UEAPMEBackground Factsheet n°3

ENTER projectNational systems of social dialogue in the EU

15/10.03

National systems of social dialogue in the EU

Introduction

National systems of social dialogue in the Member States of the EU differ widely, ranging from an uncoordinated, decentralised, informal system (as in the UK), where agreements are made primarily at enterprise level, to the “Latin model” dominated by a statutory framework for tripartite concertation and limited social partners autonomy for bipartite negotiation. In between there is the “Nordic model” of minimum state intervention and a culture of consensus between social partners, and then there is the “Central European model”, characterised by strong autonomous bipartite cooperation. Finally, we have the “Benelux model”, which combines bipartite and tripartite negotiations, a statutory framework and central agreements.

Representation and “representativeness”
  • Employers, SMEs and craft organisations

The organisation of employers varies substantially between the Member States. At intersectoral level there is essentially a single umbrella organisation in DK, IRL, ES, D, SW and UK, which represents companies’, employers’ and business/trade interests, though accompanied by separate SME organisations in some cases. In F, BE, NL and IT, the organisations representing SMEs are independent from the organisations representing big industry but they work together in close cooperation. In other countries, e.g. D, there is a division between employer representation and business/trade interest representation. The trend, however, appears to be towards the unification of representation of both.

Sometimes organisations of larger enterprises offer membership to SMEs for a discounted membership fee as the greater their representativity, the better their public reputation, but do they really take into account the specificities of the needs of SMEs in their activities? Due to voting rights (often dependent on financial contributions) and other factors, SMEs often have little influence on the policies of these organisations. SME organisations themselves are often only active on a small scale at branch or regional level. So, very often there is only one powerful organisation for large enterprises and many small organisations for SMEs. This results in a weaker position for SME-organisations in political processes and the social dialogue.

  • Trade Unions

In the EU, four countries (A, D, IRL and UK) have the relatively simple situation of a single dominant trade union confederation. In BE, F, IT, LUX, NL, P and ES there are multiple competitive trade union confederations, divided mainly on political and religious grounds. In the Nordic countries there are separate confederations for different occupational groups (blue-collar, white-collar, professional/academic). In Greece the distinction is between private and public sectors.

  • Resources, funding, power & influence

Trade union membership is continuing to fall throughout the EU due to the decline in employment in traditionally high-unionisation manufacturing industry and the increase in atypical employment. Union density ranges from 87.5% in Denmark to 9.1% in France.

  • Recognition

Recognition as an “official” social partner can take place in either of two ways: through mutual recognition on all sides or through legal recognition by the government.

The propensity of SMEs to join business associations is lower than for their larger counterparts, due to their limited resources. At the same time, however, their limited resources mean that SMEs need more support from business associations in terms of both representation and service activities. Their willingness and ability therefore contrasts with their need to associate. Where special business associations are established for SMEs aside from the “principal” cross-sectoral business confederations, their participation in social dialogue is in some cases restricted by the requirement for formal “recognition” as a social partner. Conflict over access to the social dialogue is present in several countries.

Tripartite and bipartite social dialogue

A new approach to tripartite social dialogue is being developed at local, national and European level. Tripartite social concertation engages the actors in a process of “deliberation”. They must deliberate a much wider range of policy issues and take into consideration more alternative policy options. They must be prepared to assume a wider responsibility that goes far beyond the partial interests that are usually expressed through collective bargaining. They must explain and take responsibility for their decisions to each other, their members and the general public.

Bipartite processes are at the heart of industrial relations, relying on social partners’ initiative, autonomy and responsibility. The interplay between bipartite collective bargaining and social dialogue and tripartite consultation, concertation and pacts needs, however, to be reinforced and further explored.

Restructuring processes, innovation networks, protection of the environment, changing work and life conditions, also call for a decisive partnership with local authorities. The local dimension of development, job creation and competitiveness is therefore increasingly important.

At national level, several countries have established national social pacts in order to counteract decentralising tendencies in collective bargaining (see below). Where they exist, these pacts tend to have high political profile and mobilise directly and actively many actors at regional, local and enterprise levels. Most of these national social pacts have a broader scope than the traditional issues of collective bargaining, encompassing tax policy, social security and education policy, information society, demographic ageing, working time flexibility, career breaks etc.

Collective bargaining

Sectoral bargaining has been the dominant method of wage-setting in most Western European countries since the 1940s. It still prevails today, although it is rare that all bargaining occurs at one level only. Instead, most bargaining systems are characterised by multi-level negotiations.

Traditionally, the benefit of sectoral wage bargaining has been that it has provided a level playing field for employers at domestic level. It may create the basis for a “high quality” strategy with joint employer investment in training, research and a “good” industrial climate. The challenge for employers is to combine some coordination at higher levels to ensure long-term investment in quality, and sufficient flexibility on the ground.

Even if the sectoral level is dominant in many Member States, many forces are at work which promote decentralised bargaining at enterprise level. As it is based on long-running trends in international competition, regional development, technological and organisational change, individualisation and diversity in labour markets, it is expected that this trend will continue. This trend is more visible in sectors where big companies are predominant, whereas in sectors with many SMEs, multi-employer bargaining tends to remain dominant.

In general, decentralised bargaining makes it possible for individual firms, except very small firms, to find the pay levels, pay systems, working time arrangements, training schemes and other productivity-enhancing measures, which are most suited to the industrial relations specific conditions. Decentralised collective bargaining can facilitate adaptability to local labour market demand and supply conditions and may also give individual workers more choice in the reconciliation of their professional and private lives. It is likely to become more important the more heterogeneous firms become.

The coverage of collective bargaining – ie the proportion of workers who have their pay and working conditions set – varies greatly in the EU but is generally high, ranging from almost 100% in Belgium and Austria, to a little over a third in the UK.

SME position

In order to stay competitive and attractive as an employer, SMEs’ needs for flexibility and employees’ needs for security need to be balanced. Unlike big businesses, however, SMEs are unable to solve this “flexi-security” problem at company level. The specificities of SMEs must therefore be recognised in collective agreements, which is certainly often not the case today where inter-professional and sector agreements are dominated by big companies.

Trade Unions are often reluctant to negotiate separately with SME organisations because they do not want to damage their relationship with their traditional negotiating partner, the big industry, and because they do not clearly understand the needs of SMEs as Unions are hardly present in the SME sector. On the other hand, SMEs also ask themselves why they need to talk to the Trade Unions and are wary of social dialogue which they often understand as very formalised and rigid. Progress and efforts are required on both sides in order to better integrate the SME dimension.

Trade Unions and SMEs do, however, share many concerns, for example the need for more flexible forms of work, wage negotiations adapted to the productivity level, the reconciliation of work and family life and training - especially amongst disadvantaged groups. Experience has shown that where Trade Unions and SMEs have been able to work together to find flexible solutions to these problems at the right level, the results have been very successful and it is generally more fruitful for SMEs to negotiate with Trade Unions than with governments.

If solutions are not found for introducing formal flexibility into Europe’s labour markets, then the result will be more flexibility in the informal sector, which create distortions of competition particularly for SMEs on the local market. A social dialogue between Trade Unions and a better understanding of each other is therefore of common interest.

Sources

­EIRO: Industrial relations in the Member States and candidate countries, Luxembourg 2002

­EIRO: Industrial relations in the candidate countries

­UEAPME/ETUC report from final seminar of project “The social acquis and SMEs in the accession countries”, 05.04.2003

­Final report of Social Partners’ Bratislava conference March 2001: “Social Dialogue in the European Union Candidate Countries

­European Commission: Industrial Relations in Europe 2002

­Social Dialogue at National Level in the EU Accession Countries; ILO, Geneva 2003

­European Commission: Report of the high level group on industrial relations and change in the European Union, Luxembourg 2002

­Final conference of the UEAPME project “FUTURISME II”, Brussels, 2-3 October 2003.

­UEAPME Training and Information Seminar on Social Dialogue, Brussels 4-5 October 1999, presentation by Prof. Traxler, University of Vienna

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