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Susan Hayter Industrial and Employment Relations Department

The crisis, employment and Decent Work: what can be done through collective bargaining. Susan Hayter Industrial and Employment Relations Department. DIALOGUE. Negotiating for social justice. Key questions: Impact of collective bargaining?

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Susan Hayter Industrial and Employment Relations Department

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  1. The crisis, employment and Decent Work: what can be done through collective bargaining Susan Hayter Industrial and Employment Relations Department DIALOGUE

  2. Negotiating for social justice Key questions: Impact of collective bargaining? What role did collective negotiations play during the crisis? What impact is the crisis having on collective bargaining systems? What role can collective bargaining play in equitable recovery? DIALOGUE

  3. Trade union density, OECD 1999 and 2009 DIALOGUE

  4. Collective bargaining coverage, OECD, 1997 and 2007 DIALOGUE

  5. Impact: Equity and efficiency • High coverage and coordination associated with more equitable outcomes • Erosion of collective bargaining institutions contributed to rise in wage gaps • Weakness of social partners and CB limits potential role in labour markets DIALOGUE

  6. Collective Bargaining: Challenges 2008/2009 • Management • Objectives: • Liquidity • Reduceproduction • Reducecosts • Retainqualifiedstaff • Workers • Objectives: • Job Security: avoid dismissals • Protect income • Fairness: cost-saving measures incl. management 6

  7. Negotiated responses to the crisis DIALOGUE

  8. Negotiating during the crisis Bargaining agenda: Reduce production and costs Protect employment Mitigate effects of redundancy Protect earnings Retain experience and improve skills Recovery DIALOGUE

  9. Negotiating during the crisis DIALOGUE

  10. What have we learned? • Inequality fuelled distributive conflict • Coordinated IR systems facilitated adjustment: • Tripartite social dialogue • Multi-employer bargaining • Procedural clauses provided certainty • Interest-based negotiations facilitated innovations e.g. information sharing • Public policy supported integrative outcomes e.g. short-time working schemes, training layoff schemes DIALOGUE

  11. Impact on collective bargaining • Reinforced decentralization • Weakening of bargaining power • Deregulation / re-regulation: • Limiting scope of CB agenda in public sector • Changes in the relationship between CBAs at different levels • Eliminating or re-regulating extension provisions • Recognition procedures and thresholds DIALOGUE

  12. “Labor cost adjustment can be facilitated by promoting decentralized wage bargaining, removing indexation mechanisms, and reducing dismissal costs….” IMF, 2011 “Reforms of labour market institutions leading to less coordinated wage bargaining and more decentralised wage setting,…. may reduce adverse public wage spillovers and facilitate wage adjustment also in the private sector”, ECB, 2010 “In contrast to a fully decentralised system, an intermediate degree would not tailor wage agreements sufficiently to the circumstances of individual companies and would tend to diminish wage differentials. Strong relative wage compression would hinder employment….” OECD, 2011

  13. “The crisis has also put to the test longstanding dogmas that blame labor-market rigidity for unemployment, because countries with more flexible wages, like the U.S., have fared worse than northern European economies, including Germany. …… But there are ways out of this dilemma: strengthening collective bargaining, restructuring mortgages, using carrots and sticks to get banks to resume lending….” Stiglitz, 2011. “The state can be all thumbs when it attempts intervention to reduce income inequality. Nevertheless, tools do exist. Progressive taxes on income and capital gains…., steps to strengthen union recruiting and bargaining power…..” Taylor, 2011

  14. Negotiating for precarious workers Bargaining outcomes: • Employment security • Improved pay and benefits • Skills development DIALOGUE

  15. Negotiating for social justice • Strengthen social partners • Promote collective bargaining • Getting it right: coordination and articulation • Need for knowledge raising on alternatives • Facilitate sharing of information DIALOGUE

  16. http://www.ilo.org/ifpdial/information-resources/publications/lang--en/index.htmhttp://www.ilo.org/ifpdial/information-resources/publications/lang--en/index.htm

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