Trust: a key element in effective social dialogue / Foundation Focus, September 2015
How has the crisis impacted on social dialogue in workplaces? Findings from Eurofound’s third European Company Survey show that, despite the crisis, many workplaces in Europe have managed to retain their well-functioning social dialogue practices. In fact, companies where social dialogue is working well report better company performance and overall workplace well-being. However, the research points to a sizeable minority of companies where social dialogue is characterised by a lack of resources, poor trust between management and employee representatives, and relatively high levels of industrial action.
According to the third European Company Survey, structures for workplace social dialogue are found in only about a third of establishments with 10 or more employees in the EU28: just 32% of establishments have an official structure for employee representation, and 26% of establishments are a member of an employers’ organisation, or part of a company that is (Eurofound, 2015d). In this respect, differences between countries are huge. The Nordic countries have relatively high levels of organisation of both labour and capital (generally, it is found that higher levels of organisation of workers coincides with higher levels of organisation of employers). However, and worryingly, in a relatively large group of countries – including the Czech Republic, Greece, Hungary, Latvia, Malta and the UK – only a small minority of establishments have structures for employee representation and are members of employers’ organisations. Size differences play a significant role, with small and medium-sized establishments being much less likely to have an official employee representation or to be a member of an employers’ organisation.
Collective bargaining coverage
The absence of an employee representation at the workplace level does not necessarily mean that the workers in the establishment are entirely unrepresented. Collective bargaining can take place at various levels and higher-level collective bargaining (at the national, sectoral or company level) is likely to impact on the establishment as well. The survey results show that, overall, employees in 67% of establishments are covered by one or more collective wage agreements: 30% of establishments are covered by a company-level collective wage agreement, 29% by a sectoral or regional-level agreement, 23% by a cross-sectoral agreement and 21% by an agreement negotiated for workers in a specific occupation.
In establishments where there is a structure for workplace social dialogue, the vast majority of employee representatives report having sufficient time to carry out their duties. Smaller proportions report having received training for their duties (32%) and having access to external advice (37%). As would be expected, given the obligations arising from the Information and Consultation Directive (European Parliament, 2002), a large majority of employee representatives report having received information on the financial situation of the establishment (75%) and on its employment situation (80%). Again, information provision is better in larger establishments, and country differences are quite pronounced.
In just over half of all establishments, the employee representation is involved in joint decision-making on important decisions. However, in around one-third of establishments, the employee representation is not involved in, or only informed about, important decisions. Similarly, around half of the employee representatives (52%) report having had at least some influence on the most important decision taken in the establishment in recent years. Some 17% report having a strong influence, leaving 31% not having any influence at all.
Relationships of trust
In order to capture the degree of trust between management and employee representation, two separate indices were constructed. The ‘Trust in management’ index is based on the employee representative’s assessment of the management’s trustworthiness, their general relationship with management, their perception of the management’s sincerity and whether or not they felt they were treated less favourably because of their position as employee representative. The ‘Trust in employee representation’ index is based on the manager’s assessment of the employee representation’s trustworthiness, their view on whether the involvement of the employee representation is constructive, and whether or not consulting the employee representation in important changes leads to greater staff commitment to the implementation of changes.
The figure shows a clear positive association between trust in management and trust in the employee representation, implying that trust is likely to be mutual.
The exceptions are Austria – where average levels of trust in employee representation are high and average levels of trust in management are low – and Cyprus, Hungary and Italy, where the reverse pattern is found. Where mutual trust between management and employee representation is low, industrial action is found to be more prevalent. Overall, 16% of employee representatives reported that some type of industrial action had taken place at their establishments in the three years preceding the survey.
Towards ‘win-win’ outcomes
In order to gain an insight into the way in which practices with regard to social dialogue are combined at the workplace level, establishments were grouped together based on similarities in the resourcing of employee representatives, provision of information, extent of involvement of the employee representation, level of influence of the employee representation, trust in management, trust in the employee representation and industrial action.
Four types of establishment were identified. In establishments of the ‘Extensive and trusting’ type (39%), employee representatives are well resourced and highly involved, levels of trust are high, and industrial action is rare. In establishments of the ‘Moderate and trusting’ type (26%), employee representatives are moderately resourced and involvement and influence are limited; nevertheless, levels of trust are high. In establishments of the ‘Extensive and conflictual’ type (25%), employee representatives are well resourced and highly involved and have moderate levels of influence; however, levels of trust are low, and industrial action is relatively prevalent. Finally, in establishments of the ‘Limited and conflictual’ type (10%), employee representatives lack resources and information and have little influence. In addition, levels of trust are low, and industrial action is relatively common.
Size of establishment and sector make a difference: the prevalence of the ‘Moderate and trusting’ type increases as establishment size decreases; in contrast, the prevalence of the ‘Extensive and conflictual’ type increases as establishment size increases. The ‘Extensive and trusting’ and ‘Moderate and trusting’ types are more prevalent in the services sectors than in construction, industry and transport. The transport sector stands out with a relatively high proportion of establishments of the ‘Extensive and conflictual’ type. Country differences are large but there is no clear-cut pattern, except that both the conflictual types of social dialogue are much more prevalent in Spain than in the other countries.
Establishments of the ‘Extensive and trusting’ type are most likely to achieve ‘win–win’ outcomes, scoring highest in terms of both establishment performance and workplace well-being. Establishments of the ‘Moderate and trusting’ type score slightly lower on performance and well-being than the first type, but these difference are not statistically significant. Both of the types characterised by a conflictual environment score significantly lower in terms of both performance and well-being.
The analyses show that establishments where social dialogue practices are characterised by relatively high levels of mutual trust score better on both establishment performance and workplace well-being. In general, social dialogue practices are more strongly associated with differences in performance and well-being than other workplace practices, such as practices with regard to work organisation and human resource management. However, win–win outcomes are not guaranteed even when favourable practices are in place. Institutions and context matter and the effectiveness of practices depends on the wider conditions in which establishments find themselves. It also should be noted that only a minority of establishments actually have structures for workplace social dialogue in place – and this proportion is likely to have decreased in recent years due to the recession. In this respect, also, country differences are very large. There is no doubt, therefore, that more investment is needed in both the quality and extent of social dialogue at the workplace level.
Gijs van Houten