Social dialogue under stress in crisis-hit EU

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Social dialogue is under great strain throughout the EU because of the economic crisis, with Eastern Europe particularly hard hit, says a report presented by the European Commission yesterday (11 April).

 

Employment and Social Affairs Commissioner László Andor presented the 330-page Industrial Relations in Europe 2012 report, which takes stock of relations between employers, workers, their respective representatives, and governments.

Andor said that unlike the report two years earlier, when social dialogue had been used in many countries to find “creative solutions,” this time the depth of the economic crisis had increased tensions.

Andor said that reforms introduced in the last period had not always been accompanied by a fully effective social dialogue, with stakeholders being unable to agree what should be a fair distribution of the costs of the crisis.

‘Weak’ industrial relations in Eastern Europe

The report shows that in Central and Eastern Europe industrial relations institutions remain weak and fragmented, with the notable exception of Slovenia.

Statistics show that in the 15 “older” member states, some 70% of workers are covered by negotiated agreements at their workplace. But in Central and Eastern Europe this figure is only 44%.

Trade union membership is lower in the Central and Eastern European countries, and even fewer employers in this part of the EU are members of an employers' organisation.

In the 15 older member states, some two-thirds of employers are organised. In Central and Eastern Europe, it is less than 40%.

But the situation in new states also varies greatly. Estonia, Latvia and Lithuania, together with Bulgaria and Romania, are identified as “liberalist,” with a “minimalist” welfare state and a flexible labour market, marked with a very high degree of labour migration.

In contrast, the Visegrad countries (Poland, Czech Republic, Hungary, Slovakia) are “welfarist”, with a generous social system, especially for pensioners, and a regulated work market and low migration, with the exception of Poland.

Slovenia appears as a category of its own, “corporatist”, with a generous welfare system and low migration abroad for work purposes. Slovenia is also the only new member state with high labour participation in trade unions and high institutionalisation of collective bargaining.

Initially strong labour in Bulgaria and Romania has not been matched by an equally strong state that would have been capable of building corporatism and include trade unions in policymaking, the report says.

The Commission says that well-established social dialogue contributes to economic prosperity and recommends that countries where social dialogue is weak need to strengthen it.

Need to ‘rebuild’ social dialogue in Greece

Asked if the Commission’s policy was not in fact schizophrenic, with Economic and Monetary Affairs Commissioner Olli Rehn pushing for austerity, while his office advocates social protection, Andor said Rehn too advocated for social dialogue and that the Commission speaks with one voice.

As for the troubled eurozone countries of Cyprus, Greece, Ireland and Portugal, Andor insisted that the Commission had always advocated that the troika – where the International Monetary Fund and the European Central Bank are also represented – should involve social partners.

He said that in his bilateral contacts with IMF representatives, he always stressed the importance of respecting European labour legislation and social rights.

“The principle is clear, the practice is diverse. There is certainly a difference between Greece and Ireland,” Andor said, explaining that in Ireland there has been “a certain tripartite cooperation” in order to minimise the social cost of reforms, at least in the public sector.

“The situation in Greece has been quite different, the social partners have been in a way sidelined,” he said, adding that in order to address the situation the Commission would undertake an effort to “rebuild” social dialogue in Greece in a joint effort with the International Labour Organization. 

Social dialogue - the dialogue between workers and employers - is a key element of the European social model.

The economic and financial crisis has put industrial relations under strain. Governments have targeted the public sector, which employs about a quarter of the EU's workforce, as a key sector for adjustment. Measures have included pay cuts, pay freezes and job reductions, while in some cases these measures included reforms of collective bargaining systems where they were seen as part of the problems to be addressed.

The bargaining coverage rate indicates how many employees are covered by collectively bargained labour agreements. In most member states, this rate is significantly higher for public compared to private sector workers.

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