ETUCcollective bargaining Coordination

Committee Recession salary employment in construction

EFBWW experience and position

Werner BuelenTel : 02/ 227.10.40 (ext.45)Email : wbuelen@efbh.be

Key figures of the building sector 85 – 95 % SME Highly labour intensive Strong sectoral collective bargaining Specific employment and labour

conditions Fragile (internal) employment market Complex production process Capital intensive

Wages negotiation principles for trade unions 1. Inflation and productivity

Regular wages increases is absolutely vital to ensure an building workers an adequate income and purchasing power. Periodical wages increases should at least (as a minimum) cover the increased living cost (inflation) and the added value created by workers (workers productivity).

2. Equal wages for equal workThe EFBWW and its affiliated originations in the construction industry firmly reconfirm that all workers doing the same job, should get paid equally, regardless the region of employment, the employment status, the gender, …No instruments allowing employers to breach or circumvent this fundamental principle is acceptable and should be dealt with the highest priority.

3. Safeguarding solidarity amongst workersSolidarity amongst workers is an essence of the constructions’ wage policy. The typical features of the construction industry confirm that building workers must ensure solidarity amongst themselves.As such the EFBWW strongly favours the creation of social (paritarian) social funds as a efficient instruction of solidarity between active and inactive workers, skilled and non skilled workers, younger and older workers, … Through social funds workers have a guarantee of support/assistance that they are not abandoned on case of distress or difficulties, such as temporary unemployment, periods of incapacity, reduced professional skills, ....

Financial crisis

Causes are well known by all Financial crises has become an economic

crises Vulnerable economies are first victims (UK,

Ireland, Spain, Hungary, Baltic countries, …) The whole construction will be affected,

with a loss of 2 mio jobs over 2 years (2009-2010)

General overall trends in the EU construction industry Construction business climate is currently deteriorating (2009 -

…)Banks are applying more stringent criteria for access to credit.

Many companies are now facing credit shortage and/or stricter credit terms.

The financial crisis has made it even more difficult for less well-off buyers to purchase their first home.

Companies are restructuring (downsizing) TRADE UNION ARE STILL ABLE TO RESIST WAGE REDUCTIONS

(NOT MODERATIONS) – STRONG EMPLOYERS PRESSURE RE-OPENING OF THE RETIREMENT AGE INCREASED FLEXIBILITY UNEMPLOYMENT IS ABSORBED BY TEMPORARY SCHEMES (cost) Pension funds:

General shift from DB to DC schemes No inflation Premium increase

Actual state of the art (a few examples) In the Netherlands the demand for new houses has effectively

collapsed since summer 2008, negatively impacting both developers and manufacturers.Since 2008 the construction sector is facing a liquidity squeeze, due to falling demand and the unwillingness of banks to finance the additional working capital needed, affecting both suppliers and subcontractors.Due to the financial crisis companies selling products into the construction sector have changed their strategy. Building companies are ensuring that they build on behalf of third parties and not for their own account, as such they refuse to take any financial risks. In addition the contractual terms of payment haven been strengthened : no permit extensions, no further shipments while earlier ones remain unpaid, …In 2009, once construction companies have completed current and agreed projects, the overcapacity and lack of new orders in the industry will become evident. The summer will be the crunch time: if, by then, the economic situation has not improved and government support has not been announced, we expect a substantial increase in insolvencies in the second half of the year.

Actual state of the art (a few examples) In Spain the demand for homebuilding dropped sharply in 2008 as a

result of financial crises, increasing unemployment and uncertainty about future price developments. New public works projects also fell by 20%. In view of the high borrowing of many buildings, the poor outlook for the industry and the fear of asset devaluation, banks have tightened the volumes and conditions of both corporate and consumer lending.The crisis in the Spanish construction industry has led to a very strong increase in payment defaults and insolvency in Spain. While the number of insolvency procedures increased by more than 300% in 2008, 36% of all those cases related to the construction industry, and also affected major stock-quoted companies.The companies acting predominantly in the public works sector to be less vulnerable, as these enterprises will benefit from measures being taken by the government during 2009 and should also be less affected by asset devaluation.The outlook for the whole Spanish construction industry remains negative, especially for the homebuilding sub-sector. There is still a high stock of houses, while demand remains very low. A further increase in insolvencies is expected in 2010.

European social dialogue for the construction industry

Some background information (oral)

EFBWW-FIEC Declaration on the global economic crisis and its consequences for the European construction industry of 30th June 2009

1. Stepping up public investment in public and infrastructure projects

2. Acting quickly to channel public investment into sustainable construction

3. Provide incentives for buying and renovating housing4. Guaranteeing access to mortgages for buying or renovating

housing5. Access to mortgages for buying or renovating "starter

homes“6. The provision of “social housing” for rent or sale to by the

less well-off needs to be substantially increased7. Efficient use of all investment resources for the construction

sector8. Set up temporary unemployment schemes9. Towards a stable, sustainable and transparent financial

system

EFBWW policy recommendations: Invest in our streets and not in wall street

Concrete EU-initiatives

Strengthening employability, vocational training, R&D, green jobs (Climate Change friendly production)

Safeguarding wages principles (inflation and productivity, equal wages for equal work, solidarity amongst workers)

The financial crisis must not be regarded as a pretext for pushing through a "secret agenda"

The EFBWW is appalled to note that some employers and employers' representatives in the construction sector are using the financial crisis as a pretext for pushing through a (hidden) agenda. They are arguing loudly for such measures as:

1. deregulation in the construction sector and this while the financial crisis is clearly caused by excessive deregulation;

2. cuts in workers' wages which would then not even keep pace with inflation;3. dismantling of social charges which is totally out of step with the financial crisis and

adversely affects social protection;4. relaxation of procedures for dismissing workers;5. financial support without being linked to employment guarantees;6. …

ETUC campaign for an EU minimum wage:Illusion or reality ?

Overview of EFBWW internal discussion:1. General support, but some strong opposition2. The determination of wages in the construction is inherently

connected to the national/regional, historical and political situation in each Member State.

3. Many technical and political difficulties4. Immediate focus on practical achievable topics such as :

Travelling expenses allowances for daily commuting Working time/flexibility

EFBWW policy recommendation:

Public investment policy is based on a optimistic short term vision

Temporary unemployment schemes are costly

Lack of money flow will become “serious”

Trade unions are not optimistic

The future ?

Thank you

QUESTIONS AND/ORREMARKS ?