Collective bargaining must be rebuilt in Europe

Revivified collective bargaining would benefit workers but also society as a whole—and political support is needed.

In September, industriAll Europe launched its European campaign ‘Together at Work’, which aims to promote the benefits of collective bargaining for workers, but also for the economy and the entire society.

‘Whether the EU supports or destroys collective bargaining is nothing more than a political choice. This is a timely campaign to repair the harm that was done. The only way to address inequality in Europe is through giving workers a voice,’ said the German MEP Gaby Bischoff (Socialists and Democrats) at the campaign’s launch event.

Over the last 20 years, trade unions have been under pressure in Europe. The harsh political management of the crisis has accelerated this trend. In the countries under austerity programmes dictated by the ‘troika’—of European Commission, European Central Bank and International Monetary Fund—collective-bargaining structures, and mechanisms aimed at extending agreements to all workers in a sector, have been dismantled. These policies have contaminated other countries where governments have interfered to undermine national collective-bargaining systems.

Insecurity exploding

The results are clear: inequality, in-work poverty, economic insecurity and precarious work are exploding across Europe. The promised convergence among EU countries has not come and distrust towards the EU and governments is mounting.

Today, many European countries need to build or rebuild their collective-bargaining systems, to ensure that a large majority of workers will (again) enjoy the protection of collective agreements. The ‘Together at Work’ campaign will show that Europe needs collective bargaining with solid structures, but also with strong trade unions and representative employers’ organisations which negotiate inclusive collective agreements of benefit to all.

The campaign comes at the right moment, as there is growing recognition in the new European Commission of the value of collective bargaining. Ursula von der Leyen, commission president-elect, and Nicolas Schmit, commissioner-designate for jobs, both expressed their support for collective bargaining at the European Parliament. Schmit defended the need to strengthen social dialogue and collective bargaining and insisted on the need to base any decision on impact assessments. ‘More than ever facts need to drive our actions,’ he said.

Benefits documented

The ‘Together at Work’ campaign will provide such facts, because the benefits of collective bargaining are well-documented across Europe. Companies with collective agreements have better conditions in terms of wages, working time and so on. While unions seek to ensure that no one is left behind, there is also a sizeable trade-union premium: members often enjoy better conditions than non-unionised workers.

In the Czech Republic, for example, members of OS KOVO in the metal sector earn 15 per cent more (200 euro extra per month) because of their collective agreement. In 2018, the wage difference between women and men was 23.1 per cent in companies with such an agreement but 26.0 per cent in companies without. Working time is also 55 hours shorter per year—a difference which accounts for seven shifts—where there is an agreement.

In Germany, meanwhile, data from IG Metall show that in companies without collective agreements wages are 24 per cent lower on average—for unskilled workers, the difference is 32 per cent. Working hours are also 14 per cent longer for those not covered by an agreement.  And in the UK, UNITE trade union members earn, on average, 10 per cent more than non-members.

Entire society

Collective bargaining benefits the entire society. In Germany, recent figures from the trade-union confederation, the DGB, show that employers’ escape from collective bargaining has engendered huge annual social costs: reduced tax revenue (€14.9 billion), lower contributions to social insurance (€24.8 billion) and diminished purchasing power (€35.0 billion).

These missing billions for the German state and its workers could have been invested in infrastructure, education and social security. The figures show that collective bargaining is an essential ingredient of a social model which reduces income inequalities, supports purchasing power, generates quality jobs and leads to an inclusive society.

The industriAll campaign gives the floor to workers to explain why collective bargaining and strong unions are important to them and their families. ‘Together at Work’ is about how workers can come together at work and fight for better conditions and pay through their union, which together with employers negotiates a collective agreement.  

The campaign is divided into six elements, each lasting one month and focusing on a specific target: workers, young workers, female workers, employers. Each month, new material linked to these targets will be distributed among industriAll affiliates, in hundreds of companies, conferences, on ‘social media’ and in publications, all over Europe.

Political action

This campaign is addressed to workers but political action is needed at European level to strengthen collective bargaining.

First, the European institutions, and especially the commission, must change the narrative they followed during the crisis. Collective bargaining is not the problem—it is the solution to create a fairer Europe, with social progress for all. It is also the tool to overcome the huge transformative challenges facing our industries, such as digitalisation and decarbonisation. We expect from Europe concrete action, such as a legal initiative to support collective bargaining.

Secondly, national and EU policy-makers must adopt a positive public discourse about the value of collective bargaining and social dialogue and allocate dedicated national and EU support for capacity-building. Where not yet done, member states must ratify the International Labour Organization conventions on the fundamental right to collective bargaining, as well as the Council of Europe’s decisions on this topic.

Thirdly, employers can no longer refuse to sit at the negotiating table. They must shoulder their responsibility and acknowledge that collective bargaining can also benefit companies, by creating a level playing-field which makes companies and economies more stable.

We will do what we must do as trade unions—we don’t put the responsibility solely on the shoulders of others. But we must also look to European and national policy-makers, and to employers, to demand of them real support for meaningful collective bargaining in Europe.