Thematic feature - collective agreements on changes in work organisation

This article gives a brief overview of collective bargaining on changes in work organisation in Austria, as of September 2004. It looks at: the extent to which collective agreements introduce changes in work organisation that take into account productivity demands, flexibility and security in an integrated way; the main areas in which changes are being introduced; the overall success or otherwise of bargaining on the topic; and the prospects for the future.

The EU’s European employment strategy was revised in 2003 (EU0308205F), following demands for a more results-oriented strategy contributing successfully to the targets for more and better jobs and an inclusive labour market set at the Lisbon European Council in 2000 (EU0004241F). To support the three objectives of full employment, quality and productivity at work and cohesion and an inclusive labour market, the current employment guidelines identify 10 priorities ('commandments'), including one on 'promoting adaptability of workers and firms to change'. This identifies work organisation (alongside skills, lifelong learning and career development, gender equality, health and safety at work, flexibility and security, inclusion and access to the labour market, work-life balance, social dialogue and worker involvement, diversity and non-discrimination, and overall work performance) as an element in improved quality at work, which should be pursued through a concerted effort between all actors and particularly through social dialogue.

The 2004 Council Recommendation on the implementation of Member States’ employment policies provides for four priorities:

  • increasing adaptability of workers and enterprises;
  • attracting more people to enter and remain on the labour market, making work a real option for all;
  • investing more and more effectively in human capital and lifelong learning; and
  • ensuring effective implementation of reforms through better governance.

The Recommendation refers to promoting flexibility combined with security in the labour market, by modernising and broadening the concept of job security, maximising job creation and raising productivity. As defined in the employment guidelines, 'job security' refers not only to employment protection but also to building people’s ability to remain and progress in work. Changes in work organisation thus appear to be seen as a main vehicle for increasing the adaptability of workers and enterprises. Related to this issue is flexibility and security in the labour market and the relative attractiveness of 'standard' and 'non-standard' employment relationships (with the aim of avoiding a 'two-tier' labour market).

With work organisation playing an increasingly important role in European employment policy, in September 2004 the EIRO national centres were asked, in response to a questionnaire, to give a brief overview of the industrial relations aspects of the topic, looking at: the extent to which collective agreements introduce changes in work organisation that take into account productivity demands and flexibility and security at the workplace in an integrated way; the main areas in which changes are being introduced; the overall success or otherwise of bargaining on the topic; and the prospects for the future. The Austrian responses are set out below (along with the questions asked).

Recent agreements on changes in work organisation

Please provide information on recent developments (over the last three-five years) in collective agreements on work organisation that introduce changes in flexibility, security and productivity in an integrated way. The kind of issues that such agreements might cover include: introducing autonomous (or semi-autonomous work) teams; reducing the number of hierarchical layers; new forms of employee involvement; reorganising work functions; moving away from product-based structures to business unit; flexible working hours; multiskilling; job rotation; improving training (eg making it more systematic, ensuring wider participation, or changing the focus); new pay systems (eg performance-based pay, profit-sharing, share ownership schemes), and new financial and non-financial performance measures; or new appraisal systems.

The kind of agreements that we are interested in here are those that deal with a number of the issues listed above as an overall 'package'. Please provide any overall information available on this kind of development, if possible, and brief details of three or four agreements (at company and/or sectoral level) that you consider particularly innovative and interesting. Below is an indicative list of the kind of information we are seeking.

  • What are the main aims of bargaining on work organisation - eg increasing productivity? Increasing personnel flexibility? Improving the company’s position in the market? Avoiding redundancies and lay-offs?
  • What is the extent of bargaining on work organisation - how many agreements are there? How many companies/employees are covered?
  • What are the main areas in which changes are being introduced - eg new organisational structures, new more flexible and less hierarchical methods, new corporate cultures, new business practices, more training, new performance measurement techniques, new reward systems?
  • In the context of the introduction of work organisation changes, what kind of contractual and working time arrangements are provided - ie how is the flexibility and security issue being addressed?
  • In the context of work organisation changes introduced with a view to improving productivity, what specific measures have been agreed?
  • What are the motives of the parties in concluding such agreements - please indicate the motives of each side (management and workforce), such as reducing costs, promoting flexibility, securing employment, preventing compulsory redundancy, or improving terms and conditions.

With only a few exceptions, private sector collective bargaining in Austria takes place at the sector or industry level. Since labour law confers the right to collective bargaining, almost without exception, on trade union and employers' organisations above the level of the individual company, neither company union organisations nor company works councils (AT0309203T) are allowed to negotiate collective agreements.

Modern trends of flexible work organisation resulting from structural changes in the nature of employment (mostly reflecting the tendency of an overall shift from production industry) to the service sector can be seen in Austria. However, qualitative issues in general and work organisation in particular are only of minor importance in collective bargaining. This is because work organisation issues fall within the regulatory scope of company-level co-determination and hence the consultation rights of works councils (which in most cases are integrated with trade unions). Training issues fall, in particular, within the competence of the vocational training system. Furthermore, the predominance of small and medium-sized firms in the structure of Austria’s economy (fewer than 1,000 establishments have more than 250 employees) makes it difficult to agree on industry-wide rules regarding the adjustment of working conditions to human needs. Another factor is the generally positive attitude (also among trade unions) towards technical progress and rationalisation. As a consequence, the unions’ bargaining policy is focused on enabling employees to share in the benefits of technical progress in the form of increased pay rates and shorter working hours rather than giving much emphasis to qualitative issues.

The position of the employers’ organisations is clear and simple: they promote any changes in work organisation if such measures enhance the companies’ productivity without entailing major additional costs.

Such work organisation changes are currently being implemented in sectors where large-scale, partially technology-induced reorganisation of work has challenged traditional job demands, such that traditional job descriptions (often requiring relatively low skills) and work functions have to be revised and adjusted to actual job profiles (to be redefined in terms of skills requirements and job demands, due to a general trend towards an increasing demand for highly skilled staff). For instance, this is, at present, the case in the banking sector.

In Austrian terms, collective agreements in the banking sector cover a relatively broad range of issues and provide for pay and conditions that are comparatively favourable to the employees (AT0104213F). This includes provisions for occupational pension schemes (which is rare in Austria) and - in the case of the savings and commercial banks - tenure of employment. The payment system is largely seniority-based, a fact that is being criticised by the employers, which aim to weaken the seniority principle in favour of more flexible and performance-related pay. This employers’ interest meets with the trade unions’ growing concern about the declining ability of the system actually to govern pay conditions in practice, which is manifested in the fact that 'overpayment' above the collectively agreed pay rates runs to about 30% in the sector. This is mainly because actual job profiles have moved away from what is traditionally defined in the pay grades. Therefore the two sides of industry, have in the past few years entered intense negotiations over a reform of the payment system, including the introduction of performance-related pay (ie 'variable pay systems') and corresponding measurement schemes. Moreover, according to the unions, the existing framework regulations concerning training and further training issues, which provide for an individual employee’s entitlement to take a certain period of training leave each year, should be maintained, if not improved. In terms of working time flexibilisation, the existing framework regulations agreed by industry's bargaining parties some years ago are considered by most employers as being sufficient, and are mostly not utilised fully by them.

Another example of a particularly innovative collective agreement can be found in the electrical and electronics sector. An agreement signed in December 2003 (AT0402202F) provides for a common pay system for blue- and white-collar workers, which is unique in Austria’s industrial relations so far, due to the tradition in all sectors of the economy of separate bargaining for the two employee groups. According to the agreement, the sector’s employees are covered by a new classification scheme providing for a more precise single classification of jobs, thus resolving the long-standing problem of incorrect classification, arising mostly to the detriment of manual workers and women. The new scheme is devised to improve the validity of job classifications, in particular regarding formally unskilled workers actually working as highly trained employees. Although these advantages have been counterbalanced by a less favourable system of automatic pay increments (which results in weakening the 'old' seniority principle), another innovative provision compensates for it: an obligatory pay increase in addition to the collectively agreed minimum pay increase. This new wage component is to be distributed flexibly among employee groups in each establishment and has to be paid annually and irrespective of the 'normal' collective bargaining procedure. In contrast to a 'distribution option' under previous agreements, which was voluntary (AT0201206F), the new scheme is binding on all employers in the sector. The distribution of this wage component must be based on criteria related to working performance (including 'soft skills'), the company’s pay structure (ie equality targets) and equal treatment of the sexes.

Most of the 'qualitative' issues listed above (such as the introduction of autonomous teams, the reduction of the number of hierarchical layers, new forms of employee involvement, company restructuring, job rotation etc) are not subject to sectoral collective bargaining, which focuses on quantitative issues, ie remuneration and working hours. Rather, such qualitative issues are either unilaterally dealt with by management or - if they fall within the regulatory scope of establishment-level co-determination - regulated by the parties at company level in the form of works agreements between management and works council.

During the last decade, the most important aspect of collective bargaining with respect to work organisation has proved to be the introduction of flexible working hours schemes. According to the principle of 'organised decentralisation', the parties to sectoral collective bargaining have increasingly agreed on 'opening clauses' which leave - within a certain framework - the regulation in detail of working time issues to management and works councils at company level.

Assessment

What have been the results of collective agreements introducing work organisation changes? Drawing on assessments/evaluations made by researchers or the parties to agreements (employers, trade unions, works councils etc) or other sources, please provide information on issues such as the following:

  • whether agreements have been successes or failures, and the reasons why in both cases;
  • the impacts on flexibility and security (eg are there any successful examples of collective agreements addressing this issue as part of work organisation changes?);
  • the impacts on productivity (has productivity been improved as a result of the work organisation changes introduced?); and
  • the impacts on collective bargaining - are such deals broadly considered as concession bargaining, or as 'zero-sum' or 'positive-sum' situations? What are the implications for the structure, process or nature of collective bargaining (eg company versus sectoral? workplace representatives versus trade union? from “distributive” to “integrative” bargaining [with mutual gains for both sides]) and the role of management?

Where significant differences of interpretation exist in assessments on these questions - notably between the social partners - please report on the differing views.

There is no information available on the results of collective agreements introducing work organisation changes. Neither research institutions nor the parties to collective agreements systematically examine their results and impacts. Indeed, it appears to be almost impossible to make any assessment of real effects of (this type of) bargaining, since this would imply a problematic comparison of the reality with a virtual situation, whereby some or all collectively agreed provisions are presupposed to be out of force. However, collective agreements like those outlined above are broadly considered as being successes. Irrespective of their contents and regulatory scope, this seems to be a matter of course, since they have been concluded by the two parties for the explicit purpose of improving both the competitiveness of the companies concerned (ie the businesses’ interests) and the sector’s working conditions (ie the employees’ interests). This is in line with the principle of 'positive-sum' bargaining as pursued by the social partners (if only rhetorically, in the view of some commentators).

Debate and prospects

What impact has the kind of agreement referred to above had in your country, and what impact might such agreements have in future? What is the current debate on the topic? Please provide an assessment of prospects for the future in terms of work organisation bargaining in your country (differentiating by sector, if relevant).

Collective bargaining on matters of work organisation, beyond working time regulations, has traditionally played only a minor part in Austrian industrial relations. This situation may be slightly changed by the negotiations over new framework regulations in terms of pay and - to a certain extent - appraisal systems currently under way in the banking/savings bank sector (see above). However, these negotiations mainly aim at the introduction of new grading/classification schemes in combination with some components of performance-based pay. Notably, this does not mean bargaining on changes in work organisation on a comprehensive and integrated basis. However, as far as working time flexibility is concerned, traditional work organisation may, in the near future, increasingly be challenged by employers' demands further to relax working time regulations, in terms of both legislation and collective agreements (AT0407201N).

Work organisation issues in a narrower sense are - if at all - regulated at individual establishment level (where no collective bargaining takes place); in this respect no major changes are currently foreseeable. (Georg Adam, University of Vienna)

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