Guidelines on Coordination of collective bargaining European Trade Union Institute 1 Guidelines on Coordination of Collective Bargaining Presentation European Trade Union Institute Sesimbra January 2003

Guidelines on Coordination of collective bargaining European Trade Union Institute 2 Presentation of the discussion  Fundamental objectives of coordination  Coordination guidelines, general concept  Proposed guideline  Determinants and use of the guideline  Situation in other experiences  Ways of implementation

Guidelines on Coordination of collective bargaining European Trade Union Institute 3 Fundamental objectives of coordination  1. To have a general indication on wage bargaining which comes from trade unions at the European level in order to respond to the existing guidelines coming from the Commission (Broad Economic Policy Guidelines) and the European Central Bank.  2. To avoid social and wage dumping and wage differentiation in the Euro-zone, as this could lead to a deterioration of the social climate and could delay the social convergence of the Member States.  3. To coordinate wage claims in the Single Currency area where pay is now easily comparable and also to encourage an upwards convergence of salary levels in Europe.

Guidelines on Coordination of collective bargaining European Trade Union Institute 4 Coordination guidelines, general concepts  The guideline can be applied a posteriori, i.e. after the conclusion of collective agreements in the various European countries.  It does not change national practices, but it provides a benchmark which can be taken into account during negotiations at national level or lower.

Guidelines on Coordination of collective bargaining European Trade Union Institute 5 Coordination guidelines, general concept  broader concept of coordination  trade-off between wage evolution and other more qualitative aspect of work  Qualitative elements of the agreement are difficult to evaluate in terms of cost. Quantifiable elements should be taken into account (working time reduction, training, early retirement, equal pay).

Guidelines on Coordination of collective bargaining European Trade Union Institute 6  If in a given country the rise in total wage costs does not correspond to the inflation/productivity sum, it should be able to counterbalance its position through achieving qualitative objectives.  Guidelines in qualitative aspects are necessary.  These could propose:  the reduction of working time (35-hour a week),  a certain number of training hours,  pensions convergence,  raising women's wages to reach the levels of men's wages through applying a ratio.  Or a convergence towards the levels achieved by the best performing countries in each area (benchmarking). Coordination guidelines, general concept

Guidelines on Coordination of collective bargaining European Trade Union Institute 7 Proposed guideline: the determinants  Inflation: Harmonised Index of Consumer Prices (HICPs, preferably to National Consumer Index)  Productivity: national average productivity (defined as GDP/head or preferably GDP/hour worked)  Other determinants: according to the national practice (convergence towards EU average, redistribution…)

Guidelines on Coordination of collective bargaining European Trade Union Institute 8 Determinants of the guideline - inflation  Inflation:  Inflation: HICPs should be preferred.  European single rate is impossible to be implemented: still too many differences between EU countries  National rates might be used because neither wages nor workers should be used to reduce the differentials in inflation rates. Furthermore, it is not clear that full convergence of inflation rates amongst member states will be achieved in the near future, despite the single currency.

Guidelines on Coordination of collective bargaining European Trade Union Institute 9 Determinants of the guideline - productivity  Productivity:  Productivity: national rates should be preferred  Nevertheless, any type of productivity rate is to be chosen from amongst national and sectoral rates according to the level of discussion within that country, may also be allowed, under the responsibility of national and sectoral unions. However, reference to national rates has to be done, particularly for sectors without a sectoral rate (e.g. the public sector)  Other determinants:  Other determinants: according to the national practice (convergence towards EU average, redistribution…)

Guidelines on Coordination of collective bargaining European Trade Union Institute 10 Use of the guideline: wages first Wage aspect: It is important that wages increase faster than inflation, in order to maintain purchasing power. The (nominal) increase in wages must pass the inflation rate in all cases. Similarly, an important part of productivity should compensate workers for their contribution towards its increase. This part should be as large as possible.

Guidelines on Coordination of collective bargaining European Trade Union Institute 11 Use of the guideline: then, qualitative aspects Qualitative aspects: Qualitative aspects: Preferably those which can be quantified and which give rise to a cost for the company should be taken into account. These include:  equal opportunities,  measures to achieve equal pay between women and men,  measures to improve the position of low paid workers, life-long learning,  reduction in working time,  progressive retirement...

Guidelines on Coordination of collective bargaining European Trade Union Institute 12 Use of the guideline: qualitative aspects, specific focus The part of productivity not allocated to wages should go towards improving qualitative aspects of collective agreements. Although national and sectoral organisations need to determine their own priorities, European guidelines could also be proposed for specific subjects (as some of the EIFs and the Doorn group are doing) in order to help evaluation and the comparison of the results achieved. We shall pay particular attention in the evaluation of the guideline to measuring progress in: Access to training and life long learning for all workers Eradicating low pay and promoting equal pay between men and women

Guidelines on Coordination of collective bargaining European Trade Union Institute 13 Situation in other experiences: EIFs

Guidelines on Coordination of collective bargaining European Trade Union Institute 14 Situation in other experiences: Doorn

Guidelines on Coordination of collective bargaining European Trade Union Institute 15 The challenge of the implementation of the coordination guideline  In order to be effective, a system of follow-up of the coordination guideline should be implemented. This would make it possible for the coordination guideline to become a "rule of thumb" when negotiation is conducted at national or sub-national levels.  A system of review should be established, with reports being submitted by ETUC affiliates on the evolution of the wages and/or total value of the agreements compared with the aggregate "inflation + productivity + other determinants".  We propose that for the wage elements such a review should be carried out be the CBC and the Executive Committee annually. For the qualitative elements, a similar review should take place every two years.

Guidelines on Coordination of collective bargaining European Trade Union Institute 16 Guidelines on Coordination of Collective Bargaining Presentation by Emmanuel Mermet European Trade Union Institute Madrid, 18 October 2001