Collective bargaining and social dialogue: part of the solution

There is no real alternative to social dialogue, collective agreements and the voice of workers—even the OECD agrees.

It has always been hard to predict what workers will be doing in the future and how they will be doing it. But what we do know is that most workers of today are dreading the ‘future of work’. That’s why safeguards and mechanisms to secure quality jobs are crucial.

Collective bargaining and social dialogue are part of the solution, and this was recently confirmed by the Organisation for Economic Co-operation and Development (OECD). It’s the unlikeliest of endorsements, given the organisation’s past views, but its new report—Negotiating Our Way Up—concludes that collective bargaining helps to ensure that ‘all workers and companies, including small and medium-sized enterprises, reap the benefits of technological innovation, organisational changes and globalisation’.

Dialogue between employers, workers and their representatives is much needed in a time of disruption (see automation or climate change), widening social inequalities (as evidenced by global protests due to insufficient household incomes, amongst other reasons) and new business models causing discontent over monitoring and working conditions. New unions, and attempts to form them, are emerging everywhere.

The OECD report is a timely reminder that healthy social dialogue is not a foe to productivity or progress since ‘the quality of the working environment is higher on average in countries with well-organised social partners and a large coverage of collective agreements’. Bargaining power also offsets market concentration dynamics—quite the feat in the golden age of multinational corporations and Big Tech. It concludes that there is no real alternative to social dialogue, collective agreements and the voice of workers.

So why should anybody care about this report? The OECD’s findings are often transformed into real policies. It is based on a wealth of data and a three-year-long research process, which means it has teeth. And for once, it doesn’t seek to undermine the very functions of collective bargaining but instead takes on a more neutral, positive approach by outlining three key functions of collective bargaining:
• ensuring a fair sharing of the benefits of training, technology and productive growth (inclusive function),
• maintaining social peace (conflict management function) and
• guaranteeing adequate conditions of employment (protective function).

No silver bullet

There is not just one system: ‘In two-thirds of OECD countries, collective bargaining takes place predominantly at firm level. Sectoral agreements play a significant role only in continental European countries. However, this does not tell the whole story about the actual degree of centralisation or decentralisation as countries differ greatly in terms of the flexibility for firm-level agreements to modify the terms set out in higher-level agreements.’ In other words, there is no silver bullet.

Notwithstanding, co-ordinated systems show higher employment levels, also for vulnerable groups, and less wage inequality. This implies labour-market resilience—which brings more inclusiveness, as well as competitiveness, to an economy. For these outcomes to become reality, the report notes, both social partners need to be strong. In addition, firm-level bargaining on its own is not sufficient.

More and more workers in industrialised economies are no longer in full-time, regular jobs. Facing this new reality, the OECD suggests expanding union membership to new forms of work and the ‘grey zone’ where the so-called ‘bogus’ self-employed reside. Data confirm barriers to unionisation as workers in most countries without regular jobs remain outside the scope of collective bargaining.

Administrative extension (of collective bargaining agreements to non-affiliated workers), the OECD suggests, is not a one-to-one substitute for collective organisation but can be an alternative to support wider coverage. Yet the OECD recommends representativeness criteria and a ‘public interest’ test. How and who sets these benchmarks is not clear. Experiences with opt-in and -out clauses for firms are far from positive (see what happened to Greece or Portugal post-2009). There are other solutions starting with a correct classification of the employment status.

The report recommends tailoring labour law to give workers in the ‘grey zone’ the right to collective bargaining, as well as exempting specific forms of self-employment from the prohibition to bargain collectively, in particular under competition or cartel law to curtail monopsony power.

In simple terms, it means that all Uber or Deliveroo workers should have the right to unionise and claim their rights. Indeed, several unions—aside from campaigning and supporting legal action—are trying to cover non-standard workers despite competition law and new business models. They need a more enabling environment to continue on.

It’s not all about the money

The public perception about unions is one of defending the wages and pensions of insiders. But as the report shows, there is much more to collective bargaining, such as looking at different arrangements on working time, technological standards, training, occupational health and safety, and the prevention of workplace intimidation and discrimination. These are key issues affecting all workers and are gaining momentum. Collective bargaining, the OECD report notes, can help ‘formulate solutions to emerging issues’.

Having dedicated health and safety representatives in the workplace is associated with improved physical working conditions and a reduced accident rate. Agreements made on working time, telework and flexible work, including the ‘right to disconnect’, are flourishing. On discrimination, the new International Labour Organization (ILO) convention on violence and harassment in the world of work and the fact that ever more of us live in diverse societies shows that these issues will become of increasing concern for workplace actors. Not speaking of technological change—a historical issue for unions—where new standards on workers’ data and human-to-machine interactions need to be set from an organisational perspective.

In its analysis, the OECD takes a misstep in pitting representative voice (eg works councils) against ‘direct voice’ (management setting up communications channels itself, for example).

The main findings naturally show that ‘mixed forms of voice’ fare best in ensuring job quality—and representative-only forms of voice do not due to ‘reverse causality’ (workers joining unions when working conditions are bad and job strain high). Job strain is at 30 per cent on OECD average, and lowest in Norway (17 per cent), while highest in Turkey at around 50 per cent. In terms of difference across collective bargaining systems, more job resources (and better job quality) can be found in co-ordinated systems.

More research and best practices would help future activities. For one, more has to be said about consultation and information rights, and co-determination. Secondly, an overview of national threshold legislations (small firms are exempted from creating representative structures) would be enlightening. Lastly, all of the non-monetary aspects are being discussed in tripartite, sectoral and multi-employer bargaining settings—not just at the firm level. Both have merits worth exploring.

‘Fit for purpose’?

With regard to the ‘fit for purpose’ discussion persisting on lower trade union density, the ability of unions to cover all or simply more workers, or being open to new forms of organisational change, it is time to see how to reverse policy and business-model trends that weaken workers’ bargaining power.

The OECD confirms that, against all odds, new initiatives are being developed by trade unions to adapt to the changing world of work by opening membership in the creative sector or for temporary agency workers, negotiating collective agreements with platform companies and engaging in training provisions. Just a couple of years ago, we observed that despite the lack of social dialogue on digitalisation issues, unions have moved ahead regardless.

The OECD (G20) Principles on Artificial Intelligence provide a key role for social partners in managing labour-market transitions and work organisation. The value of social dialogue deserves to be cherished as it can create a level playing field and productive economies that are less socially divided. The OECD’s work on recommending how to do that thus remains important.

This article first appeared on Equal Times