Decentralisation of collective barganing and TU revitalisation in Germany Thomas Haipeter & Steffen Lehndorff Institut Arbeit und Qualifikation Universität Duisburg-Essen 1 IAQ/IAT 2014

Net TU density Germany * IAQ/IAT

Collective bargaining coverage: Sector level agreements and total coverage incl. firm level, W and E Germany (in % of employees) IAQ/IAT

C.b. coverage by income quintiles (in %) IAQ/IAT

Real wages and actual wages (per capita, 2000=100) IAQ/IAT

Wage increase as agreed in c.b., (2000=100) IAQ/IAT

Real net wages * by income deciles, IAQ/IAT

Upheaval of IR in Germany IAQ/IAT

Employment and pay before and after „Hartz reforms“ IAQ/IAT

Real wages per capita ( ) IAQ/IAT

Metalworking Industry and Hospitals Two Case Studies IAQ/IAT

Metalworking Industry  Context: Globalisation, Relocation, Outsourcing, financial restructuring…  Organised Decentralisation via Opening Clauses: 1993: Hardship clauses (Eastern Germany) 1995: Recapitalisation clauses (Western Germany) 2004: Agreement of Pforzheim  Coordination rules by union:  Obligation to report negotiations to headquarters and acceptance of agreements by headquarters  Negotiations controlled by the regional administration level  Organisation of membership participation obligatory (collective bargaining commissions, ballots, continuous information) IAQ/IAT

Metalworking Industry Concessions by Enterprises (in % of all derogations, M&E) IAQ/IAT

Metalworking Industry Plant level orientied collective bargaining:  Relocation/Outsourcing/Competition – Threads by Management  Problem of legitimacy for union/works councils  Membership Strategy:  Priviliged information  Priviliged participation in decision making  Membership campaign (sometimes)  Positive membership effects  Concessions by management (safeguarding of employment; investments) IAQ/IAT

Hospitals Context: Marketisation of hospitals by  Financing:  Retreat of federal government from investments in favour of regional governments – Decline of public investments  Profit and loss statements  From original/real costs to case-based lump sum financing (paid by the public health insurance funds)  Privatisation:  Material: Sale of hospitals to private enterprises  Organisational: Conversion of public hospitals in private legal forms  Tasks/Activities: Outsourcing of services (laundry, canteen, car pools…) IAQ/IAT

Hospitals Ownership Structure IAQ/IAT

Hospitals Collective Bargaining Strategies of Hospitals IAQ/IAT Private HospitalsNon-Profit Hospitals Public Hospitals  Opting out of collective bargaining (TVÖD)  Plant or company level agreements  Outsourcing of services  Decoupling of wage standards from TVÖD  Outsourcing of services  Decoupling of wage standards from TVÖD  Derogations from collective bargaining norms  Outsourcing of services

Hospitals Decentralisation of Collective Bargaining / Fragmentation of Labour Standards  Three strategies union:  Collective bargaining agreements for transitions plus derogations (restrictive)  Public campaigns against privatisation  ’Conditional‘ collective bargaining strategy  Conditional bargaining:  Condition: membership and organisational density  Survey among members: CBA? Topics and demands?  Membership meetings, election of cb committee  Survey among members  Acceptance of agreement by union headquarter  Union‘s role: Professional monitoring and support (driving force members) - No service without members IAQ/IAT

Conclusions  Different Forms of Decentralisation:  Organised decentralisation by opening clauses  Fragmentation by privatisation and opting out  Common challenges for unions:  Preservation of collective bargaining norms  Increase of power and organisational density on plant level  Solutions:  Control of derogations by formal rules and centralised coordination  Membership participation and orientiation in local collective bargaining  Opportunities for SME:  Pro-active approach of works councils and unions to strengthen competitiveness  Orientation on high road strategies (innovation and quality) IAQ/IAT