The Transnationalisation of Collective Bargaining

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1. Introduction

The question of the Europeanisation of industrial relations can be investigated from various perspectives. First of all, it is seen as one aspect of the broader concept of the “social dimension” of the European Union (EU). The transnationalisation of collective bargaining clearly belongs within the process of Europeanisation and of the (uneven) development of a multi-level social and employment polity (Marginson and Sisson, 2006a). Given the progress achieved by the Community since its creation, in terms of procedural and material regulation of matters relating to social policy and labour law, it is difficult to deny that the EU has a social dimension. There is, however, little agreement as to whether this includes a European system of procedural regulations for collective industrial relations in general and collective bargaining in particular. Can one speak at all in terms of the existence of an EU-wide system for regulating industrial relations?

Our historical starting point will be the creation of the European Monetary Union (EMU) and the requirements for and constraints upon the Europeanisation of industrial relations entailed by this development. EMU was indisputably a driver for the development of EU social partnership that was conceived to act as a counterweight of market and monetary integration. In the field of collective bargaining EMU created new incentives for social actors to act together (Crouch, 2000; Dølvik, 2000; Marginson and Traxler, 2005; Glassner and Pochet, 2011), while at the same time putting pressure on national collective bargaining frameworks because central bankers and economic and finance ministers have typically supported full decentralisation of collective bargaining in order to cope with the specific constraints imposed by EMU (Verdun, 1996; Pochet, 2002).

Since collective bargaining, and in particular, wage setting, has remained a competence of national social partner organisations and political actors – and national actors are reluctant to transfer competences to the European level – a framework of voluntary and “soft” regulation of labour standards and the coordination of collective bargaining has emerged. In order to avert competitive pressures on wages and maintain dynamic wage growth and workers’ purchasing power in the EMU, a number of European and national unions embarked on a coordinated approach to wage bargaining coordination. In order to secure these goals, various forms of transnational coordination were established. At cross-industry level, the European Trade Union Confederation (ETUC) created a working group on wage coordination and adopted a resolution on this topic in December 2000 ← 13 | 14 → (ETUC, 2000). At sectoral level, the European Metalworkers’ Federation (EMF) and the European Trade Union Federation of Textiles, Clothing and Leather (ETUF-TCL) both adopted guidelines for their national bargainers in the late 1990s (EMF, 1998b). At transnational level the Doorn group, which consists of German, Belgian, Dutch and Luxembourg trade unions, began to hold annual meetings to assess the results of national wage bargaining via the formula agreed, i.e. inflation plus productivity (Pochet, 1999; Dufresne, 2002). Such transnational coordination initiatives, while not interfering with national bargaining practices, nonetheless contributed to the emergence of a “European” system of industrial relations (Crouch, 2000; Hyman, 1999 and 2001; Dølvik, 2002; Marginson and Traxler, 2005; Traxler, 2003; Freyssinet, 2006). The preconditions for and possibilities of the creation of such a European system of industrial relations, as well as its efficiency, have been analysed by a number of scholars (Traxler, 2000; Calmfors, 2001; Traxler et al., 2008b; Traxler and Brandl, 2009). Since wage bargaining in western Europe is carried out most frequently within multi-employer bargaining systems, with the sector level being predominant, the transnational coordination of collective bargaining is most feasible at the European sector level (Marginson and Sisson, 2006a; Traxler, 2003; Glassner, 2009a).

This study aims at investigating the strategies for Europeanisation that are available to European and national trade unions in the field of collective bargaining and social dialogue. The main focus is on developments within the EU since the early 1990s (Maastricht Treaty, Amsterdam Treaty, EMU, Lisbon Treaty) that have favoured the development of a European multi-level system of industrial relations. Of particular interest are transnational initiatives of European and national trade unions in different sectors aiming at the coordination of collective bargaining policies. On this basis, the future prospects of a Community-wide system to coordinate social regulation will be investigated. The following research questions can be formulated:

• In what form can a European system of industrial relations be compatible with the trend towards growing divergence within and between national collective bargaining systems (cf. Traxler, 1995; Traxler and Schmitter, 1995; Marginson and Sisson, 1996; Traxler et al., 2001)?

• Do the organisational and institutional differences between national systems of collective bargaining require differing paths to Europeanisation?

• Are centralised and decentralised forms of coordination mutually incompatible, or can both forms complement each other within a European multi-level system of industrial relations (e.g. Glassner, 2009b)?

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Both collectively agreed wage settlements and regulation of working conditions are the subject of social partners’ coordination attempts. As wages policy is explicitly excluded from regulation at Community level, only the national social partners have any coordination powers. It is generally only the trade unions that have any interest in coordination, while employers benefit from wage differentials. Mobility of capital often enables employers to threaten national negotiating partners on the employee side and force them to make concessions. One counterstrategy of the trade unions takes the form of cross-border initiatives to coordinate wage negotiations and settlements with partner organisations in economically closely linked regions and sectors, the aim being to combat the rush to undercut wages and working conditions.

The situation in the case of regulation of working conditions is rather different. Matters related to regulation of social and employment policies are separately identified in the Social Policy Agreement annexed to the European Community Treaty as being subject to regulation as part of Social Dialogue. As described above, the changes introduced by the Treaty of Amsterdam (1997) establish a framework for social dialogue at sectoral level. To date, a large number of joint statements, recommendations and agreements were made for a number of different sectors of industry.

Analysis of the specific dynamics and interaction at sectoral level is of particular interest because this level is crucial for the emergence of a European system of industrial relations for two major reasons.

Firstly, the distribution of powers between the Community organs and the European social partners on the one hand and the social partners within the member states on the other is such that the European sectoral level represents an interface for coordination of wage and working standards. In the eurozone, in which a common monetary policy has to be harmonised with the diverging degrees of coordination achieved by (sub)nationally fragmented collective bargaining systems in order to maintain macroeconomic stability within the EU, coordination of decisions on wage policy at transnational level is particularly important. With the loss of the exchange rate as an instrument for national policymakers to respond to economic shocks and changes in the competitive situation, the scope in terms of fiscal policy – in any case limited as a result of the stability and growth pact – for anti-cyclical measures within an individual state is drastically reduced. Limited labour mobility and the lack of any Community-wide system of financial compensation along the lines of the US model (cf. Eichengreen, 1997) mean that the task of economic adjustment falls to wages. This means that the actors in the field of wages and social policy, above all the trade ← 15 | 16 → unions, have a key role to play in coordinating wage settlements based on collective agreements within the EU.

Eastern enlargement of the EU has also underlined the need for coordination of wage policy. Rapidly growing wage differentials between the new and old member states – combined with transparency regarding the diverging wage levels between them – increases the pressure on wage settlements, particularly in western Europe. Thus in most member states since the early 1990s there was a return to macro-political social pacts aimed at improving national competitiveness, and during the same period the number of plant level micro-pacts between management and workforce representatives has also increased. The new member states, for their part, have to grapple with increased regime competition, as poor labour standards and lower levels of trade union membership represent an incentive for some companies. Investment decisions by businesses thus not only delay the process of catching up in terms of economic growth and improved productivity but also the development of efficient and effective social policy institutions and sustainable industrial relations in the new member states.

Secondly, industrial sectors represent the level at which national and class-specific interests crystallise. In contrast to the rational logic of decision-making according to functional requirements and dynamics ascribed by neo-functional integration theory to economic actors, the policies of European employers’ and employees’ associations are often subject to asymmetries of power and conflict. Within the political system of the EU, the class interests of capital and labour are embedded in a complex network of national, sectoral and regional interests. Political decision-making structures, which are dominated by inter-governmental modes of governance, combined with the wide range of different areas in which decisions are being made, results in constellations of interests that cut across the normal class-related positions.

The implications of these configurations of interests and decision-making structures in EU industrial relations affect the organisation of national and European employee and employer organisations in a distinctive manner. As the architecture of European social policy is based on national systems of industrial relations and the Community is not in a position to mobilise the political resources that would be required to build up a supra-state political order, the social partners in the member states direct their activities towards participation in national policy-making processes. Whereas the trade unions, since the preparatory and transitional phases of European Economic and Monetary Union, have increasingly participated in national alliances for improving employment and competitiveness (cf. Fajertag and Pochet, 2000), the employer associations have attempted to pursue their “European” interests through inter-governmental channels, ← 16 | 17 → above all through lobbying the Council of Ministers (cf. Schmitter and Streeck, 1999). As the employer associations in the member states have always rejected the idea of Community regulation of working standards, there was no transfer of resources to the supranational level. Thus Business Europe, the European umbrella organisation for employers’ associations, possesses neither a comprehensive mandate to carry out negotiations nor an agenda on which Europe-wide coordination of collective bargaining is a priority.

In contrast to national, cross-sectoral and company levels, there has been relatively little systematic comparative analysis of the transnational sectoral level, despite the fact that the level of industrial sectors offers considerable advantages for negotiating partners. Thus joint, international interests are more likely to be identified and negotiated within more narrowly defined sectoral limits than superordinate general interests at a macro-level. This greater degree of homogeneity is strengthened as a result of increasing “regionalisation” of the European economic area. The European Single Market creates the opportunity to develop cross-border regional cooperation in certain sectors. For Streeck, for example, “regionalisation of Europe” is accompanied by “Europeanisation of the regions” (Streeck, 1995a).

In functional terms, the sectoral level plays an important role as the link between central (national) coordination and decentralised, company-level agreements (Marginson and Traxler, 2005). Within a European multi-level system of collective bargaining coordination, macro- and meso-levels of political action reinforce and complement each other, with the latter providing some kind of “leverage credibility” for the former (Dølvik, 2000). Under certain circumstances, national agreements on wages and social policy that have a macroeconomic scope can have a deflationary impact on prices as a result of the effect they have on maintaining moderate levels of wages. In periods of weak economic growth and against a background of the stability-oriented monetary policy pursued by the ECB, the likelihood of a negative wage-price spiral being triggered by a wage policy based entirely on the criterion of national competitiveness is greater than the probability of inflationary trends. Effective instruments for combating one-sided developments and imbalances can be found above all at sectoral level, as it is here that in many cases macro-agreements are implemented. One fundamental problem when it comes to implementing agreements made by supra-ordinate negotiating units is the willingness of subordinate units to go along with such agreements. The degree to which so-called “vertical” coordination can take place varies considerably amongst the industrial relations systems in the member states. As collective agreements ultimately have to be implemented at company level, the closeness of ← 17 | 18 → actors at sectoral level to the micro level in hierarchical terms means they are in a better position to coordinate and monitor company agreements than actors at the macro level. The effectiveness and efficiency of vertical coordination depend largely on the prevailing institutional conditions in the various systems of industrial relations.

In order to systematically analyse the interaction of coordination activities and instruments used by national and European actors in the field of social policy, basic theoretical hypotheses are developed as part of a comparative, sector-specific investigation and then examined for their plausibility. In so doing we take into account the different theoretical approaches and conceptual frameworks of the Europeanisation in the social sphere of the EU. Three scenarios are drawn up from the point of view of the “Europeanisation optimists” and the “Europeanisation pessimists”. In the first scenario, decentralised and centralised forms of social policy coordination complement each other, whereas the two types of coordination in the second scenario compete with one another. In the third scenario, potential Europeanisation processes never get beyond their initial phase, or a trend towards “renationalisation” of social policy activities can be observed.

Taking the assumption that Europeanisation is far from being a uniform and unidirectional process as a starting point, this analysis aims to link patterns of Europeanisation in the field of collective bargaining and social dialogue with important economic and institutional factors that are prevailing in different sectors. In addition, pursuing an actor-centric approach, this analysis aims at investigating actors’ perceptions with regard to different forms of Europeanisation. Thus, the role of social partners in promoting the social dimension of the EU is a key question addressed in this study. In doing so, this analysis considers initiatives by trade unions from the EU15 countries and EU-level social partner organisations (trade unions, employers’ associations and policy actors) aiming at the transnationalisation of collective bargaining. As a time frame, the study covers the years preceding the EMU (i.e. mid- to late-1990s) to the years before the economic crisis hit Europe in late 2008.

By referring to power-based approaches in organisational and political sociology, the context of trade union action and their preferences to unilaterally promote initiatives for the transnationalisation of collective bargaining policies and thereby to actively contribute to the creation and strengthening of “European” industrial relations institutions will be laid out in more detail. The power relations between employers and their associations, the state and trade unions have to be considered particularly in order to shed light on enhancing and inhibiting factors of Europeanisation. Political, institutional and economic factors inhibit ← 18 | 19 → transnational cooperation of trade unions. Firstly, in the run-up to EMU national governments and social partner organisation adopted national social pacts aiming at the improvement of international competitiveness and fiscal stability. Wage moderation was a key component of national social pacts (Fajertag and Pochet, 1997 and 2000). In the current economic and fiscal crisis in the majority of EU countries “anti-crisis pacts” prescribing wage moderation and the flexibilisation of labour markets were concluded (e.g. Pochet et al., 2010). Secondly, throughout the EU a general trend towards the decentralisation and disorganisation of national labour relations, the flexibilisation and liberalisation of labour markets can be observed (European Commission, 2009 and 2011). At the same time, EU-level policy actors have withdrawn their political and institutional support of employee organisations by enforcing “autonomous” social dialogues and their reluctance to initiate legal procedures for the harmonisation of working conditions (e.g. Keller and Platzer, 2003).