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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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Since the 1990s the union had established a substantial presence despite very unfavourable circumstances and considerable conflict in a company with a notorious record of anti-union behaviour (Dribbusch 2003, 145; Bormann 2007). In Mai 2009 the company announced a restructuring of the organisation. It planned to concentrate business in a new format of comparatively large stores – the so-called Schlecker XL and to close many of its small outlets. The new stores would be established as a new legal entity thus avoiding the collective agreements concluded with ver.di. Furthermore, employees from Schlecker outlets that were closing down could only be transferred if they accepted employment in a Schlecker-owned temporary work agency which would hire them out to Schlecker XL. Pay levels would almost be halved. This caused a public outcry when plans were revealed by ver.di and consequently the union campaign immediately received exceptional media coverage. Even the Ministry of Labour felt forced to denounce the company’s blunt approach. Nevertheless it finally took a year of extensive campaigning before the company gave in during June 2010 and signed a new package of agreements - thereby for the first time recognising the sectoral agreements for the retail industry. The key to the success was that local organisations of ver.di successfully managed to mount public pressure by way of a large variety of actions which were often based on a broad coalition of employees and external supporters.

Limits of a re-stabilisation from below

The vice chair of IG Metall, Detlef Wetzel, who in 2007 established the first organising and campaigning department in IG Metall emphasises that: ‘The days of Rhenish Capitalism with its social compromise which was so long instrumental for us, are over, and they will not return either.’ [our translation] (Wetzel 2009, 352). This does not mean that he is against any cooperation with employers – quite the contrary – but he insists that this must be built on organisational strength at the workplace in order to avoid situations of sheer subordination. However, although the DGB-affiliates have WSI-Diskussionspapier 171 Seite 26 realised that their bargaining strength is challenged in a large range of industries they have not yet managed to turn the tide in membership development. Furthermore, it is easier for unions to stabilise or strengthen their organisational base in establishments and industries where there is already at least some kind of union presence to build on. It is much more difficult and time consuming to establish a presence in green-field sites and sectors with only marginal union structures and traditions. This, however, is the situation where bargaining coverage is at its weakest - that is in many trade and craft sectors and in most of the private service industries. Given their limited resources and the structural difficulties of organising these industries, it must be assumed that unions cannot stabilise the bargaining system on their own. This requires political and parliamentary efforts which materialise in institutional securities - that is ‘stabilisation from above’.

4.2. Re-Stabilisation from above

A high level of collective bargaining coverage which is enforced primarily by the organisational power of trade unions requires a level of union density comparable to Scandinavia which for the foreseeable future is not very likely to be the case in Germany. The unions therefore have to look for alternative strategies which primarily address the state and politicise the conflict of the future of the German collective bargaining system while aiming a ‘re-stabilisation from above’.

Considering the particularly low bargaining coverage in the low-wage sectors the unions have started to campaign for the introduction of a statutory minimum wage (Bispinck and Schulten 2008). Although this campaign has not succeeded yet, the idea of a statutory minimum wage has gained broad support among the German public and continues to be on the political agenda. It has also contributed to the introduction of collectively-agreed minimum wages in around 10 sectors which were extended on the basis of the German Posted Workers law.

Statutory minimum wages can set a wage floor which in some sectors might be a basis for a re-introduction of collective bargaining. Considering the experiences of many other European countries, however, the core instruments to support a high level of bargaining coverage are efficient extension provisions. Without a reform of WSI-Diskussionspapier 171 Seite 27 the rather restrictive German extension practice a u-turn in the development of the bargaining coverage is far from being possible.

Currently, the biggest obstacle for a more frequent use of extension provisions is the position of the German peak employers association BDA, which has often used its veto power within the Collective Bargaining Committee at the Ministry of Labour and has blocked the extension, sometimes even against the position of their own sectoral member organisations. For the BDA the extension of collective agreements is a problematic offence against the principle of free collective bargaining and, therefore, can be supported only in exceptional cases (BDA 2009). As the BDA has also blocked the extension of sectoral minimum wages in construction and other industries, the German government changed the Posted Workers law so that the final decision on the extension of sectoral minimum wages was no longer through the Collective Bargaining Committee but the Ministry (Dombre 2007). However, the procedure used to introduce - in special cases - the extension of sectoral minimum wages could also be used for the general extension of collective agreements as a way to circumvent the employers’ veto power.

A more fundamental reform of the extension provisions in Germany would have to make possible that as, for example, in the Netherlands a majority of sectoral agreement can be declared as generally binding (Zachert 2003, 2004). The experiences of the Netherlands confirm the positive results of a more frequent use of extensions in order to stabilise the collective bargaining system and to create a level playing field on wages and working conditions. The latter is also recognised by the Dutch employers - a great majority of whom supports the principle of extension (Heijnen and van Rij 2003).

5. Prospects

The experiences of many European countries have shown that the erosion of collective bargaining is not an inevitable process but that politics matter. Much depends on trade unions and whether they manage not only to stabilise their existent power bases but to build new bargaining strength in the expanding service sector and in newly emerging industries. The strengthening of organisational power is necessary but it would be unrealistic to assume that this alone will be sufficient. To secure a WSI-Diskussionspapier 171 Seite 28 comprehensive bargaining coverage requires an institutional stabilisation through the state via the use of extension provisions or functional equivalents.

A re-stabilisation of German collective bargaining through a fundamental reform of extension provisions, however, would be heavily contested. It would need strong political actors to push for it and the question arises how German unions can win the political and parliamentary support necessary. The success of the campaign for a statutory minimum wage gives some hints.

The DGB-unions won the overwhelming public support for a national minimum because they managed to successfully intervene in the public discourse. The campaign addressed a broad sense of injustice with regard to income disparities. The fear of a general social decline and a concern about the negative consequences of a growing social inequality is shared far beyond traditional union constituencies. The minimum wage, therefore, became a fundamental question of social justice. The public outcry when Schlecker tried to circumvent collectively agreed retail wages by way of transferring employees to a company owned agency company points in a similar direction.

The public solidarity the Schlecker employees received in their campaign shows that unions can succeed, even if their organisational power is limited, when their demands hit a nerve in the predominant societal discourse. In this sense union strategies for a re-stabilisation of the bargaining system ‘from below’ and campaigns in favour a re-stabilisation ‘from above’ are not mutually exclusive but complementary.


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