Report on impact of the crisis on social dialogue

The European Commission published its report, Industrial Relations in Europe 2012, in April 2013. The report on the impact of the economic crisis on social dialogue and industrial relations, focuses on the public sector, and says fiscal consolidation, aimed at cutting government deficits and debt accumulation, has hampered social dialogue. However, it states structured social dialogue is still the best way to ensure the sustainability of economic and social reforms.

Introduction

One of the flagship publications of the Directorate-General for Employment, Social Affairs and Inclusion is the report Industrial Relations in Europe 2012 (3.84Mb PDF). The report was formally launched at a conference in Budapest on 15–16 April 2013. The European Commission study concentrates on the impact of the crisis on social dialogue and industrial relations in the European Union (EU), with a particular focus on the public sector.

General trends

The report says the economic and financial crisis may well cause a ‘profound and long-lasting upheaval’ in the institutions and practices of industrial relations.

The previous report, Industrial Relations in Europe 2010 (4.88Mb PDF), found that social dialogue had helped bolster resilience to the early effects of the crisis. The latest report, however, concludes that the impact of the sovereign debt challenge and the budgetary consolidation policies being pursued in a number of countries are producing more fundamental changes to industrial relations in Europe.

Overall, as documented in Chapter 1 of the report, collective bargaining has tended to become more decentralised, with the centralisation index falling from 2.15 to 1.98 since the 2010 report. The decline in trade union membership has continued, with trade union density stabilising at around 24%, but being much lower in the private sector than in the public sector in most Member States.

Central and eastern European countries

Chapter 2 of the report focuses on the central and eastern European countries (CEECs). It notes that European Union enlargement in 2004 and 2007 increased the diversity of industrial relations systems across the EU.

In comparison with the former EU15, CEECs are characterised by:

  • weaker trade unions and a faster erosion of trade union density;
  • a lack of established employers’ associations;
  • no tradition of bipartite multi-employer collective bargaining;
  • lower bargaining coverage;
  • strong formal tripartism that partly substitutes for underdeveloped sector-level collective bargaining systems.

The report says there is potential for organised action in countries where trade unions are structurally weak. However, it also acknowledges that not all such action has brought substantive improvements for employees, victories for trade unions, or consolidation of bargaining institutions and social dialogue.

Public sector industrial relations

The effect of the crisis on public sector industrial relations is explored in Chapter 3 and Chapter 4.

The report notes that public sector collective bargaining and wage-setting systems have undergone two connected trends. First, decentralisation has taken place within or outside of a centrally coordinated framework. Second, there has been a partial substitution of automatic, seniority-based pay and career systems with performance-based systems. This has led to differences in the careers, and terms and conditions, of public employees.

Although public sector industrial relations are very diverse across Europe, there are nevertheless some common pressures as a result of the crisis:

  • a return to unilateralism on the part of governments and public employers to the detriment of social dialogue;
  • a weakening of special prerogatives of public employees (where they existed);
  • top-down determination of wages and a reduced role for trade unions, in terms of density rates and of capacity to influence government and public employers’ policies.

The severity of the impact of the crisis on the public sector varies across Member States. It depends on the extent of fiscal consolidation and public service reform that is needed.

Role and activities of the social partners

The report also explores the role of the social partners in the areas of ‘greening the economy’, and of reshaping the pension and benefit systems.

It says most examples of social dialogue around green issues and renewable energy are found in sectors in which the social partners are already well represented. Little or no dialogue is found in newly emerging industries. For example, in the electricity sector, where there is now electricity generation from renewable energy sources, social dialogue is determined by the degree to which the energy source is ‘established’.

In the area of pension and benefits systems, there are wide national differences in social dialogue, although a common factor is the debate over whether social partners should be involved in policy formulation. The report says there are clear advantages in encouraging the social partners to become involved in pension reform, because they could ensure sustainable solutions to this issue. However, there are also fears that the social partners may not be able to deliver the radical reforms that are needed.

The report states that, over the past two years, representatives of management and labour have agreed on more than 70 joint texts, conducted numerous projects and started to cooperate in new economic sectors. There were sectoral agreements on:

  • working time in inland waterways transport;
  • the Work in Fishing Convention;
  • minimum requirements for standard player contracts in the professional football sector.

The number of social dialogue committees also continued to increase. The 41st sectoral social dialogue committee, in the food and drink industry, was established in 2012.

Commentary

This comprehensive report details all the major changes and trends influencing industrial relations, social dialogue and collective bargaining in the EU, in the context of the continuing crisis. It finds that the crisis has had a significant and possibly lasting effect on public sector industrial relations. Nevertheless, it is clear that social dialogue can play an important role in helping the EU to mitigate the negative effects of the crisis on industrial relations systems, processes and outcomes in the EU Member States.

Andrea Broughton, Institute for Employment Studies

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