Industrial relations and social dialogue

Collective bargaining and social dialogue – Back to normal in 2021?

Two years after the start of the COVID-19 pandemic, social dialogue continues to make a significant contribution to helping economies recover. Managing the crisis led many governments to rely on tripartite social dialogue to develop the policies that would mitigate the negative impact of the pandemic on the economy and the labour market. This was borne out by the intensification of activities by national social dialogue institutions and by the agreements signed in many countries. In 2021, tripartite social dialogue shifted its focus from crisis mitigation measures to recovery and issues such as minimum wages and the green transition. Collective bargaining shows strong signs of recovery from the impact of the pandemic. In most countries, the number of collective agreements signed increased during 2021 but without reaching pre-crisis levels. Moreover, issues related to the COVID-19 crisis are lessening in importance in collective agreements compared to more traditional topics. The issue of wage increases in a context of growing inflation is becoming a major challenge for the next rounds of negotiations.

This article is one of a series that explores working life issues in the 27 EU Member States and Norway during the COVID-19 pandemic. It is based on information provided by the Network of Eurofound Correspondents and published as a set of individual country reports in Working life in the COVID-19 pandemic 2021.

Role of tripartite social dialogue in the recovery

During 2021, there were no major deviations from developments in tripartite social dialogue from the previous year of the COVID-19 crisis, with patterns indicating an intensification of pre-pandemic trends and practices. With few exceptions, in those countries with weak traditions and institutions of tripartite social dialogue, the pandemic did not lead to a revitalisation of the process and in some cases led to further side-lining of social dialogue and the social partners. By contrast, in countries with strong traditions and institutions of tripartite social dialogue, the social partners and governments leaned more heavily on this process to find innovative and sustainable policy solutions to the challenges posed by the pandemic and its social and economic consequences.

Where tripartite social dialogue was weak in 2021

Countries where tripartite social dialogue operated weakly in 2021 include Hungary and Greece, where developments were in line with those of the two previous years, with very limited involvement of the social partners. In Romania, tripartite social dialogue was unsatisfactory throughout the COVID-19 pandemic, with trade unions perceiving that they were insufficiently involved and that their views on important regulations affecting workers’ protection were neglected. An attempted revision of the law on social dialogue during 2021 was unsuccessful. Despite Slovenia’s strong tradition of tripartite social dialogue, the process declined during 2021. In May 2021, during the negotiations on the ninth COVID-19 emergency law, the trade unions withdrew from negotiations and announced a boycott of the Economic and Social Council (ESS). They criticised the government for violating the rules on tripartite social dialogue by sending laws to the parliament without prior negotiations in the ESS. Slovenian employers during 2021 expressed their wish to return to tripartite social dialogue. In Latvia, social dialogue has lost its tripartite character since the government enlarged the number of actors involved in institutions and consultations. In Poland, cross-sectoral tripartite social dialogue remains weak, with the involvement of the social partners limited to consultations in the context of the Social Dialogue Council.

In France, tripartite social dialogue delivered only one agreement, on training, in 2021, which is low compared to the number of agreements negotiated at this level in pre-pandemic years. In Bulgaria, political instability in the governing coalition hindered a stronger commitment from the government to tripartite social dialogue. In Luxembourg, the social partners disagree in their assessment of social dialogue during the pandemic: the trade unions criticised the weakness of social dialogue and the lack of institutionalised social dialogue through the Tripartite Coordination Committee or the Permanent Committee for Labour and Employment; employers, on the other hand, were satisfied overall with the type and level of involvement.

Where tripartite social dialogue strengthened in 2021

In other Member States, tripartite social dialogue remained important or even strengthened as a result of the COVID-19 crisis and recovery policies – Austria, Belgium and Denmark, which have strong traditions of bipartite or tripartite social dialogue, are examples. Since the outbreak of COVID-19, Danish actors have concluded 21 tripartite agreements (7 during 2021), most of them related to the pandemic, which is a substantial increase compared to pre-pandemic levels. Similarly in Norway, central tripartite cooperation was a vital input to policymaking. Other countries experienced a revitalisation, such as Ireland, where the prime minister made a clear commitment to social dialogue, as demonstrated by the meetings with the social partners that took place under the auspices of the Social Dialogue Unit of the prime minister’s department. Moreover, the main employer organisation agreed to participate in a special task force set up by the social partners’ Labour Employer Economic Forum (LEEF). This task force is charged with a range of related tasks, including an examination of how collective bargaining might be developed in a way that is consistent with Irish business competitiveness. The involvement of the main employer organisation, trade unions and government in such a forum is seen as a significant development.

National social dialogue institutions intensified their activities in some countries during 2021. In Lithuania, the activity of the Tripartite Council of the Republic increased. In Poland, despite the ineffectiveness of cross-sectoral tripartite social dialogue, more than 30 meetings of various sectoral tripartite committees took place, a significant ramp up compared to the 6 held in 2020. An intensification of social dialogue was also observed in Slovakia, where 11 meetings of the tripartite Economic and Social Council were held; this compares to 2 in 2020.

From crisis to recovery and return to traditional topics

In many Member States, tripartite social dialogue during 2021 shifted its focus away from COVID-19 crisis-management measures towards recovery policies and other traditional topics of tripartite social dialogue.

In Croatia and Slovakia, the negotiation and implementation of national recovery and resilience plans (NRRPs) opened up opportunities to promote the involvement of the social partners and other actors from civil society. In Italy, social dialogue at cross-sectoral level intensified during 2021 in the context of the preparation and implementation of the NRRP. The Permanent Panel on Social Partnership was set up to promote this involvement, though trade unions expressed their preference for a more stable setting for their participation. In Portugal, Slovakia and Spain, the NRRPs have also played an important role in tripartite social dialogue processes.

In addition to NRRPs, some traditional industrial relations topics returned to agendas, including labour market reforms, minimum wages, working conditions and decent work. The regulation of platform work was also negotiated in some countries. In Portugal, tripartite social dialogue negotiated the Green Paper on the Future of Work and the Agenda for Decent Work. One important outcome from the process was the amendment to the Labour Code in relation to telework. On the issue of decent work, discussions were held on the regulation of platform work, but stopped after the dissolution of the parliament. In Lithuania, tripartite social dialogue covered a broad agenda, such as amendments to the Labour Code, minimum wage levels and the regulation of platform work. The transposition of the Directive on Transparent and Predictable Working Conditions in the EU was negotiated on a tripartite basis in Slovakia, together with the NRPP and minimum wages. In Cyprus, tripartite social dialogue in the context of the Labour Advisory Body resumed, tackling a broad agenda, including the reform of the country’s minimum wage regime, the reform of pension schemes and the regulation of telework. Telework was also subject to tripartite social dialogue in Malta.

Social dialogue in Spain has maintained momentum since 2019 and led to several agreements in 2021, including the two tripartite agreements for the protection of employment, which contributed to the extension of temporary lay-off schemes until February 2022 and the bipartite agreement for out-of-court conflict resolution in April 2021. Moreover, in December 2021, after several weeks of negotiations, the social partners and the government signed a major reform of the labour market and collective bargaining that aims to reduce temporary contracts and overcome some of the impacts of the 2012 labour market reform.

Role played by bipartite social dialogue

Bipartite social dialogue has played two main roles: firstly, complementing tripartite social dialogue by varying the geometry in social dialogue processes, and, secondly, acting as a mechanism to manage the labour market and industrial relations. These roles became even more important during the COVID-19 crisis in dealing with issues like the implementation of short-time working schemes and health and safety regulations at company level.

As a complement to tripartite social dialogue, the topics discussed vary greatly across Member States. In the case of France, due to dissatisfaction with tripartite dialogue, the social partners have tried to strengthen bipartite social dialogue and started negotiations on modernising the approach to joint action by the social partners ( modernisation du paritarisme) – an economic and social agenda different from the government’s. More specifically, the social partners have agreed to strengthen the functioning of those institutions and policies under the responsibility of employer organisations and trade unions and to review the activity of the social partners in these instances. In Malta, bipartite social dialogue has allowed the social partners to find solutions to conflicts arising on issues linked to the pandemic, such as the dispute with doctors over working time and pay and with teachers in relation to the reopening of schools. In Bulgaria, new forms of bipartite social dialogue emerged during 2021. These included discussions and agreements or memoranda on specific issues, including the pandemic, digitalisation, employee qualifications and the European Green Deal and its impact on the labour market. In Luxembourg, the Trade Union Confederation of Luxembourg (OGBL) and the Confederation of Christian Unions in Luxembourg (LCGB) negotiated two intersectoral agreements with the employer organisation Union des Entreprises Luxembourgeoises (UEL) in late 2020 and 2021 concerning telework and the right to disconnect.

In the Nordic countries, bipartite social dialogue was a key mechanism to govern the labour market and industrial relations. In Sweden, the main social dialogue process in 2021 revolved around negotiations regarding the agreement on the Employment Protection Act. This agreement by the social partners will be the basis for legal amendments. The changes are expected to enter into force in October 2022. In Norway, stronger bipartite social dialogue at local and workplace levels has been considered key in facilitating the adjustment of companies to the challenges posed by the pandemic. In Greece, the National General Collective Labour Agreement (EGSSE) was negotiated and signed among the national partners in 2021. This agreement has allowed them to adopt, among other things, the European Social Partners Framework Agreement on Digitalisation, signed by the European social partners (2020). It has also led to the establishment of a joint working group on digital skills and employment to address issues like the right to disconnect, compliance with the rules governing working hours, telework and mobile work.

Collective bargaining: Uneven return to normality and new challenges

Collective bargaining, and in particular the negotiation of collective agreements, showed signs of recovery in most countries where data is available, after the abrupt drop-off experienced in 2019 and 2020. This recovery, however, did not mean a complete return to pre-pandemic normality in relation to the number of agreements signed, the number of workers covered by collective agreements or the issues included in collective agreements. In terms of the structure of collective bargaining, no significant changes to the predominant levels at which collective agreements are negotiated has been observed.

In many countries, collective agreements were signed after the negotiations had been postponed in the year before. However, in countries with available data, the number of collective agreements signed in 2021 was still below pre-pandemic figures, suggesting that collective bargaining was not yet fully back on track.

In 2021, several countries registered a marked increase in the number of collective agreements concluded. In Ireland, local pay bargaining in the private sector and commercial semi-state companies made a partial recovery during the year, with a total of 81 pay settlement deals over the first 9 months of 2021, compared with just 64 deals for the 12 months of 2020 (and 149 deals for the 12 months of 2019). A similar situation was reported for Cyprus, Greece, Italy, Lithuania, Portugal, Slovakia and Spain, where there was an increase in collective agreements in 2021 but still below pre-pandemic levels. Moreover, in order to prevent the emergence of gaps in collective bargaining coverage, the Portuguese government took an exceptional measure suspending the deadlines concerning the survival and expiry of collective agreements for a period of 24 months. Luxembourg and the Netherlands also saw an increase in collective agreements compared to pre-pandemic levels, but the number of agreements varies across years and no specific trend can be determined.

In those countries with coordinated bargaining systems, the number of collective agreements signed each year varies greatly due to the biannual bargaining rounds. In Sweden, 2021 was a quiet year since most collective agreements were renewed in 2020. In Germany, a pilot agreement in the metalworking sector was concluded on 31 March 2021 in the collective bargaining district of North Rhine-Westphalia. This is expected to lead the renewal of other collective agreements.

COVID-19-related clauses in general became less prominent in collective agreements over 2021. However, there were still some discussions around them. The German Metal Workers’ Union (IG Metall) and the Association of the Metal and Electrical Industry in North Rhine-Westphalia (Metall NRW) agreed on a one-off payment (worth €500) in June 2021 to help employees deal with the financial challenges of the COVID-19 pandemic. Similarly, the Irish government announced that it would recognise frontline healthcare workers for the extraordinary contribution they had made during the pandemic, noting that it also wished to acknowledge the role of some key private sector workers in the process. This would be done via consultation with the social partners (via LEEF).

Challenges ahead for social dialogue and collective bargaining

Following two years of emergency policies to manage the challenges presented by the COVID-19 pandemic, social dialogue and collective bargaining seem to be heading towards normality. Social dialogue has had a stronger focus on recovery, and longstanding topics have returned to the social partners’ agendas. Collective bargaining has shown signs of robust recovery with pre-pandemic issues back in the bargaining process. However, the war in Ukraine and the effects of the pandemic on prices are posing new challenges for social dialogue and collective bargaining.

One of the issues that had started to come to the fore in collective bargaining in 2021 was wage increases linked to inflation. Despite moderate wage increases negotiated in the context of the crisis and uncertain recovery, rising inflation triggered by higher energy prices is eroding purchasing power, which is beginning to create some tensions among the social partners in collective bargaining. In the Netherlands, disagreements have arisen in relation to this issue: while the trade unions are demanding higher wages, the employers are highlighting the problems several sectors are facing, including the phasing out of support measures. In Bulgaria, too, inflation is aggravating the confrontation between the employers and the trade unions around issues like the purchasing power of wages.

In other countries, longstanding issues and trends are back in the bargaining process and in some cases are expected to create conflicts between the social partners. This is the case in Italy, where the number of decentralised collective agreements has increased. Likewise in Finland, where the shift towards a more decentralised bargaining system, away from the sectoral to the local and company levels, has already started in the forestry industry and threatens to extend to other sectors and create social unrest during the 2021–2022 bargaining round.

Image © aerogondo/Adobe Stock

Research carried out prior to the UK’s withdrawal from the European Union on 31 January 2020, and published subsequently, may include data relating to the 28 EU Member States. Following this date, research only takes into account the 27 EU Member States (EU28 minus the UK), unless specified otherwise.

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