RCN June 14 th 2013 The impact of austerity on collective bargaining and employee participation: The local government experience Stephen Bach King’s College, London

Presentation structure EC funded research project: - Czech Republic; Denmark, France, Italy, Netherlands, UK Findings: - Comparative data: drivers and outcomes - UK: national/local picture Themes - can social partnership survive austerity? - variations between countries and within - restriction, resilience and reconfiguration

Research Questions 1.What have been the main drivers and measures of austerity adopted in each country? 2.How have these changes been implemented and to what extent has social dialogue contributed to the change process at national, sectoral and workplace level? 3.How have institutions of social dialogue influenced industrial relations processes and outcomes in the public services?

Austerity Outcomes Employment reductions Wage cuts Pay freezes Pension reform Work intensification Austerity Measures Budgetary cuts Staffing policies (e.g. replacement ratios) Alterations in wage fixing Drivers of Austerity External/ Internal High/ Low pressure Social Dialogue Tripartism Collective bargaining Joint consultation Cross-border Social Dialogue Tripartism Collective bargaining Joint consultation Cross-border ReconfigurationResilienceRestriction

Drivers: General Government Consolidated Gross Debt

Drivers: General Government Deficit/ Surplus

Market Reaction Italy Market Reaction Italy Coalition for change Czech Republic Netherlands UK Coalition for change Czech Republic Netherlands UK Lagged Response France Lagged Response France Steady State Denmark Steady State Denmark Source of pressure Degree of pressure Low High External Internal Drivers of Austerity : retrenchment pressures

Outcomes Pay Freeze France ( index point value) Netherlands ( central govt; education) UK ( ) Pay Freeze France ( index point value) Netherlands ( central govt; education) UK ( ) Pay Cuts Czech Republic 10% Italy 5-10% (linked to earnings) Pay Cuts Czech Republic 10% Italy 5-10% (linked to earnings) Pension Reform Czech Republic Denmark France Italy Netherlands UK Pension Reform Czech Republic Denmark France Italy Netherlands UK Employment reductions Czech Republic (5.5% ) Denmark (2%: ) France (5% state administration ) Italy (10% ) Netherlands (cuts planned up to 2014) UK (12% ) Employment reductions Czech Republic (5.5% ) Denmark (2%: ) France (5% state administration ) Italy (10% ) Netherlands (cuts planned up to 2014) UK (12% )

Social Dialogue: 3 scenarios Restriction – interruption & shift to unilateralism Resilience – institutional maintenance of dialogue - process often more closed/conflictual Reconfiguration – reform of institutional practice: redirected to different ends Variation: between and within national cases

Resilience and Reconfiguration Denmark France Netherlands Influences on findings: - employer and trade union strategy - different institutional/legal traditions e.g. works councils

Restriction National: austerity programmes/pay freezes: - little input from employers and unions - ‘hollowing out’ of IR: time scales - legislative/budgetary instruments dominate Czech Republic Italy UK More engagement at sectoral/enterprise level

UK Restriction Austerity measures /16 expenditure reductions - 27% local government Coalition policy: marketisation & fragmentation - 2 year wage freeze ( ); % award - civil service: facility time; review of T&Cs - NHS: resilience e.g. social partnership forum Outcomes – employment, disputes

Public Sector Employment by main Industry Education

Consequences: Disputes Source: ONS

Local govt: differing role for social dialogue Coastal CityMid-Town BackgroundUnitary Council; Conservative: , Labour: since 3 May 2012 District Council : NOC Labour 2010 – present Population236,900 (2011 Census)151,900 (2011 Census) Workforce Size (Headcount) 6,550 (4,940 FTE) as of 2012 Q21,206 (1,140 FTE) as of 2012 Q2 Social DialogueLimitedExtensive Union exclusionHighLow Employment Reduction ManyFew Pay ReductionsYes, unilaterally imposedYes, removed increment; introduced partnership payment Changes to terms & conditions Yes, unilaterally imposedYes, by local collective agreement Industrial actionYesNo

Social dialogue: restriction after 2010 Conservative led council proposed: - pay cuts on a sliding scale (2-5.5%) - aim: 400 fewer job losses Issues: - trust in employer – job losses/lack of dialogue - unilateral change in terms and conditions Local elections in 2012: - wage cuts partly reversed after Autumn dispute ended – despite job loses (temp staff) - further cuts anticipated Coastal

Externalisation: - reinforced low trust ER climate - procedural errors enabled union legal action (lack of HR expertise) Unilateralism: wage cuts Trade union strategy: - recognised dispute of national significance - selective ‘smart’ strikes - legal action (built on employer errors) - political campaign in local election Coastal Themes

Mid-Town Resilience and reconfiguration Social dialogue: Intensive - conversion: from joint consultation to partnership forum Employer approach: - in-house services retained and refocused - support for living wage provision in supply chain Partnership payment agreed : - freeze contractual increments - bonus: 2011/12 linked to outturn - employee eligibility: attendance and appraisal

Mid-Town Implications Scope for social dialogue: - limited institutional requirements for dialogue - mixture of direct and indirect involvement Resilience and reconfiguration: - influence of lack of national pay award - built workforce acceptance for change (choice?) - reconfiguration around progression/increments: individualised performance - attendance, appraisal Implications for national framework

Conclusions Findings: - political domain/scope for unilateralism/centralism - adverse effects for public service IR: - driver of change but also limits modernisation - an employer of choice? – shortages, engagement Issues: - Are challenges to social partnership & shift to unilateralism temporary or more long-term? - How can social partnership be reformed and strengthened to meet new challenges? - HR role (visibility/influence)

References/Further information Project website: Social-Dialogue-and-Austerity-EU.aspxhttp:// Social-Dialogue-and-Austerity-EU.aspx IR in Europe Report 2012: (focus on public services) &policyArea=0&subCategory=0&country=0&year=0& advSearchKey=IRIE&mode=advancedSubmit&langId =enhttp://ec.europa.eu/social/keyDocuments.jsp?type=0 &policyArea=0&subCategory=0&country=0&year=0& advSearchKey=IRIE&mode=advancedSubmit&langId =en