Collective bargaining developments: Collective employment relations - Q1 2014 (EurWORK topical update)

This article presents some of the key developments and research findings on aspects of collective employment relations in the EU during the first quarter of 2014. Collective bargaining trends and both positive and negative developments in Member States are the focus of the report.

Developments in collective bargaining

On average in the EU collective bargaining coverage declined from 56% to 51 % in the years 2011 to 2012.  An increase in coverage only took place in France, Luxembourg and Finland. The developments in some Member States do, however, reflect a silver lining on the horizon.

Impact of the crisis

As a recent Eurofound study Changes to wage-setting mechanisms in the context of the crisis and the EU’s new economic governance regime reveals, the crisis has accelerated and accentuated processes of decentralisation and deregulation in a number of Member States. Collective bargaining regimes in Cyprus, Greece, Ireland, Portugal, Romania and Spain have undergone the most extensive changes.

Re-centralisation

During the crisis, Belgium and Finland were the only Member States which opted for re-centralisation of the collective bargaining regimes. In Belgium, a continuous trend of centralisation and a shift from bipartite discussions towards decisions at tripartite or even government level was noticeable. For the period 2013–2014, the centralised collective bargaining for an Interprofessional Agreement (IPA) failed and the government decided not to allow extra wage increases above the automatically wage indexation. This decision is hampering the sectoral negotiations.  

Collective bargaining at sectoral level

Some positive developments took place in a number of Member States in terms of increased governmental support and uptake of collective bargaining at sectoral level.

In the Czech Republic, the new centre-left coalition government of the ČSSD, Christian Democrats (KDU-ČSL) and political movement ANO will probably support tripartite social dialogue more than the previous governments. In the government’s policy statement published on 14 January 2014, the new government declares that ‘it shall engage in active social dialogue with social partners as a means of maintaining social peace and shall establish an effective system for the exchange of experience between the Government and social partners’.

During the first quarter of 2014, several collective agreements were concluded by large employers. A new collective agreement was concluded in March 2014 in Škoda Auto, the car manufacturing company. The Dutch Ministry of Social Affairs and Employment assessed the development of collective bargaining in 2013. The report maps 100 collective agreements which apply to 5.1 million workers: this equates to a collective bargaining coverage of 86% in 2013 (Planet Labor, July 24, 2014, No. 8542). 

A new sectoral collective agreement has been signed between the Federation of Greek Hoteliers and the Federation of Horeca Workers. The agreement is of biennial duration – starting on 1 January 2014 and ending on 31 December 2015 ­– and covers about 130,000 workers in the tourism sector. The sectoral agreement provides for a pay freeze for 2014 and an increase of 1% in 2015. This is a positive development in the field of sectoral agreements, as for the first time in the last four years an agreement envisages pay increases.

The Greek General Confederation of Workers (GSEE) and Hellenic Federation of Enterprises (SEV), Hellenic Confederation of Professionals, Craftsmen & Merchants (GSEVEE), National Confederation of Hellenic Commerce (ESEE) and the Association of Greek Tourism Enterprises (SETE) signed a new national general collective labour agreement for the next year in March 2014.

The most positive developments have taken place in Spain, where 1,844 collective agreements were approved, almost 70% more than over the year 2012. These data reflect the growth of collective bargaining processes, the agreed restraints of salary increases and the higher lack of application of collective agreements, as an alternative to dismissals. Concerning the ‘in application’ of collective agreements, the non-applied terms refer mostly to payment issues, for which new pacts have been collectively agreed in the majority of cases (97.9% of the in applications). In addition, the report ‘State of collective bargaining in February 2014’ published by UGT trade union (www.ugt.es), shows that up to February 2014, 399 collective agreements with economic effects for the current year (2014) have been signed, affecting a total of 1,698,829 workers. This means an increase of 116.9% in the signing of agreements in comparison to the same period in 2013, and an increase of 112% in the number of workers covered. 

In the first quarter of 2013, the first successful negotiations took place in at least three Member States. In Romania, the collective labour agreement for the sector ‘Health and  veterinary activities’ concluded for the period 2014–2015, came into force on 1 January 2014. The contract was registered at the Ministry of Labour on 29 November 2013. In Slovenia, negotiations for several new sectoral collective agreements in the private sector are in progress. The national sectoral agreement between the British Footwear Association and the union Community was revised in January 2014. The agreement sets out the key provisions concerning union recognition, terms and conditions, and grievance, disputes and redundancy procedures covering production workers in the UK footwear manufacturing industry.

Decline in collective bargaining

On the contrary, some negative developments continued in at least two Member States: the Netherlands and, most strikingly, in Portugal. At the beginning of April 2014, the Dutch employers’ organization AWVN announced that 500 of the total of 900 collective agreements in the Netherlands had expired. These 500 agreements cover 2.8 million employees. According to AWVN, the main explanation is wage demands from the largest trade union federation FNV. The effect of the expiration of collective agreements varies. When the employer is party to the agreement, either directly or through membership of the employer organisation that is party to the agreement, the provisions in the collective agreement continue to apply, even after expiration. When the employer is not a party to the agreement, they are free to deviate from the expired agreement. The expiry also terminates the extension of an agreement to the whole sector by the Ministry of Social Affairs and Employment. The employees and the company group can enter into an agreement for representation on company group level. The change will probably enter into force on  1 July 2014.

The Portuguese trade union confederation UGT published its Report on collective bargaining in 2013 (Relatório Anual da Negociação Colectiva 2013) based on official information provided by DGERT. This report shows a dramatic decline in the number of collective agreements and the number of workers covered when comparing the years 2008 and 2013.

The total number of collective agreements signed in 2008 was 295 agreements, whereas in 2013 only 94 agreements were signed. In 2008 the number of extensions was 137 and this figure dropped to only nine in 2013. The combined effect of the above developments led to the decline in collective bargaining coverage from 1.9 million workers in 2008 to 242,000 in 2013.

About this article

This article is based mainly on contributions from Eurofound’s network of national  correspondents. Further resources on collective employment relations and collective bargaining can be obtained from Eurofound’s European Company Survey (ECS), EurWORKs Industrial relations country profiles or EurWORKs collective wage bargaining portal.

For further information, contact Christian Welz: cwe@eurofound.europa.eu