Impact of crisis on industrial relations and working conditions- wages

1. Impact of crisis on industrial relations and working conditions- wages Stavroula Demetriades, Head of Unit, Industrial relations and workplace developments

2. It started with UK bank Northern rock..

3. Negotiations 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)

4. National 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

5. Sectoral 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

6. Multinationals 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)

7. 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

8. More 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)

9. Banking 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)

10. Social 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

11. Working conditions Career & employment Skills development Quality of work & employment Health & Well being Reconciliation of working & non Working life

12. 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)

13. Young 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

14. Developments 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)

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

16. Major 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

17. Some interesting crisis related developments National 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

18. States. States. States. States. Source: European Commission Forecast-spring 2011

19. 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

20. 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?

21. 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!

22. Thank you!