Industrial relations

Collective bargaining coverage down as a result of the global financial crisis

New research from the ILO quantifies changes to the coverage of global collective bargaining after 2008. While some countries have experienced increased coverage, most have seen declines.

News | 19 October 2015
GENEVA (ILO News) – Figures from a new ILO database on industrial relations show that collective bargaining has come under pressure in many countries since the start of the global financial crisis in 2008.

The new IRData tool includes indicators on trade union density and collective bargaining coverage in 75 countries. It was launched together with a brief highlighting the major trends on collective bargaining .

According to the brief, collective bargaining coverage 1 varies significantly between countries, from just about 1 or 2 per cent in Ethiopia, Malaysia, the Philippines and Peru to nearly 100 per cent in France, Belgium, Austria and Uruguay.

Crisis impact

When analyzing the impact of the global financial crisis on collective bargaining, the brief looks at a sample of 48 countries and shows that, on average, there was a 4.6 per cent drop in collective bargaining coverage between 2008 and 2013, compared with an average decline in union density for the same group of countries of 2.3 per cent.

In countries in which coverage declined, this was mainly due to the cessation of national general agreements, a roll-back in policy support for multi-employer bargaining and policy induced decentralization (e.g. legislative changes that: prioritized company over multi-employer agreements; introduced the possibility for companies in trouble to opt out of sectoral agreements; and allowed for the recognition of non-union bargaining representatives at the enterprise).

The sharpest declines (by an average of 21 per cent) were seen in countries hardest hit by the crisis, such as Cyprus, Greece, Ireland, Latvia, Portugal and Romania.

But while many countries experienced a decrease in coverage, there were ten countries that advanced in the opposite direction and extended coverage. This was the case for example in Finland, where the social partners signed a national general agreement, and the Netherlands, where collective bargaining expanded and collective agreements were extended in new sectors.

Then there is a small group of countries (France, Italy, Canada, Austria and Belgium) where bargaining coverage remained stable. These are countries where collective bargaining was a key element of the crisis response, including through the negotiation of “job saving agreements”.

“Collective bargaining can play a key role in translating growth into social progress” says Philippe Marcadent, Chief of the ILO’s Conditions of Work and Employment Branch.

“Governments should be at the forefront of promoting collective bargaining and the use of social dialogue as the means to that end. This includes guaranteeing an enabling legal framework that recognizes, promotes and upholds the rights of unions and employers’ organizations to have their voices heard, as well as specific measures to promote collective bargaining.”

Other issues

The brief looks at other issues, including the level at which collective bargaining takes place. Multi-employer bargaining at the sectoral or national level remains the most inclusive form of coverage.

The reason collective bargaining coverage in some countries exceeds trade union density is because of the inclusive practices of unions, employers (having signed a collective agreement, applying the terms to union and non-union workers) and of governments (extending collective agreements signed by representative parties to all employers in a branch or sector)..

No significant difference can be found between collective bargaining coverage for men and women.

What is collective bargaining?

  • Collective bargaining is a process of negotiation between independent unions and employers (or employers’ organizations). It determines terms and conditions of employment, typically wages and working time, and relations between the parties.
  • The outcome is a collective agreement, signed by the parties to the negotiations
  • Collective bargaining affords labour protection to workers, legitimacy (or rules) and stability to employers. It provides public authorities with a form of regulation which is determined by the social partners.
  • The Right to Organize and Collective Bargaining Convention, 1949 (No.98) is one of the eight fundamental Conventions of the ILO. Other ILO tools include the Collective Bargaining Convention, 1981 (No.154) and the accompanying Recommendation (No.163).

1: Bargaining coverage is defined as the share of employees to whom a collective agreement applies.