February 21 st 2013 Strengthening Public Services Social Dialogue in an era of austerity Stephen Bach Department of Management King’s College, London

Presentation structure Aims of EC funded research project Research approach and model Social dialogue Themes: - restriction, resilience & reconfiguration - UK, Czech Republic, Netherlands

Research Questions 1.What have been the main drivers and measures of austerity adopted in each country? 2.How have these changes been implemented and to what extent has social dialogue contributed to the change process at national, sectoral and decentralised level? 3.How have institutions of social dialogue influenced industrial relations processes and outcomes in the public services?

Research Approach Czech Republic; Denmark, France, Italy, Netherlands, UK Phase 1: meeting with social partners Phase 2: analysis of national experience - drivers, measures, outcomes Phase 3: case studies of local government

Austerity Outcomes Employment reductions Wage cuts Pay freezes Pension reform Work intensification Austerity Measures Budgetary cuts Staffing policies (e.g. replacement ratios) Alterations in wage fixing Drivers of Austerity External/ Internal High/ Low pressure Social Dialogue Tripartism Collective bargaining Joint consultation Cross-border Social Dialogue Tripartism Collective bargaining Joint consultation Cross-border ReconfigurationResilienceRestriction

Market Reaction Italy Market Reaction Italy Coalition for change Czech Republic Netherlands UK Coalition for change Czech Republic Netherlands UK Lagged Response France Lagged Response France Robust Health Denmark Robust Health Denmark Source of pressure Degree of pressure Low High External Internal Drivers of Austerity : retrenchment pressures

Outcomes Pay Freeze France ( index point value) Netherlands ( central govt; education) UK ( ) Pay Freeze France ( index point value) Netherlands ( central govt; education) UK ( ) Pay Cuts Czech Republic 10% Italy 5-10% (linked to earnings) Pay Cuts Czech Republic 10% Italy 5-10% (linked to earnings) Pension Reform Czech Republic Denmark France Italy Netherlands UK Pension Reform Czech Republic Denmark France Italy Netherlands UK Employment reductions Czech Republic (5.5% ) Denmark (2%: ) France (5% state administration ) Italy (10% ) Netherlands (cuts planned up to 2014) UK (12% ) Employment reductions Czech Republic (5.5% ) Denmark (2%: ) France (5% state administration ) Italy (10% ) Netherlands (cuts planned up to 2014) UK (12% )

Social dialogue  ‘All types of negotiation, consultation or simply exchange of information between or among, representatives of governments, employers and workers, on issues of common interest relating to economic and social policy’ ILO  Tripartism  Collective bargaining  Joint consultation  Cross-border – sectoral social dialogue committees

Social Dialogue: 3 scenarios Restriction – interruption & shift to unilateralism Resilience – institutional maintenance of dialogue - process often more closed/conflictual Reconfiguration – reform of institutional practice - renewal or erosion Variation: between and within national cases

Restriction National level: austerity programmes and pay - central government - ‘hollowing out’ of national IR Czech Republic Italy UK Severity of cuts: less willingness to engage in social dialogue

UK Restriction Austerity measures /16 £95 billion expenditure reductions - sectoral variation: local government 27% cut Coalition government policy: - 2 year wage freeze ( ); 1% ( ) - restrictions on trade union facility time - marketisation/fragmentation Outcomes – main adjustment employment

Consequences: Disputes

Resilience and Reconfiguration Denmark France Netherlands Influences on findings: - employer and union strategy - differences model employer (joint regulation) v. sovereign employer (legal regulation) traditions

Main Findings – Czech Republic Zuzana Dvorakova Alexandra Stroleny

Introduction Extensive reform since the : fiscal consolidation & austerity VS. structural reforms Social dialogue = fragile

Social Dialogue National: govt :Topolánek ‘caretaker govt’: Fischer current govt: Necas Sectoral-level: no collective agreements(CA) Enterprise-level: CA possible  Scope same as before crisis (law almost unchanged)

Main Measures Pension Reform: Public Pillar 10 percent cut in the budget for public- sector wages – excluding teachers public sector pay frozen until 2014  shift from automatic progression to pay system based on merit/ performance appraisal

Agreed level of wage increases (%)

Conclusion Austerity –Cuts: Employment & wages Social Dialogue –Restriction – small size of municipalities

Public services in the aftermath of the economic crisis: how social dialogue influences changes in public sector employment relations in the Netherlands Peter Leisink Ulrike Weske Eva Knies

Overview of austerity measures YearCabinetCuts*Cuts on public sector organization 2010Balkenende million public sector wage restraint 231 million efficiency cuts on government 2010Rutte I million public sector wage restraint 1.5 billion cut back on government 2012Rutte I + other parties billion cut back on government, including public sector wage restraint rise in the pension age (67 in 2024) 2012Rutte II16 1 billion efficiency cuts on government rise in the pension age (67 in 2021) * Budget cuts in billion of Euro’s

Consequences of quantitative and structural measures Quantitative measures: wage restraint/freeze: central government, primary education employment cuts through efficiency targets instead of nr. of jobs – estimated effect: jobs until 2015 (almost 10% of total government jobs) Mix of structural and quantitative measures decentralization of responsibility for specific public services (provision of sheltered workplaces, youthcare) to local government but with less budget (10-20% efficiency cut) Structural reform of employment relations: From traditional employment security to “from job to job” support measures supporting employees’ employability

Differences between sectors Differences between sectors in the degree of direct influence by central government Central government: Minister of the Interior is also employer Primary Education: Minister of Education determines wages and primary employment conditions Hospitals: employers and unions are relatively autonomous Local government: employers and unions are formally autonomous; but interference from central government Differences in consequences: wage freeze in central government and primary education but not in local government and healthcare Differences in leeway for social dialogue

Role of central government (2) Central government Primary education Local government Hospitals Very strong central government influence Very weak central government influence

Role of social dialogue Overall: resilience of social dialogue institutions and practices Industrial relations actors: no efforts to marginalize the social dialogue; ‘normal’ employment relationships Restriction tendencies in central government and education Unilaterally imposed wage restraint/freeze Reconfiguration tendencies in local government Sectoral level: collective labour agreement of the future; new substantive arrangements, ideas about rearranging negotiation authority between sectoral and local level Local level: works council Zwolle pro-active participation in plans for job mobility platforms, public-private partnerships

Questions Are challenges to social dialogue by shift to unilateralism temporary or more long-term? To what extent is restriction, resilience or reconfiguration dominant....at national, sectoral, enterprise level? How can social dialogue be reformed and strengthened to meet new challenges?