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What’s happening to collective bargaining in Europe?

Description

Principle 8 of the European Pillar of Social Rights (EPSR) contains the explicit commitment to encourage the collective bargaining actors ‘to negotiate and conclude agreements in matters relevant to them, while respecting their autonomy and the right to collective action’. But what does this mean in practice, and how can we judge its effect? One way to assess the extent of collective bargaining is the collective bargaining coverage, which indicates the share of employees who are covered by a collective agreement. Figure 3.11 provides an overview of the collective bargaining coverage in the EU Member States before and after the crisis.

Figure 3.11 illustrates that the highest and most stable collective bargaining coverage exists in those countries whose bargaining systems are characterised by multiemployer bargaining, where negotiations mainly take place at sectoral or, in some cases such as Belgium and until recently Finland, even at cross-sectoral level.

Further crucial characteristics of extensive collective bargaining systems are, first, the existence of legal extension mechanisms (or functional equivalents) that ensure that collective agreements also apply to companies which did not sign the agreement or which are not members of the employers’ federation that signed the agreement; and second, the existence of broad-based bargaining parties like in Denmark and Sweden, where no legal extension mechanism exists and where high bargaining coverage solely rests on the organisational strength of the two bargaining parties. By contrast, the lowest coverage can be found in countries with single-employer bargaining arrangements.

Single-employer bargaining

This applies in particular to a range of central and eastern European countries, such as the Baltic states, Hungary and Poland, where coverage decreased even though it was already at a fairly low level before the crisis. Against this background it is not surprising that the countries with the highest drop in collective bargaining coverage during the crisis were all, to varying degrees, exposed to measures that led to the decentralisation of collective bargaining and/or that suspended or curtailed legal extension mechanisms. These countries are: Greece and Romania with a drop of 65 percentage points followed by Slovenia (-27pp), Slovakia (-16pp) and Portugal (-14pp).

More recently, attempts have been made in Portugal, Greece and Spain to strengthen collective bargaining coverage by reversing some of the most far-reaching ‘reforms’ that have been introduced as part of the crisis management. In Portugal, for instance, in May 2017 the newly elected government introduced less restrictive criteria for the extension of collective agreements.

Return to collective agreements in Greece

In September 2018, the Greek government re-established collective agreements for some sectors such as banking, fishing, tourism, hospitality and mining. Finally, at the end of 2018, the newly elected government in Spain not only restored the primacy of sectoral agreements over company agreements on issues such as pay and working time but also the validity of collective agreements after expiry.

However, the fact that collective bargaining coverage is still declining in the majority of EU countries illustrates the need for political support in cases where trade unions are not strong enough (any more) to ensure extensive bargaining coverage. In line with the commitment made in the EPSR, European policymakers could support the strengthening of collective bargaining by way of issuing country-specific recommendations that promote multiemployer bargaining, for instance by facilitating the extension of collective agreements and/or by strengthening the favourability principle which ensures the primacy of sectoral agreements over company-level agreements.

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Date of publication
2019

Keywords

Industrial relations , Trade unions , Wages

Contacts

Elisa Bruno

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