Industrial relations in the EU, Japan and USA, 2003–2004

Transcription

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TJ-66-05-822-EN-C
Industrial relations in the EU,
Japan and USA, 2003–2004
Industrial relations in the EU, Japan and the USA 2003-2004 provides a
detailed comparison of the different aspects of industrial relations in these
three economic blocs. On the basis of the Foundation’s annual study in this
area, the report charts the similarities and trends in this area and provides
a clear picture of the differences in both basic structures and developments
across these three major economies. In particular it highlights the
distinctive characteristics of the European Union in the areas of collective
The European Foundation for the Improvement of Living and Working Conditions is a
tripartite EU body, whose role is to provide key actors in social policymaking with
findings, knowledge and advice drawn from comparative research. The Foundation
was established in 1975 by Council Regulation EEC No. 1365/75 of 26 May 1975.
ISBN 92-897-0911-1
9 789289 709118
bargaining, trade unions, employer organisations and labour legislation.
Author: Mark Carley, SPIRE Associates
Foundation project: European Industrial Relations Observatory (EIRO)
Research managers: Stavroula Demetriades, Isabella Biletta, Christian Welz
Wyattville Road, Loughlinstown, Dublin 18, Ireland - Tel: (+353 1) 204 31 00 - Fax: (+353 1) 282 42 09 / 282 64 56
email: [email protected] - website: www.eurofound.eu.int
Cataloguing data can be found at the end of this publication
Luxembourg: Office for Official Publications of the European Communities, 2005
ISBN 92-897-0911-1
© European Foundation for the Improvement of Living and Working Conditions, 2005
For rights of translation or reproduction, applications should be made to the Director, European Foundation for the Improvement of
Living and Working Conditions, Wyattville Road, Loughlinstown, Dublin 18, Ireland.
The European Foundation for the Improvement of Living and Working Conditions is an autonomous body of the European Union,
created to assist in the formulation of future policy on social and work-related matters. Further information can be found on the
Foundation website at www.eurofound.eu.int.
European Foundation for the Improvement of Living and Working Conditions
Wyattville Road
Loughlinstown
Dublin 18
Ireland
Telephone: (+353 1) 204 31 00
Fax: (+353 1) 282 42 09 / 282 64 56
Email: [email protected]
www.eurofound.eu.int
Printed in Denmark
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For every tree felled, at least one new tree is planted.
Foreword
In an era of deepening globalisation, similarities abound between the world’s largest economies.
There also remain, however, marked differences which separate the three major economic blocs of
the European Union, Japan and the United States, not least in industrial relations. In particular,
the European social model ensures ongoing distinctive characteristics for the European Union in
the areas of collective bargaining, trade unions, employer organisations and labour legislation.
Since 2000, the Foundation has conducted a study comparing aspects of industrial relations in
these three economic blocs on an annual basis. The results have enabled us to chart the similarities
and trends in this area across the EU, Japan and the US. But it also provides a clear picture of the
differences in both basic structures and developments in these three distinct economies. While
providing a comprehensive insight into the industrial relations situation, the project also allows for
a degree of benchmarking of the EU against its major trading competitors.
This year’s report, examining the situation in Industrial relations in the EU, Japan and the USA,
2003–2004, will, we trust, continue to provide a useful contribution to understanding European
industrial relations in an international context.
Willy Buschak
Acting Director
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Contents
Foreword
v
Introduction
1
Economic and employment context
3
Collective bargaining
5
Bargaining levels and structures
5
Pay
6
Working time
9
Other issues
10
Legislative developments
13
Trade unions
17
Employer organisations
19
Industrial action
21
Migration and industrial relations
23
Labour market situation
23
Trade unions and migrants
26
Employers, employer organisations and migrants
28
Consultation and bargaining
30
Pensions and industrial relations
33
State pension systems – Involvement of trade unions and
employer organisations
33
Occupational pensions – Collective bargaining
36
Occupational pensions – Disputes
38
Occupational pensions – Social partner views
38
Conclusions
41
vii
Introduction
Since 2000, the European Foundation for the Improvement of Living and Working Conditions
(hereafter called the Foundation) has each year conducted a project comparing aspects of
industrial relations in the European Union (EU) and the world’s two other largest economies –
Japan and the USA. The essential aim is to provide a picture of similarities and differences in both
basic structures and current developments, not least to help illuminate what does and does not
make the ‘European social model’ distinctive, and to assist with ‘benchmarking’ the EU against its
major competitors in an era of deepening economic globalisation.
Earlier comparative reports from the project have examined in some detail the actors and processes
involved in basic industrial relations, such as collective bargaining, trade unions, employer
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organisations, labour legislation and employee involvement. Readers are referred to these reports
for background information. The current report looks at the main developments over 2003 and
much of 2004 in these areas, before going on to examine how the various industrial relations
systems deal with two very topical issues – the increasing level of international migration
(especially labour migration) and pensions provision (particularly occupational pensions) at a time
of demographic change.
The information in this report on the EU is taken mainly from the European Industrial Relations
Observatory (EIRO). In the areas of migration and pensions especially, there are some gaps in the
information available for the 10 new Member States (NMS) that joined the EU in May 2004. The
data for Japan and the USA are taken largely from special reports on industrial relations
developments in 2003–2004 prepared for the Foundation by experts in these countries, together
with sources such as the US Bureau of Labor Statistics (BLS) and the Japan Institute for Labour
Policy and Training (JILPT).
Parts of this report are also informed by discussions that took place at a Foundation conference on
‘Industrial relations in the EU, Japan and USA’, held in Dublin on 18–19 October 2004. This
conference was attended by experts from the countries directly concerned (the USA, Japan and
various EU Member States) and international organisations. Also during 2004, the Foundation
aimed to bring in a wider perspective and invited experts to present information on developments
in Asia and Latin America. According to the Foundation, this approach raised methodological
questions since comparisons are difficult between individual countries (such as the USA and
Japan) and a structure like the EU or a subcontinent such as Latin America. Diversity is also huge
among Asian countries because they are significant in number and with very varied cultures and
religions. Furthermore, the importance of the informal sector and the different role of social actors
in Latin America and Asia raises questions at a conceptual level. The Foundation believes that if
it wants to develop meaningful monitoring of industrial relations and labour market evolutions
beyond the OECD, these challenges will certainly have to be addressed in the future.
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EIRO articles: Industrial relations in the EU, Japan and USA, 2002 (www.eiro.eurofound.eu.int/2004/01/feature/tn0401101f.html);
Industrial relations in the EU, Japan and USA, 2001 (www.eiro.eurofound.eu.int/2003/01/feature/tn0212101f.html); Industrial relations in
the EU, Japan and USA, 2000 (www.eiro.eurofound.eu.int/2001/01/feature/tn0111148f.html)
1
Economic and employment context
The economic and labour market contexts for industrial relations in the EU, Japan and USA are
very different (see Table 1). The EU economy slowed over the 2001–2003 period, although with
some signs of renewed growth in 2004. The ‘old’ 15 Member States (EU15) experienced lower
growth over 2001–2004 (0.7% in 2003 and 1.9% predicted for 2004) than the 10 new Member
States that joined the EU in May 2004. After being largely stagnant during 2001–2002, the
Japanese economy started to recover in 2003–2004. The US economy, however, experienced a
rising trend over the whole 2002–2004 period.
EU25 inflation has been falling slowly since 2001 (when it stood at 2.5%) and was projected to
reach 1.9% in 2004. The EU15 experienced the same trend, falling from 2.2% in 2001 to a predicted
1.8% in 2004. In the USA, inflation has been fluctuating on a yearly basis – falling in 2002, rising
in 2003 and falling again in 2004 (to a projected 1.4%, somewhat below the EU level). In Japan,
prices have actually been falling since 1999; in 2003, however, the fall slowed and in 2004 prices
are predicted to have been stable.
In the EU25, employment levels rose very slightly in 2003 (by 0.2%, the same level as in the
EU15), as they had the previous year. In the USA, after slight falls in 2001 and 2002, employment
again grew in 2003 – and more strongly (at 0.9%) than in the EU. The picture remains very different
in Japan, where 2003 saw a continuation of the decline in employment witnessed since the late
1990s. The Japanese employment rate, however, was 5.5 percentage points above that of the EU25,
at 68.4% in 2003 (the EU15 was slightly closer, at 64.3%). The USA still outstrips its rivals in this
area, at 71.2%. In all three cases, male employment rates exceed female rates.
Unemployment levels in the EU remain much higher than in Japan and the USA. The EU25’s
projected rate for 2004 is 9.1%, compared with 5.5% in the USA and 4.8% in Japan. The accession
of the new Member States has pushed up the overall EU rate – the 2004 figure for the EU15 alone
is 8.1%, although this is still substantially higher than in Japan and the USA. The EU25 rate rose
in 2002 (to 8.9%) and again in 2003 (to 9.1%), before flattening out in 2004 (the same trend was
observed in the EU15). The US rate also rose in 2002 (to 5.8%) and in 2003 (to 6.0%), but is
projected to fall quite sharply in 2004. Japan’s long-term upward trend peaked in 2002 (at 5.4%),
before falling slightly in 2003 and more substantially in 2004.
Nominal pay increases per employee in the EU25 exceeded those in Japan and the USA in 2003,
as they had in 2002 and 2001. The same was true of the EU15, although here increases (3.0% in
2003) were somewhat lower than in the extended EU. The rate of increase fell over 2001–2003 in
the EU25 and USA, while in Japan, where nominal pay has been falling for several years, the rate
of decline sharpened in 2002 before lessening in 2003. The projections for 2004 indicate a slight
fall in the rate of increase in the EU25 (and EU15). However, a sharp rise in the US figure brings
its nominal pay increase above the EU figure for the first time since 2000, while 2004 should also
see Japan’s first nominal increase since 2000. Adjusting nominal compensation increases for
inflation, in 2003 real increases were greatest in Japan, followed by the EU25 (0.6% in the EU15)
and the USA, while in 2004 the USA is projected to take over the leading position, followed closely
by Japan and at some distance by the EU25 (the EU15 figure is the same as for the extended EU).
The rate of increase in labour productivity rose in all cases from 2003 to 2004, with the USA
achieving the greatest rise and Japan the least – in 2004, US productivity is projected to increase
by about twice the EU25 rate (with the EU15 increase slightly lower, at 1.6%). In 2003, nominal
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unit labour costs grew in the EU (with the EU15 showing the same 2.2% growth) and remained
almost static in the USA, while they fell in Japan. In 2004, the rate of increase is projected to slow
in the EU (and EU15) and remain virtually unchanged in the USA, with Japan’s downward trend
slowing. Finally, adjusting the nominal unit labour cost increases for inflation, they were static in
the EU in 2003, but fell in 2004. Real unit labour costs fell in both 2003 and 2004 in Japan, as they
did – more sharply – in the USA.
Table 1
Economic and employment indicators in the EU, Japan and USA, 2003–2004
EU25
2003
Japan
2004
USA
2003
2004
2003
2004
GDP growth
0.8
2.0
2.5
3.4
3.1
4.2
Inflation (CPI)
2.0
1.9
-0.3
0.0
2.3
1.4
Employment rate
62.9
–
68.4
–
71.2
–
Employment growth
0.2
–
-0.2
–
0.9
–
Unemployment rate (Eurostat definition)
9.1
9.1
5.3
4.8
6.0
5.5
Growth in nominal compensation per employee
3.1
3.0
–0.7
1.1
2.3
3.3
0.9
0.9
1.9
2.1
0.6
2.2
Labour productivity growth
0.9
1.7
2.7
3.0
2.2
3.3
Nominal unit labour cost growth
2.2
1.3
–3.3
–1.8
0.1
0.0
Real unit labour cost growth
0.0
-0.8
–0.8
–0.8
–1.6
–1.0
Growth in real compensation per employee
(private consumption deflator)
Note: 2004 figures are projections.
Sources: European Commission, Employment in Europe 2004 and Statistical Annex to European Economy, Autumn 2004.
4
Bargaining levels and structures
In 2003–2004, collective bargaining continued its long-term decline as a means of setting the pay
and employment conditions of workers in Japan and the USA, mirroring falling trade union
membership. In Japan, with bargaining conducted exclusively at company level and no
mechanisms for the extension of agreements beyond the signatories, bargaining coverage exactly
matches union density. The latter fell from 20.2% in 2002 to 19.6% in 2003, continuing a
downward trend that has been in progress for nearly 30 years. However, it should be noted that the
wage increases agreed in the ‘bargaining sector’ have a major influence on general wage levels,
setting both the market rate in the ‘non-bargaining sector’ and being passed on through
recommendations on the wages of public servants and through the minimum wage system
(although not always being directly reflected in average wages). In the USA, the coverage of
bargaining (basically conducted at company level) is similarly restricted to trade union members,
whose numbers fell from 13.2% of the workforce in 2002 to 12.9 % in 2003 and 12.5% in 2004.
However, 13.8% of the workforce were represented at the bargaining table in 2004, with the
addition of workers organised in a ‘union-typical’ manner (such as members of certain employee
associations) and those who report no union affiliation but whose jobs are covered by a union or
an employee association contract.
The bargaining coverage picture in the EU is mixed and less easy to measure on a year-by-year
basis, not least because there is not such a close correlation with union membership as there is in
Japan and the USA. On an individual country basis, there was little change reported in 2003–2004,
but at overall EU level the accession of the NMS in May 2004 will have reduced somewhat the
coverage of the EU workforce by bargaining. Though with major exceptions in both groups (e.g.
relatively low coverage levels in the UK and relatively high coverage in Cyprus), collective
bargaining coverage is much lower in the NMS, covering somewhere between a third and four
out-of-10 of the workforce on average, compared with about three-quarters in the EU15. The
EU25’s overall coverage rate has, as a result, been cut – by about five percentage points on a
weighted basis, according to EIRO calculations in 2003. However, it should be noted that
somewhere around two-thirds of the workforce of the EU25 are covered by collective bargaining,
which is a rate over three times that in Japan and over four times that in the USA.
As usual, collective bargaining in 2003–2004 occurred almost exclusively at the level of individual
company or workplace in Japan and the USA (although with a few exceptions in the latter case,
such as a multi-employer agreement for Pacific coast dock-workers). In Japan, there is a degree of
coordination on both trade union and employers’ sides during the annual ‘shunto’ bargaining
round. The general pattern for these spring-time negotiations is that major manufacturers in leading
industries, such as electrical goods or cars, take the lead in bargaining and are then followed by
other large companies and then by small and medium-sized enterprises (SMEs). Industry-level
union federations establish industry-wide targets and work out specific strategies in order to
improve the negotiating capabilities of their affiliated enterprise unions. However, since the late
1990s lower economic growth and more intensive international competition have increased the
degree of disparity in performance between companies, thus making it more difficult for unions to
set industry-wide wage increase targets and to achieve ‘horizontally egalitarian’ pay rises.
Bargaining in the USA has become increasingly decentralised in recent decades, with the level
shifting, first from multi-employer pattern bargaining (whereby an agreement is achieved in a
particular company or companies, and then extended to other companies in the sector) and
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‘master’ agreements, then shifting to the company level and, finally, from the company level to the
individual worksite.
In the EU countries, bargaining in 2003–2004 was conducted at all levels, from the national
intersectoral to the individual workplace, depending on national systems. That the central
intersectoral level plays a key role in many EU countries was underlined by the conclusion,
renewal or negotiation of major comprehensive national framework agreements on pay and other
conditions in countries such as Belgium, Finland, Greece, Ireland, the Netherlands, Slovenia and
Spain, and intersectoral agreements on specific themes in countries such as Estonia, France,
Hungary, Italy and Luxembourg. The sector is the dominant level of bargaining on pay and
conditions, or an important level, in a majority of the EU15 (the main exceptions being Ireland,
Luxembourg and the UK) and 2003–2004 saw the bargaining process (whether annual or multiannual) in these countries proceeding more or less as usual. However, there are signs of change at
various levels (see Box 1).
Box 1
Decentralisation of bargaining in the EU
The NMS generally have much more decentralised collective bargaining systems than the
EU15. The company is the key bargaining level (although, because of low bargaining
coverage rates in many countries, this does not mean that it covers a high proportion of all
companies and employees) in all 10 acceding countries apart from Slovakia, Slovenia and
Cyprus. Sectoral bargaining (in a broad sense) plays the dominant role only in Slovakia and
Cyprus, is a very important bargaining level in Slovenia, and a relatively significant
bargaining level in Hungary and to a lesser extent the Czech Republic. EU enlargement has
thus arguably shifted the ‘average’ level of bargaining towards the company level.
Change is also stirring in a number of individual countries. Most notably, there is pressure
towards decentralisation in a number of the EU15 that have long-standing systems of
sectoral collective bargaining (although generally the move is towards ‘organised’
decentralisation while maintaining a sectoral framework). In Germany, to take a leading
example, there have been numerous calls from employers and opposition politicians to
decentralise the bargaining system and allow for more company-level deviations from
sectoral agreements. Thus, in the 2004 bargaining round, trade unions were confronted with
demands from employers to extend flexibility (notably on working time) and to allow the
parties at company level to deviate from sectoral agreements. Unions managed only partly
to resist these demands and in a number of cases saw themselves forced to concede ‘opening
clauses’. Another example is France, where new legislation passed in 2004 overturned the
previous hierarchy of collectively agreed norms, introducing the possibility of company-level
agreements and departing from sector-level agreements in a way that is unfavourable to
employees, in some circumstances. A final example is Italy, where debate in 2004 over reform
of the current two-tier bargaining system (whereby company/local agreements are
concluded within the framework of sectoral agreements, with each level dealing with
specific issues) has raised the possibility of giving greater weight to the decentralised level.
Pay
As ever, pay was at the heart of collective bargaining in the EU, Japan and USA in 2003–2004. In
Japan, given difficult economic conditions, the spring wage negotiations (‘shunto’) have been
difficult for trade unions over the past few years since they have been forced to choose between
maintenance of employment levels and pay rises. Furthermore, since 1999 in particular, employers
have been seeking to prioritise lump-sum bonuses and incentives over ‘base-ups’ (pay revisions
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that reflect an upward trend in the prices index or the company’s business performance) and
‘regular’ pay increases (wage rises based on the individual employee’s ability, age or length of
service). In 2002, the Japanese Trade Union Confederation (Rengo) discontinued the submission
of a unified demand for a basic wage rise. With the majority of enterprise unions obliged to defer
their demands for a ‘base-up’ increase, the primary focus of wage talks has been on continuation
of regular pay increases and the amounts of lump-sum bonus payments. The spring wage
negotiations pushed up the average wage level by 1.63% in 2003 (the 2002 level was 1.66%) and
1.67% in 2004. (As noted above, the wage increases that result from the ‘shunto’, while having a
major influence on general wage levels, are not always directly reflected in average wages.) As for
bonuses, which account for a large proportion (probably a quarter, on average) of the annual
income of Japanese workers, employees at major companies achieved a 3% rise for the 2003
summer bonus, after a fall of 4.3% in 2002.
Rengo unions have recently been placing special emphasis on achieving wage increases for
workers in SMEs, and Rengo established its first-ever unified wage rise demand for member unions
in such companies in the light of a growing gap with larger corporations. According to a Rengo
analysis, the 2004 spring wage negotiations led to a larger wage hike in SMEs than in 2003 (when
the increase stood at 1.17%). Furthermore, since 2002, Rengo has been demanding an additional
hourly wage rise for part-time workers in the spring wage negotiations, with the aim of closing the
wage gap with full-timers. In the 2004 spring wage talks, many trade unions achieved JPY 10 – JPY
15 hourly wage increases for part-timers, which is considered a modest achievement.
Bargaining plays a far less important role in setting overall national pay increases in the USA than
in most EU countries or Japan. Indeed, there is a significant differential between the pay of the onesixth or so of US workers represented by unions (and thus covered by bargaining) and that of nonunion workers: the former’s usual median weekly earnings were 27% higher than the latter’s in
2003. Negotiated wage increases averaged 3.4% in 2003 and 3.5% in the first half of 2004. This
indicates that economic growth and major productivity gains have not yet translated into improved
wage settlements. Negotiated wage increases had been higher during the recession period (3.9% in
both 2001 and 2002), at a time of major job losses in manufacturing and slower economic growth.
Pay settlements in manufacturing lagged behind construction and the state and local government
sectors by about 0.5 percentage points in both 2003 and 2004.
Collective bargaining plays a key part in overall pay determination in most of the EU15 and also
in a number of the NMS. The nature of the role of bargaining in pay setting differs widely between
the countries – the different bargaining levels (intersectoral, sectoral, company, etc) play different
parts, while the importance of bargaining in pay determination differs considerably between sectors
of the economy and groups of workers. According to EIRO estimates, average collectively agreed
pay increases across the whole EU stood at 4.0% in 2003, down from 4.4% in 2002, although with
very considerable differences between countries. (No data are yet available for 2004.) The NMS
saw average increases of 6.5% in 2002 and 5.8% in 2003, while the average EU15 rises were 3.3%
in 2002 and 3.0% in 2004 (there were also major variations within the two groups of countries).
In 2003, there was a widespread downward trend in nominal wage increases across the EU15, with
only Finland, Spain, Italy and the UK recording a higher increase than in 2002. In many cases,
those involved in bargaining sought to concentrate on safeguarding and creating employment in a
difficult economic climate, resulting in pay moderation. National agreements explicitly sought pay
7
moderation in countries such as the Netherlands and Belgium. In the countries then awaiting EU
accession, the average increase in 2003 was still substantially higher than that in the current EU,
but the differential fell between 2002 and 2003 (with moderation in countries such as Estonia,
Hungary and Slovenia), suggesting that pay trends in the NMS may be converging downwards
towards those in the EU15.
Full data are not yet available on the outcomes of pay bargaining in the EU in 2004. However, the
indications are that there was a widespread mood of restraint. In Germany, collective agreements
concluded in the first half of 2004 (affecting about 27% of all employees covered by collective
agreements) increased pay by around 2.0% in 2004, which is below the average pay increase of
2.5% in 2003. The major private sector settlement in Denmark focused mainly on improvements in
areas such as occupational pensions, paid parental leave and sick pay, rather than on substantial
pay increases. In Ireland, the second half of the current three-year national agreement, negotiated
in 2004, provides for average pay increases of 5.5% over 18 months, compared with 7% over the
first 18 months. New three-year agreements signed in most sectors in Sweden provided for
relatively modest pay rises of under 7% over three years. Strong calls for moderation also marked
the negotiations over new national agreements for 2005 and beyond in Belgium and Finland.
However, although wage increases fell away sharply in 2004, the earlier national pay restraint
agreement in the Netherlands was abandoned by trade unions in 2004 in opposition to government
reform plans.
In some NMS, it also appears that pay moderation was the rule in 2004. For example, in Slovenia,
a new private sector pay policy agreement covering 2004–2005 provides for increases such that the
real growth in average gross pay per employee will lag behind productivity growth by at least one
percentage point. However, there were stirrings of wage militancy in some countries as economic
conditions improved. For example, Poland saw a wave of pay demands in late 2004 in sectors such
as the metal-processing, coal-mining, petroleum, automotive and food industries, with unions
calling for workers to benefit from a recent improvement in the economic climate but with
employers warning that over-hasty spending of the fruits of economic growth may lead to a
reduction of investments and thus endanger this growth. There were also a number of strike and
protests in private sector enterprises in Slovakia during 2004, focusing on unpaid wages and
dissatisfaction with the pay outcomes of collective bargaining. This is unusual in a country where
strikes have been rare and trade union protests largely confined to the public sector and responses
to government policies.
Nominal collectively agreed pay increases were highest in the EU25 in both 2002 and 2003,
followed by the USA, the EU15 and Japan (see Table 2). In 2004, the increase in the USA was more
than double that for Japan (EU figures not yet available). Adjusting for inflation, real agreed pay
increases were highest in Japan in both 2002 and 2003. In 2002, the USA was in second place,
followed by the EU25 and then the EU15. In 2003, the EU25 followed Japan, above the EU15 and
USA (which had the same increase). Finally, in 2004 real agreed pay increases in the USA
outstripped those in Japan.
Gender wage differentials persist in the EU, Japan and USA. In the EU25 (including two candidate
countries), women’s earnings (based on hourly figures) were on average 81.7% of men’s in 2003
(according to EIRO estimates, with the corresponding figures of 81.4% in the EU15 (plus Norway)
and 82.3% in the NMS/candidate countries. Overall, the gap seems to be narrowing slightly. In the
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USA, the equivalent figure for 2003 was 76%, down from 77% in 2002 – the first increase in the
gap since 1995. In Japan, the average scheduled cash earnings for female full-time workers stood
at 66.8% of male full-time workers’ earnings in 2003 (66.5% in 2002), showing a gradual upward
trend.
Table 2
Collectively agreed pay increases in the EU, Japan and USA, 2002–04 (%)
EU25*
EU15
Japan
USA
2002
2003
2004
2002
2003
2004
2002
2003
2004
2002
2003
2004
4.4
4.0
–
3.3
3.0
–
1.7
1.6
1.7
3.9
3.4
3.5
1.6
1.4
–
0.7
1.1
–
2.6
1.9
1.7
2.3
1.1
2.1
Average nominal
collectively agreed
pay increase
Average real collectively
agreed pay increase
* Minus Czech Republic and Lithuania.
Sources: EIRO, Eurostat, JILPT, Bureau of National Affairs. See main text for definitions.
Working time
In 2003–2004, working time did not appear to be a significant issue on the US collective bargaining
agenda (although it was an important topic in legislative terms, see page 10 under ‘Legislative
developments’). But it appeared to gain importance to some extent in Japan. The matter is
perennially important in bargaining in many EU countries; indeed, in some Member States there
have been signs over the past two years of a change of tack.
Working hours are a major theme for company-level bargaining in Japan. Since discontinuing the
submission of a unified demand for a basic wage rise in 2002 (see above), the Rengo trade union
confederation has placed more emphasis on improving common ‘institutional’ frameworks for all
workers, including reduced working hours and work-sharing schemes. In the 2004 spring
bargaining round, one of Rengo’s priority issues (without any notable success, however) was
eradicating unpaid overtime work, which is an increasing phenomenon. Furthermore, in 2001
Rengo and the then Nikkeiren employer organisation concluded a ‘social agreement on
employment’, which affirmed that employers would make comprehensive efforts to maintain
employment and that, in return, employees would accept shorter working hours and the resulting
2
lower wages, an approach known as work-sharing. The agreement would appear to have led to
some diversification of working patterns. In 2003, ‘average scheduled weekly working hours’ in
Japanese companies – determined by collective agreements or ‘work rules’ (uniform rules on
working conditions that employers are required by law to compile) – was 39.4 hours for full-time
workers, the same level as in 2002.
For several decades at least, the reduction of the duration of working time (or at least the normal
hours set by collective agreements) has been a major feature of western European industrial
relations – arguably, to a far greater extent than has been the case in Japan and the USA. During
the 1980s and 1990s, many European countries saw major reductions in working time, although
2
http://www.eiro.eurofound.eu.int/2003/11/feature/jp0211101f.html
9
these occurred at different paces and in different ways. In the past few years, dramatic reductions
have been rare (the main exception being the introduction by legislation of a 35-hour normal
working week in France over 2000–2002), but more gradual cuts have continued in many
countries. EIRO started producing a rough average for normal collectively agreed working hours in
western European countries in 1999, when the figure stood at 38.6 hours. In 2003, it had fallen to
38.0 hours. The average has thus continued to creep downwards, albeit slowly. Against this
backdrop, in the EU15 flexibility, in various forms, has become the main theme in negotiations on
working time (sometimes in exchange for small-scale reductions). For example, sectoral
agreements introducing or expanding working-time flexibility were signed during 2003–2004 in
countries such as Denmark, France, Germany, Italy and Spain.
In the NMS, the active role of collective bargaining in setting normal weekly hours is relatively
slight, especially in many central and eastern European countries, and collective agreements often
do not tend to deviate from the statutory normal hours (usually 40 hours). The average agreed
weekly hours across the 10 countries stood at 39.7 in 2003, down from 39.8 in 2002. In general,
the NMS still have a 40-hour normal week, with the exceptions of Slovakia and Cyprus, where
agreed hours are around the EU15 average. The 40-hour week is relatively new in some countries
and, overall, there does appear to be a downward trend across the NMS. However, in general,
working-time reductions do not appear to be high on the agenda at present, with some exceptions
such as Hungary.
Some events in 2003–2004 suggest that Europe’s downward trend in working time may be turning
(see Box 2).
Other issues
Besides pay, data on exactly what issues are covered in collective bargaining are often hard to
come by, especially in countries where agreements are concluded primarily at company level (or
lower). It is only in Japan and some EU countries (mainly those with sectorally based bargaining
systems) that relatively comprehensive data are available on this issue.
According to a large-scale official survey conducted in Japan in 2002, in the previous three years
enterprise unions had conducted collective bargaining on pay in 58.1% of cases and on working
hours in 37.9% of cases. The most common other issues subject to bargaining were:
■
■
■
■
■
■
■
■
■
■
■
employment and personnel affairs – 41.5% of cases;
management policy – 22.0% of cases;
working environment – 20.9% of cases;
measures to secure employment – 20.3% of cases;
childcare and care leave – 19.3% of cases;
welfare – 16.6% of cases;
interpretation of collective agreements – 13.0% of cases;
health management – 11.1% of cases;
equal treatment of women and men – 10.8% of cases;
training – 9.8% of cases; and
working conditions of part-time and fixed-term workers – 7.7% of cases.
10
Box 2
Signs of an end to working-time reductions in the EU?
In Germany in 2003, the IG Metall trade union failed in an attempt to extend the 35-hour
week to eastern German metal-working. Still in German metal-working, a new industry-wide
collective agreement signed in February 2004 extended existing provisions allowing
company-level flexibility. It allows deviations from sectorally agreed provisions, in areas
including the extension and reduction of working time, with and without wage
compensation, in certain cases, if this proves necessary to achieve a sustainable development
of employment. Notably, the parties at company level can agree, in certain circumstances,
that up to 50% of employees can work up to 40 hours a week. On the basis of these
provisions in the sectoral agreement, in June 2004, IG Metall reached an agreement with the
Siemens electronics group to increase weekly working hours from 35 to 40 at two mobile
phone plants in Germany, with no extra pay for the workers involved. The aim was to prevent
jobs being ‘exported’ from Germany (to Hungary). In July 2004, DaimlerChrysler, the German
– US motor manufacturer, announced an agreement that will safeguard 6,000 jobs in
Germany until 2012 in exchange for concessions on working practices and planned pay
increases, including a gradual increase in working time to 39 hours a week for services staff.3
In addition, 20,000 employees in the development and planning departments may have their
weekly working time increased from 35 to 40 hours by a supplementary agreement. It also
emerged that agreements to lengthen weekly working time, in some cases without any
additional pay and in exchange for no-redundancy commitments, were under discussion at a
number of major companies across a range of industries in Germany.
These cases produced enormous interest and debate about their significance, both in
Germany and more widely in Europe. Nor were the cases completely isolated. For example,
several similar agreements were reported in France. Notably, in July 2004, workers at the
Bosch car components plant at Vénissieux ratified an agreement reached between
management and two trade unions.4 The deal aims to safeguard investment and jobs at the
plant, in return for concessions on pay and working time. The current average weekly
working time of 35 hours over the year will rise to 36 for manual workers and a number of
days off will be abolished. This deal proved controversial, especially in trade union circles,
and highlighted debates about France’s 35-hour week legislation.5 This law is coming under
increasing pressure from the current conservative government and employers, and has
already been watered down, in terms of relaxing its provisions on overtime work and
suspending its application to small companies.
These various events sparked a series of calls for an increase in agreed working time by
companies and employer organisations in other countries, for example, in Austria, Belgium,
the Netherlands and Slovenia. Improving competitiveness was the main stated aim of such
proposals. Trade unions reacted fiercely to the employers’ calls, which they denounced as
opportunistic, and argued that a few specific company agreements, reflecting very particular
conditions, cannot be generalised.
All of these issues, however, are dealt with more frequently by management and unions via
consultation forums rather than collective bargaining proper. With regard to the regular annual
spring bargaining round, there are recent signs of diversification. As noted above, since 2002 the
Rengo union confederation has placed more emphasis on improving common ‘institutional’
frameworks for all workers, including reduced working hours, work-sharing schemes and extension
of retirement age limits. In the 2004 spring wage negotiations, Rengo targeted three main issues:
3
4
5
http://www.eiro.eurofound.eu.int/2004/08/inbrief/de0408102n.html
http://www.eiro.eurofound.eu.int/2004/08/inbrief/fr0408101n.html
http://www.eiro.eurofound.eu.int/2004/08/feature/fr0408108f.html
11
eradicating unpaid overtime work; improving working conditions for part-time workers; and
providing better support to employees of SMEs. The Japan Business Federation (Nippon
Keidanren) has been pressing for the spring wage negotiations to become a forum for a wider
variety of discussions, including corporate personnel systems, rather than focusing exclusively on
wage rise talks as in the past. It believes that the 2004 wage talks represented a positive move in
this direction. An interesting development in the 2004 spring wage negotiations was that some
member unions of the Japanese Electrical, Electronic and Information Union focused on ‘proper
work – family balance’ and achieved better conditions on paternity leave in order to improve living
standards for wage-earners.
There is no official source of data on the contents of bargaining in the USA. However, in the past
few years there seems little doubt that the single most important issue has been health insurance.
Spiralling healthcare costs dictated the general tone of collective bargaining in 2003–2004, thus
6
continuing the pattern laid down in 2001–2002. In 2003, health costs rose by 12% and were
expected to go up another 13% in 2004. During 2003, in large collective agreements covering 1.5
million workers, health costs were centre-stage and this usually involved ‘cost-shifting’ and some
wage trade-offs (whereby unions agree to lower wage increases in order to preserve health and
other benefits). Indeed, healthcare cost-shifting was at the centre of one of the USA’s largest strikes
in decades (see page 15 under ‘Industrial action’) and remains the most contentious bargaining
issue. The number of US residents without health insurance coverage rose to 45 million by
September 2004. Occupational pension provision was another major issue in bargaining (see page
25 under ‘Pensions and industrial relations’).
In the EU25, the current bargaining agenda is far from homogeneous. Notably, the agenda seems
much wider in some of the EU15, but much more restricted (and often very much pay-centred) in
many of the NMS. Issues that seem to have gained ground in many countries over recent years
(although quantitative data are not available from most countries) include:
■
■
■
■
■
6
occupational pensions (see page 25 under ‘Pensions and industrial relations’);
equality and diversity issues, including reconciliation of work and family life;
job security;
the regulation of atypical employment; and
training and skills development.
http://www.eiro.eurofound.eu.int/2003/11/feature/us0311101f.html
12
A key aspect of industrial relations in the European Union is that, at overall EU level and in many
individual Member States, detailed legislation regulates many areas of industrial relations,
employment conditions and workers’ rights. These laws are added to and amended frequently as
situations and priorities change. By contrast, in Japan and particularly in the USA, only the basic
‘rules of the game’ and/or a number of minimum rules on employment conditions are laid down in
law. However, 2003–2004 were relatively busy years in legislative terms in both countries. By its
normal standards, Japan has seen hectic activity in the volume and scope of its employment
legislation in recent years in an effort to deal with new economic and social conditions (see Box 3).
Box 3
New employment legislation in Japan in 2003–2004
A Council for Regulatory Reform (CRR), established by Japan’s current government, has called
for legal reform in the employment/labour field to encourage labour mobility, industrial
structure transformation and diversified working patterns. Following discussions in the
Labour Policy Council (comprising representatives from the academic, labour and business
communities) based on the CRR’s philosophy, law-makers in 2003 amended the Labour
Standards Law, the Worker Dispatching Law and the Employment Security Law, all with
effect from 2004. Due to fiscal difficulties, the Employment Insurance Law was also amended
and came into effect in 2003. In 2004, Parliament also amended the Law Concerning
Stabilisation of Employment of Older Persons and enacted the Employment Tribunal Law.
Some of these amendments are detailed below:
■
The revised Labour Standards Law notably stipulates that in cases where a dismissal is not
based on any objectively reasonable ground, and is not seen as a rightful decision in light
of current ‘social norms’, the dismissal will be deemed invalid, constituting an abuse of
the right to dismiss. The new law also increases the maximum duration of a fixed-term
labour contract from one to three years (five years for workers engaged in highly
specialised duties and those aged 60 and above) and seeks to enhance working-time
flexibility for workers engaged in planning and similar management-related tasks.
■
The revised Worker Dispatching Law relaxes the restrictions on the length of time a
worker may be ‘dispatched’ and the types of job dispatched workers can engage in.
(‘Worker dispatching business’ is the term used in Japan to refer to temporary work
agencies.) Specifically, workers can now be dispatched to manufacturing sites and the
maximum period has been extended from one to three years. In addition, guidelines have
been incorporated to encourage the transfer of dispatched workers to regular employee
status.
■
The revised Employment Security Law grants local public bodies the right to provide free
job placement services.
■
The revised Employment Insurance Law seeks to stabilise the finances of the
unemployment insurance programme. The contribution rate will be raised to 1.6% from
April 2005. Both the rate and maximum amount of unemployment benefits have been
lowered and a single system, determining the period of payments to both former regular
employees and part-time workers, has been established to cope with diversification in
employment patterns.
■
The new Employment Tribunal Law enables a panel in a district court (comprising a judge
and two labour experts) to provide rapid, specific solutions for labour disputes. The
current labour mediation schemes, however, managed by public administrative
organisations, will continue to play a central role in the settlement of labour disputes.
■
The revised Law Concerning Stabilisation of Employment of Older Persons requires
employers to ‘extend retirement age’ or ‘re-employ’ to secure the employment of their
employees until the age of 65. The aim is to enable older people to work until their
pensionable age.
13
3
In the USA, under the current Republican administration of President George W. Bush, one of the
main items of basic employment legislation has been subject to amendment. This is the 1938 Fair
Labor Standards Act (FLSA), which sets out rules on minimum wages and working hours. The
Administration regards the FLSA as outdated and working against the interests of both employers
seeking greater flexibility and workers seeking more control over work schedules. Under the FLSA,
workers must be paid overtime pay (at a rate of time and one-half) for hours worked over 40 hours
per week, except for overtime-exempt categories such as ‘professional’ or ‘executive’ workers.
Despite opposition from trade unions and in Congress, the FLSA has been amended with effect
from August 2004, reclassifying certain jobs as overtime-exempt and thus removing entitlement to
overtime pay. Under the new rules, workers who perform supervisory duties some of the time are
no longer entitled to overtime pay rates, even if most of the time they perform non-supervisory
work. The US Department of Labor initially claimed that roughly 750,000 workers would lose
overtime protections under the new rules, but that others would be entitled to overtime pay
because of adjustments in the minimum wage level that a worker needs to earn in order to be
overtime-eligible. Critics claim that more than eight million workers will lose overtime entitlements.
A further reform of the FLSA was announced in late 2004. The aim is to promote flexible workingtime arrangements, with compensatory time-off for extra hours worked. The proposed legislation
would allow an employee to work, for example, 50 hours per week without overtime pay and then
to be compensated by working 30 hours the following week.
At EU level, 2003–2004 was a relatively quiet period in terms of the adoption of new employment
and labour legislation. A directive was adopted on the employee involvement arrangements to
apply in the European Cooperative Society, a new (optional) form of European-scale cooperative
7
business. In the field of health and safety, directives were adopted on the minimum requirements
8
regarding the exposure of workers to the risks arising from physical agents and electromagnetic
9
fields. Discussions continued on a controversial draft directive on the working conditions for
10
temporary (agency) workers. In October 2004, the EU-level central social partners signed a
framework agreement on work-related stress, which aims to establish a framework within which
employers and employee representatives can work together to prevent, identify and combat stress
at work. The agreement will be implemented in accordance with the procedures and practices
11
specific to individual countries rather than by an EU directive.
In terms of new EU legislative proposals, highlights in 2003–2004 were draft directives: amending
the Directive concerning certain aspects of the organisation of working time (originally adopted in
1993), focusing on the ‘opt-out’ from the maximum average working week, the treatment of on-call
working and reference periods for the calculation of maximum average working time; on cross
border mergers of companies, including provisions on what happens to existing systems of worker
participation on the boards of companies involved in such mergers; and on minimum requirements
regarding the exposure of workers to the risks arising from optical radiation. In addition, the
European Commission held consultations with the social partners on: the possible revision of the
1994 European Works Councils Directive; the protection of workers’ personal data; the prevention
of musculo-skeletal disorders; and reducing exposure to cancer-causing substances.
7
8
9
10
11
http://www.eiro.eurofound.eu.int/2003/06/inbrief/eu0306201n.html
http://www.eiro.eurofound.eu.int/2004/10/feature/eu0410204f.html
http://www.eiro.eurofound.eu.int/2004/10/feature/eu0410206f.html
14
At national level, there was no let-up in the usual flow of new employment-related legislation
proposed or adopted in the EU Member States in 2003–2004, covering matters such as: part-time
work, fixed-term contracts and temporary agency work (e.g. in Cyprus, Greece, Hungary, Ireland,
Malta, Poland and Slovenia); equality, non-discrimination and reconciliation of work and family
life (e.g. in Cyprus, the Czech Republic, Denmark, Estonia, Finland, Hungary, Ireland,
Luxembourg, Malta, Poland and Slovakia); working time (e.g. in Austria, Cyprus, Germany,
Greece, Italy, Luxembourg, the Netherlands and Slovakia); employment, labour market and job
creation (e.g. in Germany, Italy and Spain); health and safety (e.g. in Estonia, Finland, Greece and
Latvia); social security (e.g. in Austria, Germany, Greece, Italy, Poland, Portugal and Spain);
employee involvement (e.g. in Lithuania, the Netherlands and the UK); termination of contract
(e.g. in Germany, Poland and Slovakia); and general industrial relations issues (e.g. in Estonia,
France, Ireland and the UK). In areas such as atypical work, equality/non-discrimination, health
and safety, and employee involvement, much national legislative activity was driven by the
requirement to comply with EU directives. In particular, much employment law activity in the NMS
over recent times has involved harmonising their provisions with EU norms.
15
Trade unions
The estimated trade union organisation rate in Japan fell from 20.2% in 2002 to 19.6% in 2003,
continuing a downward trend that has been in evidence for 28 consecutive years. In 2004, union
density in the USA slipped to 12.5% of wage and salary workers in 2004, down from 12.9% in 2003
and 13.2% in 2002, with private sector density falling to 7.9% in 2004 from 8.2% in 2003 (in 1983,
union density stood at 20.1%).
Few EU countries have union density levels as low as those of Japan or the USA – only France and
Spain in the EU15 and Estonia, Hungary, Lithuania and Poland among the NMS. Although
comprehensive data are not available, the average density in the EU25 is probably around 40%,
or some 30% when weighted for country size (figures only relatively slightly reduced by EU
enlargement), and density is 50% or over in Belgium, Cyprus, Denmark, Finland, Luxembourg,
Malta and Sweden. Furthermore, the consistent decline in union membership witnessed in Japan
and the USA, while experienced across the EU as a whole, has not applied to all EU countries. A
recent EIRO study of trade union membership over 1993–2003 in 23 EU Member States (excluding
the Czech Republic, Lithuania and Norway, and the two candidate countries of Bulgaria and
Romania) found that unions have experienced mixed fortunes. Of 19 countries for which total
national membership figures were available for the 1993–2003 period, 11 recorded an overall
increase in membership and eight an overall decrease (these, of course, are not the same as
increases or decreases in union density). The largest percentage increases were recorded in
Cyprus, Ireland, Luxembourg, Malta and Norway. The largest percentage decreases were recorded
in Bulgaria, Poland and Slovakia. Although more countries registered increases than decreases,
aggregate union membership across the 19 countries fell by about a sixth over 1993–2003. There
are several reasons for this. The countries where union membership rose were mostly smaller
countries and the absolute increase in union members was thus relatively low. By contrast, the loss
of members across the countries experiencing decreases was high in absolute terms because of
massive membership losses in some central and eastern European countries, and significant losses
in large countries with high absolute numbers of union members, such as Germany and the UK.
Unionisation levels are higher among men than women in the USA and probably Japan (although
no figures are available in the latter case). This reflects the pattern in many EU countries with low
to medium overall unionisation rates, as in Austria, Germany, the Netherlands and the UK.
However, in the high-unionisation Nordic countries of Denmark, Finland and Sweden, women’s
12
unionisation rate exceeds that of men. In 2004, the US unionisation rate was 13.8% for men and
11.1% for women. Interestingly, the gap has narrowed considerably since 1983, when the rate for
men was 10 percentage points higher than that for women; this narrowing has occurred because
the union membership rate for men has declined more rapidly than that for women. The
abovementioned EIRO study of EU trade union membership over 1993–2003 found that, among
the union organisations for which data were available in 2003, women made up approximately
41.5% of all members and men about 58.5%. The average share of women in unions in the EU15,
plus Norway, was slightly higher, while it was slightly lower (by about one percentage point) in the
NMS and candidate countries. Women made up the majority of union members in Estonia, Latvia,
Norway and Sweden; there was near gender parity in Denmark and Hungary; and men comprised
two-thirds or more of all union members in Austria, Germany, Malta and the Netherlands. Over
12
http://www.eiro.eurofound.eu.int/2001/03/update/tn0103201u.html
17
4
1993–2003, women made up an increasing proportion of union members in most organisations
and countries (e.g. in Austria, Cyprus, Denmark, Finland, Germany, Luxembourg, Norway and
Sweden), although with exceptions among central and eastern European countries. Women’s
generally increasing share of union membership would suggest that their membership is holding
up better than men’s in union organisations that are decreasing in size and that they are making
up a greater share of growth in organisations that are expanding.
One widespread response of trade unions to falling membership (and to other factors, such as
changes in the economic structure) has been to merge into larger organisations. In the EU, the
trend towards concentration of unions gives the impression of having speeded up in recent years.
Over 2003–2004, merger activity was reported (usually at the level of the unions affiliated to the
main confederations/centres) from countries such as Cyprus, the Czech Republic, Denmark,
Finland, Ireland, Luxembourg, Sweden and the UK. In Japan, a move towards merging industrylevel union federations affiliated to Rengo started in 2001 and led in 2002 to the creation of the
largest federation in the private sector, UI Zensen. In manufacturing, three Rengo affiliates merged
to form the Japan Federation of Basic Industry Workers’ Unions in 2003. Mergers among transport
sector unions are due in 2005. In the USA, there has been some consolidation among member
unions of the American Federation of Labor and Congress of Industrial Organisations (AFL-CIO),
but the process has been slow. In 2002, several prominent union leaders formed the New Unity
Partnership (NUP), which proposes consolidating AFL-CIO’s 66 affiliates into 20 or so larger
unions, which would organise in specific sectors, industries and labour markets. The debate heated
up in 2004, with the results of the 2004 presidential and congressional elections seemingly
strengthening the position of the NUP. However, strong opposition to the reform plans among some
unions has raised the possibility of a split in AFL-CIO.
Another approach to tackling membership decline is for unions to seek to organise new groups
outside their traditional constituencies (key factors in falling unionisation include the loss of
employment in traditionally high-unionisation manufacturing industry and the growth of lowerunionisation services employment, and increasing levels of ‘atypical’ employment). This has been
particularly noticeable in Japan over the past few years. The new UI Zensen federation, formed by
merger in 2002 and with affiliated unions in the distribution, retail and textile industries, actively
seeks to attract part-timer workers, a traditionally low-unionisation group. One in five of UI
Zensen’s members is now a part-timer. UI Zensen has also established an occupation-based trade
union for care workers and has launched a new union for temporary agency workers (with 20,000
members) in 2004. More part-timers, agency workers and other ‘non-regular’ workers who were
excluded from Japan’s traditional enterprise trade unions are joining ‘community unions’ on an
individual basis, as are some foreign workers (see page 23 under ‘Migration and industrial
relations’). The Japan Community Union Federation (with 5,000 members) joined Rengo in 2003.
In the USA, one union bucking the downward trend is the Service Employees International Union
(SEIU), which added 700,000 members over 2000–2004, making it AFL-CIO’s largest union, with
1.6 million members. Its strategies have included organising migrant workers and merging workers’
rights with community issues in order to unionise tens of thousands of office-building cleaners in
major cities. Unions in many EU countries have also sought increasingly to organise atypical
workers (as in Italy), migrants (as in Germany) and other ‘new’ groups, with varying degrees of
success, or in some cases to adopt a ‘community union’ approach (as with several UK unions).
18
Employer organisations
The 2003–2004 period saw a number of developments in employer organisations in the EU. As in
recent years, one trend was towards mergers, with the most notable being the fusion of Finland’s
two main central employer confederations to form Finnish Industries (Elinkeinoelämän
keskusliitto, EK), representing at least 15,000 companies that together account for over 70% of
13
Finland’s GNP. Another example was in Sweden, where the two main employer organisations in
the municipality and city council sector – the Swedish Association of Local Authorities (Svenska
kommunförbundet) and the Federation of Swedish County Councils (Landstingsförbundet) –
decided in May to merge by 2007. Short of merger, greater cooperation and collaboration was
agreed between central employer bodies in some cases: the Federation of Finnish Enterprises
(Suomen Yrittäjät, SY), a pressure group representing 88,000 SMEs, and Finnish Industries (EK)
agreed to increase their cooperation in matters related to labour market policy, giving SY wider
14
influence over collective bargaining; and the Lithuanian Confederation of Industrialists (Lietuvos
pramoninku konfederacija, LPK), which traditionally represents larger businesses and the
Lithuanian Business Employers’ Confederation (Lietuvos verslo darbdavi konfederacija, LVDK),
which represents small businesses, signed a memorandum and agreement to foster greater
15
cooperation.
Moving in the opposite direction, 2004 saw a split in the Federation of Employers’ Associations of
the Slovak Republic (Asociácia zamestnávatelsk˝ch zväzov a zdruΩení Slovenskej republiky, AZZZ
SR), formerly the country’s only central employer organisation. Dissatisfied members established a
new organisation, the National Union of Employers of the Slovak Republic (Republiková únia
zamestnávatel’ov Slovenskej republiky, RUZ SR), which soon grew to around the same size as
AZZZ SR.
A final development witnessed in several EU countries is a reduction in the scale and role of some
central employer organisations. It was decided in 2004 that the Confederation of Danish
Employers (Dansk Arbejdsiverforening, DA) is to lose one-third of its total budget and close its
regional network, transferring its regional activities to member organisations – apparently reflecting
a view in its largest affiliate that such a strong central body is no longer required. In Austria, the
Chamber of the Economy (Wirtschaftskammer) is currently undergoing internal reform, aiming to
consolidate its budget in the light of a 30% reduction of membership contributions by 2005.
The most recent significant change in the organisation of employers in Japan came in 2002, when
separate central organisations representing companies’ employer and trade/business interests
merged to form the Japan Business Federation (Nippon Keidanren). The USA is unlike Japan and
all EU Member States in that it has no identifiable national intersectoral employer body with an
industrial relations role. Major business organisations, such as the National Association of
Manufacturers and the US Chamber of Commerce, do not deal with trade unions, although they
do have some role in developing policy on labour issues. There are few national sectoral employer
bodies with any bargaining role.
13
http://www.eiro.eurofound.eu.int/2004/03/inbrief/fi0403201n.html
14
http://www.eiro.eurofound.eu.int/2004/10/inbrief/fi0410202n.html
15
http://www.eiro.eurofound.eu.int/2004/10/feature/lt0410102f.html
19
5
Industrial action
In Japan, the number of collective labour disputes has fallen progressively since the 1970s, to
4,376 in 1980, 2,071 in 1990 and 884 in 2001, although there was a slight upturn to 1,002 in 2002.
The main issues at dispute in 2002 were wage increases, followed by dismissal/reinstatement. In
the USA, industrial action in 2003 was at a very low level by historical standards, with just 14
major work stoppages beginning during the year, ‘idling’ 129,200 workers and resulting in 4.1
million working days of idleness (about one in every 10,000 available working days). Five work
stoppages beginning in 2003 accounted for 82% of all workers idled. The largest of these work
stoppages occurred in supermarkets in southern California and the 145-day strike resulted in
67,300 workers idled and 3.3 million days of idleness. The dispute focused largely on health
insurance issues and finally ended in February 2004, with defeat for the union involved, the United
Food and Commercial Workers (UFCW).
Comprehensive figures are not available for industrial action in the EU over 2003–2004. Where
statistics are available, the picture is mixed. In 2003, strike activity in Austria reached its highest
level since World War II: this resulted from large-scale trade union mobilisation, mainly in
opposition to government reform plans related to public pensions and the structure of the stateowned Austrian Railways. By contrast, the number of working days lost in Denmark due to
industrial action in 2003 was down over three-quarters on the 2002 figure; indeed, fewer working
days were lost in 2003 than in any year since the relevant statistical series started in 1973, with the
exception of 1989.
Austria was not the only country during 2003–2004 to witness national mobilisations, such as
short-term general strikes, against government policies (notably on pensions, see page 33 under
‘Pensions and industrial relations’). Other cases included France, Greece, Italy, Slovakia and
Spain. In individual companies and sectors (public and private), restructuring and attendant job
losses gave rise to a considerable amount of industrial action in many countries (notably in central
and eastern Europe). The public sector saw high-profile industrial action in countries such as
Estonia, Greece, Italy, Sweden and the UK. Strikes and industrial action within the context of
collective bargaining was not prominent over the period and overall it appears that regular
bargaining rounds passed off relatively quietly in most countries, although there were exceptions.
For example, in Germany, trade union attempts to conclude an agreement on a 35-hour week in
the eastern metal-working industry resulted in four weeks of strike action, but ended in failure.
Other examples of conflict over new agreements included action by Swedish electricians, Slovenian
journalists and Italian transport workers and metal-workers.
Table 3 sets out comparative figures on levels of industrial action in western Europe, Japan and the
USA over the period 1993–2002. Overall, during the decade, it seems that Japan had very much
lower levels of labour disputes than the USA, which in turn experienced levels around a third lower
than the EU (the OECD average was somewhere between the US and EU figures). The trend was
downward in the EU and Japan, but slightly upward in the USA. Within the EU15, there were very
notable differences between a few countries where an average of over 100 working days were lost
per 1,000 employees per year (Denmark, Finland, Italy and Spain) and those where 30 or fewer
days were lost (Austria, Germany, the Netherlands, Portugal, Sweden and the UK). The NMS are
not included in Table 3, but it appears that in most cases there has been relatively little industrial
action in recent years, against a backdrop of economic hardship, high unemployment and so on.
However, 2003–2004 saw some indications of an increasing propensity among workers to take
strike action in countries such as Estonia, Poland and Slovenia.
21
6
Finally, in a number of EU countries, new mechanisms for resolving industrial disputes, or to
guarantee minimum provision of essential public services, were introduced in 2003–2004:
16
17
18
19
examples are Cyprus, France, Ireland and Italy.
Table 3
Working days lost due to labour disputes, per 1,000 employees in all industries and
services, 1993–2002
Annual average
Annual average
Annual average
% change, 1993–7
1993–97
1998–2002
1993–2002
to 1998–2002
Austria
2
1
1
–50
Belgium
27
–
–
–
Denmark
49
299
177
510
Finland
174
54
110
–69
France
98
–
–
–
8
3
5
–63
Germany
Ireland
Italy
82
73
77
–11
152
110
131
–28
Luxembourg
12
–
–
–
Netherlands
27
12
19
–56
Portugal
Spain
23
20
22
–13
283
221
248
–22
–91
Sweden
54
5
29
UK
25
23
24
–8
EU average*
70
59
64
–16
Japan
2
1
1
–50
USA
42
47
45
12
OECD average**
56
49
52
–13
* Excludes Greece and, in some cases, Belgium, France and Luxembourg.
** Excludes, in some cases, Belgium, France, Luxembourg and Turkey.
Source: Labour Market Trends, April 2004, UK Office for National Statistics (based on ILO and OECD data).
16
17
18
19
http://www.eiro.eurofound.eu.int/2004/04/feature/cy0404103f.html
http://www.eiro.eurofound.eu.int/2004/12/inbrief/fr0412101n.html
http://www.eiro.eurofound.eu.int/2004/08/feature/ie0408203f.html
http://www.eiro.eurofound.eu.int/2003/10/inbrief/it0310101n.html
22
Throughout the world, international migration has increased substantially in recent years. The
United Nations estimates that the number of international migrants worldwide stood at 175 million
in 2000, up from 76 million in 1960. Furthermore, during the 1990s, international migration to
developed countries increased significantly, even though many of them restricted the admission of
migrants. These developments are closely linked to the labour market. According to the 2004
edition of the OECD’s annual Trends in international migration, record numbers of people are
moving to many OECD countries in search of jobs and to join their families. It notes that the
economic downturn in some OECD countries has not affected the upward trend in international
migration that began in the mid-1990s. There was a significant increase in labour-related migration
during 2001–2002, of both temporary and permanent workers and across all employment
categories – skilled workers, seasonal employees, trainees, ‘working holiday-makers’, transfers of
staff within multinational companies and cross-border workers. Other categories of admissions also
continued to grow, including family unification, refugees and students.
In this context, the impact of labour migration on industrial relations and how industrial relations
systems deal with migration are increasingly relevant questions. Migration can play a role in
meeting employers’ needs for labour in the light of demographic change or skills shortages, while
at the same time raising questions such as the relationship between migrant workers and nationals
who are unemployed, or the fair treatment of migrant workers in employment, both on grounds of
equity and related to concerns about ‘social dumping’ in the form of a pool of migrant workers
employed on a low level pay and conditions, or willing to accept employment on such terms. In
this context, it may be expected that migration will have major effects on industrial relations
systems and become an issue for the social partners and in dialogue and bargaining between them
(as well as a theme in government employment policy and legislation). Some of these aspects are
explored in the following sections. The EU information is largely based on a 2003 EIRO
20
comparative study, which covered the EU15 and four new Member States, while Box 4 sets out
some basic statistics on migration in the EU, Japan and USA. It should be noted that the categories
and terminology used in the area of migration vary from country to country and from source to
source.
Labour market situation
Key aspects of the labour market and employment situation of migrant workers include the
following:
Occupation
In the EU as a whole, foreign workers enter the full spectrum of occupations, but seem to be
concentrated largely at the top and bottom of the labour market. Many migrant workers are in
professional or skilled occupations: according to Eurostat’s Labour Force Survey figures, 23.3% of
non-EU national workers were in high-skilled, non-manual occupations in 2002. However, the
largest group of migrants is found in unskilled manual work, accounting for 33.7% of non-EU
national workers in 2002. A similar picture is reported from the USA, with immigrants having a
disproportionate presence in both high-level occupations – such as computer scientists (18.6% of
whom are immigrants) and engineers (16.4%) – and low-skilled occupations – immigrants make up
20
http://www.eiro.eurofound.eu.int/2003/03/study/tn0303105s.html
23
7
14% of the labour force, but 20% of the lower paid workers. In Japan, while no statistics are
available, the thrust of official policy has been to admit highly qualified professional/technical
foreign workers, while discouraging an influx of unskilled workers, suggesting that migrants (legal
ones at least) are found more in the upper strata of the labour market (see next page).
Box 4
Migration figures
The number of foreign nationals in Japan has increased steadily since the mid-1980s. The
number of registered foreign nationals rose from some 900,000 in 1987 to 1.3 million in 1992,
and the number of foreign nationals stood at 1,915,000 in 2003. The total number of foreign
workers stood at 580,000 in 1992, or 1.1% of the workforce, rising to 710,000 (1.3%) in 2000,
740,000 (1.4%) in 2001 and 760,000 (1.4%) in 2002. Migration to the USA has risen sharply
in recent years, with more immigrants arriving during the 1990s than in any previous decade.
The number of legal migrants averaged 935,000 per year from 1991–2002. In 2001 and 2002,
some 1,064,000 were admitted in each of the two years, but the number fell to 705,000 in
2003 as a result of new checks and restrictions introduced after the events of 11 September
2001. Immigrants presently make up 11.3% of the US population. They constituted 14% of
the US labour force in 2003, more than double the 1980 percentage. There are some 18
million foreign-born workers in the labour force, plus 5.8 million people admitted on a shortterm basis for business purposes and 990,000 ‘temporary foreign workers’.
In 2003, according to the European Commission, of the 381 million people living in the EU15
(no similar data are yet available for the EU25), some six million (1.6%) were EU citizens
living in other countries and 14 million (3.7%) were non-EU nationals, while the total
number of people not residing in their country of birth or citizenship was estimated at 33
million – 36 million (8.7% - 9.4%). The migrant population of the EU15 represented roughly
8% of the total population. There is substantial variation between countries, with Austria,
Belgium and Germany having the highest share of people with a foreign nationality, at 9%
or more. The share of foreigners is low in Finland, Greece, Italy, Portugal and Spain, at 2.5%
or less. No overall figure is available for the proportion of the total EU workforce made up
of non-nationals, but the European Commission reports that in most Member States, the
share of non-nationals is somewhat lower in the labour force than in the population as a
whole. This is the case in Austria, Belgium and Germany, where it lies between 8% and 10%;
in the Netherlands and Sweden, where it is about 4%; and in Denmark, Finland, Italy and
Spain, where non-nationals account for 1% or 2% of the labour force. On the other hand,
non-nationals are at the least equally as represented in the labour force as in the total
population in France (6%), Ireland, Greece and the UK (3% – 4% ) and Portugal (2%).
Thus, the overall picture is that migrant workers make up a much larger proportion of the
labour force in the USA than in Japan, in fact about 10 times larger. The EU15 as a whole lies
about half-way between the two extremes, with some countries approaching US levels (such
as Austria, Belgium and Germany) and some near Japanese levels (such as Finland, Greece
and Portugal).
Sector
The sectors where migrant workers are employed tend, across the EU, to be generally labourintensive and lower skilled. In 2002, according to Eurostat, the main sectors of employment for
non-EU nationals were manufacturing (22.0%), wholesale/retail trade (12.9%), business services
(11.9%), hotels/restaurants (11.2%) and construction (10.6%). The proportion of non-EU nationals
employed in hotels/restaurants and private households is far above that of EU nationals and, to a
smaller extent, this is also true for manufacturing, construction and business services. In the USA,
it appears that key sectors for migrant employment are manufacturing (e.g. textiles), construction,
24
agri-business and homecare services. In Japan, manufacturing is very much the dominant
employment sector – a 2003 survey found that manufacturing industry hires 60.2% of foreign
workers, followed by services (9.0%) and hotels/restaurants (7.4%).
Employment status
Migrants in the EU Member States are more likely than average to have ‘flexible’ and fixed-term
contracts. Across the EU in 2001, fixed-term contracts were held by over 20% of non-EU nationals,
compared with 13% of EU nationals (Eurostat figures). According to a 2003 survey in Japan, only
25.8% of foreign workers worked on a full-time regular basis. While no statistics are available for
the USA, large numbers of migrants are admitted only temporarily for employment purposes, while
many work for temporary work agencies or on a day-labour basis.
Pay
The relatively unfavourable situation of many (though not all) migrants on the EU labour market
is reflected in their wage level (and illegal immigrant workers are likely to be in an even worse
position). Migrants tend to be among the low-paid groups in a number of countries. Detailed
information on this point is rarely available, but widespread low pay is reported from countries
such as Spain and Belgium. As noted above, immigrants make up 14% of the US labour force, but
account for 20% of the lower paid workers, while half of the immigrant workforce earns less than
20% of the minimum wage, compared with one-third of native-born workers. No similar data are
available for Japan, but the low-pay effect may be less pronounced given that legal immigrants
appear to be found at somewhat higher levels of the labour market.
Working conditions
Overall, it appears that migrant workers in the EU are often worse off than nationals where working
conditions are concerned (with illegal immigrants worst off of all). The problems or practices faced
to a greater extent by foreign workers than nationals may include working on weekends, holidays,
at night or in alternating shifts (as in Germany); less job security (Spain); inadequate training (the
UK); excessively long working hours (the UK); and poor health and safety conditions or accident
rates (Austria, Spain and the UK). Much of these poor conditions can be explained by the job and
sectors in which many migrants are employed. The situation in the USA seems very much the
same. There is a large body of evidence indicating that many immigrants are abused by employers,
injured as a result of employer negligence or dismissed for trying to form a union. Studies suggest
that employer violations are quite widespread. A General Accounting Office report has disclosed
that denial of labour rights is almost routine in the ‘sweatshops’ that have proliferated in cities like
New York during the last two decades. Other studies have found that immigrants are
disproportionately exposed to violations of occupational health and safety laws since they are less
likely to receive the necessary safety equipment and training. Studies and anecdotal evidence also
point to pervasive wage and hour violations committed by day-labour employers and temporary
work agencies. There is also reportedly a lack of employer-provided training programmes available
to workers who are poorly educated or lack proficiency in English in order to improve their skills
and prospects. Criticisms regarding a lack of training opportunities have also been levelled against
government workforce development programmes. No information on these issues is available for
Japan.
25
Trade unions and migrants
The fact of labour migration poses a number of questions for trade unions. There is arguably a
tension between ‘traditional’ attitudes of wishing to protect the jobs, pay and conditions of their
existing members against competition from newcomers (who may be prepared to work at a lower
cost) and the prospect of a potentially fruitful recruiting ground (at a time of generally falling
membership) among workers who often experience the kind of poor pay and conditions that
prompted the birth of many trade unions in the first place. In the EU, this tension is apparent in a
number of countries, with some unions sceptical about the desirability of further labour
immigration and opening borders for the purpose of ‘importing’ further foreign workers (perhaps
the clearest example is Austria). Furthermore, unions in countries such as Belgium, Denmark,
Ireland and the Netherlands stress the problem of unemployment among migrants already in the
country. There seems to be less concern in countries such as Italy and the Netherlands about a
possible ‘threat’ to their members from new migration. The EU’s eastward enlargement in 2004
brought specific worries about the effects on national labour markets among unions in countries
such as Austria, Finland and Germany (especially in the construction sector). Such worries are not
restricted to the EU15: for example, unions in Hungary are concerned about the import of cheap
labour from neighbouring eastern European countries. Despite their concerns, however, many
unions in the EU act to support or recruit migrant workers (see next page under ‘Activities’).
More restrictive attitudes still appear to dominate in many Japanese unions. For example, the
Rengo confederation is in favour of admitting only ‘skilful, professional, technical foreign workers’
and attaches high value to ‘national consensus and proper balance with job opportunities for
Japanese workers’. Citing a need to protect Japanese workers and prevent a deterioration in
working conditions, trade unions have consistently opposed opening up the labour market to
foreign workers, including unskilled labour. Furthermore, because most Japanese trade unions are
enterprise unions comprising mainly full-time workers, they see almost no incentive to organise or
give support to foreign workers, and many do not admit them. More open policies have recently
been developed by some unions, but with limited success (see next page under ‘Activities’)
By contrast, many US unions are now giving priority to the interests of immigrant workers.
Historically cool towards immigrants out of fear of labour market competition, many unions now
regard an alliance with immigrants regarding civil and workers’ rights issues as a potentially critical
dimension of reviving the trade union movement. This has led to a number of major initiatives and
organising drives (see next page under ‘Activities’).
Membership
Although there is a lack of statistical information for most EU countries, trade union density among
migrant workers seems to be lower than the average, as in Belgium, Denmark, Hungary, Ireland,
the Netherlands and the UK. However, there are often considerable sectoral variations within
countries where the overall density for migrants is below average. For example, in the UK, the
unionisation of foreign workers is thought to be lower than the (low) average in hotels/restaurants
and wholesale/retail, but nearer the (high) average in public education and health services.
Similarly, in Denmark, unionisation of migrant workers appears to be lower than average in sectors
such as hotels/catering and cleaning, but nearer average levels elsewhere. Overall, indeed, it seems
that an important factor explaining their below-average union density in many Member States is
26
that many migrants work in service sectors where unionisation is traditionally low. However, the
picture of notably low relative unionisation among migrant workers is not universal. In Sweden, for
example, union density among foreign workers is only marginally lower than the 80% figure for
Swedish nationals. Even more notably, in the Emilia Romagna region of Italy, research indicates
that union density among migrants is significantly higher (45%) than the average (36%).
There appear to be no overall data on the level of unionisation among migrant workers in the USA.
One piece of evidence is that in California (one of the main states of residence for immigrants), in
2001–2002, the unionisation rate for immigrants was 11.7%, compared with 19.7% for US-born
workers (University of California Institute for Labor and Employment, 2003). Similarly, in Illinois,
research published in 2002 found that 12% of immigrants in employment in Chicago belonged to
21
a union, compared with 19% of all workers in Illinois. However, some unions appear to have
recruited considerable numbers of immigrants in recent years, as highlighted below.
Again, no union density data for foreign/migrant workers are available for Japan, but it seems that
the level is low. According to a 2003 survey, only 11.3% of establishment-level trade union
organisations have foreign workers as members, while a majority of unions actually exclude them
(see below).
Activities
Seeking to recruit migrant/foreign workers is a very obvious way in which trade unions can attend
to their needs and interests (and boost their own, often declining, memberships). However, in the
EU, union recruitment initiatives directed specifically at migrant workers are reported from only a
minority of countries, such as Finland, Italy, the Netherlands, Spain, Sweden and the UK. In other
cases, efforts are being made to improve the involvement of migrant members in trade union work
(as in Finland) and their representation in union structures and among union officials (as in
Belgium, Italy and the Netherlands). The US union movement took an unprecedented turn towards
immigrant workers in 2002, identifying them as a source of revival. A leading example is the Service
Employees International Union (SEIU), which has grown rapidly to become the largest affiliate of
AFL-CIO, partly as a result of immigrant organisation. For example, its ‘Justice for Janitors’
campaign during the 1990s unionised tens of thousands of office-building cleaners, often
immigrants, in major cities such as Los Angeles. As noted above, Japan’s enterprise-level unions
have in most cases made no efforts to recruit foreign workers, while about three-quarters do not
even permit membership for such workers and mostly have no intention of making efforts to attract
foreign workers as members. Efforts to organise migrant workers have thus been largely restricted
to the much less prevalent community-based general trade unions (‘community unions’). In
addition, some industry-level union federations organising small-scale manufacturers (where a
large number of foreign workers are employed) have recently initiated efforts to attract foreign
workers and to encourage the establishment of new trade unions. However, these efforts are facing
difficulties because, for example, many foreign workers are not permanent residents and will not,
it is thought, be reliable union members, while communication may be difficult due to language
differences.
21
Mehta, Chirag, et al, Chicago’s undocumented immigrants: An analysis of wages, working conditions, and economic contributions, Chicago:
Center for Urban Economic Development, University of Illinois, 2002.
27
Other possible types of trade union activity related to migrant workers include:
■
Involvement in, or the instigation of, campaigns and initiatives to combat racism and promote
equal treatment for migrants. Such actions are reported from the majority of western European
countries, while specific campaigns to promote equal rights for migrant workers (often in nonemployment areas, such as housing and political rights, as well as in employment) feature in
many countries. Campaigning around such issues plays a major role in the USA. Notably in
2003, AFL-CIO organised a national mobilisation of immigrant workers, known as the
Immigrant Workers Freedom Ride, centred on full citizenship rights for immigrant workers, clear
opposition to civil rights’ abuses and discrimination against immigrants, and enforcement of
immigrant workers’ rights in the workplace. No such activity is reported from Japan.
■
Practical trade union assistance and support for migrant workers and their labour market and
social integration. This is a feature in many of the EU15, often taking the form of advice,
information, special services and involvement in integration programmes. Similar efforts are
present in the USA, but are rare in Japan. However, several support initiatives have been taken
by a number of Japanese community-based and industry-level union organisations (with some
concern about the financial burdens); it appears that NGOs rather than trade unions provide
support to foreign workers in most cases.
■
In EU countries with large numbers of illegal immigrants, these seem to be a major issue for
trade unions. Thus, unions in countries such as Greece, Portugal and Spain devote
considerable attention to supporting illegal foreign workers (and recruiting them in some cases)
and seeking to regularise their situation and defend their rights. Some US unions also organise
illegal immigrant workers, but it is reported from Japan that neither unions nor illegal workers
themselves are in favour of their joining unions.
Employers, employer organisations and migrants
Labour shortages, both present and future, seem to be the main reason for employer organisations
in western Europe to develop stances and policies on migration and immigrant workers. (In the
NMS, there is very little in the way of employer organisations’ policies or activities in this area.)
Organisations in countries such as Belgium, Germany, the Netherlands and the Scandinavian
countries point to long-term demographic developments, with a declining number of young people
and an increasing number of older people. As well as reducing the size of the workforce, these
developments may weaken the basis of the social security and pensions system. Not only at
present, but also in the near future, the entry into the labour market of migrant workers is widely
perceived as necessary by employers in the great majority of countries. With few exceptions (such
as Austria and, to a lesser extent, France), the idea of a free market in trade and people, especially
within Europe, is widely embraced by employer organisations, which thus press governments to
reduce and simplify regulations. However, in most countries, their interest in such a free market in
people is conditioned by their own demands for labour and specific shortages. The majority of
employer organisations in western Europe are thus of the same opinion on the necessity of
immigration to meet labour shortages. In many countries, employers criticise governments for
being too slow, bureaucratic and ponderous on these subjects and have made proposals to
governments to tackle these problems.
28
In Japan, employer associations have hitherto supported the current, relatively restrictive, legal
framework governing the entry of foreign workers, but they too anticipate labour shortages in the
near future and recognise a need to attract more foreign workers in an acceptable manner, by
easing immigration controls in the medium and long term. This view was expressed clearly in 2004
by Nippon Keidanren in a set of ‘recommendations on accepting non-Japanese workers’, which
calls for legal change to facilitate the necessary labour migration. Many individual Japanese
employers, however, appear to take a cautious approach to opening up the labour market to foreign
workers. According to a 2003 survey, 45% of respondent companies showed positive attitudes
toward foreign workers, while about 44% had ‘no intention of hiring foreign workers’. As to a
desirable national policy on foreign workers, almost 40% of respondents supported selectively
accepting foreign workers for the job categories that suffer from labour shortages, while some 60%
wanted strict controls over foreign workers via work permits based on their qualifications or job
experience.
The views of US employers mirror those expressed in many EU countries and, to a lesser extent,
Japan. In recent years, US employers have tended to favour a generally ‘open-door’ approach to
immigration and have resisted political efforts to reduce the inflow of new immigrants. This is true
for employers that tend to hire technical and professional workers, as well as those that rely on lowwage unskilled labour. The National Association of Manufacturers, for example, sees immigration
as one way of attracting sufficient numbers of sufficiently trained workers, given a lack of suitable
‘home-grown’ workers and the coming retirement of the ‘baby boom’ generation. Employers’
demands for a steady supply of highly skilled technical and professional workers rest on the
argument that the world’s ‘best and brightest’ should be allowed to come to the USA since they
help US companies survive and prosper in the global marketplace.
In terms of specific activities by employer organisations relating to migrant workers, apart from
involvement in various bipartite and tripartite dialogue and initiatives (see below), these are not
that common in the EU. Examples include: a declaration on anti-discrimination and equal
opportunities in recruitment of immigrants in Belgium; the organisation of surveys and seminars
on migration issues in Finland; support for company-level anti-discrimination measures in
Germany; action on recruitment of people from ethnic minorities in the Netherlands; activities in
some sectors to coordinate labour migration and combat illegal immigration in Portugal; and
projects and policies on the integration of migrants, and cooperation with local authorities on
placement of migrants in Sweden. A notable example is Italy, where some employer organisations
as well as individual employers have taken various initiatives (such as training to upgrade skills
and Italian-language courses, or help with housing) aimed at assisting the integration of migrant
workers into the workforce, and into society more widely, taking the view that social inclusion may
help to improve the reliability of workers and the stability of the employment relationship. At the
level of individual employers, in some countries there are companies that support migrant workers
by addressing discrimination and operating ‘diversity management’ practices, as in Denmark,
Ireland and the UK.
In the case of Japan and the USA, there seems to be little in the way of explicit activity relating to
migrant workers emanating from employers or their organisations (beyond recruiting them and
expressing views on public policy). Japanese research has indicated a recognition among
employers of a need to raise awareness of the issue among employees, but there is no evidence of
concrete action on this point.
29
Consultation and bargaining
Reflecting national systems of social partnership, trade unions and employer associations in most
EU countries (exceptions include France and Hungary) are consulted by their governments on
issues relating to migrant workers. The level of consultation varies, however, from consultation on
specific issues such as quotas (as in Austria, Slovenia and Spain) to involvement in the drafting of
all relevant policies. To take a few examples: in 2002 the Danish social partners, municipalities and
government concluded an agreement on stronger measures to integrate immigrants and refugees
into the labour market; in Germany, the social partners were involved in the ‘immigration
commission’ that drew up a report which formed the basis for new immigration legislation in 2004;
the Italian social partners are consulted in the drafting of migration policies and are represented on
national and local bodies dealing with immigration issues; and the social partners in the UK are
represented on a recently established working group on illegal immigration.
In Japan, where consensus-building is also a feature of much policy-making, some social partner
involvement is reported in the migration area. Notably, in the context of current proposals to ease
restrictions on labour immigration, government ministries are holding discussions with
representatives of trade unions and employers in order to determine overall government policies
and specific approaches for: carrying out proper immigration control; maintaining public order;
protecting the human rights of foreign workers; and examining possible increases in
training/education or social security costs, as well as who will meet them. Given its absence of a
tradition of social partnership or tripartite concertation, it is not surprising that no explicit
involvement of unions and business/employer organisations in migration issues is reported from
the USA.
Across the EU, the issue of migrant workers does not appear to have achieved a significant place
on the collective bargaining agenda. In many countries, issues relating to migrant workers are not
seen as an issue for collective bargaining, but for bipartite and tripartite dialogue. There is no
evidence of any bargaining activity of specific relevance to the matter in France, Luxembourg,
Portugal and Sweden, or in any of the NMS. In the other EU countries, there is some bargaining
activity (though rarely very much) on themes related to migrant workers. In Austria, for example,
this is purely negative in that a number of sectoral agreements allow discrimination against migrant
workers in recruitment and dismissal. Elsewhere, the approach varies, with agreements at various
levels dealing in various ways with a number of key themes, mainly non-discrimination/equal
treatment on grounds of race and ethnic origin (which is relevant to many migrant workers and
also, of course, to many nationals) and integration. At intersectoral level, the Belgian social
partners have reached agreements both on equality and non-discrimination on racial grounds, and
on special training and employment measures for ‘at-risk’ groups, including migrants. Equal
treatment for migrants in Denmark is established as a theme in company-level employee –
management cooperation by a national agreement, while the largest social partner organisations
have also reached an agreement on the integration of migrants. Non-discrimination and equal
treatment is also dealt with by intersectoral agreements in Greece and Ireland. The narrower issue
of monitoring the working conditions of migrant workers has been addressed by a Finnish central
agreement. In most cases, there is no evidence that such intersectoral provisions are reflected in
any significant bargaining on migration issues at lower levels.
The countries where migrant workers receive most attention in collective bargaining are probably
those where the issue is dealt with in sectoral agreements – Italy, the Netherlands and Spain. About
30
one in 12 Italian sectoral agreements deal with relevant matters, as do about a fifth of major Dutch
agreements (the majority of which are at sectoral level) and a smaller number in Spain. In Italy, the
relevant agreements (often signed by employer organisations for SMEs, crafts and cooperatives)
cover a range of matters including: support for employment and social inclusion (housing,
transport, etc); language courses and, less frequently, vocational training; the creation of special
monitoring committees on migrant workers’ labour market situation; equal opportunity measures;
and special longer holidays for migrant workers (to visit their countries of origin) and time-off for
religious purposes. In the Netherlands, the focus is more specifically on the employment of migrant
workers, with a majority of relevant agreements containing target figures for new jobs for this group.
In Spain, collective agreements in sectors with large migrant workforces (as in hotels/catering,
construction and agriculture) include provisions on issues such as equal pay and (as with some
Italian agreements) flexible working time for religious purposes, such as Ramadan for Muslims.
Company-level bargaining on migration issues seems to be rare, with some exceptions in Germany,
Italy, the Netherlands and possibly the UK. A few company agreements in Italy provide for special
working-time and leave arrangements for migrant workers. In Germany, works agreements on
preventing racial discrimination and ensuring equal treatment have been signed by works councils
and management in a number of companies (covering about one million employees).
If bargaining on topics directly related to migrant workers is, at best, patchy across the EU, it
appears to be non-existent in Japan. A lack of data on the content of collective agreements makes
the situation difficult to assess in the USA, but many unions are now actively championing
immigrant workers’ issues, so it seems likely that some relevant bargaining activity is taking place.
Immigration is also very much an industrial relations ‘issue’ in the USA in ways that would
arguably be very unusual in the EU. There are reports of immigrants being dismissed for trying to
form a union in low-wage ‘sweatshop’ sectors. Notably, some employers have been found to be
using immigration law to break unionisation efforts. A number of incidents have occurred where
employers have informed on workers seeking to form a union, or being involved in union activity,
by contacting the authorities and inviting them to take action against suspected illegal immigrants.
The requirement for workers to have a valid social security number is, it is claimed, used by some
employers as a means of threatening suspected illegal immigrants not to protest at poor pay or
working conditions, which may themselves be illegal.
31
Pensions systems and their reform are currently high-profile issues in the EU, Japan and the USA,
as in most industrialised market economies. State pension schemes have recently been reformed
in many EU Member States and in Japan, with further changes to come in many cases, while the
US system is due to be overhauled soon. In numerous EU countries, governments have raised the
pension age and/or are developing plans to do so, and early retirement schemes are under heavy
pressure. Other common changes include higher contributions, lengthened contribution-history
requirements and basing pension entitlements on a longer period of earnings. The main reason
usually cited is that demographic change, resulting in an ageing overall population, threatens to
make the costs of the present systems prohibitive and that measures must be taken to make them
sustainable (as well as to keep people in work longer). Examples of EU countries that have recently
introduced major state pension reforms include Austria, Belgium, Finland, France, Germany,
Greece, Italy, Portugal, Slovakia and Spain. In Japan, against a similar background of population
ageing, a process of gradually increasing the pensionable age from 60 to 65 started in 2001. In
2004, a new pension reform plan provided for a gradual increase in contributions, new benefit
calculation formulas and changes in financing arrangements. The US ‘social security’ pension
system has not been reformed since 1983, when the retirement age was raised to 66 (starting in
2005) from 65. However, again in a context of demographic change and (disputed) concerns about
long-term sustainability, the Bush Administration, re-elected in November 2004, has proposed the
creation of private tax-free investment accounts within the social security pension scheme: this
would allow workers to divert some of their social security contributions into personal investment
accounts in exchange for agreeing in advance to receive a much-reduced guaranteed state benefit
when they retire.
The reform of state pension provision has increased attention on employment-related occupational
pensions and in many countries the regulatory environment has been changed in recent years in
order to encourage such ‘second-pillar’ provision. This is true in many EU Member States –
although the relative importance of occupational pensions varies enormously among them, as do
the characteristics of schemes – as well as in Japan and the USA. Table 4 highlights some key
aspects of occupational pensions systems in the various countries.
In the following section, the differing relationship between pensions systems and industrial
relations in the EU, Japan and USA is examined (the EU information is largely based on a 2004
22
EIRO comparative study, covering the EU15 and two new Member States). The main focus is on
occupational pensions since this is the area of pensions where, in many countries, the social
partners, social dialogue and collective bargaining play the greatest role. First, however, we look at
the involvement of the social partners in the state pensions system.
State pension systems – Involvement of trade unions and employer
organisations
In the EU, the formal position of the social partners in managing the ‘first pillar’ of state pension
provision varies from very strong, as in France, to virtually none, as in the UK. Often, the social
partners have an advisory or consultative status, as in the Netherlands or Hungary. Although in
22
http://www.eiro.eurofound.eu.int/2004/04/study/tn0404101s.html
33
8
several countries the social partners have little or no formal influence, their role in practice might
be considerable – examples include Belgium, Denmark and Finland. In most EU countries
concerned, recent state pensions reforms have involved consultation with the social partners. In
Spain, for example, the social partners are involved in negotiations over all aspects of the public
pension system, with recent changes based on agreements with all or most social partners. The
social partners are not, however, always unanimous about pension reform in countries where they
23
are involved in the process. In Italy, a 1995 reform law made structural changes to the state
pension system on the basis of an agreement between the trade unions and the government, which
was not signed by employer organisations. Furthermore, consultation does not always mean that
the social partners’ views are taken into account: in Austria, for example, although governments
have always consulted them prior to making significant changes in the state pension system, in
2003 the current conservative-populist coalition administration carried through a fundamental
24
pension reform against the explicit opposition of the social partners.
Table 4
General
Main features of occupational pensions systems in the EU, Japan and USA
Among EU countries, collective (and often sector-level) occupational pension schemes are deeply rooted in the
Netherlands, Sweden, Denmark and, to a lesser extent, the UK. Relatively recent legislative reforms have encouraged
the spread of such schemes in countries such as Austria, Belgium, Germany and Greece. Other types of occupational
pension provision include pensions provided through insurance firms (which exist, for example, in Austria, Finland
and the Netherlands) and 'direct pension guarantees' made by the employer (as in Austria, Belgium and Finland),
while distinctive country-specific schemes are present in France and NMS such as Hungary and Poland.
In Japan, a system of occupational pensions has existed in the private sector since the 1960s. Against the background
of increasing mobility and diversification of employment, the system was reformed in 2002 in an attempt to protect
pensioners, secure pension benefit portability and generally improve the environment for occupational pensions. The
new schemes may be either corporate or individual type in nature. Occupational pension programmes are usually
instituted by a company or group of companies, and fund management duties are entrusted to pension management
institutions (private insurance companies, banks, etc).
In the USA, occupational pensions have a relatively long history. Traditional defined-benefit schemes are generally
collectively based, covering the workforces of individual employers or, in a significant proportion of cases, a number
of employers. The newer and growing defined-contribution schemes (see below) are based on individual employees.
The US Congress has taken a number of measures to facilitate the expansion of occupational pension coverage, by
offering various incentives for companies to establish plans.
Coverage
In the EU, it appears that some countries are approaching full workforce coverage by occupational pensions, for
example, in Denmark, the Netherlands and Sweden, as well as in France if this country's mandatory supplementary
schemes are treated as occupational pensions. In Germany, Norway and the UK (plus Hungary if its second-pillar funds
are counted as occupational), coverage is about half of the workforce or a little more, while a third to a half appears
to be the rate in Belgium and Ireland. Only about a sixth of Austrian workers are covered by a scheme. In Finland,
Greece, Italy and Spain, coverage appears to be below 10%, in some cases far below.
In Japan, overall coverage figures are not available, but according to a 2003 survey of companies with 1,000 or more
workers, 90% operated occupational pension schemes, plus retirement lump-sum grants. However, the number of
employees covered by traditional occupational schemes decreased by three million in 2003, continuing a decline from
peak participation during the mid-1990s.
In the USA during 2003, the percentage of workers participating in an employment-based retirement plan was 42%
(57.1% for full-time, full-year workers aged 21–64), which amounts to 63.5 million workers in total (down from 67.1
million in 2000).
23
24
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http://www.eiro.eurofound.eu.int/2003/05/feature/at0305202f.html
34
Table 4
Main features of occupational pensions systems in the EU, Japan and USA (cont.)
Variations in
coverage
In the EU, apart from differences in overall occupational pensions coverage, there are large variations across different
types of organisations and types of employees. For example, overall it appears that: coverage in larger enterprises is
usually higher than in SMEs; coverage usually varies between sectors, with coverage in the public sector often higher
than in the private sector; and the likelihood of employees being covered by an occupational pension varies with
factors such as their sex, job level and type, employment status and length of service. On the last point, in many
countries, coverage tends to be higher among white-collar workers than blue-collar workers, men are better
represented than women and coverage of 'atypical' employees (part-time, fixed-term, etc) is below average. Efforts
to tackle these discrepancies are being made in some EU countries.
In Japan, a lower prevalence of occupational pension schemes in SMEs also appears to be the case.
This is clearly true in the USA, although coverage levels have increased in smaller firms (e.g. in companies with 25–99
employees, the level rose from 28.2% to 39.4% between 1987 and 2003). In the past two decades, a large coverage
gap has opened up between public and private sector full-time workers in the USA. Most public sector workers (98%
in 1998) participate in retirement plans run by their respective state legislatures, but the fall in the level of private
sector coverage is striking: in 1985, 91% of private sector full-time employees in medium and large establishments
participated in a retirement plan, but by 2000 the level had fallen to 70%. Coverage is also considerably lower among
less well-educated workers in the USA.
Defined-benefit
(DB) versus
defined-contribution (DC)
In the EU, the 'traditional' form of occupational pension is the defined-benefit (DB) scheme, whereby the pension
and other benefits that will be paid to members are clearly defined in the scheme’s rules. The other main form is the
defined-contribution (DC) scheme, whereby the member’s benefit is determined solely by reference to the
contributions paid in by the employer (and, if contributory, by the member) and the investment returns earned on
those contributions. DC schemes have long been the main form in Austria, Denmark and Italy, while a shift from DB
to DC schemes is reported from a relatively large number of countries — this is a particularly major issue in Ireland
and the UK. Furthermore, countries that have only recently set up occupational pension schemes have mostly done
so in the form of DC schemes, as in Poland and Hungary. However, DB schemes are still dominant in countries such as
France, the Netherlands, Finland (though here occupational pensions are of minor importance) and Germany. In cases
such as Austria, Belgium and Sweden, DB and DC systems exist alongside each other, without any shift being reported
from the former to the latter.
In Japan, many companies have been dissolving their traditional, non-DC occupational pension funds, given poor
investment yields and new accounting standards. Furthermore, the traditional pension schemes are not seen as being
compatible with the current lower birth rate, frequent job switching and diversified work patterns. Legislation
adopted in 2001 will eventually abolish the old schemes, replacing them with new DB or DC schemes. It is expected
that more and more employers will introduce DC plans or another new scheme, and in 2003 some 700,000 employees
joined a DC scheme.
In the USA, over the past two decades there has been a decisive shift away from DB schemes to DC plans, with a
declining stock market, low interest rates and a falling active worker – retiree ratio, making the former less attractive
to employers. DB schemes have suffered a sharp decline over the last 20 years, as measured by both the number of
plans that have been terminated and the number of workers covered. At the same time, DC plans have increased
dramatically, especially in the private sector, and now cover 59 million workers, compared with 44 million for DB
schemes.
Final salary
versus average
salary
Contributions
In some EU countries, apart from a relatively widespread shift from DB towards DC schemes, a shift is also occurring
within DB schemes, from using the employee's final salary at retirement to calculate the amount of the pension to
using their average salary over a varying period of employment (examples include the Netherlands, Ireland and the
UK). Average-wage schemes have a longer history in cases such as Finland and the French private sector. The main
motive behind this move towards average-salary arrangements is financial, with employers complaining that the costs
of DB pensions are becoming excessive.
In the USA, within the declining DB sector, benefits are still usually based on a combination of the worker's age, years
of service and final average earnings.
In many EU Member States, contributions to occupational pension schemes are shared in varying measures by
employer and employees, with the employer invariably paying the majority in such cases. For example, employers
generally pay about two-thirds and employees about one-third in Denmark, the Netherlands, the UK (DB schemes)
and France (60%:40%). The share paid by employers may be much higher (even 100%) in some countries such as
Spain, Poland, Finland, Austria and Sweden.
In Japan, employers alone pay the contributions for the new DB and DC pension plans, and under one of the
traditional schemes (the 'tax-qualified pension plan'), while employers and employees basically bear equal payment
burdens for the other traditional scheme (the 'employees’ pension fund').
In the USA, both employers and employees contribute to DB schemes. In DC plans, employees accumulate money for
retirement by making pre-tax contributions from their salaries. Employers often make a limited contribution to the
plan, but monthly contributions are not required.
Source: EIRO.
35
In the USA, the social security pension scheme is governed by Congress and trade unions and
business/employer organisations are not involved, although they lobby on the issue and over
possible reforms. While not apparently involved in managing the state pensions system, the
Japanese social partners are consulted on legislative reforms, such as those in 1999 and 2004.
Indeed, the Rengo trade union confederation and Nippon Keidanren employer confederation
issued joint statements expressing their opposition to some aspects of the 2004 reform.
Occupational pensions – Collective bargaining
In most EU15 countries, there is an appreciable degree of collective bargaining over occupational
pensions (exceptions are Finland and Luxembourg, where this sort of pension provision is
relatively uncommon). Such bargaining exists in only a very limited way in the NMS, such as
Hungary and Poland. The extent of bargaining over occupational pensions in each country
depends on the relative importance of such schemes and the involvement of the social partners in
them. But there does appear to be a general tendency for bargaining, especially at sectoral level, to
play an increasingly important role in this area, often encouraged to do so by recent legislation
promoting occupational pension provision.
National intersectoral bargaining on what can be considered occupational pension-type provision
occurs in France and Ireland. Sectoral collective agreements are essentially the basis for the entire
system of occupational pensions in Denmark, the Netherlands and Sweden. Such agreed sectoral
arrangements obviously result in a high degree of coverage, with up to 90% of the workforce
covered by the schemes in these countries. Under the influence of recent legislation, a similar
system of sectoral agreements on occupational pensions covering all major branches now appears
to be developing in Germany and Italy, although coverage is not yet at such high levels. There are
a few examples of relevant sectoral collective agreements in Austria and the trend appears to be
towards a greater focus on this level of bargaining over occupational pensions. Belgium has a
history of sectoral agreements on occupational pensions in a number of industries and a legislative
reform that came into force in early 2004 should boost bargaining on this theme at sectoral (and
company) level. Recent Greek legislation seeks to do the same. Company schemes are generally
based on work agreements between works councils and management in Austria, while companylevel bargaining over aspects of occupational pensions occurs in unionised workplaces in Ireland.
In Spain, the limited amount of collective bargaining on occupational pensions occurs exclusively
at enterprise level. Company-level bargaining over aspects of occupational schemes, especially
when they are faced with problems, seems to be spreading in the UK. Although the sectoral level
predominates, there are schemes based on company agreements in Denmark, Italy and the
Netherlands. It is arguably in the Netherlands that occupational pensions are the hottest issue in
(sectoral) bargaining at present, with the key points at issue being the level of contributions and
the nature of the schemes.
Where bargaining on occupational pensions exists, its relationship with ‘normal’ bargaining over
pay and other conditions varies in the EU. In Sweden, for example, the agreements on
occupational pensions are separate from (and have different coverage than) ordinary agreements
on pay and conditions. There is also little linkage in France, where occupational pensions are
negotiated at intersectoral level and pay bargaining occurs at lower levels. In Denmark, Ireland and
the Netherlands, however, the issue of occupational pensions is often part of general pay
36
bargaining. In Denmark, possible increases in pension contributions are often part of the overall
bargaining trade-off agenda, while in the Netherlands recent rises in contributions, resulting from
funds losing a major part of their reserves because of stock market problems, have taken away a
large part of the scope for pay rises in bargaining rounds.
In Japan’s normal collective bargaining process at enterprise level, management of the corporate
pension will be on the agenda only when the employer suggests any changes in the system, or the
introduction of a system, that may involve a change in employment conditions. In many cases,
collective agreements stipulate retirement benefits. This means that before a company can modify
its pension scheme (e.g. the premium or benefit amount) or even abolish it, it must reach
agreement with its employees. For example, an employer must obtain approval from a majority of
insured people, and from the trade union where unionised, when drafting the statute of an
‘employees’ pension fund (a traditional occupational scheme) since this requires equal
contributions by employer and employee. In addition, if a company decides to replace its existing
corporate pension plan with a defined-contribution (DC) scheme, it will need to obtain approval
from the trade union, or from at least 50% of plan members where not unionised. The level of
occupational pensions is basically determined within the system itself and is not directly
influenced by other agendas that are dealt with in bargaining.
In the USA, ‘traditional’ defined-benefit (DB) pension plans have long been a key issue in
collective bargaining. This is illustrated by the fact that in the private sector, 69% of union members
are covered by DB schemes, but only 14% of non-union workers. While many schemes are based
on single-employer agreements, unusually for the USA a significant proportion are based on multiemployer collective agreements (multi-employer plans cover about 22% of those employees with a
DB scheme or 4% of the private sector workforce). The number and coverage of DB plans is
declining, with many failing or being terminated. However, pensions remain a central issue in
bargaining and, as a general rule, companies have in recent years sought to reduce employer
contributions while unions have sought to preserve or increase them. (In non-union workplaces,
employers can reduce contributions or change plans more or less at will, but not in a unionised
environment.) Collective bargaining appears to play little part in the DC schemes that are now
becoming widespread.
With regard to the governance of occupational pension schemes, in the EU trade unions and
employer organisations play a particularly important role in Denmark, the Netherlands and
Sweden, where the systems are essentially based on sectoral collective agreements. In Denmark,
for example, occupational schemes are run by the social partners from the relevant sectoral
bargaining unit and employees sit on the funds’ boards. Joint social partner management is also
generally the rule in those countries where similar systems based on sectoral collective agreements
are currently developing or being promoted, notably in Belgium, Germany and Italy. Joint social
partner governance also plays a key role in France’s two national intersectoral supplementary
pension schemes. Where occupational schemes are largely company-based, the involvement of the
social partners in their governance tends to be much weaker, as in the UK and Spain. This also
appears to hold true in Japan and the USA. However, multi-employer DB plans in the USA are
generally operated under the joint trusteeship of labour and management.
37
Occupational pensions – Disputes
Because pensions are such a prominent and sometimes contentious issue, disputes and industrial
action relating to pensions have arisen in a number of EU countries in the past few years. The most
high-profile conflicts have been over government reforms of state pensions, with trade unions
organising ‘political’ strikes in protest, along with major demonstrations and other expressions of
opposition. Such conflicts have occurred in Austria, France, Greece and Italy. While this kind of
dispute between governments and unions, mainly over state pension provision, has become
relatively widespread, industrial conflict over occupational pensions between trade unions and
employers, especially in the form of strikes, has so far been less common. Where such action does
take place, it is usually in those countries where occupational pensions form part of the general
bargaining agenda. In such cases, it is difficult to separate pensions from other issues as the cause
of a dispute. In the Netherlands, for example, there is a straightforward link between pay and
pensions, with rising contributions for the latter increasingly cutting into space for the former.
25
During a major private sector strike in Denmark in 1998, occupational pension contributions were
one of a number of issues in dispute, alongside pay and leave, which were eventually traded off in
a deal. Strikes specifically over occupational pensions issues and unrelated to the regular collective
bargaining process seem very rare and cases are reported only from Ireland and the UK. Notably,
pensions, and especially fighting final-salary scheme closures, have become a high-profile issue for
26
UK trade unions. In 2002, following the breakdown of talks between the ISTC trade union and
the engineering firm Caparo Group, the UK’s first strike over the closure of a final-salary pension
scheme took place. Several similar stoppages have since been held or threatened at other
organisations.
There have been a number of industrial disputes over occupational pensions in the USA in recent
years (although disputes over healthcare coverage have been far more visible, see above),
sometimes linked to other issues as part of overall collective bargaining. The issue may also
become a source of conflict outside the normal bargaining process. For example, at the end of 2004
flight attendants at US Airways authorised their union to engage in strike-related activities should
a federal bankruptcy court permit management to cancel the collective agreements of 20,000
employees and terminate the pensions of 53,000 existing and former workers (as well as cutting the
health benefits of almost 11,000 retirees).
No industrial action over occupational pensions issues is reported from Japan. With regard to the
state pensions system, in opposition to a 2004 pension reform, the National Confederation of Trade
Unions (Zenroren), the country’s second-largest union centre, held a one-day strike in which about
10,000 members participated. The last large-scale strike over pensions was in 1973, when several
national centres jointly gathered 3.5 million members to demand the introduction of indexation.
Occupational pensions – Social partner views
In the EU, the social partners take a wide variety of viewpoints on occupational pensions,
reflecting the differing importance and development of such schemes. For example, in countries
25
26
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http://www.eiro.eurofound.eu.int/2003/01/feature/uk0301109f.html
38
where occupational pension schemes have only recently started to develop, trade unions may fear
that their introduction (or generalisation) will weaken the first pillar of state pensions, while some
employers may fear that they will have to contribute to the schemes, either at all or too much. More
generally, employers and unions may have different opinions on who should contribute how much
to occupational schemes and for how long. They may disagree on the type of scheme, notably DC
versus DB arrangements. Last but not least, they may disagree on whether occupational pensions
should be seen as an individual employee benefit or should be based on collective agreements. To
take the example of Belgium, the two main trade union confederations have in the past been united
in their condemnation of occupational pension schemes, considering them a tool to weaken the
first pillar of state pensions. During consultations leading to a recent new law on complementary
pensions, and after it came into force in 2004, the confederations have developed a more pragmatic
stance, focusing on issues such as calling for a stronger social partner presence in the management
of occupational funds. The main employer confederation supported the law, but is pressing for a
greater individualisation of pension schemes. It believes that the occupational pension system
created by the new law is close in some respects to a first-pillar system. The employers favour DC
schemes, to keep pension costs visible and under control, and disagree with the restrictive
conditions placed on individual pension schemes, which it believes should be a major human
resource management tool.
Spain presents another example of the range of social partner positions on occupational pensions.
Here, trade unions consider the (still limited) occupational pension system as a good supplement
to the state pension in those cases where companies can afford it. Spanish employer organisations
tend to favour private schemes within a mixed system, in which the public pension, without costing
too much, will keep its central role. From the employers’ viewpoint, occupational pension schemes,
based on contributions, can fulfil a complementary role, particularly in binding key workers to the
company. A topical issue in the UK is a trade union call for compulsory employer contributions to
occupational pensions. The Trades Union Congress (TUC) wants to: force all companies to provide
more substantial pension schemes, with a 10% contribution from employers and a 5% contribution
from employees; make it compulsory for workers to join schemes; and for ‘pension pay’ to be given
the same level of protection as current pay. Employers’ bodies have lobbied strongly against
compulsory employer contributions. An example of greater harmony is Denmark, where the social
partners administer the sector-based system together and see it as a joint project. In their reaction
to a 2003 official report that called for more freedom in the choice of pension funds, the partners
were unanimous that pensions should not be ‘gambled’ with and that proposed greater freedom for
workers to transfer pensions would undermine the element of solidarity in schemes.
One of the main points of pension contention in the USA is the DB or DC status of occupational
schemes (see Table 4). In DB plans, companies are obliged to continue making contributions
regardless of the revenues earned on the plan’s investment (even if revenues fall below levels
needed to keep the plan adequately funded). With a DC plan, a company is responsible only for
establishing the plan and deciding whether to match a percentage of employee contributions. The
rise of DC schemes is thus not difficult to understand. Companies are free to select the type of
pension plan they offer to employees and the overwhelming majority of new companies are setting
up DC plans, while older companies are switching from DB to DC. For their part, trade unions
stress a need to preserve DB schemes and highlight the risks involved with participation in DC
plans. AFL-CIO has been promoting in Congress a proposed item of legislation (the Employee Free
39
Choice Act) that seeks to overcome the most serious obstacles to union organising and firstcontract negotiations. AFL-CIO stresses the relevance to pensions – making it easier to organise a
union will, it says, strengthen the collective bargaining system, which might over time bring more
contributors to occupational pension plans. The Congress-directed activity of companies has
included calling for changes that would let them make smaller pension contributions and smaller
pay-outs when people retire. However, because employers are not legally obliged to provide
pension coverage to their employees, the incentive to exert concerted political pressure in order to
shape policy outcomes does not appear strong. Employers simply ‘vote with their feet’ and many
are either not offering pension coverage or offering severely reduced coverage. In certain sectors, a
good pension scheme is one way to attract and retain employees, but this positive aspect needs to
be weighed against the financial cost of contributing to a plan incurred by the company.
In Japan, there seems arguably to be a fair degree of social partner consensus over occupational
pensions issues. The newly established DC pension plan is aimed at enhancing pension portability
for ‘job switchers’ and providing better conditions for employees. However, this pension scheme
also, from a trade union viewpoint, contains some destabilising factors, in that it will transfer
pension management risks from employers (or pension funds) to employees. When the Japanese
Parliament passed the Defined-Contribution Pension Law in 2001, Rengo expressed its opposition
because ‘the surrounding conditions are not yet appropriately prepared for such a pension
programme to be introduced’. Employers’ bodies basically supported the legislation.
40
Conclusions
It seems that 2003–2004 was not a period of radical change in industrial relations in the EU, Japan
and the USA, with the main feature being a continuation of previously established trends.
However, there were signs of some developments that may point the way to change in the longerterm.
In Japan and the USA, collective bargaining coverage continued its long and relatively slow decline
(mirroring falling trade union membership), now standing at about one-fifth and one-eighth of the
workforce, respectively. In the EU Member States, there was little change in bargaining coverage
reported in 2003–2004 (the longer-term picture is general stability in the EU15, with a decline in
some cases such as the UK). However, at overall EU level, the accession of the NMS in 2004 (most
of which have much lower bargaining coverage rates than the EU15) has reduced the coverage of
the EU workforce by bargaining. Nevertheless, approximately two-thirds of the workforce of the
expanded EU are probably still covered.
Bargaining remained almost entirely decentralised in Japan and the USA. Indeed, Japanese unions
experienced greater difficulties than in the past in even setting industry-wide wage increase targets
in the 2003–2004 enterprise-level bargaining rounds. In the EU countries, bargaining was, as
usual, conducted at all levels, from the national intersectoral to the individual workplace,
depending on national systems, while still being considerably more centralised overall than in
Japan and the USA. However, the NMS generally have decentralised bargaining systems and
enlargement has thus arguably shifted the ‘average’ level of bargaining towards the company level.
During 2003–2004, there was also increasing pressure towards decentralisation in a number of the
EU15 – prime examples being France and Germany – with long-standing systems of sectoral
collective bargaining (although generally the move is towards ‘organised’ decentralisation while
maintaining a sectoral framework).
Despite differing economic environments, the pay outcomes of bargaining were generally moderate
across the EU, Japan and the USA. Japanese unions continued to face difficult bargaining rounds,
faced with a choice between maintenance of employment levels and pay rises in the context of a
largely stagnant economy, and the resulting wage increases continued to be low. A new stress on
pay increases for workers in SMEs produced some modest results. In the USA, economic growth
and major productivity gains were not reflected in negotiated wage increases, which were lower
than they had been during the 2001–2002 recession. At overall EU level, average collectively
agreed pay increases fell from 2002 to 2003 (although with substantial differences between
countries) and the trend seems likely to have continued during 2004. In a number of countries, pay
moderation has been an explicit aim of central agreements. While the overall trend seems similar
in the EU15 and the NMS, the average level of pay increases remains higher in the latter group
(although the gap seems to be narrowing).
Working time was not, it seems, an important issue in collective bargaining in the USA. In Japan,
the Rengo trade union confederation emphasised reduced working hours and work-sharing
schemes, as well as eradicating unpaid overtime work, but there is little evidence as to whether it
achieved its aims. In the EU15, with major working-time reductions apparently largely a thing of
the past, flexibility, in various forms, was the main theme in bargaining on working time
(sometimes in exchange for small-scale reductions). In the NMS, the active role of bargaining in
setting normal weekly hours is relatively small, especially in many central and eastern European
41
9
countries, and collective agreements often do not deviate from the statutory normal hours. A novel
feature of 2003–2004 was that a number of company agreements in Germany and elsewhere
provided for increased working time, often without any additional pay, in exchange for
commitments on maintaining jobs. These cases generated much debate across Europe and called
for an increase in agreed working time by a range of companies and employer organisations, which
met strong trade union opposition.
The single most important issue in US collective bargaining remained health insurance, against a
background of rising healthcare costs. In Japan, there were some signs of diversification beyond
pay in the regular annual spring bargaining rounds. The bargaining agenda in some EU Member
States (especially the EU15) continued to encompass a wide and varying range of issues beyond
pay and working hours.
With regard to employment and labour legislation, an interesting feature of 2003–2004 was that
there was considerable activity in Japan and the USA, where legislation generally plays a lesser role
than in most EU countries. Notably, Japan seems to be increasing the volume and scope of its
employment legislation to deal with new economic and social conditions, with a raft of adopted
and proposed new measures. In the USA, one of the main items of basic employment legislation,
the 1938 Fair Labor Standards Act, was amended, with more changes in the pipeline. The EU saw
its usual steady stream of new legislation covering all aspects of the employment relationship,
although 2003–2004 was a relatively quiet period in terms of the adoption and proposal of new EU
employment and labour legislation.
The already comparatively low level of trade union membership and density continued to fall in
the USA and Japan. In the EU (where overall union density is considerably higher than in Japan
and the USA), 2003–2004 is likely to have witnessed a continuation of the trends of the past
decade – rising membership (although not necessarily density) in a substantial number of
countries, but an overall fall in union membership across the EU, mainly because of massive
membership losses in some central and eastern European countries and significant losses in large
countries with high absolute numbers of union members, such as Germany and the UK. Against
this backdrop, union mergers continued in Japan and many EU countries, while proposals for a
radical merger and restructuring process threatened to split the USA’s AFL-CIO confederation.
Another common theme has been for unions to reach out to new groups outside their traditional
constituencies. On the employer side, a number of organisations restructured or merged in some
EU Member States during 2003–2004.
In Japan and the USA, labour disputes and industrial action remained at very low levels in
historical terms. The picture was more mixed in the EU15, but the data available again indicate
that a general trend towards lower levels of strikes and similar activity has been maintained in most
countries in recent years. In some of the generally low-strike NMS, however, 2003–2004 saw a
number of signs of increasing militancy, often over pay.
Turning to the special themes examined in this report, overall it appears that the extent to which
migration has become an ‘issue’ in industrial relations depends very much on the level of labour
immigration and the nature of national industrial relations systems. In relatively low-immigration
Japan, the issue is subject to some consultation with the social partners at national level, but does
42
Conclusions
not appear to feature at all in the decentralised enterprise-based collective bargaining system.
Similarly, enterprise trade unions seem generally to have little interest in organising foreign
workers, with the relatively little union activity in this area carried out by industry-level and
community unions, which arguably have a wider perspective. By contrast, in the high-immigration
USA, many unions are now giving priority to the interests of immigrant workers, seeing an alliance
with them as having a potentially crucial role in reviving the trade union movement. This has led
to a number of major initiatives and organising drives. However, there is little evidence of the extent
to which issues of specific relevance to immigrant workers are taken up in (company-level)
bargaining, and no explicit involvement of unions and business/employer organisations in policymaking migration issues is reported (not surprisingly, given the general absence of social
partnership or tripartite concertation). On the other hand, reflecting national social partnership
systems, in most EU countries (which have varying levels of immigration) trade unions and
employer associations are consulted by governments on issues relating to migrant workers. Trade
unions in a minority of countries have launched initiatives aimed specifically at recruiting migrants
and support, assistance and campaigning seems relatively widespread. While the issue does not
generally seem to be high on the collective bargaining agenda, there is some bargaining activity on
migrant worker-related themes in many Member States, covering general matters such as nondiscrimination and equal treatment, or more specific integration and support measures. This
activity occurs largely in those countries with an important national/intersectoral and, especially,
sectoral level of bargaining, while company-level bargaining on migration issues seems to be rare.
This might suggest that more centralised bargaining systems are better equipped to deal with such
matters.
The overall picture seems rather similar in the area of pensions, against a common background of
concerns about the effects of demographic change. In most EU Member States, the social partners
have a consultative or advisory (and, in some cases, managerial) role with regard to state pensions,
while there is some social partner consultation in Japan and none in the USA. As for occupational
pensions, there is an appreciable degree of collective bargaining on the topic in most EU15
countries. The extent of bargaining over occupational pensions in each of these countries depends
on the relative importance of such schemes and the involvement of the social partners in them. But
there appears to be a general tendency for bargaining (especially at sectoral level) to play an
increasingly important role in this area, often encouraged to do so by recent legislation promoting
occupational pension provision. Company-level bargaining also plays a role in some EU countries.
In the USA, collective bargaining plays a key part in traditional defined-benefit occupational
pension schemes, with the decline in the former reflected in the decline in the latter (which are
often being replaced by defined-contribution schemes – a trend also seen in Japan and some EU
Member States). Interestingly, this is one of the very few areas where multi-employer bargaining
plays a significant role in the USA. In Japan, company-level bargaining (the only level) plays a role
only where a scheme is to be established or the employer wants to make changes to an existing
scheme.
43
European Foundation for the Improvement of Living and Working Conditions
Luxembourg: Office for Official Publications of the European Communities
2005 – VIII, 44 pp. – 21 x 29.7 cm
ISBN 92-897-0911-1
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EF/05/73/EN
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Industrial relations in the EU, Japan and the USA 2003–2004 provides a
detailed comparison of the different aspects of industrial relations in these
three economic blocs. On the basis of the Foundation’s annual study, the
report charts the similarities and trends in this area and provides a clear
picture of the differences in both basic structures and developments across
these three major economies. In particular it highlights the distinctive
characteristics of the European Union in the areas of collective bargaining,
The European Foundation for the Improvement of Living and Working Conditions is a
tripartite EU body, whose role is to provide key actors in social policymaking with
findings, knowledge and advice drawn from comparative research. The Foundation
was established in 1975 by Council Regulation EEC No. 1365/75 of 26 May 1975.
ISBN 92-897-0911-1
9 789289 709118
trade unions, employer organisations and labour legislation.

Industrial relations in the EU, Japan and USA, 2003–2004

Transcription

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