The evolving relationship between law and collective agreements

Author:Silviana Sciarra
Profession:Professor of Labour Law
Pages:45-49
SUMMARY

1. Collective agreements and derogation from the law. 2. How to rationalise the structure of collective bargaining. 3. The expansion of collective agreements to new groups of workers and content. 4. Conclusions.

 
INDEX
CONTENT

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In the context of economic constraints, the function of labour law changes. In all cases, be it a sector or enterprise crisis, or a nationwide crisis induced by external and supranational factors, collective agreements have been at the centre of a difficult re-organisation of priorities. Rather than providing for improvements in working conditions, they had to adjust to provisions in the law dealing with deteriorations and trade-offs.This characteristic is still visible in most of the country studies.

The conclusion we draw from the selected examples referred to in this chapter is that there is a tendency to recognise a wider scope for collective agreements, dealing with issues previously assigned to law.This form of trust in collective actors is not widespread and must be framed in very different national contexts. In countries in which social consensus has been kept alive and forms of mutual control have been established within the legal and the voluntary systems of rules, the relationship established between law and collective agreements appears stronger and leads towards more visible results, as suggested in section 2.

A sign of evolution, parallel to the one previously described, is visible in the attempts made in some countries to expand the coverage of collective agreements in order to include new categories of workers.This can be viewed as a very positive and innovative tendency, when collective agreements intend to cover non-standard workers and address the issues related to unstable and insecure conditions in the labour market.

This chapter deals with a central feature in the evolution of labour law. European national traditions in this field present many different perspectives. Part of the evolution has to do with an original combination of sources in the regulation of employment contracts. This connection between legal and voluntary sources may lead to different outcomes, sometimes with an impact on the overall balance of bargaining levels.

A controversial side of evolution regards the complex relationship established among different levels of collective agreements, when disadvantageous wages or working conditions are provided for at a lower level.Although this is by no means a new issue, it re-emerges in current national debates. It reveals a tension between legal and contractual regulations, which has to do with the very sensitive nature of the rights to be protected. It may suffice to mention the debate in Germany on so-called 'opening clauses'. Whereas legislation on collective agreements (Tarifvertragsgesetz) treats the rights provided for in collective agreements as binding, 'opening clauses' in national agreements allow for derogations at company level. The level of protection may, therefore, change. A re-definition of labour standards is assigned to collective parties, thus revealing that the evolution of labour law can set voluntary - rather than legal -limits to managerial prerogatives.Areas in which 'opening clauses' more frequently occur are the reduction of working time and other measures to introduce flexibility, including at times reduction in wages. This subject matter is at the centre of contrasting proposals, which may affect the primary role of collective agreements, opening too much space for company level agreements. The optimal solution, described as 'controlled decentralisation'122 would safeguard the role of national agreements, by assigning to this level of negotiation the definition of 'opening clauses'.

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1. Collective agreements and derogation from the law

In the context of economic constraints the function of labour law changes. In all cases, be it a sector or enterprise crisis, or a nationwide crisis induced by external and supranational factors, collective agreements have been at the centre of a difficult re-organisation of priorities. Rather than providing for improvements in working conditions, they have had to adjust to provisions in the law dealing with deteriorations and trade-offs. This characteristic is still visible in most of the country studies.

France and Italy can be mentioned as examples of a recent controversial debate.

In the 1990s, France saw an increase in collective agreements departing from the law, in the implementation of legislation on working time, known as ' 35 heures '. Moving from collective agreements which brought about improvements in working conditions to ones decreasing certain standards, promoted a discussion on possible ways to reform the whole system of collective bargaining.

Starting in 2000, employers' organisations demanded a programme of structural changes in the functioning of the negotiating machinery as a contribution to the so-called ' refondation sociale'. In particular, they favoured a system of authorised derogation from the law in collective agreements.The ongoing discussion on such themes is indicative of an unsolved tension123.

The introduction of a 'majority principle' for the signature of deregulatory agreements represented a deep change. These are now enshrined in the January 2004 proposed legislation to allow further restructuring measures.

Frequent references to collective bargaining are made in the Italian 2003 reform. In several cases the rationale is to allow derogations by collective agreements at all levels, even local and plant agreements.

One more complex example is Article 20 of the 2003 Decree, dealing with agency work.The indication is that collective agreements can expand the list of activities provided for in the same article, for which agency work is admissable.The role of voluntary sources is presented as equal to that of the law inasmuch as it expands the scope of legitimate agency work.

Collective agreements can also provide for quotas of temporary agency work allowed within the user company, even for habitual activities carried on in the company. This too is a significant quasi-legal role attributed to voluntary sources.

One further Italian example is in the re-organisation of working time following the transposition of Directive 93/104/EC124. Some commentators argue critically that individual guarantees have been lowered, thus confirming the non-enforcement of the ' clausola di non regresso '. Not only did the legislature indicate 40 hours as 'normal' working time - a requirement not in the Directive - it also gives a remit to collective agreements to define the average duration of work during one year. Unlike in previous legislation, recourse can be made to collective agreements at all levels, not necessarily to national ones.

In Belgium derogations from sector agreements are allowed at company level on important issues, all mostly related to working time (maximum number of hours, night work, Sunday rest). The tendency to allow derogations, notwithstanding the highly hierarchical structure of the Belgian system of sources, has opened a discussion on the role of binding minimum labour standards.

In Germany the Bundesferfassungsgericht has recently accepted that law can violate the autonomy of collective parties, by lowering the standards provided for in collective agreements. In a somewhat contradictory way, in a judgement given on July 18th, 2000, it has also ruled that when workers are insufficiently protected by collective agreements, such as in the building industry, minimum wages can be set by ordinance.

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2. How to rationalise the structure of collective bargaining

Attempts made by the law to regulate the structure of collective bargaining may be more or less invasive, according to national traditions.

It is often the case, especially in the Nordic countries, that rationalisation is pursued by the social partners and is part of an internal re-definition of bargaining functions.

Other examples can be mentioned. The centre-right coalition in Spain managed to gain social consensus and to maintain the practice of concertation, even though it could not prevent criticism from the trade unions on some labour market reforms. In Italy too the recent labour market reform was enacted in a climate of social unrest and deep disagreement among the unions. However, the recourse to nationwide collective agreements, to complement the enforcement of the law, was not refused by the unions and employers' associations, who have already signed some agreements at the highest centralised level125.

Denmark, among all the Nordic countries, represents an example of strenuous defence of a voluntary system, both with reference to domestic legislation and for the transposition of EU law126.

Finland maintains a tradition of income policy, whereby broad 'policy' agreements at national level lay down guidelines on tax, wage and social policies.The latest agreements for the years 2001-2002 and 2003-2004 also introduced 'buffer funds', to combat possible negative consequences of the single currency127.

The UK, on the contrary, offers an example of legislation which has deeply affected the structure of collective bargaining.The 'Third Way', the emblem of the Labour government's legislative agenda, took a new direction from 1997 onwards.The legal principle was re-introduced according to which a bargaining unit, constituted with a majority of trade union support, is entitled to seek negotiation with the employer over certain conditions of employment. The 1999 ERA in Schedule A1 (amending TULRA 1992) has introduced the principle of statutory recognition of unions, which should encourage the conclusion of collective agreements.

In Ireland, the Industrial Relations (Amendment) Act 2001 established the power of the Labour Court to issue binding recommendations on pay and conditions of employment, if one of the parties refuses to enter the voluntary procedure.The latter consists in trying to reach an agreement through the Advisory Service of the Labour Relations Commission. This example confirms the legislature's attitude to favour voluntary solutions and yet to support the parties with legal measures not too invasive of their autonomy and yet efficient in conflict resolution.

Partnership agreements have, according to most commentators, contributed to the growth of the Irish economy. The 2003 agreement, which will last until 2005, is divided in two parts, one devoted to policies such as housing, migration and interculturalism, the other oriented to the definition of pay increases both in the private and public sector.The latter part is assisted by a system of dispute resolution through the Labour Relations Commission and the Labour Court and also indicates specific government's commitments in issuing statutory reforms of redundancy pay terms128.

In Spain a series of nationwide agreements (acuerdos interconfederales) culminated in the Royal Decree 8/1997, on the promotion of stability in employment.The 1997 acuerdo also dealt with ways of rationalising levels of bargaining, in order to avoid excessive fragmentation. Similarly, the Italian 1993 Protocol of Agreement, signed under thePage 48 Ciampi government, formalised the commitment of the preceding government led by Amato, to provide a more functional structure for collective bargaining.

In Portugal, the 2003 Labour Code (Article 557) devotes space to the regulation of collective bargaining, dealing with levels of bargaining and the enforceability of collective agreements, when one source substitutes the previous one. The new Code introduces a 'strategic' change in the function of collective agreements. Article 4.1 states as a general principle that, unless it is specified differently, collective agreements can change legal regulation, both in melius and in pejus, thus leaving an almost residual role to the law.The system seems deeply influenced by the recourse to compulsory arbitration as a solution in cases of long-lasting disagreement among the parties. It is worth mentioning that the Constitutional Court ruled on several points raised by the President of the Republic, before the promulgation. One of the rulings had to do with the possibility to remove rights enshrined in law by collective agreements. The court found that this provision was contrary to the Portuguese Constitution129.

In France, legislation aiming at a deep reform of collective bargaining is under discussion in Parliament130.

3. The expansion of collective agreements to new groups of workers and content

Collective agreements have been trying to expand their scope in the attempt to include new categories of workers.

One example can be mentioned. The appearance of agency workers in national labour markets, apart from substantiating one of the deepest changes in the evolution of labour law, may also activate a new role for collective bargaining131.

In 1996 in the Netherlands, agreements reached between trade unions and employers served to diminish rather strong reservations for agency work and paved the way to legislation132. In this country the so-called 'Three-quarters legislation', namely legislation partially assisted by collective bargaining, represents a well-tested technique in linking together different sources of regulation.

In Austria, a 2002 collective agreement for agency workers introduced minimum wages and the recognition of other rights, such as protection against dismissal.

In Germany, the 2003 law provides that collective agreements signed by associations of temporary agencies can derogate even in pejus to the principle of equal treatment. Similarly, they can introduce looser criteria for fixed-term contracts.

In Spain a model quite different from the other European legal systems was created, whereby temporary agencies were covered by centralised agreements. In 1999 the legislature introduced the principle of equal wages to enhance a 'convergence process' and to establish equal wages for temporary workers and workers in the user company, over a period of three years.

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Another way to expand the role of collective agreements is to include in their scope broad subject matters, which become complementary to the evolution of labour law.

For example, in Sweden 'redundancy programme agreements' provide for active measures before the expulsion of workers from the productive process takes place; they may even include financial compensation. Collective agreements also address the development of skills for people employed, either with shared costs, or with costs entirely placed on the employer.The obligation to train constitutes a further limit on the employer's initiative to terminate the contract, if it can be demonstrated that there was a skill development scheme and dismissal could be avoided on that basis.

France must also be mentioned for the 2003 agreement on training previously analysed133.

In Belgium a recent collective labour agreement (No 77bis as amended by No 77ter) provides for the right to time credit, for at least three months and for a maximum of one year in a person's career. It also establishes the right to reduce working time by one-fifth and the right of workers aged 50 or over to work part-time.

4. Conclusions

The conclusion we draw from the selected examples referred to in this section is that there is a tendency to recognise a wider scope for collective agreements dealing with issues previously assigned to law. This form of trust in collective actors is not widespread and must be framed in very different national contexts.

In countries in which social consensus has been kept alive and forms of mutual control have been established within the legal and the voluntary systems of rules, the relationship between law and collective agreements appears stronger and leads towards more visible results.This is the case of the Nordic countries and of countries with centralised tripartite bodies. In Germany, on the contrary, the Alliance for Work, started by the Red/Green coalition, has been unstable in the early part of 2003, due to unprecedented economic constraints.

It is noteworthy that in some countries - one example is Italy - legal provisions on the recognition of a wider scope in collective agreements does not correspond to a clearer identification of the criteria to establish representativeness, particularly on the side of the unions.This implies that there may be cases of strong disagreements among the unions.

This chapter in the evolution of labour law is, therefore, still an incomplete one and confirms a long-lasting tension between modernisation and collective representation.

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[122] This term is suggested by Ulrich Zachert.

[123] See National Report on France.

[124] Decree 8 April 2003, n. 66.

[125] Trade unions confederations and employers' associations signed nation-wide agreements on the transitory into the labour market of groups at risk of social exclusion (February 2004).

[126] See the Danish Report, mentioning the example of the Part-time Work Directive, transposed first into national collective agreements and then into law. See further Chapter VIII for a discussion of the Working Time Directive.

[127] Finnish Report section 1.3.

[128] Details are in European Industrial Relations Review,April 2003, p. 15 ff.

[129] European Industrial Relations Review,August 2003, Issue 355, p. 12.1.3.

[130] The Loi Fillion was voted in parliament in a first reading on 6 January 2004.

[131] Attempts to unionise agency workers are reported in Sweden. In Italy the three main confederations have extended membership to associations of non-standard workers.Associations of self-employed are also active in the Netherlands.

[132] See E. Sol, 'Targeting on Transitions: Employment Services in the Netherlands' (2001), Comparative Labour Law and Policy Journal Vol. 22, No 1, pp. 81ff, at p. 96.

[133] See Chapter III, section 3 of this Report.