IR Notes 78 – 21 June 2017
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  Interview
Andrea Garnero, economist in the Employment and Income Division of the OECD

The survey of collective bargaining published in the OECD Employment Outlook 2017 highlights the shift to more decentralised bargaining at company level. Have you been able to determine whether decentralisation is effective in terms of economic performance?
The chapter on collective bargaining does not answer this question directly. It is more descriptive and seeks to show how the systems of industrial relations function in the different member countries. For decision-makers planning reforms in particular, the study draws attention to how different these systems are. Strictly speaking, no one system is like another. There may be is a desire to decentralise collective bargaining to a level as close as possible to the workplace, but here too, there are many possible ways of achieving this.


How you nevertheless detected one model that appears more effective?
The study identifies three major models of industrial relations: the first model, which is prevalent in Mediterranean countries and France, is based on a fairly strong centralisation of collective bargaining at national and/or sectoral level, with mechanisms for extending collective agreements so as to cover all employers and employees in the sector. The second model is one typical of Anglo-Saxon countries where, unlike the first model, everything takes place at company level, (virtually) without sectoral involvement. In these countries, firm-level negotiation exists particularly in the largest companies, and the share of workers covered by collective agreement is low. The third model is that of "organised decentralisation", where firm-level negotiation plays a key role while at the same time being more or less strictly controlled by tools such as sectoral agreements which authorise derogations or opt-outs, in particular when the company is facing economic difficulties. This model is found in Germany, but also in Nordic countries such as Denmark or Sweden, where the social partners define the hierarchy between the collective agreements, which cover a large proportion of employees. While offering high collective bargaining coverage, the agreements enable terms to be renegotiated at company level by authorising flexibility in relation to the provisions of the standard set by the sector.


And of these models, does any particular one produce better results?
On first sight, but this has still to be confirmed, the third model appears satisfactory because it provides good results in terms of inclusivity (because of good collective bargaining coverage) and flexibility. For it to function at its best, this model also presupposes a high level of coordination between the social partners and a capacity for dialogue to permit objectives to be drawn up and implemented, especially in time of crisis. However, there is no one copyable template. The German model is often highlighted because of Germany's economic performance, but the number of employees benefiting from a collective agreement has been found to be falling. Finally, the study takes a favourable view of collective bargaining because of its capacity to meet a variety of challenges when it is executed in the least confrontational manner possible and in a coordinated fashion in most people's interest.

 
  Agenda

29 June
Bourg-la-Reine, France
Joint symposium of the Ires research institute and the ISST (Labour Studies Institute of Panthéon-Sorbonne University) devoted to "labour market reforms in Europe – their performance, convergence and rationale".


3 July
Bordeaux
Comptrasec (Centre for Comparative Labour and Social Security Law) is organising a multidisciplinary and international Labour Summer School on the subject of "health and work".


4 July
Paris
Meeting of the EWC Club led by the French association Astrées and IR Share on the role of European works councils concerning multinationals' corporate social responsibility and due diligence obligations.

 

IR Notes is a fortnightly newsletter produced by
IR Share and its network of experts, and is available in several European languages. It offers Europe-wide monitoring of employment law, labour relations and employment policy. It is available by subscription for 15 euros per month (excluding tax), via the IR Share website. IR Share is a privately- owned, independent, apolitical company whose aim is to inform and assist all players involved in social dialogue within and outside Europe. It has been the correspondent organisation for France and Luxembourg of the Dublin Foundation since 2009 and for Bulgaria since 2014.

 

Lead story
The European Commission wishes to regulate the right to strike in civil aviation

The European Commission has aroused the wrath of the European trade union movement by presenting, on 8 June, a series of measures for civil aviation which aim "to safeguard competition and connectivity in aviation, facilitate investments in European airlines and enhance the efficiency and connectivity of European skies" (see press release). The package is intended to deliver on two priorities of the aviation strategy for Europe adopted by the Commission in 2015: to act to maintain the leading international position occupied by European aviation, and to eliminate the obstacles to growth in European airspace. In the area of industrial relations, the Commission focuses particularly on strike action in the air traffic control sector. "Of all the causes of air traffic disruption, industrial action in the form of strikes poses the most complex challenges", the Commission states, because strikes "usually result in many flight cancellations and delays, leaving passengers stranded at airports". Such actions severely disrupt the functioning of the internal market: from 2005 to 2016, 243,660 flights were cancelled as a result of air traffic management strikes, affecting an estimated 27 million passengers. Delays caused by strikes alone have cost airlines more than € 1 billion. While the Commission recognises that "the right to strike is a fundamental right" which "is today governed in essence by national law", it is treading on shaky ground since, under the treaty, it does not have legislative power in this area. This is the reason why it refers in its communication to "guidelines" which it outlines in a working document relating to practices to support the continuity of air traffic services. To begin with, the Commission recalls that some of these practices are "applied already today in various member states". Among the approaches it suggests, the Commission encourages the member states to adopt the following practices: 1/ To promote "a sound and efficient social dialogue" in order to reduce "the probability of strikes through better social dialogue". 2/ To arrange for "unions to provide early notification of strikes" (of at least 14 days) in order to prepare "mitigation plans ahead of industrial action". 3/ To arrange for all staff members to indicate in advance (e.g. 72 hours beforehand) whether they will be participating in the industrial action. 4/ To ensure 100% continuity of service for flights crossing the airspace of strike-affected member states by enlisting the air traffic control services of bordering countries. 5/ To protect air traffic during peak periods of the day and peak periods of the year by avoiding strikes at these times. Needless to say, the Commission's initiative is highly controversial (see the reactions of the social partners below), and is perceived as an encroachment on the right to strike, interpreted as a right to damage economic interests. As in the case of its "Europe on the move" initiative for the road transport sector (see IR Notes 77), the Commission is no longer hesitant about revising certain social rights, or suggesting to the member states that they should reconsider these in cases where it has no competence, in the name of the competitiveness of the European economy.


1. European Union
Legislative proposal

Social update

Reactions of the European social partners to the regulation of air traffic controllers' right to strike: The European Commission's proposals (see lead story above), have provoked the anger of the European Transport Workers' Federation (ETF) which "strongly deplores this attempt to limit indirectly" the right to strike (see press release). The European Trade Union Confederation has demanded that the Commission "removes all references to restricting the right to strike from its initiative" (see press release). ATCEUC, the trade union organisation that represents air traffic controllers, is also up in arms (see press release). The tone from employers' organisations, such as the new, A4E association bringing together the largest mainstream carriers, is very different: "Limiting the impact of air traffic management strikes on travellers and business, without questioning controllers’ fundamental right to strike, is a key objective of A4E," declared Thomas Reynaert, managing director of A4E. "We now need courageous policy-makers in Europe to help implement these best practices" (see press release). For its part, the IACA, whose members are low-cost airlines, is also in favour of practices that ensure service continuity in order to reduce strikes (see press release).



  • Discussion of atypical employment in the air transport sector: The European ministers responsible for transport held a debate on 8 June, during a meeting of the Transport Council, on the development of atypical employment in the civil aviation sector and its consequences in relation to safety. The discussion was triggered by the Netherlands, which had sent an information note to their colleagues in which they asked the European Commission to look more closely at "pay to fly" schemes – which, for certain airlines, mean using co-pilots to fly who do not cost them anything since they pay for the chance to gain flight hours and experience – as well as the use of temporary agency personnel. According to the outcome of the Council meeting, the Commission has indicated that an evaluation is ongoing, "that atypical forms of employment should not lead to abuse" and that it is "waiting for a major ruling by the European Court of Justice regarding the legal situation of air crews". The pilots' association ECA welcomed the holding of this debate, but feels the time has come for concrete action to stop abusive atypical employment practices (see press release), whose risks for safety have already been shown by two studies.

  • European Parliament alert to developments in the road sector: In a resolution on road transport in the EU, adopted on 18 May, the MEPs recall that "the freedom to provide transport services across the EU should not justify any violation of the fundamental rights of workers or weaken" the existing social legislation. Opposing the Commission head on, the Parliament "rejects any further liberalisation of cabotage, in particular unlimited cabotage operations within a certain number of days". Considering that the problem of fatigue has not been sufficiently taken into account, the MEPs call on the Commission "to run an EU-wide scientific study on the effects of driver fatigue in bus and coach transport and freight transport by van as well as by truck".

  • Social dimension of the digitisation of industry: The European Parliament on 1 June adopted a resolution on digitising European companies, highlighting the associated benefits (a better work-life balance) and risks (danger of unstable and precarious employment; weakening of the protection of workers’ rights). The MEPs call for "the implementation of a skills guarantee, after consultation and with participation of the social partners" in order to avoid a "digital gap" undermining the employability of people who work in industry.

  • European Agenda for the collaborative economy: The European Parliament on 15 June adopted a resolution in response to the Commission communication dated 2 June 2016 entitled "A European agenda for the collaborative economy". The MEPs outline the guarantees that must be provided to workers and stress the importance "of collaborative platform workers being able to benefit from the portability of ratings and reviews, which constitute their digital market value, and importance of facilitating the transferability and accumulation of ratings and reviews across different platforms (...)" (see section 43). They point out the "possibility for unfair and arbitrary practices regarding online ratings, which may affect the working conditions and entitlements of collaborative platform workers and their ability to obtain jobs". These rating mechanisms should "be developed in a transparent way" and that "workers should be informed and consulted".

  • Assistance from the European Globalisation Adjustment Fund: The European Commission on 2 June proposed to provide Spain with €1 million from the European Globalisation Adjustment Fund (EGF) to help 339 dismissed coal miners and young people not in employment, education or training (NEETs) in the Castile and León region to find new jobs (see press release).


2. Member states
Germany

Agreement to support workers in the meat industries: The German parliament has adopted a law securing workers’ rights in the meat processing industry (Gesetz zur Sicherung von Arbeitnehmerrechten in der Fleischwirtschaft). "This decision is an important step in the right direction," stated Claus-Harald Güster, deputy president of the German food union NGG. "Through adopting the law, the government has made it clear that the voluntary commitment to improve working conditions given two years ago by meat-processing employers is not sufficient". Condemned by their competitors at European level, German companies have exploited workers with low wages and bad working conditions. The new law, a rarity in Germany – a country that takes a very hands-off approach to labour relations, aims to establish fair working conditions in this industry. The employer now has to assume liability for the whole subcontracting chain and for the payment of social security contributions. Moreover, he is now required to provide the clothing and tools needed for the work free of charge. Employers are now having to record the working time of their employees. This applies to both permanent and temporary agency staff. Breaches of the legal provisions can result in fines of between € 30,000 and € 50,000 (see press releases of DGB, NGG and EFFAT).


3. Companies
Transnational agreements

Barilla: The management of the Italian food group Barilla, members of the European works council mandated by their respective unions and the European trade union federation EFFAT on 31 May signed a European convention on health and safety. The main objective of the text is to set out the guidelines for promoting preventive measures against psycho-social risks and stress in the workplace. In signing this agreement, the parties seek to achieve a "zero accidents" objective, applied across the board. The means of achieving this objective are as follows: 1/ The adoption of a preventive approach in terms of objectives and methods, using a comparative system between countries; 2/ The adoption of transversal prevention plans linked to quantitative and qualitative targets; 3/ Enhanced social dialogue with EFFAT and its member organisations and better orchestration between the levels of information and consultation; 4/ Specific training programmes; 5/ Follow-up of the agreement by the European works council in particular (see EFFAT press release).


European works councils

  • Honda: The Japanese car-maker Honda renewed its European works council agreement on 28 February last. The text, published by the European Trade Union Institute, provides for an information and consultation procedure in the event of exceptional circumstances to involve the representatives of the countries concerned. The agreement opens up the possibility for the EWC to call in an external expert, appointed by consensus with the management, who must file their report within 15 days. An annual budget of € 50,000 is earmarked for this purpose.

  • Unilever: In a press release, the Unilever European works council has deplored the food group's decision to sell off its historic margarine business, which employs more than 1,000 people in the EU. It has drawn up a list of demands to be respected by the future buyer to guarantee jobs and the locations affected.


Trade unions

  • ArcelorMittal: The international trade union federation IndustriAll Global Union on 2 June organised a meeting between members of the German trade union IG Metall and representatives of Kazakh trade unions. IG Metall gave its support to the attendance by employee representatives from Kazakhstan at meetings of the European works council, at least as observers (see press release).


4. Studies and reports

Collective bargaining in OECD countries: In its report "OECD employment outlook 2017", which is always extremely helpful in understanding the operation of the various labour markets, the OECD offers an analysis of the industrial relations systems of its different member states. The report (available in English) includes a comprehensive and up‑to‑date review of collective bargaining systems for OECD countries. It compares estimates of membership to trade unions and employer organisations, as well as collective bargaining coverage. The report notes a continuous decrease in trade union membership and a parallel decline in collective bargaining coverage, as well as a trend toward more decentralised bargaining, with firm‑level bargaining tending to expand. While underscoring the complexity of the different models of collective bargaining and the importance of studying the interactions between the different actors, the report does not single out any one model as more effective than the others (see summaryother languages).