Comparative overview of industrial relations in Europe in 2002

This record provides a comparative overview of industrial relations in the European Union, Norway and three candidate countries (Hungary, Poland and Slovakia) in 2002.

Here we review the main developments in industrial relations in 2002 in the countries covered by theEuropean Industrial Relations Observatory (EIRO) - the EU Member States, Norway and three of the candidate countries due to join the EU in 2004 (Hungary, Poland and Slovakia). We examine the key issues covered by collective bargaining - pay, working time, job security and equal opportunities and diversity issues - as well as legislative developments, the organisation and role of the social partners, industrial action, employee participation, new forms of work (especially telework) and vocational training. We start by setting out very briefly the economic and political context for industrial relations in Europe in 2002.

Economic developments

Economic growth slowed across the European Union during 2002, continuing the downturn witnessed during the second half of 2001 - see figure 1 below.Eurostat figures relating to the year to the third quarter of 2002 show that GDP growth in the 12 countries of the'euro-zone' was 0.9%, compared with 1.4% in the year to the third quarter of 2001. GDP growth for all 15 EU Member States was slightly higher, at 1.1%, again compared with 1.4% in 2001. However, there were wide variations across the individual Member States. The country with the strongest economic growth remained Ireland, where third quarter 2002 GDP growth was 6.9%, far above the EU and euro-zone average. Other countries which experienced robust growth included Greece (3.6%), Finland (2.2%), Sweden and the UK (both 2.1%). Portugal experienced negative GDP growth, of -0.5%, while the Netherlands, Germany and Italy also saw rather poor growth (0.3%, 0.4% and 0.5%, respectively).

Figure 1. GDP growth in the EU, third quarter 2002 and 2001 (% change compared with the same period in the previous year)

Figure 1. GDP growth in the EU, third quarter 2002 and 2001 (% change compared with the same period in the previous year)

* not seasonally adjusted.

Source: Eurostat.

Euro notes and coins came into circulation at the beginning of 2002. The participating countries (all EU Member States with the exception of Denmark, Sweden and the UK) withdrew their national currencies by the end of February 2002.

Comparing the two years as a whole, inflation fell across the EU between 2001 and 2002 - figure 2 below gives the annual average rates of inflation for December 2000-December 2001 and December 2001-December 2002. The rate for the EU as a whole fell from 2.4% to 2.1% and for the euro-zone from 2.6% to 2.2%. In 2002, the highest annual average inflation was found in Ireland (4.7%), Greece (3.9%) and the Netherlands (3.9%), and the lowest in Germany (1.3%), the UK (1.3%) and Belgium (1.6%). However, inflation crept up slightly across the EU over 2002, standing in December at 2.3% in the euro-zone and 2.2% in the EU as a whole. These figures compare with December 2001 figures of 1.9% in the EU 15 and 2.0% in the euro-zone. At the end of 2002, Ireland remained the country in the EU with the highest inflation, at 4.6%, followed by Portugal and Spain (both 4.0%).

Figure 2. Inflation in the EU, average annual % increase, 2001 and 2002

Figure 2. Inflation in the EU, average annual % increase, 2001 and 2002

* 2002 figure is provisional.

Source: Eurostat.

Europe’s labour markets did not perform as well during 2002 as they did the previous year. The overall rate of unemployment for the EU was 7.8% as at December 2002, compared with 7.4% in December 2001, according to Eurostat - see figure 3 below. The unemployment rate in the euro-zone was 8.5% in December 2002, compared with 8.1% in December 2001.

The unemployment rate in December 2002 varied considerably between EU countries, ranging from 12% in Spain and 9.9% in Greece to 2.9% in the Netherlands and 2.7% in Luxembourg. Spain would appear be experiencing continuing problems in controlling unemployment, as the December 2002 rate of 12% was a significant increase on the already high 10.7% recorded for December 2001. Unemployment in the majority of EU Member States increased during the year to December 2002. The exceptions were Greece (down to 9.9% in September 2002 from 10.7% in December 2001), Italy (down to 8.9% in October 2002 from 9.1% in December 2001), Finland (down to 9.0% in December 2001 from 9.2% in December 2001) and the UK, where the October 2002 figure was stable at 5.1%.

Much of the increase in unemployment was doubtless due to the deterioration in the economic climate experienced during 2002. Member States will have to work hard at their labour market policies during 2003 to try to reverse this trend.

Figure 3. Unemployment in the EU, % of workforce in December 2002 and December 2001, seasonally adjusted

Figure 3. Unemployment in the EU, % of workforce in December 2002 and December 2001, seasonally adjusted

* (September 2002); ** (October 2002); *** (November 2002).

Source: Eurostat.

Political developments

General elections were held in nine countries during 2002. Incumbent governments retained power after the general elections in: Germany, where the'red-green' coalition of the Social Democratic Party and Alliance 90/the Greens won a narrow victory; Ireland, where the coalition of the majority centristFianna Fail party and the small right-of-centreProgressive Democrats (PDs) was re-elected; and Sweden, where the minority Social Democratic Party (Socialdemokratiska Arbetarepartiet, SAP) government was returned to office.

New governments took office in: France, where the parties of the centre-right formed the new government after the parliamentary elections in June, taking over from the former Socialist-led coalition; Hungary, where a right-wing government was replaced by a coalition of the Hungarian Socialist Party (MSZP) and the liberal Alliance of Free Democrats (SZDSZ); Portugal, where the governing Socialist Party (PS) was ousted by a coalition of the centre-right Social Democrat Party (PPD/PSD) and the right-wing People's Party (CDS/PP); and Slovakia, where the election resulted in a change in the composition of the coalition government, which moved towards the centre-right with the departure of two more left-leaning parties and the addition of a new party.

Coalition talks were underway in early 2003 following general elections in: Austria, where the conservative Austrian People’s Party (ÖVP) gained significantly at the September elections, but its former coalition partner, the populist Freedom Party (FPÖ) saw its vote fall sharply; and the Netherlands, where the the Christian Democratic Appeal (CDA) - the senior partner in the previous coalition - and social democratic Labour Party (PvdA) were the main winners in the January 2003 election to replace the short-lived coalition government which took office following a general election in May 2002.

France saw a presidential election in 2002, with Jacques Chirac, the candidate supported by the conservative Movement for the Republic (RPF), re-elected as President of the Republic.

Local and regional elections were held in 2002 in countries such as Hungary, Italy, Poland, Slovakia and the UK, resulting in varying outcomes for the parties in power or opposition at national level.

Table 1 below provides an an overview of political developments in 2002.

Table 1. Political situation in the EU Member States, Hungary, Norway, Poland and Slovakia
Country Political situation
Austria General elections were held on 24 November 2002, resulting in success for the conservative Austrian People’s Party (Österreichische Volkspartei, ÖVP). The ÖVP increased its vote to 42.3%, whereas its former coalition partner, the populist Freedom Party (Freiheitliche Partei Österreichs, FPÖ) saw its share of the vote collapse. At the beginning of 2003, the ÖVP was in negotiations with three political parties with the aim of finding a coalition partner (a coalition with the FPÖ was resumed in February).
Belgium No elections were held in 2002, and the'rainbow' coalition which has been in power since June 1999 continued to govern throughout the year. This coalition is made up of six parties: the Flemish Liberals and Democrats (Vlaamse Liberalen en Democraten, VLD); the (French-speaking) Reform Party (Movement réformateur, MR); the (French-speaking) Socialist Party (Parti Socialiste, PS); the (Flemish-speaking) Progressive Social Alternative (Sociaal Progressief Alternatief, SP.A); the French-speaking environment partyEcolo; and the Flemish environmental partyAgalev. The next general election will be held in June 2003.
Denmark The government formed in November 2001 by the Liberal Party (Venstre) and the Conservative Party (Det Konservative Folkeparti), headed by the Liberal leader, Anders Fogh Rasmussen, continued in office during 2002. The government, during the course of the year, worked on a number of labour reforms, some of which proved to be controversial.
Finland No elections were held in 2002 and the'rainbow' coalition government consisting of left- and right-wing parties - the Social Democratic Party (Suomen Sosiaalidemokraattinen Puolue), the conservative National Coalition Party (Kansallinen Kokoomus), the Left-Wing Alliance (Vasemmistoliitto), the Greens (Vihreä Liitto) and the Swedish People's Party (Svenska Folkpartiet) - elected in 1999, remained in power. The next elections will be held in March 2003.
France Presidential elections were held in April-May 2002, resulting in the re-election of Jacques Chirac, the candidate supported by the conservative Movement for the Republic (Rassemblement pour la République, RPR), as President. Parliamentary elections were held in June 2002, resulting in victory for the centre-right parties over the Socialist Party (Parti Socialiste, PS) and its partners in the previous coalition government. The new government led by Prime Minister Jean-Pierre Raffarin issued its employment and social priorities after taking office, focusing on the reanimation of the social dialogue, the revision of legislation governing the 35-hour week, pensions, social security, youth unemployment and the fight against discrimination (FR0208103F).
Germany A general election was held in September 2002, resulting in a narrow victory for the'red-green' coalition government, composed of the Social Democratic Party (Sozialdemokratische Partei Deutschlands, SPD) and Alliance 90/The Greens (Bündnis 90/Die Grünen), headed by Chancellor Gerhard Schröder. The coalition subsequently embarked upon a second four-year term, with reform of the labour market as one of its key priorities (DE0211205F). The opposition parties have a majority in the upper house of parliament, theBundesrat.
Greece The ruling Pan-Hellenic Socialist Movement (Panelinio Socialistiko Kinima, PASOK), which came to power in 2000, remained in office during 2002, headed by Prime Minister Konstantinos Simitis. The next parliamentary elections are scheduled for the summer of 2004.
Hungary A general election was held in April 2002, resulting in victory for the Hungarian Socialist Party (Magyar Szocialista Párt, MSZP) and the liberal Alliance of Free Democrats (Szabad Demokraták Szövetsége, SZDSZ) (HU0206101F) over the previous right-wing administration. The policy aims of the new MSZP-SZDSZ government include the development of a more extensive welfare state and a more consensual style of policy-making. Local government elections were held in October 2002, resulting in victory for the coalition which came to power in the April general election.
Ireland A general election was held in May 2002, resulting in the re-election of the coalition between the majority centristFianna Fail party and the small right-of-centreProgressive Democrats (PDs).
Italy The centre-right coalition of parties elected in May 2001, the House of Freedoms (Casa delle Libertà), continued to govern during 2002, led by Prime Minister Silvio Berlusconi. The coalition is composed ofForza Italia, the National Alliance (Alleanza Nazionale), the Northern League (Lega Nord) and the Centre Christian Democratic Union (Unione Democratica Cristiana di Centro, UDC) - which was formed out of a merger at the end of 2002 between the Christian Democratic Centre (Centro Cristiano Democratico, CCD) and the United Christian Democrats (Cristiani Democratici Uniti, CDU). Elections for new administrations in 10 provinces and 967 local councils were held in May 2002. The opposition centre-left coalition gained control of four municipalities, including Genoa and Verona.
Luxembourg The coalition government, made up of the Social Christian Party (Chrëschlech Sozial Vollekspartei, CSV) and the Democratic Party (Demokratesch Partei, DP), which came to power in August 1999, continued in office during 2002.
Netherlands The general election of May 2002 resulted in a defeat for the parties in the ruling coalition of the social democratic Labour Party (Partij van de Arbeid, PvdA), the liberal Party for Freedom and Democracy (Vereniging voor Vrijheid en Democratie, VVD) and the social liberalDemocraten 66 (D66). A new party, the populist List Pim Fortuyn (Lijst Pim Fortuyn, LPF), won 26 seats in parliament (out of 150), while the Christian Democratic Appeal (Christen Democratisch Appel, CDA) increased its number of seats from 29 to 43 (NL0206103N). These two parties subsequently formed a new coalition government with the VVD, led by Prime Minister Jan Peter Balkenende (CDA). The relationship between the government and the social partners soon became tense, and the coalition collapsed within three months due to internal conflicts in the LPF (NL0211101N). (A further general election was held in January 2003, resulting in the CDA winning most seats, followed closely by the PvdA, while the VVD also gained ground. D66 lost one seat and the LPF lost the majority of its seats. Talks on the formation of a new coalition government were underway at the end of January (NL0302101N).)
Norway The centre-right minority coalition government which took office in October 2001, comprising the Conservative Party (Høyre), the Christian Democratic Party (Kristelig Folkeparti, KRF), and the Liberal Party (Venstre), remained in power during 2002, under Prime Minister Kjell Magne Bondevik. During 2002, in order to govern, the government sought alternating support in parliament from opposition parties to the right and the left.
Poland The coalition government elected in 2001 - made up of the Democratic Left Alliance (Sojusz Lewicy Demokratycznej, SLD), Polish Peasants Party (Polskie Stronnictwo Ludowe, PSL) and Labour Union (Unia Pracy, UP) - continued in office during 2002. Municipal elections were held in October and November 2002, at which the ruling coalition lost some support, although it won overall.
Portugal General elections were held in March 2002, resulting in a defeat for the governing Socialist Party (Partido Socialista, PS). It was replaced by a coalition of the centre-right Social Democrat Party (Partido Social Democrata, PPD/PSD) and the right-wing People's Party (Partido Popular, CDS/PP). The new government has since met with the social partners to discuss issues such as social protection, labour flexibility, taxation, the economic situation and pay restraint.
Slovakia A general election was held in September 2002, resulting in the appointment of a new government in October 2002. The new government is a coalition of three parties which had been in the previous government - the Slovak Democratic and Christian Union (Slovenská Demokratická a Krestanská Únia, SDKÚ), the Hungarian Coalition Party (Magyar Koalíció Pártja/Strana Madarskej Koalície, MKP/SMK) and the Christian-Democratic Movement (Krestansko Demokratické Hnutie, KDH) - plus the New Civic Alliance (Aliancia Nového Obcana, ANO). Two parties in the former government - the Democratic Left Party (Strana Demokratickej Lavice, SDL) and the Party of Civil Understanding (Strana Obcianskeho Porozumenia, SOP), both located more to the left of the political continuum - are not members of the new coalition, pushing the government towards the right. The new administration characterises itself as centre-right (SK0212101N).
Spain The centre-right People’s Party (Partido Popular, PP) government, elected in March 2000, continued to govern with an absolute majority during 2002.
Sweden The general election held in September 2002 resulted in the return to power of the minority Social Democratic Party (Socialdemokratiska Arbetarepartiet, SAP) administration, which will continue to operate with the help of the Left Party (Vänsterpartiet) and the Green Party (Miljöpartiet de Gröna).
UK TheLabour Party, which was returned to power in June 2001 for a second five-year term, continued in office throughout 2002. Local council elections were held in England in May 2002, resulting in modest gains for theConservative Party andLiberal Democrat Party at the expense of the Labour Party. However, Labour continued to control the largest number of councils.

Source: EIRO.

Collective bargaining developments


The continuing centrality of collective bargaining to industrial relations in the EU and Norway was confirmed by an EIRO comparative study conducted in 2002 (TN0212102S). The study found that bargaining coverage in the 16 countries remains at a high level. Of the 12 for which comparable information was available: nine countries have a high level of coverage (over 70% of employees); two have a medium level of coverage (between 40% and 70%); and one a low level of coverage (less than 40%). High bargaining coverage is thus the norm, while there are also strong indications that only little significant change has occurred in coverage rates over the past decade or so in the EU and Norway. In two countries (Germany and the UK) bargaining coverage has declined over the past decade or so, while in one (Denmark) coverage has increased. The study concludes that in the run-up to EU enlargement, the Member States' systems of collective bargaining seem to be well established, and maintain to a large degree their great potential to regulate wages, hours and working conditions. However, in the four candidate countries included in the study (Hungary, Poland, Slovakia and Slovenia) bargaining coverage is - with the exception of Slovenia (where it stands at around 100%) - in decline, reaching only medium coverage rates at best.

Turning to collective bargaining developments during 2002, an overview of events in individual countries is provided in table 2 below. A number of new national-level agreements were concluded or negotiated during 2002:

  • in Belgium, where collective bargaining is carried out on a two-year cycle, the social partners concluded a new national agreement for 2003 and 2004 in December 2002. The accord, which was formally approved in January 2003, provides a pay framework for 2003 and 2004 and covers a range of other issues such as early retirement, leave arrangements and training;
  • in Finland, a new national incomes policy agreement was concluded in November 2002 (FI0212103F) after some weeks of difficult negotiations. The agreement sets out a pay framework for 2003 and 2004, accompanied by a range of'qualitative' measures, plus tax cuts pledged by the government;
  • in Greece, a new two-year National General Collective Agreement for the private sector was signed in April 2002, after two months of bargaining (GR0204109F). The agreement provides for minimum pay increases, along with a variety of new provisions on employment conditions and social issues. The topic of working time reduction was referred to a special committee; and
  • in Ireland, following lengthy and difficult negotiations on a new national agreement, the government and social partners finally succeeded in reaching a new accord, which is now subject to approval, in January 2003 (IE0301209F). The agreement contains an 18-month pay deal and provisions on trade union recognition and increases in statutory redundancy pay entitlement.

In those countries where sectoral bargaining predominates, 2002 was a busy year in some cases. In Germany, the year saw the conclusion of new agreements in a range of important sectors, including metalworking (DE0205206F), chemicals (DE0205204F), construction (DE0206204F) and printing (DE0206202N). In contrast to the lively activity at sectoral level, however, talks at national level within the tripartite Alliance for Jobs failed to get off the ground during 2002 (DE0212205F).

In Norway, existing two-year national sectoral collective agreements were renegotiated in 2002. Bargaining was led, as usual, by the engineering industry, which was followed by agreements in other the private, public and semi-public sectors (NO0204103F). The 2002 settlements generated higher wage growth than anticipated in some sectors, but bargaining was for the most part carried out without industrial conflict (NO0206105F).

In Denmark, there was little private sector bargaining activity, as most sectors were still covered by four-year agreements concluded in 2000. However, in the public sector, new agreements were concluded in the muncipal/county (DK0205102F) and central government areas (DK0204103F). Similarly, in Sweden many sectors were still covered by three-year accords negotiated in 2001, though 2002 saw agreements in the government sector (SE0206103N) and information and communications technology sector (SE0212103F).

In France, it is expected that 2002 will have seen a reduction in negotiating activity (definitive statistics will not be published until July 2003). Bargaining in France remains dominated by negotiations over the introduction of the 35-hour week, even though the new conservative government has recently made some adjustments to the implementation of this statutory working time reduction (FR0210106F).

With regard to the scope and coverage of bargaining, Portugal saw a decline of 4.5% in the number of agreements negotiated in 2002, compared with 2001. A fall-off in bargaining activity was also witnessed in Hungary, where 18 multi-employer agreements were concluded in 2002 in the competitive private sector, compared with 31 in 1998. The number of company-level agreements concluded during 2002 also declined in comparison with recent years.

However, 2002 saw a number of instances of collective bargaining extending to new areas. For example, January saw the conclusion of Austria's first ever sectoral collective agreement for temporary work agencies, setting minimum wages for almost 27,000 agency workers, who are primarily employed in the metalworking sector. It was negotiated by the Metalworking and Textiles Union (Gewerkschaft Metall-Textil, GMT) and the general crafts and trades subunit of the Austrian Chamber of the Economy (Wirtschaftskammer Österreich, WKÖ). In Slovakia, following legislative reform, the first collective agreements were signed in 2002 for civil servants (SK0212102N) and public service employees (SK0209101N).


As indicated by figure 4 below, the average nominal collectively agreed pay increase across the EU plus Norway was 3.8% in 2001 and 3.5% in 2002 (as calculated by EIRO -TN0303102U). The rate of increase thus declined in 2002, reversing an upward trend seen since 1999. However, within these averages, the range of increases was wide - between 7.5% in Ireland and 2.1% in Germany in 2001, and between 5.5% in Norway and 2.1% in Austria in 2002.

Figure 4. Average collectively agreed pay increases, 2001 and 2002 (%)

Figure 4. Average collectively agreed pay increases, 2001 and 2002 (%)

* Average of 18 countries; ** Average of 16 countries for 2001 and average of 15 countries for 2002; *** Average of 12 countries for 2001 and average of 11 countries for 2002

Source: EIRO.

The trend towards increased pay moderation was relatively widespread in 2002, with the average rate of nominal increase falling in countries such as Austria, Belgium, Finland, Ireland, Luxembourg, the Netherlands, Portugal and the UK. However, the rate of increase rose in Germany, Greece, Italy, Norway and Spain, and remained stable in Denmark and Sweden. Adjusting the nominal increases for inflation, average real collectively-agreed pay increases across the EU plus Norway rose slightly from 0.8% in 2001 to 1.0% in 2002 - though in the EU the rate of increase actually fell to 0.7% in 2002 (Norway experienced a particularly large real pay rise). The rate of real pay increase rose in nine of the 15 countries for which data are available and fell in only five.

In those countries where pay moderation continued or strengthened, this was largely as a result of sluggish economic performance, as well as the efforts of the government or social partners in some cases. In Austria, for example, there was limited leeway for pay increases, due to a less than robust economic position, coupled with an oversupply of labour. The metalworking sector agreement, which traditionally sets the pace in Austria, contained minimum increases of 2.2%-2.3%, plus an option for employers to distribute a proportion of pay flexibly. Other agreements concluded after the metalworking accord provided for increases of between 2.1% and 2.3%.

Pay moderation was a continuing theme during bargaining in the Netherlands in 2002 (NL0204103F). In the end, the average collectively agreed increase was 3.8% (down from 4.4% in 2001), with a range from 2.9% in industry and transport to 4.5% in agriculture. In November 2002, the Dutch government and social partners reached a'social agreement' for 2003, which included a pay increase limit of 2.5% - the first such centrally agreed wage ceiling for a decade (NL0212101N). Bargaining in Spain in 2002 was conducted within the framework of a pay moderation accord concluded in December 2001 (ES0201207F). The relatively moderate pay developments in 2002 in Belgium, Finland and Ireland were also governed by national intersectoral agreements signed in previous years. In the UK, where company bargaining predominates, collectively agreed basic pay rose by an average of 3.0% during 2002 (down from 3.5% in 2001), although average earnings increased by 4.2%. Most public sector workers received above-inflation increases, following the government’s decision to implement in full pay awards recommended by independent pay review bodies.

In some other countries, however, pay moderation faltered somewhat during the year. This was the case in Germany, where theIG Metall trade union was keen to achieve significant pay increases in the metalworking sector, following some years of wage restraint. The union succeeded in negotiating a 4% increase for 2002 (DE0205206F), although part of this is tied to the introduction of a new pay framework. Overall, collectively agreed pay increases in 2002 were, at an average of 2.7%, somewhat higher in 2002 than in the previous two years (2.4% in 2000 and 2.1% in 2001). Nevertheless, when increases in consumer prices and in social security contributions are taken into account, there was'negative wage drift'.

In France, where pay growth has been dampened since 1998 by the introduction of the 35-hour week, there was some evidence that it began to pick up again during 2002. This was due in part to the fact that many wage freeze and pay moderation accords introduced in recent years in tandem with a reduction in working hours are now coming to an end.

In the candidate countries, pay increases are generally much higher than the EU average at present, with the average for Hungary, Poland and Slovakia exceeding 6% in both 2001 and 2002. In Slovakia, pay growth was estimated to be around 8.8% in the year to the third quarter of 2002. Actual pay growth, taking inflation into account, was estimated to be 6.1%, the highest increase for four years. In Hungary, average collectively agreed pay increases were estimated to be 11% in 2002, slightly higher than the maximum set down in a national tripartite recommendation.

Finally, aside from pay increases, pay flexibility was on the bargaining agenda in some countries. Notably, in Denmark, the bargaining parties in the industry sector concluded an agreement on the introduction of a new pay system, known as'Plus-pay' (Plusløn) - a performance-related system, with a close connection between an element of pay and the performance of the individual employee and the enterprise's results and earnings (DK0211102N). Furthermore, in July, the Danish Commerce and Service (Dansk Handel & Service, DHS) employers’ organisation launched a document promoting a flexible'buffet' system, whereby employees could construct their own package of pay and benefits (DK0208101N).

Working time

As indicated by figure 5 below, average collectively agreed weekly working time in the EU plus Norway was virtually static between 2001 and 2002 at 38.2 hours (as calculated by EIRO -TN0303103U). As in previous years, significant general agreed working time reductions were virtually absent in most countries in 2002.

Figure 5. Average collectively agreed normal weekly hours, 2002

Figure 5. Average collectively agreed normal weekly hours, 2002

* 2000 figure; **2001 figure; *** Average of 16 countries; **** Average of 18 countries

Source: EIRO.

Despite the overall stability of agreed normal weekly hours, working time has remained a prominent issue for negotiators.

In terms of working time reductions, France is, of course, the country which has been most prominent over the past four years, following the adoption of legislation on a 35-hour week. 2002 was no exception, with the issue of working time dominating bargaining and average collectively agreed normal weekly hours falling to 35.7 from 36.1 in 2001. However, there were some signs that its influence is beginning to wane slightly, with more attention devoted to the issue of pay than in previous years. In Belgium, the 2001-2 national intersectoral agreement provided for a one-hour cut in the working week, from 39 to 38 hours. This came into effect on 1 January 2003.

At individual sector and company level, 2002 saw a number of agreements on cutting weekly working hours. In Slovakia, collective agreements negotiated for the civil service and public services in 2002 reduced working time for these employees from 40 hours to 37.5 hours a week. In Greece, average agreed weekly working time is, at 40 hours, the highest in the EU (and actual working time for full-time workers is rising) and trade union demands for reduction of the working week to 35 hours without loss of pay have not so far been successful. However have been some working time reductions at sectoral level, notably in banking, where agreed weekly working time was reduced from 38 hours 20 minutes to 37 hours in 2002 (GR0206102N). In Luxembourg, some new agreements introduced slight reductions in the statutory working week of 40 hours.

Elsewhere, working time reductions have in some cases been realised through cuts in annual hours and/or the introduction of additional leave. For example, in Denmark two extra days of holiday were awarded to public sector employees in the context of the renewal of their collective agreements in 2002. In Italy, a new agreement in the chemicals sector provided for an annual eight-hour reduction in working time (IT0203103N).

Much discussion of working hours reductions is still linked to greater flexibility in working time, though there appear to have been few notable new agreements on this issue in 2002.

Finally, in the UK, there is an ongoing debate concerning what is known as the'long hours culture'. The UK government has taken advantage of a clause contained in the EU working time Directive (93/104/EC) which allows individual employees to'opt out' of the 48-hour maximum weekly working time provision. Trade unions have been calling for an end to this opt-out, with theTrades Union Congress (TUC) claiming that 16% of the UK workforce works over 48 hours a week (UK0202102F).

Job security

The issue of job security remained a key concern for trade unions in many countries during 2002, as waves of enterprise restructuring and downsizing continued to sweep across Europe.

In Spain, the general lack of job security continues to be one of the labour market's main problems, as perceived by the social partners. This is largely due to the continuing high numbers of workers employed on temporary and fixed-term contracts. The issue of job security was addressed by the national agreement laying down guidelines for bargaining in 2002, which devoted a chapter to maintaining and increasing employment, promoting vocational training and preventing the unjustified use of successive temporary contracts.

In Greece, a new sectoral agreement for journalists (GR0205101N) contains a number of clauses relating to job security. It commits employers to refraining from collective dismissals and prolongs an existing provision that states that changes in ownership of newspapers will not affect journalists’ employment rights and that, in such cases, their employment relationship will not be considered to have been interrupted. At enterprise level in Greece, an innovative collective agreement was concluded at theHilton hotel in Athens, relating to the temporary closure of the hotel. The accord provides for a continued employment relationship, with a degree of wage compensation, for many of the hotel's employees, and commits the company to not making use of a clause allowing it to dismiss 2% of its workforce a month until the hotel begins to operate once more (GR0201115F).

Many companies in Italy were hit hard by the economic slowdown over the year. For example,Alitalia has experienced considerable difficulties, linked to the international civil aviation crisis (IT0203101N). However, an accord was signed at the airline in March 2002 which makes it possible to avert some 2,500 planned redundancies through the use of measures such as retirement, a two-year pay freeze and the use of'solidarity contracts', whereby the impact of reducing labour costs is distributed among a large number of employees by means of a reduction in working time (IT0205202F). Restructuring also took place in a range of'new economy' companies in Italy (IT0203305F). However, the most prominent case of industrial restructuring in Italy is the reorganisation of the motor manufacturer Fiat Auto. After some months of discussions betweenFiat management and trade unions, industrial action and the drawing up of restructuring plans and measures, an accord was reached between Fiat management and the Italian government in December 2002 (IT0212211F). This has, however, been rejected by trade unions.

A further example of job security in the face of motor manufacturing restructuring was found in the UK, where the closure ofFord’s Dagenham plant andVauxhall’s Luton plant, with the loss of 3,000 jobs, took place without compulsory redundancies (UK0205104F).

In Finland, a central goal of the trade unions in the bargaining over a new central incomes policy agreement for 2003-4 was to obtain greater financial compensation for employees who are made redundant (FI0209102F). They were not successful, but instead it was agreed that an'employment programme' for workers threatened by redundancy should in future be prepared in cooperation between employers, employees and public authorities. The aim is to ensure that redundant employees will be able to find a job quickly, either with the same or another employer. In addition, the period of increased income-related unemployment benefit will be extended for employees with 20 years' employment.

Job security and corporate governance

The extent to which employees and their representatives can influence company restructuring decisions and maintain job security in such situations depends on the national legal and industrial relations context. In some countries, the main channel of influence is through works councils and co-determination systems, while in others trade unions and collective bargaining are the main channel. An EIRO comparative study conducted in 2002 (TN0209101S) examined this issue, linking it in with national systems of'corporate governance' (ie the set of mechanisms that control and influence senior management).

The study found that in one group of countries (essentially Ireland and the UK), shareholdings being dispersed across a range of financial intermediaries and a well-developed'market for corporate control'- the'outsider' system of corporate governance - go hand-in-hand with a'minimalist' legal framework concerning employee rights in restructuring. In most continental European countries, which exhibit more stability in ownership and less of a market for corporate control - the'insider' systems (though these vary considerably) - employee rights tend to be stronger, either through systems of co-determination or through collective bargaining (or some combination of the two). However, many countries that have traditionally been characterised by insider systems are evolving. Countries such as the Netherlands, Finland, Spain and France have witnessed significant shifts in the direction of a more outsider-oriented system, while in others such as Germany and Sweden the changes have been notable. Nevertheless, none of the insider systems has yet converged closely on the UK-Irish model.

The study concludes that restructuring has been most pervasive, and has occurred most rapidly, in the outsider systems and in rapidly evolving insider systems. Without question, the impact on employees and their job security of restructuring has been felt most acutely in countries without a strong tradition of social concertation and where union strength is patchy.

Equal opportunities and diversity issues

Equal pay and equal opportunities for women and men remain issues which appear on the bargaining agenda to varying degrees throughout Europe, though overall they cannot be said to be at or near the top of this agenda in most countries. For example, a study on'Equal pay between men and women in collective bargaining' conducted in 2002 by Greece'sResearch Centre for Gender Equality (KETHI) found that the content of collective agreements in Greece is rather poor in this area, and that collective bargaining does not work as a measure to promote equal pay - however, there are examples of collective agreements that have contributed to reducing the gender pay gap (GR0212103F). In Spain, although a number of non-discrimination and equal opportunities clauses exist in company and sectoral agreements (ES0209103F), the number of these clauses concluded in 2002 stagnated somewhat. The year also saw little in the way of equality bargaining in countries such as Austria and Germany, while the issue does not appear significantly in bargaining in the candidate countries

However, concern in many quarters that the gender pay gap remains unacceptably wide (averaging around 20% across the EU and Norway -TN0303102U), translated in some countries into efforts to address this problem in 2002. For example:

  • in Belgium the 2001-2 intersectoral agreement commits the social partners to maintaining efforts to achieve greater equality between men and women. This includes reviewing job classifications with a view to making them gender-neutral;
  • Finland's 2003-4 central incomes policy agreement again includes an'equality increment' (of 0.3% in 2003) to be used for improving gender wage equality;
  • the Netherlands' bipartite Labour Foundation (Stichting van de Arbeid) developed a checklist on equal pay, to be used by negotiating parties at sectoral and company level; and
  • in the UK, theEqual Opportunities Commission began a consultation on a revised version of its code of practice on equal pay in December 2002.

In Denmark, however, an amendment to the Act on Equal Pay for Men and Women, aimed at creating more transparency in wage data by obliging employers to produce gender-based pay statistics, was postponed by the new liberal-conservative government in May 2002 (DK0206101N).

On broader gender equality issues, Italy provided several prime examples of innovative agreements in 2002. At local and regional level, the issues of equal opportunities and gender inequality were addressed in a new'pact for employment and growth' signed in Milan by the municipal authorities, trade unions and employers' organisations (IT0205203F) and in a'Pact for the development of the economy, work, quality and social cohesion in Lombardy' (IT0209206F). The measures agreed in Lombardy include initiatives to support female employment, such as specific training measures, counselling and the provision of incentives to support the creation of company childcare facilities and the implementation of more flexible working hours. At company level, an agreement signed atFerrero in October (IT0212103N) introduced, as a two-year experiment, the possibility of job-sharing schemes - whereby two workers share the same position - especially designed to meet the needs of working mothers who have completed their maternity leave and whose children are still under the age of three, and of workers with serious health problems.

Gender mainstreaming is an issue which is gaining ground in some countries. For instance, in Austria, the Union of Salaried Employees (Gewerkschaft der Privatangestellten, GPA) approved in November 2002 a gender mainstreaming plan which will oblige the union to examine all its collective agreements for clauses discriminating against women in terms of pay and qualifications.

Other diversity issues, such as those relating to older workers, workers with disabilities and ethnic minority workers, do not appear to have featured significantly in bargaining in 2002, with the possible exception of older workers in some countries. One relevant initiative in this area was a collective agreement reached by the Belgian social partners on the National Labour Council (Conseil National du Travail/Nationaal Arbeidsraad), which lays down the rules for a right to outplacement assistance for older workers (over the age of 45) who lose their jobs (BE0208301N). The new three-year collective agreements for Denmark's central government and municipal/county sectors contain strengthened measures for older workers ('senior policy').

The Norwegian government and social partners signed an agreement on an'inclusive working life' in 2001, which includes a scheme whereby companies conclude agreements with the social insurance authorities, committing themselves to monitoring closely employees on sick leave and to making adjustments to the workplace for older or disabled employees. By the end of 2002, such agreements covered around a quarter of Norwegian employees (NO0301104F). Policy for older workers has also received considerable attention from the Finnish social partners (FI0204101F). Finally, at European level, an interesting development in 2002 was a set of voluntaryguidelines on promoting age diversity at the workplace agreed by the social partners in the commerce sector (EU0205202N). The guidelines focus on areas such as non-discrimination, equal access to training, and adaptability of working time arrangements in order to allow older workers to carry on participating actively in the labour force.

Table 2. Trends in collective bargaining in the EU Member States, Hungary, Norway, Poland and Slovakia in 2002
Country Trends
Austria Bargaining in 2002 was, as usual, conducted at sector level, based on the pace-setting metalworking industry. One new development in 2002 was the conclusion of a first-ever agreement for temporary agency workers.
Belgium 2002 was covered by the second-year provisions of the 2001-2 intersectoral agreement. This accord provided for a'wage norm' of 6.4% for 2001 and 2002. However, it is estimated that private sector pay growth was 7.3% over this period. A new intersectoral agreement for 2003 and 2004 was concluded in December 2002, providing for a new wage norm of 5.4% over 2003-4.
Denmark Collective bargaining took place in the public sector at state level and at municipal/county level (the private sector was largely covered by earlier multi-year agreements). The new three-year accord for state employees provides for an overall framework of a 7.55% increase in costs. A pilot scheme on a flexible, decentralised pay system (Ny Løn) has been made permanent. At municipal/county level, the new three-year accord provides for a 5.55% pay increase in addition to extra holiday, improvements to pension provision and extra funding for the flexible, decentralised pay system.
Finland 2002 was covered by the second year of the 2001-2 central incomes policy agreement. A new agreement was concluded in November 2002 after some weeks of difficult negotiations. The accord increases pay costs by 2.9% from 1 March 2003 and a further 2.2% from 1 March 2004, in addition to covering a range of'qualitative' areas, such as working time, training, partial care leave and the status of worker representatives.
France It is expected that figures for 2002 will demonstrate a reduction of overall bargaining activity at both sectoral and company level. Further, there is evidence that the issue of working time reduction, which has dominated bargaining since 1998 due to the legislation on the 35-hour week, is beginning to lose ground in favour of pay. This is partly due to the fact that many pay moderation and pay freeze agreements, concluded in conjunction with working time reduction, are now coming to an end.
Germany Bargaining in 2002 was dominated by the conclusion of new agreements in large sectors such as chemicals, metalworking and construction. Many of the new agreements will run beyond the end of 2003. In pay terms, the pace was set by the metalworking accord, which provided for an increase of 4% in 2002. The average annual collectively-agreed increase in 2002 was, at 2.7%, higher than in the previous two years.
Greece A new two-year national agreement was concluded in April 2002. The new accord provides for an increase in minimum pay rates of 5.4% in 2002, plus inflation guarantees, and a 3.9% increase in 2003. The accord subsequently formed the basis for negotiations at lower level. Overall, the year saw a greater decentralisation of bargaining.
Hungary In quantitative terms, bargaining declined at both sectoral and company level during 2002. At sectoral level, 18 agreements were signed, of which 10 contained provisions relating to pay. However, the pay provisions were largely'symbolic'. At company level, the number of agreements concluded declined significantly, although accords contained pay increases of 11% on average, slightly higher than levels recommended nationally.
Ireland 2002 was covered by the final year of the 2000-2 national agreement. Debate about whether or not to negotiate a new national incomes policy agreement dominated the bargaining agenda for most of the year. In the end, the social partners succeeded in concluding a new draft accord in January 2003 after negotiations had broken down completely at one stage. The other main bargaining issue in 2002 was public sector pay, based on the publication of a public sector pay'benchmarking' report in August 2002.
Italy At the end of 2002, a total of 51 industry-wide collective agreements were in force (out of 80 agreements covering 11.5 million employees examined by anIstat survey), covering around 7.5 million employees (a fall from the 2001 figure). During 2002, 34 industry-wide agreements were signed, covering around 3.6 million employees. These included a range of sectors in manufacturing and construction. For example, in the chemicals sector, a new accord was concluded in February, providing for an eight-hour reduction in annual working time and the establishment of a voluntary sectoral supplementary health insurance scheme.
Luxembourg Notable bargaining events in 2002 included the conclusion of a new three-year pay agreement in the public sector, providing for an annual pay increase of 1.6% in 2002, 2003 and 2004. In the banking sector, a new two-year accord was signed by the Luxembourg Association of Banking and Insurance Staff (Association luxembourgeoise des employés de banque et d'assurance, ALEBA) only, after it was deemed to be representative by the administrative courts. However, other nationally representative unions protested against this.
Netherlands Pay moderation was a key issue for employers and the government during 2002, a factor which made negotiations difficult on occasion. Unions stated that they were not prepared to moderate wage claims if the government went ahead with plans to abolish subsidised employment schemes and reform occupational disability insurance legislation. The average collectively agreed increase was 3.8%, with the lowest in industry and transport (2.9%) and the highest in agriculture (4.5%). In November, the government and social partners concluded a'social agreement' for 2003, which included a pay increase limit of 2.5% - the first such centrally agreed wage ceiling for a decade.
Norway Bargaining was carried out on a sectoral basis during 2002. Negotiations began with the manufacturing industry settlement, which it is estimated will generate wage growth of around 5%. The settlements that followed, in both the private and public sectors, included some which provided for even higher increases. Overall wage growth in 2002 is estimated to be 5.5%, significantly above inflation of 1.3%.
Poland Collective bargaining has relatively little overall impact on industrial relations in Poland as many issues are regulated either by legislation or by tripartite commissions at national and regional levels. According to the Ministry of Labour and Social Policy, 143 multi-employer agreements and 111 additional protocols were registered with the ministry as at 15 February 2002, covering a total of around 750,000 employees.
Portugal In quantitative terms, the number of agreements negotiated in 2002 was around 4.5% lower than during 2001. Pay and pay-related items remain the most popular bargaining topics. Other issues covered by bargaining during the year included working time, annual leave, career development, job classification and training.
Slovakia In quantitative terms, the number of agreements concluded remained stable during 2002. In total, 62 sector- or branch-level agreements were concluded during the year. New legislation, which came into force on 1 April 2002, liberalised collective bargaining in the private sector, allowing the social partners to bargain on any issues of common interest.
Spain Pay negotiations during 2002 were conducted within the framework of a national accord on pay moderation concluded by the main social partners. Overall, however, it would appear that purchasing power was lost over the year - the average collectively-agreed pay increase was 3% in September 2002, compared with inflation of 3.5% at that time. The national accord also provided for bargaining to focus on employment and health and safety.
Sweden 2002 was a rather quiet year in terms of collective bargaining, as many sectors were covered by three-year accords negotiated in 2001. An exception was the government sector, where a total of three agreements were negotiated. Further, new agreements in the information and communications technology sector were concluded in December.
United Kingdom Collective bargaining in the UK continues to be highly decentralised, with most bargaining carried out at company or workplace level and little multi-employer bargaining outside the public sector. In terms of pay, collectively-agreed basic pay rose by an average of 3.0% during 2002, while average earnings increased by 4.2%.

Source: EIRO.

Legislative developments

As indicated in table 3 below, 2002 was a busy year in terms of the adoption of new employment legislation.

New equality legislation featured in many Member States. In Belgium, a new law aimed at combating'moral' (ie bullying) and sexual harassment in the workplace was passed in 2002 (BE0205301N). In Denmark, new legislation amended existing laws on maternity and parental leave (DK0202104F), and in Austria, a ban on night work for women was revoked during 2002 (AT0207204F). In Norway, the Gender Equality Act was amended, covering matters such as an obligation on companies to report on equal opportunities, equal pay for work of equal value and banning sexual harassment (NO0204101N). In Poland, amendments made to the Labour Code in 2002 (see below) seek to tackle persistent gender-based discrimination at work and the fact that it has been very difficult for victims of discrimination to seek legal redress (PL0211105F).

Several countries implemented, or prepared to implement, EU Directives2000/43/EC implementing the principle of equal treatment between persons irrespective of racial or ethnic origin (EU0006256F) andDirective 2000/78/EC establishing a general framework for equal treatment in employment and occupation. Relevant legislation was approved by the Belgian parliament in December (BE0212304F). In Norway, a public committee delivered its recommendations for the implementation in Norway of Directive 2000/78/EC - the main change involved is the introduction of a ban on discrimination on grounds of age (NO0301102N). In the UK, consultation on new discrimination legislation in response to the Directives took place during the course of 2002 (UK0201117N).

Working time and work organisation featured in new legislation in many countries. In France, where the legislative agenda has been dominated for many years by the introduction of the 35-hour week, the new government took steps in the latter part of the year to soften the impact of the working time reductions, mainly by increasing the annual overtime quota (FR0209105F andFR0210106F). In Denmark, a new law on part-time work was passed in 2002 after much debate (DK0206102N). The new legislation seeks to make access to part-time work easier, by means including the controversial abolition of restrictions on the use of part-time work laid down in collective agreements. In Luxembourg, new legislation implementing a 40-hour statutory working week in the hotels and catering sector (after a 30- year legal vacuum) in three stages was adopted in 2002 (LU0301107F). In the Netherlands, the EU fixed-term contracts Directive(1999/70/EC) was implemented in November 2002, and in Sweden too, new legislation implemented the EU fixed-term work and part-time work(97/81/EC) Directives in 1 July 2002 (SE0208102N).

Labour market reform was another area which saw much legislative activity during 2002. In Germany, a special commission set up to look at ways of increasing employment - the Hartz commission - issued its reform proposals in August (DE0209205F). These proposals have formed the basis for new legislation, including provisions promoting temporary agency work (DE0212203N). A new law in the area of labour migration, covering employment permits for domestic staff from central and eastern European countries, came into effect at the beginning of 2002 (DE0201226N). However, further labour migration legislation was successfully challenged in the Federal Constitutional Court (Bundesverfassungsgericht) later in the year (DE0210204F).

In Denmark, new legislation on labour market reform was passed in October (DK0210102F), creating a simplified single system of measures aimed at getting unemployed people back into work and replacing the previous dual system of separate provision for those with and without unemployment insurance. Also in Denmark, a new law permitted cross-sector unemployment insurance funds - in addition to the existing trade union-run sectoral funds - making it possible for employees to choose freely between funds (DK0209102F). In Spain, much of the year was taken up with debate on the government’s proposals to reform unemployment benefit. After some months of protests from trade unions, much of the legislation was revoked (ES0212201N).

Similarly, the Italian labour market parties were occupied with the issue of labour market reform for much of the year. The government’s original proposals were the cause of much industrial unrest during the year (see below under'Industrial action'). However, in July the government and most of the social partners - with the exception of the General Confederation of Italian Workers (Confederazione Generale Italiana del Lavoro, Cgil) union confederation - signed a'Pact for Italy' on labour market measures (IT0208103N), which has since formed the basis for new legislation.

Extensive general labour law changes were made or debated in a number of countries. The Portuguese government is seeking to introduce a Labour Code, which would replace most current labour legislation by bringing existing provisions together in a single text. At the same time, current collective and individual employment law provisions would be amended significantly in a variety of areas. The text had not been finalised by the end of the year, but it is believed that the Code will be the most significant legislative event in Portuguese industrial relations for 30 years (PT0211104F). In the UK, wide-ranging legislation in the form of the Employment Act 2002 reached the statute book in July 2002 (UK0210103F). This contains a range of provisions, relating to issues such as work/life balance, employment tribunal procedures, workplace dispute-resolution mechanisms and equal treatment for fixed-term employees.

Major legislative changes have been implemented in the candidate countries, in order to comply with the 'acquis communautaire' - the body of EU law that candidate countries must adopt. Thus in Poland, the Labour Code was overhauled in 2002, with major changes to the regulation of fixed-term work, working time, breaks and the introduction of provisions banning sex discrimination (PL0209107F). Similarly, in Slovakia, the Labour Code was reformed with effect from 1 April 2002 (SK0207102F). The new Code lays down the basic rights and obligations of employers and employees in the business sector, covering matters such as employment relationships, pay, working time and collective labour relations. The aim is to meets the requirements of the market economy and balance the interests of employers and employees, while harmonising Slovakian labour legislation with EU law. In addition, also from 1 April 2002, new employment legislation came into force for the civil service and the public service (SI0206102F).

In Hungary, the Labour Code was amended in 2001 as part of attempts to implement the acquis communautaire, including the EU working time Directive. However, trade unions objected to the new legislation, perceiving it be too flexible and accusing the government of trying to cut wage costs on the pretext of implementing EU legislation. The socialist-led government which came to office in April 2002 partially restored the pre-2001 provisions with regard to flexibility in work organisation and working time, and set higher minimum standards in some areas than the working time Directive (HU0210101F). The 2002 Labour Code amendments also included extensions of trade union workplace rights and the duties of employers in terms of information and consultation.

Table 3. Main legislative developments in 2002
Subject New legislation
'Atypical work' InSweden, new legislation implementing the EU Directives on part-time work and fixed-term contracts came into force on 1 July. In November, the fixed-term contracts Directive was implemented intoDutch law. InDenmark, new legislation on part-time work was adopted in June.German legislation on labour market reform adopted in November included measures to promote an expansion of temporary agency work.
Employment, labour market and job creation InItaly, most of the year was taken up with discussions about the government’s plans to reform labour market regulation. A new'proxy law' was finally passed by parliament in February 2003 - following an agreement with most social partners reached in July 2002 - which delegates to the government the authority to introduce significant legislative amendments in this area. Similarly, labour market reform dominated debate inGermany. Recommendations on reform issued by the Hartz commission in August made it onto the statute book towards the end of the year. In October, theDanish parliament approved a government labour market reform plan, aimed at getting unemployed people back into work. On migration issues, a newItalian law on immigration was passed in August, introducing stricter controls and closer links between employment and residence permits, whilePortugal's immigration law was amended and a new law came into force inGermany offering employment permits to domestic staff from central and eastern European countries. InFrance andPortugal, new legislation was passed which aimed to encourage the recruitment of young people.
Equality InDenmark, new legislation regulating parental leave and maternity leave was adopted in March. One of the main features of theUK's Employment Act 2002 is the introduction of a right (from 6 April 2003) for parents of children aged under six to request flexible working patterns for childcare purposes. In the spring, theNorwegian Gender Equality Act was amended, and private companies given until 2005 (state-owned companies until 2003) to improve women's representation on company boards to at least 40%, failing which a gender quota will be introduced. InBelgium, new legislation on'moral' and sexual harassment was adopted in the spring, along with measures to extend paternity leave and introduce paid breaks for breastfeeding. In July, new legislation ending a previous ban on night work for women was adopted inAustria. New legislation inPoland made it easier to bring sex discrimination cases and amended protective regulations on women's employment.
Health and safety New health and safety legislation was passed in February inPortugal. InFinland, new occupational health legislation came into force on 1 January, aiming to deal with changes in working life and increased stress.
Industrial relations InSlovakia, three new acts on the Labour Code, the civil service and the public service took effect in April, regulating employment relations and collective bargaining. In theUK, the wide-ranging Employment Act 2002 reached the statute book in July. It contains a range of provisions, including reform of employment tribunal procedures, and workplace dispute-resolution mechanisms. InPoland, the Labour Code was amended in July.
Social security InSweden, a new law was passed in April, reforming the country’s occupational injury insurance scheme, and in June unemployment benefits were increased. A major reform of unemployment benefit was introduced inSpain in May, but largely repealed by the end of the year, following union protests. InDenmark, a new law adopted in June permitted cross-sector unemployment insurance funds. In December, new legislation on retirement and invalidity pensions provided by the social security system was passed inPortugal.
Termination of contract InFrance, a number of provisions of a recent law relating to redundancy protection were suspended in December for 18 months, pending amendments to restrict its scope. The key provisions relate to information and consultation rights and the right of employee representatives to bring in a mediator. InAustria, legislation establishing a new severance pay scheme was adopted in June.
Working time InFrance, the new government took steps in 2002 to limit the scope of working time reduction legislation. Although the 35-hour week will not be repealed, its application will be made more flexible by increasing the annual overtime quota. InHungary, the government had, in 2001 introduced new legislation implementing the EU working time Directive, among other measures, but this was controversial, with trade unions objecting to what they felt was too much flexibility. The new government, elected in 2002, partially restored the pre-2001 working time regulations. InLuxembourg, new legislation passed in December introduces a 40-hour statutory working week in the hotels and catering sector in three stages starting in January 2003.
Miscellaneous In July, the amended 1998 EU Directive on transfers of undertakings was implemented into bothDutch andGreek law. A controversial new law on the minimum wage was adopted inPoland in October, increasing the minimum wage, amending the way in which it is set, and setting a lower rate for recent school-leavers.

Source: EIRO.

The organisation and role of the social partners

2002 saw a number of changes to the structure of social partner organisations throughout Europe. On the trade union side, many mergers were either discussed or implemented during the course of the year - see the box below. This is largely a response to the changing nature of membership and of work in general, and a way of cutting costs in the context of declining membership in many, although not all, countries.

Trade union restructuring and reorganisation in 2002

Specific trade union restructuring and related events in 2002 included the following:

  • Austria's largest union, the white-collar GPA, finalised an internal restructuring process in November 2002 (AT0212202F). Its governing body also approved a planned merger with four other unions affiliated to the Austrian Trade Union Federation (Österreichischer Gewerkschaftsbund, ÖGB), including the Metalworking and Textiles Union (Gewerkschaft Metall-Textil, GMT). This merger, which will take place in 2005, should allow for a more coordinated bargaining policy across a range of sectors;
  • the Confederation of Christian Trade Unions (Confédération des Syndicats Chrétiens/Algemeen Christelijk Vakverbond, CSC/ACV), Belgium's largest union confederation, launched a reorganisation aimed at integrating its representational activities for white- and blue-collar members, and at increasing women's representation (BE0211301N);
  • in Denmark, three unions affiliated to the Confederation of Danish Trade Unions (Landsorganisationen i Danmark, LO) decided to begin merger talks (DK0211105F) - the General Workers’ Union (Specialarbejderforbundet i Danmark, SiD) and the Union of Female Workers (Kvindeligt Arbejderforbund, KAD) and the Union of Wood, Industrial and Building Workers (Træ-Industri-Byg, TIB). The merger, which would create Denmark's largest union, is planned to take place in 2004;
  • in Finland, two blue-collar unions affiliated to the Central Organisation of Finnish Trade Unions (Suomen Ammattiliittojen Keskusjärjestö, SAK) - the Chemical Workers' Union (Kemianliitto) and the Textile and Garment Workers' Union (Tekstiili- ja vaatetustyöväen liitto, Teva) - announced their intention to merge by June 2004 (FI0204102N);
  • in Germany, the metalworkers' trade unionIG Metall initiated a review of its future direction, which received considerable public attention (DE0206205F);
  • at its conference in November, theGreek General Confederation of Labour (GSEE) took a number of important decisions on restructuring. There will be closer cooperation and, it is planned, eventual merger with the other main union confederation, theConfederation of Public Servants (ADEDY), along with greater coordination between GSEE member organisations at various levels (GR0212102F);
  • the National Association of Hungarian Trade Unions (Magyar Szakszervezetek Országos Szövetsége, MSZOSZ) set up a new structure based on six clusters of sectoral federations (HU0212101N). It is hoped that this new structure will enable the federations to respond to the challenges of the market economy and facilitate the development of sectoral dialogue;
  • a large number of changes took place in Norway during 2002. Two teachers’ unions merged on 1 January to form the Norwegian Education Union (Utdanningsforbundet) (NO0110105N). It was decided in October to merge the Norwegian Union of Municipal Employees (Norsk Kommuneforbund, NKF) - affiliated to the Norwegian Confederation of Trade Unions (Landsorganisasjonen i Norge, LO) - and the independent Norwegian Association of Health and Social Care Personnel (Norsk Helse- og Sosialforbund, NHS), creating Norway's largest union (NO0211106F). A new confederation was established in January - the Confederation of Higher Education Unions (Utdanningsgruppenes Hovedorganisasjon, UHO), which mainly represents public sector staff with high levels of education and qualifications (NO0201184F). Finally, a number of LO transport and service sector unions started deliberating a possible merger (NO0210102F);
  • in Poland, a new national trade union centre, the Trade Unions Forum (Forum Zwiazków Zawodowych, FZZ), was established (PL0212109F). It is now seeking a seat on the national Tripartite Commission (Komisja Trójstronna);
  • in Sweden, talks were held throughout the year on the possibility of a number of union mergers, including in local government, metalworking (SE0212101N) and transport (SE0203101N); and
  • in the UK, a merger between theAmalgamated Engineering and Electrical Union and theManufacturing Science Finance union took effect from 1 January, creating a new union,Amicus (UK0104123N).

The representativeness of unions was a major issue in some countries during 2002. In France, the representative status of trade unions was the subject of much discussion during the year, with the government due to launch talks on the rules governing collective bargaining in early 2003. Elections to joint industrial tribunals (conseils de prud'hommes), a major test of trade union representativeness in the private sector, were held in December 2002 (FR0301107F). The positions of the unions remained stable, with the General Confederation of Labour (Confédération générale du travail, CGT) gaining the largest share of the vote. In Luxembourg, the government presented a new bill dealing with collective labour relations in November (LU0211102F). Among other issues, the bill redefines the concept of the'national representativeness' of trade unions - a status that governs matters such as which unions are allowed to sign collective agreements - which has caused much debate and dispute in recent years. The proposals were largely welcomed by the main union confederations, but opposed by the Luxembourg Association of Banking and Insurance Staff (ALEBA), which has been at the centre of the recent representativeness debate. Representativeness was also under discussion in the Netherlands (NL0206105F).

As mentioned above, the background to much union restructuring is that trade union membership continues to fall in a number of countries. For example, membership of unions affiliated to the German Federation of Trade Unions (Deutscher Gewerkschaftsbund, DGB) dropped by 199,000 (2.5%) in 2002 to stand at 7.7 million (DE0302201N). However, while membership has continued to fall for over 10 years, the pace of decline slowed in 2002, with some unions seeking to improve their recruitment strategies. In 2001, union membership in the Netherlands fell by 0.4%, though with contrasting fortunes for the main confederations. In Sweden, the professional workers' unions affiliated to the Swedish Confederation of Professional Associations (Sveriges Akademikers Centralorganisation, SACO) recorded a record membership increase of 4.4% in 2001, while the white-collar unions affiliated to the Swedish Confederation of Salaried Professionals (Tjänstemännens Centralorganisation, TCO) experienced a rise of 1.3%. However, the largest confederation, the blue-collar Swedish Confederation of Trade Unions (Landsorganisationen, LO), lost 2.6% of its members.

Union membership decline has been particularly notable in some candidate countries. An example is Hungary, where figures published in May 2002 indicated that the number of people contributing some of their income to any of the trade unions fell by 6% from 2000 to 2001 (HU0206102N). Over the past 20 years, trade union density in Poland has dropped from 80% of the workforce to 14% in 2002 (PL0208105F).

On the employer side, a number of significant organisational events took place during 2002 - see the box below.

France is unusual in that employers' organisations face a major test of their representativeness every five years in the form of the election of employers' representatives on joint industrial tribunals. In the December 2002 elections (FR0301107F), the major organisations - the Movement of French Enterprises (Mouvement des entreprises de France, MEDEF), the General Confederation of Small and Medium-sized Enterprises (Confédération générale des petites et moyennes entreprises, CGPME), the Craftwork Employers' Association (Union professionnelle artisanale, UPA), the National Federation of Farmers' Unions (Fédération nationale des syndicats d'exploitants agricoles, FNSEA) and the National Union of the Liberal Professions, (Union Nationale des Professions Libérales, UNAPL) - presented their usual united slate of candidates, despite mounting tensions, especially between MEDEF and UPA, during the year (FR0206101N). The slate won over 80% of the vote. However, organisations representing the'social economy' (mutual insurance societies, cooperatives, and not-for-profit organisations) caused a major surprise by running their own slate and winning over 11% of the vote.

Employers' organisation restructuring and reorganisation in 2002

Restructuring and related events affecting employers' organisations in 2002 included the following:

  • in Austria, the Chamber of the Economy (Wirtschaftskammer Österreich, WKÖ) continued a series of reforms. Membership dues have been reduced and the organisation plans to reduce staff in order to cut costs;
  • on 1 July, three major Danish service sector employers' organisations merged, creating Commerce, Transport and Service (Handel, Transport og Serviceerhvervene, HTS). With more than 10,000 affiliated enterprises and 90 sectoral member organisations, HTS is Denmark's second-largest combined trade and employers' organisation (DK0207102N);
  • in Germany, employers' organisations are suffering from declining membership, particularly in the eastern part of the country. A study published in 2002 found that some associations have begun to offer companies a new kind of membership, under which they are not be covered by sectoral agreements, but still receive a full range of other membership services (DE0212202F);
  • in May, the Confederation of Norwegian Business and Industry (Næringslivets Hovedorganisasjon, NHO) and the Confederation of Norwegian Commercial and Service Enterprises (Handels- og Servicenæringens Hovedorganisasjon, HSH) announced their decision not to go ahead with a planned merger, citing significant differences in areas such as their organisational structures (NO0206102N); and
  • in November, the boards of the Swedish Association of Local Authorities (Svenska Kommunförbundet) and the Federation of Swedish County Councils (Landstingsförbundet) decided unanimously to propose a merger to create a new employers' association for almost all of the local government sector (SE0212101N). The new body could be in place at the end of 2004.

Industrial action

While no overall strike statistics are yet available, it appears that 2002 was, like 2001, a varied year in terms of industrial action, with some countries experiencing little activity (such as Denmark, Finland, Luxembourg and Sweden) but others witnessing significant unrest, often in the form of'political' action by trade unions against government policies, notably concerning the labour market, labour law and public restructruring. This was the case in Spain and Italy, where unions staged national-level protests against government labour market reform proposals. In both countries, the governments have since modified their original plans, to some extent in collaboration with the social partners.

In Spain, trade unions staged a one-day general strike on 20 June 2002 (ES0207201N), mostly in protest against the government’s proposals to reform unemployment benefit. However, commentators also note that this marked the culmination of trade union frustration with the government, which the unions accused of having issued legislation without full social partner consultation on many occasions in the recent past. Following the strike and other protests, most of the original proposals were withdrawn.

In Italy, trade unions organised a united general strike on 16 April 2002 in protest against the government’s labour market reform plans and in particular against proposals to modify Article 18 of the Workers’ Statute, which guarantees reinstatement for employees found to have been unfairly dismissed. Accordingly, April alone accounted for 50% of all days lost to industrial action during the year. 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) - subsequently signed a tripartite agreement on labour market reform and other matters (see above under'Legislative developments'), which included a compromise on Article 18. However, the third main confederation, Cgil, did not sign and continued its protests against government policy, including a one-day general strike on 18 October (IT0212104N). Italian protest strike action was not restricted to the national intersectoral level. For example, on 15 November 2002, metalworkers' unions organised a one-day general strike across the sector (IT0212106N). The action focused on supporting negotiations over the restructuring plan and job losses at Fiat (see above under'Job security') and at putting pressure on the government to draw up a national industrial policy.

In Portugal, the the General Confederation of Portuguese Workers (Confederação Geral de Trabalhadores Portugueses, CGTP) staged a one-day general strike on 10 December (PT0212104F) in protest against the government’s proposals to introduce a Labour Code incorporating major labour law changes (see above under'Legislative developments'). In Austria too, where there are often no strikes at all over the course of a whole year, 2002 saw the staging of a range of protests against government restructuring plans - as in railways (AT0211201N) schools (AT0206203F) and post-bus services (AT0206202N). In Belgium, industrial action included protests at the national rail company against restructuring plans (BE0205303F) and against the deregulation of the dockwork sector (BE0207302F).

The public sector was the scene of much strike activity in 2002. The UK experienced a significant level of industrial action during the first 10 months of the year - although the number of strikes was low, the number of workers involved was dramatically higher than in recent years, due to national disputes in the public sector or public services. Major disputes included strikes in the rail sector in January (UK0201169F), in local government in July (UK0208102N) and in the fire service, from November 2002 in support of a 40% pay claim (UK0211107F). While Greece experienced a relatively peaceful year in 2002, compared with the often high levels of industrial action experienced in the past, public servants staged a strike on 5 December in protest against low pay increases (GR0212101N). Ireland also saw relatively little strike action over the year, but high-profile disputes hit the health and education sectors and there was a major dispute involving pilots at the semi-state airlineAer Lingus (IE0205201N), linked to restructuring. France saw considerable public sector industrial action, involving groups such as civil servants (FR0211106F), customs officers (FR0205102N) and local public transport workers (FR0205103N). The public sector also witnessed strikes in Italy (IT0203102N) and Portugal (PT0209102N).

In the Netherlands, the level of industrial action is usually low, partly due to the fact that courts often step in to ban strikes (NL0209103F). However, some action did take place in 2002, including a wildcat strike at the airlineKLM, staged by ground engineers over pay (NL0210101N). Further, the first-ever strike in the Dutch information and communications technology sector took place atGetronics in the summer over pay (NL0207102N).

In some countries, industrial action was linked to major collective bargaining rounds. This was the case in Germany, where important sectoral agreements were renewed throughout the course of the year. The most significant action was taken in metalworking, where unions staged 10 days of strike action before a settlement was finally concluded (DE0205206F). Other significant action took place in banking (DE0301202N) and in construction, where the union staged a first national strike for 50 years (DE0206204F). In Norway, nurses held a five-week strike in support of their demands to negotiate a new collective agreement (NO0201114N), which was ended by compulsory arbitration. Other strikes took place in connection with the 2002 bargaining round (NO0204103F), but the overall incidence of industrial action in 2002 in Norway was thought to be lower than during the previous main bargaining round, in 2000.

In France, a number of high-profile company-level strikes took place as a response to proposed restructuring exercises, closures and job losses, as atLustucru (FR0207103N),Daewoo (FR0205101N) andBiscuiterie Nantaise (FR0203101N). There were also a number of disputes centring on pay and employment security, affecting several major retailers, fast-food restaurants and other service sector companies (FR0206106F,FR0202104F,FR0203104N andFR0203102N).

In terms of the regulation of disputes, a major development in 2002 was an agreement between the Belgian social partners on the resolution of industrial disputes and other matters, in which the partners undertake to prioritise social dialogue (rather than bringing court cases) in the event of any strike action (BE0204301N). In March, the Norwegian government issued proposals for amendments to the legislation relating to labour disputes. However, it proposed only minor modifications and did not recommend any changes to the present legal framework in areas such as bargaining, mediation and ballots over mediation proposals, which have been the subject of substantial debate in recent years (NO0205102F). During 2002, theEuropean Commission was expected to launch consultations with the social partners on the possible establishment of a voluntary conciliation, mediation and arbitration service at European level (EU0206203F). However, no such consultations had taken place by the end of 2002.

Employee participation

An important event in the development of the EU framework of employee involvement law occurred in March 2002, with the adoption of Directive2002/14/EC on national information and consultation rules (EU0204207F). The new Directive essentially obliges Member States to ensure that there are arrangements in place for informing and consulting employees on a range of issues. In practice, this Directive will have the largest impact in Ireland and the UK, the two current Member States which do not have general, permanent and statutory system of employee representation at the workplace. Accordingly, the UK government began the process of consulting on the transposition of the Directive into national law in July 2002 (UK0208101N). Employers’ groups and the TUC issued their initial responses later in the year (UK0210101N). Similarly, in Ireland, the Directive has received mixed reviews from the social partners. TheIrish Congress of Trade Unions (ICTU) is strongly in favour of the measure, while employers' organisations have opposed it on the grounds that it is a potential burden on business.

Elsewhere in the EU, the Directive appears to have caused relatively little stir, as the adjustments which must be made to national information and consultation provisions are generally thought to be quite minor. In Norway, which must transpose the Directive owing to the operation of theEuropean Economic Area (EEA) agreement, the social partners have stated that they would like to implement it by means of collective agreements. The matter has been referred to a public committee which should make proposals on implementation by the end of 2003. The Directive is likely to have rather more impact in the candidate countries, which are still developing their systems of workplace involvement and representation. In Poland, for example, non-union forms of representation are still rare (PL0208106F). In Slovakia, some of the principles of the new information and consultation Directive have already been incorporated into the new Labour Code, which came into force in April 2002 and gives works councils rights to be informed and consulted on a range of issues. In Hungary, the provisions of the Labour Code on trade union rights at the workplace and employers’ information and consultation duties were amended in 2002.

Germany's legislation on works councils, the Works Constitution Act, was reformed in 2001 and March-May 2002 saw the first elections of works council members under the new rules (DE0212204F). The aim of the legislative reform was to extend and improve employee representation at the workplace, and it looks as though it has succeeded. The provisional results show that the decline in the number of works councils has been turned around, and indicate greater stability and increasing numbers of works councillors. In comparison with the 1998 elections, the number of works councillors increased by 11%, the number of works councillors released from work full time nearly doubled, and the number of female works councillors increased by 5%.

Dutch legislation governing the operation of works councils is set to be evaluated in the near future. Recent research has highlighted concern about a perceived lack of interest in works councils among employees and about the ability of individual works council members to perform their duties (NL0203102F).

Turning from the national to the European level of worker involvement, the European Commission plans to consult the EU-level social partners in autumn 2003 about revising the 1994Directive (94/45/EC) on European Works Councils (EWCs). 2002 saw considerable discussion, particularly in trade union circles, on possible strengthening amendments to the Directive. A major trade union conference was held in November in Aarhus, Denmark to discuss this issue (EU0212208F). The year also saw - somewhat behind schedule - completion of the transposition of the Directive in Italy. The social partners had reached an agreement on transposition in November 1996, but a number of matters needed to be dealt with by legislation, and the relevant decree finally came into force in April 2002.

A more recent development in European-level worker participation is theRegulation (No. 2157/2001) on the European Company Statute (creating a new, optional form of company incorporated at EU level) and the accompanyingDirective (2001/86/EC) on employee involvement in European Companies, adopted in October 2001 and due to be implemented in the Member States by October 2004. There appear to have been few moves towards national transposition so far, and these have not gone beyond the consultative or preparatory stage (as in Finland, Italy and the Netherlands). For example, in Sweden, a government commission has been set up in order to prepare for implementation, and is due to report its findings by May 2003.

Finally, beyond the European level, in July 2002, management and employee representatives atDaimlerChrysler, the German/US motor manufacturer, agreed to establish a World Employee Committee, a formal representative body for employees and trade unions across the company's global operations (DE0209204N). The new body - one of only a handful of such world works councils - aims to improve the exchange of information between employee representatives in different countries, and between employee representatives and management.


Telework is a form of working which has grown in significance around the EU over the past decade (though not yet to any great extent in the candidate countries), largely due to the development of new technology which enables employees to work remotely from their employers' premises. The European Commission estimates that there are currently 4.5 million employed teleworkers (and 10 million teleworkers in total) in the EU.

In July 2002, the EU-level central social partners concluded anagreement on telework (EU0207204F). The signatories were: theEuropean Trade Union Confederation (ETUC); theCouncil of European Professional and Managerial Staff (EUROCADRES)/European Confederation of Executives and Managerial Staff (CEC) liaison committee; theUnion of Industrial and Employers' Confederations of Europe (UNICE)/theEuropean Association of Craft, Small and Medium-Sized Enterprises (UEAPME); and theEuropean Centre of Enterprises with Public Participation and of Enterprises of General Economic Interest (CEEP). Previous EU-level framework agreements have been implemented by Directives, but the telework accord will be implemented by the national social partners in the Member States (by July 2005) - the first time that this has happened. Given the recent nature of the agreement, national-level implementation was not yet far advanced at the end of 2002. However, the first steps have been taken in some countries. For example:

  • in Spain, a new national intersectoral framework agreement providing guidelines for bargaining in 2003 contains a section committing the social partners to implementing the EU telework agreement.
  • in Finland, there has been some discussion among the social partners on how to implement the agreement. It has been decided that the best way forward is a general bipartite accord at central level. A proposal for negotiation will therefore be issued once background discussions have been completed;
  • shortly after the European agreement was signed, the chair of the DGB union confederation and the president of the Confederation of German Employers' Associations (Bundesvereinigung der deutschen Arbeitgeberverbände, BDA) issued a joint declaration which welcomed the accord and invited the sectoral collective bargaining partners and company-level parties to agree new regulations on telework;
  • in Sweden, discussion has been taking place among the social partners on the implementation of the accord. Trade unions want to achieve this by means of collective agreements. However, private sector employers are not as enthusiastic about this approach; and
  • in the UK, the social partners have agreed to enter into discussions on a voluntary code of practice on teleworking in response to the EU-level agreement.

Aside from developments directly connected to the implementation of the European agreement, in 2002 there was debate and discussion, often at sectoral level, on how to regulate this area, looking at issues such as the employment terms and conditions for teleworkers, health and safety, equal treatment with office-based workers, representation rights, promotion and advancement issues, training and access to and contact with the workplace. In some cases, this has resulted in legislative proposals or collective agreements. In Austria, for example, agreements specifically dealing with teleworkers have been signed in an number of sectors, including electricity power supply, telecommunications, information technology services sector, mineral oil production and, most recently (from January 2003) information consulting. Similarly, in Germany, new provisions governing teleworkers were included in the agreement for the rail sector during 2002. On the legislative front, the proposed Portuguese Labour Code (see above under'Legislative developments') includes provisions regulating telework. In Norway, a joint union/employer committee is examining the issue of work performed outside the traditional workplace. The committee is due to present its findings in July 2003.

Italy provides several examples of agreements on the use of telework for specific purposes. The new'Pact for the development of the economy, work, quality and social cohesion in Lombardy' (see above under'Equal opportunities and diversity issues') includes measures encouraging teleworking arrangements in the framework of supporting female employment and eliminating structural factors which impede the reconciliation of work and family responsibilities. A May 2002 agreement on the 2002-4 industrial plan of theTelecom Italia group includes provisions on using telework as a means of reducing the burdens on workers who are redeployed as part of a reorganisation process (IT0206203F). Moreover, the agreement provides that consultations may be held in individual companies and business units aimed at introducing, strengthening and developing the use of telework.

Vocational training

Vocational training and lifelong learning are issues which have gained in importance over the past few years as governments, social partners and policy-makers strive to ensure that workers learn and update skills which are relevant to today’s fast-moving labour market. At EU level, the central social partners agreed a'joint framework of actions for the lifelong development of competencies and qualifications ' in March 2002 (EU0204210F), setting out four priority areas for action: identification and anticipation of competencies and qualifications needs; recognition and validation of competencies and qualifications; information, support and guidance; and resources. While the framework is not a binding text, the signatory parties hope to make an effective and specific contribution to the realisation of lifelong learning within the framework of the objectives established by the EU. The signatories' member organisations will promote the text'at all appropriate levels' in the Member States.

So far, there appears to have been little in the way of specific responses to the new EU-level framework in the Member States. One exception is the UK, where an initial meeting between CBI and TUC officials in 2002 discussed the preparation of a UK report in response to the framework. However, training is already an important issue for the national social partners in many countries. For example, it has been dealt with in intersectoral bargaining in a number of cases in recent years:

  • in Belgium, the intersectoral agreement for 2001-2 included training as one of its objectives. It committed the parties to increasing the average proportion of the paybill which is devoted to training to 1.6% by the end of 2002, with a longer-term ambition to increase this to 1.9% of paybill by 2004;
  • Finland's 2003-4 central agreement provides resources for funding a programme to raise the level of'know-how' among adult employees. Furthermore, the basic amount of adult training benefit will be increased, personnel training will be made more effective and learning at work will be developed on a tripartite basis;
  • in France, intersectoral negotiations on vocational training reform broke down in October 2001 (FR0111123F). However, new talks were convened in January 2003 (FR0302104N); and
  • the Spanish national continuing training system is based on the extensive involvement of the social partners and collective bargaining in managing all levels of training, enshrined in the partners' third National Agreement on Continuing Training (ANFC), signed in December 2000 (ES0101130F). The government has recently proposed an overhaul of the system, transferring management of training to the regions and giving individual employers a greater role (ES0302103N). However, trade unions are opposed to this on the grounds that it would separate the issue of training from that of collective bargaining;

Training has also featured in bargaining at lower levels. For example, in Italy, the chemicals sector agreement signed in 2002 contained an innovative provision allowing individual workers and their employers to sign a training pact, under which the company allows the worker to participate in continuing vocational training and the worker agrees to modify their working hours, rest or other contractual obligations in order to take part (IT0203103N). In, Austria, some sectors have introduced a collectively agreed entitlement to one week's training leave (eg the mineral oil sector and all telecommunications enterprises other thanTelekom Austria) (AT0206201T). In September 2002, the establishment of a training institute for the Luxembourg building industry was announced, as provided for by a collective agreement signed in 2000. The institute, which will offer skills training at four levels, will be funded by a mandatory annual levy of 0.65% of total paybill on the enterprises in the sector (LU0210102F). In the Netherlands, training measures are included in the majority of collective agreements, according to a report published in 2002 by the Labour Foundation.

The social partners also focused on training outside the bargaining arena in a number of countries in 2002. In Ireland, the social partners have been looking closely at the issue in recent times, and in May 2002 theIrish Business and Employers Confederation (IBEC) launched a new policy document on training, which points to the need to'up-skill' those in employment in order to ensure the continuing competitiveness of the Irish economy. The provision of training is currently one of the central concerns of trade unions in Germany, which are particularly anxious about the decline of training places on offer from employers (DE0209203F).

2002 also saw a number of training initiatives by governments. Legislation on a new individual learning and skills development plan was passed by the Swedish parliament in June 2002 (SE0204102F). The reform, which will come into operation on 1 July 2003, offers incentives to employees to undertake skills development and encourages employers to contribute to the financing of employee training. In Austria, a range of training measures were introduced, aimed at improving employment opportunities for young people under the age of 25 (AT0210201N). In August, the UK government began to develop a new network of employer-led sector skills councils, with the aim of improving skills, productivity and competitiveness (UK0211105F). The new government in Germany has stated that a reform of the vocational education act is one of the priorities for its forthcoming four-year term, while the new Portuguese government has promised to reform current training provision. In Hungary, the new government plans a comprehensive amendment of the 1993 vocation training legislation, and social dialogue has begun on the issue.

New forms of work

Part-time work and work on fixed-term contracts are now well established features of the labour market in most European countries - see figures 6 and 7 below. In 2002, high-profile debate and activity on'non-standard' forms of work tended to focus more on issues such as temporary work through agencies and flexible forms of working

Figure 6. Part-time work in EU Member States, Hungary, Norway, Poland, Slovakia and Slovenia, % of total employment, 2000 and 2001

Figure 6. Part-time work in EU Member States, Hungary, Norway, Poland, Slovakia and Slovenia, % of total employment, 2000 and 2001

* Employees only (2000); ** Population between 15 and 74 (2001); *** Population over 15 (2001); **** 2000 data (2001).

Eurostat labour force survey.

There was, however, some legislative activity on fixed-term contracts and part-time work (see above under'Legislative developments') in 2002. In Sweden, legislation came into force implementing the EU Directives on part-time work and fixed-term contracts. The Netherlands implemented the fixed-term contracts Directive in November 2002 without being obliged to modify existing legislation to any great extent. New Danish legislation was adopted, easing access to part-time work. Fixed-term work was a focus in Portugal's debate on a proposed new Labour Code. The government initially proposed a significant deregulation of this form of work but, after negotiations with the social partners, these provisions have been modified somewhat. Poland's amended Labour Code also deregulates the use of fixed-term contracts (PL0209107F). Finally, Ireland has yet to implement the EU Directive on fixed-term work and in 2002 the Irish government received a'reasoned opinion' from the European Commission warning it that it was in breach of its obligations. The government intends to pass legislation in the near future.

Figure 7. Fixed-term work in EU Member States, Hungary, Norway, Poland, Slovakia and Slovenia, % of total employment, 2000 and 2001

Figure 7. Fixed-term work in EU Member States, Hungary, Norway, Poland, Slovakia and Slovenia, % of total employment, 2000 and 2001

* Population between 15 and 74; **Population over 15; ***2000 data. (All notes trelate to 2001)

Eurostat labour force survey.

Non-permanent work and industrial relations

An EIRO comparative study conducted in 2002 (TN0202101S) examined'non-permanent work'- notably fixed-term contracts, temporary agency work and casual or seasonal work. It found that:

  • although the situation varies from country to country, non-permanent workers are in some cases likely to face discrimination in a number of areas, often owing to length-of-service requirements for entitlement to some legal or collectively agreed entitlements, or benefits offered by employers. This can apply in areas such as dismissal protection and compensation, pay (especially bonuses and other additional payments), pensions (sometimes basic state pensions, and more frequently additional provision) and unemployment benefits;
  • non-permanent employees (and especially those on shorter contracts) tend to receive less training than those on open-ended contracts, though temporary agency workers are sometimes better provided for in this area;
  • there is some evidence of links between non-permanent employment and increased health and safety risks or poor working conditions;
  • in some countries, there are service-related conditions for acting as employee or trade union representatives or standing and/or voting in elections, which may affect the representation of non-permanent workers;
  • the extent to which non-permanent employment is dealt with in collective bargaining varies considerably between countries, and between forms of such employment. In many countries, collective bargaining relating to temporary agency work seems to be spreading, but non-permanent work in general, or other specific types of non-permanent work, seem to be rather less regulated by collective bargaining in most countries. There are relevant national intersectoral agreements in a few countries, and sectoral and company agreements in some others, generally adapting pay and conditions to non-permanent workers, or regulating the use of non-permanent work.

It was probably temporary agency work which received most attention in 2002, not least because in March the European Commission issued aproposal for a Directive establishing a general principle of non-discrimination against temporary agency workers (EU0204205F). This sparked off debate in some countries. Notably, in the UK, where the temporary agency work sector is very deregulated, employers expressed concern about the proposed Directive (UK0212101N), though trade unions broadly support the initiative. A similar discussion occurred in the Netherlands.

The regulation of temporary agency work through collective bargaining expanded or continued in some countries in 2002. In Austria, the first-ever collective agreement covering this sector was concluded in January and was updated by a follow-up agreement in the autumn (AT0202202N). The accord is important as it provides for payment for workers for periods during which they are not hired out by an agency. In Italy, the social partners concluded a new national collective agreement for the temporary agency sector in July 2002 (IT0208101N). The accord deals with issues such as the creation and tasks of joint bodies and trade union representation. In the Netherlands, a new collective agreement for the sector came into force in September 2002. It runs for a total of nine months and provides for a pay increase of 2.75%.

The issue of temporary agency work took centre stage in Germany during 2002 as this formed the centrepiece of the Hartz commission proposals on labour market reform (see above under'Legislative developments'). The Hartz commission advocated the setting up of special personnel service agencies (PSAs), attached to local labour offices, which will employ unemployed people and hire them out on a short-term basis. New legislation adopted in November (DE0212203N) covers employees of these new agencies, in addition to employees of existing private sector employment agencies. The new law relaxes some of the provisions of existing, rather restrictive, legislation governing the operation of temporary agencies. It also provides that temporary agency workers have to be paid the same wages as permanent employees, and any deviations from equal pay are possible only through the provisions of collective agreements. At the end of the year, the social partners were engaged in negotiating a collective agreement regulating terms and conditions for temporary agency workers.

In Belgium, a set of bills on the reorganisation of the labour market proposed in November by the minister for employment and training in the Wallonia regional government include provisions regulating private placement services. In September, the Polish government presented proposals to regulate the legal status of temporary work, which is a relatively new phenomenon in Poland (PL0210104N). Finally, the UK government published for consultation a revised draft of the Conduct of Employment Agencies and Employment Business Regulations, which will update the law on the operation of employment agencies.

On new forms of work more widely, an Italian'proxy law', drawn up during 2002 and passed by parliament in February 2003, delegates to the government the authority to reform the labour market, including the creation of a number of new types of contract, including'work on call', whereby workers receive an'availability allowance' in exchange for a commitment to work on an intermittent basis. Furthermore, parliament passed a decree which introduced maternity allowances for women engaged in'freelance work coordinated by an employer' (IT0207303F) - one of the most widely used forms of atypical employment in Italy, affecting around 1 million workers. In Austria, the government proposed extending unemployment insurance coverage to workers who are not dependent employees. However, this was postponed following calls from employers to extend this cover to people who have set themselves up as self-employed.

In Hungary, legislative amendments made in 2002 contained provisions relating to non-standard forms of work, including work on call, the posting of workers, the temporary reallocation of duties and the temporary transfer of an employee to another employer. In the UK, the government began consultations in July on extending existing statutory employment rights to categories of atypical workers who are not legally classified as'employees'. These could include workers such as casual workers, agency workers, home workers, freelancers and those on'zero hours' contracts. Trade unions are keen to extend statutory employment protection to all these types of employee. However, employers are wary, arguing that this would undermine flexible working.

Economically dependent work

A 2002 EIRO study (TN0205101S) looked at the phenomenon of'economically dependent workers'- workers who are formally self-employed but depend on a single employer for their income. The study found that such employment relationships exist in greatly varying forms in many countries, though are generally quite limited in terms of the number of workers involved.

Economically dependent work is a'grey area' which creates problems for employment law. It is not recognised as a specific employment relationship by any national legal systems, though there have been some relevant legislative initiatives - such as the introduction of a'presumption of subordination' for certain categories of workers (as in Austria, France, Greece and Portugal) or the extension of some specific aspects of protection (typically social security coverage, sometimes including health and safety provisions) to certain forms of self-employment (as in Austria, Germany and Italy) formerly devoid of them. Trade unions are increasingly calling for economically dependent work to be regulated properly and for social security coverage and employment law protection to be provided. Unions have made some efforts to recruit and represent the workers involved, but their situation is very rarely dealt with in collective bargaining.


2003 looks set to be a challenging year in terms of industrial relations, collective bargaining and pay. In the context of economic uncertainty, there are many advocates of pay moderation, as in 2002. However, this looks likely to be achieved with varying degrees of success around Europe.

In political terms, the EU Presidency will be held by the Greek government during the first half of 2003 and by the Italian government during the second half of the year. In individual Member States, 2003 will see the formation of new governments in Austria and the Netherlands, following recent elections. The industrial relations implications will depend on the composition of the new coalition governments. General elections will be held in Belgium in June and Finland in the spring of 2003.

In terms of collective bargaining, new national agreements will govern developments in 2003 in a number of countries. A new two-year accord, covering 2003 and 2004 has been concluded by the social partners in Belgium. This will now be followed by negotiations at sectoral level. In Spain, a new national one-year framework accord for lower-level bargaining was concluded in January 2003 and in Finland, a 2003-4 national accord was concluded in November 2002. A draft national agreement reached in Ireland in early 2003 awaits ratification by the social partners. However, aside from this, the issue of public sector pay is set to dominate Irish industrial relations in the coming months, with the implementation of a pay'benchmarking' report issued in 2002.

In Germany, 2003 is likely to see much debate about the future of the tripartite national Alliance for Jobs, which was moribund in 2002, but which the government hopes to resuscitate in 2003 (though prospects seem poor -DE0302104N). This issue may be prominent in 2003 as there will be little sectoral bargaining this year: most large sectors concluded agreements in 2002 which extend into 2003 and beyond.

Sectoral bargaining will dominate in Italy during 2003 as the social partners in many large industries, including metalworking, aim to renew their collective agreements. The two-tier (sector and company/local) bargaining system put into place by a July 1993 tripartite agreement has been under strain for some time and 2003 will be a test of this system. In Sweden, the latter part of the year will be taken up with preparations for the 2004 bargaining round, when many large three-year sectoral agreements will be renewed. Debates are expected to focus on pay. Sectoral bargaining will take place in Denmark in 2003 in the finance sector and the meat industry, where collective agreements dating from 2001 will expire (most sectors are still covered by four-year agreements concluded in 2000).

The labour market will pose one of the biggest challenges of 2003 in many countries. In Germany, this issue is set to dominate the agenda as the government tries to bring down unemployment. Poland is another country which is concentrating on bringing down unemployment by means of labour market measures. Ambitious measures launched in June 2002 will continue to operate throughout 2003.

Pensions reform is causing headaches for many national governments. The French government is to examine the issue during the year, placing it high on the national industrial relations agenda. Social security more broadly is a topic which also may feature in debates during 2003. Furthermore, sickness absence has been a particular problem in some countries for many years. For example, in Norway, the question of reducing sickness absence is likely to surface during the autumn of 2003 when an earlier agreement on the issue is given a mid-term review. Similarly, the Swedish social partners will continue discussions on reducing the country's high levels of sickness absence.

In terms of new legislation, a comprehensive draft bill on labour relations is expected to be prepared in Greece in 2003. In addition, the Greek government is likely to prepare a legislative framework for fixed-term work. In Luxembourg, a new law on collective industrial relations and the regulation of industrial disputes, issued in November 2002, will make its way through the parliamentary process during the course of 2003. In Portugal, it is expected that the new Labour Code will be finalised during 2003. Similarly, changes to the Slovakian Labour Code are expected during the year. The transposition of recent EU Directives will be an important issue in some countries - for example, the way in which the government implements the EU employee consultation Directive will be a major focus of attention in the UK.

The relationships between the social partners may be tested in some countries. In Italy, cooperation between the main trade union confederations was under considerable pressure in 2002. Continuing divisions between them may hamper discussions on solutions to major issues such as the renewal in 2003 of the key sectoral collective agreement in metalworking. Finally, in the UK, elections will take place during 2003 for new general secretaries of two of the country’s most influential trade unions - theTransport and General Workers' Union (TGWU) and theGMB general union. The outcome of these elections will have significant implications for government-union relations. (Andrea Broughton, IRS)

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