strategy should therefore strike the right balance between measures to address the employment impact of the crisis and reforms aimed at addressing Europe’s medium- and long-term labour market challenges. In concrete terms, an increase in EU growth rate to an average of at least 2 % should be the aim in coming years. The European cross-industry social partners called upon Member States to implement the right mix of policy measures addressing flexibility and security dimensions (labour law and contractual arrangements, effective and high-quality active labour market policies, lifelong learning policies, efficient and sustainable social protection systems, social dialogue) and to review, and if necessary adjust, the design of labour law, job protection systems and collective bargaining practice, in cooperation with social partners. They also called for a supportive public environment and access to high-quality, affordable and effective public services as a prerequisite of business development and people’s welfare and once more called for the application of the European Small Business Act, including the commitment to the ‘think small first’ principles. With respect to governance issues, they called for a sense of collective responsibility and an appropriate European framework enabling the Europe 2020 strategy to be implemented in a coordinated and consistent way, and for benchmarking in order to pin down structural weaknesses at national level. They called for a stronger involvement of the social partners at all levels (European, national, regional and local levels) in the design and in the monitoring of both European and national reforms strategies and for support in developing their capacity where needed. In particular, social partners must actively contribute to the design and implementation of policy measures addressing the flexibility and security dimensions.

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6.2.2. Restructuring restructuring was one of economic chemicals and on climate change, and change management and employment growth, with Europe since they feared that these initia- as a whole adding 7 million new jobs tives could potentially threaten the No matter what the macroeconomic over the period 2000 to 2005. The bur- competitiveness of the EU chemical circumstances, restructuring and the den of job loss did not, however, fall industry. In their response to the con- anticipation of change have often fea- evenly between sectors and regions sultation on the Europe 2020 strategy tured prominently on the agenda of and there were often sharp distinc- they in particular underlined the sec- European social dialogue committees. tions between those who gained and tor’s leading role in innovation and In times of crisis, change is acceler- those who did not. research, as well as its key contribu- ated and the pressure to restructure tion to the provision of high-quality increases for companies and workers The third phase of the project took employment and training. alike. These topics therefore acquire place against the background of the additional urgency, as the representa- financial and economic crisis that took To help employers and trade unions tives of management and labour bring hold toward the end of 2008. Work better manage restructuring pro first-hand experience of the effects of during 2009 with the social part- cesses, the European social partners the crisis to the dialogue table. ners in Belgium, Germany, Finland, in the electricity sector published Luxembourg, Portugal and Romania a toolkit for socially responsible In this context, between 2005 and was dominated by the impact of the restructuring, including a best prac- 2009 the cross-industry social part- crisis and the design and adoption of tice guide. This toolkit analyses the ners carried out a project in 26 Mem- anti-crisis measures, to the exclusion context of the restructuring in the ber States, which specifically looked of virtually all other issues. A final industry (liberalisation, technologi- at the role of the social partners at the seminar was held in January 2010 in cal change), the importance of social national, sectoral, regional and enter- Brussels, where a synthesis report of dialogue and the transparency of the prise levels in economic restructuring. the five-year project was presented process. It addresses the questions The first phase of the project -under by the project consultant. The results of outsourcing, training needs, off- taken in 2005 and 2006 covered the showed that the active engagement shoring, lifelong learning and health 2004 accession countries of Cyprus, of the social partners in the manage- and psychosocial issues. It offers a the Czech Republic, Estonia, Hun- ment of change consistently improved practical checklist for the design of a gary, Latvia, Lithuania, Malta, Poland, performance in restructuring out- restructuring strategy and presents in- Slovakia and Slovenia. During this comes. There were practical examples depth case studies. phase, the role of the social partners of excellence in each case, whatever in restructuring was examined against the national system of employment In postal services, the crisis has com- the background of the enormous tran- relations. pounded the ongoing decline in mail sition from command to market econ- volumes due to electronic substitution omies and subsequent job growth in A project on restructuring was also and the opening of the market to cre- certain sectors resulting from the carried out by the sectoral social ate additional pressure on established direct and indirect effects of increased dialogue committee for the chemi- postal operators. Accordingly, the foreign direct investment. cal industry. Many different types of social partners in the sector treated the restructuring were identified, such crisis as an integral part of their work The second phase of the project (2007– as relocalisation, delocalisation, clo- on the evolution of the sector, discuss- 08) involved 10 more Member States: sures, offshoring, expansions, merging how postal services are regulated Austria, Denmark, France, Greece, ers, outsourcings, etc. All these types with respect to their employment and Ireland, Italy, the Netherlands, Spain, of restructuring are becoming more social dimension in different Member Sweden and the United Kingdom. complex and different viewpoints on States, and working towards an up-to- The restructuring that took place in how to respond were expressed by date mapping of this social regulation many sectors in most of these coun- the social partners. Contrary to ini- across the entire European Union. tries reflected the growing importance tial intentions, it was not therefore of services and a parallel reduction possible to prepare general guide- In similar work, the social partners of employment in manufacturing lines on restructuring in the sector. in the railway sector published a joint associated with attaining world com- Separately, the committee issued report in February 2009 on the impact petitiveness. Although job reductions joint statements by the social part- of European rail freight restructur- took place, the overall background to ners criticising some EU policies on ing on employment. The fundamental

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objective of this report was to provide restructuring affecting air traffic European level. ATCEUC recognises input for social dialogue, achieved by management (the ‘Single European ETF as the organisation that repre- the organisation of seminars and visits sky’). The corresponding working sents all other ATM personnel at Euro- to freight sites in six Member States. group of the committee issued a joint pean level. This agreement will ensure This was the first time that the social statement within the framework of the ATCEUC’s involvement in the sec- partners have addressed the subject European conference on functional tor’s social dialogue structures, which of rail freight restructuring and its airspace blocks, where the social part- is extremely relevant with regard to impact on employment on a European ners agreed to assess once a year the the social partners’ role in the ambi- scale. The social partners concluded progress made by their members as tious ‘Single European sky’ initiative that staff numbers in the sector have regards the consultation of workers. to reform the architecture of European been cut substantially due to insuf- To this end the social partners jointly air traffic control. ficient productivity improvements drafted a first questionnaire to assess and a decline in the market share. the consultation process concerning In September 2009, the social partners Railway companies have, with some functional airspace blocks during the in the live performance sector pre- exceptions, introduced social support feasibility study. In their assessment, sented a joint statement on Creativity, measures. Restructuring has taken the social partners pointed out that innovation and the role of the cultural place, new job configurations have more precise and joint definitions sector. While appreciating that the emerged and training has fostered on involvement levels are needed, European Agenda on Culture places enhanced competencies. Outright although in general an information artists and their work at the centre of dismissals have been avoided through process had been activated. Social creativity and wealth creation within redeployment and early retirement. In dialogue needed to be reinforced in a knowledge society, they called upon addition to these changes, the sectoral the implementation phases. The trade the EU to take account of the partic- trade union federation ETF empha- unions felt informed and involved ularities of the sector and the way it sised the spread of job insecurity, the but not always sufficiently consulted functions. The EU and Member States increase in geographical mobility and nor treated as real partners, leading should embrace policies that allow in working time in certain Member to dissatisfaction with the way the the performing arts to develop and States and the coexistence of different views of the employees were consid- expand and make them a more attrac- contractual status for workers within ered. On the other side, the provid- tive sector in which to work, includ- the same company. Employers placed ers were of the view that the levels of ing: by assuring the sustainability of their emphasis on the survival of their involvement of staff representatives the sector through its inclusion in companies, performance improve- was adequate, since no decisions economic recovery plans designed to ments and cost control, notably had yet been taken, and that further stimulate investment and create jobs; through greater flexibility in order to consultations were foreseen on the by addressing employment and social respond to demand more effectively possible social consequences of the protection issues in the sector in the and to withstand the impact of cycli- development of functional airspace context of mobility. cal economic changes, and on efforts blocks. Based on these results, the to find solutions for employees. The social partners suggested discussing social partners’ joint objective is to use possible joint recommendations in 6.2.3. Labour market social dialogue to strike a balance that the social dialogue committee. and employment will be acceptable for both parties, notably between the economic and In a related development, the Air Traf- In October 2008, the European cross- the social perspectives, occupational fic Controllers European Unions Coor- industry social partners started nego- and family life, etc. However, they fear dination (ATCEUC) and the European tiations on an agreement on inclusive that the pressure of lower transport Transport Workers’ Federation (ETF) labour markets, which were success- prices in general and for rail transport signed a cooperation agreement on 18 fully concluded in December 2009. in particular may make certain devel- June 2009 to set up the modalities of The framework agreement on inclu- opments more difficult. cooperation between the two work- sive labour markets was presented ers’ organisations. ATCEUC and ETF on 25 March 2010 on the occasion In the civil aviation social dialogue mutually recognise each other as social of the Tripartite Social Summit. It committee, the development of func- partners in the air traffic management represents their fourth European tional airspace blocks was a key topic (ATM) field and as organisations autonomous agreement signed in in the context of the major sectoral that represent air traffic controllers at the last seven years. The agreement

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provides an important input for the labour market as well as those who, social dialogue committee. A full European Commission’s own agenda although in employment, are at risk report on the implementation actions on inclusive labour markets and for of losing their job, but does not tar- taken will be prepared by the social the Europe 2020 strategy. The social get specific groups. The framework dialogue committee and adopted by partners see the agreement as provid- agreement recognises that achiev- the European social partners in 2014. ing practical tools that may be useful ing inclusive labour markets is a key at national level. concern involving the shared respon- Also addressing the topic of employ- sibilities of employers, individuals, ment, the social partners in the con- The aim of the framework agreement workers and their representatives. struction sector signed a joint opinion is to make full use of Europe’s labour on self-employment and bogus self- force potential, improve job quality As an autonomous framework agree- employment in February 2010. The and increase employment rates in ment, implementation will be the text recognises the joint responsibility the face of demographic ageing (see responsibility of national social part- of social partners to prevent and com- Box 6.5 summarising the agreement’s ners, who have three years to do so. bat bogus self-employment practices, main features). It covers persons who Yearly tables summarising the ongo- including through: preventive meas- encounter difficulties in entering, ing implementation of the agreement ures (awareness raising; social con- returning to or integrating into the will be prepared by the cross-industry siderations in public procurement; improved administrative cooperation; simplified administrative pro- Box 6.5: Main features of the autonomous cedures); promotion of supply chain agreement on inclusive labour markets responsibility; and efficient puni- With their agreement, the social partners commit to take concrete actions to help disadvan- tive measures. European, national taged people to enter, remain and develop in the labour market. To this end, the agreement and regional authorities are urged to includes a number of specific measures to be taken by the social partners, among which are: develop a set of common criteria for • awareness-raising campaigns; guidelines to determine the nature of • dissemination of information about availability of jobs and training schemes; individuals’ employment status and • cooperation with the ‘third sector’ to support those who encounter particular difficulties thereby to prevent and combat bogus in relation to the labour market; self-employment. In similar vein, • cooperation with education and training systems in order to better match the needs of the social partners in the hospitality the individual and those of the labour market; sector are monitoring the extent of • promoting vocational education and training and measures to ease the transition between undeclared and illegal working prac- education and the labour market; tices in the sector and the various • introducing individual competence development plans (in line with the framework of ways of addressing the problem at the actions for the lifelong development of competences and qualifications) jointly elabo- national level (best practices). They rated by the employer and the worker, taking into account the specific situation of each aim to agree on a joint opinion con- employer, particularly SMEs and worker; cerning undeclared work. • promoting the development of means of recognition and validation of competences; • improving the transferability of qualifications to ensure transitions to employment; • promoting more and better apprenticeship and traineeship contracts. 6.2.4. Training and skills The agreement also contains a list of recommendations to public authorities and other development actors, including: • development or upgrading of skills through tailored education and training; The development of skills and train- • equal access to health, education, housing and social security services as well as access ing opportunities for workers is a key to the basic utilities that play an important role in alleviating and addressing the impact strategy to address the challenges of social exclusion; resulting from industrial change and • effective use of existing financial instruments, including the European Social Fund, to pro- restructuring, to improve employ- mote and fund policies aimed at the integration of disadvantaged people in employment; ability and to facilitate mobility, all • improvement of the availability and quality of adequate training offers for individuals of which become even more press- and employers, in particular taking into account the needs of SMEs and of people with the least qualifications; ing during an economic recession. • reinforcement of an active participation of adults in further education and training, European social dialogue committees independent of their previous educational attainments. have therefore continued their work on these issues.

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In this context, in 2009 the social part- in the commerce sector. In 2008 and partners adopted a joint declaration in ners in the personal services sector 2009 they have translated and dissem- December 2009 on training for tem- reached an autonomous agreement inated — with the financial support porary agency workers, highlighting introducing European Hairdressing of the EU — the interactive European the key role played by social partners Certificates. These certificates will Commerce Competence e-learning in facilitating skills upgrading. attest the skills and competencies of tool. Six qualification modules teach hairdressers and salon managers on core competences that are common In 2009 and 2010, the social partners a European level and will be entirely across Europe. Successful completion in the construction sector jointly compatible with the European Quali- could be certified by competent bod- worked on two projects related to fications Framework (EQF). To this ies in the Member States, provided skills and training. The first of these end, the European social partners further efforts in this area. The- cer aimed at having discussions, col- have set up a joint secretariat to check tification could supplement national lecting information and comparing national training standards against qualifications and should be particu- the qualifications framework in the the competencies required for obtain- larly useful in those countries that Member States at different levels. The ing the European certificate and to have no elaborate sectoral vocational aim is to make qualifications more administer the overall certification training system as yet. It should thus transparent at the European level. system. The certificates will be issued increase mobility and make qualifica- The second project aimed to compare to individuals through the national tions more transparent. the different qualifications systems social partner organisations in the systems of eight Member States and hairdressing sector. In contract catering, the social part- possibly find a common definition of ners are working on a training tool the term ‘bricklayer’. In agriculture, the social partners for food hygiene in the framework agreed on two general templates con- of a joint project. The tool is being In 2009, in a context of substantial insta- cerning ‘plant grower’ and ‘livestock created in electronic form (internet bility due to restructuring, the social breeder’ to be integrated into the based), although a printable version partners in the sugar sector focused on taxonomy on European skills, com- will also be made available. Addressed the need to improve employability in petencies and occupations, which is to workers, it would contain a test their industry. To this end they organ- currently being developed. This ini- to check that individuals have pro- ised a conference on employability in tiative of the European Commission, gressed through the training manual. October 2009 in Brussels in the frame- outlined in its ‘New skills for new jobs’ It is planned that the tool also contains work of a project co-financed by the communication of December 2008, visual elements and consists of differ- European Commission. This project will link skills and competencies to ent levels of training. This multilin- resulted in a definition of the concept occupations in order to enhance the gual tool will remain on a basic and of employability, highlighted good quality and transparency of vacancy simple level, with additional specifica- practices in the sugar and the agro- information to improve matching tions for further in-depth training on food industry as well as from outside between job seekers and vacancies. particular issues possible in the Mem- these sectors, made recommendations ber States. concerning success and employabil- In the hospitality sector, the European ity factors, listed skills that should be social partners are aiming to imple- In 2008, the Europen social partners developed and that are required in ment the European Qualification and for the temporary agency work sector the sugar sector, gave an overview Skills Passport by elaborating the list of carried out a joint project on training of European and national financing skills and identifying countries inter- opportunities for agency workers. The possibilities in 20 sugar producing ested in participating in the experi- main objective of the project was to countries, and provided a practical dic- mentation phase. The social partner assess the role temporary-work agen- tionary defining concepts connected would also like to continue coopera- cies may play in facilitating transitions with employability. This information tion with other sectors working on in the European labour market by pro- is presented in the form of an interac- skills and qualifications and to ensure moting vocational training opportuni- tive computer-based tool, allowing the compatibility with other passports/ ties for temporary agency workers. It content to be progressively enriched by systems (Europass, EURES, EQF). also aimed to identify good practices new contributions. The tool is available that could be used to improve and in multiple languages on the website Skills development is also a priority increase opportunities for training of the sugar social dialogue committee issue for the European social partners in the sector. In the follow-up, social (http://www.eurosugar.org).

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In the railways sector, the social As a result, the social partners signed likely developments in the two profes- partners organised a conference on a joint declaration in 2009, outlining sions. The group would then use the employability in 2008, designed to their common understanding and review of the two professions to con- implement the joint recommenda- examining joint initiatives. sider how the sectoral social dialogue tions on the concept within a rail committee could make a contribution context that they had approved in The public urban transport working enhancing training provision within late 2007. This conference allowed group of the road transport sectoral the audiovisual sector. employers, trade unions, experts and social dialogue committee carried out other stakeholders to exchange views a project on service quality and new Also in 2008, the European social on the current status of and progress career paths for drivers in European partners in the live performance sec- in the implementation of the recom- public urban transport. In this frame- tor set out a project on theatre tech- mendations. With the help of specific work, the social partners discussed a nical training in the European Union. examples of good practice, partici- future-oriented competence profile A consortium of experts undertook a pants discussed the significance of the for European urban transport driv- survey and produced a comprehen- employability approach for the Euro- ers. Such a competence profile should sive report that was presented and pean railway companies and their make it possible to adapt the structures discussed at a training forum that employees. The European social dia- of work organisation and qualifications took place in March 2009. Taking up logue committee continues to work to the requirements of a high serv- the conclusions of the report and the on this issue and to closely support ice quality in public urban transport forum, the social partners adopted a and promote the process of imple- and to improve professional develop- training action plan which contains menting the strategy of employability ment possibilities for the employees of a series of joint actions social part- in the various national contexts. urban transport enterprises, especially ners engage to carry out in the area for the driving staff. The social part- of training. Two key priorities are the Through the ground handling working ners are working towards a common building of a communication platform group of the civil aviation social dia- statement on recommendations and on theatre technical training and the logue committee, the European social the next steps for their ongoing social realisation of a road show visiting dif- partners jointly organised a confer- dialogue in this field. ferent parts of Europe to inform stake- ence on best practices on training and holders on training opportunities and qualifications in this part of the sector In September 2009, the social part- ways to develop training in the sector. in Granada in 2008. The conference ners of the maritime transport sector highlighted the evolution of the Euro- together with the Universities of Lon- Faced with increasing globalisation, pean ground handling sector and the don, Nantes and Groningen launched the social partners in the textile and link between training, safety and the projects addressing the training and clothing sector agreed on the cru- quality of service. Following the con- recruitment of seafarers. The aim of cial importance of early anticipa- ference, the European social partners these projects is to identify train- tion employment trends and training acknowledged that the development ing needs, to enhance the image and requirements to optimise the manage- of staff skills is an essential factor to attractiveness of the sector, to promote ment of jobs and skills of European deliver safe and qualitative services. A quality working and living conditions workers and thereby the performance priority is to recognise the proficiency at sea and to develop the career path of companies. In 2009, in the context of of employees, thereby improving their of seafarers. the European Commission’s proposal employability and facilitating the to establish sector councils for jobs and adaptation of the companies, which In October 2008, the social partners skills, they finalised a project studying are confronted by new challenges in in the audiovisual sector decided to good practices on the matter and the an international economy. The Euro- step up their work on training and feasibility of establishing a network of pean social partners generally agree mandated a sub-working group to currently existing skills observatories. that it is vitally important to their examine the professions of journalism In the follow-up, the social dialogue industry that workers have the neces- and sound technician focused on: the committee has started to explore the sary skills and qualifications to meet training needs in the two professions; set-up and working arrangements of a the challenges of a sustainable aviation the current availability of training at possible sector council. Similarly, the market. They have therefore decided national level, including the establish- education, commerce, postal serv- to examine several examples of good ment of an inventory of the studies ices and tanning and leather sectoral practice in a study conducted in 2008. and work already available; and the social dialogue committees have also

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expressed interest in becoming pilot of the EU common principles of of committees have been involved in sectors for the proposed European flexicurity was also welcomed by the a multi-sectoral initiative to combat skills councils. European Commission in its commu- third-party violence and harassment. nication of 3 June 2009 on a ‘shared When setting up the new European commitment for employment’. On sectoral social dialogue committee for the basis of this commitment and 6.3.1. Health and safety the metal industry in January 2010, the recommendations on flexicurity social partners agreed to focus the expressed in the joint labour market Traditionally, the area of health and committee’s work in two dedicated analysis, European social partners safety features at the top of the list of working groups: one on training and have decided to undertake joint work topics that the social partners address skills and one on international com- together with their national affiliates in the European social dialogue competitiveness and employment. Finally, on the implementation of the flexicu- mittees. Despite the urgency of the the new European sectoral social dia- rity principles. Economic crisis that developed in logue committee for the education 2008 and 2009, the European social sector, launched in June 2010, under- The main objective is to assess the role partners continued their ongoing lines the implications of increasing of social partners at different levels in work on this important policy area. attention to education, training and the implementation of flexicurity. This human resources development in EU project also aims to promote trust One issue that was successfully tackled policymaking in general. and mutual understanding between by social partners during the report- the social partners so as to facilitate ing period concerned injuries in the the implementation of the flexicurity hospitals sector. Injuries caused by 6.2.5. Flexicurity principles at national level. In under- needles and other sharp instruments taking this project, European social are one of the most common and Flexicurity, bringing together flexibil- partners are building on their experi- serious risks to healthcare workers in ity and security, stands for a combina- ence and results of the EU-wide joint Europe and represent a high cost for tion of reliable and flexible contractual study on restructuring that took place health systems and society in general. working arrangements, adequate and between 2005 and 2010 (see above). On several occasions the European sustainable social protection systems, The full results of the project will be Parliament had expressed concern at lifelong learning strategies and effec- available in spring 2011. the life-threatening risks to healthcare tive labour market policies. The Euro- workers from contaminated sharp pean Council agreed on common instruments, since the existing leg- principles on flexicurity in December 6.3. Other themes islation, in practical terms, did not 2007, and the onset of the crisis in in European address the risk arising specifically 2008 has considerably enlivened the from working with these. On 6 July debate about the appropriate policy social dialogue 2006, Parliament adopted a resolution mix of flexibility and security in spe- on protecting European healthcare cific situations. In the context of the Despite the economic crisis, the Euro- workers from blood-borne infections Europe 2020 strategy, the social part- pean social dialogue committees con- due to needle-stick injuries, request- ners play a key role in the definition tinued to work on a large number of ing the Commission to submit a legis- and implementation of the second other topics. Progress was achieved in lative proposal for a directive. phase of the flexicurity agenda. The a number of committees on issues of European social partners in the cross- health and safety at work, freedom of Pursuant to Article 154 of the Treaty industry social dialogue committed movement in the EU single market, (ex Article 138), before submitting a in their 2009–10 work programme to working conditions, corporate social proposal for legislation, the Commis- ‘jointly monitor the implementation responsibility and sustainable develop- sion launched in 2006 and 2007 a two- of the common principles of flexicu- ment, and gender equality and recon- stage consultation of the European rity, notably to evaluate the role and ciliation of personal and professional social partners. In a joint letter of 17 involvement of the social partners in life. The long-term question of demo- November 2008, EPSU and Hospeem, the process and to draw joint lessons.’ graphic changes was also on the agenda who are the European social partners of several sectors, as was the subject in the hospitals and healthcare sector, The European social partners’ commit- of capacity building of social part- informed the Commission of their ment to monitor the implementation ner organisations. Finally, a number intention of negotiating a framework

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agreement on the prevention of sharps achieve this result. Member States of mental well-being in their sector. injuries in their sector. must take the necessary measures to By reviewing existing knowledge and comply with this directive by 11 May practice and producing good-practice Consequently, the Commission sus- 2013 at the latest. guidelines, they aim to prevent work- pended the drafting of its legislative related mental health disorders and proposal, awaiting the result of the In early 2009, the social partners in reinforce the link between good work negotiation process. After five months the personal services sector notified and good health. of negotiations, on 17 July 2009 the the Commission of their intention to European social partners signed an enter into negotiations on a European The social dialogue committee for EU-wide agreement. The social part- framework agreement on the preven- postal services adopted a joint dec- ners’ agreement aims to achieve the tion of health risks in the hairdressing laration on accident prevention in safest possible working environment sector. Towards the end of 2009, the their sector in June 2009, highlight- for employees in the sector and pro- negotiating teams reached agreement ing the activities of the social partner’s tect workers at risk. Its goal is to pre- on a first draft text, which foresees accident prevention working group vent injuries to workers caused by all detailed provisions regarding the han- and the results that were achieved types of sharp medical objects (includ- dling of materials, protection of the through the collection and exchange ing needle sticks). For this purpose an skin and respiratory tracts. It also aims of best practices at a conference in integrated approach to assessing and to prevent musculoskeletal disorders, Budapest and a technical seminar preventing risks, as well as to training improve the working environment in 2008 in Brussels. In the declara- and informing workers, is envisaged. and work organisation, ensure mater- tion the social partners commit to nity protection and deal with problems further work on the issue of accident Following the agreement’s signature, related to the mental load. The social prevention, including the ongoing the social partners requested the partners have signalled their intention dissemination of best practices and Commission to submit the agree- to ask the Commission to present their broadening the scope of the remit of ment to the Council for a decision, in agreement to the Council for a deci- the working group to include health accordance with Article 155(2) TFEU sion, once the agreement has been rati- issues related to occupational safety (ex Article 139(2) TEC). On 26 Octo- fied and signed by the European social and accident prevention. The social ber 2009, after verifying the represent- partners. In this way the agreement partners express their conviction that ative status of the signatory parties, would be implemented by EU legisla- accident prevention calls for a shared their mandate and the compliance of tion, according to Article 155(2) of the responsibility on the part of compa- each clause with EU law, the Commis- Treaty (ex Article 139(2)). nies, employees and their unions, and sion adopted the proposal for a Coun- they emphasis the importance of pre- cil directive, containing the full social Given the importance of the issue ventative systems to reduce risk situa- partner agreement as an annex. On 11 for the sector, for some time, social tions and accidents, while promoting February 2010 the European Parlia- partners in the live performance sec- a safer working environment. ment supported the proposed direc- tor have been discussing possibili- tive in a resolution, and on 8 March ties for more concrete action in the Four of the recognised social partners 2010 the Council reached political area of health and safety at work. In within the European social dialogue agreement on its adoption (3). The March 2009, they decided to create a committee for civil aviation, AEA, directive is a fundamental step toward working group on risk assessment. It ECA, ERA and ETF, jointly organ- the improvement of health and safety aims to: map tools and practices that ised a conference in October 2008, of patients, workers and employers already exist in the sector in various addressing the concept of workplace in the hospital and healthcare sector. Member States; assess the possibility health promotion (WHP) for air crew. When implemented, it will dimin- of developing a concrete risk assess- The social partners agreed that preven- ish the occurrence of accidents and ment tool/guidelines tailored for the tion of work-related illness (including infections. The use of foreseen risk live performance sector on the basis accidents at work, occupational dis- assessment, prevention, protection of existing practices. eases and stress) and increased well- and training procedures will help to being at the workplace are a benefit During 2010 the social partners in the to both employers and employees in 3 Council Directive 2010/32/EU of 10 May telecommunications sector are car- the civil aviation industry. The confer- 2010 implementing the framework agreement on rying out a project to examine good ence covered critical aspects of stress prevention from sharp injuries in the hospital and healthcare sector concluded by Hospeem and EPSU. practices in relation to the promotion management for air crew, work-life

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balance and air crew development by the European social partners. A few disorders (MSDs). They insisted upon and training and their impact on work weeks later, a conference on reducing the necessity to install national observa- health. The European social partners dust was held, which also produced an tories on MSDs, in order to collect data will continue to work together on overview of best practices and a joint and to come to a common definition of the improvement of WHP in carriers declaration on the subject of working MSDs. The European social partners operating within the European Union. conditions and wood dust. were also involved in a project on the They recognise their joint responsibil- prevention of MSDs in agriculture, ity in matters concerning WHP and In a joint working group, the Euro- which resulted in the development of encourage their affiliates to engage pean social partners in the construc- informational material. in regular procedures of information tion industry drafted a guide for a and consultation of trade unions and health and safety management system Social partners in the extractive staff representatives, including, where for the construction sector. Ten basic industries committee carried out a possible, negotiations on promoting files with examples have been created project analysing trends in the causes work health for air crew. for companies that don’t yet have such of accidents and promoting relevant a management system, as well as for guidelines and best practices. In addi- A few months later, in March 2009, the those companies that have introduced tion to collecting existing information social partners in the sector adopted one and would like to develop it fur- and relevant industry experience, an a ‘Charter and guidelines for a just ther. The European social partners in-depth study of five countries was culture in aviation’ for continuous FIEC and EFBWW are also officially launched (Bulgaria, Hungary, Poland, improvement in aviation safety. From recognised as partners in the cam- Germany and Sweden) and to identify the social partner perspective, there paign of the European Agency for best practices. These will be dissemi- is a need to develop an atmosphere Health and Safety at Work (OSHA) on nated among stakeholders, including of trust in which professionals and risk assessment. Despite the improve- young workers and subcontractors. organisations are encouraged to pro- ments observed in accident statistics vide safety-related information. The over the last few years, the construc- Other sectoral social dialogue com- charter and guidelines are a concrete tion industry still records high levels mittees also worked on problems of tool for employers and employees to of accidents and therefore health and health and safety in their sectors. The create such an atmosphere of trust safety is one of the highest priorities social partners in the cleaning indus- and thereby advance aviation safety. for the European social partners. In try identified threats to the health and The signatory parties hope that the this context, they carried out a project safety of workers arising from the obli- forthcoming draft regulation by the on nanotechnologies in the Euro- gation to clean a too large surface in Commission on civil aviation acci- pean construction industry. Given the insufficient time. In sea fisheries, risks dents and incidents investigation will growing importance of nanotechnol- to health and safety arise from the strengthen ‘just culture’ principles. ogies and their increasing use in the high age of fishing vessels, in a context construction sector, the project aimed where modernisation is constrained In early 2010, social partners in the to address the health risks that may be by the low income of fishermen. In woodworking sector organised a con- associated with these technologies. maritime transport, the question of ference on the reduction of formalde- resources for investing in improve- hyde exposure in their industry, which Similarly, the European social partners ments which help to guarantee the resulted in the publication of a booklet in agriculture actively took part in the health and safety of workers was also a of best practices and a joint declaration OSHA campaign on musculoskeletal subject for discussion.

Box 6.6: Implementation of the European framework agreement on work-related stress The cross-industry social partners presented their report on the implementation of the European framework agreement on work- related stress in December 2008. This marked the end of the implementation period of this autonomous agreement that was adopted on 8 October 2004. The agreement had followed a Commission consultation and was to be implemented by the European social partners’ members in accordance with the procedures and practices of the industrial relations systems of the Member States, as specified under Article 155 (ex Article 139) of the EU Treaty. The aims of the framework agreement are to ‘increase the awareness and understanding of employers, workers and their representatives of work-related stress’ and to ‘provide employers and workers with a framework to identify and prevent or manage problems of work-related stress’. In this agreement, the EU’s cross-sector social partners confirm that the rules of the Framework Directive on Safety

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and Health at Work (89/391/EEC) also apply to stress as a risk factor. This means that the employer shall take the necessary measures to protect workers from work-related stress based on the general principles of prevention, including the provision of information and training. The agreement provides an action-oriented framework, with indications as to how stress-related problems can be detected, factors that have to be analysed in a risk assessment, and measures to prevent, eliminate or reduce stress problems at work. National social partners implemented the framework agreement by national collective agreements or agreements on recommendations and guidance as well as complementary activities, such as the development of practical tools or surveys. This contributed to and took place in the context of increasing awareness about work-related stress, not only among management and workers, but also among public authorities, labour inspectorates, occupational health and safety agencies and health experts and practitioners. The initiatives taken by these actors — including legislation — interacted with those taken by social partners (see table). At national level, the following results must be highlighted. • The agreement triggered or substantially accelerated social dialogue and policy development in 12 Member States where work-related stress had mostly been an expert issue (1). • The agreement led to the creation and dissemination of practical guidance and tools in many Member States, including their adaptation across borders. • Even in those countries where work-related stress had already been on the agenda, the framework agreement gave a boost to efforts to raise awareness and to agree on guidance. • The agreement was followed by amendments to the regulatory framework in seven Member States (2), bringing the number of Member States with a legal framework that explicitly addresses psychosocial risks and/or stress to 14. • The agreement was implemented by binding national collective agreements in six countries (3). As a result a set of principles and rules is now enshrined in a majority of Member States (either through legislation or through binding collective agreements) (4). In other Member States, social partners have concluded agreements that were not declared generally binding, or joint guidelines with a substantial, joint effort of awareness raising and follow-up (5). However, shortcomings remain. As regards coverage, the Agreement has not been implemented in all Member States (6), and where social partners have chosen non-binding agreements and unilateral action, not all workers are covered (which is of particular relevance in Member States where psychosocial risks are not explicitly addressed in the legal framework, and where stress is not fully recognised as an occupational health risk by all parties). As regards impact, this report identified 12 Member States in which social partners do not seem to have used to the full the potential of the Agreement for improving awareness and understanding of work- related stress and the proposed solutions. (7) Substantial and joint efforts to improve awareness and understanding are essential, and may even offset the lack of a binding agreement and limited coverage. As regards the action-oriented framework, in some Member States, it is unclear whether workers and employers have easy access to a comprehensive action-oriented framework that covers all areas addressed in the Agreement (work organisation, working conditions, communication, and subjective social factors). (8) In addition, in many Member States, not all of the areas addressed in the Agreement are included in the national implementing measure. This means that there are persistent discrepancies in the levels of protection available across Member States, and that it is not possible to conclude that a minimum level of protection has been established throughout the EU. Worryingly, social partners in Bulgaria, Estonia, Greece, Italy, Lithuania, and Malta have not reported on the implementation of the Agreement. This gives rise to heightened concern, given that social partners in Bulgaria, Estonia, Lithuania and Malta did not report on the first European social partners’ autonomous agreement on telework either. Follow-up and reporting on the implementation of autonomous agreements across the EU is a minimum requirement, in line with Article 155(2) of the TFEU. When the Commission launched its consultation of social partners in 2002, its objective was to improve protection for all workers throughout the EU. The EU social partners’ agreement’s objective was to provide a framework for better addressing work-related stress at the workplace level. It has certainly contributed to raising awareness, promoting a set of principles and rules and building consensus within the EU about the structural nature of work-related stress and the need for concerted responses to it. However, there is room for improvement, both at national and EU level, as regards extending protection, and further developing adequate responses to the challenge. There is therefore scope for all stakeholders to consider further initiatives to ensure that the objective is reached.

1 Czech Republic, France, Italy, Cyprus, Latvia, Luxembourg, Poland, Portugal, Romania, Slovenia, Slovakia, Norway. 2 Belgium, Latvia, Lithuania, Hungary, Portugal, Slovakia, Italy. 3 Denmark, Greece, France, Italy, Romania, Iceland. 4 Netherlands, Finland, Sweden, Belgium, Denmark, UK, Iceland, Norway, Italy, France, Greece, Romania, Latvia, Hungary, Slovakia, Portugal, Lithuania, Bulgaria, Estonia. 5 Spain, Luxembourg, Austria, Ireland, Germany, Czech Republic. 6 In Malta, Cyprus, Poland and Slovenia social partners have not reported follow-up to their general declarations concerning the implementation of the Agreement, which would complement the general legal framework in these countries. 7 Bulgaria, Estonia, Greece, France, Italy, Hungary, Malta, Lithuania, Poland, Romania, Slovenia, and Slovakia. 8 Estonia, Malta, Poland, Portugal, Romania, Slovenia.

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The framework agreement on work-related stress is the second ever European autonomous agreement. Like with the first autonomous agreement on telework, it was expected that implementation measures would vary from Member State to Member State, as the responsibilities of the actors and the legal framework differ. The comparison (see table) reveals that in many Member States the same instruments have been used. The European social partners reported challenges linked to the national industrial relations systems and to the issue of work-related stress. First, ‘in particular in the 12 new Member States, challenges were still encountered (…) due to the lack of experience with autonomous social partner negotiations and not fully developed social dialogue structures’ (European social partners (2008)). It can be added that low coverage of social dialogue in some Member States can be a challenge for the autonomous implementation of European agreements, in particular where agreements are not extended and recommendations and complementary measures are used. In addition, some of the European social partners’ member organisations have no direct responsibility in collective bargaining in Member States and/or have little authority over their affiliates that are active in sectors and companies (see Chapter 1). Second, discussions clarifying aspects like the distinction between work-related stress and stress emanating from outside the workplace, the distinction between individual and collective intervention, the difficulty of assessing stress levels and evaluating the work environment, the costs of risk assessments, or the need to raise awareness with the general public and also trade union officials and business leaders, complicated the implementation process.

Instruments chosen to implement the framework agreements on telework and work-related stress Instruments chosen Telework Stress FR, BE (7), RO (6), extended by decree/binding erga omnes FR, BE, LU, EL (1)(2) cross- EL (1)(2) Collective agreements at industry binding on signatory parties and their national level IT, IS IT, IS members sectoral DK (3) DK (9), NL (10) Agreements by social recommendations to lower bargaining levels FI and ES (2) FI and ES partners addressed mainly to lower bargaining levels as well as NL and SE (2) companies and teleworkers Guidelines, LU, NL, NO, SE recommendations UK, IE (4), AT (5), CZ (5), DE (5) addressed mainly to individual companies and teleworkers LV (2) and NO (2) Model agreements proposed by social partners/jointly promoted stress tools DE (5) and IE IE, AT, UK based on agreement between social partners PL LV, IT, HU, SK, Legislation after consultation of social partners HU, SK and CZ (6) CZ (6), PT no/little involvement of social partners PT and SI (6) Mostly accompanying measures PT, DE Joint declarations DE CY, PL, SI BG, CY, EE, LT, MT BG (8), EE (8), No implementation yet/no information and RO LT (8), MT NB: This table does not cover sector-specific or regional agreements reported by social partners which relate to a small number of sectors or regions only and which have sometimes been adopted prior to/without any reference to the telework framework agreement (e.g. DE, ES and AT). Furthermore, it does not cover individual company agreements. The existence of an explicit reference to stress of psychosocial risks in the national legal framework is not systematically taken into account. Incomplete or example-based reporting of individual instruments and the difficulty of identifying them in all Member States could distort the overall presentation.

1 Legal status not fully certain. 2 Mainly based on literal translation/translation in annex, i.e. little adaptation to national context. 3 Covers the industry, services, local, regional and national government sectors, is accompanied by guidelines and is supplemented by cross-industry agreement. 4 Implementation not finalised. 5 Unilateral instruments, i.e. not jointly adopted. 6 Partial implementation only. 7 1999, extended to public sector by legislation in 2007. 8 Explicit legal framework. 9 Local and regional administration, state sector. 10 Not a direct implementation measure.

188 Chapter 6: European social dialogue developments 2008–10

6.3.2. Freedom of movement • The European social partners security systems. They consider that recall that the principle of non- the provisions of the ‘Agreement con- On an invitation from Commissioner discrimination and equal treatment is cerning social security for Rhine boat- Špidla and the French Presidency of the a key principle in the internal market, men’ are those best suited to the needs European Union in October 2009, the applying to workers and companies of the industry and its employees and European social partners of the cross- alike. The Treaty (Article 45 TFEU, are convinced that the implementa- industry social dialogue committee ex Article 39 EC) provides that free tion of Regulation (EC) No 883/2004 agreed to carry out joint work on the movement of workers entails the abo- in inland waterways transport will consequences of the Court of Justice’s lition of any discrimination based on prove impracticable. rulings relating to economic freedoms nationality as regards employment, and fundamental social rights of remuneration and other conditions of In September 2009, the European social workers (the Viking, Laval, Rüffert work and employment. partners in the construction industry and Luxembourg cases). The Euro- presented their new website on post- pean social partners agreed that the • The Posting of Workers Directive ing of workers in the construction sec- impact of the four CJEU cases, which provides for minimum standards tor (http://www.posting-workers.eu). goes beyond the specific national situ- which must be observed to ensure This website is the main outcome of a ations which were at stake, called for a respect for the rights of workers joint project co-financed by the Euro- reflection at EU level. and a climate of fair competition. pean Commission, presenting infor- Although the European social part- mation on the applicable working The European social partners focused ners agree on this, they have differ- conditions in the construction indus- their work on the following issues: ent views on whether these aims are try in the EU Member States such as fair competition in the internal mar- achieved by the Posting of Workers minimum wages, working time and ket; obstacles to be removed and/or Directive following its interpreta- health and safety provisions. On the conditions to be put in place for free tion by the European Court of Jus- one hand, the social partners clearly movement of services and workers; tice. Whilst both sides recognise the expressed their divergent opinions transparency and legal certainty; the need to compel service providers to with regard to the need for a possi- principle of non-discrimination, the comply with a nucleus of rules as ble revision of the posting of work- role of public authorities. The docu- defined in the host country, they ers directive. On the other hand, they ment of 19 March 2010 summarising disagree on the definition of this agreed on the need to improve imple- the conclusions of their joint work nucleus as well as on the possibil- mentation of the directive, includ- includes two sections: a first contain- ity for trade unions and/or Mem- ing through increased transparency, ing shared observations; and a second ber States in the host country to go taking better account of the needs of with separate contributions from, beyond this nucleus of rules. SMEs and micro-enterprises as well as respectively, employers and trade of the self-employed and through the unions. The social partners agreed on • The European social partners rec- strengthening of labour inspection. the following four points. ognise the importance of better They see the website as a contribu- monitoring and enforcement of the tion to further developing the internal • The ‘four freedoms’ regarding the Posting Directive, but have differ- market and combating illegal prac- free movement of people, goods, ent views about the degree to which tices. They also announced their joint services and capital need to be safe- this may solve the key problems commitment to develop an EU-wide guarded and properly developed arising from the CJEU cases. social identity card for workers in the with a view to enabling higher lev- construction industry. els of prosperity and social devel- The issue of the working environment opment in Europe. European social and questions of mobility also figured In 2008, the hospitals sector adopted partners are committed to the full on the agenda of several sectoral social a code of conduct and engaged in implementation of the free move- dialogue committees. The social part- follow-up activity on ethical cross- ment principles to the extent that ners represented in the sectoral dia- border recruitment and retention. this takes place in a context of fair logue committee for inland waterways The European social partners in the competition. To that end, accom- transport published a joint opinion in sector, Hospeem for the employers panying measures have to be in August 2009 expressing their worries and EPSU for the workers, recognise place both at national and at Euro- about the implementation of the new the inequalities and unnecessary bur- pean level. rules on the coordination of social dens on healthcare systems, caused by

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unethical recruitment practices in the focus on existing regulation), gather 6.3.4. Corporate social EU. The aim of the code of conduct is and analyse good and bad practices responsibility (CSR) and to promote ethical and stop unethi- with regard to cross-border activities sustainable development cal practices in cross-border recruit- and support the preparation of practi- ment of health workers. To achieve cal information tools for temporary- Corporate social responsibility was this, the code specifies that employ- work agencies and temporary agency again on the agenda of several social ers and workers must cooperate and workers wishing to work abroad. dialogue committees during the past work with governments, regulatory two years. The social partners in the and professional bodies and other rel- sugar sector adopted a report each evant stakeholders at local, regional 6.3.3. Working conditions year on the implementation of CSR and national level in order to protect in the sugar industry, which regularly the rights of workers and ensure that The social dialogue committee in the contains several examples of good employers get highly qualified staff. sea fisheries sector intends to open practices in fields such as health and In 2010, Hospeem and EPSU entered negotiations on the implementation safety, restructuring, employability or into negotiations with a view to adopt of certain standards under the 2006 training. In the hospitality sector, the a framework of actions on recruit- ILO Fishing Convention into EU leg- social partners are collecting instances ment and retention. islation. Such action would strengthen of good practice amongst businesses the labour standards that had already in order to implement their joint initi- In a project in the agriculture sector, been agreed at international level in ative for improving CSR in the sector. the social partners gathered informa- 2006 and make them mandatory for In the same way, the social partners of tion concerning administrative for- Europe. Working conditions and the the social dialogue committee for con- malities from a majority of Member image of the sea fisheries sector would tract catering are implementing the States, especially concerning the hous- be enhanced through this measure. agreement on CSR in their sector. ing of seasonal workers in the sector. The social partners in the private In the furniture sector, the social In 2009 the social partners in the elec- security sector found that the national partners organised a conference in tricity sector signed a joint position on provisions for their sector were not suf- late 2008 on the improvement of the the social aspects of CSR in their indus- ficiently harmonised, leading to prob- workplace environment and work- try, referring to international standards lems of mobility for workers between ing conditions, which resulted in a of CSR. The social partners empha- different countries. They have therefore booklet collecting several examples sised that any CSR policy must be fully launched a project to facilitate tran- of best practices. A similar conference integrated within the organisation. The snational mobility and to prepare an on enhancing the value of work in the social partners have closely followed informational toolkit for workers who sector in order to attract young peo- the development of the Global Report- would like to move between countries. ple was held in 2009, also producing a ing Initative’s (GRI) electricity utility brochure of best practices. sector supplement to current report- In order to analyse cross-border ing indicators, which would include movement of temporary agency At the 2009 plenary meeting of the additional benchmarks important to workers and the impact and imple- railways sectoral social dialogue the industry. Reporting on the basis mentation of the European direc- committee, the signatory parties to of these indicators will ensure that tive on posting of workers and the the 2004 autonomous agreement on the electricity industry will continue new directive on temporary agency a European drivers’ licence (CER and to contribute to socially responsible work, the social partners in the sec- ETF) agreed on a joint declaration and sustainable development, thereby tor carried out a research project. on the application of the agreement. promoting the well-being of citizens. They set up a European observatory As a number of provisions of this European electricity companies are on cross-border activities within tem- autonomous agreement are incor- encouraged to take on board the indi- porary agency work that was officially porated in Directive 2007/59/EC on cators, since the European social part- launched in December 2009. The the certification of train drivers, the ners recommended that they become European observatory will equip the declaration clarifies the modalities a reference standard for the electricity European social partners with a bet- of application of the agreement. The industry in developing CSR policies. ter understanding of the reality of declaration will act as a guideline for cross-border activities within tem- CER and the ETF members in the The social partners in the tanning and porary agency work (with a special application of the agreement. leather sector adopted a framework

190 Chapter 6: European social dialogue developments 2008–10

agreement on social and environmental Furthermore, against the background a European directive. The resulting reporting standards for their industry of ongoing trade negotiations with Parental Leave Directive (2010/18/EU), in 2008. The agreement contains guide- countries/regions in Asia and Latin based on the social partners’ agree- lines that aim at providing companies in America in particular, the social dia- ment, was formally adopted by the the sector (mostly SMEs) with the tools logue committees of the textile and Council on 18 March 2010. Member to report regularly on their social and clothing, tanning and leather and States have two years to transpose the environmental performance, includ- footwear sectors held a joint meeting new rights into national law. ing a template for such reports. Social on trade negotiations and trade sus- partners have subsequently carried tainability impact assessments. In this The main provisions of the new agree- out a series of Commission-supported context, the social partners recalled ment and directive are: projects with the objective of translat- that a level playing field, including the ing the agreement into all relevant EU enforcement of intellectual property • longer leave — each parent will be languages, achieving a wide dissemi- rights and social and environmen- able to take four months off per nation of the agreement and promot- tal legislation, were a precondition child (compared to three months ing the use of the standard and the for competitiveness and sustainable previously). The extra month can- reporting template. Separately, in 2009 development. They stressed the need not be transferred from one parent the social partners agreed on a joint for fair and equal rules and accom- to the other, thereby encouraging declaration on the deforestation of panying policy measures to mitigate fathers to take their leave. In the the Amazon rainforest, in which they possible adverse effects and ensure past many working fathers have express their solidarity with the objec- a fair distribution of the benefits of transferred their right to leave to tive of preserving the environment trade. The social partners expressed the mother; and avoiding irresponsible harm to their hope that existing social dialogue the rainforest, and called for increased structures such as the sectoral social • temporary changes to work sched- transparency in the supply chain for dialogue committees would continue ules — employees returning from hides and skins. In their declaration, to be regularly informed and con- parental leave will have the right the European social partners stress the sulted on trade policy issues, includ- to request changes to their working importance of improving the traceabil- ing both impact assessments and the hours or patterns for a set period of ity of raw materials in the supply chain follow-up and monitoring of trade time. In considering such requests, in order to fulfil sustainability objec- agreements, notably the sustainable employers will be obliged to bal- tives and also to meet objectives related development chapter. ance the needs of the employee as to animal welfare. well as the company; Similarly, the social partners in the In the textiles and clothing sector, shipyards sector began joint work on • work contracts — the new rights the social partners are implementing the feasibility of adopting common will apply to all workers, regardless a Commission-supported project to social standards for their sector. Their of their type of contract (e.g. fixed- promote social dialogue in compa- aim is to contribute to create a level term, part-time, agency workers); nies within the sector through a joint playing field in global trade in the however, the possibility of a quali- implementation of REACH, the EU’s shipyards sector with respect to social fication period of maximum one regulation on chemicals and their standards. year is maintained; safe use. The project is a response to social partners’ concern about how • no discrimination — an employee SMEs, and particularly those in the 6.3.5. Gender equality applying for or taking parental leave new Member States and candidate and reconciliation will be protected not only against countries, will adapt to REACH. The of personal and dismissal but also against less project intends to provide training to favourable treatment on grounds social partner representatives on the professional life of taking parental leave. consequences of REACH and how to implement this regulation. It includes a In June 2009, following nine months The agreement also includes non- toolbox to explain REACH to employ- of negotiations, the European cross- binding references to the following: ers’ and trade unions’ representatives industry social partners signed a in SMEs and the results will be dis- revised EU framework agreement on • importance of income in the take- seminated at a conference. parental leave, to be implemented by up of parental leave;

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• reference to the ‘increasing diversity in audiovisual services set up a work- and age management strategies. This of family structures’, while respecting group on gender equality with a toolkit presented an analysis of the ing national law and practice; mandate to negotiate a framework demographic challenge in the sector, for action on gender equality in the and offered a set of tools for age man- • encouragement for workers and audiovisual sector in the EU for adop- agement, focused on the recruitment employers to maintain contact dur- tion by the sectoral social dialogue and retention of older workers, the ing parental leave and to arrange committee. This framework of action health and well-being of older workers, reintegration measures in order to will focus on the following key areas: work-life balance and flexible work- facilitate the return to work; elimination of gender stereotypes; ing time, measures to recruit younger non-discrimination in recruitment; workers and preparation for exiting • assessing the need for additional career development; training; equal active working life and retirement. The measures for adoptive parents; pay and; reconciliation of private toolkit underlined the role of social dia- and professional life. In general, the logue in the creation and implementa- • adjusting conditions for parents of working group’s objective is to further tion of age management strategies and children with a disability or a long- develop joint actions in this field and the social partners’ conclusions were term illness. to enhance gender equality in the sec- summarised in a 10-point plan for suc- tor across the EU. The working group cessful age management in the sector. All matters regarding the income of will: organise an exchange on existing The European social partners recom- workers during parental leave are left policies on gender equality and high- mended this plan to their national for Member States and/or national light good practices; and identify tools affiliates as a starting point in creating social partners to determine. Several and actions to enhance gender equal- effective age management strategies. Member States already have provi- ity in the workplace applicable across sions on parental leave going beyond countries. Similarly, in the insurance sector, the previous EU minimum standard the European social partners signed of three months. In any event, they In 2008, the social dialogue com- a joint declaration in 2010 on the will have to make sure they comply mittee for local and regional govern- demographic challenge, addressing a with the remaining provisions, such as ments adopted guidelines on drawing number of recommendations to the on non-transferability, non-discrimi- up equality action plans, which aim to national level. National social part- nation and return to work. support regional and local initiatives ners were encouraged to develop poli- on equality, and to encourage a joint, cies promoting work-life balance and In 2009, the European social partners long-term and sustained approach lifelong learning and to recognise the at cross-industry level have also con- to equality by members of the Euro- importance of health and safety at cluded the final evaluation report of pean social partners EPSU (workers) work in this context. their five-year framework for action and CEMR (employers). As such it on gender equality. This framework provides a framework to develop best Securing continued access to a skilled targeted four priorities: addressing practice and to check progress. An workforce is of vital importance for gender roles; promoting women in appendix to the guidelines sets out the long-term competitiveness of the decision-making; supporting work- an equality checklist that can be used shipyards sector. Due to demographic life balance; tackling the gender pay to assess equality performance over change, many older employees are gap. This final report is based on time. Equality plans are also a useful expected to retire in the coming years, annual national reports, which high- tool to help better implement equal- taking with them a wealth of experi- light the key features of their work to ity legislation or other equality objec- ence, knowledge and competence. promote the four priorities from 2005 tives. A template for a gender equality As a result, the demand for highly to 2009. The social partners intend to plan is also proposed in an appendix qualified engineers but also for highly continue working on these priorities, to the guidelines. skilled blue-collar workers is mount- use the good practice gathered in this ing across Europe. The yards need to process and build further on the joint retain valuable and essential know- work done. 6.3.6. Demographic change how, recruit young people and skilled professionals and retrain employees Inspired by the experience of the The social dialogue committee in the to maintain their skills base and safe- cross-industry social partners, in electricity sector prepared a toolkit in guard their long-term prosperity. In December 2009 the social partners 2008 on the promotion of age diversity line with an anticipatory approach,

192 Chapter 6: European social dialogue developments 2008–10

the shipyards sectoral social dialogue June 2008, the study was presented at change for the skills and competencies committee developed and launched a workshop in the Netherlands, during that are necessary to ensure the sec- its third joint project with the finan- which the social partners discussed tor’s future competitiveness. It dem- cial support of the European Com- the results, exchanged experience on onstrates how companies can benefit mission entitled ‘demographic change existing initiatives and reflected on from the skills and motivations of dif- and skills requirements’ in 2008. The potential solutions for the future. ferent age groups in the workforce and project comprised a research study provide guidelines, information and and a subsequent workshop. The study In 2009 the social partners in the gas good-practice approaches. The toolkit analyses the present situation as well sector prepared a toolkit and a study also contains several case studies, as the future changes in the workforce on demographic change, age man- highlighting joint company — trade structure of European shipyards in agement and competencies in the gas union approaches, including in the order to assess the impact of the demo- industry in Europe. The toolkit aimed sector’s major companies. The toolkit graphic change. It serves as a basis for to raise awareness and point to ways in thus underlines the role of social dia- establishing a strategy for future train- which the social partners can address logue in the management of demo- ing and recruitment requirements. In the implications of demographic graphic change.

Box 6.7: Participation in sectoral social dialogue committee meetings — summary statistics A maximum of 54 participants are invited to plenary meetings of sectoral social dialogue committees. This number is designed to permit the participation of one employer and one trade union representative per Member State, yet the actual composition of the delegations falls within the autonomy of the recognised European employers and trade union organisations on each social dialogue committee. As each participant in a social dialogue committee meeting represents the European social partner organisation rather than national social partners, there are no seats reserved for delegates of a particular Member State and the composition of the committees can change from meeting to meeting. In practice it is therefore uncommon to see delegations composed of exactly 27 members from each of the Member States. The actually observed average number of participants in the plenary sessions of the sectoral social dialogue committees in the period 2003–08 ranged between fewer than 20 participants in footwear, tanning and leather, inland navigation and textile and clothing — and less than 25 participants in the cleaning industry and in the commerce sector — to 40 or more in postal services, maritime transport, personal services, the chemical industry and professional football (the latter not being fully representative as only the launch event of the committee could be taken into account) (Chart 6.1). Low participation rates in some sectors reflects the limited presence of a sector amongst the EU Member States; this applies to the above four sectors with an average number of below 20 participants per plenary meeting. In other sectors which are present in all EU Member States, such as the commerce sector, however, the comparatively low participation rates could be a signal that the involvement of actors needs to be enhanced and/or the relevance of the agenda and work programme of the committee to be reviewed. The comparatively high participation rates in other sectors are indicative of, and go hand in hand with: the high relevance of the committee’s work for the national social partners, e.g. with regard to the liberalisation and evolution of postal services or the EU legislation on chemical products (REACH); active negotiations of the social partners in maritime transport and personal services on agreements to be implemented in accordance with Article 155. Similarly, the observed share of women among the participants of plenary meetings of the sectoral social dialogue committees reflects to a large extent the employment characteristics in the sector (Chart 6.2). It ranges from 10 % or less in woodworking, professional football, steel, shipyards and the sugar industry to 40–50 % in personal services, commerce, local and regional government and contract catering, and more than 70 % in hospitals and healthcare. The observed share of participants from the new Member States that joined the EU in 2004 and 2007 respectively (12 new Member States) is an indicator not only of the importance of a sector in the new Member States and of social dialogue in it, but also of the successful integration of the social partners from the new Member States into the existing social dialogue structures. It ranges from less than 10 % in footwear, personal services, sea fisheries, the cleaning industry, shipyards, civil aviation, telecommunications, steel, insurance and banking to 25 % or more in tanning and leather, textile and clothing, furniture, railway, contract catering, the extractive industries and inland navigation (Chart 6.3). Social partners in some of the latter sectors, notably tanning and leather and textile and clothing, have carried out apparently successful, dedicated capacity-building projects to foster the integration of social partner representatives from the new Member States into European sectoral social dialogue structures. Finally, there is an important difference in the participation from employer and employee representatives across the various committees (Chart 6.4). This may reflect both diverging representativeness structures across sectors (with e.g. five or more employer organisations recognised as representative in sectors such as civil aviation, audiovisual services or extractive industries) as well as differences in the commitment and mobilisation of one or the other side of industry in a sectoral social dialogue committee. In construction and agriculture, the participation rates are biased significantly towards employer representatives (making up two-thirds or more of the participants in plenary meetings), while in civil aviation, textile and clothing, shipyards, gas and banking two-thirds or more of the participants are from trade unions.

193 Chart 6.1: Average number of participants per plenary session, 2003–08

Industrial Relations in Europe 2010

Chart 6.1: Average number of participants per plenary session, 2003–08

Professional football Chemicals industry Personal services Maritime transport Postal services Gas Sugar Steel Road transport Audiovisual Hospitals Live performance Local and regional governments Railway Private security Sea sheries Chart 6.2: Share of women among the participants Agriculture Civil aviation in plenary sessions, 2003–08 Electricity Catering Insurance Extractive industry Banks Agency work Shipyards Telecommunications Horeca Construction Furniture Woodworking Commerce Cleaning industry Textile Inland waterways Tanning and leather Footwear 0 10 20 30 40 50 60

Source: European Commission. %

Chart 6.2: Share of women among the participants in plenary sessions, 2003–08

Hospitals Catering Local and regional governments Commerce Personal services Agency work Cleaning industry Horeca Postal services Agriculture Sea sheries Gas Audiovisual Footwear Textile Chemicals industry Live performance Insurance Private security Maritime transport Banks Railway Inland waterways Extractive industry Electricity Civil aviation Road transport Tanning and leather Telecommunications Construction Furniture Sugar Shipyards Steel Professional football Woodworking

0 10 20 30 40 50 60 70 80 Source: European Commission. %

194 Chart 6.3: Share of representatives from the 12 new Members States among the participants in plenary sessions, 2003–08

Chapter 6: European social dialogue developments 2008–10

Chart 6.3: Share of representatives from the 12 new Members States among the participants in plenary sessions, 2003–08

Inland waterways Extractive industry Catering Railway Furniture Textile Tanning and leather Chemicals industry Sugar Live performance Woodworking Horeca Postal services Hospitals Private security Professional football Agriculture Electricity Agency work Maritime transport Chart 6.4: Share of employer/employee representatives among Gas Local and regional governments Road transport the participants of plenary meetings, 2003–08 Construction Commerce Audiovisual Banks Insurance Steel Telecommunications Civil aviation Shipyards Cleaning industry Sea sheries Footwear Personal services 0 5 10 15 20 25 30 35 40 Source: European Commission. %

Chart 6.4: Share of employer/employee representatives among the participants of plenary meetings, 2003–08

Construction Agriculture Personal services Commerce Extractive industry Furniture Woodworking Postal services Tanning and leather Local and regional governments Catering Professional football Horeca Inland waterways Railway Private security Chemicals industry Cleaning industry Telecommunications Steel Sugar Road transport Footwear Hospitals Agency work Electricity Insurance Live performance Maritime transport Sea sheries Civil aviation Employer Textile Audiovisual Employee Shipyards Gas Banks 0 20 40 60 80 100

Source: European Commission. %

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6.3.7. Third-party violence identify best practice. The results of by employers, workers and their rep- and harassment these projects were presented at a con- resentatives/trade unions to reduce, ference on 22 October 2009, where the prevent and mitigate problems. The Following the signature of the cross- participating European social part- guidelines will be promoted within industry social partner framework ners agreed on a draft commitment the Member States at all appropriate agreement on harassment and violence to develop a jointly agreed instrument levels taking account of national prac- at work in 2007, the European social that will set out the steps needed to tices, through joint and/or separate partners in the hospitals, regional and prevent, identify and manage prob- actions. The relevant sectoral Euro- local government, commerce and pri- lems of third-party violence. pean Social Dialogue Committees vate security services sectors (EPSU, will prepare a joint progress report in Hospeem, UNI europa, Eurocom- Since the conference, the European 2012 and a final joint evaluation will merce, COESS and CEMR) have been social partners, now joined by the edu- be undertaken in 2013. jointly exploring how the autonomous cation sector (ETUCE, EFEE), have agreement could be complemented developed multi-sectoral guidelines The European social partners in the by a multi-sectoral approach to the to tackle third-party violence and har- commerce sector have developed specific area of third-party violence. assment related to work, which were a toolkit, ‘STOP IT! — preventing In support Chart of these 6.5: discussions, Texts adopted two signed by the on 30European September social 2010. These dialogue third-party committees, violence 2002–10 in commerce’, projects were launched to investigate guidelines, building upon existing aimed at directly helping employees how the problem has been tackled by best practice in the sectors, set out and employers to improve safety in the social partners across the EU and to the practical steps that can be taken workplace. It is based on best practice

Box 6.8: Texts adopted by the European social dialogue committees, 2002–10 The past two years have seen more binding agreements signed by European social partners than any previous two-year period and two of these agreements have been adopted as a Council directive in accordance with Article 155 of the Treaty (ex Article 139). At the same time, the past two years have seen a decline in the number of all other categories of non-binding documents, including process-oriented texts, joint opinions, declarations and tools. It should be noted, however, that the relatively small number of documents adopted in each two-year period in each category means that the comparisons across time should be treated with caution. Overall, most of the outcomes of European social dialogue continue to be of a ‘soft’ nature, i.e. aim at raising awareness, disseminating good practice, helping to build consensus and confidence. Joint texts, presentations of good practices or common projects offer opportunities for social partners to learn from one another and build trust. There are a number of qualitative signs of a significant impact at national level, although it is not possible to document this with systematic quantitative data. The output and impact of European social dialogue should not, therefore, only be assessed by considering the number and type of texts.

Chart 6.5: Texts adopted by the European social dialogue committees, 2002–10 Sept 2002 to Aug 2004 Sept 2004 to Aug 2006 Agreement Council Council decision Sept 2006 to Aug 2008 Sept 2008 to Aug 2010

Sept 2002 to Aug 2004 Autonomous Sept 2004 to Aug 2006 Autonomous agreement Sept 2006 to Aug 2008 Sept 2008 to Aug 2010

Sept 2002 to Aug 2004 Code of conduct Process-oriented Sept 2004 to Aug 2006 Guidelines texts Sept 2006 to Aug 2008 Policy orientations Sept 2008 to Aug 2010

Sept 2002 to Aug 2004 Declaration Joint opinions, Sept 2004 to Aug 2006 Joint opinion declarations, tools Sept 2006 to Aug 2008 Tool Sept 2008 - Aug 2010

Sept 2002 to Aug 2004 Follow-up Sept 2004 to Aug 2006 Cross-industry reports Sept 2006 to Aug 2008 Sectoral opinion Sept 2008 to Aug 2010

0 5 10 15 20 25 30 35 40 45 50 55 60 65 Source: European Commission.

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from across Europe on how to deal This was also the objective of the Euro- on the EU to encourage governments with the issue of abusive behaviour pean social partners in the temporary to create favourable conditions for an and violence from customers in the agency sector in organising a round autonomous bilateral social dialogue workplace. It covers risk assessment, table in Sofia in December 2009 to in the countries of southern Europe prevention, conflict management promote the sectoral social dialogue and urged national governments to and stakeholder partnerships. It was on temporary agency work in Bulgaria. allow and encourage management presented to the public and national This was the third activity of this kind and labour to organise, including free- member organisations in October after similar round tables organised in lance/self-employed workers. 2009. Eurocommerce, the European Poland (2006) and Hungary (2007). employers’ organisation, had proposed Furthermore, the ITC-ILO is cur- to UNI europa commerce to jointly Starting in 2007, the social partners rently carrying out a project to assess develop such a tool as an alternative in the audiovisual sector undertook a the evolution and implementation of to negotiating a binding autonomous project in the new Member Sates pro- European sectoral social dialogue in agreement on the subject. moting social dialogue in the sector. the new Member States and candidate They chose to adopt a step-by-step countries, with a focus on achievements approach, providing information and challenges in postal services, tele- 6.3.8. Capacity building sessions and national roundtables communications, construction, tour- and social partner for social partners from the Czech ism, the chemical, energy, metal and organisations Republic, Hungary, Romania, Slo- textile industries. Transnational semi- vakia and Slovenia. It culminated in nars involving local stakeholders from Several sectoral social dialogue com- a regional seminar providing for an all new Member States and candidate mittees continued their efforts to exchange on the structure and func- countries took place in spring 2010, enhance the participation of stake- tioning of social dialogue in Prague and the main results of the project will holders from new Member States by in June 2008. Building on this expe- be disseminated at a social dialogue supporting capacity building actions. rience, the European social partners seminar at the end of 2010. In this context, in 2008 the social wished to involve social partners partners in the textile and clothing, from other new Member States in footwear and tanning and leather this capacity-building process and at 6.4. Conclusion sectors concluded an ambitious the same time deepen the exchange project on capacity building of their of experience with a focus on indus- This review of the main activities of counterparts in the new Member trial relations and collective bargain- the European social dialogue commit- States and also the candidate coun- ing. Actions under this new project tees during the period 2008–10 has tries. This one-year project aimed again include national roundtables shown the vitality of this instrument at strengthening social dialogue in in order to mobilise social partner of European governance, highlighting the sectors concerned with a view to organisations. the key role that social partners play in encouraging the full participation of shaping EU social policy and defining the sectoral social partners from new After a capacity-building project tar- European social standards. The ongo- Member States and candidate coun- geting Bulgaria and Romania, the live ing interest of the European social tries in the European sectoral dia- performance sector launched a simi- partners in participating in European logue committees. The project’s main lar project in 2009 for the southern social dialogue, as evidenced by the goal was to support sectoral social Europe region, including new Mem- continued creation of new sectoral partners in the implementation of ber States and candidate countries. social dialogue committees over the their national action plans, agreed The project aims to promote national reporting period, is testament to their upon in the course of a previous social dialogue in the countries of the belief in the added value that social capacity-building project that ended region concerned. Based on interviews dialogue brings at the EU level, as a in 2007. Through this initiative, the carried out in 12 countries, a draft complement to national industrial European social partners lent their report on the state of social dialogue relations systems. support not only to the development in the live performance sector was pre- of national social partners’ capacities pared and presented at a conference The past two years have also shown but also to the promotion of sectoral which took place in Croatia in Feb- that the social partners are increas- social dialogue in the new Member ruary 2010. In their final declaration ingly making fuller use of the space States and candidate countries. the European social partners called for autonomous action and the

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Box 6.9: Financial support The European Commission’s promotion of European social dialogue includes financial support, mainly in the form of grants to social partners and other industrial relations stakeholders. On the basis of Article 154 of the Treaty on the Functioning of the European Union (Lisbon Treaty; ex Article 138), the most important financial programmes are the three headings in the EU budget earmarked for industrial relations and social dialogue, for information and training measures for worker’s organisations and, for the information, consultation and participation of representatives of undertakings. Further details on these funding opportunities can be found on the following website (http://ec.europa.eu/social/main.jsp?catId=86&langId=en). Industrial relations and social dialogue This budget heading supports the European social partners and other organisations active in the field of industrial relations to address the overarching challenges facing European employment and social policy as set out in the Europe 2020 strategy and in connection with EU initiatives to address the consequences of the economic crisis. Each year, through a call for proposals with two application deadlines, the Commission supports around 80 projects led by the social partners and other organisations active in the field of industrial relations. These projects cover activities linked to the work programmes of the European cross-industry and sectoral social dialogue committees and measures undertaken to strengthen the social partners’ capacity, especially in the new Member States and candidate countries and which contribute to the development of European social dialogue (excluding national capacity-building activities which can be funded under the European Social Fund). The total funding available under this budget heading in 2010 is EUR 16 million. Of this, EUR 14.15 million is awarded through the call for proposals. Other activities that are supported in 2010 include studies in the field of industrial relations and social dialogue and meetings of the European social partners, including the cross-industry and sectoral social dialogue committees. Information and training measures for workers’ organisations This budget heading provides support for information and training measures for workers’ organisations carried out by European, national and regional workers’ organisations. Each year, through a call for proposals with one application deadline, the Commission supports around 30 projects in this field. This budget heading also provides support to the European Trade Union Institute (ETUI) and the European Centre for Workers’ Questions (EZA), which are the major European institutions providing training and research for European workers’ organisations. ETUI works with the European Trade Union Confederation (ETUC) and EZA works with the Christian workers’ organisations, which are also members of the ETUC. The total funding available under this budget heading in 2010 is EUR 16.4 million. Of this, EUR 3.216 million is awarded through the call for proposals. Information, consultation and participation of representatives of undertakings This budget heading provides support for operations to ensure the conditions for fostering the development of employee involvement in undertakings, by promoting the relevant EU legislation. This includes the directives on European works councils, on employee involvement in the European Company and European Cooperative Society, the directive establishing a general framework for informing and consulting employees in the European Community, the directive on cross-border mergers of limited liability and fostering transnational company agreements. Each year, through a call for proposals with two application deadlines, the Commission supports around 45 projects in this field. The total funding available under this budget heading in 2010 is EUR 7.3 million, all of which is to be awarded through the call for proposals.

possibilities for negotiation that have has become an EU directive, while autonomous agreement on the intro- been conferred on them by virtue of their recent agreement on inclusive duction of European hairdressing the Treaty. This is demonstrated by labour markets will be implemented certificates in the personal services the four binding agreements that have autonomously under the respon- sector will improve the transparency been reached since August 2008 (4). sibility of the national social part- and comparability of the sector’s pro- The cross-industry social partners ners. The agreement on preventing fessional qualifications across the EU. have successfully negotiated a revised sharps injuries in the hospitals sec- In addition, two further sets of nego- agreement on parental leave, which tor became EU legislation through a tiations which may result in binding decision of the Council, successfully agreements are in progress.

4 A fifth text concerned the application of an contributing to improving the health autonomous agreement in the railways sector from and safety of healthcare workers in While these positive examples indi- 2004 on locomotive drivers’ licences, clarifying that an area where the European Parlia- cate the potential of European social agreement’s relationship to subsequent EU legislation (see section on ‘working conditions’ above). ment had long called for action. The dialogue, the possibilities offered

198 Chapter 6: European social dialogue developments 2008–10

by this framework have not yet lack of trust between partners, have sphere of action. They are there- been fully exploited in all cases. For also prevented more progress from fore often best-placed to address the instance, important sectors where being made in some social dialogue corresponding social policy issues. large transnational companies are committees. When they reach agreements at a prevalent tend to pay less atten- European level such as those docu- tion to the negotiation dimension of Despite these difficulties in reach- mented here, their action embodies European sectoral social dialogue, ing a uniform assessment of Euro- the principle of social subsidiarity as some of the social partners may pean social dialogue over the past enshrined in the social policy title prefer direct negotiation at company two years, the European social part- of the Treaty on the Functioning of level, including with European works ners, both at the cross-industry as the European Union: in the social councils. Disagreements over sub- well as at the sectoral level, are the policy field, negotiated agreements stantive issues, such as in the assess- stakeholders that best know the resulting from social dialogue can ment of the causes of the crisis by the conditions and problems that affect be a valid and useful alternative to cross-industry social partners and a employers and workers in their regular EU legislative action.

Table 6.1: European social partner joint texts September 2008 to October 2010 European social Title Topic Type Date dialogue committee Statement on health and safety aboard fishing vessels: Health and safety Sea Fisheries Joint opinion 8.9.2008 for new vessels of unrestricted sizes Joint statement on the European Union Emissions Economic and/or Chemical Industry Joint opinion 29.9.2008 Trading System (EU ETS) sectoral policies Working in partnership through responsible care Health and safety Chemical Industry Tool 29.9.2008 Joint statement on workplace health promotion for Health and safety Civil Aviation Declaration 17.10.2008 air crew Framework of actions on gender equality — Follow-up Gender equality Cross-Industry 12.11.2008 Third follow-up report 2008 report Joint press release: social dialogue on logistics Social dialogue Road Transport Declaration 2.12.2008 EFFAT-Hotrec joint statement on the continuation of their work on the ‘European qualification and skills’ Mobility Horeca Declaration 2.12.2008 passport’ Joint opinion on migration and mobility: challenges Mobility Commerce Joint opinion 12.12.2008 and opportunity for the EU education systems Demographic change in the electricity industry in Europe. Toolkit on promoting age diversity and age Ageing workforce Electricity Tool 15.12.2008 management strategies Restructuring in the electricity industry: a toolkit for socially responsible restructuring with a best practice Restructuring Electricity Tool 15.12.2008 guide Economic crisis: joint reaction of the social partners for Economic and/or Commerce Joint opinion 18.12.2008 commerce sectoral policies CEMR-EP/EPSU joint message to the Spring European Economic and/or Local and Regional Joint opinion 27.2.2009 Council 2009 sectoral policies Government Working group — Education, training and lifelong Employment Chemical Industry Joint opinion 2.3.2009 learning — Joint declaration Charter and company guidelines on just culture Working conditions Civil Aviation Tool 31.3.2009 Joint declaration on training and qualification in the Training/lifelong Civil Aviation Declaration 5.5.2009 ground-handling sector learning The impact of the financial crisis in the live performance sector. Joint statement by the European Economic and/or Live Performance Joint opinion 6.5.2009 sectoral social partners ahead of the Employment sectoral policies Summit 7 May 2009 The social aspects of corporate social responsibility CSR — Corporate Policy Electricity 7.5.2009 in the European electricity industry social responsibility orientations

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European social Title Topic Type Date dialogue committee Economic and/or Joint opinion on the global economic crisis Chemical Industry Joint opinion 13.5.2009 sectoral policies Economic and/or Statement on the economic crisis Road Transport Joint opinion 14.5.2009 sectoral policies Joint declaration of the CER-ETF agreement on a Autonomous Working conditions Railways 10.6.2009 European locomotive driver’s licence agreement Joint declaration on accident prevention in the postal Health and safety Postal Services Declaration 12.6.2009 sector Implementation of the Follow-up ETUC/BusinessEurope/UEAPME/CEEP framework Harassment Cross-Industry 16.6.2009 report agreement on harassment and violence at work Cooperation agreement between ATCEUC and ETF Social dialogue Civil Aviation Procedural text 18.6.2009 European agreement on the implementation of the Training/lifelong Autonomous Personal Services 18.6.2009 European hairdressing certificates learning agreement Joint CANSO-ETF analysis of the ATM social dialogue Restructuring Civil Aviation Tool 30.6.2009 FAB questionnaire The global economic crisis and its consequences for the European construction industry Economic and/or Construction Joint opinion 30.6.2009 Positive measures and concerns of the European social sectoral policies partners EFBWW and FIEC Response to the second phase of consultation of the social partners under Article 138(2) of the EC Treaty on Working conditions Sea Fisheries Joint opinion 8.7.2009 reassessing the regulatory social framework for more and better seafaring jobs in the EU Joint declaration concerning social security provisions Mobility Inland Waterways Joint opinion 14.8.2009 in inland waterways transport Agreement Framework agreement on parental leave (revised) Gender equality Cross-Industry Council 18.9.2009 decision Private security European sectoral social partners Social aspects of EU statement to expert group on cross-border transport of Private Security Joint opinion 28.9.2009 policies the euro cash Creativity, innovation and the role of the cultural sector. A joint statement on behalf of the European Social aspects of EU sectoral social partners ‘live performance’ in the Live Performance Joint opinion 30.9.2009 policies framework of the European Year of Creativity and Innovation 2009 Toolkit. Demographic change, age management and Ageing workforce Gas Tool 15.10.2009 competencies in the gas sector in Europe Preventing third-party violence in commerce — A toolkit Harassment Commerce Tool 21.10.2009 Implementing the framework agreement on prevention Agreement from sharp injuries in the hospital and healthcare sector Health and safety Hospitals Council 26.10.2009 concluded by Hospeem and EPSU decision Follow-up Framework of actions on gender Gender equality Cross-Industry 13.11.2009 report Joint declaration of the European social partners of the furniture industry, EFIC UEA and EFBWW calling on Economic and/or Furniture Joint opinion 18.11.2009 the European and national authorities to support the sectoral policies industry in its confrontation with the economic crisis Joint position of the social dialogue Extractive Economic and/or industries on COP 15 and its impact on EU extractive Extractive Industry Joint opinion 19.11.2009 sectoral policies industries Economic and/or Joint opinion on protecting creativity, innovation and jobs Audiovisual Joint opinion 30.11.2009 sectoral policies Joint sectoral contribution to the Commission’s Economic and/or Inland Waterways Joint opinion 30.11.2009 consultation on the future of transport sectoral policies

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European social Title Topic Type Date dialogue committee Training for temporary agency workers: joint actions Training/lifelong Temporary Agency developed by sectoral social partners play a key role in Declaration 3.12.2009 learning Work facilitating skills upgrading Joint statement of the social partners of the European CSR — Corporate leather industry on the Greenpeace report on the Tanning and Leather Declaration 15.12.2009 social responsibility deforestation of the Amazon rain forest Contribution of the social partners to the Sectoral Social Dialogue Committee on Sea Fisheries Contribution of Economic and/or Sea Fisheries Joint opinion 22.12.2009 the social partners to the European Commission Green sectoral policies Paper Reform of the common fisheries policy Joint statement on demographical challenges of the Policy Ageing workforce Insurance 26.1.2010 insurance sector orientations Economic and/or Emerging from the crisis Construction Joint opinion 29.1.2010 sectoral policies Joint statement to the European Council meeting Economic and/or Local and Regional Joint opinion 4.2.2010 11 February 2010 on the economic crisis sectoral policies Government Economic and/or Employment and bogus self-employment Construction Joint opinion 5.2.2010 sectoral policies Joint declaration of the social partners in the European Health and safety Woodworking Declaration 10.2.2010 woodworking industries Economic and/or Social partners’ statement on bluefin tuna Sea Fisheries Joint opinion 9.3.2010 sectoral policies ATM social partners position on the implementing Economic and/or Civil Aviation Joint opinion 18.3.2010 rules of the performance scheme sectoral policies Autonomous Framework agreement on inclusivelabour markets Employment Cross-Industry 25.3.2010 agreement ‘Single European Sky II’ implementation — Social dialogue Civil Aviation Joint opinion 30.4.2010 Consultation of ATM social partners The new review of Directive 2003/88/EC of the European Parliament and of the Council of Working time Sea Fisheries Joint opinion 21.6.2010 4 November 2003 concerning certain aspects of the organisation of working time Eurelectric/EPSU/EMCEF joint response to the public Social aspects of EU consultation ‘Towards a new energy strategy for Europe Electricity Joint opinion 23.6.2010 policies 2011–20’ Joint position paper of the European social partners in the construction industry on the findings of the high-level group (HLG) on the action programme Working conditions Construction Joint opinion 30.6.2010 for reducing administrative burdens in the European Union, COM(2007) 23 final Opinion of the social partners on the potential unilateral Sustainable Extractive Industry Joint opinion 2.7.2010 increase of the EU GHG reduction target to – 30 % development Joint recommendations for better representation and Follow-up integration of women in the railway sector. Status and Gender equality Railways 12.7.2010 report how to apply the joint recommendations Common contribution of the social partners for commerce Training/lifelong to some flagship initiatives of the ‘EU 2020: a European Commerce Joint opinion 4.8.2010 learning strategy for a smart, sustainable and inclusive growth’ Joint declaration of the European social partners in agriculture on the Commission’s communication Economic and/or Agriculture Joint opinion 3.9.2010 COM(2009) 591 final ‘A better functioning food supply sectoral policies chain in Europe’ Protecting workers’ health against plant protection Health and safety Agriculture Joint opinion 3.9.2010 products/resolution Joint declaration — European Union Association Economic and/or Agriculture Joint opinion 3.9.2010 agreement — Euromed sectoral policies Towards a new European energy policy 2011–20 draft Social aspects of Electricity Joint opinion 13.10.2010 report of MEP Lena Kolarska-Bobinska Community policies

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Table 6.2: European social dialogue committees

Cross-industry social dialogue committees

Organisations representing workers Organisations representing employers Date of creation BusinessEurope ETUC CEEP 1992 Liaison Committee Eurocadres and CEC UEAPME

Sectoral social dialogue committees Organisations representing Sectors Organisations representing employers Date of creation workers Agriculture EFFAT GEOPA/COPA 1999 Audiovisual UNI-MEI, EFJ, FIA, FIM EBU, ACT, AER, CEPI, FIAPF 2004 Banking UNI europa FBE, ESBG, EACB 1999 Central administrations TUNED EUPAN 2010 Chemical industry EMCEF ECEG 2004 ACI-Europe, AEA CANSO, ERA, IACA, Civil aviation ECA, ETF 2000 IAHA Cleaning industry UNI europa EFCI 1999 Commerce UNI europa EuroCommerce 1999 Contract catering EFFAT FERCO 2007 Construction EFBWW FIEC 1999 Education ETUCE EFEE 2010 Electricity EPSU, EMCEF Eurelectric 2000 Extractive industries (mines) EMCEF APEP, Eurocoal, Euromines 2002 Footwear ETUF:TCL CEC 1999 Furniture EFBWW UEA 2001 Gas EMCEF, EPSU Eurogas 2007 Horeca/tourism EFFAT Hotrec 1999 Hospitals EPSU Hospeem 2006 Inland waterways ETF EBU, ESO 1999 Insurance UNI europa CEA, BIPAR, ACME 1999 Live performance EAEA Pearle 1999 Local and regional governments EPSU CEMR 2004 Metal, engineering and technology-based EMF Ceemet 2010 industries Paper EMCEF CEPI 2010 Personal services UNI europa Coiffure EU 1999 Postal services UNI europa PostEurop 1999 Private security UNI europa CoESS 1999 Professsional football EPFL, ECA FIFPro 2008 Railways ETF CER, EIM 1999 Road transport ETF IRU 2000 Sea fisheries ETF Europêche/Cogeca 1999 Sea transport ETF ECSA 1999 Shipbuilding EMF CESA 2003

202 Chapter 6: European social dialogue developments 2008–10

Organisations representing Sectors Organisations representing employers Date of creation workers Steel EMF Eurofer 2006 Sugar EFFAT CEFS 1999 Tanning and leather ETUF:TCL Cotance 2001 Telecoms UNI europa ETNO 1999 Temporary agency work UNI europa Eurociett 1999 Textiles/clothing ETUF:TCL Euratex 1999 Woodworking EFBWW CEI-Bois 2000

203

Chapter 7: Review of European legislation 2008–10

The past two years resulted in a mixed picture with respect to the development of Another important development employment-related legislation at EU level. On the one hand, important advances was the proposal and swift adop- were made with the adoption of directives on matters such as temporary agency tion by the Council and Parliament work, the European works councils and the equal treatment of men and women of a recast European works councils in self-employment. Three directives resulted from social partner agreements: on directive strengthening the infor- parental leave (cross-industry), on the prevention of sharps injuries (hospitals mation and consultation rights of and healthcare sector) and on the working conditions of seafarers (maritime workers on transnational matters transport sector). On the other hand, major difficulties were encountered, among and clarifying a number of outstand- them the failure of the revised working time directive and complications with the ing legal issues; in the context of the interpretation and enforcement of the posting of workers directive. crisis, its importance is particularly evident (2). The impetus for this proposal was given by the Commission’s 7.1. Introduction identify any outstanding issues jus- renewed social agenda of 2008 (3), tifying review. which was built around three axes: The development of European opportunities, access and solidarity. employment legislation over the During the period, the Commission This agenda identified the Commis- period 2008–10 was punctuated by continued to deploy significant sion’s priorities and set out a series of important breakthroughs as well as efforts in monitoring the correct concrete measures to attain them as uncertainties and drawbacks. The transposition and application of well as the instruments to be used to political context continued to be EU law in the enlarged European this end. characterised by sharp differences Union. It issued guides, communi- of approach, not only between social cations and reports, commissioned In addition, following a consulta- partners but also among the key studies and related projects and tion of the European social part- institutional stakeholders. While set up expert committees. It also ners by the Commission the former the European Parliament has, in continued to provide appropriate decided to negotiate and subse- several instances, recommended to technical assistance aiming at the quently agreed on the incorpora- the Commission to initiate legisla- correct transposition of the rele- tion into the EU legislative acquis tive action in order to cope with vant EU legislation in the candidate of a substantial number of provi- emerging problems in the function- countries. sions contained in the 2006 ILO ing of labour markets, the Council, Maritime Labour Convention (4). now extended to 27 Member States, In the area of labour law, a major The new directive (2009/13/EC) has grown increasingly reticent to breakthrough was the adoption on completes or amends existing EU expand the legislative acquis in the 19 November 2008 of a new directive provisions applying to the working employment area. on temporary agency work, which conditions of seafarers, including provides for a significant increase in working time. Furthermore, in the In line with the better regulation the legal protection afforded to tem- interests of clarity and rationality, agenda, the Commission has been porary workers while recognising the provisions regarding the protec- increasingly engaged in strength- the role of work agencies in bring- tion of workers’ rights in the case ening the evidence basis of its leg- ing greater flexibility to the labour of employers’ insolvency were con- islative proposals. Considerable market and providing job oppor- solidated in the insolvency directive resources have been invested in tunities. The adoption of Directive (2008/94/EC). producing ex ante assessments of 2008/104/EC (1) put an end to a six- the social, economic and environ- year deadlock in the Council which A major setback was the withdrawal mental impact of new legislation. centred on the issue of duration of the Commission proposal to The administrative burden arising of the grace period during which amend the working time directive from existing EU legislation and user undertakings can be exempted (2003/88/EC), after the failure of from national transposing rules has from applying the principle of equal the Council and Parliament to agree been estimated. In the same vein, treatment. The directive awards an further efforts have been devoted important role to solutions framed 2 Directive 2009/38/EC of 6 May 2009 (OJ L 122, to the ex post evaluation of EU leg- via national social dialogue. 16.5.2009, p. 28). 3 COM(2008) 412 final of 2.7.2008. islation in order to determine its 4 See Chapter 4 of the Industrial Relations in Europe economic and social impact and 1 OJ L 327, 5.12.2008, p. 9. 2008 report for details.

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on a compromise proposal during list of indicative occupational limit In another important development, the final conciliation procedure in values for chemical agents (Direc- the application of the principle of April 2009. Introduced in 2004, the tive 2009/161/EU), which shows the the right to equal treatment between proposal aimed to identify a solu- determination of the Commission men and women will be strengthened tion to the difficulties in implement- to keep the EU health and safety at for those working in a self-employed ing CJEU rulings on the SIMAP and work acquis in line with the most capacity through Council Directive Jaeger cases, as well as addressing recent scientific data available. 2010/41/EU. This was adopted on stakeholders’ claims in respect to the 17 July 2010. extension of the reference period for An important achievement was averaging weekly working time and the adoption of Council Direc- This chapter reviews the main devel- the individual opt-out. The Commis- tive 2010/32/EU implementing the opments concerning EU employment sion responded to the failed concili- framework agreement on preven- legislation between 2008 and 2010 ation by launching a comprehensive tion of injuries from sharp instru- in three sections: labour law, health review of the directive including an ments in the hospital and healthcare and safety at work and employment- extensive evaluation exercise and a sector, concluded by Hospeem and related equality legislation. In each first consultation of the European EPSU. The incorporation into the section, measures with general social partners. EU legislative acquis of the agree- application are reviewed first, fol- ment constitutes a significant con- lowed by those which are sector spe- Another source of difficulties was tribution to realising the safest cific. Attention then turns to issues the interpretation and enforcement possible working environment in of implementation, monitoring and of the posting of workers directive the sectors concerned. inspection. The concluding section (96/71/EC). In the wake of the then presents some future perspec- CJEU rulings on Laval, Rueffert and Two important contributions to the tives for EU employment legislation, Commission v Luxembourg and, as improvement and clarity of the EU its further development and imple- a follow-up to the 2007 communi- regulatory framework, in line with mentation. cation, the Commission decided to the key priorities of the Commis- step up its efforts to facilitate admin- sion’s better regulation agenda, were istrative cooperation among Mem- made through the adoption of two 7.2. Labour law ber States and promote debate with ‘codification’ Directives 2009/104/EC stakeholders. In order to face up to on work equipment and 2009/148/EC such difficulties, the Commission is on asbestos. A special mention should 7.2.1. Temporary agency reviewing the implementation and be made in the context of better reg- work interpretation of the legal frame- ulation to the development of guides work on posting of workers and has of good practice aiming at facilitating Temporary agency work has been already launched several external and improving the practical applica- growing steadily and currently studies on the legal and economic tion of certain health and safety at accounts for about 1.7 % of total effects of the directive. work directives such as noise, con- employment in the EU (5). The struction, artificial optical radiation. phenomenon is particularly wide- In the area of health and safety at spread in Member States such as the work and in line with the commit- Concerning the area of employment- United Kingdom, France, Germany ments of the EU strategy for health related equality, the adoption of and the Netherlands. With the goal and safety at work 2007–12, the Council Directive 2010/18/EU imple- of improving the working condi- developments during the period menting the 2009 framework agree- tions of the concerned workers, by aimed to ensure a regulatory frame- ment on parental leave concluded by application of the principle of equal work capable of continuously adapt- the European social partners, demon- treatment, Directive 2008/104/EC ing to change while respecting the strated the capacity of the social part- on temporary agency work (6) was principle that legislation should ners — and the EU institutions — to adopted on 19 November 2008. It also be coherent, simple and effective build on the previous 1995 agreement aims to provide a suitable framework and also meeting the objective of (also implemented as a directive). The reducing the administrative burden agreement strengthens and further 5 Cf. ‘The agency work industry around the world’, on companies. An example of this clarifies the rights to leave of working Ciett, 2010. concern was the adoption of a third parents (see Chapter 6 for details). 6 Cf. Note 1.

206 Chapter 7: Review of European legislation 2008–10

Box 7.1: Main provisions of Directive 2008/104/EC on temporary agency work Equal treatment From the first day of the worker’s assignment to a user undertaking, the basic working and employment conditions of the agency worker have to be at least those that would apply if he/she was recruited directly by that company to occupy the same job. Equal treatment applies to pay, the duration of working time, overtime as well as to breaks, rest periods, night work, holidays and public holidays, to the extent that these conditions are considered to be binding for workers of the user company. For pregnant women and nursing mothers, any rules in force in the user undertaking concerning their protection will also be applicable to agency workers. The same goes for the rules on equal treatment for men and women and on any action against discrimination based on sex, race or ethnic origin, religion, beliefs, disabilities, age or sexual orientation. The directive allows for certain derogations from the principle of equal treatment, however, under strict conditions. • In some Member States, temporary agency workers may be offered a permanent contract of employment with the agency and continue to be paid between assignments. In certain circumstances, Member States may provide for an exemption from the principle of equal pay. • There are countries where agency work is regulated also or mainly by collective agreements between the social partners. After consulting them, Member States may give them the option of concluding collective agreements establishing arrangements which may differ from equal treatment. The overall protection of agency workers has to be upheld in all circumstances. • Under stringent conditions and on the basis of an agreement concluded by the social partners, Member States may introduce derogations from the principle of equal treatment. In this context, they may establish a qualifying period for equal treatment. Improved access to permanent employment, collective facilities and vocational training Agency workers have to be informed of any vacant posts in the user undertaking. Temporary-work agencies cannot prevent agency workers from being hired by the user company once their assignment has terminated or charge the workers any fees on that occasion. Agency workers have access to all collective facilities in the user undertaking, in particular any canteen, childcare facilities and transport services, under the same conditions as workers employed directly by the company, unless a difference in treatment is justified by objective reasons. Member States have to take measures or promote social dialogue, in order to improve access to training for agency workers in the temporary-work agencies, even in the periods between assignments, as well as their access to training designed for the staff of user undertakings. Representation of agency workers and information of workers’ representatives Temporary agency workers are considered to be workers of the agency, for the purpose of setting up workers’ representatives bodies. However, Member States can also decide to take them into account as workers of the user enterprise. The user enterprise must provide suitable information to its workers’ representatives’ body on the use of temporary agency workers when reporting on the employment situation in the undertaking. Reduced prohibitions and restrictions on the use of temporary agency work Prohibitions and restrictions on the use of temporary agency work are to be reviewed and suppressed unless they are justified on grounds of general interest. Such grounds relate in particular to the protection of agency workers, the requirements of health and safety at work or the need to ensure that the labour market functions properly and abuses are prevented.

for temporary agency work to better 7.2.2. Working time despite two readings and a concilia- contribute to the creation of jobs and tion process. Several issues remained to the development of flexible forms In 2004, the Commission had put outstanding, the most intractable of of work in the EU. forward a proposal (7) to amend the all being the suppression of the pos- working time directive (2003/88/EC), sibility for individual workers to opt The directive has to be transposed following wide consultations. After out from the weekly 48 hour limit. into national law by 5 December four years of intense negotiations, the 2011 at the latest. An expert group Council was able to adopt a common Other difficult issues included the has been set up, composed of rep- position. However, in April 2009, the extension to 12 months of the ref- resentatives of national adminis- Council and Parliament concluded erence period for averaging weekly trations, to facilitate the work of that they could not reach agreement, working time and the handling of Member States’ administrations in the timing of compensatory rest 7 Original proposal COM(2004) 607; amended transposing the directive. proposal COM(2005) 246. periods and of on-call time.

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This negative outcome created a assessment, including an examina- reinforced cooperation in this area. difficult situation for several Mem- tion of the legal application of the The main elements of this recom- ber States and for social partners at directive in the Member States and mendation were endorsed by the national level. The Commission con- a study of the social and economic Council in June 2008, which invited sidered this situation to be clearly aspects that are pertinent for a com- the Commission to institutionalise unsatisfactory for governments, prehensive review of the directive. the existing informal group on post- workers and businesses. In its view, ing of workers, transforming it into it is necessary to review the working a committee of experts. This was time rules in the EU on the basis of 7.2.3. Directive 2008/94/EC subsequently set up through Com- an impact assessment with a strong on the protection mission Decision 2009/17/EC of social dimension and a full-scale of employees in the 19 December 2008; a separate sub- consultation of the social partners. group was charged with developing case of employers’ an information exchange system. In this context, on 24 March 2010 insolvency The expert committee has already it adopted a communication on started to address a number of dif- reviewing the working time direc- In times of crisis, when the number ficulties in implementing and apply- tive, seeking the views of the social of insolvencies is increasing, Euro- ing the posting of workers directive partners at European Union level in pean legislation on the subject with the aim of clearing up outstand- accordance with Article 154 of the becomes particularly relevant. In ing issues and building consensus. TFEU, on the possible direction of order to codify previous legislation EU action on this issue (8). At the in the interests of clarity and ration- Furthermore, in order to discuss and same time, the Commission is con- ality, Directive 2008/94/EC on the exchange views on the consequences ducting a comprehensive review of protection of employees in the case of the recent rulings by the Court of the directive, which includes a thor- of employer’s insolvency was adopted Justice in this area (9), a forum on work- ough evaluation of its provisions, in on 22 October 2008, replacing the ers’ rights and economic freedoms order to determine how they cope previous Directives 80/987/EEC and was organised on 9 October 2008, with the workplace realities of the 2002/74/EC. with wide participation from Member early 21st century. States, stakeholders and institutional This legislation aims to ensure the actors. The forum fulfilled its objec- The Commission communication protection of workers in case of insol- tives in that it contributed to clarify- sets out the trends and prospects vency of their employer by requiring ing the positions of the key political regarding working time, describes Member States to establish institu- actors on the way forward for han- the current regulation in this area, tions that guarantee the payment of dling the consequences of the rulings announces the objectives of a com- unpaid salaries. The Commission at both national and EU levels. Fol- prehensive review of the EU directive plans to report on the implementa- lowing an invitation from the Com- and identifies the key issues arising tion and application of the directive mission and the French Presidency of in its application. Those concern in by the end of 2010. In addition, the the Council, in early 2010 the ETUC particular the following: (a) working Commission Green Paper on the and BusinessEurope presented an hours; (b) on-call time; (c) flexibil- future of pensions includes a ques- analysis of the consequences of the ity on the averaging of weekly work- tion about the protection of workers’ rulings as seen from their respective ing hours; and (d) flexibility on the and pensioners’ interests, covered by perspectives (10). timing of minimum daily and weekly complementary occupational pen- rest periods. sions, in the event of the employer’s In 2009 the Commission launched insolvency. several ex post evaluation studies (11) The communication contains a list of specific questions on which the Com- 9 See Industrial Relations 2008 report, Chapter 6, mission seeks the views of the Euro- 7.2.4. Posting of workers box on main judgments of the CJEU in the field of labour law in 2006–07, p. 140. pean social partners. In parallel with 10 Report of 19 March 2010 on ‘Joint work of the this consultation, the Commission Following on from its 2007 commu- European social partners on the CJEU rulings in the will carry out an extensive impact nication on the posting of workers, Viking, Laval, Rüffert and Luxembourg cases’. on 3 April 2008 the Commission 11 See http://ec.europa.eu/social/main. jsp?catId=626&langId=en under VT/2009/062 and 8 COM(2010) 106 final of 24.3.2010. adopted a recommendation on VT/2009/062. See also pilot project VP/2009/015.

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on the application of the posting of workers directive as part of a pilot Box 7.2: Main provisions of the recast European project to investigate the actual works council directive (2009/38/EC) working and living conditions of The establishment of EWCs posted workers in all the Member • Central and local managements are responsible for providing the information which States, including the social, eco- allows negotiations to be opened. nomic and legal aspects. The project • The Special Negotiating Body is composed of one representative per 10 % portion of the is focusing on sectors with higher employees in a Member State. It has the right to meet alone before and after any meeting numbers of posted workers. In with the central management. addition, the Commission granted • The competent European trade union and employers’ organisations are to be informed financial support for several projects of the start of negotiations. Trade unions are also among the experts on whom the SNB may call for assistance in the negotiations. for the exchange of information and good practice in this area among The operation of EWCs stakeholders (especially the social • The arrangements for informing and consulting employees have to be defined and implemented in such a way as to ensure their effectiveness and to enable the company to take partners) in 2009. Further support decisions effectively. will be provided for the same pur- • The transnational competence of EWCs is determined. pose in 2010. • The concepts of information and consultation are more precisely defined. As indicated in its Europe 2020 • The role of the select committee and the content of consultation are strengthened in the subsidiary requirements. strategy for smart, sustainable and • Information and consultation at transnational (EWC) and national levels are to be linked inclusive growth (12), the Commis- together. Arrangements to that effect are to be defined primarily by agreement. sion is currently working to adapt • Employees’ representatives have to be provided with training without loss of wages and the legislative framework, wher- shall have the means required to apply the rights arising from the directive. ever necessary, in line with ‘smart’ • Employees’ representatives have to inform employees of the content and outcome of the regulation principles, in the area of information and consultation procedure. posting of workers. To this end, it Adaptation clause and window of opportunities will take into account, in particular, • The recast directive provides for a mechanism to adapt existing EWCs, where the struc- the findings of the aforementioned ture of the undertaking or group of undertakings changes significantly. studies as well as European Parlia- • Companies where agreements to establish new EWCs are concluded between 5 June ment resolutions, European social 2009 and 5 June 2011 or where existing agreements are revised during this period are not partners’ analysis, the Monti report bound by the new obligations introduced by Directive 2009/38/EC. on re-launching the single market (13) and the outcome of public consultations. (international treaty), incorporating 7.2.6. Employee involvement into EU legislation certain rules for determining the law that applies 7.2.6.1. Recast European works 7.2.5. Rome I regulation to contractual obligations in situ- councils directive ations of a conflict of laws of dif- The Rome I Regulation (EC) ferent jurisdictions. The regulation On 2 July 2008, the Commission No 593/2008 on the law applica- includes a specific employment- presented a proposal for a recast ble to contractual obligations (14), related provision, namely Article 8 European works council directive, which was adopted on 17 June 2008, determining the law applicable to which was adopted as Directive entered into force in its integrity on individual employment contracts. 2009/38/EC (15) on 6 May 2009. 17 December 2009 and applies to It incorporates important elements This recast directive clarifies and contracts concluded after that date. of the interpretation of the Rome strengthens the previous legisla- The regulation updates and modern- Convention devised by the CJEU tion from 1994 in several respects ises the previous Rome Convention (the concept of habitual place of (see Box 7.2). Its provisions have to work and mandatory rules are par- be transposed into national law by 12 COM(2010) 2020 of 3.3.2010. ticularly relevant in the context of 5 June 2011. The European Com- 13 Cf. Report on ‘A new strategy for the single employment contracts). mission published a leaflet to market’ submitted by Professor Mario Monti to President Barroso on 9 May 2010. 14 OJ L 177, 4.7.2008. 15 OJ L 122, 16.5.2009, p. 28.

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inform stakeholders (16) and set up (b) in case of the transfer of reg- This convention incorporates the vari- an expert group with a view to assist istered office, specific rules ous conventions and recommenda- Member States in their transposi- apply: when the employees tions on maritime labour adopted by tion of the new directive. enjoyed participation rights in the ILO since 1919 into a single con- the home Member State (and solidated text to serve as a basis for the At the first stage consultation accord- not in the host Member State) first universal maritime labour code. ing to Article 154(4) TFEU (ex Arti- and they represent one third of The Commission actively participated cle 138(4) of the EC Treaty), the the total number of employees, in the work leading to its conclusion European cross-industry social part- negotiations should start (the in February 2006. Subsequently, on ners (17) did not commence nego- rules on employee participa- 7 June 2007 the Council adopted a tiations, yet in August 2008 they tion of the home Member State decision (2007/431/EC) which, on adopted a joint position accepting would apply if no agreement is the one hand, authorised Member the Commission’s proposal (18) as the reached). States to ratify, in the interests of the basis of the revision and suggesting a European Community, the Maritime limited number of changes. Against On 10 March 2009 the European Par- Labour Convention and, on the other this background, the European Par- liament proposed a certain number hand, encouraged them to do so by liament and the Council were able to of amendments including on the sub- 30 December 2010. arrive at a first-reading agreement as ject of employee participation. The early as December 2008. Commission proposal is still pending The European legislation currently in before the Council. force already covers most of the topics regulated by the Maritime Labour 7.2.6.2. European Private Convention. In fact, in most instances Company Statute 7.2.7. Maritime sector the European legislation establishes higher standards in comparison with On 25 June 2008 the Commission 7.2.7.1. Directive on Maritime those of the convention. However, in adopted its proposal for a Council Labour Convention a few cases the Maritime Labour Con- regulation on the statute for a Euro- vention proposes a more specific reg- pean private company (or Societas In a pioneering development among ulation or working conditions which Privata Europaea — SPE) (19). The ini- sectors that are global in nature, the are more favourable for seafarers. tiative creates a new European legal maritime shipping industry has seen form intended to enhance the com- considerable efforts to define and The social partners of the maritime petitiveness of SMEs by facilitating effectively enforce global minimum transport sector were consulted by the their establishment and operation in standards of employment and health Commission on whether the relevant the single market. The provisions on and safety conditions of seafarers provisions of the Maritime Labour employee participation contained in employed or working on board a Convention should be incorporated the proposal can be summarised as seagoing vessel. The International into Community law and were asked follows: the principle is that the SPE Labour Organisation addressed this to consider entering into negotiations is subject to the rules on employee issue in the 2006 Maritime Labour with the aim of reaching an agreement participation, if any, applicable in the Convention, and for its part the Coun- concerning certain of its provisions. Member State in which it has its reg- cil adopted Directive 2009/13/EC The social partners decided to engage istered office, with two exceptions: on 16 February 2009 (20). It will in negotiations and, on 19 May 2008 enter into force simultaneously with (in connection with the first Maritime (a) in case of a cross-border merger, the ILO Maritime Labour Conven- Day), they signed a joint agreement the rules on employee par- tion (i.e. following ratification by 30 on the 2006 Maritime Labour Con- ticipation in Regulation (EC) states accounting for at least 33 % vention (21). No 56/2005 apply; of world tonnage). Given that the EU-27 dispose of 28 % of the world The social partners requested the fleet, the European Union can play a EU to take the appropriate measures 16 http://ec.europa.eu/social/main.jsp?catId=157&la ngId=en&pubId=348&type=2&furtherPubs=yes crucial role in accelerating its entry to implement their agreement as a 17 ETUC, BusinessEurope, CEEP and UEAPME. into force. Council decision, in accordance with

18 COM(2008) 419 final of 2.7.2008. 21 See Chapter 4 of the Industrial Relations in 19 COM(2008) 396 final. 20 OJ L 124, 20.5.2009, p. 30. Europe 2008 report for details.

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Article 155 of the Treaty (ex Article conditions and for investigating and be entirely justified insofar as it did not 139). Following this request, on 2 July reporting on-board occupational appear to be accompanied by specific 2008 the Commission submitted a accidents. Regulation 4.1 and Stand- arrangements, more adapted to the proposal for a directive. The Council ard A4.1 cover seafarers’ entitlement concrete situation of such workers. reached political agreement regarding to access medical care, including this proposal on 17 December 2008 essential dental care, on board ship Following a first-stage consultation of and formally adopted Directive and ashore. Closely related to health the social partners in 2007 (22) and an 2009/13/EC on 16 February 2009. and safety at work are provisions of in-depth analysis of their positions, Article 3 of the agreement provid- the Commission carried out a second The incorporation of elements of ing minimum standards concerning stage consultation, in which it sought the Maritime Labour Convention of accommodation, recreational facili- the opinions of the social partners 2006 into Community law by means ties, food and catering for seafarers. on a number of concrete solutions of Directive 2009/13/EC will update which would provide the basis for the European legislation in force by reviewing the exclusions regarding the inclusion of those standards of the 7.2.7.2. Review of the regulatory seafaring workers contained in the convention which are more favoura- social framework concerning aforementioned directives. The sec- ble for seafarers. It is expected that the seafarers — Exclusion ond stage consultation was concluded working conditions of seafarers will of seafarers in December 2009. At the same time be improved, particularly as regards the Commission launched a study in employment agreements, hours of Several labour law directives either order to gather empirical evidence work, repatriation, careers and skills exclude seagoing workers from their relevant to an eventual legislative ini- development, accommodation and scope or authorise the Member States tiative and assess the impact of sev- recreation facilities, food and catering, to do so (cf. Directives 2008/94/EC, eral options. health and safety protection and medi- 94/45/EC, 2002/14/EC, 98/59/EC, cal care, and complaint procedures. At 2001/23/EC and 96/71/EC). The exist- the same time the standards contained ence of the exclusions was mainly 7.2.7.3. Proposal of decision in the agreement of the social partners justified by national circumstances on ratification of ILO’s 2007 will be subject to the specific enforce- which made it particularly difficult, at Fishing Convention ment mechanisms of EU law. the time when they were adopted, to apply the relevant directives to seago- In line with the 2006 commu- Improvements to the health and ing workers. nication on decent work for all safety protection and medical care (COM(2006) 249), which included of seafarers are the subject of spe- The Commission reviewed the per- a Commission commitment to the cific provisions in Article 4 of the tinent legislation in order to identify promotion of up-to-date ILO conven- social partners’ agreement. Regula- the exclusions or derogations affect- tions, the Commission adopted, on tion 4.3 of the agreement requires the ing workers in maritime professions, 27 May 2008, a proposal for a Coun- Member States to ensure that seafar- the problems raised by practical cil decision (23) authorising Member ers are provided with occupational application and the difficulties of States to ratify, in the interests of the health protection and live, work and interpretation of such legislation. It European Community, the Work in train on board in a safe and hygienic sought to determine to what extent Fishing Convention concluded in environment. Furthermore, national action might be needed to improve 2007 by the International Labour guidelines for the management of legal protection for maritime profes- Organisation (Convention 188). The occupational safety and health on sions in the EU. In view of the highly decision also calls on the Member board ships shall be drawn up. Finally, globalised context of most maritime States to deploy efforts to ratify the each Member State shall adopt meas- sectors, it undertook such analysis convention as soon as possible, prefer- ures addressing, inter alia, the risk against the background of the already ably before the end of 2012. Member evaluation, training and instruction extensive body of international con- States need the Council’s authorisa- of seafarers, on-board programmes ventions and standards. tion prior to ratification, because the for the prevention of occupational accidents, injuries and diseases as The Commission concluded that the 22 COM(2007) 591final ‘Reassessing the regulatory social framework for more and better seafaring jobs well as requirements for inspecting, exclusion of seafaring workers from in the EU’. reporting and correcting unsafe the scope of some directives might not 23 COM(2008) 320 of 27 May 2008.

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convention includes rules in areas 10 Member States (staff working However, the Commission identi- which fall under exclusive Commu- document — SEC(2008) 2485) (24); fied some issues that deserved further nity competence, namely the coordi- consideration, and envisages carrying nation of social security schemes. • Report of 12 December 2008 on out a full examination and assessing the economic and social impact of the appropriateness/scope of an even- The convention will replace some older Directive 2005/47/EC on working tual revision of the directive. Such an ILO standards and is expected to rem- time of workers in the international assessment will be carried out in par- edy the low rate of ratification of many rail sector. allel with the reflection on potential conventions in the field of maritime amendments to the SE Statute, which labour. It sets minimum rules aiming In addition, the following reports are in turn will build on the report on the at improving the working conditions expected to be adopted in 2010: application of the Regulation on the on board fishing vessels in areas such Statute for a European Company pub- as health and safety and medical care, • Report on the transposition lished on 17 November 2010.(26) rest periods, protection by a work and implementation of Direc- agreement and social security. Thus, it tive 91/383/EEC of 25 June 1991 As regards the European coopera- is intended to help establishing a level supplementing the measures to tive society, a report on the review playing field in one of the most global encourage improvements in the of Council Directive 2003/72/EC of and dangerous occupations. safety and health at work of work- 22 July, supplementing the statute ers with a fixed-duration employ- for a European cooperative society The European Parliament approved ment relationship or a temporary with regard to the involvement of the proposal by legislative resolution employment relationship; employees, is expected to be adopted of 14 January 2009. On 30 November in 2010. 2009 the Council reached a political • Report on the transposition and agreement on this issue. implementation of Directive 94/33/ EC of 22 June 1994 on the protection 7.2.8.2. Monitoring of of young people at work; implementation of directives 7.2.8. Facilitation and monitoring • Report on the implementation Following the 2007 studies on the of implementation of Directive 2003/88/EC on the implementation of the EU labour organisation of working time. law acquis in the enlarged European in the Member States Union, the Commission commis- In the area of information and con- sioned new studies to cover the most sultation of employees (25), on 30 recent countries which acceded to the 7.2.8.1. Transposition/application September 2008 the Commission EU, i.e. Romania and Bulgaria. These reports adopted a communication on the were finalised at the beginning of review of Directive 2001/86/EC on 2010. In 2008, the Commission prepared involvement of employees in the Euro a number of reports concerning the pean Company (COM(2008) 591). In line with its communication on transposition and/or implementation The Commission, in agreement with applying Community law (27), the of certain directives in the area of EU the majority of Member States and Commission continues to put great labour law. In particular, the following the European social partners, con- emphasis on monitoring the cor- documents were adopted: cluded that there is a lack of practical rect transposition and application experience regarding the application of the labour law directives. Priority • Report of 11 April 2008 on the of the directive and that, therefore, it was accorded to dealing with three implementation of Article 8 of was too early to revise it. directives — Directive 99/70/EC on Directive 80/987/EEC (comple- fixed-term work, Directive 97/81/ mentary pension rights in the event EC on part-time work and Directive of insolvency of the employer); 2003/88/EC on the organisation of 24 This complements the Commission staff working document of 11 August 2006 on the implementation working time. Following complaints • Report of 17 September 2008 on of Directive 1999/70/EC in the EU-15. the implementation of Directive 25 The Commission had adopted in 2008 a communication on the review of Directive 26 COM(2010) 676 of 17.11.2010. 99/70/EC (fixed-term work) in new 2002/14/EC (cf. Chapter 6 of 2008 IRR). 27 COM(2007) 502 of 5.9.2007.

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or on the basis of its own findings only concerns part of an undertak- One judgment was delivered relat- and/or of the aforementioned studies, ing, for the directive to be applica- ing to Directive 97/81/EC (part-time the Commission cooperated with the ble it is not required that this part work), one of the directives based on a Member States concerned to resolve retains organisational autonomy. In European social partners’ framework the issues that were raised. Where it Case C-561/07 (31), the Court ruled agreement. This directive ensures that was not possible to find a solution, it that Italy had infringed the directive workers employed part-time receive launched infringement proceedings through its legislation on undertak- comparable treatment to full-time staff for non-notification and/or incorrect ings in critical difficulties which on open-ended contracts. In Joined implementation of EU legislation, relieved these undertakings from Cases C-55/07 and C-56/07 (36), the which led in some cases to judgments certain obligations resulting from the CJEU ruled that it precludes national by the Court of Justice. directive. legislation which requires that copies of part-time employment contracts be Two judgments concerned Directive sent to the authorities within 30 days 7.2.9. Interpretation 80/987/EEC (32) (insolvency of the of their signature. of directives employer). This directive aims at the protection of workers in case of insol- The CJEU rendered one judgment The Court of Justice had the oppor- vency of the employer by requiring concerning Directive 1999/70/EC tunity to interpret a number of provi- Member States to establish institu- (fixed-term work). This directive sions of the EU directives in the field tions that guarantee the payment of establishes minimum requirements of labour law in several judgments unpaid salaries. In Case C-310/07 (33), relating to fixed-term work, in order rendered between May 2008 and Feb- the Court clarified the conditions to ensure equal treatment of work- ruary 2010. Most of these judgments for the competence of the guarantee ers and to prevent abuse arising from were rendered following preliminary institution in a Member State in case the use of successive employment questions submitted to the CJEU by the insolvent company had activities contracts or relationships of this national courts. Some were the result in more than one Member State. In type. In Joined Cases C-378/07 to of infringement proceedings launched Case C-69/08 (34), the Court clarified C-380/07 (37) the Court clarified the by the Commission. the conditions that national law can conditions for allowing successive impose limitation periods for claim- employment contracts. The CJEU rendered four judgments ing the intervention of the guarantee relating to Directive 2001/23/EC institution. As for Directive 96/71/EC (posting (transfer of undertakings). The aim of of workers) one judgment is worth this directive is to protect employees As for Directive 2003/88/EC (work- mentioning. This directive aims to in the event of a change of employer ing time), one judgment was issued remove the uncertainties and obsta- and, in particular, to safeguard their by the CJEU. This directive lays down cles impeding the free provision of rights. In Case C-313/07 (28) the minimum general safety and health services by increasing legal certainty Court clarified that the directive requirements for the organisation and making it easier to identify the does not have effects on contracts of working time. In Joined Cases working conditions in the Member other than employment contracts. In C-350/06 and C-520/06 (35), the Court State to which the worker is posted Case C-396/07 (29), the Court clari- clarified the relationship between paid which apply. In Case C-319/06 (38) the fied the effects of the termination of annual leave and sick leave. CJEU considered that Luxembourg an employment contract because the 31 Judgment of the Court (Second Chamber) of transfer of undertaking involved a 11 June 2009, Commission of the European 36 Judgment of the Court (Third Chamber) of Communities v Italian Republic. 24 April 2008, Othmar Michaeler (C-55/07 and substantial change of working con- C-56/07), Subito GmbH (C-55/07 and C-56/07) ditions. In Case C-466/07 (30), the 32 Directive 80/987/EEC has been repealed by and Ruth Volgger (C-56/07) v Amt für sozialen Directive 2008/94/EC which codifies Directive Arbeitsschutz and Autonome Provinz Bozen. Court ruled that where the transfer 80/987/EEC as amended by Directive 2002/74/EC. 37 Judgment of the Court (Third Chamber) of 33 Judgment of the Court (Fourth Chamber) of 23 April 2009, Kiriaki Angelidaki and Others v 28 Judgment of the Court (Fourth Chamber) of 16 October 2008, Svenska staten v Anders Holmqvist. Organismos Nomarchiakis Autodioikisis Rethymnis 16 October 2008, Kirtruna SL and Elisa Vigano v Red 34 Judgment of the Court (Second Chamber) of (C-378/07), Charikleia Giannoudi v Dimos Elite de Electrodomésticos SA and Others. 16 July 2009, Raffaello Visciano v Istituto nazionale Geropotamou (C-379/07) and Georgios Karabousanos 29 Judgment of the Court (Fourth Chamber) of della previdenza sociale (INPS). and Sofoklis Michopoulos v Dimos Geropotamou 27 November 2008, Mirja Juuri v Fazer Amica Oy. 35 Judgment of the Court (Grand Chamber) of (C-380/07). 30 Judgment of the Court (Fourth Chamber) of 20 January 2009, Gerhard Schultz-Hoff v Deutsche 38 Judgment of the Court (First Chamber) of 12 February 2009, Dietmar Klarenberg v Ferrotron Rentenversicherung Bund (C-350/06) and Stringer and 19 June 2008, Commission of the European Technologies GmbH. Others v Her Majesty’s Revenue and Customs (C-520/06). Communities v Grand Duchy of Luxembourg.

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of the employer. For Case C-44/08 (42); Box 7.3: Who should consult employees, and at what time, on see Box 7.3. collective dismissals in the case of a group of undertakings? An important judgment in the field of collective dismissals was rendered in Case C-44/08. The CJEU delivered one judgment In this case the executive council of the parent company of a group decided to make a concerning Directive 2002/14/EC proposal to the board of that company for disengagement from the group’s factory in (information and consultation). This Finland. A week later the board of directors decided to support the proposal, but no spe- directive establishes a general frame- cific decision was taken in relation to that factory. On the same day, the subsidiary that owned the factory proposed consultations with the employees’ representatives, which work for informing and consulting took place for several weeks. At the end of this period the subsidiary’s board of directors employees. In Case C-405/08 (43), took a decision to terminate the operations in Finland. The employees’ representatives the Court clarified the extent of the challenged in the national court the information and consultation procedure followed protection granted to employees’ since they considered that the decision to close the factory had been adopted before representative. the start of the consultation procedure. The Finnish Supreme Court put a preliminary question to the CJEU and stayed proceedings. In its judgment, the CJEU ruled that the adoption within a group of undertakings of strategic decisions or of changes in activities which compel the employer to contemplate or to plan for collective redundancies 7.3. Health and safety gives rise to an obligation on that employer to consult with workers’ representatives. The CJEU considered that the consultation procedure must be started by the employer once a of workers strategic or commercial decision compelling him to contemplate or to plan for collective redundancies has been taken. The CJEU also ruled that the obligation to start negotiations does not depend on whether the employer is already able to supply to the workers’ 7.3.1. Risks arising from representatives all the information required by the directive; the information can be physical agents provided during the consultations and not necessarily at the time when they start. More- over, in the case of a group of undertakings consisting of a parent company and one or more subsidiaries, the obligation to hold consultations with the workers’ representatives 7.3.1.1. Electromagnetic fields falls on the subsidiary which has the status of employer only once that subsidiary, within which collective redundancies may be made, has been identified. Finally, the CJEU ruled that in the context of a group of undertakings, a decision by the parent company which On 20 May 2010, the second-stage has the direct effect of compelling one of its subsidiaries to terminate the contracts of consultation of the social partners employees affected by the collective redundancies can be taken only on the conclusion on a possible amendment of Direc- of the consultation procedure within that subsidiary, failing which the subsidiary, as the tive 2004/40/EC was launched by the employer, is liable for the consequences of failure to comply with that procedure. Commission. had infringed the directive by representatives in the case of collec- Directive 2008/46/EC, amending imposing certain obligations on the tive redundancies. It specifies the Directive 2004/40/EC on minimum employer which go beyond what is points which these consultations health and safety requirements allowed by the directive. must cover and the useful informa- regarding the exposure of workers to tion which the employer is required the risks arising from physical agents One judgment was delivered concern- to provide during the consultations. (electromagnetic fields), postpones ing Directive 91/533/EEC (informa- In addition, the directive establishes by four years, until 30 April 2012, tion on individual contract). This the procedure and practical arrange- the deadline for the transposition of directive requires employers to inform ments for collective redundancies. Directive 2004/40/EC to allow a full employees in writing of the conditions In Case C-12/08 (40), the Court clari- analysis of new information in this applicable to the contract. In Case fied that the directive allows national field. A first consultation of the social C-306/07 (39) the Court clarified the legislation that subjects the exercise partners on possible new measures to meaning of temporary contract for of the rights of individual work- be proposed was finalised in Octo- the purposes of the directive. ers to certain requirements. In Case ber 2009. This provided appropri- C-323/08 (41), the Court clarified the ate information for the preparation As for Directive 98/59/EC (collec- scope of the directive in case of death of the second stage consultation. tive redundancies), the CJEU delivered three judgments. This directive 40 Judgment of the Court (Fourth Chamber) of 16 July 2009, Mono Car Styling SA, in liquidation v 42 Judgment of the Court (Fourth Chamber) of 10 requires employers to consult staff Dervis Odemis and Others. September 2009, Akavan Erityisalojen Keskusliitto 41 Judgment of the Court (Fourth Chamber) of 10 AEK ry and Others v Fujitsu Siemens Computers Oy. 39 Judgment of the Court (First Chamber) of 18 December 2009, Ovido Rodríguez Mayor and Others 43 Judgment of the Court (Third Chamber) of 11 December 2008, Ruben Andersen v Kommunernes v Herencia yacente de Rafael de las Heras Dávila and February 2010, Ingeniørforeningen i Danmark v Dansk Landsforening. Others. Arbejdsgiverforening.

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Depending on the outcome of the 7.3.2. Risks arising from Union, the United Nations Globally second stage consultation, the Com- chemical agents Harmonised System for Chemical mission should be in a position to Classification and Labelling. present a new proposal for a directive during 2010. 7.3.2.1. Third list of limit values Five EC directives on health and safety at work refer to chemical classification On 17 December 2009, the Commis- and labelling requirements. It is neces- 7.3.1.2. Artificial optical radiation sion adopted Directive 2009/161/EU sary to amend these five directives to establishing a third list of indicative ensure that the current level of worker A guide to good practice for imple- occupational exposure limit values for protection is maintained. The direc- menting Directive 2006/25/EC on chemical agents. tives are Directive 98/24/EC (chemical minimum requirements regarding the agents), Directive 2004/37/EC (car- exposure of workers to risks arising Indicative occupational exposure limit cinogens and mutagens), Directive from physical agents (artificial optical values are health-based, non-binding 92/58/EEC (safety signs), Directive radiation) has been published. values, derived from the most recent 92/85/EEC (pregnant workers) and scientific data available and taking Directive 94/33/EEC (young people at This non-binding guide, fore- into account the availability of meas- work). The second-stage consultation seen under Article 13 of Directive urement techniques. They set thresh- is foreseen in the course of 2010. 2006/25/EC, aims to promote a good old levels of exposure at such a level understanding of the provisions of that, when repeated on a regular basis the directive in order to ensure and throughout a working life, the expo- 7.3.3. Exposure to asbestos maintain effective and sufficient sure will not lead to adverse effects on conditions of protection for workers the health of exposed persons and/or On 30 November 2009, the European exposed to artificial optical radia- their progeny at any time, as far as can Parliament and the Council adopted tion. Its purpose relates to the ascer- be predicted from the contemporary Directive 2009/148/EC on the protec- tainment and evaluation of risks, the state of knowledge. tion of workers from the risks related to correct selection and use of working exposure to asbestos at work (codified equipment, the optimisation of meth- The new directive includes in its Annex version) (44). In the interests of clarity ods and the introduction of protective 19 chemical substances for which the and rationality, Directive 2009/148/EC measures (technical, organisational Member States are now required to incorporates in one text the texts of and of personal nature) according to establish national occupational expo- Directive 83/477/EEC on the protec- the preceding risk analysis. sure limit values, taking into account tion of workers from the risks related the European Union values. Member to exposure to asbestos at work (sec- States must comply with this by 18 ond individual directive within the 7.3.1.3. Noise December 2011 at the latest. meaning of Article 8 of Directive 80/1107/EEC) and its amendments, A guide to good practice for the i.e. Directives 91/382/EEC, 98/24/EC, application of Directive 2003/10/EC 7.3.2.2. Classification, labelling 2003/18/EC and 2007/30/EC. on the minimum safety and health and packaging of chemical requirements regarding the exposure substances of workers to the risks arising from 7.3.4. Musculoskeletal physical agents (noise) has been pub- On 9 December 2009, the first-stage disorders lished. This non-binding guide aims consultation of the social partners at to facilitate the assessment of risks EU level was launched on the need to On the basis of the findings of a two- from noise exposure, thus reducing adapt EU directives to Regulation (EC) phase social partner consultation car- such exposure and promoting, for No 1272/2008 on classification, label- ried out under Article 154(4) TFEU example, the purchase of quiet work ling and packaging of substances and (ex Article 138(4) of the EC Treaty) equipment where possible. It assists mixtures. New requirements for the and, in the light of the results of a pre- companies, especially SMEs, with classification, labelling and packaging paratory study on the social-economic preventing occupational risks. It of chemicals arise from the adoption of impact of various policy options, the contains a number of good-practice Regulation (EC) No 1272/2008 which examples. implements, within the European 44 OJ L 330, 16.12.2009, pp. 28–36.

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Commission is currently working on a In the interests of clarity and ration- of minimum safety and health proposal for new legislation to address ality, Directive 2009/104/EC incorpo- requirements at temporary or mobile all significant ergonomic risk fac- rates in one text the texts of Directive construction sites has been published. tors at work and lay down minimum 89/655/EEC concerning the minimum health and safety requirements for the safety and health requirements for the protection of workers in all sectors use of work equipment by workers 7.3.8. Extractive industries of activity from work-related muscu- at work (second individual directive loskeletal disorders (WRMSDs) and within the meaning of Article 16(1) On 3 September 2009, the Commission display-screen vision problems. of Directive 89/391/EEC) and its adopted a report on the practical imple- amendments, i.e. Directives 95/63/EC, mentation of two directives on health WRMSDs are one of the major safety 2001/45/EC and 2007/30/EC. and safety in the extractive indus- and health problems facing the Euro- tries, namely, Directives 92/91/EEC pean Union today. They affect both (mineral extraction through drilling) women and men and all sectors of 7.3.7. Construction sector and 92/104/EEC (surface and under- activity across the European Union. ground mineral extraction) (48). The According to information from Euro- 7.3.7.1. Practical implementation report assesses the practical imple- stat (45), work-related MSDs are the report mentation of Directives 92/91/EEC main work-related health problem, and 92/104/EEC in the EU-15 Member accounting for 60 % of all work-related On 6 November 2008, the Commission States, and points to issues where fur- diseases in the EU-27. adopted a communication on the prac- ther action is needed for improvement, tical implementation of two directives especially since the extractive indus- on health and safety in the construction tries sector is a traditionally high risk 7.3.5. Environmental tobacco sector, namely Directives 92/57/EEC sector. It addresses issues such as the smoke (temporary and mobile sites) and directives’ transposition and enforce- 92/58/EEC (safety signs at work) (47). ment in the Member States, workers’ On 10 December 2008, the Commis- This communication assesses the prac- qualifications, health surveillance, and sion launched a first stage consultation tical implementation of Directives accidents and their causes. It highlights of the social partners at EU level on 92/57/EEC and 92/58/EEC in the the need for Member States to provide the protection of workers from risks EU-15 countries and highlights issues extra support to SMEs enabling them related to exposure to environmental where further action is needed for to put in place an effective health and tobacco smoke at the workplace. This improvement, especially in the con- safety policy. consultation of the social partners struction sector with its extremely high regarded the possible direction of an rate of accidents. As regards Direc- EU legislative initiative. Following tive 92/57/EEC, the communication 7.3.9. Maritime sector an analysis of the responses received addresses such issues as its transposi- from the social partner organisations, tion by the Member States, the main 7.3.9.1. Directive implementing the second stage consultation of the actors on a construction site, the docu- social partners’ agreement on social partners is under preparation. ments required, the responsibility of Maritime Labour Convention the various players on the site and its enforcement. The main positive effects As reported at 2.7.1 above, the Council 7.3.6. Work equipment and the problems of implementation of adopted on 16 February 2009 Direc- the two directives are also addressed. tive 2009/13/EC implementing ECSA’s On 16 September 2009, the European and ETF’s agreement on the 2006 Parliament and the Council adopted Maritime Labour Convention (49). Directive 2009/104/EC concerning the 7.3.7.2. Guide The agreement aims in particular at minimum safety and health require- improving the working conditions of ments for the use of work equipment A non-binding guide to help improve seafarers in terms of, inter alia, health by workers (codified version) (46). the practical application of Directive and safety protection and medical care 92/57/EEC on the implementation (see above for details). 45 Eurostat 2007, European labour force survey, Ad hoc module on accidents at work and work-related health problems. 48 COM(2009) 449 final. 46 OJ L 260, 3.10.2009, pp. 5–19. 47 COM(2008) 698 final. 49 OJ L 124, 20.5.2009, p. 30.

216 Chapter 7: Review of European legislation 2008–10

7.3.9.2. Practical implementation report Box 7.4: Significant judgments of the Court of Justice in the field of health and safety at work in 2008–10 On 29 October 2009, the Commis- Commission v France (1): In a ruling, the Court condemned France for not respecting cer- sion adopted a report on the practical tain provisions of the so-called framework directive (89/391/EEC) (safety and health of implementation of health and safety workers at work). It concerned firstly the fact that French legislation allowed for deroga- at work Directives 93/103/EC (fish- tions for the French public transport company RATP, despite the fact that Article 2 of the directive defines its scope of application as covering all sectors of activity, both public and ing vessels) and 92/29/EEC (medical private. Furthermore, the Court condemned France as regards the public railway company 50 treatment on board of vessels)) ( ). SNCF, which had failed to include in its proper regulations certain provisions transposing the directive. These concerned Article 7 (protective and preventive services), Article 9(1) The report assesses the practical (c) (keeping of a list of occupational accidents) and Article 13(2) (workers’ obligations). implementation of Directives 92/29/ Thirdly, France had not correctly transposed Article 10(1) of the directive (information EEC and 93/103/EC in the EU-15 of workers on health and safety risks and on the protection measures), imposing this for example only in companies with more than 20 employees instead of in all companies as Member States and highlights issues required by the directive. Finally, France had not transposed Article 12(3) and (4) (training where further action is needed for of workers’ representatives) in the mining sector. improvement, especially since the Commission v Italy (2): The Court declared that Italy did not correctly transpose Article maritime sector is a high risk sector. 3(1) of Directive 92/57/EEC (construction sites). According to this provision, at construction sites with more than one company, a coordinator for health and safety matters has to For Directive 92/29/EEC, the report be appointed in order to prevent accidents. Italy had transposed the directive in such a way addresses, among others, the issues of that construction sites with less than 200 working days and those not comprising particular risks are exempted from this obligation. The Court ruled clearly that the directive does medical supplies, training and inspec- not allow for derogations to the obligation contained in Article 3(1). In fact, the risks are tions. The report concludes that action the same and accidents very often occur at small construction sites. will be taken with a view to a technical adaptation of the directive’s Annexes 1 Judgment of 5 June 2008 in Case C-226/06, European Court Reports 2008, p. I-00086. in the light of technical progress. 2 Judgment of 25 July 2008 in Case C-504/06, European Court Reports 2008, p. I-00118.

As regards Directive 93/103/EC, it is prevention of injuries from sharp Regulation (EC) No 1338/2008 on stressed, among others, that whilst instruments in the hospital and Community statistics on public health its scope covers solely vessels of 15 m healthcare sector concluded by the and health and safety at work (52).The in length and more, vessels of under sector’s European social partners, regulation aims at establishing the 15 m in length account for a major- Hospeem and EPSU (51) (see Chapter 6 framework for the systematic produc- ity of the fleet and have higher acci- for details of the agreement). Member tion of statistics in these two areas, in dent rates. The report concludes that States must take the necessary meas- the form of a minimum data set, to be attention will be given to this issue by ures to comply with this directive by carried out by the European statistical analysing options such as guidance 11 May 2013 at the latest. system, i.e. Eurostat, the national sta- for smaller vessels and the possibility tistical institutes and all other national of amending the directive in order to authorities responsible for the provi- extend its scope to cover also vessels 7.3.10.2. Guide sion of official statistics in these areas. under 15 m in length. It sets out the general principles and A non-binding guide on preven- describes the main contents of the tion and good practice with a view data to be collected. 7.3.10. Healthcare sector to improving the health and safety of workers in the hospitals and the healthcare sector has been published. 7.3.12. Senior Labour 7.3.10.1. Injuries from sharp Inspectors’ Committee instruments 7.3.11. Statistics On 22 October 2008, the Commission On 10 May 2010, the Council adopted adopted a decision amending Deci- Directive 2010/32/EU implement- On 16 December 2008, the European sion 95/319/EC setting up a commit- ing the framework agreement on Parliament and the Council adopted tee of senior labour inspectors (SLIC),

50 COM(2009) 599 final. 51 OJ L 134, 1.6.2010, p. 66. 52 OJ L 354, 31.12.2008, p. 70.

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primarily to reduce the number of Following their consultation by the The legislative procedure is currently members per Member State from two Commission in 2006 and 2007, the in the hands of the European Parlia- to one (53). Since the latest enlarge- European social partners (Busi- ment and the Council. ments of the European Union effec- nessEurope, the ETUC, CEEP and tively doubled the size of the SLIC, the UEAPME) entered into negotiations plenary meetings have comprised 54 with a view to revising the 1995 7.4.3. Self-employed workers members. With a view to enable the agreement. On 18 June 2009, they directive SLIC to fulfil its tasks and allow the signed the revised framework agree- members of the committee to engage ment and addressed a joint request In October 2008 the Commission in a practical, interactive exchange of to the Commission to submit a pro- presented a proposal for a directive experience and opinion, which is not posal for a Council decision imple- on the application of the principle feasible with such a large Committee, menting it. Following the adoption of equal treatment between men the number of members per Member of the directive by the Council, and women engaged in an activ- State was reduced from two to one, Member States will have two years ity in a self-employed capacity. This with effect from 1 January 2010. The to transpose the new rights into proposal has been adopted by the Member States are allowed to appoint national law. European Parliament and the Coun- an alternate member to attend meet- cil on 15 July 2010 (55). The directive ings where the full member cannot be lays down a framework for putting present. The SLIC gives its opinion to 7.4.2. Pregnant workers into effect in the Member States the the Commission on all problems relat- directive principle of equal treatment between ing to the enforcement by the Member men and women engaged in an activ- States of EU law on health and safety In October 2008, the Commis- ity in a self-employed capacity, or at work. sion presented a proposal to amend contributing to the pursuit of such the current provisions of Directive an activity, as regards the aspects 92/85/EEC on maternity protection. that are not covered by Direc- 7.4. Equality rights The aim of this proposal is to provide tives 2006/54/EC and 79/7/EEC. in employment for better reconciliation of private, It covers self-employed workers and professional and family life and thus assisting spouses and repeals Direc- allow more women to enter or stay in tive 86/613/EEC. the employment market if they have 7.4.1. Directive children. The main elements of the directive are on parental leave as follows: The most important changes proposed The Council adopted, on 8 March 2010, are to: • Member States must provide that the Council directive (54) implement- female self-employed women can, ing the revised framework agreement • increase maternity leave from 14 to if they so request, benefit from a on parental leave concluded by Busi- 18 weeks; maternity allowance for a period of nessEurope, UEAPME, CEEP and the at least 14 weeks; ETUC. The new directive repeals and • allow the woman to take the main replaces Directive 96/34/EC, which part of maternity leave only after • Member States must ensure that, put into effect the 1995 social partner the birth of the child; whenever there is a social pro- framework agreement and established tection system for self-employed for the first time minimum standards • provide for an obligatory leave of workers, assisting spouses can, at on parental leave at EU level. These six weeks after birth (currently their request, benefit from a social rights for working parents have now there is a minimum of two weeks); protection. been strengthened and clarified. The provisions of the revised agreement • improve protection against dismissal; It should be noted that life partners, are outlined in Chapter 6. when and insofar as recognised by • allow the woman to ask for changes national law, are considered as spouses in her working conditions. for the purpose of the directive. 53 OJ L 288, 30.10.2008, p. 5. 54 Directive 2010/18/EU, OJ L 68, 18.3.2010, 55 Directive 2010/41/EU, OJ L 180, 15.7.2010, pp. 13–20. pp. 1–6.

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7.4.4. Monitoring of works councils, maritime transport, Chapters 2 and 3 — and, on the other equality and anti- protection against risks caused by hand, long-term challenges such as discrimination chemical substances and injuries from globalisation, demographic ageing, sharp instruments, parental leave and climate change and pressure on natu- legislation protection of self-employed spouses. ral resources. Chapter 5 has provided Difficulties also emerged, both in the an overview of what the shift to a The Commission continues to place enforcement or interpretation of spe- low-carbon economy could mean for great emphasis on the correct trans- cific provisions and in finding a com- industrial relations systems. position and application of the rel- promise between co-legislators for the evant EU directives. This includes adoption of new legislation, as was the Second, the entry into force of the Council Directive 2000/78/EC, case with the proposed revisions to Lisbon Treaty offers new possibili- which established a general frame- the working time directive. ties and perspectives. Several changes work for equal treatment in employ- may be of great significance to the fur- ment and occupation across the Looking to the future, the Euro- ther development of European social EU. Apart from a few, where Mem- pean Union has to act within a sig- policy, in particular: the statement of ber States did not communicate nificantly changed context. First, EU values and objectives; the binding their national transposing meas- the EU currently faces a challenging Charter of Fundamental Rights; the ures, the Commission concluded its period as a result of, on the one hand, social clause of general application, examination of the relevant direc- the economic crisis — as shown in the explicit recognition of the role of tives’ transposition across the EU. relation to industrial relations in social dialogue. Following this thorough analysis, the Commission was in the position in several cases to close the infringement Box 7.5: Significant judgments of the Court of Justice proceedings it had initiated against in the field of equality rights in employment (2008–10) several Member States. However, Generalisations do not justify derogations in age discrimination laws in other cases it considered appro- Is there a conflict between the employment equality directive and national rules in priate to pursue further its action the United Kingdom, which permit employers to forcibly retire employees aged 65 on the basis of Article 157 TFEU or over? This was in essence the question posed by the UK High Court to the Court of Justice, regarding a case brought by an NGO (the National Council on Ageing) (ex Article 226 TC) (56). against the UK government. The CJEU observed (1) that the Member States enjoy broad discretion when choosing the means to achieve their social policy objectives, but not at the expense of frustrat- 7.5. Conclusion: future ing the implementation of the principle of equality on grounds of age. Mere gener- perspectives alisations do not justify derogations. Certain differences in treatment on the grounds of age can be ‘objectively and reasonably’ justified by a legitimate aim, but Member States must establish to a high standard of proof the legitimacy of the aim relied on As this chapter has shown, signifi- as a justification. cant progress was achieved during the Case C-388/07, National Council for Ageing, judgment of 5 March 2009. period 2008–10 in a number of areas Young workers must not be discriminated where new rules create the conditions The Austrian Supreme Court asked the Court of Justice whether Directive 2000/78/ for improving working conditions EC was compatible with an Austrian law which excludes previous service from being in the EU, while contributing to the taken into account for a pay raise, if such service was completed before the person reached the age of 18 years. modernisation of the labour mar- The Court of Justice accepted as legitimate the aim of avoiding putting persons who kets in line with the objectives of the have pursued a general secondary education at a disadvantage as compared with per- Lisbon strategy and the Europe 2020 sons with a vocational education, as well as that of avoiding making apprenticeships strategy. Examples of such advances more costly for the public sector and thereby promoting the integration of young were particularly evident in the areas people who have pursued training of this type into the labour market. of temporary agency work, European However, the Court of Justice considered that the criterion of the age at which the vocational experience was acquired is not appropriate for achieving the envisaged legitimate aims. 56 In accordance to this provision, when the Commission considers that a Member State has failed Case C-88/08, Hütter, judgment of 18 June 2009. to comply with its obligations under EU law, it may deliver a letter of formal notice, a reasoned opinion 1 http://curia.europa.eu/ (Case C-388/07, Judgment of 5 March 2009). and eventually bring the matter before the CJEU.

219 Industrial Relations in Europe 2010

Against this background, the Com- legislative framework, in line with tual administrative burden. Besides mission adopted its Europe 2020 ‘smart’ regulation principles, to evolv- the work under way regarding the strategy for smart, sustainable and ing work patterns (e.g. working time). directives on posting of workers and inclusive growth (57). This strategy sets It also intends to adapt the exist- on working time (58), priority will out a vision of Europe’s social market ing framework to emerging risks for be given to the directives regarding economy for the 21st century and puts health and safety in the workplace workers’ information and consulta- forward the EU’s priorities, targets and (e.g. electromagnetic fields, mus- tion at national level (59). Such evi- flagship initiatives in order to realise culoskeletal disorders, environmental dence-based research is expected to this vision. It outlines also the instru- tobacco smoke, nanomaterials, car- inform the Commission’s assessment ments to be mobilised to this effect. cinogens and mutagens). Further, it of the effectiveness of the relevant The strategy provides for further will also act in order to clarify rules acquis in the current crisis, in par- action to be taken to make full use when these are not sufficiently clear to ticular concerning the restructuring of the problem-solving potential of allow proper enforcement (e.g. post- of companies. social dialogue. Equality of treatment ing of workers). and the fight against discrimination The Commission will further pursue, will be further promoted. A second More generally, the Commission in particular, its proposals which are phase of the flexicurity agenda will intends to undertake an evalua- currently pending before the EU leg- be defined and implemented together tion of several existing directives in islature. It will continue to closely with the European social partners. order to review their effects, to verify involve the European social partners. whether they meet their stated objec- It will also pursue its efforts to moni- As regards legislation, the Commis- tives, and to assess the benefits and tor the effective implementation and sion envisages working to adapt the costs generated, including the even- enforcement of the acquis.

58 See Sections 2.2 and 2.4 above. 59 As part of the Commission’s 2010 work programme, the Employment, Social Affairs and Inclusion DG has started to carry out a ‘fitness check’ of the following directives: Directive 98/59/EC on collective redundancies, Directive 2001/23/EC on transfers of undertakings and Directive 2002/14/EC establishing a general framework relating to 57 COM(2010) 2020 of 3.3.2010. information and consultation of workers in the EC.

220 Chapter 7: Review of European legislation 2008–10 OK

UK OK OK OK OK OK OK OK OK CP OK EX OK OK NA OK OK OK OK OK

EX SK EX OK OK OK OK OK OK OK OK OK CP NA OK OK NA OK EX OK OK EX SI OK OK OK OK OK OK OK OK OK OK EX NA OK OK NA OK EX OK OK OK SE EX OK OK OK OK OK OK OK OK OK NA NA OK OK NA OK OK OK OK EX RO EX EX EX EX EX EX EX EX OK EX EX OK OK EX NA EX EX EX OK OK PT OK OK OK OK EX OK OK OK EX OK NA NA OK OK NA OK OK OK OK EX PL OK OK OK OK OK OK OK OK OK OK EX NA OK OK NA OK EX OK OK OK NL OK OK OK OK EX OK OK OK OK OK EX NA OK OK NA OK OK OK OK EX MT EX OK OK OK OK OK EX OK NA OK NA NA OK OK NA OK EX OK OK EX LV OK OK OK OK OK OK OK OK EX OK EX NA OK OK NA OK EX OK OK LU OK OK OK OK EX OK OK OK CP OK EX NA OK OK NA OK OK OK OK OK LT OK OK OK OK OK OK OK OK EX OK EX NA OK OK NA OK EX OK OK EX IT OK OK OK OK OK OK OK OK NC OK OK NA OK OK NA OK OK OK OK OK IE OK OK OK OK EX OK OK OK EX OK EX NA OK OK NA OK OK OK OK OK HU EX OK OK OK OK OK EX OK EX OK EX NA OK OK NA OK EX OK OK EX FR OK OK OK OK OK OK OK OK EX OK NA NA OK OK NA OK OK OK OK OK FI EX OK EX OK OK OK OK OK EX OK EX NA OK OK NA OK OK OK OK OK ES OK OK OK OK OK OK OK OK EX OK EX NA OK OK NA OK OK OK OK OK EL OK OK OK OK EX OK OK OK EX OK OK NA OK OK NA OK OK OK OK OK EE OK OK OK OK OK OK OK OK NC OK EX NA OK OK NA OK EX OK OK EX DK OK OK OK OK OK OK OK OK OK OK EX NA OK OK NA OK OK OK OK OK DE OK OK OK OK OK OK OK OK EX OK EX NA OK OK NA OK OK OK OK OK CZ OK OK OK OK OK OK OK OK CP OK EX NA OK OK NA OK EX OK OK OK CY OK OK OK OK OK OK OK OK NA OK OK NA OK OK NA OK EX OK OK EX Annex: Transposition of European directives, October 2010 directives, October European of Transposition Annex: BG EX EX EX EX OK EX EX EX OK EX EX OK OK EX NA EX EX EX EX EX BE OK OK OK OK EX OK OK OK EX OK EX NA OK OK NA OK OK OK OK OK AT EX OK OK OK OK OK OK OK CP OK NA NA OK OK NA OK OK OK OK OK

Directives 01/86 — involvement 01/86 — involvement European — statute employees Company Directives in force in Directives 91/383 — temporary employment 1. Labour law 02/14 — information and and 02/14 — information employees of consultation 91/533 — written statement 91/533 — written 03/72 — cooperative societies 03/72 — cooperative 94/33 — protection young young 94/33 — protection work at people 03/88 — working time 03/88 — working 94/45 — European works works 94/45 — European (97/74 — UK) councils 05/47 — European railways railways 05/47 — European 96/71 — posting of workers workers 96/71 — posting of 06/109 — European works works 06/109 — European council 97/74 — extension 94/45 to 94/45 to 97/74 — extension UK 08/94 — insolvency employer employer 08/94 — insolvency 80/987) (codification 97/81 — part-time work 97/81 — part-time work (98/23 — UK) 98/23 — extension 97/81 to 97/81 to 98/23 — extension UK 98/59 — collective (codification) redundanies 99/63 — working time of time of 99/63 — working seafarers 99/70 — fixed-term work work 99/70 — fixed-term 00/79 — agreement on on 00/79 — agreement time civil aviation working 01/23 — transfer of of 01/23 — transfer undertakings (codification 98/50) 77/187 and

221 Industrial Relations in Europe 2010

UK OK OK OK NA OK CP CP

SK SK OK OK OK OK NA OK OK SI SI OK OK OK OK NA OK OK SE SE OK OK OK OK NA OK OK RO RO OK OK OK OK NA NC OK PT PT OK OK OK OK NA OK OK PL PL OK OK OK OK NA NC CP NL NL OK OK OK OK NA OK OK MT MT OK OK OK OK NA OK OK LV LV OK OK OK OK NA CP OK LU LU OK OK OK OK NA OK OK LT LT OK OK OK OK NA OK OK IT IT OK OK OK OK NA OK OK IE IE OK OK OK OK NA OK OK HU HU OK OK OK OK NA OK OK FR FR OK OK OK OK NA OK OK FI FI OK OK OK OK NA OK OK ES ES OK OK OK OK NA OK OK EL EL OK OK OK OK NA OK OK EE EE OK OK OK OK NA CP OK DK DK OK OK OK OK NA OK OK DE DE OK OK OK OK NA OK OK CZ CZ OK OK OK OK NA CP OK CY CY OK OK OK OK NA OK OK BG BG OK OK OK OK NA OK OK BE BE OK OK OK OK NA OK CP AT AT OK OK OK OK NA OK CP

Directives Directives whoseDirectives has deadline implementation yet expired not agency 08/104 — temporary (deadline: 5.12.2011) work Maritime 09/13 — agreement Labour Convention 99/63) (amending works 09/38 — European (deadline 5.6.2011) council Directives Directives in force 79/7 — social security 2. Equal treatment men and and men 2. Equal treatment women 86/613 — self-employed 86/613 — self-employed be (to repealed women 5.8.2012) 92/85 — pregnant workers 92/85 — pregnant 96/34 — parental leave leave 96/34 — parental be(97/75 — UK) (to repealed 8.3.2012) 97/75 — extension 96/34 UK 97/75 — extension 04/113 — equal access goods/04/113 — equal access services 06/54 — equal opportunities 06/54 — equal opportunities employment Directives whoseDirectives has deadline implementation yet expired not leave 10/18 — parental (deadline: 8.3.2012) 10/41 — self-employed (deadline: 5.8.2012)

222 Chapter 7: Review of European legislation 2008–10 OK

UK OK OK OK OK

UK OK

UK OK OK OK OK OK OK

OK SK OK OK OK OK SK OK SK NA OK OK OK OK OK OK SI OK OK OK OK SI OK SI NA OK OK OK OK OK SE OK OK OK OK SE OK SE OK OK OK OK OK OK OK RO OK OK OK OK RO OK RO OK OK OK OK OK OK OK PT OK OK OK OK PT OK PT OK OK OK OK OK OK NA PL OK OK OK OK PL OK PL NA OK OK OK OK OK OK NL OK OK OK OK NL OK NL OK OK OK OK OK OK NA MT OK OK OK OK MT OK MT NA OK OK OK OK OK OK LV OK OK OK OK LV OK LV NA OK OK OK OK OK OK LU OK OK OK OK LU OK LU OK OK OK OK OK OK OK LT OK OK OK OK LT OK LT NA OK OK OK OK OK OK IT OK OK OK OK IT OK IT OK OK OK OK OK OK OK IE OK OK OK OK IE OK IE OK OK OK OK OK OK OK HU OK OK OK OK HU OK HU NA OK OK OK OK OK OK FR OK OK OK OK FR OK FR OK OK OK OK OK OK NA FI OK OK OK OK FI OK FI OK OK OK OK OK OK OK ES OK OK OK OK ES OK ES OK OK OK OK OK OK NA EL OK OK OK OK EL OK EL OK OK OK OK OK OK NA EE OK OK OK OK EE OK EE NA OK OK OK OK OK OK DK OK OK OK OK DK OK DK OK OK OK OK OK OK OK DE OK OK OK OK DE OK DE OK OK OK OK OK OK OK CZ OK OK OK OK CZ OK CZ NA OK OK OK OK OK OK CY OK OK OK OK CY OK CY NA OK OK OK OK OK OK BG OK OK OK OK BG OK BG OK OK OK OK OK OK OK BE OK OK OK OK BE OK BE OK OK OK OK OK OK OK AT OK OK OK OK AT OK AT OK OK OK OK OK OK OK

Directives 91/382 — asbestos (amending (amending 91/382 — asbestos be83/477) (to repealed 4.1.2011) Directives in force in Directives 00/43 — race 3. Equal Treatment 3. Equal Treatment Article 13 EC 92/104 — mining 00/78 — equal treatment 00/78 — equal treatment employment Directives Directives in force in Directives 98/49 — supplementary rights pensions 4. Free movement of workers of movement 4. Free Directives Directives in force in Directives be (to 83/477 — asbestos repealed 4.1.2011) 5. Health and safety at work at safety and 5. Health 89/391 — framework directive directive 89/391 — framework workplace at safety health and 89/654 — workplaces 89/656 — personal protective 89/656 — personal protective equipment 90/269 — manual handling handling 90/269 — manual loads of 90/270 — display screen 90/270 — display equipment 91/322 — chemical, physical physical 91/322 — chemical, agents biological and

223 Industrial Relations in Europe 2010 UK OK OK OK OK CP OK OK OK OK OK OK OK OK OK OK OK OK SK OK OK OK OK OK OK OK OK NA OK OK OK OK OK OK OK OK SI OK OK OK OK OK OK OK OK OK OK OK OK OK OK OK OK OK SE OK OK OK OK OK OK OK OK OK OK OK OK OK OK OK OK OK RO OK OK OK OK OK OK OK OK OK OK OK OK OK OK CP CP OK PT OK OK OK OK OK OK OK OK OK OK OK OK OK OK OK OK OK PL OK OK OK OK CP OK OK OK OK OK OK OK OK OK OK OK OK NL OK OK OK OK OK OK OK OK OK OK OK OK OK OK OK OK OK MT OK OK OK OK OK OK OK OK OK OK OK OK OK OK OK OK OK LV OK OK OK OK OK OK OK OK OK OK OK OK OK OK OK OK OK LU OK OK OK OK OK OK OK OK NA OK OK OK OK OK OK OK OK LT OK OK OK OK OK OK OK OK OK OK OK OK OK OK OK OK OK IT OK OK OK OK OK OK OK OK OK OK OK OK OK OK OK OK OK IE OK OK OK OK OK OK OK OK OK OK OK OK OK OK OK OK OK HU OK OK OK OK OK OK OK OK OK OK OK OK OK OK OK OK OK FR OK OK OK OK OK OK OK OK OK OK OK OK OK OK OK OK OK FI OK OK OK OK OK OK OK OK OK OK OK OK OK OK OK OK OK ES OK OK OK OK OK OK OK OK OK OK OK OK OK OK OK OK OK EL OK OK OK OK EX OK OK OK OK OK OK OK OK OK OK OK OK EE OK OK OK OK OK OK OK OK OK OK OK OK OK OK OK OK OK DK OK OK OK OK CP OK OK OK OK OK OK OK OK OK OK OK OK DE OK OK OK OK OK OK OK OK OK OK OK OK OK OK OK OK OK CZ OK OK OK OK OK OK OK OK NA OK OK OK OK OK OK OK OK CY OK OK OK OK OK OK OK OK OK OK OK OK OK OK OK OK OK BG OK OK OK OK OK OK OK OK OK OK OK OK OK OK OK OK OK BE OK OK OK OK OK OK OK OK OK OK OK OK OK OK OK OK OK AT CP OK OK OK CP OK OK OK NA OK OK OK OK OK OK OK OK

Directives exposure (deadline: 1.9.2007) exposure 92/29 — medical assistance on on 92/29 — medical assistance vessels of board 07/30 — practical reports implementation 92/57 — construction 06/25 — physical agents agents 06/25 — physical (deadline: 27.4.2010) 92/58 — health and safety safety 92/58 — health and signs 08/46 — amending 04/40 08/46 — amending fields electromagnetic 92/91 — drilling 93/103 — work on board board on 93/103 — work vessels fishing 98/24 — chemical agents 5 agents 98/24 — chemical 99/92 — explosive 99/92 — explosive atmospheres 00/39 — chemical agents 00/39 — chemical 00/54 — biological agents 00/54 — biological 02/44 — vibration 02/44 — vibration 03/10 — noise 03/10 — noise 03/18 — asbestos (amending (amending 03/18 — asbestos be83/477) (to repealed 4.1.2011) 04/37 — carcinogens 04/37 — carcinogens 06/15 — occupational 06/15 — occupational

224 Chapter 7: Review of European legislation 2008–10 UK SK SI SE RO PT PL NL MT LV LU LT IT IE HU FR FI ES EL EE DK DE CZ CY BG BE AT

Directives Directives whoseDirectives has deadline implementation yet expired not fields 04/40 — electromagnetic (deadline: 30.4.2012) equipment 09/104 — work 89/655) (no time (codification transposition) for limit time (no 09/148 — asbestos transposition) for limit exposure list 09/161 — third (deadline values limit 18.12.2011) CP = Partial communication; EX = Notification ongoing, examination by the service responsible; NA = Not applicable to the Member State; NC = No communication of national legislation; legislation; national of communication No NC = State; Member the to applicable Not NA = serviceresponsible; the by examination ongoing, EX = Notification communication; CP = Partial complete. = Communication OK

225

European Commission

Industrial Relations in Europe 2010

Luxembourg: Publications Office of the European Union

2011 — 225 pp. — 21 × 29.7 cm

ISBN 978-92-79-17861-0 doi:10.2767/1416

The economic crisis presented considerable challenges to industrial relations across the EU. This report reviews trends and developments in the relationships between workers, employers, their respective representatives and public authorities during 2008-10. It begins with an overview of the main characteristics of industrial relations institutions before analysing the strategies and perspectives of social partners and social dialogue developments in the face of the crisis. The report then examines wage bargaining, wage flexibility and minimum wages as well as the implications for industrial relations of the transition to a low-carbon economy. Finally, the report gives an overview of EU-level social dialogue and legislative developments. This publication is available in printed format in English only. The Executive Summary is available online in 23 language versions.

How to obtain EU publications Free publications: • via EU Bookshop (http://bookshop.europa.eu); • at the European Union’s representations or delegations. You can obtain their contact details on the Internet (http://ec.europa.eu) or by sending a fax to +352 2929-42758. Priced publications: • via EU Bookshop (http://bookshop.europa.eu). Priced subscriptions (e.g. annual series of the Official Journal of the European Union and reports of cases before the Court of Justice of the European Union): • via one of the sales agents of the Publications Office of the European Union (http://publications.europa.eu/others/agents/index_en.htm). KE-AS-10-001-EN-C

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