The labour and social policy of the Federation of Austrian Industry

In late 2000, the Federation of Austrian Industry (VÖI) attracted attention through its far-reaching demands in the current debate about changes in Austria's social welfare system. This feature examines VÖI's internal structure, social and labour policy and perception of social partnership.

The Federation of Austrian Industry (Vereinigung der österreichischen Industrie, VÖI) is Austria's second central employers' organisation, alongside the Chamber of the Economy (Wirtschaftskammer Österreich, WKÖ) (AT0009230F). VÖI is a voluntary association (WKÖ membership is compulsory) of Austria's industrial companies and of all other companies linked to industry. It enjoys the informal privileges of a social partner in the process of policy-making. It is also licensed by the Federal Arbitration Board to conclude collective agreements. However, VÖI has refrained from using this right so far. Instead, an exchange of views and coordination of positions on bargaining policy take place within VÖI's special committee on social policy. These views are then channelled into the WKÖ industry section's sectoral subunits - which conduct collective bargaining - via joint positions reached by the organisations' leaderships.

Structure of VÖI

VÖI's most important decision-making bodies are as follows:

  • the plenary meeting (Vollversammlung) of all members is held once a year. It approves the organisation's accounts, sets the level of membership fees and decides upon matters tabled by the federal executive council. The plenary elects the members of the executive council every third year;
  • the federal executive council (Bundesvorstand) consists of up to 100 members, nominated by regional groups (see below) and the plenary meeting for a three-year term of office. The chairs of the nine regional groups and a number of honorary members are also members of the federal executive council; and
  • the presidential (steering) committee (Präsidium) consists of the the president and the two vice-presidents, elected by the executive council for a four-year term. This committee manages the daily business of the federation.

VÖI's internal structure is both functional (in terms of policy fields) and territorial (corresponding with Austria's nine provinces). In functional terms, six special standing committees cover the following areas: economic policy; social policy; foreign economy and European integration; environment and transport policy; taxation and financial policy; and education. Chairs are elected from amongst their members by the committees. Further committees have also been established, including a committee for legal matters and a small and medium-sized enterprise (SME) working group.

VÖI members are primarily served by nine independent regional offices, which function as the local contact centres for members. They represent members' positions, provide services and answer queries. The regional groups may consult relevant technical experts based at the VÖI federal office in Vienna.

Representativeness

The membership domain of VÖI cuts across sectors and branches. Historically, it was founded as a representative body for the industry sector. While manufacturing is still the stronghold, members now also come from the service sector (eg insurance companies and banks). VÖI sees itself as the voice of all companies using "industrial methods" of production, and not only traditional industrial companies. The separation of management tasks from non-management tasks is regarded as the key characteristic of industrial production methods.

Notably, firms in "new economy" sectors have increasingly joined VÖI in recent years, since they regard it as a body which represents their interests. Correspondingly, the federation puts considerable emphasis on the interests of the new economy in its policies, believing that this dynamic sector is likely to develop into a leading industrial sector in the future.

In 1998, 2011 companies with 448,491 employees were members of VÖI, representing 14.7% of Austria's total employment. Since VÖI's domain cuts across any statistical classification system, it is only possible to estimate the membership density in the industry sector, at about 85%-90%.

Social and labour policy

The key aspects of VÖI's social and labour policy (which have attracted attention in the debate over social welfare reform in 2000) and its perception of social partnership, are set out below (based on a recent interview with Wolfgang Trittremmel, the head of VÖI's department of labour and social affairs).

The general aim pursued by VÖI in this area is a more flexible, decentralised and privatised economy. Accordingly, its key demands are as follows:

  • lowering non-wage labour costs. Austria has comparatively high non-wage labour costs, and this is regarded as disadvantage in terms of international competitiveness;
  • flexibilisation of labour standards. A number of existing regulations are seen as outdated and as hindering the economy. For example, some regulations on employment protection and working time should be amended;
  • decentralisaton of collective bargaining. Working time and pay should be negotiated at the company level; and
  • reconsidering the role of the state. Responsibility for social security should increasingly be transferred to the individual. For example, employees and companies should be required to make provisions for retirement pensions in addition to state-provided pensions.

Development of social partnership and future prospects

Since the establishment in early 2000 of the coalition government of the populist Freedom Party (Freiheitliche Partei Österreichs, FPÖ) and the conservative People's Party (Österreichische Volkspartei, ÖVP) (AT0002212F), social partnership as a system of concertation between government and organised business and labour has lost significantly in importance. Moreover, an imbalance between organised business and labour has been perceived in many quarters. Generally, Mr Trittremmel of VÖI argues that the government shows more understanding for the employers' organisations' demands than the previous coalition of the ÖVP and the Social Democratic Party (Sozialdemokratische Partei Österreichs, SPÖ). It has become easier for employers to find support, since the ministers responsible for social and labour affairs in the former ÖVP-SPÖ coalitions were usually linked to the Austrian Trade Union Federation (Österreichischer Gewerkschaftsbund, ÖGB) or the Chamber of Labour (Bundesarbeitskammer, BAK). However, many initiatives of the new government are deemed to be not far-reaching enough by VÖI.

VÖI believes that the specific value obtained from cooperation between employers' and employees' organisations must be redefined in the future. Most importantly, the social partners have to find topics on which they can reach solutions, supplementary to government activities.

In the view of Mr Trittremmel, the development of the social partnership in recent years has been characterised by two distinct properties. First, with regard to collective bargaining, which takes place at sectoral level in Austria, cooperation still works well. The most important reason for this is the immediate effect, in the sense of pay increases and sectoral regulations on other aspects of employment conditions, that these negotiations have for all participants. Second, in the field of public policy, which formally falls within the purview of state powers, social partnership has increasingly lost its function as a platform for "interest clearing" and its ability to resolve problems. This development did not start when the new government came to power in early 2000, but has already begun in the early 1990s. In contrast to the continuing strength of sectoral collective bargaining, it is now difficult for the social partners to find common approaches and strategies for the long term in the public policy arena.

Commentary

VÖI often tends to adopt more pronounced positions than WKÖ, mainly due to the former's narrower domain. Nevertheless, both organisations still appreciate social partnership at a time when this approach has increasingly come under pressure from the government. However, a reform of social partnership, and especially its role in public policy-making, is seen as necessary by both employers' organisations. (Angelika Stueckler, Univ. of Vienna).

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