Collective Bargaining in European Countries

Collective Bargaining in Europe ‘Collective Bargaining’ is a fundamental right in EU - & social dialogue & collective bargaining between employers & workers organizations for regulating working conditions in EU play a major role. [1961 European Social Charter& reinforced in later declarations such as EC Charter of the Fundamental Social Rights of Workers in 1989 and in the Charter of Fundamental Rights of the European Union of December 2000]. While legal & institutional framework for CB is different in each country, one can broadly categorize CB under 4 models – the Latin, Nordic, Anglo-Saxon and ‘Rhineland’ models.

Organizing & CB Coverage (2004, in percent) Sweden - 81 - 93 Finland - 76 - 93 Denmark - 74 - 83 Belgium - 56 - 93 Norway - 54 - 73 Austria - 37 - 98 Italy - 35 - 83 Spain - 15 - 83 Source: SAK, quoting OECD Employment Outlook, July 2004, 30/11/2006

Organizing & CB Coverage in OECD Countries (2004, in percent) UK - 31 - 33 Germany - 25 - 68 Portugal - 24 - 83 Netherlands 23 - 83 Japan - 22 - 18 Switzerland 18 - 43 US - 13 - 14 France - 10 - 93 Source: SAK, quoting OECD Employment Outlook, July 2004, 30/11/2006

Right to Information Works Council Directive (94/45/EC): gives workers across the EU the right to information and consultation on company decisions at European level through their EWCs - applies to companies with 1,000 or more employees, including at least 150 in two or more Member States [BUT only about 1/3rd of the companies have set up EWCs although it covers about 60% of the workers in EU]. Majority of EWCs meet once a year, with an extra meeting as required EWCs comprise of workers’ representatives only, or joint worker/management representation

Sweden - the country with lowest days lost due to industrial conflict. FoA & Right to collective bargaining - 8 out 10 workers in unions, 6 out 10 employers in the employers’ organizations Right to blockade, sympathy strikes (can cut electricity to the workplace, can refuse to supply services, material to an employer who refuses to negotiate in good faith – to prevent social dumping & unfair competition – principle: basic rules must be same for all occupations & work places) Union strike fund (sufficient to fund 3-4 months strike for every worker in Sweden) - last strike was in 1980

Finland – IR system 3 national unions (SAK, STTK, AKAVA) & 4 national employer organizations Organizing & CB Coverage high: 76 – 93 Jointly administer pension funds Labour legislation jointly drafted Ex. wage tax reduction & wealth tax abolishment agreed to at the same time as new wage agreement Collective Agreements Act 1946 National Incomes Policy Agreement & industry wide agreements – legally binding No legal industrial action during the validity of the agreement

Finland – IR system CBA signed with industrial employers organization applies also to non-member employers in the same industry Where CBA exists, its terms & conditions apply also to temporary workers, agency & contract workers working in the industry Failure to implement the CBA entails penalties both on the violating party and its organization – both unions and employers organizations have the responsibility to ensure CBA is respected Till 2005, mainly centralised negotiations – now union-federation level negotiations also – SAK plays the coordinating role 2008 Employers position has changed, don’t want centralized agreements

Germany Social market economy – have as much ‘market’ as possible & have as much ‘govt intervention’ as necessary – different from Anglo-Saxon model (US, UK) Any one employed for over €400, will have an employment contract & has to be covered for social security (otherwise it is an illegal employment) Social security system set up under law but financed 50-50 by W & E (not by tax payer) – State guarantees the system (makes up the short fall) – contributions work out to about 40% of the wage bill

Germany FoA (Art 9, German Constitution) & Right to collective bargaining exists – but no trade union law in Germany Employers & employees regulate their business between themselves without interference from the govt either in union formation or in CB process – the system functions because – strong unions-strong employers – both parties ensure implementation of what is agreed Germans tend to go for consensus rather than conflict & therefore CB plays a major role - agreement applicable to all, even non-members

Germany Unified trade union movement – one DGB on top and (now) 6 industry-wide unions with about 8 million members - membership fee: 1% of the gross income p.m. of the employee, out of which 12.5% goes to DGB CB – industry-wide – between union & industry association – can be nationwide or area wise – 2 types of agreements: wage related & agreement on social aspects of work (working conditions, time, etc) - strike only for one reason – failure of wage negotiations No minimum wage law in Germany; CB on wages defines minimum wages in that industry FoA & CB are not only rights but also obligation of German labour & employer organizations.

Italy: Bargaining Levels Tripartite Negotiations National sector negotiation Company or Territorial Integrative Negotiation The system on Industrial Relations in Italy was reformed in 1993 with the Constitutional Chart of Industrial Relations. This protocol established three levels of collective bargaining:

Tripartite Negotiation Parties State or public institution Trade Union Confederations Employers representative institution Contents: Income policies and employment Work policies Support to production system Labour market Social security →According to the economic needs and the EU economic standards (great attention to inflation)

Sector - National Collective Bargaining Parties Trade Unions Branches or categories representative (Branch or category) Employers (trade representative institutions) Contents National/sector collective contracts Working hours Wages increase Leaves Working conditions The national/sector collective contracts last fours years, after which they should be renegotiated

Integrative Company or Territorial Bargaining Parties RSU (Unitary Unions Representatives) Employers (representatives of a certain company, or representative of a certain trade in a certain territory) Contents Integrative Company or Territorial Contracts Variable wage increase (linked with the productivity) Organization of work an internal mobility Management of working hours flexibility Professional grading Continuous training Health and safety

Integrative company or territorial bargaining: RSU (Unitary Unions Representatives) Characteristics: It represent all workers It applies its powers in relation to negotiation, consultation and participation It is elected by all workers (members and non-member of trade unions) on competitive lists of all trade unions existing in the company Functions: General representation of workers within the company Check the right application of collective contracts Bargaining activity Rights: To stipulate the collective company contracts To be consulted and informed To have 10 days of paid leaves to do trade union activity (Workers Rights Statute, Law 300/1970)

Current problems in the Italian Industrial Relations The method of the trilateral negotiation is not very much appreciated by many political parties There are too many National Contracts and they are not able to follow the changes within the organization and the market Problems related to the renegotiation of expired national collective contracts Company bargaining is carried on only in medium and large companies Open problem: in the case of division among trade unions, how effective is a contract signed by just some trade unions?

Tendency towards decentralization of CB in Europe Decentralization of CB happening – employers reluctant to sign national/industry wide (multi-employer) agreements – however decentralization is taking different forms, and leads to different outcomes – Ex: Germany: organized decentralization – to adapt pay and working time to the specific conditions of the company in a collective negotiated way UK – disorganized decentralization - to establish ‘union-free’ companies – leading ‘decline of collective bargaining as a mechanism of employment regulation’

regulation of working time is increasingly being dealt with at the plant & company level.