Impact of flexible labour market arrangements in the machinery electrical and electronic industries

Report for discussion at the Tripartite Meeting on
the Impact of Flexible labour market Arrangements
in theMachinery, Electrical and Electronic Industries

Part 3    

Copyright ® 1999 International Labour Organization (ILO)

3. Time for change:
Negotiating working hours

Without having conducted an exhaustive survey, available evidence does suggest that flexibility of working hours/time is one of the more innovative areas that can be bargained over. This is all the more true since, unlike other aspects of flexibility, time is inelastic -- limited to 24 hours a day, seven days a week. But before looking into specific examples (shown in box 3.1), let us see some of the more recent trends in collective bargaining in the mechanical and electrical engineering sector in selected countries.

In the broadest sense, collective bargaining refers to a process of interest accommodation which includes a wide range of bipartite or tripartite discussions relating to labour problems directly or indirectly affecting a group of workers. In a narrower and more traditional sense, a more precise definition would view collective bargaining only in connection with bipartite negotiations between employers or their associations and trade unions (or workers' organizations), leading to the conclusion of an agreement.⁽¹⁾ The pivotal role of collective bargaining in the metal trades sectors as a pattern-setter for the rest of the economy has been recognized in several countries.⁽²⁾ The size of the metal sector, union density and high exposure of the metal industries to the world market make it particularly susceptible to competitive pressures imposed on open economies.

3.1. Some recent trends in
collective bargaining

The Federation of Finnish Metal, Engineering and Electrotechnical Industries (FIMET) is typical of many employers' organizations today which feel that the mandatory application of collective agreements should be limited to a minimum, leaving it up to each individual workplace to agree upon practices which are best suited for it. They feel that the stipulations of collective agreements should be sufficiently flexible to allow for local agreements. Companies and units not in need of special considerations could still apply the national collective agreement or parts of it. Employers feel that in this way the bargaining system and the working conditions could be better adapted to the needs of the markets.

In recent years employers have sought to expand companies' room to manoeuvre; they judge that the experience has been slow but not disappointing. There are many examples showing that the degree of autonomy and self-determination at the plant level has grown considerably, and this has been positively received. In many plants, workers work in teams without supervision, directly accepting customer orders and distributing individual tasks within the team, in fact setting their own delivery targets.
 

Although Germany is still characterized by industry-wide collective bargaining conducted between the Federation of Engineering Industries Employers' Associations (Gesamtmetall) and the metalworkers' union (IG Metall) for all aspects related to wages and conditions of work,⁽³⁾ the law also provides that works councils can enter into specific agreements with management at the plant level. While this possibility has always existed, it would appear that issues related to flexible working time arrangements are increasingly being taken up by individual plants. In fact, the original agreement in Germany on reducing working time to 37.5 hours a week was silent on how it was to be implemented; this was left to individual internal agreements. In addition, two other trends can be identified. One is the increasingly frequent practice of including "opening clauses"⁽⁴⁾ in collective agreements, which leave it to individual plant-level arrangements, under certain circumstances, to expand or limit what has been bargained collectively at the sectoral level (see table 3.1). The second tendency is the call by Gesamtmetall to give enterprises more room to manoeuvre, suggesting that collective agreements should in future only provide minimum and maximum levels -- a corridor,⁽⁵⁾ so to speak, within which individual plants and works councils would agree to operate. In this respect, in the state of the North Rhein-Westphalia, IG Metall has already agreed to 15 deviations from the collective agreement since the beginning of 1997 to take account of situations which could not have been foreseen at the time of bargaining.⁽⁶⁾ The employers' desire for a corridor is also consistent with their model for a reform of the collective bargaining system, which would be shaped like a pyramid, in which only the minimum would be negotiated in the basic agreement, as a foundation on which other elements such as specific plant-level agreements would be built later, topped off by non-binding recommendations by the social partners for other benefits.⁽⁷⁾ This stance is consistent with the "Frankfurt Declaration on the reform of industry-wide collective bargaining" of 17 November 1997.⁽⁸⁾ In the Declaration the employers suggest widening the scope of internal agreements to determine conditions of employment at the plant level (within the overall framework of the industry-wide collective agreement), extending the possibilities for working time flexibility in collective agreements, and pursuing a policy of performance-related payments tied to corporate success. In this context, the employers would like to limit industry-wide collective bargaining to basic monthly wages and salaries, which would nevertheless guarantee the workers a fixed income. However, they suggest that other elements of remuneration -- Christmas bonuses, additional holiday pay, savings plans, etc. -- be based on individual company performance and negotiated at plant level. For their part, the unions are not entirely opposed to rethinking the concept of collective bargaining, being fully aware that opening clauses are in fact already paving the way for more and more works councils to enter into local agreements once exclusively reserved for collective bargaining. One solution would be for the unions to train plant-level collective bargaining units.⁽⁹⁾

In the United Kingdom, one of the more significant developments has been the absence of industry-wide collective bargaining since 1989. However, the Engineering Employers' Federation (EEF) pointed out in material submitted to the ILO that, although it had withdrawn from the process of national collective bargaining, the national agreements themselves had not been terminated. Nevertheless, variations of terms and conditions of employment since then have been negotiated through collective agreements at the plant level. This trend towards local-level bargaining had been developing over several decades, and a growing proportion of EEF's membership consist of companies which now believe that employee relations issues can only be satisfactorily resolved at the level of the parties concerned. According to the employers the benefits of such local bargaining include the following:

• member companies are not subject to the engineering industry national agreements and do not have to make any changes to their existing arrangements;
• business needs can be reflected in local terms and conditions of employment and working arrangements can be specific to the company;
• company culture can be based on local criteria and developed at that level;
• union recognition and procedural arrangements (where applicable) can be organized to suit company circumstances.

On the other hand, according to Paul Blyton, the withdrawal of the EEF from nationwide collective bargaining changed the very nature of bargaining in another fundamental way. Prior to 1989, the industry association had negotiated the basic weekly working hours with the unions, leaving it to the local or plant-level negotiations to determine and implement the details of shift work, overtime, short-time working and breaks. Now, with the decentralization of collective bargaining, there is no longer a national standard agreement on working time and other basic conditions of work and, although collective bargaining may still take place at the corporate or plant level in the larger unionized companies, these decisions are increasingly being taken by management in the smaller enterprises. This is also related to the general decline in union density -- overall union recognition for bargaining purposes fell from just over half of engineering establishments in 1984 to around a third in 1990 -- which in turn affected collective bargaining. Figure 3.1 shows union density and collective bargaining rates for a number of countries, which are also indicative of what is happening in the mechanical and electrical engineering sector.

While not conclusive, the above examples do document a trend away from nationwide and sector-specific collective bargaining towards a more plant- and enterprise-centred approach. In line with this, the introduction of flexible manufacturing systems has also meant a retreat from defending rigid job descriptions in the bargaining process, as the following two examples illustrate.

A similar situation to that described in box 3.2 was also found in many United States metalworking factories, where the labour agreement is in fact an explication of the job classification system. A comparative study points out that at one factory, Smithfield, every worker's job was spelled out through the classification system. The duties that individual workers were to perform -- and by implication not to perform -- were subject to the collective bargaining process. Such a system placed limits on management's flexibility in the areas of job assignment and overall staffing. An internal work organization system like the one at Smithfield had evolved in the majority of the unionized metals manufacturing facilities in the United States by the early 1950s. Unionists refused to perform functions that they believed strayed from their classification and zealously guarded what they felt to be "their" work.⁽¹⁰⁾

The problem with such a system was that layout of the factory floor and work flow "assumed the organizational features codified in the labour agreement" and management subconsciously "arranged its equipment accordingly" leading to a "labour-management relations regime which in turn supported the production structure". There were distinct departments based on a particular machining function or finishing operation. These included conventional grinding, milling and machining, computer numerically controlled (CNC) milling and turning, manual polishing, assembly, quality assurance and welding. Each part progressed from department to department, each headed by a department head, foreman and lead man.

3.2. Bargaining for time: Specific examples⁽¹¹⁾

3.2.1. Industrialized countries

In Austria, a new law gives collective agreements the authority to allow and regulate flexible working time arrangements, which can be reached through plant-level agreements. As in many other countries, there is a trend towards annualization of working time, with the duration of the normal working week (38.5 hours) calculated on the basis of a 52-week period. In February 1997 a flexible working time model was agreed on for the metal trades (Metallgewerbe) (see box 3.3).

According to a new law in Belgium, companies now have the possibility of organizing their working time on a yearly basis (starting on 1 November 1997). Flexible hours are limited to two hours a day and five a week. Larger companies must reach an agreement with the works council. A maximum of 130 flexible hours may be worked over a six-month period; these must be compensated for in the following half-year. Employers wishing to make use of this system must also afford the right to part-time jobs for a least 10 per cent of the workers.
 

Table 3.1. Opening clauses in selected areas of collective agreements for the
mechanical and electrical engineering industries

Recent collective agreements in some companies such as Diakin and Permec-Mustad in Belgium now provide for two 12-hour shifts on weekends, which are compensated at the full rate for 38 hours, i.e. the normal weekly pay of someone working from Monday to Friday.

The current agreement in Denmark stipulates that only eight hours of overtime a month can be paid and further overtime has to be compensated in the form of time off, which must be taken over a period of four months. Annual hours and flexible working time might also become part of collective agreements in the near future. Here the unions are willing to meet employers' demands for more flexibility with a counter-demand for some reduction in working time as well as extended workers' participation rights.

In the view of the Finnish Metalworkers' Federation the metalworking industry in Finland has been among the pioneers regarding the development of working hours. A joint working group was established to decide on new experimental proposals in this area. According to the Agreement on flexible working time, ordinary working time is defined on an annual basis, which should not exceed a weekly average of 36.5 hours (less public holidays) at the end of the year but without daily or weekly limits, which are to be agreed upon locally.

In France, an intersectoral agreement on working time was signed in October 1995 by the National Council of French Employers (CNPF) and four trade union confederations (the French Democratic Confederation of Labour (CFDT), Force Ouvrière (FO), the French Confederation of Christian Workers (CFTC) and the French Confederation of Executive Staffs (CFE-CGC)). The social partners agreed to reduce working time in exchange for greater flexibility on an annual basis, to discourage overtime work and promote part-time arrangements and "time savings accounts", and to offer the possibility of early retirement for workers aged over 57.

In May 1996, the employers' organization (UIMM) and two trade unions -- FO and the CFE-CGC -- in the metalworking industry reached an agreement on working time and job creation to implement the national framework agreement. The CFDT argued that the deal allowed employers "maximum flexibility" without providing any compensation and with no positive impact on employment.

Under the agreement, weekly hours may vary while respecting average hours (39 hours per week) over a 12-month period, in order to respond to fluctuations in activity. The authorized weekly maximum is 46 in any week and no more than 44 over any period of 12 consecutive weeks, instead of the 48 or 46 hours provided for by legislation. If the annualization is applied to a three-month period the additional paid leave is two days; it is three days for a four-month period and six days for a ten-month period. These six days correspond to a one-hour reduction in working time per week and are compensated at 100 per cent. Under normal circumstances, no overtime rates are paid to workers with annualized hours. However, if the total annual hours exceed the normal level, the excess hours are paid at overtime rates or compensated in the form of time off. These "time savings accounts" (compte épargne temps) will enable workers to save up overtime premiums, bonuses, and up to three weeks' annual leave, and to use them for a long period of leave.

The report of the International Metalworkers' Federation (IMF) goes on to state that while annualization is a way for enterprises to cope with the cyclical nature of their business, it could nevertheless seriously affect family life in the case of peaks of up to 46 hours a week (or 48 hours without annualization).

In addition, an Act to promote employment through collective agreements reducing hours of work (known as the "Robien Act") was adopted in 1996 as part of the Government's drive to tackle France's unemployment problem. Its provisions can be implemented by plant, company or branch agreement (see box 3.4).

In the metal industry, a series of agreements have also been signed in large industrial groups or establishments of large groups, such as Philips and Thomson. In addition to the agreements negotiated in the framework of the Robien Act, over a hundred more have been reached outside it. The UIMM also provided examples of agreements signed with respect to annual hours and the reduction of working time between companies such as Constructions Electriques-Nancy and MGI Coutier Plastiques, and between the UIMM itself and the unions with respect to working time related to preserving employment.
 

In Germany,⁽¹²⁾ 12 job-related initiatives originated in collective bargaining, in particular in the chemical sector agreement of 1993 and the metal trades sector agreement of 1994, in which trade unions accepted wage restraint and a reduction in hours of work, with wage cuts, in exchange for job protection measures. Moreover, the action of the federal Government acquired greater momentum from that period onwards, as is clear from its participation in tripartite meetings on employment with a view to concluding an "Alliance for Jobs". These meetings were requested by the trade union confederation in the metal trades sector, IG Metall, which embarked upon negotiations with German employers in the industry on job security. Although these two initiatives did not produce any final conclusion, a number of the proposals submitted during discussions were taken up in other forms. Indeed, they paved the way for the conclusion, in February 1996, of a central tripartite agreement -- which subsequently became law -- on the introduction of a system of part-time jobs for older workers if new workers were hired simultaneously; in addition, a tripartite "Alliance for Jobs" was successfully concluded in Bavaria in June 1996; finally, the "philosophy" underlying endeavours to achieve a central pact -- namely wage restraint in exchange for job protection measures -- made a significant contribution to a number of other industry-wide agreements, particularly those concluded in 1996 in the chemical and textile sectors. It should also be noted that, although the Government took a highly controversial step in proposing a reduction of payment of sick leave, the measure will not truly come into effect, where applicable, until the social partners renegotiate industry-wide agreements -- thereby confirming the strategic position of collective bargaining by branch of activity in Germany.

Germany is the only country to date which has achieved a reduction of the working week to 35 hours. In terms of working hours efforts are now aimed at creating new jobs, for example by reducing overtime and compensating overtime in the form of days off rather than pay. IG Metall estimates that this step alone could create over 100,000 jobs in the metalworking industry in the short run. In April 1997, the union leadership gave a new impetus to the debate on working time by proposing the 32-hour week as its objective for 1999. In addition to reduced weekly working time, the IMF's German affiliate is also arguing for negotiated provisions on part-time work for older workers (Altersteilzeit). The model proposed by IG Metall stipulates that from the age of 55 workers should be entitled to work part time over a period ranging from two to ten years. During this time span, 85 per cent of the previous net remuneration must be paid. The total sum of contributions must be made up to 100 per cent, so that there is no reduction in pension when the worker reaches pensionable age.

In Ireland, the Services Industrial Professional Technical Union (SIPTU) reports that there has been a move towards the introduction of annualized hours (averaging may be balanced out over a four-, six- or 12-month period depending on the circumstances), eliminating the need for overtime, but these systems are often resisted by the workers, who have come to depend on overtime earnings. Indeed, concerning the reduction to a 39-hour week, it suited some employees to have six days off in lieu per year and to continue working a 40-hour week.

In Italy the trade unions argue that overtime should be reduced as much as possible. At Olivetti, for example, some 850 jobs were saved by the introduction of solidarity contracts with no enforced redundancies. An additional 232 jobs were saved through economies elsewhere in the company and a further 32 by bringing back in-house work which had been previously contracted out.⁽¹³⁾

The issue of weekend working has moved to centre stage recently, as employers attempt to extend operating times in order to remain competitive. Recent collective agreements have seen the introduction of weekend-only shifts, mainly made up of young people, for example in the electronics firms SGS-Thomson and Sony. At Fiat's Termoli and Melfi plants, employees now work a five-day week, spread over Monday to Saturday, with rotating Saturday working. In the Olivetti Group, an agreement has been concluded at Valeo introducing a 36-hour week in return for six-day working. However, many of these agreements are coming up against the opposition of the workforce.⁽¹⁴⁾

In the Republic of Korea, major unions negotiated a reduction to a 40-42-hour work week in 1996. Nevertheless, in spite of these breakthroughs in some enterprises, working hours remain substantially higher here than in other OECD countries.

In the Netherlands, the number of part-time workers in the metal industry is lower than the national average for all sectors but still higher than in other European countries, at least in some branches. Part-time work accounted for 6.9 per cent of work in electro-technical jobs, 6.7 per cent in transportation and 7.3 per cent at Philips. According to the trade unions, the employers' attitude in collective bargaining was that part time was not relevant, possible or interesting for the metal industry. Another reason for this low rate is that only 10.7 per cent of the metal industry workforce are women, who are more interested in part-time work. Under the new collective labour agreement in the metal industry for 1996-98, employers have agreed to set up an employment fund to promote job creation projects. The employment fund is financed by both employers and workers: the former contribute 1.1 per cent of the total annual wage bill and the latter 0.6 per cent in 1997 and 0.5 in 1998. So far, the reduction of the working week to 36 hours is a popular theme in the Netherlands.

In Norway, a 2.5-hour reduction in working time without loss of income was negotiated in 1986 by the bargaining partners, bringing contractual weekly hours of work to 37.5 hours (legal working time is 40 hours under the Working Environment Act, 1977).
 

In Sweden, the issue of working time was on the agenda of Svenska Metall's Congress in April 1997. Svenska Metall's immediate aim is to reduce working time by 100 hours per year following the model initiated in the 1995-96 collective agreement. According to this model, workers are granted compensatory leave which is put into individual working time accounts. The compensatory leave negotiated was 19 hours a year (24 minutes per week). Svenska Metall's longer term goal is to reduce weekly working time to an average of 30 hours. It was further agreed to work towards a lowering of overtime from 200 to 100 hours per year and to strengthen workers' right to refuse overtime.

In Switzerland the metalworkers' union (SMUV/FTMH) has recently put forward a proposal for annual hours which it is claimed would both increase operating hours for machines and preserve jobs. A ban on overtime would also reduce unemployment if new recruits were hired.

An important breakthrough was achieved in the watchmaking sector in the field of working time. The new agreement signed in 1996 contains several innovations and improvements, including:

• modulated retirement enabling workers to reduce their personal working time by 20 per cent two years before the regular retirement age;
• increase in leave of half a week for all;
• unpaid parental leave from four to 12 months for both parents upon request, with guaranteed reinstatement and equivalent conditions.

This agreement, in force until the year 2001, covers some 28,000 workers in over 400 enterprises.

No changes have occurred in Turkey, where statutory working time is still 45 hours a week with maximum allowed overtime of 270 hours per year. Through collective agreement, unions have been able to reduce working hours to 42.5 per week. They also succeeded in having tea breaks included in working time and the overtime premium increased from 50 to 100 per cent.

In the metal manufacturing sector in the United Kingdom,⁽¹⁵⁾ interest in the organization of working time is associated partly with recent collective agreements to reduce the length of the working week. Outside these agreements, however (which cover less than half of the employees in the sector overall), a number of other working time developments are also evident, most notably the introduction of new shift-work patterns and the development of seasonal hours arrangements.

Among the companies adopting annual hours arrangements to meet output or demand variations are several Japanese-owned consumer electronics companies located in the United Kingdom. Typically in these companies, the busiest period of demand falls in the months leading up to Christmas, with a significant weakening of demand in the subsequent months. In the past, Hitachi, for example, covered the increased work demand during the August to November period by extending overtime working and recruiting temporary labour. Under a new agreement (signed with the single union recognized at the company, the Amalgamated Engineering and Electrical Union), employees are paid for 39 hours throughout the year, although actual weekly hours are 42 during the August to November period and 37 hours at other times. In its first year of operation, the number of temporary workers engaged during the peak period fell by 75 per cent and less weekend overtime was worked by permanent employees. This move away from a fixed-length working week and towards reductions in overtime working (and overtime payments) has not been accompanied by any reduction in employees' contractual hours of work. In fact, employees have typically gained no direct concessions as a result of accepting differential hours arrangements, and indeed have commonly experienced a reduction in earnings as a result of the scheme owing to reduced overtime working during the peak period. Central to management's case for introducing the scheme at Hitachi, however -- and a major influence shaping the union's response -- was the fact that the product market at that time was too weak to justify the full retention of staff during the non-peak period.

A similar variation in working hours between peak and low demand periods has also been introduced in a number of other (mainly Japanese-owned) consumer electronics companies in the United Kingdom, such as Matsushita and Toshiba.⁽¹⁶⁾

Working time and compensation in the United States electrical machinery and electronics industries is generally patterned after national bargaining with the General Electric Company. In July 1997, the Coordinated Bargaining Committee of GE Unions successfully concluded negotiations on a new three-year agreement covering 46,000 workers. An additional paid holiday (Martin Luther King Jr.'s Birthday) was negotiated, the first in nearly a quarter of a century. In addition, the Special Early Retirement Option (SERO) with full pension benefits was greatly expanded. This "30-and-out" provision not only enhances the job security of union members at GE, but will also reduce lifetime working hours for thousands of GE workers in the United States.

3.2.2. Developing countries

According to the IMF report, in Brazil working time in the metal industry is still about 44 hours per week, spread over a five-day week. Yet there are prospects of achieving a reduction to 40 hours per week. Collective agreements negotiated with several companies have resulted in the suspension of overtime, forcing them to recruit more workers or even introduce another shift in order to cope with demand. In Colombia working time is eight hours per day, six days a week, i.e. 48 hours per week, both in operations and in administration. However, metal unions always include a clause calling for a reduction to 40 hours per week in their bargaining position. In Chile, there has not been any statutory modification in the length of working time, which remains at 48 hours per week. At some major plants such as GM and Philips, however, unions have managed to have the lunch break included in the 48 hours.

Through collective bargaining, the unions in South Africa have achieved a 44-hour week in engineering, 40 hours in the automobile industry and 45 in the motor servicing industry. Maximum overtime allowed is ten hours per week.

3.2.3. Central Europe

In 1996, the ILO's Central and Eastern European Multidisciplinary Advisory Team (ILO-CEET) in Budapest, on behalf of the Bureau for Workers' Activities (ACTRAV), carried out a comparative survey of collective bargaining in 14 multinational enterprises (MNEs) in the food and drink sector and the metal trades industries in Central Europe.⁽¹⁷⁾ Of the 15 subsidiaries of seven multinationals which were in the metalworking industry, all were in mechanical and electrical engineering except for one automobile producer (see table 3.2).

Table 3.2. Subsidiaries of multinationals and their ownership, metal industries

A comparison group of domestically owned metal manufacturing firms was also formed from a similar survey undertaken a year earlier which included Bulgaria (134 companies), Czech Republic (20), Hungary (78), Poland (25) and Slovakia (61). All were privately owned except those in Bulgaria, which were publicly owned. As an indirect indicator of flexibility figure 3.1 shows that with respect to the original bargaining stance, most frequently compromises were made on remuneration and social issues. It was also found that the domestic companies compromised at about the same rate on the same issues, although the willingness to negotiate was weaker and the bargaining atmosphere was worse in the domestic companies than in the MNE subsidiaries. In three-quarters of the MNEs, the collective agreement determined wages, shift supplements, overtime pay and normal working hours. In the domestically owned units these issues were less likely to be determined by collective bargaining (although the question about working hours was not asked). Figure 3.2 shows which work arrangements (fixed-term, part-time, subcontracting) were limited by the terms of the collective agreement in the multinationals, which was about the same for the domestic companies, except that fixed-term work was limited less often and part-time work and subcontracting more often.

Interestingly, bargaining with the MNEs took longer, but this is more related to the fact that management was more willing to discuss the full range of issues, which domestic companies were not. At the beginning, some MNEs also exercised numerical flexibility in the initial take-over to reduce staff (either through voluntary or compulsory redundancies, or through early retirements) and to hire a new (younger and more highly educated) workforce to match the new technologies being introduced. For the moment many of these new recruits are not interested in joining trade unions. On the whole, the study found that trade union membership was lower in the multinationals than in the domestic firms and the position of the trade unions weaker in subsidiaries in the mechanical and electrical engineering sector than in those in the food and drink industries.

3.3. Plant-level agreements

According to Lindecke,⁽¹⁸⁾ although an earlier study had revealed "that little use had been made at plant level of the provisions on flexiblization of working time introduced into collective agreements in the engineering industry between 1984 and 1990", by 1995 a survey carried out by the Frauenhofer Institut found that 56 per cent of the plants in the German capital goods industry had introduced flexible working-time systems.

Another recent study provides for the first time valuable insights into the contents and functioning of plant-level (internal) flexibility agreements on working time. Most of the agreements examined were concluded in 1996 and mainly cover the mechanical and electrical engineering industries.⁽¹⁹⁾

The study by Lindecke and Lehndorf confirms the specific nature of each individual firm. Some of the important lessons arising from the study relate to the question of overtime and the danger that if too much is accumulated, the temptation to compensate in cash might be overwhelming, especially in countries where overtime payments are traditionally looked upon as part of the collective agreement. This leads to the question of transparency. Who will be responsible for ensuring that the actual time worked is correctly credited or debited? While the study in question found that in most cases either the individual employees or in some cases their supervisors were responsible for monitoring the hours worked, in one quarter of the agreements, the works council was given the right of inspection. And in eight agreements the position of "time monitors" was created (these may or may not be members of the works council).

While most plant-level agreements in the engineering industries are silent on the subject of what happens if the maximum number of hours of permitted overtime is exceeded, an almost equal number simply state that they are forfeited (see table 3.3). This then raises questions about "unpaid" overtime, the need to designate someone to monitor the time actually worked, and the period of time over which the "equalization" must be implemented (in some cases weekly, monthly, quarterly, yearly or even beyond). Most of the agreements examined provided for calculation on a yearly basis, which was in accordance with the industry-wide collective agreement. Nevertheless, four plant-level agreements extended this period -- two within specified limits and two others for unlimited periods of time. The authors raise a number of questions about how such plant-level agreements could be upheld if they go against the overall collective agreement and how workers with an excess balance might be credited in the event of insolvency of the firm or the expiry of their contracts before credited time could be compensated. In Switzerland, for example, the courts have recently ruled that where it has been agreed to work under flexitime arrangements, excess hours can only be compensated in time off and not in cash.⁽²⁰⁾ This then puts the onus on the worker to ensure that hours credited for overtime work are taken within the limits imposed and before the expiry of their contracts.

Table 3.3. What happens when maximum permitted overtime is exceeded?

One way to avoid problems like the above and to link the increase in any excessive overtime worked (which cannot be compensated for or equalized) to the creation of new jobs would be to set up what is known as a "traffic-light" system (see table 3.4). Although only four of the more than 100 agreements examined contain such provisions, their contents provide food for thought. Thus one agreement specified that negotiations on hiring new staff must begin when the average credit balances exceeded 120 hours in the various departments.

Table 3.4. Traffic-light system to monitor the amount of overtime hours worked

Finally, as can be seen in table 3.5, although plant-level agreements did make it possible to seek employment guarantees as well, only 20 of the agreements studied seem to have availed themselves of this possibility.

Table 3.5. Duration of employment guarantee

* * *

This chapter has shown a shift in many countries from centralized to decentralized bargaining, especially with regard to negotiating flexible working time arrangements at the plant level. There also appears to be a trend towards the reduction of the working week to under 40 hours, but with an increased tendency to spread these hours out over the entire day or week. In addition, it seems to be increasingly likely that overtime will be compensated not in cash, but in time off. However, whereas overtime was previously calculated at time-and-a-half or double-time for cash settlement, the extra hours worked now appear to be calculated at one-and-a-quarter or one-and-a-half hours off (up to certain limits).

1.  R. Blanpain: "Collective bargaining", in Social Europe: The regulation of working conditions in the Member States of the European Union, Vol. 1 (Supplement 4/92), p. 87. In this connection, the term "interest accommodation" is preferred to "compromises" or "tradeoffs".

2.  F. Traxler and B. Kittel: "The bargaining structure, its context and performance: A case of global competition among national bargaining systems?", Paper prepared for the Conference on Economic Internationalisation and Democracy, 14-15 Dec. 1997, University of Vienna, p. 11.

3.  In fact s. 77 of the Works Constitution Act expressly forbids plant-level agreements on matters related to pay or conditions of work which are, or normally would be, regulated by the collective agreement. In recent times, however, there has been strong pressure from all sides to deviate from this rigidity. See, for example, the position of the Association of German Machinery and Equipment Manufacturers (Verband Deutscher Maschinen- und Anlagenbau e.V. -- VDMA) in: Die VDMA-Vorschläge zum Tarifrecht -- Dokumente und Argumente.

4.  R. Bispinck: "Tarifliche Öffnungsklausel: Differenzierung und Dezentralisierung des Flächentarifvertrags -- Eine Analyse der Tarifbestimmungen in 80 Tarifbereichen", in WSI Informationen zur Tarifpolitik (Düsseldorf, 1997), pp. XIII and 8.

5.  According to a survey conducted by the Emnid-Institut on behalf of the employers, 75 per cent of the workers would be willing to accept a working-time corridor of between 30 and 40 hours a week, a step which unions fear might usher in a return to the 40-hour week. "Erhalt und Reform des Flächentarifs gefordert", in Frankfurter Allgemeine Zeitung, 21 Jan. 1998; "Arbeitgeber bekennen sich zum Flächentarif", in Handelsblatt, 21 Jan. 1998, etc.

6.  "Keine Angst vor Reform des Flächentarifs: IG Metall -- Gespräch mit dem Bezirksleiter von Nordrhein-Westfalen", in Handelsblatt, 3 Feb. 1998, p. 4.

7.  R. Bispinck: "Collective bargaining policy and flexibility: A case study of the Federal Republic of Germany", unpublished manuscript (Geneva, ILO); and Bispinck, WSI Informationen, op. cit., p. XIII.

8.  Circular letter of the Federation of Engineering Industries Employers' Associations (Gesamtverband der metallindustriellen Arbeitgeberverbände e.V. -- Gesamtmetall), 17 Nov. 1997.

9.  "Der DGB sucht ein neues Tarifkonzept: 'Öffnungsklauseln Zeichen der Schwäche, zugleich aber auch sinnvoll' -- Betriebliche Tarifkommissionen?", in Frankfurter Allgemeine Zeitung, 25 Oct. 1997.

10.  R. Forrant: Survival of the flexible in the global economy: Employment security and shop-floor reorganization in two Massachusetts metalworking firms, Sectoral Activities Programme Working Paper (Geneva, ILO, forthcoming).

11.  Much of the information in this subsection was drawn from International Metalworkers' Federation (IMF): Metalworkers and working time in the world, Report for a conference held in Tokyo, 15-16 Oct. 1997 (Geneva, IMF, 1997).

12.  R. Bispinck: "Germany", in G. Fajertag (ed.): Collective bargaining in Western Europe, 1995-1996 (Brussels, European Trade Union Institute, 1996), pp. 95-117.

13.  Trade Union Advisory Committee (TUAC): Adaptability versus flexibility: A trade union agenda for managing change (Paris, TUAC-OECD, 1995), cited in IMF, op. cit., p. 40.

14.  M. Biagi: "Collective bargaining and flexibility in Italy", unpublished paper prepared for the ILO's Labour Law and Labour Relations Branch (LEG/REL), 1997.

15.  P. Blyton, op. cit., p. 84.

16.  P. Blyton: The development of annual working hours in the United Kingdom, Working paper (Geneva, ILO, 1995), p. 10.

17.  P. Repo: "Collective bargaining in Central European subsidiaries of multinationals: Report of trade union experiences in Bulgaria, Czech Republic, Hungary, Poland and Slovakia", ETUI Seminar on Multinationals, 13-14 Dec. 1996 (unpublished manuscript).

18.  C. Lindecke: Unpublished discussion paper citing Marcus Promberger and Rainer Trinczek: "Stell Dir vor, es gibt Möglichkeiten zur flexiblen Gestaltung der Arbeitszeit, und sie werden kaum benutzt", in Seifert (ed.), G. Lay and C. Mies: Neue Arbeitszeitmodelle haben das Experimentierstadium verlassen, Frauenhofer Institut für Systemtechnik und Innovationsforschung: Mitteilung aus der Produktionsinnovationserhebung 5 (Karlsruhe, 1997), pp. 104-129.

19.  C. Lindecke and S. Lehndorf: "Current trends in the flexible organization of working time: A survey of some recent internal agreements"; see also idem: "Aktuelle Tendenzen flexibler Arbeitsorganisation: Ein Überblick über neuere Betriebsvereinbarungen", in WSI Mitteilungen (Bund-Verlag, Düsseldorf), No. 7/1997, pp. 471-480. Of 109 agreements studied, 99 were in the engineering industries.

20.  Neue Zürcher Zeitung, 24 Dec. 1997.

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