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«German Collective Bargaining in a European Perspective Continuous Erosion or Re-Stabilisation of MultiEmployer Agreements? Reinhard Bispinck, Heiner ...»

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Levels of collective bargaining As in Germany sector-wide bargaining is still the dominant form of collective bargaining in most of the countries from northern, western and southern Europe (Schulten 2005, Carley 2008; Table 1). The major exception here is the UK where since the 1980s the company has become the dominant bargaining level. In contrast to that most central and eastern European countries have predominately company bargaining with the exception of Slovenia which has established a sector-level bargaining system (Kohl 2009).

There is a close correlation between the degree of centralisation in collective bargaining and the bargaining coverage. In all countries with a sector-wide multiemployer bargaining system a majority of employees is covered by collective agreements, while in countries with a dominance of company bargaining it is only a minority. In more decentralised bargaining systems the bargaining coverage depends much more on the unions’ organisational power. Usually, only those companies have collective agreements, which have a strong trade union representation at shop floor level. In more centralised bargaining systems the relation between bargaining coverage and union power is somewhat decoupled as trade unions can use highly organWSI-Diskussionspapier 171 Seite 19 ised companies to push fro an agreement which later also becomes valid for companies with a weaker union representation.

Although many European countries have been faced with a trend towards decentralisation of collective bargaining since the 1990s, in contrast to Germany this development has usually not led to a decline in the bargaining coverage. One major reason for this is the fact that decentralisation took place mainly in an ‘organised’ or ‘controlled’ form and remained embedded within a two-level bargaining system of sectoral and company bargaining (Stokke 2008). Moreover, most other European countries have a so-called ‘monistic’ system of representation with a trade union bargaining monopoly at sectoral and at company level. This allows unions to act within a two-level bargaining system without losing their bargaining power (Ilsøe u.a. 2007).

In contrast to that, in Germany with its so-called ‘dual’ system of representation the decentralisation of collective bargaining often strengthens the bargaining role of the

works council. Since the latter is not a union body, decentralisation has led to a significant weakening of unions’ bargaining power and was not able to contribute to stabilising the overall bargaining system (Bispinck and Schulten 2010):

Political support for collective bargaining

In most European countries the collective bargaining system is seen as a core institution of the national social and economic model. While collective bargaining is based on autonomous self-regulation between employers and trade unions, it is the role of the state to guarantee the legal and political functioning of the bargaining system.

However, there are great differences in the form and intensity of how the state directly or indirectly influences collective bargaining.

An important indirect form of support for the collective bargaining system is the legal privileging of certain organisations. On the employees’ side, in particular, most European countries gave the exclusive right of bargaining to trade unions (Schulten 2005). In addition to that, many European states provide specific institutions which support the bargaining parties. A prominent example can be found in the Scandinavian states where the unions are allowed to manage the unemployment funds. This gives employees a strong incentive to become union members. On the employers’ side the most prominent example is Austria where the obligatory membership of WSI-Diskussionspapier 171 Seite 20 companies within the Austrian Economic Chamber guarantees an extremely high employer density.

A more direct form of political support is the extension of collective agreements to parties not involved in collective bargaining (Traxler and Behrens 2002, Stokke 2010). On the employees’ side many European states have a so-called erga omnes regulation, according to which in those companies covered by an agreement, the agreements are automatically valid for all employees regardless of whether they are union members or not (Table 1). Moreover, in countries such as Germany, where the legal coverage of collective agreements is restricted to union members, in practice the companies usually provide the same conditions for all employees.

On the employers’ side, most countries allow sectoral collective agreements to be extended also to companies which are not members of the signing employers’ association by declaring an agreement as generally binding (Table 1). There are only five countries within the EU (Denmark, Sweden, Malta, Cyprus and the UK) where such extension provisions do not exist. In two countries (Ireland and Italy) there are functional equivalents as the labour courts can de facto contribute to an extension of agreements. In Austria there is the legal possibility of extension, but because of the high density of employers’ associations there is only little scope for it to be used.

The remaining 18 EU member states can be divided into two groups of countries which use the extension provisions rather frequently or rather rarely. Among the countries with the legal possibility of extension but who make little use of it in practice are most of the central and eastern European countries, although more recently the instrument has gained somewhat more importance in the Czech Republic and in Slovakia (Kohl 2009). As discussed above Germany also belongs to that group - with extension provisions being rarely used.

Among the countries where the use of extension provisions is of high importance are Belgium, Finland and the Netherlands as well as the southern European countries France, Spain, Portugal, Greece and Romania. In France more than 1,000 collective agreements were declared as generally binding in 2008 which accounted for around 90% of all newly concluded agreements (Ministère du Travail 2009). In Finland there are about 150 extended sectoral agreements which correspond to 80% of all agreements at sectoral level. In the Netherlands the extension was used for about 70% of all sectoral agreements (SER 2007).

WSI-Diskussionspapier 171 Seite 21 Table 1: Extension of collective agreements

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By using the extension provisions, the coverage of a collective agreement is usually extended to all companies within a certain sector. In addition to that, some countries such as France or Spain even have the possibility to enlarge collective agreements WSI-Diskussionspapier 171 Seite 22 to sectors which have no agreement at all (Rebhahn 2002). To sum up, the broad use of extension provisions is in many European countries a major instrument to support the collective bargaining system and to provide a high bargaining coverage even when the union density is rather low. At the same it gives an important incentive for employers to organise as the employer density is particularly high in countries with a more frequent use of extension provisions (Traxler 2004).

4. Re-Stabilisation of the bargaining system The erosion of the collective bargaining system is not an inevitable process - as the developments in other European countries show. This requires political intervention in favour of a re-stabilisation of the bargaining system. We distinguish two necessary approaches. The first is a ‘re-stabilisation from below’ which aims at strengthening union power in order to defend existing bargaining coverage, to re-establish such a coverage where it has been lost and to win new agreements where collective bargaining does not exist. The second is what we call a ‘re-stabilisation from above’. It focuses on the institutional strengthening of sectoral collective bargaining.

4.1. Re-Stabilisation from below Against the background of diminishing political and bargaining power, German unions have started to discuss and develop new political strategies which aim at a revitalisation of the union movement. Two strategic approaches in particular are under discussion within the union movement generally, and in IG Metall and ver.di in particular (Urban 2005).

The first has a kind of ‘back-to-the-roots’ attitude and wants to concentrate the union activities on the ‘core businesses’, i.e. collective bargaining and workers interest representation at company level. Its basic assumption is that unions will only overcome their crisis if they regain strength at company level. In contrast to that, the second approach wants to strengthen the union voice in the overall political arena by promoting social movement unionism and seeking new alliances with other social movements (Uellenberg 2009, Urban2010). Both approaches do not necessarily compete with each other but could form complementary parts of a comprehensive strategy.

WSI-Diskussionspapier 171 Seite 23

Defending collective bargaining

As decentralization went on, the union have been forced to develop a new balance between sector-related bargaining and company-related implementation of openingclauses and the like. To defend the collectively agreed standards and to regain grounds regarding bargaining coverage the IG Metall launched a campaign for ‘active collective bargaining’ (“Tarif – aktiv!”) (Wetzel 2007). Combined with organising activities to increase membership levels it was about mobilising members and activists with the aim to monitor closely that agreed wage increases were effectively implemented. Where employers withdrew from agreements the goal was to regain coverage. The union reported some success in cases of company-oriented bargaining conflicts about possible deviations from the sector-agreement, but up to now it is far from being a comprehensive campaign.

Since 2005 ver.di, IG Metall and the building workers union IG BAU have also picked up elements of Anglo-Saxon campaigning and organising models (Bremme et al.

2007; Wetzel 2009). IG Metall launched a number of trans-sectoral campaigns with a strong emphasis on strengthening the union at the workplace by involving and mobilising members. These new approaches are not undisputed in the union. One campaign labelled ‘better instead of cheaper’ (Besser statt billiger) focuses on innovation and demands prior expert counselling on alternatives if companies want to implement cost-cutting programmes and make use of opening clauses to deviate from collective agreements. Critics see a potential danger that this furthers the erosion of sectoral collective agreements whereas the defenders of the campaign argue that deviations take place anyway and that is better to deal with them openly and combined with a mobilising strategy than under the table and in back-room negotiations. The union reports rising union density in establishments where mobilising concepts have been followed (Huber et al. 2006). Case studies show that these and similar approaches can be instrumental in controlling the erosion of the bargaining system but that they are not applicable everywhere as to be effective they require a certain level of organising density and bargaining strength (Haipeter 2010).

Rebuilding this bargaining strength is the aim of an organising drive of IG Metall in the automotive trades, notably in car repair and service. In 2008, the union representting this trade, which is characterised by a great number of small and medium-sized WSI-Diskussionspapier 171 Seite 24 enterprises, was faced with a challenge: employers in North-Rhine Westphalia, the largest federal state in Germany and an important bargaining region, completely withdrew from the sectoral agreement and sought cooperation with the CGB. In a first step - partly by way of industrial action- IG Metall managed to secure the old standards by way of company level agreements. The middle range strategy of IG Metall is now to rebuild the union presence by way of establishing works councils where there are not any and to increase union density in the trade with the ultimate aim of re-establishing a sectoral agreement.

In 2010 the union started a campaign to organise employees in the fast growing ‘green’ economy - notably in the wind turbine industry, where both union presence and bargaining coverage are scarce. Bargaining is largely restricted to some companies which have their origins in traditional metal manufacturing, whereas new entrants in the market abstain, or are hostile to, collective bargaining. It is too early to tell whether the union will finally manage to win a sectoral agreement. In some sectors IG Metall and the chemicals workers’ union IG BCE will have to settle disputes over organising territories.

Mobilising for collective bargaining in the service sector

Mobilising members and workers with the aim of strengthening union’s bargaining power has also been a major element in a partly revised bargaining strategy of the United Services Union, ver.di since 2006. This has included an extended involvement of members in industrial action, and a closer consultation of the rank and file on collective bargaining results. An important part of it is a ‘fight-back strategy’ towards employers who want to withdraw from existing agreements or avoid collective bargaining (Dribbusch 2009). However, the fact that the annual number of industrial disputes ver.di was engaged in quadrupled within five years from 36 in 2004 to 163 in 2009 reflects not only a greater militancy of the union but is also an indicator for an increasing aggressiveness of employers (Dribbusch 2010).

Coalition building

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small workplaces and a shop-by-shop approach is often hardly feasible. The union therefore combines its organising and bargaining strategy with public campaigns aimed at winning the sympathy of customers and the wider public. A successful example of mobilising not only employees, but also the wider public, was the campaign to secure bargaining coverage at the leading drugstore discount chain Schlecker.

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