Autumn bargaining round opens

In October 2004, against the background of a public debate on possible increases in working time, recently initiated by employers, the pattern-setting metalworking industry opened Austria’s autumn bargaining round. Whereas the employers want a further relaxation of working time regulations, the trade unions demand harmonisation of the pay schemes for the sector’s white- and blue-collar workers. The unions will oppose any attempts to introduce more flexible working time schemes aimed at extending employees’ net working hours.

In principle, collective bargaining in Austria, which is confined to the private sector, takes place at multi-employer sectoral or industry level. The public sector is excluded from formal bargaining, but negotiations between public sector trade unions and government representatives are likewise conducted, with parliament determining the terms of employment (AT9912207F). Private sector collective bargaining results in more than 400 separate collective agreements annually, covering about 98% of all private sector employees. Only a few dozen of the agreements cover a larger number of employees in broadly defined sectors or industries, while the majority are narrow subsectoral agreements or separate agreements on specific issues, some of them concluded at federal state (Land) level only. Despite the large number of agreements concluded annually, the wage bargaining system is strongly coordinated across the economy, primarily based on the pattern-setting role played by the metalworking industry in the overall bargaining process (AT0210202F). This means that the metalworking collective agreement sets the pace for subsequent negotiations in other bargaining units in the course of the annual autumn bargaining round (usually starting in October).

The unions’ demands

The 2004 bargaining for about 182,000 blue- and white-collar workers employed in the metalworking sector opened on 8 October, when the white-collar Union of Salaried Employees (Gewerkschaft der Privatangestellten, GPA) and the blue-collar Metalworking and Textiles Union (Gewerkschaft Metall-Textil, GMT) met the employers’ side - ie representatives of the various branch subunits of the Chamber of the Economy (Wirtschaftskammer Österreich, WKÖ) - for the first time. A few days before, the trade unions had delivered their joint list of demands to the employers This list includes increases in minimum and actual wages and salaries (without defining any particular percentage rises), plus equivalent increases in additional payments and apprentices’ remuneration, and the introduction of a common pay scheme applying to both blue-and white-collar workers.

So far, there is only one (sub)sector in Austria - the electrical and electronics sector - that has concluded a collective agreement providing for a single common pay system for both employee groups (AT0402202F). This agreement, which came into effect on 1 May 2004, is widely perceived as a milestone in Austrian industrial relations since it breaks with the tradition of separate bargaining for blue- and white-collar workers (mostly to the detriment of the former due to imprecise job classification systems). Interestingly, bargaining for the 60,000 or so employees in the electrical and electronics subsector was part of the overall metalworking negotiations until 2001, when the relevant WKÖ branch unit withdrew from the employers’ metalworking joint negotiation team in order to implement a more innovative payment system. The agreement in the electrical and electronics sector eventually reached in December 2003 has been held up by the unions as an example for the whole metalworking industry. GPA and GMT now also aim to improve the validity of job classifications in the 'core' metalworking sector, in particular with regard to formally unskilled manual workers actually working as skilled workers. However, the unions’ goal of pay harmonisation for the two employee groups in the metalworking industry will be hard to achieve, as the employers’ side wants to combine negotiations on this matter with issues on its own agenda.

Working time flexibility

The metalworking employers are demanding a further relaxation of the current collectively agreed working time regulations. In doing so, they have been supported by a recent initiative from the new president of the Federation of Austrian Industry (Industriellenvereinigung, IV), the cross-sector voluntary (as opposed to the compulsory-membership WKÖ) employers’ organisation representing manufacturing industry, which makes no use of its formal capacity to conclude collective agreements. In early summer 2004, the IV president, Veit Sorger, called into question Austria’s working time regime (AT0407201N). According to Mr Sorger, Austrian businesses have to face substantial competitive disadvantages due to excessively rigid and inflexible working time regulations, in terms of both legislation and collective agreements. In this context, he even raised the idea of longer working hours, which had hirtherto been a 'taboo' in Austrian industrial relations.

Although most employers and WKÖ itself do not demand an extension of statutory working time, in early autumn 2004 the latter presented a bargaining agenda providing for the implementation of 'innovative working time schemes'. Under this scheme, existing 'bandwidth models' should be extended, allowing the uneven distribution of normal working hours within longer reference periods. This would mean that a collective agreement could permit the normal working day and/or week to be extended to a higher maximum level (eg 50 hours per week) within a longer reference period (eg one year), provided that weekly hours do not exceed 38.5 hours (as, for instance, currently set by collective agreement in the metalworking industry) when averaged over the whole reference period. Such arrangements would grant the employer the possibility to use its workers more flexibly (and thus react to fluctuations in demand) and to save on overtime payments, since extra working hours exceeding the 'normal' working day or week are, in the context of the 'bandwidth model', not classified as overtime (and thus do not attract a premium rate of pay or additional time off).

Such proposals presented by the employers have been rejected by the unions, since they imply both net working time extensions and net income losses due to cuts in overtime pay. The unions are instead calling on the employers’ side to design innovative working time models beyond simply increasing the volume of working time. Such models should take into consideration the employee’s entire working life, thus including provisions on time off for retraining, childcare and nursing commitments, sabbatical leave or partial pension schemes. More flexible working time arrangements (as demanded by the employers) will only be agreed in exchange for this kind of substantial benefits, the unions state.

Commentary

The 2004 autumn bargaining round has so far been overshadowed by a somewhat bizarre working time debate. Whereas the business organisations more or less emphatically demand a net working time extension for competitive reasons, almost all experts agree that simply extending working hours (notably without wage compensation) would have virtually no effect on competitiveness with regard to 'low-wage' countries. This is because - irrespective of any unfavourable impacts on welfare standards - a reduction of Austria’s labour costs by five or six percentage points (corresponding to a working time extension of two hours per week proposed by IV) would not decisively change the gap in this respect compared with the new EU Member States. Therefore a 'pure' labour cost approach seems to be quite useless. Rather, one key determinant of international competitiveness is a country’s unit labour cost position, and in this respect Austria performs outstandingly well (AT0310202F). This reflects Austria’s relatively high standards in both product quality and qualification of the labour force. Against this background, collectively agreed provisions on retraining schemes and fair, common job classification and pay systems for all employees appear to be more promising than demotivating and economically questionable working hours extensions. Last but not least, it is important to note that up until the 1990s collective agreements proved to be instruments that could combine regulations on greater flexibility as regards working time (which suits employers) with a reduction in weekly working hours (which is a trade union objective in terms of employment policy). In this respect, the terms and conditions of policy-making have completely changed. (Georg Adam, University of Vienna)

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