I Introduction and overview 2005

i) The socio-economic context

The economic background to collective bargaining remains difficult in 2005, as in previous years. The resumption in growth has faltered once again, and the forecasts for 2006 give no indication of a return to a satisfactory growth rate either. Faced with a European framework that prevents them from properly pursuing macro-economic policies, is overly reliant on an upturn led by exports to the rest of the world and underrates the importance of domestic demand, many Member States have chosen the easy way out, i.e. to exert greater pressure on workers in a bid to prompt greater wage moderation and greater flexibility on the labour market and in working time.

ii) Wage bargaining developments in 2005

Despite this difficult economic background, the pressure exerted by some governments and the blackmailing tactics used by some employers (demanding wage cuts in exchange for not relocating their production), the unions have tried to curb the slow-down in wage increases. Most unions have secured above-inflation wage increases, thereby avoiding a decrease in the purchasing power of wages (see the report in annex). The new Member States are seeing more dynamic wage increases as a result of their need to make up for lost time. Moreover, in some of the new Member States wage formation structures are being bolstered (law on minimum wage rises in Poland, structural development of sectoral bargaining in Hungary, etc.). Nonetheless - and this is true of almost all countries - much remains to be done to ensure that the wages negotiated using ETUC’s coordination formula (stable inflation plus productivity) effectively support Europe’s domestic demand. In the euro zone in particular, average wage rises within the collective bargaining process have continued to slow down and are barely managing to offset inflation. Nevertheless, despite this difficult framework of reference, a number of unions have also met the challenge of change by concluding agreements that aim to enhance the quality of workers’ rights, in particular in the fields of training, safety and achieving a decent work-life balance.

In this context, based on the answers received in the context of the questionnaire, we note that:

 In several countries the trade union initiative was finalised to underpin the importance of training in general and lifelong learning in particular. But in the past training was only reflected in actual collectively negotiated solutions in a limited number of countries. In this context the recent EMF initiative to support a joint European demand on this topic constituted an important development.

 Gender equality and a policy of non-discrimination were considered important everywhere, but the results achieved though collective bargaining are still extremely inconsistent. Nonetheless, it ought to be pointed out that in some countries significant agreements have been concluded and cover wage parity and/or improved maternity protection (examples of such agreements have been concluded in the Czech Republic, France, Denmark, Belgium, Germany and Austria). There are still positive experiences regarding bargaining on working hours in the context of gender equality. All these agreements should constitute a framework of reference for improving our initiative on this ETUC strategic priority everywhere. As in the Executive Committee resolution in 2004, we are once again calling upon all the bodies in question to draw up consistent initiatives in national and sectoral collective bargaining and when reviewing systems of classification and evaluation. It is also important to make use of the results of the Action Framework for Gender Equality in the context of European social dialogue, in which wage parity constitutes a fundamental point for discussion. The same commitment has to be made with respect to young workers.

 In several countries the employers’ associations are still pushing for the decentralisation of collective bargaining and/or for the further spread of agreed exceptions. In this connection we should stress the value of actions taken in response, like the recent action in Germany. As the Executive Committee has already done in the past, we confirm our categorical opposition to any legislation interfering with the structure of collective bargaining that would call into question the very autonomy of the social partners. We emphasise that only the social partners can decide on any changes in the contractual links arising within the context of collective agreements.

II. ETUC guidelines for coordinating collective bargaining in 2006

With the 2006 economic growth rate forecast at 1.5 %, the scenario of mediocre growth looks set to continue next year. Apart from a lack of confidence and poor domestic growth, high oil prices are also responsible for this new downturn in growth in 2005 and for the weak revival forecast for 2006. At the same time, the rise in oil prices is temporarily fuelling inflation, to which the Central European Bank is continuing to react in an entirely traditional manner, pursuing a policy based on raising interest rates, but without supporting the revival of growth.

Against this backdrop, ETUC highlights the relevance of collective bargaining based on the promotion of the general criteria of inflation and productivity, leading to greater purchasing power for wage earners and prompting stronger growth and domestic demand.

ii) Working time

The pressure imposed by the employers and some governments to wrest greater general flexibility is growing all the time. The classic justification for this invokes factors such as constantly growing market fluctuations, trade globalisation and more intense restructuring, relocation and merger activities. ETUC knows that for the employers the deregulation of job protection has become a political leitmotif.

ETUC notes that after calling loudly back in the summer of 2004 for an increase in working time, today the employers are exerting pressure to secure greater margins of flexibility, if possible so without engaging in collective bargaining. We reiterate our firm opposition to the dogmatic prolongation of working time. ETUC does not reject flexibility for all that it constitutes a bargaining issue. Negotiating labour schemes is the only real solution if we intend to try and secure a balance and reconcile companies’ needs for flexibility with workers’ demands regarding their domestic and professional lives. This is the price to pay for the quality of work envisaged in the Lisbon Strategy. Consequently, the revision of the working time directive is becoming increasingly urgent, since it could curb dispensations from Community legislation, which are seen as the only way of meeting company requirements.

The number of workers in precarious jobs in Europe is becoming worryingly high, a claim borne out by constantly rising proportions of fixed-term work (13 %) and workers on low wages (15 %). Part-time work, which in some countries rather than being a choice remains precarious, represents 17% of the overall labour force. Furthermore, the figures indicate an upward trend in the number of bogus self-employed (almost 23 million), two-thirds of whom may be classed as dependent workers, but who have no contractual cover and no social protection worthy of the name. In addition, there are over 20 million unemployed people on the European labour market.

In many instances, these ‘minimal’ job statuses are presented as a step into the labour market on the way to a better-paid job. Nothing could be further from the truth. On the contrary, such low statuses often end up trapping workers in precarious jobs. For the workers affected, the lack of security and financial leeway ends up prompting them to take on several jobs within one or more companies, thereby making them put in excessive hours. These workers have no access to training and therefore no prospects of finding a way out of their precarious situation. Thus, even after seven years, the majority of workers on low wages (56%) find themselves in another badly paid job or simply stop working altogether. It is also important to note that women and young people are more affected by such precarious job statuses.

In view of this situation, ETUC calls on its members to pay particular attention during the 2006 collective bargaining round to curbing or offsetting the phenomenon of excessive labour market flexibility. In particular, ETUC asks its members to:

Identify the problems of excessive flexibility and precarious work in each country;
make this problem a central theme of their collective bargaining with a view to seeing how collective agreements can limit excessive flexibility and how adjustments can be made to balance flexibility with security;
ensure that in any event the 2006 collective bargaining round tackles gender inequality, which persists in spite of rules and regulations to the contrary, and the situation of poor workers. Collective bargaining must attempt to guarantee all workers the right to receive training, in particular low-skilled workers and those in precarious jobs.
The right to undergo training to boost workers’ skills is a key point for supporting our strategy designed to facilitate access to employment and job quality. Consequently, it must constitute a focal point of our initiative at every level, i.e. be at the heart of sectoral and confederal European social dialogue and also a core element in any national trade union initiative. The recent initiative by EMF, which called for a joint European demand that a right to at least five days’ training per worker per annum, paid for by the employers, should be included in collective agreements, may serve as a general reference point that we endorse and for which we ask all the member organisations to assess the conditions for supporting similar initiatives.

A meticulous follow-up must also be guaranteed, like the one in place at ETUC. ETUC would therefore ask its members to submit a document to the collective bargaining coordination committee in May 2006, setting out the situations of excessive flexibility on the labour market in their country as well as the strategies devised by unions to rectify these situations.

ETUC is also keen to stress that another way of tackling the issue of excessive flexibility is through the national reform plans linked to the new Lisbon process. For this reason, ETUC will endeavour to establish links between the collective bargaining coordination committee and these aspects of the national reform plans.

III A European framework for cross-border bargaining: preliminary guidelines for an ETUC position

In the Social Agenda 2005-2010, the Commission stated its intention to create an optional European framework for transnational collective bargaining. To this end, a group of experts consisting of labour law jurists and university academics was formed in April 2005 with a view to cataloguing the existing agreements and providing some preliminary ideas for consideration, particularly regarding the legal aspects. At the end of September 2005, this group of experts submitted its report to the Commission, which announced that it will be producing a document on the subject of which social partner consultation will begin early next year.

The Commission’s initiative aims to supplement the structure of European social dialogue, on the basis of Articles 138 and 139 of the Treaty. The current social dialogue framework is structured around two levels: cross-industry and sectoral. This initiative will supposedly be complemented by social dialogue at company level.

At this point we should make a number of observations:

We should bear in mind that the increased development of transnational activity by multinational groups and ongoing delocalisation and merger operations at transnational level have so far taken place outside an effective bargaining power or framework;
however, if an agreement is concluded anyway, it will have no legal value and there would thus be no prospect of sanctions and no recourse if the employer concerned failed to implement or respect it;
most of the agreements already signed deal with subjects linked to workers’ rights, such as health and safety, training and anti-discrimination standards and/or more general principles such as respect for the environment and issues related to CSR. Having said that, some agreements were signed with the aim of countering transnational restructuring processes, a phenomenon that is sure to expand in the future.

For these reasons ETUC believes that this Commission initiative meets an undeniable need and must figure within a consistent framework that strengthens and regulates industrial relations at European level with an eye to bolstering the European social dialogue.

ETUC acknowledges the relevance of the Commission’s initiative, but also regrets the working method it adopted in this connection.

ETUC cannot agree to see the analysis of the problem being entrusted mainly to a group of experts who, though no doubt competent, whatever their knowledge do not belong to the world of the social partners. Bargaining is the ‘core business’ of the social partners in all the EU Member States. ETUC regrets that the social partners, the importance of whose role has been underlined by the Commission on several occasions, were not invited to present their vision of a European framework for cross-border collective bargaining before taking any other initiative.

ETUC also deplores UNICE’s opposition to this initiative, especially since the arguments it puts forward are inconsistent with the dynamics of the European social dialogue: In actual fact, UNICE refers to the fact that collective bargaining should be undertaken exclusively at national level without playing any role at cross-border level. Amongst other things, this stance denies the social consequences of company mobility as well as the reality of the creation of the internal market. It is also incompatible with the ambitions that autonomous European social dialogue ought to have, as demanded in Laeken in 2001.

On the other hand, ETUC believes that a framework of reference may be useful, though the criteria envisaged for its implementation and efficiency must be clear and precise.

In this respect, there are many problems that need to be raised in advance and thoroughly dealt with before the framework is implemented. These problems include the following:
validation standards for transnational agreements, their binding character, and extension thereof, which will necessitate an appropriate legal framework within the European standards system;
possible sanctions and means of recourse;
the Court of Justice’s specialisation in the field of labour law;
actions intended to deal with potential conflicts of interest during bargaining or the implementation of concluded agreements;
the question of the hierarchy of standards negotiated at cross-border level amongst the various contractual levels.

ETUC is now in a position to pinpoint several key aspects of this framework:

1.The first relates to the negotiating mandate and the right to sign transnational agreements. The power to do this must remain solely and strictly a trade union right, owing to their representativeness, long recognised by the Commission, which also specified as much in a text. Transnational agreements as such must be left up to collectively responsible and thus players with a mandate to represent their members. Trade union organisations are recognised to be representative due to the fact that they undertake collective representation, and this has legal ramifications. If this power were transferred to company level today, it would threaten to lead to the fragmentation of collective bargaining to the detriment of the unions. EWCs, which we stress were only given powers of information and consultation, are not appropriate bodies for negotiations given the current state of the legislation. Moreover, the powers of information and consultation are so weak that we are insisting they be improved via a review of the directive in question. In addition, introducing a possibility of cross-border bargaining must not be allowed to become a pretext for stepping up the current trend towards greater individualisation in company-level bargaining.

2.The second fundamental point resides in the response to be made to the fact that this new level must fit in the existing structure of collective agreements negotiated at various levels, but without changing or interfering with national powers and responsibilities. In our opinion, this level should add to and enrich the overall framework of negotiation available to the social partners at all levels.

3. As regards the third point, concluded agreements must not be allowed to adopt the lowest common denominator from clauses already negotiated in collective agreements or national legislation. Therefore, enforcement of the ’non-regression’ clause must be clearly specified: cross-border bargaining highlighted by the Commission cannot be allowed to weaken acquired rights and undermine the protection of the workers.

IV. Practical aspects of a trade union strategy to provide examples of good practices

National collective bargaining is increasingly taking place in a European context. What happens in one country is; increasingly being influenced by the collective agreements and government measures in place in other countries. Employers are already using this fact to turn up the pressure, referring to the practices stipulated in the collective agreements in key countries. In view of this situation, ETUC has pledged to develop its own information and communication strategy in a bid to prevent the circulation of false information and to enable the member organisations to define proactive strategies faced with national employers’ organisations and governments.

The aim is to provide all its members with authentic information as well as provide them with the texts of the most important agreements.

In order to implement this strategy, ETUC, in collaboration with polling organisations linked to the trade union movement, will publish and distribute a newsletter every two months that will describe the latest bargaining trends in the different countries. A page will also be created on the ETUC website containing old and recent statistics on collective bargaining.

Annex: The Coordination of Collective Bargaining in Europe :Annual Report for 2005