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Collective bargaining

Negotiating for social justice: Collective bargaining in times of crisis

This year marks the 60th anniversary of ILO Convention No. 98 on the Right to Organize and Collective Bargaining. While much has changed since the Convention was adopted in 1949, collective bargaining remains a fundamental right, an important tool to improve incomes and working conditions, and advance social justice. ILO Online spoke with Susan Hayter, senior ILO industrial relations expert, about recent trends and innovations in collective bargaining worldwide, including responses to the economic crisis, discussed at an ILO meeting in Geneva this month.

Article | 19 November 2009

A recent ILO survey shows that trade union membership declined in many countries – how does this affect collective bargaining?

Susan Hayter: The ILO conducted a statistical inquiry into trade union membership and collective bargaining coverage in 2008-09. The preliminary results of this inquiry show that trade union membership declined in many countries. The number of workers covered by collective agreements, however, remained relatively stable in some countries while it fell in others, particularly those which deregulated labour markets and removed support for collective bargaining.

The data also shows a significant difference in the role that collective bargaining plays in regulating terms and conditions of work in higher and lower income countries. In higher income countries, the proportion of workers covered by collective agreements is either equal to or higher than trade union membership. In developing countries, institutions supporting industrial and employment relations are weak, and the proportion of workers engaged in and covered by the terms of collective agreements remains very low, often below that of union membership, particularly when those in informal employment are included.

What is the role of the ILO with respect to collective bargaining?

Susan Hayter: ILO standards promote collective bargaining and help to ensure that good labour relations benefit everyone. Adopted in 1949, the ILO’s Right to Organise and Collective Bargaining Convention, 1949 (No. 98) promotes the utilization of machinery for voluntary negotiation between employers and workers, with a view to the regulation of terms and conditions of employment by means of collective agreements. It was supplemented by Convention No. 151 on Labour Relations (Public Service) (1978) and Convention No. 154 on Collective Bargaining (1981). The ILO’s supervisory bodies – especially the Committee of Experts on the Application of Conventions and Recommendations and the Committee on Freedom of Association – continue to supervise the application of these fundamental rights at work. The ILO assists its constituents to establish institutions that can support the effective recognition of these rights, such as dispute resolution agencies. It also provides training and advisory services, and undertakes comparative research in support of these services.

Collective bargaining remains an important tool with which to improve incomes and working conditions and advance social justice. Through collective bargaining, innovative means are being found to address contemporary labour market challenges such as increasing employment insecurity and rising inequality. The ILO Global Jobs Pact adopted last June by the International Labour Conference to stem the global economic and jobs crisis calls for the “strengthened respect for, and use of, mechanisms of social dialogue, including collective bargaining”.

What role can collective bargaining play as an effective crisis response?

Susan Hayter: Collective bargaining can play an important role as part of a broader crisis response, keeping wages stable, maintaining aggregate demand and avoiding potentially deflationary wage developments which may delay recovery. Public policy plays an important role in protecting industrial relations systems from erosion and keeping wages stable.

It is worth noting that during the general economic depression in the 1930s, many governments instituted measures to extend collective agreements and protect collective bargaining from being undermined by intense cost-based competition. Established collective bargaining practices were also an element that allowed the Republic of Korea to weather the Asian financial crisis in the late 1990s and enabled South Africa to make a relatively peaceful transition into the post-apartheid era.

Through collective bargaining, enterprises and trade unions are also finding practical ways to save jobs while at the same time facilitating the adaptability and longer term sustainability of enterprises.

How can collective bargaining contribute to innovation, productivity, competitiveness and enterprise sustainability?

Susan Hayter: Whereas wages and working time remain the primary issues for collective bargaining, negotiating agendas increasingly link pay to productivity and seek to implement flexible working time arrangements. This can be beneficial for both enterprises seeking to increase their flexibility – and workers seeking to share the benefits of productivity gains and balance work and family life. There is also evidence that where changes in work organization are negotiated with workers and their representatives, this contributes to improved enterprise performance.

One of the responses by the social partners to technological change and rising employment insecurity is to improve the skills of workers to ensure long-term employability. Thus, the inclusion of training and lifelong learning on the collective bargaining agenda is seen as an innovative development. Support for lifelong learning and training can be beneficial to both enterprises and workers, especially in the context of technological change or economic uncertainty.

This development has been particularly significant in Europe. Countries that have strong social partners and a strong institutional base for social dialogue and collective bargaining have had the most success in setting up collectively agreed frameworks for continuing vocational training.

How can collective bargaining contribute to better working conditions for non-regular workers?

Susan Hayter: Social partners in different countries are also using collective bargaining to improve the terms and conditions of employment of non-regular workers. These agreements include one or a combination of the following approaches: first, collective agreements include provisions that seek to regularize the employment of non-regular workers. Second, collective agreements seek to improve wages and benefits for non-regular workers.

In Europe, some collective agreements covering temporary agency workers place limits on the duration of temporary contracts, after which workers become eligible for an open ended contract. In Chennai in the Tamil Nadu region in India, a growing number of collective agreements include provisions to make contract workers permanent when a vacancy arises. In Uruguay, recent agreements in the manufacturing sector also include measures aimed at regularizing employment. In countries such as Argentina and Korea, industry/ sectoral agreements have been instrumental in ensuring wage parity between regular and non-regular workers.