Industrial relations and social dialogue

Mixed impacts of COVID-19 on social dialogue and collective bargaining in 2020

A first analysis of developments in working life in 2020 shows that the COVID-19 pandemic had a considerable impact on social dialogue and collective bargaining in the EU, Norway and the UK, albeit to varying degrees. While in some countries, standard procedures were by and large maintained, in others, tripartite consultation was sidelined in the face of time pressure and an uncertain economic environment. Collective bargaining was often postponed or suspended indefinitely, especially in those sectors that were hit hard by government-imposed lockdowns. The number of renewed collective agreements decreased sharply in some countries.

This article is one of a series that explores working life issues in the 27 EU Member States, Norway and the UK during the COVID-19 pandemic. It is based on information provided by the Network of Eurofound Correspondents and published as a set of individual country reports in ‘Working life in the COVID-19 pandemic 2020’.

Introduction

The COVID-19 pandemic had a sudden and strong impact on national labour markets and economies worldwide. In order to mitigate the negative effects of the crisis on citizens, workers and businesses, it was critical for governments to react quickly. In many cases, social partners were involved in the design and implementation of the government support measures.

In addition to the participation of social partners in such measures, social dialogue at all levels, both with (tripartite) or without (bipartite) government participation, has been shown to play an important stabilising role, especially in times of crisis. However, in emergency situations like the one triggered by the pandemic, the crisis may be used as a way to sideline social partners, for example, through the adoption of state-of-emergency legislation. It is also likely that bipartite social dialogue – at all levels, including collective bargaining – and its actors, institutions and processes has been impacted by the extraordinary situation.

In terms of the COVID-19 pandemic, once the crisis is declared to be over, it remains to be seen whether the crisis-led adaptations of social dialogue and collective bargaining will be maintained – or whether there will be a return to the pre-crisis status quo – at national and industry levels. At the European level, the way ahead is clear: as stated in recent European Commission policy documents, there is a focus on the reinforcement of social dialogue at all levels.

Impact on social dialogue

Smooth transition to online communication

The impact of COVID-19 on industrial relations institutions and actors in the EU, Norway and the UK was marginal. None of the countries experienced major changes during 2020. On the contrary, several countries, including Austria, Finland and Germany, reported that their institutionalised systems of industrial relations worked well when faced with the crisis. Changes in industrial relations processes, however, were reported in many countries, mostly related to the mode of communication and timing. Due to public health guidelines enforcing restrictions on personal meetings and the implementation of remote working, social dialogue and collective bargaining often had to be rescheduled or switched to online meetings and video conferences when the epidemiological situation made it necessary. In several instances, this was a first-time experience for social partners. Overall, the transition appears to have been smooth, with no major difficulties reported regarding the implementation of remote information, consultation and negotiation processes. In some cases, such as in Ireland and Latvia, the experience of virtual conciliation and communication was assessed as difficult and having substantial limitations. Only one country – France – reported that legislative adaptation allowed for online negotiations. In this case, the government quickly adopted measures to enable collective agreements to be negotiated and signed remotely.

Tripartite social dialogue deemed effective in most countries

In the aftermath of the global financial crisis of 2007–2009, social dialogue played a role in cushioning the impact of a large economic downturn. Across all European countries, tripartite negotiations between governments, unions and employer organisations resulted in the development of successful strategies that helped to maintain employment and support businesses. During the COVID-19 crisis, many countries resorted once more to the participation of the social partners in national crisis management, despite some logistical challenges that were caused by pandemic measures.

In Austria, Cyprus, Finland, Germany and Portugal, tripartite dialogue was assessed as being effective in 2020. Denmark and Lithuania reported that negotiations had been accelerated due to the exceptional circumstances. In Croatia, tripartite consultation was revived in the face of the crisis, with the reactivation of the country’s Economic and Social Council after it had been inactive for two years due to disputes and the previous withdrawal of unions from the body. A similar development was seen in Lithuania, where the number of tripartite meetings increased by 55% compared with 2019. In Norway, the way in which crisis measures were designed to address the pandemic brought the social partners and government into close cooperation.

At the bipartite national level, positive developments triggered by the exceptional situation were reported in France, the Netherlands and the UK. In France, the relationship between the social partners was revived (even though their positions were largely ignored by the government) with the conclusion of three cross-industry agreements in 2020 (prior to this, the most recent agreement dated back to 2018). In the Netherlands, social dialogue at the national level became closer and more informal. In the UK, where social dialogue is not institutionalised, a significant increase in tripartite social dialogue activities was reported.

Disruptions to social dialogue in a few countries

In a few countries, the exceptional circumstances were used to sideline the social partners and put established social dialogue practices under threat. In countries such as Bulgaria, Latvia, Luxembourg, Romania and Slovenia, social dialogue was partially suspended during 2020, often in connection with imposed lockdowns in the early months of the pandemic. In Luxembourg, social dialogue was resumed and strongly revived after it had abruptly been suspended by a lockdown; however, its functioning became more complicated, as ministries were not always available and there were long gaps between meetings. In Poland, the tripartite Social Dialogue Council (RDS) was sidelined for most of 2020 and only minimal social dialogue occurred.

In Slovenia, the pandemic initially halted tripartite negotiations on important legislation. The first two COVID-19 laws were adopted under an accelerated procedure with no involvement of the Slovenian Economic and Social Council. After successful protests by trade unions against the social partners’ exclusion, the council was re-established and became involved in negotiations regarding subsequent COVID-19 laws.

In Slovakia, the government tried to avoid the institutional framework of social dialogue; tripartite negotiations have been halted since August 2020, posing a serious disruption to standard procedures in the country.

State of emergency used to sidestep workers' rights

In some countries, the temporary implementation of a state of emergency or a state of alert was taken as an opportunity to sideline social partners’ participation. Such a development took place in a few countries, mostly in central and eastern Europe, as well as in southern Europe. The most prominent example is Greece, where social dialogue was omitted in the legislative process to introduce large-scale restrictions related to constitutional rights and freedoms. The government’s abolition of the Sunday holiday for retail and pharmacy deliveries was vehemently opposed by unions. Furthermore, the Greek parliament authorised the obligatory live streaming of lessons in schools without any prior warning and without any consultation or dialogue with the education trade unions.

In Poland, the federal government adopted legislation violating the autonomy of the Social Dialogue Council and of the social partners, whereby the Prime Minister would gain the right to dismiss any member of the central-level tripartite body if they committed an act of ‘misappropriation of the council's activities, leading to the inability to conduct transparent, substantive and regular dialogue between employees and employers’ organisations and the government’ (Anti-crisis shield 1.0, article 46). The social partners jointly protested against this regulation.

In Portugal, the right to strike was suspended, on the grounds that it could ‘compromise the functioning of critical infrastructures or health care units, as well as in sectors related to the production and supply of essential goods and services to the population‘ (Decree no. 14-A/2020, article 4 c).

In Slovakia, the new government did not consult the representatives of trade unions and employers on newly implemented measures via the usual standard forms of social dialogue, arguing that there was no time due to the increased urgency.

Impact on collective bargaining

Mixed impacts across countries

Collective bargaining was also impacted by the pandemic. Negotiating processes were adapted during the crisis and meetings were often held virtually instead of face-to-face. In some countries, the process was speeded up, often with little room to negotiate. In other countries, however, collective bargaining was shelved or suspended.

In Austria, Finland and Germany, collective bargaining continued as usual and was only marginally impacted by the crisis. It could be seen that in a stable industrial relations system, the actors were able to quickly adapt to upcoming challenges. Negotiations in Austria were unusually quick and conflict-free. In Italy, collective bargaining continued at the industry-wide level without any particular disruptions, although negotiations became more difficult and took longer. In Malta, concessionary collective bargaining emerged as a practice in the collective bargaining process, with employees generally forfeiting some of the collective agreement’s benefits in exchange for protection against layoffs. In some cases, fortunate timing was a factor in successful bargaining: in Estonia, sectoral collective bargaining that had already been planned in the healthcare and public culture sectors took place as usual in late 2020. In Finland, collective bargaining started in November 2019 and was concluded amid the pandemic.

In some cases, collective bargaining was suspended in 2020, especially in those sectors that were hit hard by government-imposed lockdowns. In Austria and Czechia, for example, no collective bargaining took place in the Horeca (hotel, restaurant and catering) sector. In Finland, negotiations in the Horeca sector were postponed.

In Portugal, collective bargaining was profoundly affected by the crisis. The level of coverage of wage bargaining in terms of renewed collective agreements dropped to levels similar to those seen in the critical years of austerity, although extension procedures mitigated the decline slightly. In Greece, negotiation procedures for collective agreements were frozen, affecting hundreds of thousands of employees.

Deferral and delays in several countries

The most common practice during the pandemic was the postponement of collective bargaining, which was frequently accompanied by the extension of existing collective agreements. In Bulgaria, collective bargaining rounds in some sectors and companies were postponed during the first lockdown. In Germany, the social partners in some sectors reconsidered bargaining plans in light of the shrinking economy. In some industries, existing collective bargaining agreements were extended until the end of 2020, due to the uncertainty over future economic developments (such as in the Netherlands and Norway). In Spain, the COVID-19 crisis led to delays and postponements in collective bargaining, especially in the first period of the crisis. In Ireland, many planned negotiations were disrupted and delayed at the enterprise level.

In Romania, regulations ensure that all collective bargaining agreements remain valid during a state of emergency or state of alert and up to 90 days beyond. The negotiating parties are obliged to initiate collective bargaining within 45 days after the end of the state of alert.

In Cyprus, the process of renewing or concluding collective agreements slowed down. According to reports, the great majority of collective agreements that expired at the end of 2019 or during 2020 have not been renewed, as social partners were not willing to negotiate amid the economic uncertainty of the COVID-19 crisis.

In Sweden, where bargaining rounds take place at three-year intervals and the latest was scheduled for spring 2020, all parties agreed to prolong the agreements until the end of October with negotiations resuming then.

Emergence of new topics

As a consequence of the exceptional situation in 2020, several new topics emerged in the collective bargaining process. In Bulgaria, in some industrial branches without sectoral collective bargaining (such as the chemicals, textiles, clothing and food industries), the social partners negotiated framework agreements. Most of these related to the impact of COVID-19 on working life, but some also considered issues such as the green economy and digitalisation. In Germany, collective agreements to improve short-time workers’ public allowances were concluded in several industries in 2020.

In Austria, the social partners signed the first general collective agreement in decades, regulating mask-free time. The social partners agreed that after three hours of wearing a facial mask, those employees who are legally required to wear one during their work may take it off for at least ten minutes, either during a break or by switching to tasks not involving customer contact.

In France, a mechanism was set up that allows an employer to oblige employees to take paid holidays or work reduced hours and make use of a system of ‘long term’ short-time working (STW), provided that a collective agreement has been concluded beforehand.

Fall in number of collective agreements

In total, the number of collective agreements decreased sharply in Europe. In Spain (where the crisis also led to some delays in the negotiation of collective agreements), a remarkable decline of over 60% in the number of newly signed collective agreements was noted. In France, from March 2020 to the end of the year, a total of 53 industry agreements and over 8,000 company agreements were concluded – a marked decline when compared with the previous year. The same holds true for Lithuania and the Netherlands, where only about one-fourth of the number of company-level collective agreements were signed or renewed in 2020 when compared with 2019.

Derogations from existing collective agreements were applied, but only on a limited basis. In Spain, almost 500 companies availed themselves of the possibility to suspend the application of certain collective agreement clauses (those referring to wages); this affected over 20,000 employees during 2020. In most cases, the suspension was negotiated with workers' representatives, who acknowledged that there were strong economic reasons for accepting it.

Works council elections

In some countries, works council elections were impacted by the COVID-19 pandemic. In Belgium, the elections, which take place every four years, were postponed from May to November 2020. While they are normally held in person at the workplace, alternative options were provided, including electronic voting. According to a survey, however, only around 15% of employees voted via an online platform. In comparison, one-third voted via postal ballot and 55% received an invitation to vote in person (meeting hygiene and distancing standards).

In Spain, the works council elections were postponed from March to June 2020, coinciding with the end of the first state of emergency. In France, the government decided to postpone workplace elections for SMEs with fewer than 11 employees – which should have taken place by the end of 2020 – to spring 2021.

Conclusions

During the COVID-19 pandemic, it became evident that established social partner and industrial relations structures helped to ensure a relatively smooth continuation of social dialogue. The biggest change was the switch to online modes of communication, which was perceived in some cases as having a negative impact on conciliation procedures.

While in the majority of EU countries, tripartite dialogue was continued – sometimes in a different manner and less frequently – in some countries (including Poland and Slovakia) and during some periods of 2020, the circumstances were used to sideline the social partners’ influence. In a few Member States (Greece, Poland and Portugal), restrictions relating to constitutional and workers’ rights were introduced via emergency legislation.

In a positive development, at the bipartite national level, the exceptional situation prompted closer cooperation between the social partners in France, the Netherlands and the UK.

Collective bargaining was affected to varying degrees by the pandemic. The most common impact was a deferral of the process and the extension of existing collective agreements, which occurred particularly in those sectors that were hardest hit by lockdown measures. In countries where collective bargaining was taking place (often via video conferences and other online tools), the process was often speeded up (as in Austria), while in a few instances (as in Italy), it took longer and became more difficult. The number of newly signed collective agreements decreased sharply in some countries.

It remains to be seen whether the crisis will have a longer-term impact on collective bargaining coverage, as was the case following the economic crisis that occurred more than a decade ago.

Image © Hero Images/Adobe Stock

Moksliniuose tyrimuose, kurie buvo atlikti iki JK išstojimo iš Europos Sąjungos 2020 m. sausio 31 d. ir vėliau paskelbti, gali būti pateikiami su 28 ES valstybėmis narėmis susiję duomenys. Po šios datos, jei nenurodyta kitaip, tyrimuose remiamasi tik 27 ES valstybių narių (28 ES šalių be JK) duomenimis.

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