Collective agreement in construction sector finally renewed

Unions and employers in Luxembourg have been in deadlock since 2009 over a new sectoral collective agreement in the construction industry. In July 2013, after years of industrial unrest, social partners finally renewed the agreement. However, even as the deal was being signed there was acrimony between the two main unions involved in the negotiations and condemnation of the stance of Prime Minister Jean-Claude Juncker, who was seen as supporting the employers.

Background

On 10 July 2013, unions and employer organisations in Luxembourg’s construction industry agreed to renew a sectoral collective agreement which covers about 14,000 people.

On the workers’ side the deal was negotiated by the Independent Trade Union Confederation of Luxembourg (OGB-L), and the main unions within the construction sector that received 80% of the votes in the professional elections. For the employers, the agreement was signed by the Federation of Construction and Civil Engineering Employers, which is affiliated to the Federation of Craft Workers (Fédération des Artisans), and the Building and Public Works Employers’ Group, which is affiliated to Business Federation Luxembourg (FEDIL).

The agreement was officially signed on 17 July 2103. It was also signed by the Luxembourg Confederation of Christian Unions (LCGB) which gained around 20% of the share of votes of the professional elections.

Long wait for renewal

The previous collective agreement for Luxembourg’s construction sector expired in 2009, but its terms have continued to regulate the employment of the industry's 14,000 workers and they have not had a wage increase for three years.

Although there have been discussions since the end of 2009 about new terms, the social partners have failed to reach agreement. A significant demonstration demanding a new agreement was attended by more than 2,500 workers, a conciliation process failed in December 2012, and finally a ballot was held earlier this year for strike action (LU1302021I).

On 18 June 2013, OGB-L announced that 95% of workers had voted in favour of a one-day strike on 17 July. At the end of the official conciliation process in early July, and after the ‘last chance’ round of negotiations on 6 July, the social partners finally reached agreement on 10 July 2013. Disputes lasting as long as this are rare in Luxembourg.

Modest three-stage wage increase

The new collective agreement came into force on 1 September 2013 and is valid until 31 August 2016. It incorporates a three-stage wage increase awarded – 1% from 1 September 2013, followed by a 0.7% increase from September 2014 and a further 0.7% from September 2015. The wage increase is slightly higher than that proposed by the employers – 0.5% a year for 2013, 2014 and 2015 – but below OGB-L’s claim for a 1.5% increase each year for three years.

Other improvements include an increase in the Christmas bonus from 5% to 6% of salary. The LCGB has said this bonus will be the equivalent of 72% of the basic monthly salary for all workers of the sector. The social partners also agreed to establish a working group to oversee the creation of one category of employment in the industry, merging the two currently distinct categories of ‘employee’ and ‘worker’. Employers will also be required to provide fail-safe tools to their employees who work on non-secure building sites.

There were complex discussions over the contentious issue of flexible working time. The employers wanted an increase in the maximum allowable number of working hours from 40 hours per week to 52 for the six-month period from May to October. However, in the end the employers and unions agreed to drop this issue from their negotiations and maintain the status quo.

Reaction of the social partners

Despite the successful conclusion of a new agreement for the sector, there were recriminations between the sector's two most respresentative unions about how long the process had taken.

The sector's second most representative trade union, the LCGB, sent an open letter to the employer organisations on 1 July 2013. The union stressed that it had helped create the conditions that had made it possible for the employers to sign up to the new agreement. While the LCGB was satisfied with its own ‘constructive approach’, it criticised the lack of any increase in wages between 2009 and 2013.

In a press release issued on 17 July 2103, the LCGB condemned the position of the main union OGB-L. It said:

The responsibility for this situation rests solely and exclusively to the spokesman of the negotiators, the majority union within the construction sector. If the majority union had bargained in an intelligent way, the construction workers would not have had to wait four years for a new collective agreement.

OGB-L, in turn, criticised LCGB for agreeing to open negotiations over flexible working time. In its own open letter, OGB-L said: ‘LCGB has stabbed the 14,000 employees of the construction sector in the back.’

Jean-Luc De Matteis, Central Secretary at OGB-L, also criticised the attitude of Prime Minister Jean-Claude Juncker. He spoke out against Juncker’s support of the employers in an article in the newspaper Le Quotidien on 11 July 2013. However, the OGB-L said it was very pleased that the result demonstrated the union’s fighting spirit, only a few months ahead of the next round of professional elections in November.

Commentary

From an industrial relations point of view, the conflict between the OGB-L and the LCGB is a significant outcome of these negotiations. In November 2013, the 14,000 employees in the construction sector will choose which union they feel is best able to represent them. The union’s approach to the construction sector negotiations will be an important factor in that decision.

The unions may be pleased that they have stopped employers widening the scope of the collective agreement to include provisions for flexible working time. However, the employers are now likely to seek flexibility elsewhere, perhaps in short-term employment contracts, or by using temporary workers.

Frédéric Turlan, IR Share

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