Industrial relations in the EU, Japan and USA, 2000

This overview compares some key aspects of industrial relations systems in the EU, Japan and USA, and developments in this area in 2000, with the aim of highlighting some of the main areas of difference and similarity.

The process of economic 'globalisation' and increasing competition, along with the European Union's deepening economic integration, means that the EU is tending more and more to compare itself in many areas with the world's two other largest economies - Japan and the USA. This process of comparison and 'benchmarking' is seen as particularly important in the light of the EU's commitment, outlined at the March 2000 European Council summit in Lisbon (EU0004241F) to becoming 'the most competitive and dynamic knowledge-based economy in the world capable of sustained economic growth with more and better jobs and greater social cohesion'.

Industrial relations systems and developments play an important part in determining economic, employment and social outcomes. The purpose of this report is to compare - from a European perspective - some key aspects of industrial relations systems in the EU, Japan and USA, and developments in this area in 2000, with the aim of highlighting some of the main areas of difference and similarity.

Part one looks at four key areas of collective industrial relations, which are both relatively accessible to comparison, and also widely seen as key foundations of the 'European social model'- ie the manner of regulating employment and social issues which is regarded as being characteristic of a majority of the EU Member States. These areas (and their definitions for the purposes of this report) are:

  • the 'social partners'- the term often used at EU level and in many Member States to denote trade unions and employers' organisations (though in some countries, the government may also be regarded as a 'social partner' in some cases);
  • 'bipartite and tripartite consultation and dialogue'. At EU level, there is a 'social dialogue' between European-level trade union and employers' organisations, at both the overall, whole-economy level (known as 'intersectoral' or 'interprofessional') or at the level of individual economic sectors. This dialogue may involve discussions, cooperation, consultation and in some circumstances, negotiations and agreement - and it may be either bipartite, involving only unions and employers' organisations, or tripartite, often instigated and structured by the European Commission or in response to Commission proposals. The EU-level social dialogue has been formalised in the European Community Treaty- Article 138 gives the Commission the task of promoting the consultation of 'management and labour at Community level' and taking 'any relevant measure to facilitate their dialogue by ensuring balanced support for the parties'. European-level trade union and employers' organisations are consulted on relevant EU legislative proposals, and may in certain circumstances reach agreements which take the place of such legislation and may be given legislative force by Council acts. In many EU Member States, there are consultative and cooperative relationships between trade union and employers' organisations (often at intersectoral level, but also at lower levels), which are either bipartite or tripartite (ie also involving the government). Such dialogue may occur in formal bipartite or tripartite advisory and consultative structures, or may occur in an ad hoc way. Separate dialogue and consultation between government and trade unions, or government and employers' organisations, does not fit the definition used here;
  • collective bargaining- the process of establishing pay, terms and conditions of employment and other employment-related matters through bipartite negotiation and agreements among trade unions and either employers' organisations or individual employers. In the EU Member States, collective bargaining may occur at many levels - intersectoral, sectoral, regional, company, workplace etc - with the importance of each level and the relationships among them differing between countries; and
  • employee participation- used here to refer to 'indirect' or representational employee involvement, through elected or appointed representatives, at company or workplace level. This occurs primarily through 'works councils' or similar bodies, with a range of information and consultation rights (plus stronger 'co-determination' rights on some topics in some countries, such as Germany). Such participation may also take the form of employee representation on the board of directors or supervisory boards of some types of company. For the purposes of this report, we do not consider 'direct' employee involvement (ie generally management-initiated ways of informing and/or consulting individual employees) or employee financial participation in company results.

Part 1. Structures and processes

Trade unions

Trade unionism in the EU is arguably characterised by a high degree of unity and coherence at European level, and enormous diversity and sometimes division at national level. The European Trade Union Confederation (ETUC) brings together almost all major confederations and centres in EU countries (as well as many from elsewhere in Europe, making 74 in total). The most notable exceptions are: a number of specific organisations for managerial and professional staff, which belong to the European Confederation of Executives and Managerial Staff (CEC); and a number of organisations (generally outside the trade union 'mainstream') affiliated to the European Confederation of Independent Trade Unions (CESI). Also affiliated to ETUC are 11 'European industry federations', grouping most major EU trade unions in their respective sectors. ETUC claims a total affiliated membership of 60 million.

At national level, there is a complex pattern of trade union organisation. The simplest situation is probably found in Austria and Germany, where there is a single dominant confederation (with only relatively minor alternative organisations in Germany, and none in Austria) made up of a quite small number of primarily industrial unions. A single major national centre is also the case in Ireland and the UK, though with a greater number of member unions, which are a mixture of industrial, general and occupational unions.

Multiple competitive trade union confederations, divided (at least originally) mainly on political and religious grounds are the case in Belgium, France, Italy, Luxembourg, the Netherlands, Portugal and Spain - with the number of main confederations varying from five in France to two in Portugal and Spain. In many cases, these confederations are made up of sectoral federations. In some of these countries - notably France and Italy - there are significant trade unions outside these 'representative' confederations. In the Nordic countries, the general picture is of separate confederations for different occupational groups - typically blue-collar, white-collar and professional/academic - made up of industrial and occupational unions. Finally, the distinction in Greece is between confederations (made up of a variety of types of member organisation) for the private and public sectors.

The structure of trade unionism in the USA is relatively straightforward and similar to that in Ireland and the UK. There is a single main national centre, the American Federation of Labor and Congress of Industrial Organisations (AFL-CIO), made up of a relatively large number of industrial and occupational unions. Only a few unions lie outside the AFL-CIO umbrella.

In Japan, there are two confederations of significant size. By far the larger is the Japanese Trade Union Confederation (Rengo), which organises over 60% of unionised workers. Rengo's membership is based largely on enterprise-level unions, organised in sectoral federations (there are thus some similarities with a country like France, where the main union confederations are made up essentially of local unions organised in sectoral federations). The second confederation, the National Confederation of Trade Unions (Zenroren), represents only around 7% of all unionised workers. Rengo and Zenroren are divided on political grounds - in the sense that the latter was formed as a more 'militant' and 'political' alternative to the less political Rengo.

Table 1. Basic trade union organisation, EU, Japan and USA.
. Mainly industry/sector organisational structure Mixed (industry/general/occupational) organisation structure
Single main confederation Austria, Germany, EU level Ireland, UK, USA
Multiple confederations (divided on religious/political/organisational lines) Belgium, France, Italy, Japan, Luxembourg, Netherlands, Portugal, Spain Denmark, Finland, Greece, Norway, Sweden

A common trend across the EU (at both European and national levels), Japan and the USA is towards consolidation and merger of trade union organisations. The number of European industry federations affiliated to ETUC has been reduced by mergers in recent years (eg in the food and agricultural sectors, and in services), while the number of member unions of most national union confederations has declined (and there are plans for further rationalisation in future in some countries). A particularly notable recent merger was the creation in Germany in 2001 of the Unified Service Sector Union (Vereinigte Dienstleistungsgewerkschaft, ver.di), which is thought to be the largest union in the democratic world, with nearly 3 million members. In the USA, the number of unions affiliated to AFL-CIO has fallen from 96 in 1985 to 64 today. The process of consolidation among federations affiliated to Rengo has been relatively slow, though major recent mergers have included the creation in 1999 of the 500,000-strong Japan Association of Metal, Machinery and Manufacturing Workers (JAM).

Overall, union membership has generally been falling across the industrialised market economies in recent decades - according to most commentators, this is due largely to a number of common trends such as a decline in employment in traditionally high-unionisation manufacturing industry and the growth of lower-unionisation services employment, and increasing levels of 'atypical' employment. This seems to be the case relatively uniformly across the EU, Japan and the USA (though some EU countries, such as Sweden, have only recently started to experience union membership loss). In many cases, membership losses have been slowed (as in Austria or Germany) or even slightly reversed in the most recent years (eg UK union membership rose slightly each year from 1998 to 2000, while US union membership rose by more than 265,000 in 1999, the largest annual growth in over 20 years).

Even where union membership losses have been stemmed, increasing employment levels in many countries have meant that union density (the proportion of those in employment who are union members) has fallen - an example is Ireland, where the number of union members increased over the 1990s from 475,000 in 1990 to 562,000 in 1999, but union density fell from 57.1% to 44.5% over the same period (IE0102164F). Current union density levels are set out in table 2 below.

Table 2. Trade union density (%), 2000
Country Union density
Denmark 87.5
Finland 79.0
Sweden 79.0
Belgium 69.2
Luxembourg ** 50.0
Ireland 44.5
Unweighted EU average 43.8
Austria 39.8
Italy** 35.4
Greece 32.5
Weighted EU average 30.4
Portugal* 30.0
Germany** 29.7
UK 29.0
Netherlands 27.0
Japan 21.5
Spain 15.0
USA 13.5
France 9.1

* 1999 figure; ** 1998 figure; *** estimate.

Source: EIRO and national figures.

As the table indicates, the average trade union density in the EU (unweighted for the different sizes of the 15 countries) is more than double that in Japan and more than three times that in the USA. Union membership is clearly an altogether more common phenomenon in Europe than the minority pursuit it is in Japan and the USA. However, the unweighted average for the EU does not represent the proportion of the total EU workforce who are union members. Density in the largest countries - France, Germany, Italy, Spain and the UK - is considerably lower than the unweighted average (very much so in the cases of France and Spain), so the true average is substantially less. An estimate based on comparing the above density figures with Eurostat Labour Force Survey figures for total employment (in 1999) gives a weighted EU average of 30.4%

Union density varies considerably among EU Member States, from around 70% or more in Belgium, Denmark, Finland and Sweden to under 20% in France and Spain. However, the USA's union density is lower than any EU country's except France, while Japan's density exceeds only that of France and Spain.

In gender terms, unionisation levels are higher among men than women in the USA and probably Japan (though no figures are available in the latter case). This reflects the pattern in many EU countries with low to medium overall unionisation rates - such as Austria, Germany, the Netherlands and the UK. However in the high-unionisation Nordic countries - Denmark, Finland and Sweden - women's unionisation rate exceeds that of men (TN0103201U).

Employers' organisations

As with trade unionism, the representation of employers' interests at EU level is relatively comprehensive and coherent. The Union of Industrial and Employers' Confederations of Europe (UNICE) represents almost all the main national intersectoral confederations of private sector employers and business in the EU Member States (and elsewhere in Europe). It acts as both an employers' organisation (in that it engages in dialogue and, in specific circumstances, negotiations with ETUC) and as a trade/industry association (in that it is involved in promoting its members' interests in a range of areas, and in seeking to influence EU decision-making in areas of relevance). UNICE's coverage of organisations representing small and medium-sized enterprises (SMEs) is arguably patchy, and a separate European-level body, the European Association of Craft and Small and Medium-sized Enterprises (UEAPME), seeks to represent this category of businesses. Since 1998 , UEAPME and UNICE have cooperated closely in EU-level social dialogue and negotiations with ETUC (EU9903159F). Furthermore, the European Centre of Enterprises with Public Participation and of Enterprises of General Economic Interest (CEEP) represents enterprises and organisations with public participation or carrying out activities of general economic interest, whatever their legal or ownership status. It is treated as central social partner organisation alongside UNICE by the European Commission, and is involved in dialogue and negotiations with ETUC.

At European sectoral level, there are many hundreds of organisations representing business interests. However, very few of these are employers' organisations, in the sense that they represent their members with regard to employment issues or have relations with trade union organisations. The main exceptions are the organisations in those sectors where a 'sectoral social dialogue' has developed, either autonomously or on the instigation of the European Commission. There are over 20 sectoral dialogue committees, bringing together European-level representatives of trade unions and employers for discussions on employment and social issues. Thus, there are European-level bodies acting in some ways as employers' organisations in sectors such as agriculture, banking, civil aviation, cleaning, commerce, construction, electricity, footwear, hotels and catering; inland navigation, insurance, leather, maritime transport, personal services (hairdressing), postal services, private security, public services, railways, road transport, sea fishing, sugar, telecommunications, textiles and clothing, tobacco and woodworking.

Joint texts (opinions, declarations, codes of conduct etc) on a range of issues (eg training, employment, fundamental rights or health and safety) have been reached in most of these sectors, but the employers' bodies (and union organisations) do not have a genuine bargaining role over pay and conditions, except in exceptional circumstances - eg the conclusion of an agreement on the organisation of working time in March 2000 between the European-level social partners in civil aviation, adapting the principles of the 1993 EU working time Directive to this sector, and thus avoiding the prospect of non-negotiated EU legislation on the issue (EU0004238N).

At national level, the organisation of employers varies substantially between the Member States. At intersectoral level, in countries such as Belgium, Denmark, France, Ireland, Italy, the Netherlands, Spain, Sweden and the UK, there is essentially a single umbrella organisation (at least for the private sector) representing companies' employers' and business/trade interests - though accompanied by separate SME organisations in some cases (as in France or Spain). In other countries - notably Germany - there is a division between the representation of employers' and of business/trade interests, with separate central organisations for each. The trend, however, appears to be towards the unification of representation of employers' and business/trade interests - see for example the recent merger of the Swedish Employers' Confederation (Svenska Arbetsgivareföreningen, SAF) and the Federation of Swedish Industries (Industriförbundet) to create the Confederation of Swedish Enterprise (Svenskt Näringsliv) (SE0105199N), or the forthcoming merger of employers' and trade associations in the Danish services sector (DK0107127F). Another difference at intersectoral level is that there may be a single central (private sector) body - as in the countries mentioned above - or there may be separate bodies for industry, services and in some cases agriculture - as in Finland, Greece and Portugal.

In terms of the role of employers' organisations, regular national intersectoral bargaining with trade unions over substantive pay and conditions issues is part of the remit of central employers' bodies in Belgium, Finland, Greece, Ireland and Portugal. Intersectoral bargaining over specific issues or procedural matters is part of the employers' confederations' role in Denmark, France, Italy, Spain and Sweden. While usually falling short of bargaining, employers' confederations have close cooperative relations with trade unions in various fora in Austria, Germany (the tripartite Alliance for Jobs) and the Netherlands (the bipartite Labour Foundation, or Stichting van de Arbeid), which may lead to joint texts or approaches. It is perhaps in the UK that the main employers' body (the CBI) has the least 'bargaining-like' role in any area.

At industry level, sectoral employers' organisations with a collective bargaining role are key components of the industrial relations systems of most EU countries - Austria (where sectoral sections of the Chamber of the Economy [Wirtschaftskammer Ã-sterreich, WKÃ-], play this role), Belgium. Denmark, Finland, France, Germany, Greece, Italy, Netherlands, Portugal, Spain and Sweden. Only in Ireland, Luxembourg and the UK are there few sectoral employers' associations with a bargaining role, as collective bargaining occurs essentially at company level (though overlaid with intersectoral bargaining in Ireland - see below under 'Collective bargaining').

Japan is like many European countries in having a single central employers' body - the Japan Federation of Employers' Associations (Nikkeiren). There is (as, for example, in Germany) as separate central organisation representing companies' trade/business interests - the Japan Federation of Economic Organisations (Keidanren). However, reflecting the trend noted above for Europe, Nikkeiren and Keidanren have agreed to merge in 2002. Nikkeiren does not participate in collective bargaining with trade unions, but it is involved in formal tripartite dialogue with government and unions, and less formal bipartite dialogue with unions. Furthermore, Nikkeiren attempts to influence the annual 'spring offensive' (Shunto) bargaining round, by issuing guidelines to employers (see below under 'Collective bargaining').

Nikkeiren is composed of 60 industrial employers' organisations (plus 47 regional associations), which do not generally have any direct bargaining role (though it has been suggested that they play a 'behind the scenes' role in coordinating member companies). Almost all bargaining occurs at the level of the individual enterprise.

The USA is unlike Japan and all EU Member States in that it has no identifiable national intersectoral employers' body with an industrial relations role. A special organisation has been created to allow US employers to be represented by a single intersectoral body in international organisations and fora - the United States Council for International Business (USCIB). Major business organisations such as the National Association of Manufacturers (NAM) and the US Chamber of Commerce do not deal with trade unions, though they do have some role in labour issues. NAM, for example, has a human resources policy department and human resources committee and runs a Center for Workforce Success. There are a number of employers' bodies established solely for the purpose of helping companies avoid unionisation - for example, the Council on Union-Free Environment (CUE), with 300 member companies, is 'dedicated to assisting companies desiring to remain union-free through positive employee relations'. There are few national sectoral employers' bodies with any bargaining role, and bargaining takes place predominantly at enterprise or local level (see below under 'Collective bargaining').

Table 3. Industrial relations role of employers' organisations in the EU, Japan and USA
. Bargaining or significant dialogue with unions Little/no bargaining or dialogue with unions
Intersectoral organisations EU level, Austria, Belgium Denmark, Finland, France, Germany, Greece, Ireland, Italy, Japan, Luxembourg, the Netherlands, Portugal, Spain, Sweden UK, USA
Sectoral organisations EU level, Austria, Belgium, Denmark, Finland, France, Germany, Greece, Italy, Netherlands, Portugal, Spain, Sweden Ireland, Japan, Luxembourg, UK, USA

Bipartite and tripartite consultation and dialogue

The EU is generally marked by the existence of structures and processes whereby organisations representing employees and employers are involved in bipartite and tripartite dialogue and consultation at an overall, intersectoral level. At the level of the EU itself, the central social partner organisations - UNICE, ETUC and CEEP - meet regularly with one another in a social dialogue that has produced a number of joint texts, are widely consulted by the European Commission and are involved (on the basis of the provisions of the European Community Treaty) in the formulation and implementation of employment and social legislation. For example, they have reached European agreements on issues such as parental leave (TN9704201S), part-time work (EU9706131F) and fixed-term work (EU9901147F), which have been implemented in law through EU Directives. They are also involved in a variety of consultative fora (such as the Standing Committee on Employment) and in the 'macroeconomic dialogue' with the Member States and EU institutions (EU9906180N). Similar bipartite dialogue and EU consultative arrangements also exist at European sectoral level in many industries. Furthermore, through the Economic and Social Committee, (national) employers' and employees' organisations have an input into the EU decision-making process.

In individual EU Member States, national intersectoral dialogue and consultation occurs in some form in most cases (though to differing degrees). Many countries (eg Belgium, France, Greece, Italy, the Netherlands, Portugal and Spain) have a tripartite or bipartite 'Economic and Social Council' or similar body with an advisory and consultative role on matters of relevance to the social partners. In many countries, the social partners are heavily involved in bodies regulating matters such as social security and health and safety. In Austria, there is a deeply embedded system of 'social partnership' at all levels. In Germany, a national tripartite Alliance for Jobs brings together all parties in cooperation over employment issues (DE9812286N).

Tripartite agreements between government, trade unions and employers are a regular feature in some countries, either laying down overall incomes policy and similar general provisions (as in Ireland, Italy and Portugal), or dealing with specific issues such as employment or social security (as in Portugal and Spain). Bipartite intersectoral agreements between unions and employers lay down guidelines for lower-level bargaining on pay and conditions in Belgium, Finland and Greece, or deal with specific issues, as in Belgium and France.

It should be noted that such dialogue and consultative arrangements are by no means uniformly common across the EU, with the UK, for example, having few formal institutions of this kind.

Japan also has a relatively high level of tripartite dialogue and consultation, with the enactment or amendment of labour legislation or major labour policy changes first being discussed in tripartite deliberative councils and a certain level of consensus reached beforehand between the parties concerned. In this sense, the government's labour policy can be regarded as the result of agreement between labour and management. However, there is no practice of bipartite labour-management negotiations at national level to determine working conditions, though the Rengo trade union confederation and Nikkeiren employers' federation occasionally meet and exchange views.

By contrast, the USA appears to have little or no tradition of bipartite or tripartite dialogue at national level. There is no bipartite bargaining or dialogue between intersectoral social partner organisations - indeed there is no representative umbrella employers' organisation (see above under 'Employers' organisations'). There is no national tripartite consultative forum or process, though the government may bring together trade unions and employers'/business organisations for consultation or discussion on specific issues. For example, in June 2001 the Secretary of Labor organised a Summit on the 21st Century workforce, bringing together business, trade union, academic and government leaders to address the structural changes that are affecting the US workforce and economy. The Department of Labor may also consult trade unions and employers'/business organisations separately.

Collective bargaining

The level at which collective bargaining is conducted is perhaps one of the most notable differences between most EU countries on one side, and Japan and the USA on the other.

At the EU level, 'bargaining' of a kind - primarily over agreements to replace proposed EU legislation in the employment and social field - occurs between ETUC, UNICE and CEEP. A similar process has occurred on some occasions over specific issues in a number of sectors (eg working time in civil aviation and maritime transport). However, concrete pay and conditions of employment are not subject to collective agreement at European intersectoral or sectoral level. There are also no known cases of such concrete bargaining at European level within European companies (though a few European Works Councils have reached some form of agreement on specific issues, while cross-border comparisons are increasingly deployed by management and unions in national bargaining, and unions are actively seeking to enhance transnational coordination of bargaining - TN9907201S).

The EU Member States have widely differing systems of collective bargaining over pay and conditions. However, despite these differences and a widely-observed trend towards the decentralisation of bargaining, it can be said that most countries have relatively centralised systems. To take the key issue of pay determination, table 4 below indicates the levels at which wage bargaining is conducted in the EU Member States.

Table 4. Wage bargaining levels in the European Union and Norway
. Intersectoral level Sectoral level Company level
Austria . XXX X
Belgium XXX X X
Denmark XX XX X
Finland XXX X X
France . X XXX
Germany . XXX X
Greece X XXX X
Ireland XXX X X
Italy . XXX X
Luxembourg . XX XX
Netherlands . XXX X
Portugal . XXX X
Spain . XXX X
Sweden . XXX X

X = existing level of wage bargaining; XX = important, but not dominant level of wage bargaining; XXX = dominant level of wage bargaining.

Source: EIRO ( TN0007402S ).

As the table indicates, in three countries (Belgium, Finland and Ireland), the intersectoral level is currently the dominant wage bargaining level and in eight countries (Austria, Germany, Greece, Italy, the Netherlands, Portugal, Spain and Sweden) the sectoral level remains the most important level of wage bargaining, while in two countries there is no predominant bargaining level (Denmark, Luxembourg). In only France and the UK is the company the key pay bargaining level, while it is also important in Luxembourg. On issues other than pay, some matters are more likely to be determined by company bargaining in many countries, but conversely they are also liable to be dealt with at a higher level in some cases.

The situation could not be more different in Japan and the USA, where the predominant bargaining level for pay and all other issues is the individual company. Intersectoral or sectoral bargaining is virtually unknown (with some exceptions at industry level in the USA). Although the picture is not uniform among Member States (the UK, for example, has a highly decentralised bargaining structure), it is clear that collective bargaining is much more centralised in the EU than is the case in its two major competitors.

However it should be noted that in Japan, there is a degree of coordination on both trade union and employers' sides during the annual Shunto bargaining round. The general pattern for these spring-time negotiations is that major manufacturers in leading industries such as electrical goods or cars take the lead in bargaining and are then followed by other large companies and then by SMEs. In the USA, many trade unions seek to conduct 'pattern bargaining', whereby an agreement is achieved in a particular company or companies and then extended to other firms in the sector.

The coverage of collective bargaining - ie the proportion of workers that have their pay and conditions set by collective agreements - varies greatly in the EU, but is generally high (if declining in some countries) - see table 5 below. At one extreme are Austria and Belgium, where 100% of employees are covered by a system of sectoral agreements. Indeed, high bargaining coverage rates are found in most countries with a system of sectoral collective agreements, such as Denmark (80%), France, Germany (68% in the west, 51% in the east), the Netherlands (75%) and Sweden (90% in private sector). High levels of bargaining coverage are achieved by intersectoral agreements in Finland, Greece and Ireland. At the lower end of the coverage spectrum is the UK, where bargaining occurs largely at company or lower levels - here only around 36% of non-managerial employees have their pay set by collective bargaining

Direct bargaining coverage is also low in the company-dominated systems of Japan and the USA. The USA is very much distinguished by a division between a 'union sector', where collective bargaining determines pay and conditions, and a 'non-union sector', where management decision governs pay and conditions. The union sector covers only around 15% of the workforce. In Japan, there is a similar distinction between the 'bargaining sector' and 'non-bargaining sector', with the former covering only 21.5% of the labour force. However, it should be noted that the wage increases agreed in the Japanese bargaining sector have a major influence on general wage levels, both setting the market rate in the non-bargaining sector and being passed on through recommendations on the wages of public servants and through the minimum wage system.

Table 5. Direct collective bargaining coverage, selected EU countries, Japan and USA
Country Coverage
Austria 100%
Belgium 100%
Sweden (private sector) 90%
Denmark 80%
Netherlands 75%
Germany (west) 68%
UK (non-managerial staff) 36%
Japan 22%
USA 15%

Source: EIRO and national figures.

Employee participation

A key feature of industrial relations in most EU Member States is the existence of a widespread system of indirect or representational employee participation at company or workplace level through 'works councils' or similar bodies. Statutory works councils systems based on legislation or widely applicable collective agreements exist in Austria, Belgium, Denmark, Finland, France, Germany, Greece, Italy, Luxembourg, the Netherlands, Portugal and Spain. In these countries, works councils elected by employees (sometimes from trade union lists) have a range of information and consultation rights - and even 'co-determination' rights on some topics in some countries (eg Germany) - on a variety of matters relating to the company's financial, economic and employment situation, and/or personnel management and employment conditions issues. In Sweden, legislation provides similar rights to trade unions in companies. Only in Ireland and the UK is there no general, permanent system of works council-type bodies.

In addition, in a majority of EU countries, there is a statutory system for some form of employee representation on the board of directors or supervisory boards of some types of company (TN9809201S). Such participation is relatively widespread in Austria, Denmark, Finland, France, Germany, Luxembourg, the Netherlands and Sweden, and restricted to some public sector organisations in Greece and Ireland.

At EU level, legislation has introduced European Works Councils (EWCs), pan-European structures for the information and consultation of employees and their representatives on a range of business and employment issues in multinational companies over a certain size operating in the EU. Furthermore, a forthcoming Directive will ensure that employees in all Member States (employed in companies or establishments over a certain size) are informed and consulted on business, employment and work organisation matters (EU0110206F). Specific Directives have guaranteed information and/or consultation on specific issues, notably business transfers, collective redundancies and health and safety.

The situation is very different in the USA. There is no legislation providing for works council-type structures or board-level employee representation. Nevertheless, in 1994 a survey conducted by the Dunlop Commission (see below), found that 96% of large employers had some form of employee involvement team, while 52% of employees reported some form of employee participation at their workplace. However, according to the Labour Policy Association (which represents senior human resources managers) many participation arrangements are limited in their scope, or have been curtailed, due to fear of breach of labour law

The reason is that the National Labor Relations Act prohibits the formation of an employer-dominated 'labour organisation' or 'employee representation committee' which deals with management over pay, working time or conditions of work. The original purpose of this provision, introduced in 1935, was to prevent employers from controlling company unions. However, as interpreted by the National Labor Relations Board (NLRB), the law results in severe restrictions on the formation of non-union teams or committees that address 'terms and conditions of employment'- which is taken to include a wide range of matters such as pay, training, productivity/efficiency rewards, work assignments, job descriptions/classification, workloads/quotas, recruitment and dismissal. However, a number of recent NLRB decisions (notably the Crown Cork & Sealcase in 1998) may indicate some relaxation of this position.

The 1995 report of the Dunlop Commission on the 'future of worker-management relations' recommended that this restriction on employee participation programmes in non-union workplaces should be lifted (though with protection for union representation). A Teamwork for Employees and Managers (TEAM) Act was subsequently introduced in Congress, which would have allowed teams of employees in non-union workplaces to work with management to address workplace issues of mutual interest. The legislation did not pass in 1995 and has not been reintroduced.

In Japan, employee participation at enterprise level is not governed by legislation, but there is a high level of employee-management cooperation. According to a 1999 survey, 41.8% of establishments with 30 or more employees had a 'labour-management consultation organisation'- a permanent structure in which labour and management consult on issues related to management, production, working conditions and welfare programmes. Trade unions were represented in around 85% of these establishments, indicating a high level of inter-relation between the two (65% of employee representatives in labour-management consultation organisations were union representatives). Such bodies are more common in larger firms. Furthermore, a 1996 survey indicated that around 64% of companies had some form of 'employee organisation'- a permanent organisation for employees that holds social gatherings and employee meetings.

Japanese labour-management consultation organisations deal with a wide range of issues - notably working time, working conditions, health and safety, welfare, childcare, management policies, overtime premia, pensions, lay-offs and redundancies, restructuring, production/sales and training. Participation take many forms, notably written explanation by management, exchange of opinions, discussion and agreement.

Part II. Outcomes and issues

Economic and employment situation

As indicated by table 6 below, economic growth in 2000 was highest in the USA and lowest in Japan. The EU fell between the two. In the EU, growth was slowing slightly towards the end of the year, as it was in the USA, while Japan was showing some signs of recovery. The overall EU figure hides considerable variations between individual Member States (growth was particularly high in Ireland and Finland and low in Italy).

Along with the highest growth figures, the USA had the highest inflation in 2000, followed by the EU. Continuing the trend of recent years, prices continued to fall in Japan.

Within this economic environment, employment continued to grow in the EU in 2000, and at a rate higher than in the previous year. Employment growth, at 1.8%, was higher than in both the USA and Japan (where employment declined). However, Europe is still seeking to catch up with the USA in terms of its employment rate, which at 63.3% in 2000 was some 10 percentage points behind that in the USA. Nevertheless, the EU rate has been increasing since the mid-1990s, while that in Japan is declining and that in the USA has leveled off. In all three cases, male employment rates exceed female rates, with the gap greatest in Japan and least in the USA.

On the other side of the employment coin, the unemployment rate in the EU (at 8.2% in 2000) was nearly twice the level in both Japan and the USA, though the trend in the EU has been downward since the mid-1990s. US unemployment also continued to fall, reaching record low levels in 2000, while the Japanese rate stabilised at a high figure by national standards of 4.7%, following a decade of growth.

The USA experienced the greatest pay and productivity increases in 2000. Nominal compensation growth, at 4.8%, exceeded that in the EU by nearly two percentage points and that in Japan by over four points. US productivity grew over twice as fast (3.7%) as in Japan (1.8%) and the EU (1.6%). Japan's low compensation growth, coupled with a degree of productivity increase, meant that nominal unit labour costs actually fell in 2000 (by 1.0%). This compared with increases of 1.3% in the EU and 1.1% in the USA.

Table 6. Economic and employment indicators, EU, Japan and USA, 2000
. EU Japan USA
GDP growth 3.3 1.2 5.0
Inflation* 2.1 -0.7 3.4
Employment rate 63.3 62.4 74.0
Employment growth 1.8 -0.2 1.3
Unemployment rate 8.2 4.7 4.0
Growth in nominal compensation per employee 2.9 0.7 4.8
Labour productivity growth 1.6 1.8 3.7
Nominal unit labour costs 1.3 -1.0 1.1

*Change in consumer prices index; EU figure is average over December 1999-December 2000 .

Sources: European Commission (Employment in Europe 2001), Eurostat, Japan Statistics Bureau, Japan Institute of Labour (JIL), US Bureau of Labor Statistics (BLS).


Figures are available from the EU and Japan for collectively agreed pay increases in 2000. According to EIRO estimates (TN0103888U), average collectively agreed pay increases across the EU stood at 3.0% in 2000, up slightly from 2.9% in 1999. There were considerable variations between Member States - from 5.5% in Ireland to 1.6% in France. The 3.0% increase should be compared with average inflation of 2.1% over the year - indicating a real pay increase of 0.9%.

In Japan, the average pay increase resulting from the annual spring bargaining round in 2000 was 2.06%, down from 2.21% in 1999. Inflation stood at -0.7%, indicating a more substantial real pay increase of around 2.8%. However, it should be noted that the spring wage increases are not directly reflected in the trend in average wages.

No such figures are available for the USA, where collective bargaining in any case plays a far less important role in setting overall pay increases than in most EU countries or Japan. However, figures are available for the increase in private industry wages and salaries, which rose by 3.9% for the year ending December 2000, compared with a 3.5% increase in 1999. With inflation at 3.4% in 2000, real pay increases were around 0.5%. Real pay increases in 2000 thus seem to have been considerably greater in Japan than in the EU or the USA.

Figures on changes in average earnings are available for all three cases for 2000, and probably provide a better comparative picture. In the EU (according to EIRO estimates), average earnings increased by an average of 3.7% in 2000 (an average of 10 countries), compared with 3.5% in 1999. In the USA, the median weekly earnings of full-time wage and salary workers in the private sector rose by 5.4% between 1999 and 2000. In Japan, total cash earnings increased by 0.5% from 1999 to 2000, following a decrease of 1.3% in the previous year. Again correcting for inflation, it seems that real earnings in 2000 increased by most in the USA (2.0%), followed by the EU (1.6%) and Japan (1.2%).

One feature of pay which is common to the EU, Japan and USA is the gender wage differential. In the EU (plus Norway), women's earnings were on average 78.6% of men's in 1999 (TN0103201U). In the USA, the equivalent figure for 2000 was very similar, at 76%. In Japan, the figure ranged in 2000 from 64.3% for workers who are graduates of senior high schools to 75.5% for graduates of higher professional schools or junior colleges.

Table 7. Pay developments in EU, Japan and the USA, 2000 (%)
. EU Japan USA
Average nominal collectively agreed pay increase 3.0 2.1 3.9
Average real collectively agreed pay increase 0.9 2.8 0.5*
Average nominal earnings increases 3.7 0.5 5.4
Average real earnings increases 1.6 1.2 2.0
Women's average earnings as % of men's 78.6 64.3-75.5** 76.0

* Figure refers to private industry wages and salaries.

** Figure varies with level of education, no single figure available.

Sources: EIRO, US Department of Labor, JIL. See main text for definitions.

A statutory minimum wage system underpins pay in Japan and the USA and in many EU countries (with a collectively agreed minimum wage system applying in most others).

The US statutory national minimum wage has remained unchanged at USD 5.15 (EUR 5.57) per hour since 1997. Individual states often have their own statutory minimum wages, which are in some cases higher than the federal rate (the higher rate always applies). Minimum wage rates in three states - California, Connecticut, and Rhode Island - were raised by state legislation in 2000, while in four states - Connecticut, Delaware, Massachusetts, and New York - they rose in 2000 due to previous legislation.

In Japan, minimum wages legislation provides for the establishment of minimum wage rates by geographical area (prefecture) and industry. In January 2000, the weighted average minimum wage by prefecture was JPY 5,213 (EUR 52.4) per day, or JPY 654 (EUR 6.57) per hour, while the weighted average minimum wage by industry was JPY 5,944 (EUR 59.7) per day.

In EU countries with a national minimum wage, increases ranged from 4.1% (Portugal) to 0.02% (Belgium) in 2000, and the overall average rate of increase (for eight countries) stood at 3.0% in 2000.

Working time

According to EIRO estimates (TN0103999U), the average normal weekly working hours set by collective bargaining across the EU (plus Norway) stood at 38.1 hours in 2000, down slightly from 38.6 hours in 1999. Agreed normal weekly hours ranged from 40 hours in Greece to 35 hours in France, but all other Member States were in the 37-39 hours range. In most countries, agreed weekly hours appear to have leveled out in recent years, with significant reductions rare (with exceptions such as France, where bargaining prompted by legislation has cut the normal week from 39 hours to 35 in the past couple of years). In most EU countries, relatively high collective bargaining coverage levels (see above under 'Collective bargaining') mean that the average collectively agreed normal working week is probably relatively close to the actual normal working week (though this is less likely to be the case in a country such as the UK).

Figures on collectively agreed normal weekly hours are not available from Japan and the USA, but some comparisons can be made with the former. For Japan, the figure for 'average scheduled weekly working hours' was 39.2 hours for full-time workers in 2000 (just under one hour higher than the EU average figure).

Comparison of actual hours worked is also very difficult, owing to a lack of uniform statistics. A major problem is that in some cases national figures distinguish between full- and part-time workers and in others they do not. Figures for average actual weekly hours worked by full-timers (based on national definitions) are available (from EIRO - TN0103999U) for 12 EU Member States, and the average (in 1999) was 39.4 hours (varying between 42.2 hours in Greece and 38 hours in Belgium, Denmark and the Netherlands). This compares with an average figure from Eurostat for the whole EU of 40.5 hours in 1998 (TN0002402U). In the USA, full-time workers - defined as those working at least 35 hours per week - worked an average of 43.3 hours per week in 2000, the same figure as in 1999. The Japanese figures for actual hours worked do not distinguish between full- and part-timers and are expressed in monthly, rather than weekly, terms. However, the figures indicate a slight increase between 1999 and 2000.

Overall, it seems that there was little relatively little change in the duration of weekly working time in 2000 in the EU (with the exception of France), Japan or the USA.

Perhaps the best way of comparing working time between the EU, Japan and USA, and of assessing trends, is to look at annual working hours. The Japan Institute of Labour (JIL), based on various national figures, has produced estimates for annual total hours actually worked (by production workers in manufacturing industry) for Japan, the USA and three of the largest EU countries - France, Germany and the UK - see table 8 below.

Table 8. Annual total hours actually worked (production workers in manufacturing industry), 1980-98
. 1980 1990 1996 1997 1998
Japan 2,162 2,214 1,993 1,983 1,947
USA 1,893 1,948 1,986 2,005 1,991
France 1,759 1,683 1,679 1,677 1,672
Germany 1,719 1,598 1,517 1,517 1,517
UK 1,883 1,953 1,934 - 1,925

Source: Japan Institute of Labour.

The table indicates that actual annual working time in Japan rose from 1980 to 1990, whereafter it declined substantially over the 1990s. In the USA, annual hours also rose from 1980 to 1990, continued to increase until 1997, and then fell slightly. France and Germany both experienced an overall downward trend over the period, though leveling out over the second half of the 1990s. The UK saw a rise up until 1990, followed by a slight fall. In 1998, the USA had the highest annual hours, followed relatively closely by Japan and the UK. France and Germany were far behind.

Turning to normal annual working time, figures for average collectively agreed annual working hours are available from EIRO for eight EU countries where working time is measured on this basis, while the JIL has produced figures for 'scheduled' annual working hours in Japan and the USA - see table 9 below. Allowing for differences in calculation methods, the table indicates that the differences between the EU countries, Japan and the USA are generally far less when considering normal/scheduled hours than for actual hours. This suggests that the differences between the EU, Japan and the USA lie more in the overtime and additional hours worked in the latter two cases.

Table 9. Average collectively agreed or scheduled annual working hours, 1999
Country Annual hours
Japan* 1,795
Spain 1,765
USA* 1,752
Netherlands 1,744
Italy 1,739
France 1,735
Finland 1,723
Average of 8 EU countries 1,723
Denmark 1,717
Belgium 1,714
Germany 1,643

* 1998 figure

Source: JIL and EIRO (for Europe except for Finland, for which the figure is as calculated by a joint social partners working group, on the basis of a normal 4-hour week, taking into account various working time reduction patterns and annual leave).

With regard to statutory working time limits, almost all EU Member States have a framework of legal rules on maximum working times. These should, at the least, respect the provisions of the 1993 EU Directive (93/104/EC) on certain aspects of the organisation of working time, which include a 48-hour maximum working week (on average over a reference period not exceeding four months). The exception is Denmark, where there are no statutory maximum working time rules, and the EU Directive has been implemented through collective bargaining (as is the norm in this country). The EU countries divide fairly equally between those that set the statutory maximum working week at 48 hours (France, Germany, Greece, Ireland, Italy, Luxembourg the Netherlands and the UK) and those which set it at 40 hours (Austria, Finland, Portugal, Spain and Sweden) or 39 (Belgium). In the first group of countries, the statutory maximum is far in excess of average collectively agreed weekly working hours, and of actual average weekly hours - it thus appears to operate essentially as a 'safety net'. In the second group of countries, the statutory maximum is far closer to average agreed or actual weekly hours, indicating a more active role for the law in governing working time.

In Japan, the normal working week was set at 40 hours by the Labour Standards Act in 1988 - however, as is frequently the case, extension of working hours may be specified in individual labour-management agreements, although guidelines issued by the Ministry of Health, Labour and Welfare set a maximum limit. In 2000, the average scheduled weekly working hours for full-time workers was below this 40-hour norm, at 39.2 hours. In the USA, there is no statutory maximum or normal working week as such, but employees covered by the Fair Labor Standards Act must receive overtime pay for hours worked in excess of 40 in a working week (at a rate not less than 50% over their regular rates of pay). With full-time workers working an average of 43.3 hours per week in 2000, there appears to be considerable overtime working in practice.


Another important aspect of working time is the amount of paid annual leave to which workers are entitled (a factor which obviously influences the annual duration of working time). In the EU, figures are available from EIRO for the average number of days of collective agreed annual leave for 11 countries (harmonised on the basis of a five-day working week). These indicate an average annual leave entitlement in 2000 of 25.6 days (varying from 31.4 in the Netherlands to 20 in Ireland) - a figure little changed from 1999, though there has been a widespread trend towards increased annual leave in a longer perspective.

For Japan, figures are available from the JIL on the average paid holiday entitlement, which stood at 17.8 days in 1999, up from 17.5 days in 1998. However, a notable feature of holidays in Japan (which is not known to be a major issue in the EU), is that by no means all of this leave entitlement is actually taken up. In 1999, only 50.5% of annual leave entitlement (or 9.0 days) were taken on average. This rate of take-up has been decreasing as leave entitlement has increased over the past decade.

The latest figures available for the USA from the Bureau of Labor Statistics (BLS) refer to 1997 and cover 'average vacation days' in the medium and large private sector. No overall figure is available for all workers, but separate ones for varying lengths of service. Thus, annual vacation days stood at 9.6 days at one year's service, 13.8 days at five years' service, 16.9 days at 10 years' service and 20.3 days at 20 years' service. All these figures had increased slightly over the previous decade.

All EU Member States have a statutory minimum period of paid annual leave. The countries fall into two groups - those which have a 20-day minimum entitlement (Austria, Belgium Germany, Greece, Ireland, Italy, the Netherlands and the UK) or 22 in the case of Portugal, as laid down in the EU working time Directive, and those with a 25-day minimum entitlement (Denmark, France, Luxembourg, Spain and Sweden) or 24 in the case of Finland. The EU average is 22 days' leave (harmonised for a five-day week). In Japan, legislation entitles workers with at least six months' continuous service to a minimum of 10 days' paid annual leave, with the number of days increasing with the length of service. There is no statutory annual leave entitlement in the USA. The 1997 BLS statistics referred to above indicate that 89% of employees in the medium and large private sector had paid holidays in 1997 (down from 96% in 1988).

It seems clear that annual leave, both in law and in practice, is considerably higher in the EU than in either Japan and the USA, and constitutes a key factor in their different overall annual working time levels.

Finally, public holidays also have an impact on annual working time. According to research from the UK Trades Union Congress (TUC), the average number of public holidays in the EU stands at 10.8 days. This compares with 10 days in the USA and 15 in Japan (according to JIL figures). There is considerable variation within the EU, between 12-14 public holidays per year in Portugal and Spain and eight in the Netherlands and the UK.

Table 10. Annual leave and public holidays in the EU, Japan and USA
Country Average annual leave entitlement* Statutory minimum annual leave entitlement Public holidays per year Average annual leave plus public holidays Statutory minimum annual leave plus public holidays
Austria NA 20 13 NA 33
Belgium NA 20 10 NA 33
Denmark 30 25 9.5 39.5 34.5
Finland 25 24 12 37 36
France NA 25 11 NA 36
Germany (west) 29.2 20 9-12 38.2-41.2 29-32
Greece 23 20 10-12 33-35 30-32
Ireland 20 20 9 29 29
Italy 28 20 12 40 32
Luxembourg 27 25 10 37 35
Netherlands 31.4 20 8 39.4 28
Portugal 22 22 12-14 34-36 34-36
Spain NA 25 12-14 NA 37-39
Sweden 25 25 11 36 36
UK 25 20 8 33 28
EU average 25.6 22 10.8 36.4 32.8
Japan 17.8 10** 15 32.8 25
USA 16.9*** 0 10 26.9 10

* Average collectively agreed entitlement for EU countries, average paid holiday entitlement for Japan, average vacation days in medium and large private sector for USA.

** Basic entitlement after six months' service - increases with length of service.

*** After 10 years' service in medium and large private sector.

Sources: EIRO, JIL, BLS, TUC (Banking on your holiday?, August 2001).

Industrial action

International comparison of industrial action figures is a difficult exercise, not least because the definitions of industrial action used in national statistics vary so dramatically. For example, the US statistics record only 'major work stoppages'- defined as those in which at least 1,000 workers are involved for at least one shift. By contrast, the UK figures, for instance, record all stoppages involving 10 or more workers or lasting more than one day (plus smaller-scale disputes when the aggregate of working days lost exceeds 100). Furthermore, figures are not yet available for 2000 for Japan or for some EU countries, while no overall data exist for the whole EU.

In the USA, major work stoppage activity rose in 2000 after dropping to record lows in 1999. Thirty-nine major work stoppages began in 2000, 'idling' 394,000 workers and resulting in 20 million working days of 'idleness' (this compared with 17 stoppages, 73,000 workers idled, and 2 million days of idleness in 1999). Most of the stoppages were in the private sector.

The most recent figures available for Japan are for 1999, when there were 419 disputes which involved strike action, in which 106,000 workers participated, with 87,000 working days lost. Compared with 1998, the number of strikes fell by 20.3%, the number of participants by 35.8% and the working days lost by 14.2%.

Comprehensive figures are not available for the EU in 2000, but the picture seems somewhat varied. In the largest economies, the year was one of relatively low and often declining levels of action in France, Germany, Italy and the UK, but an increase in the level of industrial disputes in Spain. The general trend towards low levels of action was also followed in countries such as Denmark, the Netherlands and Portugal. Major strikes were witnessed in Finland (in chemicals, transport and the paper industry - FI0004142F), Norway (private sector - NO0005191N) and Greece (two one-day general strikes - GR0012190N). Protests by road hauliers over high fuel prices took place in the autumn of 2000 in a large number of countries, including Belgium (BE0010329F), France (FR0010197F) and Spain (ES0010217F). The public sector saw significant action in countries such as Belgium (BE0012334F) and Ireland (IE0004149F). 2000 also saw a number of cases of industrial action coordinated by trade unions at European level, largely in response to either company restructuring or sectoral liberalisation plans - eg in the rail sector (EU0004239N), at ABB Alstom (EU0005247N) and Vauxhall (EU0102293N).

Broadly speaking, levels of industrial action have declined across the EU, Japan and USA over the past two decades, with many countries recording record lows in recent years.

Equal opportunities and diversity

Equal opportunities and diversity issues played a prominent role in industrial relations in many EU countries in 2000, mirroring the attention given to the matter at overall Union level. During the year, the EU-level legislative framework in the area of equal treatment was expanded from issues related to gender to a wide range of other issues by two new Directives: Directive 2000/43/EC implementing the principle of equal treatment between persons irrespective of racial or ethnic origin (EU0006256F); and Directive 2000/78/EC establishing a general framework for equal treatment in employment and occupation - which covers discrimination based on age, disability, sexual orientation and religion/belief (EU0102295F). 2000 also saw the issue of a long-awaited proposal aimed at formulating an EU-level legal framework for the regulation of sexual harassment at the workplace (by amending and modernising the 1976 equal treatment Directive 76/207/EEC) (EU0006255F).

Legislation in a range of equality-related areas was enacted in many countries during 2000, in part in preparation for the coming into force of the two new EU equality Directives. In France, new legislation sought to eradicate discrimination on a variety of grounds, including sex and race (FR0011198N), while the country's statutory ban on women's night work was revoked (FR0010196F). Other countries which introduced or drew up new gender equality legislation in 2000 included Denmark (DK0012106N), Germany (DE0009282F), Italy and Portugal. In Luxembourg, new legislation governing sexual harassment at the workplace was adopted in April 2000, obliging employers to create a workplace free of sexual harassment (LU0005137F). In Norway, the government issued plans to amend the legislation which prohibits discrimination relating to recruitment and selection, adding disability to the existing grounds of sex, race, ethnic origin and sexual orientation.

Equality issues featured in national agreements in a number of countries. In Belgium, the 1999-2000 intersectoral agreement called on the social partners to review sectoral job classification systems which may lead to gender inequalities (BE9811252F). In Finland, a new incomes policy agreement provided for a special wage increase for women and low-wage earners (FI0012170F). The new Irish national agreement contained a variety of clauses related to equal opportunities issues and the elimination of discrimination, as well as clauses relating to childcare and work-life balance (IE0003149F). In Denmark, the Danish Confederation of Trade Unions (Landsorganisationen i Danmark, LO) and the Danish Employers' Confederation (Dansk Arbejdsgiverforening, DA) agreed to initiate a study on gender equality and discrimination.

The issue of integrating people with disabilities into the labour market was the focus of new programmes in 2000 in countries such as Austria (AT0101238N) and Germany, while in the UK, the focus was on age discrimination, with the government and employers' groups promoting age diversity in employment (UK0003159N).

Equality issues were perhaps less prominent in Japan in 2000, with no new legislation on the topic. However, in the previous year, the Law concerning the Promotion and Equal Opportunity and Treatment between Men and Women in Employment was amended, strengthening employers' gender equality obligations and seeking to prevent sexual harassment in the workplace. At the same time, regulations preventing the employment of women for long hours were abolished. Although no notable agreements are reported for 2000, equality and related issues are dealt with in enterprise-level collective bargaining and in negotiations within establishment-level labour-management consultation organisations. Equal treatment between men and women features in negotiations within labour-management consultation organisations in a quarter of cases, while it features in collective bargaining in 9.7% of cases where a labour-management consultation organisation exists, and in 14.0% of cases where no such organisation exists.

No new equality legislation is reported from the USA in 2000, but the country already has in place a relatively comprehensive set of federal civil rights laws prohibiting discrimination in the workplace on the grounds of race, colour, religion, sex, national origin, age and disability (many of these are areas where EU legislation is only now catching up). The main equality developments in 2000 related to charges of discrimination filed with the Equal Employment Opportunity Commission (EEOC). The number of charges filed with the EEOC rose from 77,444 to 79,896 between 1999 and 2000, although this figure did not approach the peak of 91,189 reached in 1994. The EEOC filed 327 suits against employers in 2000, down from 465 in 1999 and succeeded in obtaining USD 293.2 million (EUR 317 million) for private sector charging parties. In federal courts, 2000 saw some significant case law developments in the area of age discrimination.

The main vehicle for ensuring equal opportunities in the USA is federal civil rights legislation, but equality issues do feature in collective bargaining (such as equal pay for women, sexual harassment, diversity training, child- and eldercare, and combating discrimination). However, no statistics are available on the extent of such bargaining, and no particularly notable agreements were reported in 2000.

Job security

The issue of preserving and creating jobs remains central in the EU, where despite recent improvements the unemployment rate remained above 8% in 2000. At EU level, 2000 marked the third full cycle of the 'European employment strategy', based on the four main 'pillars' of employability, entrepreneurship, adaptability and equal opportunities. Since 1998, a set of annual Employment Guidelines has been adopted by the Council of Ministers, on a proposal from the European Commission, covering the four pillars and setting out a number of specific targets for Member States to achieve in their employment policies. The Guidelines must be transposed into concrete measures by the Member States, through their National Action Plans (NAPs) for employment. These NAPs are forwarded to the Commission for evaluation. The Commission then issues a joint employment report, together with the Council of Ministers, and may propose recommendations to individual countries on how they could better achieve set goals. The employment strategy makes specific reference to the role of the social partners in individual Member States in the formulation of NAPs on those aspects which give them a direct role. Further, national governments are expected to consult the social partners generally about the NAP and take on board their views.

Given this overall concern with employment, it is unsurprising that much collective bargaining in the EU has focused on job security and creation in recent years. Agreements have been concluded at all levels - national, regional, sectoral and company - with the aim of preventing or reducing job losses, or creating new jobs (TN9710201S). Some types of these agreements have been referred to - for example, by theEuropean Foundation for the Improvement of Living and Working Conditions- as pacts for employment and competitiveness(PECs). Such pacts are seen as allowing for the reconciliation of: management wishes to reduce costs, improve flexibility and change organisational culture in the face of increasing competitive pressures; and employee representatives' concerns to minimise job losses and strengthen their role in company decision-making.

In 2000, a year which was marked by strong economic growth and widespread skills shortages, the need for job security clauses in collective agreements was arguably less great than in recent years. However, in many countries employment remained central to bargaining. Notably, in Germany, the tripartite Alliance for Jobs forum recommended that the 2000 (mainly sectoral) collective bargaining round be conducted in a manner which would enable employment creation and the safeguarding of jobs, although there were divergent views on how collective bargaining could contribute to raising employment levels (DE0001232F). In France, the recent legislation on working time reduction encourages collective agreements on the 35-hour week either to safeguard or to create employment (FR0001137F). In 2000, the employment-safeguarding element of the working time reduction legislation was used to a far lesser extent than the employment-creation element. Only 10% of 35-hour week agreements were of the 'defensive' employment-safeguarding variety. The overall impact of the agreements negotiated within the context of the French legislation served to create or safeguard almost 252,000 jobs by early 2001.

However, the limits of job security agreements were also illustrated in 2000. In the UK, a number of high-profile company restructuring announcements, such as those at Rover and Vauxhall, superseded previously-agreed 'no compulsory redundancy' clauses, calling into question the validity of such provisions (UK0012104F).

In Japan, legal precedents and principles mean that redundancies are handled cautiously. However, continuing poor economic conditions mean that the number of companies engaged in workforce restructuring and rationalisation is increasing and even companies which previously strongly supported employment stability for regular workers began to show signs of a change of direction in 2000. Unsurprisingly, stability of employment remains an important issue in collective labour-management relations at company level. Around 42% of private sector establishments with more than 30 employees have a labour-management consultative body and (according to a 1999 survey) nearly three-quarters include 'temporary lay-off, workforce rationalisation and dismissal' as matters for discussion (which most commonly takes the form of 'consultation', followed by 'agreement' and 'explanation').

Job security is also a major issue in US collective bargaining. Research indicates that over 90% of current collective agreements contain provisions designed to enhance workers employment security (eg extended 'recall rights', subcontracting restrictions, or advance notice of shutdowns). With the first signs of economic slowdown starting to bite in 2000, there was no indication that such provisions were likely to become any less common. For example, the important four-year collective agreements signed at the 'big three' motor manufacturers (Ford, General Motors and DaimlerChrysler) in 1999 all included new job security programmes, adding to existing provisions and providing stronger job protection.

Overall, it thus seems that job security is a theme which is important in collective bargaining in the EU, Japan and the USA, regardless of the different economic/employment situations of the three countries/regions and their varying bargaining systems.

New forms of work

A common trend across the EU, Japan and the USA is the spread of 'atypical' forms of employment - such as temporary work (mainly fixed-term contracts and temporary agency work), part-time work, teleworking, on-call work and so on. Table 11 below gives comparative figures for part-time and temporary work.

Table 11. Extent of part-time and temporary work in EU, Japan and USA (% of employment)
. Part-time work Temporary work
EU 17.6% 13.2%
Japan 15.4% 12.4%
USA 17.1% 4.9%

Notes: EU = figures from 1999 Eurostat Labour Force Survey, part-time work self-reported, temporary work refers to contracts of limited duration; Japan - figures from JIL (2001 for part time, 2000 for temporary), part-time work is less than 35 hours per week, temporary work refers to non-agricultural employees classified as temporary or daily; USA - figures from BLS (January 2001 for part-time work, February 2001 for temporary work), part-time work is less than 35 hours per week, temporary work refers to 'contingent' work ('workers who do not expect their jobs to last') plus temporary agency workers.

At the table indicates, part-time work (despite differing definitions) is at around the same level in all three cases, at approximately one-sixth of all employment (though the EU figure masks huge variations - eg nearly 40% part-time employment in the Netherlands). Another common issue is that part-time work is predominantly a female phenomenon - 33.4% of female employees are part-time in the EU (1999 Eurostat figure), nearly 40% in Japan (1999 JIL figure) and nearly 20% in the USA (1999 JIL figure). Some 77% of all part-timers are women in the UK (2000, EIRO), compared with 68% in the USA and 67% in Japan (1999, JIL).

Temporary work is considerably more common in the EU and Japan than in the USA (though problems of definition are particularly acute in this form of employment).

Teleworking/telecommuting is on the increase in all three cases. In Japan, it is estimated that some 2.2 million workers (around 3% of total employment) are involved in telecommuting - 1.13 million people working at home, 110,000 working in satellite offices and 950,000 involved in 'mobile work' (ie work using mobile equipment) - though this does not necessarily mean that they spend the entire working week telecommuting. According to the European Commission, about 4.5% of the EU labour force telework on a regular basis. Other new forms of employment are particularly relevant in some countries. For example, 2 million US workers (1.5% of total employment) work on-call - ie they are called to work only as needed.

In this context, it is unsurprising that new forms of work were very much at the forefront of debate at EU level in 2000, with the social partners engaged in (ultimately unsuccessful) negotiations over an EU-level agreement on temporary agency work (EU0106215N) and the European Commission consulting the social partners on the modernisation of work organisation (including teleworking) (EU0007259N) .

In the bargaining arena at national level, there were some signs in 2000 that the temporary agency work sector was beginning to regulate itself. In Sweden, a new collective agreement for white-collar temporary agency employees was concluded (SE0003127N), as was a first sectoral agreement for blue-collar agency employees (SE0011163N). In Spain, a collective agreement for the temporary agency sector was negotiated in 2000 (ES0009111F). However, temporary agency work remains strictly regulated by law in many countries, although there have been recent moves to relax legislation to a certain degree - as in Belgium in 2000. In Italy, where relatively tight restrictions on temporary agency work still apply, moves were made in 2000 to extend temporary work in the public administration (IT0008161N). In Norway, new legislation amending the rules on the hiring out of labour (by temporary work agencies and other companies) came into force (NO9912168F). Legislation or legislative proposals also addressed temporary agency work issues in Finland and France in 2000.

With regard to teleworking, a 2000 agreement in the Austrian information technology sector included regulations governing telework for the first time (AT0012235N). In Denmark, an agreement on teleworking was concluded in the commerce and services sector (DK0011102N). The new Irish national agreement promotes the increased use of teleworking and other new forms of work.

In Japan, there has been substantial recent legislative activity to take account of the growing levels of atypical employment. In December 1999, the 'worker dispatching' legislation - 'worker dispatching business' is the term used in Japan to refer to temporary work agencies - was amended. The amendments deregulated temporary agency work to some extent, while introducing a range of provisions to ensure appropriate conditions of employment for the workers involved. Earlier in 1999, the legislation regulating fixed-term contracts was amended, allowing longer contracts in some circumstances. Overall, in Japan, the increasing diversity of forms of employment has raised the question of whether 'group-based' employment contracts under which all workers share common conditions will be increasingly replaced by individual contracts, requiring adaptation and change in existing patterns of labour-management relations.

No legislative developments relating to new forms of employment are reported from the USA in 2000, while no data is available on the content of any collective bargaining on the issue.

Mark Carley, SPIRE Associates



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EIROnline (

American Federation of Labour-Congress of Industrial Organisations (AFL-CIO) website ( and websites of affiliates.

Bureau of National Affairs (USA) website (

Council on Union-Free Environment (CUE) website (

EU Council of Ministers website (

EU Economic and Social Committee website (

European Association of Craft and Small and Medium-sized Enterprises (UEAPME) website (

European Centre of Enterprises with Public Participation and of Enterprises of General Economic Interest (CEEP) website (

European Commission DG Employment and Social Affairs website (

European Confederation of Executives and Managerial Staff (CEC) website (

European Trade Union Confederation (ETUC) website ( and websites of affiliates.

Japan Federation of Economic Organisations (Keidanren) website (

Japan Federation of Employers' Associations (Nikkeiren) website (

Japan Institute of Labour website (

Japanese Ministry of Health, Labour and Welfare website (

Japanese Trade Union Confederation (RENGO) website (

Labor Policy Association (USA) website (

National Association of Manufacturers (USA) website (

National Confederation of Trade Unions (Japan) (Zenroren) website (

Report of the Dunlop Commission (USA) (available at

Union of Industrial and Employers' Confederations of Europe (UNICE) website (

US Bureau of Labor Statistics website (

US Chamber of Commerce website (

US Council for International Business (USCIB) website (

US Department of Labor website (

US National Labor Relations Board website (

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