Impact of crisis on industrial Impact of crisis on industrial relations and working conditions- relations and working conditions-

wageswagesStavroula Demetriades,

Head of Unit,

Industrial relations and workplace developments

It started with UK bank Northern rock..It started with UK bank Northern rock..

Negotiations at European levelNegotiations at European level

• After a period of consensus, tensions grew• Absence of a joint text at cross-sector level between SP• Joint initiatives in 7 sectors – financial support,

investment in training and qualifications• Common strategy among 3 federations (Metal, Chemical• and Textile)

National levelNational level

• Few agreements but important involvement of SPs in design and implementation of government anti-crisis packages

• Successful conclusions of bi/tripartite agreements, despite tensions with governments in 10 countries (NL, BE, PL, EST, LV, FR, LT, CZ, BG, SK)

• Success of social dialogue alternating between opposition, tension and occasionally deadlock in 8 countries (ES, FIN, GR, IE, LU, SI, HU, I)

• No official collective agreements but successful support to government programmes (A, CY, DK, DE, MLT, PT, RO)

• Most conflicts related to public sector and government decisions

Sectoral levelSectoral level

• Where sectoral collective bargaining occurred it took two forms:

Negotiating over employment issues related to the crisis

Traditional CB over wages and working conditions

MultinationalsMultinationals• EWC, very few agreements• Difficulties of information and consultation procedures• EMF-ArcelorMittal, General Motors-EWC; Unicredit

(banking) on training, professional development, strategies for managing restructuring, EO, improve working conditions (2008,9)

• International Framework Agreements: UNI global union and Danske Bank (2008) set the framework for implementation of group-wide human relations policies (work-life balance, employee involvement HR practices across countries)

What did the social partners agree about?What did the social partners agree about?

• Agreements to avoid redundancies: Key instrument negotiated in 13 countries: introduction and/or

extension of STW Development of skills and qualifications Short term cost saving devices Wage flexibility

• and/or agreement to mitigate the effects of redundancies Severance payments Support to improve purchasing power Support measures such as job to job transition

More concretely.. Banking globallyMore concretely.. Banking globally

• Financially crisis concentrated in USA, EU• Brazil, China and Japan not hit but had to address the

impacts of the global downturn in the real economy• Cost saving measures to reduce labour costs by means of

wage moderation or wage reduction; more flexible labour force and higher labour productivity through changes in work organisation and work intensification

• Wages: reduction of variable wages and reduced wage increases for senior officials outside the scope of CA (D, UK)

Banking sectorBanking sector

• Work organisation, working time: higher use of off-shoring (i.e RBS, Lloyds) increasingly affecting jobs with higher skills content; British banking workers accepting opt-out from EU working time Directive

• Higher use of flexible temporary contracts (IT); strengthening of flexibilisation practices (ABNAmro-NL); Sabbaticals for 1/3 of salaries (BBS-SP)

Social dialogue in the banking sectorSocial dialogue in the banking sector

Shared diagnosis & innovative practices (Credit Agricole Asset Mng and Credit Lyonnais Asset Management

Social plans (ABNAmro) Job protection in Japan Coordinate employee response in Brazil

Working conditionsWorking conditions

Career & employment

Quality of work & employment Skills development

Reconciliation of working & nonWorking life

Health &Well being

Developments in working conditions in 2010 Developments in working conditions in 2010

• National reports show uneven developments (some stable some worsening w.c.): Permanent full time: Decreased (DK, FI, GR, IE, LT, MT,N, SK,

ES). Increased (D +1%), Stable (H) Temporary work: Increased (D, NL, LT), Decreased (SP, BG) Part time: Increase (BG, GR, NL, SK), Decrease (LT) Undeclared work increased: BG, GR, SI Job insecurity: UK, IE, SI, FI Young unemployment (rise in young temporary workers in

Austria, Belgium, the Czech Republic, Latvia, Luxembourg, Hungary and the UK)

Young workersYoung workers

• young workers are often subject to more flexible and less secure employment conditions, including a comparatively high share of fixed-term contracts and temporary agency work

• serious consequences for personal development as well as social cohesion.

• negative impact on individuals throughout their adult life (reduced life earnings, unemployment, precarious work, poor health, postponing starting a family as well as weak engagement with civil society

Developments in working conditionsDevelopments in working conditions• Changes in work organisation > work intensity (AT, D, NL, RO,).

Often, sector related• Stress reported as a main health risk (B, UK, L, NL, SE)• Measures to improve health & safety at work

French government 4y plan Hungary: new legislation to oblige micro companies to introduce

yearly health tests Bulgaria: enforcing inspections in small enterprises Latvia: Employers’ Association introduced an electronic work

environment risk assessment system; manual for young employers Portugal: 4th Nat plan for equality, citizenship, gender and non-

discrimination 2011-13 (gender violence, sexual, moral harassment at workplace)

2.2%

1.0%

1.8%2.2%

2.1%1.8%

1.0%

3.1%

2.4%

1.6%

2.4%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%S

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2009 2010

Source: EIRO; different collective agreements databases; weighted and non-weighted averages of collectively agreed pay increases as reported by the various sources.

““Average” collectively agreed pay increasesAverage” collectively agreed pay increases

Major trendsMajor trends

General• Decreases in rates of collectively agreed pay• Prolongation of periods of validity of agreements

Sectoral level• Public sector: decline of pay increases, non-renewal of

agreements, pay freezes or pay cuts• Metal: decline of pay increases• Banking: decline of pay increases

Some interesting crisis related developmentsSome interesting crisis related developmentsNational level• BE: no pay increase, but eco-cheques (250 euros p.p.)• IT: The inter-confederal agreement regarding the reform of the bargaining system (22 January

2009) foresees an “equalizing economic element” to be applied in companies where decentralized bargaining (at company or regional level) does not take place.

• ES: Agreement for employment and collective bargaining 2010-2012: introduction of a moderate growth policy of wages: 1% for 2010 are supplemented with a wage review clause and a non-application or opt-out clause

Minimum wage• PL: 2010 government disregarded the Tripartite Commission’s decision regarding raise of

minimum wage to the level of PLN 1386, whereas the social partners had agreed on the increase to PLN 1408.

• EE: no increase of minimum wage since 2008• IE: Minimum wage cut by €1 per hour to €7.65 from February 1, 2011 as part of

Government's four year economic recovery plan

                                                                                                                                                      

                                                                                                                                                            

                                                                                                                                                            

                                                                                                                                                            

Source: European Commission Forecast-spring 2011

As a conclusion..As a conclusion..

• Europe’s SD systems have weathered the storm though not without problems or major disputes.... Variation across countries: Strengthening of SD (eg AT, BE) Weakening (eg ES, IE, GR)

• SD was most effective in MS where higher-level CB is predominant, sets the framework for company agreements

• Accelerated trend of decentralisation• Wages affected and certain aspects of working conditions• Governments’ role pivotal, unilateralism

What future for Europe?What future for Europe?

• Near-death experience• Economies saved but at what cost..• An economic crisis only? Moral as well? Fundamental

changes • Pursuit of non- regulated self-interest, leads to societal

well being?

What future for Europe?What future for Europe?

• Support SD at all levels, particularly EU, to secure meaningful jobs decent work, less inequality, respect for the natural resources,..

• The rules of the game have changed globally

MORE RESEARCH IN 2012!

Thank you!Thank you!