Tension between social partners in construction sector

Employers and unions are still divided over the renewal of a collective agreement in Luxembourg’s construction sector. There has been no pay increase since the previous agreement expired in 2009 and trade unions have threatened strike action if mediation fails. The employers want to restructure working hours to compensate for working time lost during poor weather. Unions are concerned about the possible implications of the proposed change to working hours.

Background

The collective agreement in Luxembourg’s construction sector expired in 2009. Its provisions have continued to apply to the 14,000 workers employed in the industry and they have not had a pay increase for three years. Construction is one of the largest sectors of Luxembourg’s economy.

The two main trade union organisations, the Independent Trade Union Confederation of Luxembourg (OGB-L) and the Luxembourg Confederation of Christian Unions (LCGB), released a joint communiqué (in French) on the issue. In it they opposed the employers’ proposals to make working hours more flexible. The employers want to increase the maximum of 40 hours per week and eight hours per day laid down in previous agreements.

Proposals for a 52-hour week

Two organisations have been negotiating for the employers, the Federation of Construction and Civil Engineering Employers which is affiliated to the Federation of Craft Workers (Fédération des Artisans), and the Building and Public Works Employers’ Group which is affiliated to Business Federation Luxembourg (FEDIL).

During negotiations the employer organisations presented their proposals for more flexible working hours, summarised in this press release (in French, 28KB PDF). The basis of the proposals is to make workers available for longer during periods of good weather, and less during unfavourable conditions. They might even not work at all during in the winter.

The employers are asking for an increase in maximum working hours from 40 to 52 hours per week for the six months between May and October. According to the employers, payment for the 12 extra hours would be calculated at a rate of 140% of the normal hourly wage. Workers would then be paid 100% of their normal salary for hours not worked during periods of inclement weather under the weather-related lay-off scheme. The current rate is 80% of normal pay.

As explained in an editorial (in French) in the daily newspaper Le Quotidien:

...these overtime hours would not be paid to the employees at the end of the month [during which they were worked], however, but during the winter months, when the building sites are paralysed by bad weather. The overtime hours would thus be used to finance the weather-related layoff scheme.

Demonstration follows rejection of union demands

In 2009, when the current agreement was due to expire, the unions presented their first list of demands for wage increases and these were rejected by the employers. The dispute deepened on 22 March 2012, when a last-ditch attempt to negotiate a new agreement failed. The two trade unions organised a demonstration that was held on 4 May 2012 and attended by around 2,500 employees. In an OGB-L press release (in French), the unions called on the employers to return to the negotiating table and give up their claims for more flexible working hours.

Controversial survey

On 7 November 2012, the employer organisations presented the results of a survey conducted on their behalf by the TNS-ILRES market research institute. The survey showed that 42% of employees questioned said they would be willing to work up to a maximum of 52 hours per week between May and October. This compared with 44% who weren’t, many of whom were older workers.

The employers believe that the survey demonstrates support for their proposal, especially since the switch to a 52-hour week would be voluntary and could meet the needs of younger workers.

However, Jean-Luc de Matteis, Central Secretary of the OGB-L, described the survey in a press release (in French) as ‘a trick’. He said the employers’ proposal and its repercussions had not been clearly explained to the employees when they were questioned for the survey.

Conciliation process

A conciliation session took place on 8 December 2012 before the National Conciliation Service (ONC), but the two parties were unable to reach agreement. Referral to the ONC is obligatory in the event of conflict. Both the employers’ organisations agreed to withdraw their demand for flexibility on condition that the unions drop their call for a 3.5% pay rise.

According to the employers, however, the unions came to the conciliation meeting with a raft of fresh demands. In particular they called for a one-off payment of €750 instead of the 3.5% increase. As a result the employers refused to continue with the negotiation, saying the trade union demands were still too excessive.

Following the meeting, the employers reiterated their demand for flexibility and their refusal to grant any backdated pay rise. The two unions have applied to the ONC for a final conciliation session. Should it fail, the OGB-L and LCGB are threatening to call a strike vote. To succeed, 75% of workers would have to vote in favour.

Commentary

At the end of 2011 and in 2012, there were a number of spectacular business failures in the construction sector due, in part, to management mistakes by employers who had grown their companies by slashing prices to win markets.

The trade unions believe that the employers are playing on these difficulties in order to drag out the negotiation of a new agreement for as long as possible.

For its part, the LCGB has emphasised that construction workers are ready to take action.

On one matter at least the employers and trade unions stand together, in their support for the introduction of electronic ID badges for workers on building sites. Luxembourg’s Labour Minister Nicolas Schmit has said these will be introduced by summer 2013. It is hoped the badges will help combat fraud, particularly in relation to posted workers.

Frédéric Turlan, IR Share

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