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Collective bargaining

Collective bargaining is the process of negotiation between unions and employers regarding the terms and conditions of employment of employees, and about the rights and responsibilities of trade unions. It is a process of rule making, leading to joint regulation.

The central role of collective bargaining between workers and employers and their organisations in industrial relations in the Member States is recognised by the EU in Article 28 of the Charter of Fundamental Rights of the European Union of December 2000 (‘Right of Collective Bargaining and Action’) and in Article 12 of the Community Charter of the Fundamental Social Rights of Workers of 1989.

‘The Right to Bargain Collectively’ was also declared a fundamental right in the 1961 European Social Charter of the Council of Europe (Article 6). The interpretation by the European Court of Human Rights in Strasbourg of the right to freedom of association in Article 11 of the European Convention for the Protection of Human Rights and Fundamental Freedoms has extended some protection also to collective bargaining (Wilson and the National Union of Journalists; Palmer, Wyeth and the National Union of Rail, Maritime and Transport Workers; Doolan and others v. United Kingdom, decided 2 July 2002).

Just as collective bargaining receives legal support in the Member States, this array of European legal guarantees provides the background for the EU’s recognition of the centrality of collective bargaining. The operation of collective bargaining in EU industrial relations is multi-faceted, as evident in the various functions attributed to collective agreements by EU Directives and the growing role of European collective agreements. At EU level, collective bargaining takes place at inter-confederal/inter-sectoral, multi-sectoral, industry/sectoral, enterprise and inter-regional level.

Collective bargaining is a means of implementing EU directives in the field of employment and industrial relations. Therefore, one specific process of collective bargaining takes place when negotiations develop ‘in the shadow of the law.’ This is exemplified by Council Directive 94/45/EC of 22 September 1994 on the establishment of a European Works Council, or a procedure in Community-scale undertakings and Community-scale groups of undertakings, for the purposes of informing employees and consulting with them – the European Works Councils (EWC) Directive. The directive is characterised by a strategy, which is apparently assuming greater prominence in the EU system: the delegation to the social partners, management and labour, of the competence to negotiate the relevant European labour standards . The EWC is to be negotiated by the central management of the multinational enterprise and the representatives of the workforce; they must negotiate ‘in a spirit of cooperation with a view to reaching an agreement on the detailed arrangements for implementing the information and consultation of employees’ (Article 6). However, the Directive shapes the negotiating process by explicitly providing that, if agreement is not reached, minimum (subsidiary) requirements laid down in an Annex to the Directive will apply (Article 7(1)). In practice, therefore, the structure of negotiations between the parties is influenced by the subsidiary requirements. Also in the case of the establishment of a European company or a European Cooperative Society , management has to negotiate at European level with a special negotiating body composed of representatives from various Member States.

The increasing number of transnational enterprise undergoing restructuring represents another driver for collective bargaining at European level. There are already cases in which European industry federations and/or European Works Councils have signed framework agreements concerning the social regulation of restructuring processes. Other framework agreements that were negotiated at European level deal with labour policies and labour standards.

As part of its Social Agenda for the period 2005-2010, the European Commission initiated a discussion on setting up an optional legal framework for transnational collective bargaining. With the growth of transnational enterprises, the continuing pressure of takeovers and mergers and the extension and development of European Works Councils, transnational collective bargaining is expected to become more common. Therefore, the European Commission believes that a legal framework might become necessary to regulate such issues as defining the actors entitled to negotiate, the form and content of agreements, the legal effect of agreements, links to national and sectoral agreements as well as the right to collective action. Such an approach is anchored in the ‘partnership for change’ priority advocated by the Lisbon Strategy .

See also: coordination of collective bargaining; derogation; European social dialogue; horizontal subsidiarity; multi-sector agreement ; pacts for employment and competitiveness ; right of collective bargaining; social dialogue.

Please note: the European industrial relations dictionary is updated annually. If errors are brought to our attention, we will try to correct them.
Page last updated: 19 March, 2007