Changes in national collective bargaining systems since 1990
This comparative study provides an overview of the development of national collective bargaining systems since 1990 in the EU Member States (except Luxembourg and Portugal) plus Bulgaria, Norway and Romania. It examines: the legal framework for collective bargaining; national data and documentation on collective agreements; the basic features of the countries' bargaining systems - such as bargaining levels, coverage and extension procedures; changes since the early 1990s; and the views and demands of the social partners and political actors on the future development of collective bargaining.
Collective bargaining plays a key role in industrial relations in all current EU Member States, though national systems differ very widely in terms of the level, coverage, content and nature of bargaining. Despite all these differences, industrial relations research usually distinguishes between two groups of countries that have a broad range of similarities in their collective bargaining systems. The first group, which covers most of the 'old' EU Member States, is characterised by relatively strong multi-employer bargaining institutions, with sectoral or intersectoral bargaining and relatively high bargaining coverage. This rather strong and centralised system of collective bargaining differs fundamentally from bargaining systems in most countries outside Europe as, for example, in the USA or Japan (TN0401101F). There is, however, a second group within Europe, which includes the UK and most of the new EU Member States, that has comparatively weak bargaining institutions with the company as the predominant bargaining level and relatively low bargaining coverage.
Beyond this relatively clear-cut dichotomy between centralised and decentralised bargaining systems, in practice many European countries have a quite differentiated multi-level bargaining system in which different levels of bargaining (intersectoral, sectoral and company) are connected with each other. Moreover, other forms of negotiations such as tripartite consultations at national level or 'works agreements' at company level (ie concluded by works councils or similar bodies) are often closely connected with collective bargaining. Against this background, the aim of this comparative study is to analyse the development of national collective bargaining systems in the various European countries since 1990. It is based mainly on contributions from the European Industrial Relations Observatory (EIRO) national centres in 26 countries - the EU Member States (with the exception of Luxembourg and Portugal) plus Bulgaria, Norway and Romania.
The study focuses on four main points:
- an overview of the legal framework for collective bargaining as well as of the major sources of national data and documentation on collective agreements;
- an analysis of the basic features of national bargaining systems - such as bargaining levels, coverage, extension procedures and the influence of tripartite consultation;
- an examination of developments in national bargaining systems and the changing importance of the various bargaining levels since the early 1990s; and
- a summary of the views of social partners and political actors on the future of national collective bargaining systems.
Legal framework for collective bargaining
According to the Charter of fundamental rights of the European Union, which was adopted by the European Council in Nice in 2000 (EU0012288F) and has now become part (EU0308204F) of the new Treaty establishing a Constitution for Europe, 'workers and employers, or their respective organisations, have, in accordance with Union law and national laws and practices, the right to negotiate and conclude collective agreements at the appropriate levels' (Article II-88 of the Treaty).
In 17 out of the 26 countries involved in this study, the right to collective bargaining is explicitly or implicitly secured by the national Constitution - see table 1 below.
Almost all European countries - with the notable exception of the UK - have a more or less detailed legal framework for collective bargaining that provides some basic provisions on:
- the parties entitled to conclude collective agreements;
- the possible levels of collective bargaining;
- the hierarchy of different bargaining levels;
- the legal coverage of collective agreements; and
- the procedural rules for collective bargaining
As shown in table 1, in most countries examined the legal framework for collective bargaining is either part of a labour code or general industrial relations framework legislation (as in Austria, Bulgaria, Cyprus, France, Hungary, Ireland, Latvia, Lithuania, Malta, Poland, Slovenia and Spain) or is laid down in a particular law on collective agreements (as in Belgium, the Czech Republic, Estonia, Finland, Germany, Greece, the Netherlands, Romania and Slovakia).
In three Scandinavian countries - Denmark, Sweden and Norway - the legal framework for collective bargaining is mainly determined by bipartite 'basic agreements' concluded between employers’ associations and trade unions at national level. The same holds true for Italy, where the 'basic agreement' was concluded on a tripartite basis. Basic agreements of a kind can also be found in Cyprus and Finland, in the latter case complementing the legislation on collective agreements.
At the beginning of the 1990s, most countries in Central and Eastern Europe (CEE) introduced new labour laws, which included the legal foundations for the creation of a new collective bargaining system. After more than a decade of experience, many CEE countries have adjusted and expanded their legal framework for collective agreements in recent years.
Apart from the CEE countries, there have not been many changes in the legal framework for collective bargaining in the rest of Europe since 1990. One notable exception is Italy where a tripartite national agreement signed in 1993 (IT9709212F) laid the foundation for a fundamental reform of the bargaining system. In Greece, a new law on collective bargaining was adopted in 1990, but this legislation has remained unchanged since then. In France, a collective bargaining law reform was passed in 2004 that involved some procedural changes regarding the conclusion of collective agreements and the relationship between the various levels of bargaining, but arguably this will not lead to fundamental changes in the French bargaining system (FR0404105F).
Basic agreements have also been renewed in Finland and Norway with no major consequences for the bargaining systems. There have been some changes in the Swedish bargaining system as a result of a new practice of 'cooperation agreements' on bargaining and dispute procedures, which began in the industry sector in 1997 (SE9703110N) and has spread to many other sectors (SE0203105F).
|.||Right to collective bargaining secured by Constitution||Main legal framework||Relevant law/agreement available on the Web|
|Austria||No||1974 Labour Constitution Act (Arbeitsverfassungsgesetz, ArbVG)||In German|
|Belgium||No||1968 Law on Collective Agreements and Joint Committees (Loi du 5 Decembre 1968 sur les Conventions Collectives et les Commissions Paritaires)||In French and Dutch|
|Bulgaria||Yes||Labour Code (Part IV, Art. 50-60)||In English|
|Cyprus||Yes||1977 Industrial Relations Code (IRC) (non-binding 'basic agreement' between central employers’ associations, trade unions and the state)||In English|
|Czech Republic||Yes||Act 2/1991 on Collective Bargaining||In English|
|Denmark||No||Basic agreements between central trade unions and employers’ associations - eg that between the Danish Confederation of Trade Unions (Landsorganisationen i Danmark, LO) and the Danish Employers’ Confederation (Dansk Arbejdsgiverforening, DA), which dates from 1899 and is still in force with some alterations (DK9908140F)||In Danish (LO-DA basic agreement)|
|Estonia||Yes||1993 Collective Agreements Act (EE0309102F)||In English|
|Finland||Yes||1946 Collective Agreements Act (Työehtosopimuslaki), complemented by basic agreements between central trade unions and employers’ associations||In English|
|France||No||1972 Labour Code (Code du Travail, Livre 1, Titre 3)||In French|
|Germany||Yes||1949 Collective Agreement Act (Tarifvertragsgesetz, TVG) (DE9905200F)||In German|
|Greece||Yes||Law 1876/1990 on Free Collective Bargaining||.|
|Hungary||Yes||Act No. 22 of 1992 of the Labour Code (Munka Törvénykönyve) (Chapter 3) (HU0210101F)||In English|
|Ireland||No||Various Industrial Relations Acts||In English|
|Italy||Yes||Tripartite intersectoral agreement of 23 July 1993 (IT9709212F)||In Italian|
|Latvia||Yes||2002 Labour Law (Darba likums) (Part B) (LV0405103F)||in English|
|Lithuania||Yes||2002 Labour Code (Darbo Kodeksas) (Part II)||in English|
|Malta||No||2002 Employment and Industrial Relations Act (EIRA)||In English|
|Netherlands||No||1927 Collective Agreement Act (Wet op de Collectieve Arbeidsovereenkomst) (NL0211104F)||In Dutch|
|Norway||No||Basic agreements between central trade unions and employers’ associations - eg that between the Confederation of Norwegian Business and Industry (Næringslivets Hovedorganisasjon, NHO) and the Norwegian Confederation of Trade Unions (Landsorganisasjonen i Norge, LO) - and Labour Dispute Act||In English (2002-5 LO-NHO basic agreement)|
|Poland||Yes||1974 Labour Code (Kodeksu Pracy) and 1994 Act to amend the Labour Code and other Acts in respect of collective bargaining (PL0212108F and PL0210108F)||In English|
|Romania||Yes||Law No. 130/1996 on Collective Agreements and 2003 Labour Code (Cod al Muncii) (Title VIII) (RO0401107F)||In English (Labour Code)|
|Slovakia||Yes||Act 2/1991 on Collective Agreements (Zákon o kolektívnom vyjednávaní) and Act No. 311/2001 on the Labour Code (Zákonník práce) (Part 10) (SK0312103F)||In Slovakian (Collective Agreements Act): in English (Labour Code)|
|Slovenia||Yes||2003 Law on Labour Relations (though some provisions of the previous 1990 Law on Labour Relations and Yugoslav-era Law on Basic Rights from the Labour Relationship remain valid) (SI0212101F)||.|
|Spain||Yes||1980 Workers’ Statute (Estatuto de Trabajadores)||In Spanish|
|Sweden||Yes, but only right to take industrial action||Basic agreements between central trade unions and employers’ associations - eg the 1938 'Saltsjöbaden' agreement between the former Swedish Employers’ Confederation (Svenska Arbetsgivareföreningen, SAF) and the Swedish Trade Union Confederation (Landsorganisationen, LO), which is essentially still in force.||.|
|UK||No||No major statutory regulation (principle of voluntarism applies)||.|
Parties involved in collective bargaining
All the countries examined have quite similar regulations regarding the bargaining parties on the employers’ side. Usually both employers’ associations as well as individual employers are legally entitled to conclude collective agreements. On the employees’ side, the situation is much more differentiated - see table 2 below. In almost all countries, the right of collective bargaining is legally restricted to trade unions only. However, there are major differences in determining the status of the trade unions involved. While some countries have no clear provisions at all, others have quite strict rules and often limit the right to collective bargaining to those trade unions that have officially been recognised as representative (eg in France).
The exclusive role of trade unions as the only party entitled to conduct collective bargaining on the employees’ side is questioned in those countries that have either relatively low trade union density or a 'dual-channel' system of employee representation, with non-union bodies such as works councils at company level. In the three Baltic states - Estonia, Latvia and Lithuania - authorised representatives of the employees, which are in some cases works council-type bodies, are legally entitled to conclude collective agreements at company level, if the employees are not represented by a trade union. The same held true for Hungary between 1998 and 2002, before the government revoked works councils' rights to conclude collective agreements (HU0210101F). In Austria, Germany, the Netherlands and Spain, works councils can renegotiate certain collectively agreed standards at company level or can conclude complementary works agreements, if entitled to do so by collective agreements at sectoral level (eg through the use of an 'opening clause'). In France, since 1998 trade unions have had the possibility to appoint a 'mandated employee' in companies with no union representation, .who can enter into collective bargaining at company level. The final agreement, however, has to be confirmed by the union (FR9807123F).
|.||Employees’ representatives entitled to conclude collective agreements||Employees covered by collective agreements||Extension procedures or equivalent|
|Only trade unions||Trade unions, works councils and other employees’ representatives||Only employees who belong to the parties signatory to the agreement (eg trade union members)||All employees working for an employer that is covered by an agreement|
|Norway||X||.||.||X||No (limited exception)|
* Works councils can renegotiate certain collectively agreed standards at company level, if entitled by sectoral agreements. ** In companies with no union representation, unions can appoint 'mandated employees' to negotiate with the employer, but any agreement has to be confirmed by the union. *** There are agreements with 'normal' applicability covering trade union members only and agreements with erga omnes applicability covering all employees. **** National and sectoral agreements cover only trade union members, while company agreements cover all employees of the company. ***** Until recently extension was possible for multi-employer agreements, but following a ruling by the Constitutional Court, since April 2004 the Czech Republic's legislative provisions on extension of collective agreements have been rescinded. ***** Employee representatives are entitled to conclude collective agreements in companies where employees are not organised in trade unions, but works councils do not yet exist.
Parties covered by collective agreements and extension procedures
Collective agreements are first of all valid for those employers and employees that belong to a party that signed the agreement, ie the members of employers’ associations and trade unions. However, most European countries have some kind of extension mechanism, which can lead to a significant increase in bargaining coverage (TN0212102S).
Of the 26 countries covered by this study, 18 have some kind of 'erga omnes' principle, according to which an employer covered by a collective agreement is obliged to provide collectively agreed standards not only for trade union members but for all employees - see table 2 above. In Finland there are agreements with 'normal' applicability covering trade union members only and agreements with erga omnes applicability covering all employees. If a collective agreement covers about half of the employees in a sector, it is automatically an erga omnes applicable agreement (FI0107193F). In Lithuania, national and sectoral agreements cover trade union members only, while company agreements are valid for all employees. Even in those countries where agreements are binding only on trade union members, in practice the employers often provide the same or similar conditions for all employees.
In addition, in 18 countries considered there are further extension procedures or equivalent provisions that allow collective agreements to be extended to employers that are not a member of the employers’ association which signed the agreement. In Austria and Slovenia, the main bargaining party on the employer’s side is a 'chamber' that has obligatory membership among almost all employers. Collective agreements in these two countries, therefore, automatically cover almost all employers.
Among the countries that have no extension procedures are the Scandinavian countries - Denmark, Norway (though here there is a limited and rarely used exception, in that agreements may be extended if foreign employees are being paid less than is normal for Norwegian employees - NO0411103F) and Sweden - as well as Cyprus and the UK, which have a strong tradition of voluntarism in collective bargaining. With the exception of Lithuania and Romania, all other CEE countries have some extension procedures, many of which have been introduced quite recently and have not been used very extensively yet. In the Czech Republic, the legislative provisions for extension of collective agreements have been rescinded after a ruling by the Constitutional Court in April 2004 (CZ0410103F), and new draft legislation is currently going through the legislative process. In Slovakia, a December 2004 amendment to the Collective Agreements Act contains a provision whereby the consent of employers concerned by extension is a necessary precondition for the use of the extension procedure.
National data and documentation on collective agreements
Of the 26 countries involved in this study, 18 have a legal obligation to register collective agreements at the ministry of labour (or equivalent) or related institutions such as labour inspectorates or national economic and social councils - see table 3 below. In four CEE countries (Czech Republic, Lithuania, Slovakia and Slovenia) this obligation is limited to national and sectoral agreements, while there is no national register of company agreements. Eight countries, mainly in northern and western Europe (Denmark, Greece, Ireland, Italy, Latvia, Norway, Sweden and the UK), have no legal obligation to register collective agreements.
As documented in table 3, national data and reports on collective bargaining are available in particular in those countries that have a national register of collective agreements. Regular data and monitoring on collective bargaining is usually provided by the Ministry of Labour or related institutions. Additionally, in many countries collective agreement archives are held by employers’ associations and trade unions, which are often used only for internal purposes with only limited access to the public. Countries with no national collective agreement register typically have also no official data or regular documentation on collective bargaining. In those countries, the main sources of regular information on collective agreements are research institutes and specialist industrial relations publications (as, for example, in Ireland and the UK).
|.||Obligatory registration||National documentation and data on collective agreements|
|Austria||Yes||No regular national documentation on collective agreements. However, the Federal Arbitration Board as well as both trade unions and employers' associations provide some data on an irregular basis|
|Belgium||Yes||National Labour Council (Conseil National du Travail/Nationale Arbeidsraad, CNT/NAR) publishes all intersectoral agreements on its website. Federal Public Service for Employment, Labour and Social Dialogue provides regular data and publishes all agreements concluded after 1 January 1999 on its website.|
|Bulgaria||Yes||General Labour Inspectorate of the Ministry of Labour provides regular data on collective agreements. The largest trade union confederation, the Confederation of Independent Trade Unions in Bulgaria (CITUB), has a register of sectoral collective agreements and provides data and analyses.|
|Cyprus||Yes||Some data is provided by the Industrial Relations Service of the Ministry of Labour.|
|Czech Republic||Yes*||The Ministry of Labour and Social Affairs collects data on higher-level agreements. The Czech-Moravian Confederation of Trade Unions (Českomoravská konfederace odborových svazů, ČMKOS) provides data on company agreements concluded by its affiliates.|
|Denmark||No||Trade unions and employers’ associations provide some data and surveys on an irregular basis.|
|Estonia||Yes||Regular data on collective agreements are provided by the Ministry of Social Affairs.|
|Finland||Yes||All collective agreements with erga omnes applicability are documented in the official register by the Ministry of Labour.|
|France||Yes||The Ministry of Employment, Labour and Social Cohesion provides an annual report on collective bargaining.|
|Germany||Yes||The Ministry of Labour publishes an annual report on the number and development of collective agreements. The collective agreement archive of the German Federation of Trade Unions (Deutscher Gewerkschaftsbund, DGB) is organised by the Institute for Economic and Social Research (Wirtschafts- und Sozialwissenschaftliches Institut in der Hans Böckler Stiftung, WSI). The WSI collective agreement archive provides regular reports and studies, of which most are available on the web.|
|Greece||No||Regular data on collective agreements are provided by the Mediation and Arbitration Service (OMED).|
|Hungary||Yes||Regular data on collective agreements are provided by the Ministry of Labour. Some of the data collected are available on the Ministry's website (in Hungarian).|
|Ireland||No**||No regular data on collective agreements from official or social partner sources. Regular information on agreements is provided by the independent subscription-based Industrial Relations News (IRN).|
|Italy||No||The National Council for Economic Affairs and Labour (Consiglio nazionale dell’economia e del lavoro, Cnel) keeps an archive of national and decentralised (at both territorial and firm level) collective agreements. Cnel also publishes reports on collective bargaining developments, usually on a biannual basis. The National Statistical Office (Istituto nazionale di statistica, Istat) carries out a regular survey of sectoral bargaining, which focuses on wage dynamics.|
|Latvia||No||The Ministry of Welfare and main trade union confederation provide data on an irregular basis.|
|Lithuania||Yes*||The Tripartite Council of the Republic of Lithuania (Lietuvos Respublikos Trišalė taryba, LRTT) provides some data on an irregular basis.|
|Malta||Yes||There is no regular national documentation on collective agreements.|
|Netherlands||Yes||The Labour Inspectorate (Arbeidsinspectie) of the Ministry of Social Affairs and Employment publishes a twice-yearly report on collective agreements. An unofficial website on collective bargaining, http://cao.pagina.nl/, provides comprehensive information on new agreements, documents, reports etc.|
|Norway||No||There is no regular national documentation on collective agreements. Trade unions and employers’ associations have their own archives but these are mainly for internal use.|
|Poland||Yes||Regular information on collective agreements is provided by the State Labour Inspection (Państwowa Inspekcja Pracy).|
|Romania||Yes||Regular data on collective agreements are provided by the Ministry of Labour, Social Solidarity and Family.|
|Slovakia||Yes*||Regular data on sectoral collective agreements are provided by the Ministry of Labour, Social Affairs and Family.|
|Slovenia||Yes*||There is no regular national documentation of collective agreements (SI0401103F).|
|Spain||Yes||Regular data and reports on collective agreements are provided by the the Economic and Social Council (Consejo Económico y Social, CES).Annual reports on collective bargaining are also published by the General Workers’ Confederation (Unión General de Trabajadores, UGT) and the Trade Union Confederation of Workers’ Commissions (Comisiones Obreras, CC.OO).|
|Sweden||No||Annual reports on sectoral collective agreements are published by the Mediation Authority (Medlingsinstitutet).|
|UK||No||There is no regular national documentation on collective agreements. The trade union-sponsored Labour Research Department (LRD) publishes reviews of new agreements in its monthly Workplace Report, while information is also available from several other specialist publications.|
* Legal obligation to register exits only for national and sectoral agreements, but not for company agreements. ** Some agreements are registered voluntarily by the Labour Court
Main characteristics of national collective bargaining systems
There are several elements that define national collective bargaining systems. The first is the relative importance of the various bargaining levels, with a differentiation between more centralised and more decentralised bargaining systems. A second element is bargaining coverage, which is influenced by the levels of bargaining as well as by the existence and use of extension procedures. A third element is whether or not tripartite concertation at national level has an influence on collective bargaining. Since many European countries have multi-level bargaining systems, the relationships and interactions between the different bargaining levels can be treated as a fourth main element characterising a national bargaining system.
Levels of bargaining
Table 4 below outlines the importance of the various levels of bargaining in the 26 countries considered. The importance of the different bargaining levels may vary depending on the topics regulated by collective agreements and, therefore, the information provided in table 4 focuses exclusively on wage bargaining. In this respect, three groups of countries may be distinguished:
- the first and smallest group covers four countries (Belgium, Finland, Ireland and Slovenia) where the intersectoral level is the most important bargaining level for the determination of wages. In addition, there are five countries (Greece, Estonia, Hungary, Lithuania and Romania) where the national minimum wage is determined by bipartite or tripartite agreement at national level. Since the coverage of the other bargaining levels (sectoral and company level) is much lower in these countries, one might consider the intersectoral level the most important bargaining level. However, except for the national minimum wage, lower bargaining levels are of main importance for the determination of wages in these countries;
- a second group of 11 countries, mostly in northern and western Europe (Austria, Bulgaria, Denmark, Germany, Greece, Italy, the Netherlands, Norway, Spain, Slovakia and Sweden), have national bargaining systems in which the sector is the most important bargaining level for wage determination; and
- a third group of 10 countries, including most of the CEE states (the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland and Romania) plus Cyprus, Malta and the UK, have relatively decentralised bargaining systems with company bargaining dominant.
Finally, there is France, which does not fit into any these groups since it has no pay bargaining level that is clearly most important. While in particular for small and medium-sized companies the sector level is the most important, it is the company level that is key for most larger companies.
There are huge differences in collective bargaining coverage across Europe (TN0212102S). The proportion of employees covered by collective agreements varies between nearly 100% in Austria or Slovenia to around 10% in Lithuania - see table 4 below. There are two main elements that influence the bargaining coverage. First, there is a clear correlation between bargaining coverage and the relative importance of bargaining levels. Countries with a dominance of sectoral or intersectoral bargaining tend to have much higher bargaining coverage than countries where company bargaining predominates. Second, the existence and use of extension procedures (see table 2 above) may have a positive effect on bargaining coverage. This is the case, for example, in France, Italy and the Netherlands. However, there are many countries, in particular in Central and Eastern Europe, which have introduced the possibility of an extension procedure but have not used it very often so far, and bargaining coverage is still rather low.
Influence of tripartite concertation
In 16 out of 26 countries covered by this study, tripartite concertation at national level has a regular influence on wage bargaining - see table 4. In three countries (Finland, Ireland and Slovenia) the state sits directly at the bargaining table so that collective agreements at intersectoral level are concluded on a tripartite basis. In many other countries (eg the Netherlands, Norway, Spain and many of the CEE countries) there are either regular or irregular tripartite framework agreements at national level that contain legally non-binding recommendations for pay increases. In addition, almost all countries with a statutory minimum wage have also some form of tripartite consultation on its regular adjustment. This also applies to countries such as France or the UK that have no other form of formal tripartite concertation.
|.||Importance of bargaining levels||Collective bargaining coverage||Influence of tripartite concertation||Tripartite consultation on national minimum wage|
|Intersectoral level||Sectoral level||Company level|
|Intersectoral bargaining dominant|
|Sectoral bargaining dominant|
|No bargaining level clearly dominant|
|Company bargaining dominant|
X = existing level of wage bargaining; XX = important, but not dominant level of wage bargaining; XXX = dominant level of wage bargaining; (XXX) = bargaining on national minimum wage.
* Consultation on the minimum wage in the sense that the social partners will probably consult the government if they plan to modify the minimum wage. ** There are no figures on Irish bargaining coverage available, but coverage must be above 44.5% (which is the union density rate) since all union members are automatically covered by national agreements, while many non-union employees de facto receive the nationally agreed pay increases. *** There is one main intersectoral agreement covering all manufacturing sectors in Denmark; bargaining coverage refers to private sector only (it is almost 100% in the public sector). **** Bargaining coverage refers to west Germany - in east Germany bargaining coverage is only about 54%. ***** Bargaining coverage refers to Cypriot private sector only (it is almost 100% in the public sector). ****** There is automatic annual adjustment of wages to price developments in Malta; different studies estimate the proportion of employees covered by collective agreements at between 40% and 60%. ******* All employees in Romania are covered by the national agreement on minimum wages; no figures are available on the coverage of sectoral and company agreements, but it is estimated that a large proportion of employees are not covered by these agreements.
Sources: EIRO; European Commission, Industrial Relations in Europe 2004.
Relationship between different bargaining levels
Many of the countries examined can be considered to have multi-level collective bargaining systems with interaction between the different bargaining levels - see table 5 below. This holds true for almost all countries where intersectoral or sectoral bargaining predominates, which usually have complementary bargaining at company level. In most cases there is a clear hierarchy in the bargaining levels, following a kind of 'favourability principle' according to which standards concluded at higher level can only be improved on (for employees) but not worsened at lower level. Intersectoral or sectoral agreements often define the room for additional bargaining at company level. Moreover, in many countries there exist various forms of 'opening', 'hardship' or 'inability to pay' clauses, which under certain conditions allow companies to apply standards below those concluded at higher levels. In Belgium, Finland and Ireland, the intersectoral agreements also include provisions for maximum wage increases as well as guidelines for companies that want to pay above the norm.
|.||Main characteristics||Relationship between intersectoral/sectoral and company bargaining|
|Austria||Dominance of sectoral bargaining; company bargaining is limited to very few companies.||Collective agreements can provide 'delegation' or 'opening' clauses for bargaining at company level.|
|Belgium||Three-level bargaining system with a dominance of bipartite intersectoral bargaining, and complementary bargaining at sectoral and company level.||Intersectoral agreement provides a framework for maximum wage increases. Normally the latter can not be exceeded at sector or company level except for specific reasons laid down in the intersectoral agreement.|
|Bulgaria||Two-level bargaining system with a dominance of sectoral bargaining (BG0312203F) and complementary bargaining at company level.||Sectoral agreements include provisions regarding additional agreements at company level. Sectoral agreements also often include 'hardship' clauses, according to which companies with economic difficulties can decrease wages to the level of the national or sectoral minimum wage.|
|Cyprus||Dominance of company bargaining, with sectoral bargaining in some sectors.||A company-level agreement can include lower terms and conditions of employment than agreed at sector level.|
|Czech Republic||Dominance of company bargaining, though some sectors have sectoral bargaining, which is often combined with complementary bargaining at company level||Some sectoral agreements define the room for negotiations at company level.|
|Denmark||Multi-level bargaining system with a dominance of sectoral bargaining and complementary bargaining at company level.||Some sectoral agreements are more open than others regarding the issues to be negotiated at company level; for instance, some 'minimum-wage' agreements provide for wage negotiations only at company level, though more usually at both levels, while 'normal-wage' agreements provide for wage negotiations only at central sectoral level.|
|Estonia||Dominance of company bargaining with sectoral bargaining in a few sectors and a bipartite intersectoral agreement on the national minimum wage.||If there is a sectoral agreement, a company agreement can only improve the situation for the employees.|
|Finland||Three-level bargaining system with a dominance of tripartite intersectoral bargaining and complementary bargaining at sectoral and company level.||Higher-level agreements define the issues for company bargaining and may determine the conditions under which companies can diverge from standards collectively agreed at intersectoral or sectoral level.|
|France||Parallel existence of sectoral and company bargaining with no dominant bargaining level. Intersectoral agreements on some specific issues.||Agreements signed at sector and company level can only in exceptional circumstances dilute the benefits obtained at a higher level (sectoral or intersectoral agreements or legislation).|
|Germany||Dominance of sectoral bargaining; with some company bargaining in certain sectors or companies||Most sectoral agreements contain 'hardship' and 'opening' clauses, according to which companies are allowed to diverge from collectively agreed standards under certain defined conditions and on certain defined issues.|
|Greece||Dominance of sectoral bargaining with some company bargaining and a bipartite intersectoral agreement on the national minimum wage and some other aspects of employment conditions.||Strict hierarchy of bargaining levels on the basis of a 'favourability principle'.|
|Hungary||Dominance of company bargaining with sectoral bargaining in a few sectors (mainly public utilities). Intersectoral agreements provide some minimum standards (eg minimum wage).||According to the Labour Code, in some exceptional cases company agreements can provide for conditions that are more unfavourable for the employees in comparison with those agreed at higher level or guaranteed by law.|
|Ireland||Three-level bargaining system with a dominance of tripartite intersectoral bargaining and complementary bargaining at sectoral (though agreements at this level are few) and company level.||National tripartite agreements establish guidelines on minimum and maximum wage increases. They also include provisions for deviation from the national norm company (or sector) level regarding both 'above the norm' pay deals as well as 'inability to pay' arrangements, whereby company agreements may provide lower wage increases than agreed at national level.|
|Italy||Two-level bargaining system with a dominance of sectoral bargaining and complementary bargaining at company or territorial level.||The two bargaining levels are essentially coordinated, by the provisions of an intersectoral incomes policy agreement as far as wage dynamics are concerned, and by the prevalence of sectoral over company bargaining, since the former sets the framework rules that define the scope of the latter. A limited number of sectoral agreements also contain opening clauses that allow for divergence at company level in certain cases, notably when company restructuring is under way. These clauses do not apply to wages.|
|Latvia||Dominance of company bargaining with sectoral bargaining in a very few sectors.||-|
|Lithuania||Dominance of company bargaining with sectoral bargaining in a very few sectors and a tripartite intersectoral agreement on the national minimum wage.||-|
|Malta||Dominance of company bargaining with sectoral bargaining in a very few sectors.||-|
|Netherlands||Dominance of sectoral bargaining with some company bargaining, in particular in larger companies.||Sectoral agreements may contain provisions that allow or oblige employer and works council to negotiate certain issues at company level.|
|Norway||Multi-level bargaining system with a dominance of sectoral bargaining and complementary bargaining at company level in some sectors. In the private sector, intersectoral bargaining plays an important role, in the sense that all agreements between the NHO employers' confederation and the LO and YS union confederations are often negotiated at the same time in a coordinated way. There are also basic agreements at national level that set a certain framework for sectoral and company bargaining.||Sectoral agreements may contain opening clauses that give the bargaining parties at company level the opportunity to depart to a certain extent from the standards determined at sector level. In practice, however, these opening clauses are rarely used and play a minor role.|
|Poland||Dominance of company bargaining with sectoral bargaining in a very few sectors||Bargaining parties can agree on a suspension of an agreement or parts of the agreements if the company has difficulties. A 2002 amendment to the Labour Code gives employers the opportunity to suspend the application of an agreement in the face of financial hardship.|
|Romania||Multi-level bargaining system with a dominance of tripartite intersectoral bargaining and complementary bargaining at sectoral and company level. A large proportion of employees are covered only by intersectoral bargaining.||There is a strict hierarchy of bargaining levels, with no 'opt-out' options for lower-level bargaining.|
|Slovakia||Two-level bargaining system with a dominance of sectoral bargaining and complementary bargaining at level.||Sectoral collective agreements create a framework for company bargaining. According to the 'favourability principle', company agreements can only improve employment conditions. Opening clauses in sectoral agreements are not allowed.|
|Slovenia||Three-level bargaining system with a dominance of tripartite intersectoral bargaining and complementary bargaining at sectoral and company level.||The current tripartite pay agreement allows companies facing economic difficulties to postpone agreed pay increases under certain conditions.|
|Spain||Collective bargaining is structured at several levels: workplace, company, local, county, provincial, inter-provincial, regional, inter-regional and national. The greatest number of workers are covered by provincial sectoral agreements, followed by national sectoral agreements.||In principle, lower-level agreements can improve on or worsen standards agreed at higher levels. Many sectoral agreements include opening clause for company bargaining.|
|Sweden||Two-level bargaining system with dominance of sectoral bargaining and complementary bargaining at company level.||Sectoral agreements usually define the scope for company bargaining. In principle, company agreements can worsen standards in comparison with the sectoral level. However, in practice, this is very rarely the case.|
|UK||Dominance of company bargaining; with sectoral bargaining in a very few sectors (eg construction and public services).||In the case of sectoral agreements, there is usually also complementary bargaining at company level.|
Developments in national collective bargaining systems since 1990
At first sight, national collective bargaining systems have remained relatively stable since 1990 - see table 6 below. The shift from multi-employer to single-employer bargaining in the UK during the 1980s and the shift from intersectoral to sectoral bargaining in Sweden in the early 1990s were the last major fundamental changes in the countries examined. Most of the other countries have more or less continued with the basic structures and institutions of their national bargaining systems. This holds true also for the CEE countries, which had to establish new bargaining systems during the transformation period in the first half of the 1990s (TN0207104F).
However, beyond the relative stability of the formal bargaining institutions, many European countries have been affected by a gradual process of transformation that might lead to more fundamental changes in the future. There has been a more or less strong tendency towards decentralisation of collective bargaining in almost all countries that still have a dominance of intersectoral or sectoral bargaining. In many countries, such as Austria, Denmark, Finland, Germany, Italy, the Netherlands, Norway or Sweden, the higher-level agreements have widened the scope for additional bargaining at company level and/or have introduced opening clauses that allow companies to diverge from certain collectively agreed standards. Following this process of organised or controlled decentralisation, many countries have seen the emergence of rather differentiated and flexible multi-level bargaining systems.
With the exception of Slovenia and to a certain extent Bulgaria and Slovakia, the development of new collective bargaining structures in the CEE countries has led to rather decentralised bargaining systems with a dominance of company bargaining and the determination of certain minimum standards (eg minimum wages) at national level. In some of these countries there have been attempts to develop sectoral bargaining structures, often with direct support of an EU PHARE programme on the strengthening of social dialogue. However, these initiatives have usually not led to the establishment of strong sectoral bargaining structures to date.
Exceptionally, some centralisation of collective bargaining has taken place in Spain, where reforms of the previously highly fragmented bargaining system have led to a strengthening of sectoral bargaining.
The development of collective bargaining coverage in Europe since 1990 shows a rather varied picture - see table 6 (for seven countries, no information is available on this point). In 11 countries, mostly those with relatively centralised bargaining systems (Austria, Belgium, Denmark, Finland, France, Italy, the Netherlands, Norway, Romania, Slovenia and Sweden), bargaining coverage has remained relatively stable. In seven countries (Bulgaria, the Czech Republic, Germany, Poland, Slovakia and the UK), bargaining coverage has decreased, while Spain is the only country where bargaining coverage has increased slightly.
|.||Change in the importance of bargaining levels||Change in bargaining coverage|
|Austria||There have been no fundamental changes in the bargaining system. Some new sectoral agreements have been established (eg for the information technology sector - AT0012235N). There has been a tendency towards 'organised decentralisation' of collective bargaining, whereby the sectoral bargaining parties have deliberately devolved bargaining tasks (in particular relating to working hours and, with some delay, to variable pay) to company level (eg by the introduction of opening clauses into sectoral agreements).||Stable.|
|Belgium||There have been no fundamental changes in the bargaining system. Since 1996, a law has provided for the fixing of the maximum available margin for wage increases every two years, mainly as a function of what is happening in Belgium's three main trading partners and neighbours - France, the Netherlands and Germany. The intersectoral agreement that is negotiated every two years must therefore lay down, on the basis of a technical report from the bipartite Central Economic Council (Conseil Central de l’Economie/Centrale Raad voor het Bedrifsleven, CCE/CRB), the maximum wage increase margin (BE0212302N).||Stable.|
|Bulgaria||There are some tendencies towards decentralisation of bargaining, mainly as a result of privatisation of former state-owned industries, with the new owners usually preferring company bargaining.||Decreasing.|
|Cyprus||There have been no fundamental changes in the bargaining system.||No information available.|
|Czech Republic||There has been a decline in company agreements and the number of employees covered. Sectoral bargaining has shown a slight increase since 1999 (CZ0412102F).||Decreasing.|
|Denmark||Although the sector is still the most important bargaining level, there is a significant tendency towards decentralisation of bargaining. At company level, negotiations in cooperation committees (joint works council-type bodies with equal representation of management and employees) has grown in importance. In some sectors, sectoral agreements determine only minimum wages while actual wages are determined at company level.||Stable.|
|Estonia||Since the establishment of a new bargaining system in the early 1990s, there have been no fundamental changes with the exception of the introduction of an extension mechanism in 2000.||No information available.|
|Finland||Intersectoral bargaining has remained the most important bargaining level. At the same time there has been a tendency towards decentralisation of bargaining. Company bargaining has gained more scope for flexibility in enforcing the provisions of higher-level agreements, eg concerning working time arrangements as well as the allocation of the local share of contractual wage increases, which has increased in recent years.||Relatively stable.|
|France||There is no clear tendency in collective bargaining. State intervention has become more important regarding the determination of pay (via increases in the statutory minimum wage) and working time. However, the 1998 law on the 35-hour working week (FR9806113F and FR0001137F) led to a strengthening of collective bargaining and in particular to a sharp increase in the number of company agreements.||Stable.|
|Germany||The sector has remained the most important bargaining level but company bargaining has increased in importance. There is a strong tendency towards decentralisation of collective bargaining through the widespread conclusion of opening clauses within sectoral agreements, which allow for additional bargaining at company level (DE0312202F).||Decreasing.|
|Greece||Overall, the bargaining system has remained stable. In recent years, there has been an increase in the number of company agreements.||No information available.|
|Hungary||There have been no fundamental changes in the bargaining system (HU0401103F). Recently, bipartite sectoral social dialogue committees have been created with support of the EU PHARE programme on strengthening autonomous social dialogue (HU0212106F). However, it is very uncertain whether or not these committees will become a forum for sectoral bargaining in future.||Decreasing at sector level, relatively stable at company level.|
|Ireland||The development of the collective bargaining system has been to a certain extent paradoxical. On the one hand, the system of centralised tripartite agreements has remained stable since 1987. On the other hand, as far as lower-level bargaining is concerned there has been an increasing trend of decentralisation to the company level, and sectoral bargaining has declined significantly.||No information available.|
|Italy||Although the two-level bargaining system has remained stable in principle, there is a trend towards an increased importance for the company or local level. This tendency has essentially been realised through a growing use of framework rules at national level which must then be implemented at decentralised level, taking local situations into account.||Stable.|
|Latvia||Since the establishment of a new bargaining system in the early 1990s, there have been no major changes.||No information available.|
|Lithuania||Since the establishment of a new bargaining system in the early 1990s, there have been no major changes. However, a new Labour Law adopted in 2002 has significantly widened the scope for collective bargaining.||No information available.|
|Malta||There have been no fundamental changes in the bargaining system.||No information available.|
|Netherlands||The sector remains the most important bargaining level. There has been an increase in the number of company agreements. In banking and finance, there has been a shift from sectoral to company bargaining (NL9905139F and NL0007197N). The proportions of employees covered by sectoral and by company agreements have remained relatively stable. There is a significant tendency to incorporate opening clauses into sectoral agreements, which usually deal with working time arrangements, but only exceptionally with pay.||Stable.|
|Norway||Overall, there have been no fundamental changes in the bargaining system. In general, company bargaining has gained importance as a supplement to sectoral bargaining.||Stable.|
|Poland||The number of agreements signed at company level (the main bargaining level) has shown a significant decline since the mid-1990s (though there was some recovery in 2003 - PL0411105F).||Decreasing.|
|Romania||Since the establishment of a new bargaining system in the early 1990s, there have been no fundamental changes.||Stable.|
|Slovakia||There have been no fundamental changes regarding the importance of bargaining levels (SK0210102F). However, overall bargaining coverage has decreased considerably, especially in the private sector. In 2002, the formerly unified bargaining system was divided in separate systems for the private and public sector, with rather more legal restrictions for the latter (SK0206101N).||Decreasing.|
|Slovenia||Since the establishment of a new bargaining system in the early 1990s, there have been no fundamental changes.||Stable.|
|Spain||The bargaining system has been affected by tendencies of both centralisation and decentralisation. On the one hand, there has been a process of centralisation in the structure of bargaining in sectors where it was previously highly fragmented. This is indicated by an increase in the number of provincial and national sectoral agreements. Furthermore, since 2002, annual intersectoral agreements have laid down guidelines for lower-level bargaining (ES0503204F). On the other hand, there has been a process of decentralisation in the content of the bargaining and specific adaptation to the situation of companies.||Increasing.|
|Sweden||Since the final collapse of intersectoral bargaining in the early 1990s, the two-level bargaining system, with sectoral and additional company bargaining, has remained stable. There has been some re-strengthening of sectoral agreements through the conclusion of new basic framework accords. However, within the two-level bargaining system, company bargaining has increased in importance.||Stable|
|UK||The demise of sectoral bargaining arrangements, which proceeded apace in the 1980s, continued in the 1990s.||Decreasing|
Social partners’ and political actors’ views and proposals for future developments
There has been an ongoing debate on the future development of collective bargaining systems among social partners’ organisations and various political actors in most countries covered by this study - see tables 7 and 8 below.
|.||No major changes||Decentralisation*||Centralisation**|
|Austria||Employers, trade unions, relevant political actors||Some employers (with regard to working time)||.|
|Belgium||Employers, trade unions, relevant political actors||Some politicians and employers at regional level||.|
|Cyprus||Employers, trade unions, relevant political actors||.||.|
|Czech Republic||.||Employers||Trade unions|
|Denmark||Employers, trade unions, relevant political actors||.||.|
|France||Trade unions, government||Some employers||Some employers|
|Germany||Trade unions, government||Employers, leading opposition parties||.|
|Greece||Employers, trade unions, relevant political actors||.||.|
|Hungary||Employers||.||Trade unions, government|
|Ireland||Employers, trade unions, relevant political actors||.||.|
|Italy||Some trade unions||Employers, government, some trade unions||.|
|Malta||Employers, trade unions, relevant political actors||.||.|
|Netherlands||Majority of employers, trade unions, relevant political actors||Some employers||.|
|Norway||Most trade unions||Employers, few trade unions||.|
|Poland||Employers, trade unions, relevant political actors||.||.|
|Spain||Some employers, some trade unions, government||Some employers, Bank of Spain, leading opposition party||Some employers, some trade unions|
|Sweden||Most employers, trade unions, relevant political actors||.||.|
|UK||Employers, trade unions, government||Leading opposition party||Few trade unions|
* Decentralisation usually means shifting importance to bargaining at company level; in the case of Belgium it means a shift from national to the regional level, in the case of Slovenia a shift from intersectoral to sectoral level. ** Centralisation means shifting importance to the sectoral and/or intersectoral bargaining level.
In most countries, there is at least one party that is currently calling for major changes in the bargaining system. In only 11 out of 26 countries involved in this study (Austria, Belgium, Cyprus, Denmark, Greece, Ireland, Malta, the Netherlands, Poland, Sweden and the UK) do all relevant parties seem to accept to a large extent the existing bargaining system and demand no major changes (though there are some calls from Austrian employers for decentralisation on working time flexibility).
In eight countries (Bulgaria, Czech Republic, Finland, Germany, Italy, Norway, Romania and Slovakia), employers - sometimes supported by the governments or leading political opposition parties - are demanding a further decentralisation of collective bargaining systems, while the trade unions are usually defending the existing system. In Italy, the unions are divided since two of the main union confederations - the Italian Confederation of Workers' Unions (Confederazione Italiana Sindacati Lavoratori, Cisl) and the Union of Italian Workers (Unione Italiana del Lavoro, Uil) - are in favour of more decentralisation while the third - the General Confederation of Italian workers (Confederazione Generale Italian del Lavoro, Cgil) - is defending the sector as the most important bargaining level (IT0412306F). In Slovenia, the positions are somewhat the other way round - employers are defending the existing system of intersectoral bargaining while the trade unions call for decentralisation in order to strengthen sectoral bargaining. Finally, in six CEE countries (Bulgaria, Czech Republic, Estonia, Hungary, Latvia and Lithuania) the unions want to strengthen sectoral bargaining. However, the employers in these countries have shown little interest in such a centralisation of collective bargaining so far and often openly reject the unions’ demands.
|Austria||In general, all social partner organisations and all relevant political actors are not opposed to the existing system of collective bargaining. However, there have been some initiatives on the part of the current conservative-populist government and some employers’ organisations to increase the influence of companies, in particular with respect to working time flexibilisation (AT0410202F).|
|Belgium||Most social partners’ organisations and politicians support the existing system of collective bargaining. There are some politicians and employers’ associations, in particular in the Flemish region, that want to shift intersectoral bargaining from national to regional level (BE0209303F). The trade unions have strongly opposed such demands.|
|Bulgaria||A large proportion of small and medium-sized enterprises and multinational companies are not members of the nationally representative employers’ associations (BG0310103F) and therefore not covered by sectoral or company agreements. Some employers’ associations refuse to conclude a national framework agreement and prefer only sectoral or company bargaining. Trade unions are interested in stabilisation of the bargaining system and a strengthening of sectoral bargaining.|
|Cyprus||Prompted by Cyprus’ EU membership, one of the two main union confederations, the Cyprus Workers' Confederation (SEK), has renewed its longstanding demand to abolish the principle of voluntarism and to give collective agreements a legally binding character (CY0402102N). However, such demands have been rejected by the main employers’ association as well as by the other main union confederation, the Pancyprian Federation of Labour (PEO).|
|Czech Republic||Both employers’ organisations and trade unions support a reform of the Labour Code that widens the scope for collective bargaining, based on the principle that 'anything not forbidden is permitted' (the current Labour Code is based on the principle that 'anything not permitted is forbidden') (CZ0412102F). The trade unions are very much in favour of strengthening social dialogue and collective bargaining, especially at sector level. The main employers’ associations are not satisfied with the provision whereby employment conditions can be negotiated directly between employers and employees only if there is no trade union organisation operating at the company. However, the unions strongly oppose this view.|
|Denmark||Neither the social partners nor political actors currently demand major changes to the collective bargaining system as such. Among the unions, there are current discussions about the need for legislation supplementary to collective agreements (which play the main role in regulating employment conditions in Denmark). Some union leaders find it outmoded that the Danish model of regulation leaves 15% of employees completely uncovered by rules concerning pay and employment conditions.|
|Estonia||The employers’ associations support the current bargaining system but want to make the national minimum wage model more flexible in order to introduce different minimum wage rates for low-qualified groups of employees (EE0409101N). The trade unions want to strengthen sectoral bargaining and argue in favour of the extension of sectoral agreements to all companies in a sector.|
|Finland||The employers’ associations have recently demanded major changes in the Finnish bargaining system in order to strengthen the importance of company bargaining (FI0408202F). They argue that wage developments in particular should better take into account differences in profitability and labour productivity. Therefore, the employers want to give the companies more possibilities to diverge from collectively agreed standards determined at national or sector level. By contrast, the trade unions are very much in favour of continuing with the existing three-level bargaining system. The same holds true for the current Finnish government.|
|France||The main employers’ confederation, the Movement of French Enterprises (Mouvement des entreprises de France, MEDEF), is campaigning in favour of a greater focus on company-level agreements, possibly exempt from the rules set by higher negotiating levels, on the condition that some unions with representative status present in these companies agree. By contrast, the Union of Crafts Industry Employers (Union professionnelle artisanale, UPA) prefers more centralised bargaining - for example in 2001 it signed an agreement with all the trade unions, aimed at improving industrial relations in this sector (FR0201143N). The unions are more or less in favour of maintaining the current system with its hierarchy of labour law rules.|
|Germany||The employers’ associations call for further decentralisation of collective bargaining through the introduction of more opening clauses into sectoral agreements. They also argue in favour for a change to the Collective Agreement Act in order to reinterpret the 'favourability principle' so that companies can introduce employment conditions below the collectively agreed standards if this would help to safeguard jobs. While most employers’ organisations want to continue with -at least - some framework agreements at sectoral level, there are also some influential voices in the employers’ camp that call for a more radical decentralisation of collective bargaining and want to give works councils the right to conclude collective agreements. By contrast, the trade unions defend the current system of 'controlled decentralisation' and demand a reinforcement of the extension mechanism. The current 'red-Green' government has so far made no attempts to change the legal framework for collective bargaining but has asked the social partners to continue with the introduction of opening clauses. The major conservative and liberal opposition parties have presented draft bills to change the Collective Agreement Act in order to increase bargaining power at company level (DE0312202F).|
|Greece||Neither the social partners nor political actors currently demand major changes to the collective bargaining system.|
|Hungary||The trade unions want to strengthen sectoral bargaining and therefore would like to convert existing bipartite sectoral social dialogue committees into bargaining forums. The government has also expressed its support for strengthening such sector-level regulation. However, most employers’ associations have shown no interest so far in enhancing a system of sectoral bargaining.|
|Ireland||Most employers’ associations, trade unions and major political parties support the existing system of collective bargaining.|
|Italy||Confindustria, the main employers’ confederation, favours a further decentralisation of collective bargaining to company level. In its view, industry-wide agreements should retain a basic framework role and leave the specification of the main provisions to company agreements. The employers’ view is shared by the current government, which expressed its support for a further decentralisation of collective bargaining in a 2001 White Paper on the labour market (IT0110104F). However, the government also takes the view that reform of the current bargaining system should be determined by the social partners’ organisations themselves. The three main trade union confederations (Cgil, Cisl and Uil) set up a joint committee in December 2004 to agree on a common proposal for the revision of the bargaining structure introduced by the July 1993 tripartite agreement (IT0412306F). However, the unions have different points of views on the reform of bargaining. Cisl and Uil favour a further decentralisation of collective, while Cgil insists that the key role of national sectoral agreements should be preserved.|
|Latvia||Employers’ organisations support the current bargaining system, in which company bargaining predominates. The unions want to promote the spread of collective agreements and to increase bargaining coverage.|
|Lithuania||Employers’ organisations support the current bargaining system, in which company bargaining predominates, and have no interest in strengthening sectoral bargaining. Furthermore, they want to deregulate legal provisions on employment conditions in favour of collectively agreed standards. By contrast, trade unions strongly support more centralised bargaining at both sectoral and national level. The government is in favour of strengthening the autonomous relations between employers’ associations and trade unions.|
|Malta||Employers’ organisations want to abolish the annual mandatory pay increase that adjusts wages to price developments, while trade unions want to continue with the system of automatically adjusting wages to inflation. Otherwise, there are no demands for fundamental changes in the bargaining system.|
|Netherlands||Although employers’ representatives have sometimes questioned the current bargaining system and suggested that it might be better to conclude collective agreements with works councils instead of trade unions, the majority of employers support the existing system. The same holds true for the trade unions, which have supported the development of 'controlled decentralisation' since the 1990s. Recently, the government and in particular the liberal coalition parties have expressed criticism of the practice of extension of collective agreements (NL0403102F). The cabinet has threatened not to extend agreements that run counter to government policy. The unions have announced their strong resistance to any restrictions on the practice of extension.|
|Norway||Most employers' associations argue in favour of a more decentralised bargaining system. However, this has not led so far to employers’ organisations opting out of sectoral bargaining. In practice, they accept the existing system but call for certain changes, eg that proposals for new agreements should no longer be subject to ballots among union members. With the exception of some smaller confederations, such as the Federation of Norwegian Professional Associations (Akademikerne), the majority of trade unions want to maintain the system of sectoral bargaining. There are some debates within the unions on whether or not the manufacturing sector should continue to be the trend-setter in regular bargaining rounds.|
|Poland||At present, changes to the collective bargaining system are not on the political agenda and are demanded by neither social partners’ organisations nor political actors. The employers are strongly against any legal initiatives to strengthen multi-employer bargaining.|
|Romania||The employers’ associations call for a reconsideration of the bargaining system, with greater emphasis on lower levels, authorisation to adopt opening clauses, and an extension of the period of validity of collective agreements. The trade unions want collective bargaining to become mandatory at sectoral and national levels and want to include more severe penalties for employers that do not observe the provisions of collective agreements concluded at these levels.|
|Slovakia||The main employers’ associations call for a more flexible framework for the negotiation of terms and conditions of employment in companies. They criticise the 'rigid' role of sectoral collective agreements, which reduce the room for manoeuvre of management at company level. To facilitate more flexible wage bargaining, employers would also like to see changes in the current implementation of the minimum wage, eg the introduction of regional minimum wages. The trade unions want to retain the current, well-developed role of sectoral bargaining and are in favour of more extension of collective agreements. The current government supports the implementation of a more flexible framework for negotiations and considers decentralisation of collective bargaining to company level as a suitable tool to this end.|
|Slovenia||There has been an ongoing debate on possible changes in the bargaining system for many years. The critics of the current system have emphasised two main points. First, they want to break the employer-side bargaining monopoly of compulsory-membership 'chambers' in favour of employers’ organisations with voluntary membership. A draft Law on Collective Agreements which would provide the legal basis for this change was submitted to parliament in 1995 and returned to the parliamentary agenda in 2002 (SI0212101F). A special commission composed of representatives of the government, employers and trade unions has been set up for the further elaboration of a new Collective Agreement Act. Second, the critics argue for a shift in the importance of bargaining levels from the intersectoral to the sectoral level. Such a decentralisation of collective bargaining has been supported by the largest trade union organisation, the Union of Free Trade Unions of Slovenia (Zveza svobodnih sindikatov Slovenije, ZSSS). By contrast, the employers’ organisations, and particularly the Chamber of Industry and Commerce of Slovenia (Gospodarska zbornica Slovenije, GZS), want to retain the centralised bargaining structure.|
|Spain||The main employers’ organisation, the Spanish Confederation of Employers' Organisations (Confederación Española de Organizaciones Empresariales, CEOE), wishes to give greater power to the company level in determining employment conditions. However, the position of the employers is not unanimous. Some employers' associations representing large companies that compete with small ones in the same sector feel that the centralisation of collective bargaining should be reinforced. Other employers' associations that do not have a significant capacity of control and influence in the market are in favour of decentralising collective bargaining. The trade unions want to articulate and structure bargaining better. On this subject they are sometimes in agreement with certain business sectors. Calls for more decentralisation of bargaining have been supported by the Bank of Spain and the leading conservative opposition party. The current socialist government has not found a clear position yet, but seems to favour no fundamental changes.|
|Sweden||Neither the social partners nor political actors currently demand major changes to the collective bargaining system as such. On a related matter, the employers’ organisations have frequently demanded the abolition of the right to take sympathy strikes (SE0302102F).|
|UK||Employers are satisfied with the decentralised bargaining system and there are no signs that companies would have an interest in a return to multi-employer bargaining. Trade unions generally favour multi-employer arrangements but currently there are also no strong demands for a restrengthening of sectoral bargaining, with the notable exception of the train drivers’ union, the Associated Society of Locomotive Engineers and Firemen (Aslef), which is currently campaigning for a return to national bargaining in the sector (UK0309103F). The government has no explicit policy on the bargaining system but seems to support the current situation. The conservative opposition argues for more deregulation of the labour market and emphasises the importance of the free market principle.|
In almost all countries involved in this study, collective bargaining is a more or less well established form of regulating pay and employment conditions between employers and employees. Most European countries also have in place comprehensive legislation that secures the principle of the right to collective bargaining and determines a procedural framework. In practice, however, the national bargaining systems have many differences. The most important of them is perhaps the huge variation in bargaining coverage. In about half of the countries (notable most of the 'old' EU Member States), more than two-thirds of employees are covered by a collective agreement. By contrast, collective agreements cover often much less than 50% of all employees in the other half of the countries (including most of the new EU Member States).
Bargaining coverage is clearly linked to two other factors - namely the predominant bargaining level and the use of extension procedures. Roughly speaking, this study confirms the existence of two different types of bargaining system in Europe. The first type is characterised by high bargaining coverage brought about by a developed system of multi-employer bargaining, with collective agreements concluded at intersectoral or sectoral level and/or a widespread use of extension procedures. The second type has relatively low bargaining coverage with a predominant system of company bargaining and a practical absence of extension procedures.
Since 1990, those countries with a bargaining system belonging to the first type have been faced with strong pressure towards decentralisation of collective bargaining. Although none of these countries have seen a fundamental shift in their bargaining systems (as occurred in the UK during the 1980s), a process of organised decentralisation has come to predominate. The result has been the emergence of rather differentiated multi-level bargaining systems with an increasing importance of the company level. Considering the ongoing debates and further pressures for decentralisation, coming in particular from the employers' side, it remains an open question whether or not the process of organised decentralisation might lead at a certain point to a more fundamental change in bargaining systems. If this were to happen, multi-employer agreements might increasingly become empty frameworks, or even be abolished, while bargaining coverage would decline significantly.
The experiences of most CEE countries have shown how difficult it is for countries where company-level bargaining predominates to establish higher-level bargaining structures. Attempts by the trade unions to introduce sectoral bargaining have made only little progress so far. As compensation for the gaps in the bargaining structure and the corresponding low bargaining coverage, state regulation of employment conditions (eg statutory minimum wages) plays a much more important role in the CEE countries than in most of the rest of Europe.
High bargaining coverage, which is equivalent to a high degree of employee protection and participation, can be achieved only with a comprehensive multi-level bargaining system. In order to strengthen or rebuild such a system, employers’ associations and trade unions need a supporting legal and political framework. One crucial element in this is the existence and use of extension procedures in order to avoid 'free-rider' behaviour.
Therefore, it might be no coincidence that in recent years many of the CEE countries have introduced new extension procedures, although they have not used them very extensively so far. Since strong autonomous relations between social partners’ organisations are widely regarded as a core element of the 'European social model', there needs to be a growing responsibility to maintain or rebuild comprehensive collective bargaining systems for all relevant political actors, not only at national but also at European level. (Thorsten Schulten, Institute for Economic and Social Research, WSI)