IZA Research Report No. 38 Cross-Border Collective Bargaining and Transnational Social Dialogue Based on a study conducted for the European Parliament under contract IP/A/EMPL/FWC/2008-002/C1/SC7 Copyright remains with the European Parliament Werner Eichhorst (IZA) Michael J. Kendzia (IZA) Barbara Vandeweghe (IDEA Consult) RESEARCH REPORT SERIES July 2011 This IZA Research Report is based on a study conducted for the European Parliament under contract IP/A/EMPL/FWC/2008-002/C1/SC7. Copyright remains with the European Parliament. Link to the original study: http://www.europarl.europa.eu/document/ activities/cont/201107/20110711ATT23834/20110711ATT23834EN.pdf The opinions expressed in this document are the sole responsibility of the author and do not necessarily represent the official position of the European Parliament. Reproduction and translation for non-commercial purposes are authorised, provided the source is acknowledged and the publisher is given prior notice and sent a copy. DIRECTORATE GENERAL FOR INTERNAL POLICIES POLICY DEPARTMENT A: ECONOMIC AND SCIENTIFIC POLICY EMPLOYMENT AND SOCIAL AFFAIRS Cross-border collective bargaining and transnational social dialogue STUDY Abstract The present study analyses cross-border collective bargaining and transnational social dialogue across the EU and aims to survey its impact at the European level. Therefore, the study discusses the current prevailing EU legislative framework as well as the latest developments within this area. By mapping the social partnership across the EU, it is shown that the system of industrial relations differs from Member State to Member State, in particular between the EU-15 and the EU-12 Member States. The study also finds that in practice cross-border collective bargaining plays only a minor role, while transnational social dialogue including international and European framework agreements has been developing significantly during recent years, although no legal framework for such transnational texts exists thus so far. Similarly, it is noted that European Works Councils constitute effective motors within the development process of transnational social dialogue. The study concludes with a discussion on further advancement of EU legislation and the formulation of practical policy recommendations for the European Parliament. IP/A/EMPL/ST/2010-06 JUNE 2011 PE 464.431 EN This document was requested by the European Parliament's Committee on Employment and Social Affairs. AUTHORS Werner Eichhorst (IZA) Michael J. Kendzia (IZA) Barbara Vandeweghe (IDEA Consult) RESPONSIBLE ADMINISTRATOR Ms. Laurence SMAJDA European Parliament DG Internal Policies of the Union Policy Department A - Economic and Scientific Policy B-1047 Brussels [email protected] LINGUISTIC VERSIONS Original: EN Executive summary: DE/FR ABOUT THE EDITOR To contact the Policy Department or to subscribe to its newsletter please write to: Poldep- [email protected] Manuscript completed in June 2011. Brussels, © European Parliament, 2011. This document is available on the Internet at: http://www.europarl.europa.eu/activities/committees/studies.do?language=EN DISCLAIMER The opinions expressed in this document are the sole responsibility of the author and do not necessarily represent the official position of the European Parliament. Reproduction and translation for non-commercial purposes are authorised, provided the source is acknowledged and the publisher is given prior notice and sent a copy. Cross-border collective bargaining and transnational social dialogue _________________________________________________________________ CONTENTS LIST OF ABBREVIATIONS ...........................................................................6 LIST OF TABLES..........................................................................................8 LIST OF FIGURES .......................................................................................9 EXECUTIVE SUMMARY ..............................................................................10 1. INTRODUCTION AND OVERVIEW..........................................................16 1.1 Conceptualisation and definition..................................................... 16 1.2 Main driving forces and historic development ................................... 21 2. INDUSTRIAL RELATIONS IN THE EU.....................................................24 2.1 The institutional structure of European social dialogue ...................... 24 2.2 Mapping of social partnership across EU Member States .................... 27 2.3 The European coordination of collective bargaining ........................... 32 2.4 Transnational company agreements ............................................... 37 2.5 Promoting common objectives ....................................................... 42 2.6 The role of EU funding .................................................................. 43 3. RECORD OF LEGISLATIVE ACHIEVEMENTS ...........................................46 3.1 The roles played by European institutions and Member States ............ 46 3.2 Directives on information and consultation of employees ................... 48 3.3 Directives in the framework of the free provision of services .............. 51 3.4 Directives on working conditions .................................................... 53 3.5 Coordination of Social Security ...................................................... 54 3.6 The effects of the Laval, Viking and Rüffert cases ............................. 55 3.7 Concluding remarks ..................................................................... 57 4. WHAT HAS BEEN ACHIEVED SO FAR? ...................................................59 4.1 Review of cross-border collective bargaining .................................... 59 4.2 Review of transnational company agreements.................................. 60 4.3 The role of European companies (SEs) ............................................ 64 4.4 Addressing the economic crisis ...................................................... 65 4.5 Barriers and challenges................................................................. 66 Policy Department A: Economic and Scientific Policy ________________________________________________________________ 5. FURTHER ADVANCEMENT OF EU LEGISLATION.....................................68 5.1 The role of European Works Councils .............................................. 68 5.2 Discussing the need for a EU legal framework .................................. 70 5.3 The private international law solution.............................................. 72 6. POLICY RECOMMENDATIONS ............................................................76 REFERENCES.............................................................................................80 5 Cross-border collective bargaining and transnational social dialogue _________________________________________________________________ LIST OF ABBREVIATIONS CEC European Confederation of Executives and Managerial Staff CEEMET Council of European Employers of the Metal, Engineering and Technology-based Industries CEEP European Centre of Employers and Enterprises providing Public services CSR Corporate Social Responsibility ECJ European Court of Justice EFA European framework agreement EFFAT European Federation of Food, Agriculture and Tourism Trade Unions EIFs European industry federations EMCEF European Mine, Chemical and Energy Workers’ Federation EMF European Metalworkers’ Federation EMU European Monetary Union EPSU European Federation of Public Service Unions Epsucob@ EPSU’s collective bargaining network ETUC European Trade Union Confederation ETUF: TCL European Trade Union Federation: Textiles, Clothing and Leather Eucob@n European collective bargaining network EU-12 The 12 Member States which joined the European Union after 1 May 2004 EU-15 The 15 Member States which were members of the EU before the enlargement on 1 May 2004 6 Policy Department A: Economic and Scientific Policy ________________________________________________________________ EWC European Works Council GUF Global Union Federation IFA International framework agreement ILO International Labour Organization IRTUC Interregional Trade Union Councils MEB Multi-employer bargaining MNC Multinational company OECD Organisation for Economic Co-operation and Development PWD Posting of Workers Directive SE Societas Europaea (European Company) SEB Single-employer bargaining TAW Temporary agency work TCA Transnational company agreements TFEU Treaty on the Functioning of the European Union UEAPME European Association of Craft, Small and Medium-Sized Enterprises UNI Europa Union Network International Europe Financial Services Finance UNI Europa Union Network International Europe Graphical Sector Graphical 7 Cross-border collective bargaining and transnational social dialogue _________________________________________________________________ LIST OF TABLES TABLE 1: Classification of the terms used ................................................................. 18 TABLE 2: European social dialogue at a glance .......................................................... 19 TABLE 3: Different levels of European social dialogue ................................................. 25 TABLE 4: Union density and bargaining level in the European Union 2008 ..................... 31 TABLE 5: The coordination model of the metal sector ................................................. 33 TABLE 6: Coordination of collective bargaining by