Trends in collective bargaining in the EU Final conference: “Collective bargaining in Croatia and...

Trends in collective bargaining in the EU

Final conference: “Collective bargaining in Croatia and EU today”

Zagreb, 14 October 2015

Dr. Torsten Müller

European Trade Union Institute - ETUI

Megatrends as challenges for trade unions and CB

1.) Structural change: Manufacturing to services Increasing privatisation of public sector

2.) Increase of precarious and and atypical forms of employment

3.) Globalisation makes national regulation more difficult

4.) Neoliberal hegemony – reinforced by crisis

Dr. Torsten Müller – Collective bargaining in Croatia and EU today, Zagreb, 14 October 2015

Main trends in collective bargaining systems across EU

1.Change in political framework conditions: unprecedented degree of direct political interventions

2.Different modes and degrees of decentralization in collective bargaining structures

3.Spread of company-level employment and competitiveness pacts


EU crisis management

Basic assumptions:

1. Crisis is primarily a crisis of cost competitiveness

2. Lowering labour costs is the key to regain (price) competitiveness and to address macroeconomic imbalances!!!


EU crisis management New European Economic Governance:A new European interventionism in the area of wage policy through European Semester/European Imbalances procedure: half of the EUMember states received recommendations Troika /Memorandum of Understanding

Policy measures: Direct intervention into wage developments by cutting and freezing public sector and minimum wages Structural reforms of wage setting institutions to increase downward flexibility of wages


Intervention into national collective bargaining

DG ECFIN 2012: “Employment friendly reforms”

Decreasing bargaining coverage Decreasing extension of collective

agreements Decentralizing bargaining systems Removing or limiting the favourability

principle Introducing/extending possibilities to

derogate from higher level agreements Overall reduction of wage-setting power of trade unions


Continuity DG ECFIN approach

DG ECFIN 2015:

“Moreover, major reforms in the labour market, such as decentralised wage bargaining and more flexible wage arrangements, … as well as past wage moderation will also support job creation.”


Country-specific recommendations 2011-2014


Measures in countries under international surveillance


Abolition of additional benefits in public service (2008-13)


Greece Hungary Portugal Romania Spain

13th/14th monthly pay

Cuts in pension entitle-ments

Accomo-dation allowance

Medicationallowance

Food allowance

Eingriffe in nationale Mindestlöhne


22 % cut (32% cut for young

workers under 25) in 2012

Freeze until the end of the assistance

programme

Freeze 2011-2014

No MW rise without approval

of Troika

1 € cut in 02/2011rescinded in

07/2011

Freeze since 1997

Suspension of automatic Indexation

No MW rise without approval

of Troika

National hourly minimum wages (in Euro, January 2015)


Quelle: WSI-Minimum wage database

Minimum wage in % of median wage


Real compensation in the EU 2010-2014


Number of collective agreements


Decollectivisation of industrial relations


Portugal Spain2008 2013 2008 2013

Agreements 295 94 5987 3161

Of which company

95 48 4539 2274

Extension 137 9

Workers covered

1.8 mio 242,000 12 mio 8.5 mio

Collective Bargaining Coverage


Dominant level of negotiations


Quelle: European Commission 2015: Industrial Relations in Europe 2014

Implications of interventionist approach

1. Systematic undermining of (cross-)sectoral systems of multi-employer collective bargaining

2. Dramatic decrease of collective bargaining coverage leading in parts to a decollectivisation of industrial relations

3. Pressure on wages: deflationary tendencies and downward wage competition with negative consequences for internal demand.


Organized de-centralization in northern European countries

(Inter-)sectoral agreements define the terms of transferring bargaining competences to lower levels

Tools: Company-level employment pacts State-sponsored schemes for

temporary working time reductions

and lay-offs

Path-dependent adjustment of existing

multi-employer bargaining systems


Wages and collective bargaining under deflation: alternative approach

● Stabilising and enforcing wage developments:

• counter deflationary price developments

• stabilise and increase private demand

• counter income inequality

● Requires …• stop of wage cuts and wage freezes

• wages increase at least in line with productivity and target inflation

• more expansive wage developments in the surplus countries

● Requires …• strengthening of wage setting institutions


Thank you very much for your attention!!!

Dr. Torsten MüllerSenior Researcher

European Trade Union InstituteBld. du Roi Albert II, 51210 BrusselsEmail: [email protected]

Dr. Torsten Müller – ILO-EPSU Seminar, April 2015

Trends in collective bargaining in the EU

mailto:[email protected]

Trends in collective bargaining in the EU Final conference: “Collective bargaining in Croatia and...

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