EurWORK European Observatory of Working Life

Social pact

A social pact is defined as a formal and public policy contract between the government and social partners about industrial relations, labour market or welfare policies. This tripartite agreement specifies both the objectives to be reached and the responsibilities each signatory actor has in relation to the fulfilment of these objectives. [1]

As such, social pacts differ from collective bargaining in that they require the direct or indirect participation of more actors than the two social partners usually involved in collective bargaining negotiations. A pre-condition for a social pact is the intervention of the government. In addition to the government and social partners, other actors and institutions may also be involved, including civil society organisations.

Social pacts also differ from other forms of institutionalised tripartite relations or social dialogue, such as tripartite social and economic councils, where cooperation is built into the institutions. In contrast, a social pact takes place at a certain moment and requires an explicit act of will on the part of the signatories.

The most comprehensive attempt to define and gather information on the development of social pacts is the Database on Institutional Characteristics of Trade Unions, Wage Setting, State Intervention and Social Pacts (ICTWSS). It contains information on the negotiation and signing of pacts, the actor combinations involved, whether these are wage pacts or pacts dealing with other issues and whether they are broad or single-issue pacts. In addition, the database details the existence of bipartite and tripartite councils or bodies for social economic policymaking, advice and forecasting.

Social pacts tend to be regarded as emergency solutions for countries having conflictual industrial relations. From this perspective, social pacts are a functional alternative to a strongly institutionalised industrial relations system. The role of the state is also important in this context as it provides resources for political exchanges between trade unions and employer organisations; consequently, social pacts are inherently unstable.

See also: coordination of collective bargaining social dialogue tripartite concertation.


Footnote

  1. ^ Avdagic, S., Rhodes, M. and Visser, J. (2011), Social pacts in Europe: Emergence, evolution, and institutionalization , Oxford University Press, Oxford, UK.

 

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