Changing industrial relations in local public sector

In Austria, almost all employees in the public sector are excluded from the right to conclude collective agreements. However, until recently, informal wage negotiations between the authorities and the relevant trade unions have taken place in a highly centralised manner. Since the new coalition government of the conservative ÖVP and populist FPÖ broke with this practice in 2000, an evolving new practice of separate wage setting for the various levels of the public sector has created organisational problems within the local public sector (cities and municipalities). We review the situation in 2002.

Under the terms of the Austrian Constitution, the country has three levels of government: the federal (ie central) state; the provinces (Länder); and the local state (cities and municipalities). The local state provides two categories of local public services: governmental services in the narrow sense; and such consumer-oriented services as transport, power and rubbish collection, which are often organised in the form of businesses owned by the respective city or municipality. Since Austrian cities and municipalities have so far largely refrained from privatising such consumer-oriented services, this feature examining industrial relations in local public services considers them in the broad sense (ie covering both categories of services).

Collective bargaining

It is a general characteristic of the public sector in Austria that almost all its employees are excluded from the right to conclude collective agreements (AT0005221F). According to law, the terms of employment for public sector employees are unilaterally determined by the responsible authorities. De facto, however, informal negotiations between the authorities and the relevant trade unions take place. The agreements resulting from these negotiations are then ratified by the authorities. This pattern also holds true for the local public sector.

Until recently, these de facto negotiations were highly centralised, in that wage negotiations for the employees of the federal state, the Länder and the local state were conducted jointly on an annual basis. For this purpose, both sides in the talks - the various unions representing public sector employees and the responsible authorities - each set up a joint negotiating committee. The last time that this centralised form of wage setting took place was in 1999, regulating public sector pay for 2000.

New legal context

The new coalition government consisting of the conservative People's Party (Österreichische Volkspartei, ÖVP) and the populist Freedom Party (Freiheitliche Partei Österreichs, FPÖ) which came to power in February 2000 (AT0002212F) broke with this practice in 2000, by refraining from inviting the representatives of the Länder and the local state to take part in joint negotiations. As a consequence, wages were set separately for the three levels of government.

This new practice of separate wage setting created problems, especially for the Union of Employees of the Local State (Gewerkschaft der Gemeindebediensteten, GGB) which represents the workers employed at local state level. This is because there are many cities and municipalities and they lack representation by a comprehensive employers' association (see below). Under these circumstances, the provincial subunits of GGB had to seek separate negotiations with each of the larger cities and muncipalities in the course of the 2000 wage round. GGB claims to have succeeded in maintaining comparable pay rises across the distinct units of the local state, although negotiations could not be conducted with the numerous small muncipalities. Pay comparability was, however, maintained as these small muncipalities simply followed the pay increases fixed for their larger counterparts. The general strategy adopted by GGB at local level has been to orient its demands towards the pay rises fixed for the Länder.

There are only three actual collective agreements relating to local public services. They cover the consumer-oriented services in the cities of Vienna, Graz and Innsbruck. The parties to these agreements are GGB for the employees and the relevant businesses (Stadtwerke) owned by these cities' authorities. Collective bargaining coverage is 100% of workers in each of these cases. Consumer-oriented services are also provided by several other (usually much smaller) cities. In these cases, GGB concludes only informal agreements with the businesses concerned because the latter are not formally authorised to conclude collective agreements. As a rule, these informal agreements copy the wage arrangements set for the cities' governmental services.

Trade unions

The only trade union which organises the employees of local public services is GGB. In 1999, GGB's total membership stood at 176,112 employees, a figure which exceeds the estimated number of 150,000 to 160,000 employees working in the local public sector. This is mainly due to union membership among retired employees. Excluding these retired members, the 'net' membership of GGB is around 140,000, implying a level of unionisation of around 90% in local public services. As mentioned above, GGB concludes collective agreements for city-owned businesses in Vienna, Graz and Innsbruck. In addition, GGB is involved in consultation, including de facto negotiations, over the employment terms applying to the local public sector's governmental services and to the consumer-oriented services of those cities for which no collective agreement can be concluded.

Trade union representation is likely to change in the future because the cities are to convert their service-provision businesses into private-law companies. This change will mean that the employees involved will fall under the remit of the relevant private sector collective agreement referring to the specific type of consumer-oriented service concerned. Hence, unions other than GGB will conclude collective agreements on behalf of these employees - the Union of Salaried Employees (Gewerkschaft der Privatangestellten, GPA) for white-collar-employees and the Metalworking and Textiles Union (Gewerkschaft Metall-Textil, GMT) for blue-collar employees. GGB has reached a cooperation arrangement with each of these unions. Accordingly, GGB will continue to organise employees working in city-owned private-law companies, whereas collective bargaining on their behalf will be conducted by either GPA or GMT in the way outlined above.

This arrangement enables GGB to maintain its organising monopoly in local public services, whereas representation of these employees in collective bargaining will move to the two other unions. This means that union domains will remain demarcated in a complementary, non-competitive way. This cooperation is facilitated by the fact that all three unions are members of the Austrian Trade Union Federation (Österreichischer Gewerkschaftsbund, ÖGB).

Employers

As outlined above, there is no employers' organisation in the local public sector that might act as a social partner in relation to the trade union. This is for two main reasons. First, the vast majority of the sector is excluded from the right to bargain. Second, the long-term practice of highly centralised de facto negotiations relieved individual local authorities of dealing with industrial relations issues.

Although there are associations whose membership domains relate to the local public sector - including the Österreichische Gemeindebund, the Österreichische Städtebund and the Verband der Öffentlichen Wirtschaft und Gemeinwirtschaft Österreichs (VÖWG) - they all lack any role in industrial relations. In formal terms, this is manifested in the fact that none of these associations is entitled to conclude collective agreements. However, since the new coalition government has decentralised and differentiated public sector negotiations, a need for employers' representation has emerged for the local part of the sector. Therefore, one cannot rule out the possibility that one or other of these associations will take on industrial relations activities in the foreseeable future.

Commentary

The ongoing processes of restructuring of the public sector strongly challenge existing industrial relations practices in two main respects: First, the traditional union demarcations are questioned. Since all unions are under the umbrella of ÖGB, this is the less severe problem, as the abovementioned cooperation developments in the local public sector underscore. More important are the restructuring effects on negotiations and bargaining mechanisms. This includes building new employers' organisations. Due to its higher differentiation and fragmentation, this creates more problems for the local public sector than for its Länder and federal state counterparts (Franz Traxler, University of Vienna).