Trade union representativeness problem resurfaces in banking

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In April 1999, ALEBA, a trade union representing bank staff in Luxembourg, which does not have nationally representative status and which recently joined with UEP to form a new federation for white-collar workers, quite unexpectedly signed a new collective agreement for the banking sector with the ABBL employers' organisation. The representative unions in the sector did not sign the deal. The Ministry of Labour's assessment of the legality of this agreement will be tantamount to a declaration on the nationally representative status of this new enlarged union organisation.

On 29 April 1999, a new collective agreement for the 22,000 private-sector white-collar employees in the banking sector was signed by the Luxembourg Association of Banks and Bankers (Association des Banques et Banquiers du Luxembourg, ABBL) and the Luxembourg Association of Bank Staffs (Association luxembourgeoise des employés de banque, ALEBA), though not the other trade unions in the sector. This development added new fuel to the long-running debate on the issue of trade unions' nationally representative status, especially in banking.

Nationally representative status

For a collective agreement to be valid, the 1965 Law on Collective Agreements requires it to have the support of one or more of "the most representative trade union organisations" at the national level. It excludes sectoral unions, company unions and enterprise- and establishment-level employee representatives. Trade unions identify themselves as the most representative nationally through the size of their membership, their activities and their independence.

Since November 1998, when the most recent "social elections" of employee representatives on a variety of company and national bodies took place (LU9812185N), there has been ample support for the view that Luxembourg has only two nationally representative trade union organisations: the Luxembourg Confederation of Independent Trade Unions (Onofhängege Gewerkschafts-Bond Lëtzebuerg, OGB-L) and the Luxembourg Confederation of Christian Trade Unions (Lëtzebuerger Chrëschtleche Gewerkschafts-Bond, LCGB). The elections confirmed the collapse in support for the Federation of Private Sector White-Collar Employees (Fédération des Employés Privés, FEP), hitherto regarded as having nationally representative status for private sector white-collar workers. Both the Union of Private Sector White-Collar Employees (Union des Employés Privés, UEP) and the Confederation of Private Sector White-Collar Employees (Confédération des Employés Privés, CEP) (LU9805162N) claim nationally representative status as FEP's replacements, but this issue has yet to be addressed by the Ministry of Labour and Employment.

Back in 1995, the government sought the opinion of the Economic and Social Council (Conseil économique et social, CES) on amending the criteria for assessing nationally representative status, and the entitlements associated with it (bargaining rights, representation on various bodies etc), with a view to reforming the 1965 Law on Collective Agreements and avoiding negative incidents in future, particularly in the banking sector where there has been a history of controversy (LU9806166N). The Council was unable to identify solutions in its opinion (LU9705107F), leaving the way open to future lawsuits on this issue in a sector that plays a vital role in the Luxembourg economy.

New federation formed

ALEBA, while it is the main union in the banking sector, does not have nationally representative status and therefore has no entitlement to sign a collective agreement on its own. However, on 27 April 1999, ALEBA and UEP created a new federation, the ALEBA-UEP Trade Union Federation (Fédération syndicale ALEBA-UEP), stating that white-collar workers in the private sector wanted a new organisation that was independent of the two "big political unions".

When the new organisation was set up, its president stated that, on the basis of the November 1998 social elections, ALEBA and UEP combined represented 24% of private-sector white-collar workers. In these circumstances, it would be hard to dispute that the new federation, whose main aim is to "group white-collar workers in the private sector in a strong new union", meets the criteria for nationally representative status.

ALEBA signs banking agreement

All the evidence had suggested that the four unions involved in long-running negotiations over a new collective agreement for the banking sector - LCGB, OGB-L, FEP and ALEBA - had adopted a joint strategy of claiming substantial pay rises, while at the same time opposing the employers' demand for a six-month reference period for averaging out variations in working hours (LU9904103N). However, on 29 April 1999, ALEBA, acting both on its own behalf and representing the ALEBA-UEP Trade Union Federation, signed a new collective agreement for white-collar banking employees with the ABBL employers' organisation.

The main provisions of the agreement, which runs for three years over 1999-2001, are as follows.

Pay

The agreed pay increases and bonuses consist of:

• in 1999 - a 1.5% pay increase, plus a so-called "conjunctural" (ie long-service) bonus payable in June, which is higher in than previous years, and a one-off bonus of EUR 372 paid during the month following the signing of the agreement;

• in 2000 - a 1.5% pay increase and a 1% "linear" increase incorporated into pay scales, plus an increase in certain scales, together with a "conjunctural" bonus, payable in June, equal to that paid the previous year; and

• in 2001 - a 1.5% pay increase and a 0.5% "linear" increase incorporated into pay scales, plus a "conjunctural" bonus, payable in June, equal to that paid the previous year.

"Performance-related pay" is retained, in that the three annual 1.5% pay rises are global figures, with the increases awarded to individual workers based on criteria linked to their seniority and performance.

Working time

The agreement provides that the flexible working hours system that operates in most banks is deemed to be a "work organisation plan" within the meaning of the Law of 12 February 1999 on the National Action Plan on employment (LU9903197F). This legislation requires such plans to be drawn up where an employer wishes to vary working hours around an average level over a reference period. The new agreement introduces a reference period of six months, accompanied by an obligation to notify excess hours' totals to the employee committee/works council (délégation du personnel) after three months. The details of the work organisation plan are to be determined at enterprise level, and presented to the employee committee/works council for a prior opinion.

Work performed between the 45th and 48th hour will be paid at the hourly rate increased by 25%, assuming that it is carried out by agreement with the employer.

Employees' annual holiday entitlement is increased to 26 days from the age of 50, and to 27 days from the age of 55.

Next steps

The signed agreement has been sent to the Labour Inspectorate for validation. At this stage, it is open to the Ministry of Labour and Employment to reject it, at the suggestion of the director of the Labour Inspectorate, if it feels that the collective agreement has been concluded between parties that do not have the legal authority to do so. In other words, the Minister must now reach a decision on the nationally representative status of ALEBA/the ALEBA-UEP Trade Union Federation. It may fall to the Administrative Tribunals, in the event of the case being taken to court, to decide on the validity of this decision.

Commentary

The question of nationally representative status has once again been posed in a sector where a sectoral trade union with substantial membership does not formally have the right to sign agreements. This is an issue that has been looming for some considerable time. However, it should be borne in mind that the system was designed precisely to prevent exclusively sectoral organisations (or company unions) calling a strike (without the help of a nationally representative trade union) and damaging the country's economy.

The problem that the Ministry of Labour has to resolve has become more difficult as it now has to take a view on the possible impact of the new federation. It is difficult to believe that this highly sensitive political question will be resolved before 13 June 1999, when the legislative elections are due to take place. (Marc Feyereisen)