Social Dialogue including Health and Safety in Micro and Small

Companies

Jean-Michel MILLER

Research Manager - Eurofound / Dublin

Ljubljana, 5 June 20141

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EUROFOUND

EUROFOUND: European Foundation for the Improvement of Living and Working Conditions

Established in 1975 / Dublin Comparative socio-

economic research Tripartite European Agency Staff: 120 persons Budget: EUR 20.5m

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• “ …an EU-wide framework for occupational safety and health is and will remain crucial to establishing a level playing field on the Single Market for all firms — regardless of their size, location or sector of activity. This is especially true for small and medium-sized enterprises, which employ most of the EU’s active population.”

• László Andor Commissioner for Employment, Social Affairs and Inclusion speech: “Better working conditions for an inclusive growth” (Conference on working conditions Brussels, 28 April 2014)

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László Andor's reflection on 2.5 years in the Barroso II Commission

• “… Ensuring the health and safety of workers while doing more also for competitiveness will not be easy.

• But whilst acknowledging the importance of reducing the regulatory burden on SMEs, I warn against the simplistic view that would propose blind scrapping of legislation. One cannot play with the safety and health of workers. Moreover, as Europe's workforce shrinks and grows older, we need to extend working lives and increase productivity, and this will not happen without adequate protection of workplace health and safety. ..(p 32)

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Micro and Small Companies (MSCs) Important - heterogeneous group In 2011, and with view on the EU 28 non-financial business economy,

- 93% of all enterprises were micro companies, 7% were SMEs- 30% of all employees worked in micro companies, 38% in SMEs- 17% of the turnover was made by micro companies, 38% by SMEs

Micro and small companies contribute more to job creation, 2002-2010:- 85% of all new jobs created have been in SMEs- Between 2002 and 2010 nearly six out of ten jobs created by SMEs

came from micro companies- while employment in larger companies increased only by 0.5% on

average per year, the on average increase in micro and small enterprises was 1.3% and 1% respectively

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Social Dialogue in MSCs - Research Questions / Deliverables

What are the changes, “the update on regulations on social dialogue, including on health and safety and content of social dialogue”.• What is the practice of social dialogue in small and micro

companies in the EU?• Report:• - Literature review• - Update on regulation• - Case studies• Executive Summary

Literature review - Findings Research has addressed SMEs rather than micro and/or small

companies with less than 50 employees Topics addressed with view on SMEs:

- Performance of SMEs with view on aspects such as employment development, job creation, internationalisation, training, HR practice (DG ENTR)

- Restructuring, effects of the crisis (Eurofound)- OSH, working conditions (Eurofound, OSHA)- Training and skills development (DG EMPL, DG ENTR)- Workplace labour relations and working conditions (Eurofound)

What we don‘t know / gaps of research- Specificity of micro and small companies- Role of collective representation and organisation at local, regional and

sectoral/profession level- Driving factors of more formalised structures of social dialogue at

company level

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Some findings from the EWCS (2010)

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Some findings from the EWCS (2010)

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Spain

Table 4. % Employees who receive training or information on risk prevention

2011

%Yes %No

%Unknown %No response

Between 1 and 10 46.4 52.3 1.2 0.2

Betwen 11 and 49 63.8 34.9 1.2 0.1

Between 50 and 249 68.2 30.8 1 0.1

250 or more 72.9 26.4 0.5 0.1

Source: Own elaboration with figures extracted from the 7th National Survey on Working Conditions (2011)

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• Employee representation and influence on management decisions on OSH

Findings from the European Company Survey 2013:- 26% of small establishments had an official employee representation structure,

compared to 60% of medium-sized and 82% of larger enterprises.

- Nearly one third of employee reps in micro companies state that they have no influence on management decisions in the area of OSH!

- Employee representatives stating to have “some influence” on management decisions in small companies (56%) is higher than in medium and large ones (54% and 53%).

- But only 12.8% of employee reps in small companies felt that they have a “strong influence” on decisions, compared to 17% in large companies.

No influence Some influence Strong influence0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

Small companies (10-49 employees)Medium companies (50-249 employees)Large companies (250+ employees)

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What makes the difference?:Findings from a special evaluation of the IAB survey

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Questionnaire survey carried out between May and September 2013

to study current regulations governing social dialogue in all its forms in small and micro enterprises, including those on health and safety, structures (both formal and ad-hoc) and content of social dialogue, providing an update of a previous Eurofound review on the subject (e.g. on health and safety);

to describe major trends in social dialogue, OHS, training and wages in micro and small companies by means of a set of selected indicators;

to document initiatives and examples of good practice where social dialogue devised tailor-made solutions for small and micro companies tackling major structural problems in policy implementation, such as workers’ representation, and participation or health and safety.

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Regulatory frameworks and changes

Workplace representation

- General representation structures are present in both M-SCs in 22 MSs + NO, while in 5 only in small ones: trade unions representatives tend to prevail over elected ones. In many countries they carry out also OHS duties in MSCs. They are compulsory in small firms only in LU;

- OSH representatives (or committees) are compulsory in small firms in AT, DK (10 employees), FI, DE (20 employees). In BE only in some sectors (mining) and in RO if required by Labour Inspectorate;

- Regulatory changes are concentrated in MSs affected by severe macroeconomic adjustments: GR, CY (OSH) in more inclusive sense just before, while exclusion of micro firms in HU and RO are part of the adjustment package in restrictive sense;

- Territorial-level representatives is an increasing option in IT, NO for OSH and envisaged by social partners in FR.

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OSH as a topic of social dialogue in micro and small companies: tripartite

Tripartite initiatives at cross-sectoral level:

- Germany: 2013-2018 German Common Occupational Safety Strategy involving also work insurances addressing (GDA) initiative on musculoskeletal disorders (MSDs) in MSCs as part of 2013-2018 OSH strategy;

- Italy: partnerships on OSH certification between Inail (national work accidents insurance) and social partners

Tripartite initiatives at sectoral level:

- United Kingdom : CONIAC, tripartite committee in construction complementing resources from the sectoral skills council providing Construction Skills Certification Schemes (CSCS) and employers’ Construction Industry Training Board (CITB);

- Ireland: National Health Agency and Social partners’ Construction Safety Partnership initiatives such as SMP20 (toolkit for contractors) and various ‘safe system of work plans’ (SSWPs)

- Greece: tools for risk assessment developed jointly by ELINYE and social partners in car repair, hairdresser, bakeries, carpenter workshops, retail, butcher and business catering

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OSH as a topic of social dialogue in micro and small companies: bipartite

Bipartite initiatives:- Link with tripartite and/or public policies

• Denmark regular update in all sectors;• Netherlands arbo-catalogues used as reference standards by labour inspectorates

- Initiatives among social partners

• Luxembourg: SCIPRISC: coaching on OSH in construction;• Sweden: collaboration between bipartite OHS institute (Prevent) and bipartite work

insurance (AFA); initiative in local governments- Public institutions - employer initiatives

• Sweden: information website on welding established by IVL, a government-employers partenrship

• UK: “small trade associations forum” between employers and HSE

Distinctive feature: Sectoral level initiatives exploit social partners’ better knowledge of specific situation

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Social dialogue in micro and small companies: SBAs and training

Small Business Acts – three strategies:

- Unilateral approaches: UK (register of OHS consultants; Lofstedt report, -35% in regulations by reviewing sector-speficic regulatory consolidation; no inspection in low-medium risks), ES (simplified forms in MSCs), SI (implementation in MSCs as “soft laws”);

- Concerted simplification: MT (OSHA calls on SPs and WRs support), NO tripartite action;

- “neutral” transitions to ICT: AT, IE (BeSmart), SK.

Training and labour market management

- IT: specific interprofessional training funds for MSCs financingterritorial-level training plans

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Coverage of MSCs by social dialogue institutions and collective bargaining

SD coverage varies significantly between large/medium companies and MSCs in most EU countries.

Presence of collective bargaining, company agreements and representation structures increases with the size of the company.

MSCs less covered by SD instruments (e.g. in Western Germany just 10% workers in companies 5-50 employees covered by workers council vs. 44% average).

Clear divide between micro companies and small ones, where the situation is more favourable (e.g. , in Spain 32% employees in micro companies benefit from a collective bargaining structure vs. 58% in small companies).

Employee’s representation bodies more common in micro or small establishments belonging to a larger company or group (e.g. France).

Remarkable case of Denmark: in spite of following the general pattern, MSCs show relatively high figures of collective agreement coverage: 67% of companies 5-9 employees, 74% in 10-19 employees; 82% in 20-49 employees.

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Quality and contents of social dialogue and workers participation in MSCs

Difficult to determine general quality patterns concerning SD in MSCs. Both negative and positive assessments depending on countries.

Positive assessments:

- quality of the works council in micro companies (NL)

- possibilities of involvement and influence in companies (BE, FI)

- the smaller the company, the more open and confidential relations (FI)

- lack of formal structures can be compensated by direct dialogue

Negative assessments:

- Very low union density and reduced company membership in employers’ assoc. (PL)

- Minimal presence of and dialogue with TU (IT); Unions face worse conditions (CZ)

- Important number of companies operate ‘outside’ the participation model (NO)

MSCs contain simultaneously the best and the worst examples of social dialogue => Not possible to generalise

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Case studies: Objectives, rationale and selection criteria

Objectives and rationale- 10 practical examples and experience from five countries where social dialogue in micro

and small companies has worked well- illustrating the added value of social dialogue as well as describing national context factors- practical examples of implementation/adjustment of social dialogue frameworks to the

specific needs of micro and micro companies- Case study reports are based on interviews at company level as well as interviews with

national level social partners Selection criteria and selection process

- countries with different industrial relations models (BG, DE, DK, ES, IT);- sample includes countries with a high presence of small and micro firms and countries

with a comparative strong system of collective bargaining and social dialogue;- “new cases” a priority- selection of cases in consultation with national SPs, professional organisations, OSH

institutions- Selection process proved difficult and much more lengthy as expected for different

reasons, in particular for the micro company cases

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Elements of social dialogue in practice: Three major forms

Social dialogue as bilateral communication- Lack of formal structures; ad-hoc and depending on concrete needs- Employer driven

Social dialogue as information and consultation- Based on legal regulation of I&C or company solutions for continuous

information and consultation

Social dialogue as negotiation- Formal structures of information and consultation in place- Regular negotiation on pay and other issues

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Elements of social dialogue in practice: Main characteristics

Bilateral communication

- Micro companies in DE, IT and ES; small company in DE- No formal structures of employee representation (e.g. works councils) and ad-hoc provision of

resources- Main topics/content: working conditions, OSH, work organisation

Information and consultation

- Micro companies in BG and DK, small companies in BG, IT, ES- Formal structures of dialogue in place, including employee representation- Resources in accordance to legal requirements

Negotiation

- Small company in DK- Formal structures of I&C and formal negotiation rounds on pay and other issues related to working

conditions and work organisations- Resources available for employees go beyond I&C practice (consultation amongst employees,

external trade union support, training)

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Internal factors of influence for good practice social dialogue

General internal factors supporting social dialogue at company level

- Participatory approach of leadership and management applied by the owner/manager based on mutual respect and trust

- Employer/owner actively involved in local, regional and sectoral/professional networking

- Orientation towards a business model and competition strategy that is based on quality of products/services and not on competition on the basis of prices and costs

- Certain degree of employment stability and low staff fluctuation

- Work organisation based on team-functioning and high degree of autonomy and responsibility of individual workers

- Occupational safety and health as well as pay and working conditions at the upper level of sectoral/occupational standards

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Internal factors of influence for good practice social dialogue

Internal factors that characterise more structured and institutionalised practice of social dialogue

- Size, i.e. small companies are rather likely to be covered by regulatory requirements of I&C and OSH that foresee company-level structures and institutions

- Not only the employer but also employees are involved in local, regional and sectoral organisation and networking, in particular trade union organisations

- Openness of the employer towards the establishment of structures of interest representation and cooperation at company level

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External factors of influence for good practice social dialogue

Industrial relations and collective bargaining- National “culture” of social dialogue and representation by employer and trade union

organisations- Collective bargaining agreements at national as well as regional level both at sectoral and

cross-sectoral level Local, regional and sector-specific organisation and networking:

- Local and regional employers organisations such as craft guilds, industry employer organisations or networks of employers at various levels

- Territorial social dialogue and bipartite institutions in fields such as OSH, mutual insurance associations and general interest representation (e.g. craft chambers)

- Territorial, local and regional workers and trade union organisations, again both at sectoral and cross-sectoral level

Public authorities and governments- including tripartite initiatives, e.g. with view on OSH, CSR, work-life balance, further

training

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Key findings on trends and challenges Social dialogue and industrial relations

- Decreasing organizational strength of employers organisations at local and sectoral level- Local presence of trade union organisations is eroding, lack of capacities

Working conditions and OSH- Companies face increased competition, in particular from low cost competitors - The

‘high road’ is becoming narrower- Increased pressure on costs have a negative effect on employment and working conditions

as well as OSH standards EU level developments and deregulation

- Positive effects: I&C regulation, concrete outcomes of EU level social dialogue, OSH regulation and guidance

- Negative effects: Deregulation (craft sector), effects of common market, “softness“ of SD regulation

- OSH regulation: Lifting of regulatory frameworks for micro companies not regarded as a specific need

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Overall conclusions

What we already knew:- MSCs have received little attention by research on industrial

relations and working conditions, including OSH- Social dialogue in MSCs is shaped and influenced very much by

the peculiar character of the employer – employee relationship- In particular in micro companies social dialogue is mostly not

based on formalised structures- OSH practice in MSCs and in particular in micro companies is

characterised by a lack of awareness, resources and influence

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Overall conclusions

What we didn’t knew (or now know better):

- The differences between micro and small companies are significant

- The role of the employer is key - good practice in social dialogue is often resulting from a specific leadership approach and often linked to a specific business strategy

- Good practice is very much shaped by the national IR context of labour relations ‘culture’ which favour or obstruct social dialogue at company level

- Representation and availability of resources provided by local and regional resources (often at sector/professional level) is a crucial factor of influence, in particular for micro companies

- Consultation and negotiation practice at company level prerequisites not only solid involvement of the employer in representative structures but also strong employee representation within and outside the company

- The trend of decentralisation of IR and collective bargaining affects social dialogue in micro and small companies much more than in larger companies

- The influence of EU level policy and regulation is contradictory

- With view on OSH we found no evidence that existing regulation is regarded as unnecessary burden

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• Many thanks for your attention !

• Jean-Michel MILLER

• jmm@eurofound.europa.eu• www.eurofound.europa.eu