Variation of Collective Agreement

This chapter provides a new overview of the role of collective bargaining in ensuring good labour market performance. This assessment of collective bargaining contributed to the new OECD Employment Strategy (OECD, 2018[1]), which sets out three main strategic objectives for successful labour market policies: (i) more and better jobs; (ii) the inclusiveness of the labour market; and (iii) resilience and adaptability. Collective bargaining has the potential to play a central role in all three. The chapter examines a variety of outcomes related to good labour market performance, including employment, wages, inequality and productivity, while the role of collective bargaining in resilience has already been studied in the OECD (2017[2]). where LEVEL is the predominant level at which wage bargaining takes place (from 1 for collective bargaining at company level to 5 for central/cross-sectoral negotiations), fAEB is the frequency or scope of additional company negotiations (from 0 if they do not take place to 3 if they take place frequently), the articulation of company negotiations (from 0 in absentia to 3, if they are not articulated) and DR is the possibility of overriding the principle of favor in higher-level agreements (from 0 if favoritism The principle is reversed to 3 if favor is enshrined in law and strictly applied without exception. Collective agreements in Germany are legally binding, which is accepted by the population and does not give rise to any concern. [2] [Review failure] Although there has been (and probably still is) a “she and us” attitude in industrial relations in the UK, the situation in post-war Germany and some other Northern European countries is quite different. In Germany, the spirit of cooperation between the social partners is much stronger. For more than 50 years, German employees have been represented by law on company boards. [3] Management and employees are considered together as “social partners”. [4] ← 20. Misalignment of wages and productivity can lead to efficiency costs, especially lower productivity growth.

The possible link between efficiency, wage-productivity alignment and wage dispersion potentially gives collective bargaining a central role in the relationship between productivity and inequality – see OECD (2016[98]) and OECD (2016[100]). Another key feature of collective bargaining systems is the degree of wage coordination between collective bargaining units. Soskice (1990[15]) suggested that coordinated sectoral collective bargaining systems could be as effective as national collective bargaining systems in adapting to aggregate economic conditions. Subsequent studies have shown that coordination plays a key role in improving the performance of sectoral collective bargaining – see review in Aidt and Tzannatos (2002[12]) and evidence in Elmeskov et al. (1998[16]), OECD (2004[17]), Bassanini and Duval (2006[13]), OECD (2012[18]) and Eurofound (2015[14]). The OECD Employment Strategy (OECD, 2006[19]), re-evaluated in 2006, adopted this “extended” version of the Calmfors-Driffill hypothesis, which included that decentralised and centralised or coordinated collective bargaining systems lead to better employment outcomes than sectoral collective bargaining systems.10 Collective agreement renewals can only be used in countries with some form of inter-industry agreement. The case of Australia, where a government agency sets minimum standards for each sector, is an alternative approach to ensuring basic conditions of employment between all firms in a sector (Box 3.5). The main challenge of this system is that it is difficult to establish appropriate sectoral standards, as this requires detailed knowledge of the sector, which often requires a strong involvement of the social partners. Employee i`s salary is measured per hour and survey weights are used to better match the sample with the actual labour force. Control variables, x i b, include models for age, sex, education, firm size, type of contract (permanent or temporary), duration of employment, industry and occupation. Some rule sizes are not available for some countries. Comparing the coefficients estimated β^ for the same variables makes it possible, for example, to examine differences in the gender gap or education premiums between workers covered by collective bargaining and those who do not.

Corridor agreements: they set the limits (minimum and maximum) between which employment conditions may be set in company agreements. In France, Italy and Portugal, there is no change in the level of bargaining and the degree of effective centralisation since, as indicated in Chapter 2, collective bargaining on wages in these countries remains fairly centralised. This may seem surprising, since in recent decades the principle of favourability has been reversed in France and other reforms have encouraged collective bargaining at company level. However, as explained in Chapter 2, decentralisation in France extended only to non-wage conditions, while wage bargaining remained strictly in the hands of sectoral collective bargaining. The effectiveness of the articulation of agreements at enterprise level within the framework of framework agreements, which characterises organised decentralisation, depends to a large extent on the degree of collective representation of employees at company level. The United States recognizes collective agreements. [9] [10] [11] It is important to note that once the costs are covered, the employer and the union are required to comply with this agreement. Therefore, an employer should hire a lawyer before participating in the collective bargaining process. Australia does not have sectoral collective bargaining, but a form of industry- or occupation-wide regulation, called the Modern Awards, which sets industry-specific wage floors that vary by skill levels. While about 36% of employees are directly covered by collective agreements, 23% are only covered by bonuses.

That is, about three-fifths of employees have wages that are not set by the employer and the individual employee, but by collective bargaining or by an external regulatory body. This is well above the average rate of collective bargaining in OECD countries. The system has been in place for several decades and a similar organisational regime existed in New Zealand until 1991 – see Peetz and Rasmussen (2018[68]) for a detailed analysis of how the Modern Awards work. Source: Wage negotiations: OECD calculations based on TURI and Eurofound data, database on wages, hours of work and collective bargaining disputes for European countries, ABS Cat. No. 6306.0 Employee earnings and hours of work for Australia and StatCan, Employment and Social Development Canada, Key Wage Settlements for Canada. . .

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