Susan Hayter Industrial and Employment Relations DepartmentDIA

LOG

UE The crisis, employment and Decent

Work: what can be done through collective bargaining

Negotiating for social justiceD

IALO

GU

E Key questions: • Impact of collective

bargaining?• What role did collective

negotiations play during the crisis?

• What impact is the crisis having on collective bargaining systems?

• What role can collective bargaining play in equitable recovery?

Trade union density, OECD 1999 and 2009

DIA

LOG

UE

Aus

tral

ia

Aus

tria

Bel

gium

Cana

da

Czec

h R

epub

lic

Den

mar

k

Esto

nia

Finl

and

Fran

ce

Ger

man

y

Gre

ece

Hun

gary

Irel

and

Ital

y

Japa

n

Kor

ea

Luxe

mb

ourg

Net

herl

ands

New

Zea

land

Nor

way

Pola

nd

Port

ugal

Slov

ak R

epub

lic

Spai

n

Swed

en

Swit

zerl

and

Uni

ted

Kin

gdom

Uni

ted

Stat

es

0.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

80.0

90.0

100.0

TUD 1999 TUD 2009

Tra

de

Un

ion

den

sity

Source: Data from ICTWSS Database, Version 3 (2011)

Collective bargaining coverage, OECD, 1997 and 2007

DIA

LOG

UE

Aus

tral

ia

Aus

tria

Bel

gium

Cana

da

Czec

h R

epub

lic

Den

mar

k

Finl

and

Fran

ce

Ger

man

y

Gre

ece

Hun

gary

Ital

y

Japa

n

Luxe

mbo

urg

Net

herl

ands

Nor

way

Pola

nd

Port

ugal

Slov

ak R

epub

lic

Slov

enia

Spai

n

Swed

en

Swit

zerl

and

Uni

ted

Kin

gdom

Uni

ted

Stat

es

0.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

80.0

90.0

100.0

CBC 1997 CBC 2007

Coll

ecti

ve b

arga

inin

g co

vera

e

Source: Data from ICTWSS Database , Version 3 (2011)

Impact: Equity and efficiencyD

IALO

GU

E • High coverage and coordination associated with more equitable outcomes

• Erosion of collective bargaining institutions contributed to rise in wage gaps

• Weakness of social partners and CB limits potential role in labour markets

Collective Bargaining: Challenges 2008/2009

6

WorkersObjectives: • Job Security:

avoid dismissals

• Protect income

• Fairness: cost-saving measures incl. management

Management

Objectives: • Liquidity• Reduce production• Reduce costs• Retain qualified

staff

Negotiated responses to the crisisD

IALO

GU

E

Negotiated response

Industrial relations system

Severity of the economic crisis

Public policies

Strategies of social partners

Negotiating during the crisisD

IALO

GU

E Bargaining agenda:

1. Reduce production and costs

2. Protect employment

3. Mitigate effects of redundancy

4. Protect earnings

5. Retain experience and improve

skills

6. Recovery

Negotiating during the crisisD

IALO

GU

E

Working time

Compensation

Employment

security

France: CFTC-CMTE, CFE-CGC, FCE-CFDT & (UIC) for chemical industry (Sept 2009)

• Extends statutory provisions for partial unemployment

• Improves level of compensation up to 80% for partial unemployment

• Encourages job retention and training

Germany:Gesamtmetall & IG Metal for metal sector on short-time work (2009)

• Reduce notice period for STW at company level to one day, providing works council agrees

• Introduce two addional modes to pay addtional STW working allowances

• Ease adoption of training measures through opening clause – no additional STW allowances need to be paid

South Africa:NUMSA, Uasam Solidarity & SEIFSA for metal and engineering (2009 – 2010)

• Wage increases between 7 – 8% with exemptions, increase in applications for exemptions

• Increased use of STW, notification from 2 to 5 days

• Extensive use of Training Layoff Scheme• All labour brokers to be registered with council

Argentina: Deutz Agco Motors & SMATA (January ’09)

• Production workers suspended for 5 months (Feb - June ’09); received 70% of basic salaries; company cont. social contributions during period of suspension

• July – Sept. ‘09, workers faced cuts of 3-4 workdays; received 70% of their basic salaries; company continued social contributions.

Germany:

Daimler & Works Council

(2009)

• Extension of short-term working time (trucking)• Reduction in working time by 8,75% - no pay• Employment guarantee• Expiry of all temporary contracts• Postpone wage increase from May to Oct. 2009 • Reduction of base salary for all executives

Uruguay:Los Piques SA & Piques Worker‘s Union (March ’09)

• Temporary suspension of production (annual leave) • Reduced work days for 3 months (April – June ‘09)

as either: 5 workdays and 3 days off; 5 workdays and 2 days off; or 4 workdays and 3 days off

• Commitment to schedule each worker a minimum of 152 hours per month (including paid holiday)

What have we learned?D

IALO

GU

E• Inequality fuelled distributive conflict• Coordinated IR systems facilitated adjustment:

- Tripartite social dialogue- Multi-employer bargaining - Procedural clauses provided certainty

• Interest-based negotiations facilitated innovations e.g. information sharing

• Public policy supported integrative outcomese.g. short-time working schemes, training layoff schemes

Impact on collective bargainingD

IALO

GU

E • Reinforced decentralization• Weakening of bargaining power• Deregulation / re-regulation:

– Limiting scope of CB agenda in public sector– Changes in the relationship between CBAs

at different levels– Eliminating or re-regulating extension

provisions– Recognition procedures and thresholds

14

“Labor cost adjustment can be facilitated by promoting decentralized wage bargaining, removing indexation mechanisms, and reducing dismissal costs….” IMF, 2011

“Reforms of labour market institutions leading to less coordinated wage bargaining and more decentralised wage setting,…. may reduce adverse public wage spillovers and facilitate wage adjustment also in the private sector”, ECB, 2010

“In contrast to a fully decentralised system, an intermediate degree would not tailor wage agreements sufficiently to the circumstances of individual companies and would tend to diminish wage differentials. Strong relative wage compression would hinder employment….” OECD, 2011

15

“The crisis has also put to the test longstanding dogmas that blame labor-market rigidity for unemployment, because countries with more flexible wages, like the U.S., have fared worse than northern European economies, including Germany. …… But there are ways out of this dilemma: strengthening collective bargaining, restructuring mortgages, using carrots and sticks to get banks to resume lending….” Stiglitz, 2011.

“The state can be all thumbs when it attempts intervention to reduce income inequality. Nevertheless, tools do exist. Progressive taxes on income and capital gains…., steps to strengthen union recruiting and bargaining power…..” Taylor, 2011

Negotiating for precarious workersD

IALO

GU

E Bargaining outcomes:

• Employment security

• Improved pay and benefits

• Skills development

Wages and benefits

• Equal pay for equal work

• Wage improvements

• Port Authorities & Federation of Maritime Dockers’ Trade Unions of Argentina (FEMPRINA) (2005, 2006), equal pay & working time

• IG Metal & Adecco for Audi (2007), equal pay (departing from 3 other collective agreements TAW confederations that derogate).

• IG Metal & Stahl (2010), general wage increase and equal pay for temporary agency workers.

• ABU, FNV, CNV & De Union, LBV (2009 – 2014) derogates from equal treatment, only after 26 weeks.

• Japan Post Holdings & Japan Post Trade Union (2008, 2010), 2,000 Yen increase in wages for fixed-term contract workers, hire 2,000 contract as permanent

• Hindustan Unilever Limited & Sarva Shramik Sanghatna, November (2008), substantial wage increases for temporary agency workers (assisted by IUF)

Employment security• Limits to

externalization

• Regularizing employment

• Tesco & SIPTU (2007), agency workers not exceed 10% of workforce ; after 26 weeks on employment panel for direct recruitment; equal pay.

• Road freight Bargaining Council, (2006/7) labour broking not to exceed 30%, if supplied to client over two months considered ordinary employee.

• METRORAIL & SATAWU (2009), 1063 fixed-term employed on permanent basis

• Tamil Nadu Electricity Board & TNEB union (2007), 6000 temporary agency made permanent, progressive absorption of remaining (21,600)

• Glaxo Smith Kline & Milk Food Factory Workers' Union supported by IUF (2010), India, regularization of 443 temporary agency workers in a phased manner.

• South African Airways & SATAWU (2009), regularisation of workers employed through a labour broker.

Skills development• Equal access to

training and career progression

• Aeon and Aeon trade union (2004), unified qualification and evaluation schemes, equal training opportunities.

• NUMSA & AMEO (2009), short-term workers entitled to participate in industry’s multi-skilling programme.

Negotiating for social justiceD

IALO

GU

E • Strengthen social partners • Promote collective bargaining• Getting it right: coordination and

articulation• Need for knowledge raising on

alternatives• Facilitate sharing of information

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