Industrial Relations in Europe Report 2010

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1 Industrial Relations in Europe Report 2010 a summary from the Conference by Allan Jones Audiovisual SDC, 20 June

2 What is the Industrial Relations in Europe Report? The Industrial Relations in Europe report provides an overview of major trends and developments in the relationship between employers and trade unions across Europe. It combines factual information with analysis of current issues in industrial relations at company, sectoral, national and European level. The 2010 edition of the report provides an analysis of industrial relations throughout the recent crisis, illustrating how employers and trade unions coped with the turmoil, affected its course and influenced outcomes in the period between 2008 and The report also includes information on developments in European social dialogue and labour legislation. 2

3 How did social dialogue in the EU fare in the face of the crisis? On the whole, industrial relations in Europe have shown to be robust under strain and have been vital in mitigating the effects of the recession, although not to the same extent in all countries. As the economic crisis spread and affected most Member States in 2008 and early 2009, a consensus developed between social partners in many countries on the need for rapid action to preserve employment and to stimulate the economy. This concerted action by employers, trade unions and governments allowed Europe overall to weather the crisis better than feared and to minimise job losses. The social partners have played a significant role in limiting negative social consequences. On average, employment dropped less dramatically than economic activity. 3

4 Why has social dialogue been more successful in some countries rather than others? Two factors shaped the extent to which agreement was possible between social partners in the face of the crisis. 1) the nature and depth of the recession and the size and scope of the resulting challenges. 2) the traditional strength of the national industrial relations systems, which vary widely between Member States. o o While there is no straightforward pattern of association, in countries where the crisis was most severe, disagreement tended to dominate. In countries with traditionally strong industrial relations institutions, a considerable degree of policy consensus between the social partners was able to emerge. In general, the success of the solutions framed by social dialogue underlines the long-term benefits of well structured industrial relations systems. 4

5 In which countries is social dialogue strongest? Given the large diversity of industrial relations systems in the EU, there is no universally agreed assessment of the strength or quality of social dialogue. Nonetheless, the percentage of workers in a given country that are subject to collectively negotiated agreements setting wages and working conditions is a useful indicator for cross-country comparisons. While in Austria, Belgium, Slovenia, Sweden, France and Finland, 90 % or more of workers are covered by a collective agreement, in the Baltic states this applies only to a quarter of all employees or less. With the exception of Slovenia and Romania, all of the new Member States have collective bargaining coverage rates of around 50% or less, showing the relative weakness of social dialogue in those countries. Across the EU-27, two thirds of workers are covered by a collective agreement. 5

6 Bargaining coverage rates, and

7 Bargaining coverage, union and employer density, 7

8 What are the main outcomes of European social dialogue? A number of sectoral social dialogue committees have agreed on joint statements addressing the crisis, including those for the chemical industry, construction, road transport, commerce, live performance, regional and local government, woodworking and furniture sectors. The Cross-industry Social Dialogue committee did not manage to agree on a joint declaration because of fundamental differences of opinion about the causes of the economic crisis and the measures needed to address it. The vitality of European social dialogue was underscored by the launch of four new sectoral social dialogue committees during 2010 at the joint request of the respective employers' organisations and trade unions. The new committees cover the European metal, paper and education sectors as well as central public administrations. 8

9 Collective bargaining 122 million out of 184 million employees are covered by collective bargaining (66 percent) The coverage rate has not changed much since 2000 (some countries down, some up) But variation in levels are large Across countries (EU15: 76%; EU12: 43%) Across sectors (higher in public sector, manufacturing, transport, lower in retail, business services Across firms (strong size effect) Decentralisation is the main trend Sector bargaining dominant in 11 MS; company bargaining in 9 MS 9

10 Governments Role of state and government in collective bargaining has many facets: Labour and social protection law, both collective and individual rights, partly based on EU law; but mix between law and collective bargaining varies Most MS have mandatory minimum wage, but procedures, levels and impact vary great deal; Few MS still use retail price indexation Some MS (minority) o Prescribe procedures for conflict settlement o Use the public sector as pace-setter o Impose ceilings on bargaining outcomes o Negotiate Social Pacts (usually involving taxes and social protection measures, ALMP, training or union rights) General trend of decreasing government intervention, but this may have changed during the recession. Direct government intervention tends to be a substitute for poor relationships and lack of coordination between unions and employers. 10

11 Conclusion On most variables we see after 2000 a continuation of trends that began earlier; decentralization of collective bargaining; falling levels of conflict; more employee participation in the firm (national and transnational) Continuities, moreover, exist in high levels of employer organization (EU15), bargaining coverage, and a government role in industrial relations (although slightly diminishing), including the extension of agreements, the setting of mandatory minimum wages, and the negotiation of social pacts However, there is also continued diversity across MS. Not much EU impact on hard core IR institutions: union and employer organization, collective bargaining over wages, industrial conflict. However, where there is scope for EU law (e.g. employee consultation) we observe some convergence. Question for near future is whether the current recession will push toward more convergence, either directly or via EU, especially in the EURO zone. 11

12 and finally You can download your own copy of the report from the EC Europa website, Industrial Relations page : The full 230 page report is in EN only The 8 page summary is in all EU languages Thank you 12