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The role of collective agreements in times of crisis:
developments in the private and public sector in Europe
MANAGING WORKFORCE CHANGE: STRENGTHENING
PUBLIC SERVICES AND SOCIAL DIALOGUE IN AN ERA
OF AUSTERITY
Brussels, 21 February 2013
Vera Glassner
Questions addressed:
 How where crisis effects mediated through institutional
setting for social dialogue and collective bargaining in the
private and public sectors?
- Between countries: representing different IR regimes (CZ;
DK; FR, IT; NL; UK – and others!)
- Between (private) sectors?
 What are differences between institutional and
membership-based factors of trade unions to address
effects of the crisis
 Focus of presentation on bargaining processes and
bargained outcomes (vs. effective pay & conditions)!
2
CB responses to the crisis in the private
sector
 Effects of economic crisis on CB and labour policies vary
according to the type of industrial relations regime
 Effects were uneven across the EU due to multitude of factors
- Political factors (composition of government, political change)
- Depth and magnitude of economic crisis
- IR institutions and – depending on them –
- Responses of social partners and governments
-  Economic & institutional factors & responses differed across
sectors & groups of employees
3
Table 1: Overview of industrial
relations regimes in the EU
Dimension
Northern
European
Social
Democratic
Model
CentralSouthern
western
European
European
NeoNeocorporatism
corporatism
Countries
SE, DK, FI
Trade union
density (%)
(2000-2009)
73.1
AT, DE, BE,
NL, LU, SI
33.9
ES, PT, FR,
IT, GR, CY
23.5
UK, MT,
IE
33.2*
CZ,SK,PL,HU,
EE,LT,LV, RO,BG
19.8
Collective
bargaining
coverage rate
(%) (2000-2009)
Predominant
level of
collective
bargaining
MEBa or SEBb
predominating
88.4
83.3
74.7
42.1*
36.3
Sector
Sector
Sector
(FR :
Company)
Company
Company
MEB
MEB
MEB
SEB
SEB
Regime
Western
European
Liberalism
Central-eastern
European
(‘embedded’)
Neoliberalism
4
Table 1: Overview of industrial
relations regimes in the EU (ct’d)
Regime
Dimension
Northern
CentralSouthern
European
western
European
Social
European
NeoDemocratic
Neocorporatism
Model
corporatism
Western
European
Liberalism
Central-eastern
European
(‘embedded’)
Neoliberalism
Practice to
No (except
extend collective FI)
agreements
Yes**
Yes**
No
Limited
Statutory
minimum wage
No
Yes (DE
partly)
Yes (except
IT)
Yes
Yes
Role of social
partners in
public policymaking
Institutionaliz Institutionaliz Varying,
ed
ed
Politicized
Ad hoc,
issuespecific
Politicized; weak
social partners
Strong state
but
intervention
rare
Dominant state,
strong legalism
Role of state in
Limited
wage bargaining
Limited;
strong
legalism
Active state,
clientelistic
relationship
5
Social partner responses
Private sector: national level
Measures included in national social partner agreements
(2008-2011) (ranked by no. of agreements)
 General training (AT, CY, NL, DE, IT, PL, FR, LT, RO, ES, PT,
CZ, DK, FI, SE)
 Short-time work linked to training (AT, BE, BG, CZ, DE,
DK, FR, IT, NL, PL, SI)
 Wage moderation/flexibilization of wage bargaining
(BE, IT, NL, SI, SK, ES, GR)
 Short-time work (no link to training measures) (BE, DK,
IT, NL, PT, RO)
 Working time flexibilisation (AT, BE, EE, PL, BG, FI)
6
Social partner responses
Private sector: sector level
 General training (DE metal, chemicals, steel; FR metal; IT
various sectors; NL metalworking; SE manufacturing, wood industry)
 Wage moderation/flexibilization of wage bargaining
(AT metal; BE metal, chemicals, textiles; FI technology industry;
NL metal, light engineering; SE technical professions, manufacturing
etc.; DE metal, textiles, chemicals; IT metal; ES metal)
 Short-time work, linked to training (SE manufacturing; DE
metal; IT various; FR metal)
 Short-time work, without link to training (BE chemicals,
textiles, metal; IT metal)
 Working time flexibilization (NL metal, light engineering; IT
various manufacturing branches)
7
Bargaining Low
coordination Fragmented
bargaining,
mostly at
Scope of
company
collective
level
bargaining
High
Mixed sectoral Sectoral
Sectoral and
and firm-level bargaining industry
bargaining,
widespread, level
weak
limited
predominant
enforceability freedoms (enforceable
collective
of sectoral
for
agreements
agreements
company
bargaining and peace
Mixed sectoral
and economywide bargaining
(enforceable
central/sectoral
agreements)
clause)
Low No legal
provision for
extension
Legal provision
existing but
rarely used
(<10% of
workforce)
High Legal
provision
existing and
extensive use
PL, LT, LV
MT, UK
CY, LU
RO
DK*, IT**,
PT, SE*
EE
BG, CZ
SK
DE
HU
FR
AT**, NL,
ES
SI, IE
BE, FI, GR
8
Developments in the
public sector
 Public austerity targeted at public sector wages & employment
 Dependence on international financial institutions:
- HU, LV and RO received loans already in 2008 and 2009 
government response cuts in public sector jobs and pay freezes/cuts
 Governance crisis in the Euro area :
- GR, IR, PT, CY reveived IMF/EU loans (2010-2012)  conditional
upon fiscal reform & financial sustainability  largest public sector pay
cuts in southern EU
 Increasing public debt and deficts direct consequence of rising
unemployment, fiscal stimulus packages and bail-out programmes for
ailing banks  public sector pay and/or employment cuts/freezes in
UK, IT, ES, RO, PT, ES, IE etc.
9
Tab. 3: Public sector wages
in the focus of austerity
Gross
government
debt (% of
GDP 2011)
Low (< 60%)
Medium (<100- High (>= 100%)
>60%)
No cuts
(2008-2012)
DK, FI, SE
AT, MT
+0% (20082012)
BG, CZ, EE, LV,
LU, PL, RO, SI,
SK
CY, FR, NL, ES,
UK, HU, DE
Cuts (20082012)
RO(-15%), LV (- HU (-9%),
12%), LT(-9%),
ES(~5%)
EE(-7%), CZ (0 to4%)
BE, GR, IT, IR, PT
GR (-33%), PT (6 to -22%), IT(-5
to -10%), IR
(~5%)
10
Tab. 4: Collective action in the
public sector
Unilateral state decision Collective action,
to cut/freeze pay and/or including strike action and
jobs in public sector
demonstration, mass rally,
picketing
(only demonstration etc.)
Yes: BG, HU, FR, CZ, EE, Yes: BE, HU, FR, SI, CZ,
GR, IE, IT, LV, LT, LU, NL, EE, GR, IE, IT, NL, PT,
PT, RO, SK, ES, UK
RO, ES, UK (LV, LT, PL,
SK)
No: BE, DE, SI
No: BG, DE, LU
11
Conclusions from findings
in the public sector:
 Public sector no stronghold of collective bargaining any
more  Public sector unions lost bargaining power due to double
role of state as employer and governments‘ aim to restore fiscal
sustainability and international competitiveness via public austerity
 Effects of public austerity and increased recourse to neo-liberal
policies in current crisis, e.g. labour market liberalisation,
decentralisation of CB, labour code changes, on IR in private
sector;
 Despite loss in bargaining power still high mobilisation power of
public sector unions agains austerity drive of governments
  Changes in power resources of trade unions that affect their
strategic responses to current challenges!
12
Fig. 4: Trade union density (net)
in the EU27,
weighted average EU-10 and EU-15
13
13
Fig. 5: Employer density EU27,
weighted average EU10 and EU15
14
14
Fig. 6: Collective bargaining
coverage rates EU27,
weighted average EU10 and EU15
15
Fig. 7: Strike activity EU
(measured as days-not-worked‘,
per 1000 employees)
16
16
Tab. 5: Sources of trade union
power in the EU27
Institutional power : MEB,
Power ressource
coordinated national/sectoral
CB, high enforceability of
collective agreements,
extension of collective
agreements
Membership
Low
power:
organisational
power (union
High
density, strike
activity)
Low
High
EE, LT, LV
CZ, HU, SK,
PL
AT, DE, NL,
LU
ES, FR, IT, PT, SI, BE, DK,
GR, MT, CY
SE, FI
UK, IE
RO, BG
17
Assumptions: Trade union
strategies in the crisis
1)
The larger institutional resources (national/sectoral CB,
bargaining coordination, extension practice) the higher probability
that trade unions use CB as instrument to tackle crisis
Central-western EU, Nordic EU, FR, IT
2)
The lower institutional resources AND the higher
memership power, the higher probability that trade unions
mobilize against public austerity
 Southern EU, RO
3)
Low institutional AND membership power resources:
responses via CB and/or mobilisation limited  Baltic
countries, CZ, SK, PL.
4)
Encompassing institutional AND membership-based
resources: Nordic EU (SI)
18
Findings: Social partner responses
in varying institutional contexts
 Nordic EU: CB responses widespread: temp. lay-offs, work-sharing,
link to training, flexibilisation of pay-setting; public sector almost
not affected by cuts; high incidence of strikes (exc. DK!);
 Central-western EU: CB widely used (lesser in SI): short-time
work (STW), linked to training in DE, FR; wage moderation in all
countries; public sector wage freezes (NL, LU); low incidence of
strikes (exc. NL public sector, SI)
 Liberal-western EU: Very few incidences of CB responses due to
decentralised bargaining system, national social dialogue broke down
over public sector pay cuts in IE; public sector workers affected by
cuts& freezes of pay & employment; steep increase of strike
activity – in particular IE;
19
Findings: Social partner responses
in varying institutional contexts
 Southern EU: CB responses only in FR,IT: STW, training, wage
moderation, flex. work organisation (IT); ES, PT, GR national
agreements (in part. general training, wage
moderation/flexibilisation); government measures to further
decentralise and/or weaken CB (GR, PT, ES) deep cuts and
repeated wage freezes in public sector; high incidence of public
sector strikes (but: recent data on DNW lacking)!
 CEE: very few CB responses: mostly MNCs or manufacturing sectors
with MEB: national-level agreements on training, wage moderation
and flexibilisation work organisation;
government measures to further decentralise and/or weaken CB
(RO, HU); pronounced public austerity affected public sector; very
low incidence of strikes!
20
Conclusions
 Responses of social partners and governments to address effects of
crisis in private sectors varied according to industrial relations
(IR) regime:
Divergence in use of CB as anti-crisis instrument: northern and
central-western EU, partly southern EU (IT, FR) vs. liberalwestern, ES, PT, GR and CEE
When institutional resources and state support low, often
recourse to membership-based strategies, e.g. organising &
media campaigns, mobilisation against governments‘ austerity drive
Sectoral differences: manufacturing vs. private services (partial
exceptions telecommunications, transport, banking)
Different groups of workers: core labour force vs. temporary
workers
21
Conclusions
 Public sector:
 Weakening of CB, wage cuts/freezes, often by unilateral state decision
 Public austerity and employment cuts/freezes: general trend towards
reduction of public sector employment reinforced in current debt
crisis
 No correlation between extent of public deficits and debt and public
sector austerity in CEE but link exists in Southern Europe
 Factors: dependence on international financial institutions, FDIs, (foreignbased) MNCs, weak social partners and highly politicized involvement of
social partners in public policy making
 Decline of institutional support for CB: public sector unions as main
driving forces for mobilisation against public austerity and government
policy of weakening legal basis of MEB, workers‘ and trade union rights.
 BUT: STRUCTURAL (labour market) POWER (third power source),e.g.
scarceness of qualified labour due to emigration, enhances SD & bargaining
power of unions!
22
Publications:
 Glassner, V. with Keune, M. (2012) The crisis and
social policy: The role of collective agreements,
International Labour Review, 151(4): 351-376.
 Glassner, V. (2013) Central and eastern European
industrial relations in the crisis: national divergence
and path-dependent change, Transfer. European Review
of Labour and Research, 9(2), forthcoming.
23
Developments in the public sector:
Fig. 1: Employment in general government and public corporations as a percentage of the labour force (2000 and 2008), OECD 2011
24
Figure 2.
Gross government debt in the EU27 (2008, 2010, 2011, % of GDP)
25
Figure 3.
Gross government deficit (surplus) EU27 (2008, 2010, 2011,% of GDP)
26
Annual change in
GDP (%)
27
Unemployment rates
(total employment)
28