Stephen Bach King’s College, London Stephen.bach@kcl.ac.uk

1. RCN June 14th 2013The impact of austerity on collective bargaining and employee participation: The local government experience Stephen Bach King’s College, London Stephen.bach@kcl.ac.uk

3. Presentation structure • EC funded research project: - Czech Republic; Denmark, France, Italy, Netherlands, UK • Findings:- Comparative data: drivers and outcomes - UK: national/local picture • Themes- can social partnership survive austerity?- variations between countries and within - restriction, resilience and reconfiguration

4. Research Questions • What have been the main drivers and measures of austerity adopted in each country? • How have these changes been implemented and to what extent has social dialogue contributed to the change process at national, sectoral and workplace level? • How have institutions of social dialogue influenced industrial relations processes and outcomes in the public services?

5. Drivers of Austerity • External/ Internal • High/ Low pressure Austerity Measures • Budgetary cuts • Staffing policies (e.g. replacement ratios) • Alterations in wage fixing Social Dialogue • Tripartism • Collective bargaining • Joint consultation • Cross-border Restriction Resilience Reconfiguration Austerity Outcomes • Employment reductions • Wage cuts • Pay freezes • Pension reform • Work intensification

6. Drivers: General Government Consolidated Gross Debt

7. Drivers: General Government Deficit/ Surplus

8. Drivers of Austerity : retrenchment pressures Source of pressure External Market Reaction Italy Lagged Response France Coalition for change Czech Republic Netherlands UK Steady State Denmark Internal Degree of pressure Low High

9. Outcomes Pay Cuts Czech Republic 10% Italy 5-10% (linked to earnings) Pay Freeze France (2010-2012 index point value) Netherlands (2011-13 central govt; education) UK (2011-2013) Employment reductions Czech Republic (5.5% 2009-12) Denmark (2%: 2010-12) France (5% state administration 2008-10) Italy (10% 2008-14) Netherlands (cuts planned up to 2014) UK (12% 2008-12) Pension Reform Czech Republic Denmark France Italy Netherlands UK

10. Social Dialogue: 3 scenarios • Restriction – interruption & shift to unilateralism • Resilience – institutional maintenance of dialogue - process often more closed/conflictual • Reconfiguration – reform of institutional practice: redirected to different ends • Variation: between and within national cases

11. Resilience and Reconfiguration • Denmark • France • Netherlands • Influences on findings: - employer and trade union strategy - different institutional/legal traditions e.g. works councils

12. Restriction • National: austerity programmes/pay freezes:- little input from employers and unions - ‘hollowing out’ of IR: time scales- legislative/budgetary instruments dominate • Czech Republic • Italy • UK • More engagement at sectoral/enterprise level

13. UK Restriction • Austerity measures 2010- - 2010-15/16 expenditure reductions - 27% local government • Coalition policy: marketisation & fragmentation - 2 year wage freeze (2011-13); 2013- 1% award - civil service: facility time; review of T&Cs- NHS: resilience e.g. social partnership forum • Outcomes – employment, disputes

14. Public Sector Employment by main Industry Education

15. Consequences: Disputes Source: ONS

16. Local govt: differing role for social dialogue

17. Coastal 2010-2012 • Social dialogue: restriction after 2010 • Conservative led council proposed: - pay cuts on a sliding scale (2-5.5%)- aim: 400 fewer job losses • Issues: - trust in employer – job losses/lack of dialogue - unilateral change in terms and conditions • Local elections in 2012:- wage cuts partly reversed after Autumn 2012 - dispute ended – despite job loses (temp staff)- further cuts anticipated

18. Coastal Themes • Externalisation: - reinforced low trust ER climate - procedural errors enabled union legal action (lack of HR expertise) • Unilateralism: wage cuts • Trade union strategy: - recognised dispute of national significance - selective ‘smart’ strikes - legal action (built on employer errors)- political campaign in local election

19. Mid-Town Resilience and reconfiguration • Social dialogue: Intensive - conversion: from joint consultation to partnership forum • Employer approach: - in-house services retained and refocused - support for living wage provision in supply chain • Partnership payment agreed 2011-2013:- freeze contractual increments - bonus: 2011/12 – @£400 linked to outturn - employee eligibility: attendance and appraisal

20. Mid-Town Implications • Scope for social dialogue:- limited institutional requirements for dialogue - mixture of direct and indirect involvement • Resilience and reconfiguration: - influence of lack of national pay award - built workforce acceptance for change (choice?)- reconfiguration around progression/increments: individualised performance - attendance, appraisal • Implications for national framework

21. Conclusions • Findings: - political domain/scope for unilateralism/centralism- adverse effects for public service IR: - driver of change but also limits modernisation - an employer of choice? – shortages, engagement • Issues:- Are challenges to social partnership & shift to unilateralism temporary or more long-term? - How can social partnership be reformed and strengthened to meet new challenges? - HR role (visibility/influence)

22. References/Further information • Project website: • http://www.kcl.ac.uk/sspp/departments/management/Social-Dialogue-and-Austerity-EU.aspx • IR in Europe Report 2012: (focus on public services) • http://ec.europa.eu/social/keyDocuments.jsp?type=0&policyArea=0&subCategory=0&country=0&year=0&advSearchKey=IRIE&mode=advancedSubmit&langId=en