Conference on tripartism

EU Presidency Conference on Tripartism in an enlarged European Union

Co-organised by the Danish Ministry of Employment and the European Foundation for the Improvement of Living and Working Conditions

Hotel Comwell, Elsinore, Denmark
29-30 October 2002

See also conference information from the Danish Ministry of Employment.

Speech abstract - Timo Kauppinen
Research Manager, European Foundation for the Improvement of Living and Working Conditions

Quality of Industrial Relations in the Candidate Countries benchmarked in the EU Perspective

Industrial relations

The concept of industrial relations was born alongside industrialisation. In the beginning industrial relations meant the relationship between the capital and labour, between employers' organisation and trade unions in industrial workplaces. Later the concept spread from industry to cover also private and public service sectors and even the agricultural sector.

Industrial relations form a system similar to how we have economic and political systems. The economic system produces goods and services. The political system produces law and decrees. The system of industrial relations produces collective agreements and labour laws. These three systems are in a close relationship with each other. In the socialist state industrial relations was a part of the communist state. The conflicting relationship was abolished by state-ownership. In the capitalist system a conflicting relationship exists between the capital and labour in industrial relations. Collective bargaining is a way to solve conflicting interest. Negotiations may take place at company level, sectoral level or national level.

Different industrial relations systems in the EU countries and in the Candidate Countries

In the Nordic Countries, traditionally, negotiation systems have been very centralised. Employees' unionisation is 70-80 percent. National organisations have negotiated framework agreement on wages, working hours and other conditions of work. However, in the 1990s the system has become decentralised. Sweden started to negotiate only on the sectoral level and more and more room has been given to the company level. In Ireland since 1987 social partners and the state have concluded three-year national partnership agreements. Unionisation is at 45 percent.

The most common system of industrial relations in the EU countries is sectoral level collective bargaining. Germany is a good example of this where normally the IG Metal and DGB's metal employers' organisation negotiates sectoral agreement, which gives a model for other sectors' collective agreements. Sectoral negotiations are typical also in Austria, Belgium, the Netherlands, Portugal, Spain, Greece and Italy. Unionisation varies from Sweden's 85 percent to Greece 10 percent.

In the UK collective agreements are concluded at company level. In France some sectors, especially public sectors, conclude sectoral agreements, but mainly negotiations take place in the companies. Unionisation in France is 8 percent and in the UK 20 percent

In spite of the different models of negotiations, the coverage of collective bargaining is about 70-80 percent in all EU countries except in the UK where only one third of employees are covered by collective agreements.

Comparative studies from the candidate countries show that the company level negotiations characterize industrial relations in Estonia, Latvia, Lithuania, Poland, Hungary, Malta, Cyprus, Romania, Bulgaria, and Turkey. Sectoral collective agreements are common in the Slovak Republic and Czech Republic. National level negotiations are typical for the Slovenian system of industrial relations.

Classification helps us to understand systems but at the same time it is easy to give too simple a picture, because in all countries the system is much more complicated and varies also over time, which means that we need continuous comparison and benchmarking.

Benchmarking quality of industrial relations systems

Comparison of the systems helps us to understand differences and similarities between countries but benchmarking also seeks best practices. Ireland and Finland are good examples of the success of centralised tripartite negotiations in the 1990s. The UK won its economic success through decentralised negotiations and the Netherlands through sectoral negotiations. Slovenia has been very successful in economic development with centralised negotiations and Estonia in company level negotiations.

These are good examples from the recent development. Surprisingly, both centralised and decentralised systems have brought good economic results. However, development in the EU countries show, that in the longer run, none of the industrial relations systems have been able to guarantee continuous sustainable economic growth and real wage increases.

The third benchmarking conclusion is that the system of industrial relations must be adapted to the needs of the market and economic situation. The fourth is that the system must be flexible and take into account the economic and political situation.

The benchmarking studies have also shown that that industrial relations system can destroy positive economic and social development if the agreements do not reflect competitiveness and productivity development.

The quality of industrial relations is measured by economic and social development of the country. However, benchmarking results show that industrial relations are not strong enough to determine the direction of economic development but can support it.

When speaking about industrial relations it is also worth mentioning that what is good for employers is not always good for workers and vice versa. The employer is seeking flexibility and employees security. These targets, however, are not always in conflict. Employers and employees are mutually dependent and have joint interests. Well-functioning industrial relations are guaranteed by joint cooperation and negotiations.

Questions to the panel

Benchmarking questions for the panel are based on the project which the European Foundation is carrying out together with the Swedish Work Life and EU Enlargement project. The project is called Social Dialogue and Economic and Monetary Union (EMU) in the Candidate Countries.

The objective of the project is to bring together industry, trade unions, government, academic people and citizens to investigate and assess how EMU/euro and social dialogue can best be utilised to generate for the applicant countries economic wealth in harmony with employment and social equality. Estonia, Hungary, Malta, Poland and Slovenia were selected as the pilot countries for the project.

The Vienna workshop in May 2002 produced national development plans by benchmarking social dialogue in the five candidate countries to the social dialogue in the EU countries. The jointly agreed national development plans are as follows:

  • Estonia: Towards tackling youth unemployment by social dialogue;
  • Hungary: Towards EMU and social convergence by social dialogue;
  • Malta: Towards a culture of trust within the Maltese Council for Economic and Social Development;
  • Poland: Towards a social pact for young by social dialogue;
  • Slovenia: Towards EMU via a social agreement by social dialogue.

In the Elsinore workshop 4 we will discuss the quality of industrial relations by using the drafted development programmes as examples. The basic questions are as follows:

  • What is the topic of development plan?
  • Why the topic was selected?
  • Who has responsibility to implement it?
  • When it will be implemented?
  • Where it will be implemented?
  • Which resources will be used for implementation?

After having heard the short answers to the questions, there will be the opportunity to put benchmarking questions to the panel and evaluate the quality of industrial relations in the candidate countries.

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