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12 October 2017

OECD Confirms Research into Collective Bargaining is a Complicated Business

Müller and Garnero

Presenting key OECD results on Collective Bargaining at the ETUI’s recent monthly forum, titled: ‘Collective Bargaining in a changing world of work’, OECD Economist Andrea Garnero stressed the importance of Collective Bargaining as fundamental right and a key labour market institution.

The new study is part of a reassessment of the OECD’s job strategy. It aims to better assess the role of Collective Bargaining in delivering good labour market outcomes, in terms of more and better jobs, and a more inclusive, resilient and adaptable labour markets.

According to Garnero, there is a need for more robust evidence when researching Collective Bargaining, most previous studies focused mainly on the “dominant” level of collective bargaining, which proved too imprecise, specifically in relation to policy development.

Now research on Collective Bargaining, including this OECD study takes into consideration a variety of articulated bargaining levels, recognising the importance of processes rather than just focussing on institutional structures. Garnero stated, ‘there is not one but several bargaining systems, hence the need to assess data at a micro-level, which can take into account the granularity of the systems’.

The economist flagged up different Collective Bargaining systems as they operate in different countries, including a mix of company, sectoral and national systems. They have different degrees of flexibility including decentralisation, organised decentralisation and centralised systems, with various degrees of coordination. He went on to argue that in order to achieve positive labour market outcomes Collective Bargaining coverage still remains an important factor which among other things is closely linked to the employers’ organisations membership density, their willingness to reach agreements and the ability of social partners to build levels of trust.

For the same reason, Collective Bargaining agreements need to be better enforced through more effective inspections, an increase in transparency and a rise in awareness campaigns. ‘Name and Shame’ programmes can also play a useful role, in enforcing agreements.

In conclusion Garnero stated that for Collective Bargaining to remain relevant, it cannot, however, just be about coverage, in that there has to be a balance between flexibility and inclusiveness.

In response, Torsten Müller, ETUI Senior Researcher, while recognising that the OECD study did justice to the complexity of Collective Bargaining, he had concerns that the research places too much emphasis on flexibility and not enough on inclusiveness.

The ETUI researcher challenged some of the OECD’s categorisation, noting that when one has a wealth of data it is tempting to assign countries to ideal-type categories, which often do not reflect the more complex actual practice. He went on that this may lead to misguided policy advice.

Regarding the interpretation of the OECD data Müller felt the study – in emphasising the decrease in union density – could be interpreted as questioning the legitimacy of trade unions to represent workers, in the name of flexibility. He emphasised that in several EU countries trade union membership density has remained healthy, despite the mega-trends of globalisation and the ravages of the economic crisis.

Müller concluded that this research, should not be used to make the case for a more restrictive approach to collective agreements for instance by restricting the extension of collective agreements, in the name of ‘going for growth’. In that when multi-sector Collective Bargaining agreements have been dismantled for there has been high level of de-centralisation, this had not led to either economic or wage growth.

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