guidelines on coordination of collective bargaining european trade union institute 1 guidelines on...
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Guidelines on Coordination of collective bargainingEuropean Trade Union Institute 1
Guidelines on Coordination of Guidelines on Coordination of Collective BargainingCollective BargainingGuidelines on Coordination of Guidelines on Coordination of Collective BargainingCollective Bargaining
Presentation
European Trade Union Institute
Sesimbra January 2003
Guidelines on Coordination of collective bargainingEuropean Trade Union Institute 2
Presentation of the discussionPresentation of the discussionPresentation of the discussionPresentation of the discussion
Fundamental objectives of coordination
Coordination guidelines, general concept
Proposed guideline
Determinants and use of the guideline
Situation in other experiences
Ways of implementation
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Fundamental objectives of Fundamental objectives of coordinationcoordination
Fundamental objectives of Fundamental objectives of coordinationcoordination
1. To have a general indication on wage bargaining which comes from trade unions at the European level in order to respond to the existing guidelines coming from the Commission (Broad Economic Policy Guidelines) and the European Central Bank.
2. To avoid social and wage dumping and wage differentiation in the Euro-zone, as this could lead to a deterioration of the social climate and could delay the social convergence of the Member States.
3. To coordinate wage claims in the Single Currency area where pay is now easily comparable and also to encourage an upwards convergence of salary levels in Europe.
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Coordination guidelines, general Coordination guidelines, general conceptsconcepts
Coordination guidelines, general Coordination guidelines, general conceptsconcepts
The guideline can be applied a posteriori, i.e. after the conclusion of collective agreements in the various European countries.
It does not change national practices, but it provides a benchmark which can be taken into account during negotiations at national level or lower.
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Coordination guidelines, general Coordination guidelines, general conceptconcept
Coordination guidelines, general Coordination guidelines, general conceptconcept
broader concept of coordination trade-off between wage evolution and other more qualitative
aspect of work Qualitative elements of the agreement are difficult to evaluate
in terms of cost. Quantifiable elements should be taken into account (working time reduction, training, early retirement, equal pay).
inflation wage increase(at least above inflation and withas much productivity as possible
.…)productivity
other determinants
improvement ofqualitative aspects of work
(especially where quantifiable andcalculable in terms of costs)
total labour costs
=
total valueof the agreement
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If in a given country the rise in total wage costs does not correspond to the inflation/productivity sum, it should be able to counterbalance its position through achieving qualitative objectives.
Guidelines in qualitative aspects are necessary. These could propose:
the reduction of working time (35-hour a week), a certain number of training hours, pensions convergence, raising women's wages to reach the levels of men's wages through applying a ratio.
Or a convergence towards the levels achieved by the best performing countries in each area (benchmarking).
Coordination guidelines, general Coordination guidelines, general conceptconcept
Coordination guidelines, general Coordination guidelines, general conceptconcept
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Proposed guideline: the determinantsProposed guideline: the determinantsProposed guideline: the determinantsProposed guideline: the determinants
Inflation: Harmonised Index of Consumer Prices (HICPs, preferably to National Consumer Index)
Productivity: national average productivity (defined as GDP/head or preferably GDP/hour worked)
Other determinants: according to the national practice (convergence towards EU average, redistribution…)
inflation wage increase(at least above inflation and withas much productivity as possible
.…)productivity
other determinants
improvement ofqualitative aspects of work
(especially where quantifiable andcalculable in terms of costs)
total labour costs
=
total valueof the agreement
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Determinants of the guideline - inflationDeterminants of the guideline - inflationDeterminants of the guideline - inflationDeterminants of the guideline - inflation
Inflation:Inflation: HICPs should be preferred.
European single rate is impossible to be implemented: still too many differences between EU countries
National rates might be used because neither wages nor workers should be used to reduce the differentials in inflation rates. Furthermore, it is not clear that full convergence of inflation rates amongst member states will be achieved in the near future, despite the single currency.
inflation wage increase(at least above inflation and withas much productivity as possible
.…)productivity
other determinants
improvement ofqualitative aspects of work
(especially where quantifiable andcalculable in terms of costs)
total labour costs
=
total valueof the agreement
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Determinants of the guideline - productivityDeterminants of the guideline - productivityDeterminants of the guideline - productivityDeterminants of the guideline - productivity
Productivity:Productivity: national rates should be preferred
Nevertheless, any type of productivity rate is to be chosen from amongst national and sectoral rates according to the level of discussion within that country, may also be allowed, under the responsibility of national and sectoral unions. However, reference to national rates has to be done, particularly for sectors without a sectoral rate (e.g. the public sector)
Other determinants:Other determinants: according to the national practice (convergence towards EU average, redistribution…)
inflation wage increase(at least above inflation and withas much productivity as possible
.…)productivity
other determinants
improvement ofqualitative aspects of work
(especially where quantifiable andcalculable in terms of costs)
total labour costs
=
total valueof the agreement
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Use of the guideline: wages firstUse of the guideline: wages firstUse of the guideline: wages firstUse of the guideline: wages first
Wage aspect: Wage aspect:
It is important that wages increase faster than inflation, in order to maintain purchasing power. The (nominal) increase in wages must pass the inflation rate in all cases.
Similarly, an important part of productivity should compensate workers for their contribution towards its increase. This part should be as large as possible.
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Use of the guideline: then, qualitative aspectsUse of the guideline: then, qualitative aspectsUse of the guideline: then, qualitative aspectsUse of the guideline: then, qualitative aspects
Qualitative aspects: Qualitative aspects:
Preferably those which can be quantified and which give rise to a cost for the company should be taken into account.
These include: equal opportunities, measures to achieve equal pay between women and men, measures to improve the position of low paid workers, life-long learning, reduction in working time, progressive retirement...
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Use of the guideline: qualitative aspects, Use of the guideline: qualitative aspects, specific focusspecific focus
Use of the guideline: qualitative aspects, Use of the guideline: qualitative aspects, specific focusspecific focus
The part of productivity not allocated to wages should go towards improving qualitative aspects of collective agreements.
Although national and sectoral organisations need to determine their own priorities, European guidelines could also be proposed for specific subjects (as some of the EIFs and the Doorn group are doing) in order to help evaluation and the comparison of the results achieved.
We shall pay particular attention in the evaluation of the guideline to measuring progress in:
Access to training and life long learning for all workers
Eradicating low pay and promoting equal pay between men and women
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Situation in other experiences: EIFsSituation in other experiences: EIFsSituation in other experiences: EIFsSituation in other experiences: EIFsSources Guideline How is it used?
ETUC proposal Inflation+ national average productivity
Total value of the agreement(wages plus qualitative aspects ofthe agreement)
EIFs Guideline How is it used?EMF Inflation minimum
+ Productivity (balanced share)Total value of the agreement(wages plus qualitative aspects ofthe agreement)
ETUF-TCL(with OSE)
Inflation minimum + full nationalaverage productivity if sectoralproductivity is exceedingnational average, otherwiseshare of productivity
Total value of the agreement(wages plus qualitative aspects ofthe agreement)
ECF-IUF Inflation+ Sectoral Productivity(balanced share)
Total value of the agreement(wages plus qualitative aspects ofthe agreement)
Uni-europa Inflation+ participation in productivity ?
EPSU Inflation minimum+ national average productivity(balanced share)
?
Other initiatives Guideline How is it used?Doorn Inflation
+ productivityTotal value of the agreement(wages plus qualitative aspects ofthe agreement)
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Situation in other experiences: DoornSituation in other experiences: DoornSituation in other experiences: DoornSituation in other experiences: Doorn
Country Year Inflation Productivity Distribution margin
Wagerise
Utilisation
A B A + B = C D D – C =E
Belgium1999 1.1 1.2 2.3 2.5 0.22000 1.4 2.2 3.6 3.6 0.099/2000 2.5 3.4 6.0 6.2 0.2
Germany1999 0.6 0.8 1.4 3.1 1.72000 1.6 2.5 4.1 2.3 -1.899/2000 2.2 3.3 5.6 5.5 -0.1
Luxembourg1999 1.0 2.2 3.2 3.1 -0.12000 2.9 2.0 5.0 4.5 -0.499/2000 3.9 4.2 8.3 7.7 -0.6
Netherlands1999 1.7 0.8 2.5 2.7 0.22000 2.0 2.0 4.0 3.5 -0.599/2000 3.7 2.8 6.7 6.3 -0.3
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The challenge of the implementation of the The challenge of the implementation of the coordination guidelinecoordination guideline
The challenge of the implementation of the The challenge of the implementation of the coordination guidelinecoordination guideline
In order to be effective, a system of follow-up of the coordination guideline should be implemented. This would make it possible for the coordination guideline to become a "rule of thumb" when negotiation is conducted at national or sub-national levels.
A system of review should be established, with reports being submitted by ETUC affiliates on the evolution of the wages and/or total value of the agreements compared with the aggregate "inflation + productivity + other determinants".
We propose that for the wage elements such a review should be carried out be the CBC and the Executive Committee annually. For the qualitative elements, a similar review should take place every two years.
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Guidelines on Coordination of Guidelines on Coordination of Collective BargainingCollective BargainingGuidelines on Coordination of Guidelines on Coordination of Collective BargainingCollective Bargaining
Presentation by Emmanuel Mermet
European Trade Union Institute
Madrid, 18 October 2001