Bargaining in the public sector

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In spring 2000, Austria's new government has proposed renewed expenditure cuts in the public administration and a pensions reform, against the backdrop of a rising budget deficit. Social partnership in the public sector has so far proved to be very stable, as in other sectors of the Austrian economy, but the new cuts mean that conflicts between the social partners are likely to intensify in the near future.

In Austria, the sectoral level is the most important for the collective regulation of terms and conditions of employment. This also holds true for the public sector in the narrow sense (ie government services). However, the public sector is distinctive in that free collective bargaining does not exist. Public sector employees and their representatives are entitled neither to conduct collective bargaining nor to conclude collective agreements. In contrast to Germany, this applies not only to civil servants but also to other "contractual" public sector employees, so that virtually all public sector workers are excluded from the right to bargain. From a strict legal point of view, employment conditions are unilaterally determined by the state. However, there is a practice of informal bargaining, in that regular, annual negotiations occur between the authorities and the public sector trade unions. The outcomes of these negotiations de facto determine the public sector terms of employment, especially with regard to pay, since they are always ratified by the authorities.

Social partners in the public sector

Unlike most private employers, state authorities are not members of the Chamber of the Economy (Wirtschaftskammer Österreich, WKÖ) employers' organisation (AT0004217N). In general, the public administration has three hierarchic levels - federal, provincial (Länder) and local (Gemeinde).

Public sector employees are represented by separate trade unions, which largely reflect the differentiation of the state: the Union of Public Services (Gewerkschaft öffentlicher Dienst, GÖD) represents civil servants and contractual employees of the federal and provincial administrations; and the Municipal Employees' Union (Gewerkschaft der Gemeindebediensteten, GdG) organises the employees of local administrations.

Public employees' unions, both federal/provincial and local, have relatively high density rates. More than 80% of all employees in local administrations and 60% of all federal and provincial public employees are members of the respective unions. Membership figures tended to be fairly stable in the 1990s, and small declines in absolute membership primarily ensued from declining employment in the public administration.

Despite this differentiation in both state authorities and trade unions, negotiations take place jointly on behalf of the public sector as a whole. This means that representatives of the federal state, the Länder and the local authorities participate in these negotiations on side of the employers. Preparations for pay bargaining are made by the state's personnel development division, which is responsible for supporting politicians with relevant documents and calculations. The personnel development division has been shifted between various governmental institutions several times in the past decade, due to the redistribution of government competences regarding the public administration. First, it was transferred from the Office of the Federal Chancellor to the Finance Ministry, and since April 2000 the division is subordinate to the Vice Chancellor of the new governing coalition of the People's Party (Österreichische Volkspartei, ÖVP) and the Freedom Party (Freiheitliche Partei Österreichs, FPÖ) (AT0002212F), Susanne Riess-Passer. Mirroring the employers, the trade unions form a joint committee for the negotiations.

In recent years, a demand to split up the negotiations has been made by the employees of several public administration departments. Among them are departments with a strong corporate identity, such as diplomatic departments and the public audit office. However, these efforts have not yet translated into separate negotiations.

Impact of EMU

Since the 1990s, pay negotiations have increasingly been conducted in the shadow of talks about expenditure cuts in the public sector (AT9706117F), mainly caused by the imperative to meet the Maastricht criteria for EU Economic and Monetary Union (EMU). Similarly, issues such as pay and pension arrangements have repeatedly been subject to political reform measures, implying negotiations with the trade unions on this issue. So far, all these reforms have been formulated and implemented based on accords with the unions. For instance, in connection with such reforms, in 1996-7 the social partners in the public sector agreed on a wage increase in form of a flat-rate single payment (Einmalzahlung). This measure favoured lower-income personnel and prevented a rise of the general income level during these years.

Women in the public administration

The public sector's equal treatment policy for women and men is outlined in specific federal legislation dating from 1993. Accordingly, no person is to be discriminated against on grounds of gender. This applies essentially to recruitment, payment regulations, voluntary social security benefits, admission to training and promotion.

Furthermore, regulations concerning specific employment promotion measures for women exist, which have to be applied in cases of under-representation in particular areas, which is defined as an employment share for women of below 40%. All ministries have to establish a "promotion plan", containing measures aimed at overcoming under-representation of women. In cases of equal qualification, there is an obligation to prefer female applicants for jobs until the female share of 40% is reached. The same applies to advancement in the administrative hierarchy.

Payment systems are more standardised in the public sector, such that gender-specific wage differentials are significantly lower than in the private sector. Women generally enjoy more equal salaries with men than in large parts of the private economy. The income of civil servants is determined by two factors: the general salary and "position-related allowances" (Funktionszulage) - an additional regular payment depending on the particular circumstances of a civil servant. The general payment system is the same for all civil servants, but women tend to be disadvantaged in regard to the Funktionszulage. During recent years, this discrimination has been reduced somewhat, with the additional payments being awarded more objectively.

Recent conflicts and problems

The Austrian budget deficit was stabilised at around 2% of GDP in 1997, but is tending to increase again. As a consequence, Austria was criticised by the EU Council of Economic and Financial Affairs Ministers in May 2000. This development necessitates further efforts to cut public spending.

In general, the new centre-right coalition governments plans to cut about 9,000 jobs in the public administration by 2003. In the view of the GÖD trade union, this measure could create unacceptable working conditions and insufficient services for citizens. Furthermore, along with the pension reform planned in the private sector, employees of the public sector also face cuts in their pensions (AT0002211N). Negotiations are currently underway, and the reform is expected to take effect in October 2000. The government proposals involve rising contributions to the pension scheme. Furthermore, the health service is confronted with substantial expenditure cuts, since its deficit is estimated at 5.7% in 2000. Thus, the government has proposed expenditure cuts in the health administration of ATS 1.5 billion. The unions oppose the projected expenditure cuts strongly and some public sector unions and works councils have responded with protests and staff meetings.

Commentary

So far, no details of the new government's proposed reform measures can be assessed, since negotiations started only very recently. However, it seems obvious that the public administration will have to face considerable expenditure cuts and tighter regulations concerning pensions. This will probably intensify the conflict between the government and the unions. In this respect, it is worth noting that, for more than a decade, the public sector has seen more industrial disputes than the private sector in terms of both employees involved and working hours lost. Nevertheless, the principle of social partnership has prevailed so far, as all former governments conducted their reforms in concertation with the unions, so that these reforms could rely on wide-ranging consent. As regards the recent reform initiatives, the new government may be determined to enforce its programme even against open union resistance. The unions have expressed doubt that social partnership in the sector can survive under these circumstances (Angelika Stueckler, University of Vienna).