1. Collective bargaining for decent work Changhee Lee ( 李昌徽） Senior Policy Analyst Policy Integration Department 1

2. 1.ILO, collective bargaining and industrial relations 2.Key trends of collective bargaining 3.Collective bargaining and wage fixing 4.Crisis and collective bargaining 2

3. Origin of ILO Established in 1919 –To promote social progress and overcome social and economic conflicts of interest through dialogue and cooperation “Whereas universal and lasting peace can be established only if it is based upon social justice” 2 nd oldest UN agency (next to ITU) The only UN agency with tripartite decision-making structure –Workers and employers sitting together with governments –International Labour Conference and Governing Body Key instruments –International Labour Standards: 189 ILO Conventions –Conventions and Recommendations –Technical Cooperation 3

4. Tripartite principle of the ILO and importance of industrial relations Recognition of key roles of workers’ and employers’ organizations in governing labour markets, through dialogue and cooperation Key roles of IR institutions in ensuring inclusive growth with equity and harmony in a market economy ILO standards have contributed to shaping modern IR institutions across the world 4

5. Definition of collective bargaining Negotiations between an employer, a group of employers or one or more employers' organisations, on the one hand, and one or more workers' organisations, on the other, with the purpose of: (a) determining working conditions and terms of employment; and/or (b) regulating relations between employers and workers; and/or their organisations. 5

6. International Labour Standards on Collective Bargaining o The Right to Organise and Collective Bargaining Convention, 1949 (No. 98) o The Labour Relations (Public Service) Convention, 1978 (No. 151) o The Labour Relations (Public Service) Recommendation, 1978 (No. 159) o The Collective Bargaining Convention, 1981 (No. 154) o The Collective Bargaining Recommendation, 1981 (No. 163) o The Collective Agreements Recommendation, 1951 (No. 91) o The Voluntary Conciliation and Arbitration Recommendation, 1951 (No. 92) o The Right to Organise and Collective Bargaining Convention, 1949 (No. 98) o The Labour Relations (Public Service) Convention, 1978 (No. 151) o The Labour Relations (Public Service) Recommendation, 1978 (No. 159) o The Collective Bargaining Convention, 1981 (No. 154) o The Collective Bargaining Recommendation, 1981 (No. 163) o The Collective Agreements Recommendation, 1951 (No. 91) o The Voluntary Conciliation and Arbitration Recommendation, 1951 (No. 92) 6

7. Other international labour standards on industrial relations Social dialogue C144 - Tripartite Consultation (International Labour Standards) Convention, 1976 (No. 144)C144 - Tripartite Consultation (International Labour Standards) Convention, 1976 (No. 144) R152 - Tripartite Consultation (Activities of the International Labour Organisation) Recommendation, 1976 (No. 152)R152 - Tripartite Consultation (Activities of the International Labour Organisation) Recommendation, 1976 (No. 152) R113 - Consultation (Industrial and National Levels) Recommendation, 1960 (No. 113)R113 - Consultation (Industrial and National Levels) Recommendation, 1960 (No. 113) Workplace labour relations R094 - Co-operation at the Level of the Undertaking Recommendation, 1952 (No. 94)R094 - Co-operation at the Level of the Undertaking Recommendation, 1952 (No. 94) R129 - Communications within the Undertaking Recommendation, 1967 (No. 129)R129 - Communications within the Undertaking Recommendation, 1967 (No. 129) R130 - Examination of Grievances Recommendation, 1967 (No. 130)R130 - Examination of Grievances Recommendation, 1967 (No. 130) 7

8. Why bargain collectively over wages?  Fairer outcomes: addresses imbalance of power in employment relations  Tailoring of wage policies to industry and/or enterprise  Protects wages: Multi-employer bargaining takes wages out of competition Provides measure of protection against wage risk  Form of self-regulation: reduces onus on State to regulate and enforce wages  Common rules: Fosters industrial peace and stability 8

9. 1.ILO, collective bargaining and industrial relations 2.Key trends of collective bargaining –Coverage by collective agreements –Bargaining structures –Bargaining agenda –Bargaining outcomes 3.Collective bargaining and wage fixing 4.Crisis and collective bargaining 9

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14. 14 Union membership and collective bargaining coverage in China

15. 15 Trade unions and workers congress

16. 16 Growth of labour disputes

17. Global Trend Collective bargaining Trade union density and collective bargaining coverage is quite high in continental Europe, low in Anglo-Saxon countries, and low in most developing countries Trade union density has declined in many countries Collective bargaining coverage is stable in most continental European countries In Asia, trade union density very low (from 2% to 25% with an exception from China) and fragmented in many countries (Cambodia, Thailand, Philippines, Indonesia) Enterprise is the most important level of collective bargaining in Asian countries 17

18. Collective Bargaining in East Asia… In Japan, Korea and Singapore there is usually one union at enterprise level and relatively strong to be able to negotiate CBA’s – CB coverage roughly the same as union density. E.g. 25% of workers in Singapore are covered by CBA In Indonesia, Cambodia, Philippines and Thailand there are usually multiple unions and determination of an exclusive bargaining agent could be complicated. CB coverage is less than union density 18

19. Collective Bargaining challenges… Lack of enterprise unions (“no one to talk to”) or competing enterprise unions (“who to talk to”) In some countries senior management also holding senior union positions at the enterprise level – management negotiating agreements with themselves… 19

20. Structures of Collective Bargaining Centralized: Inter-sectoral multi-employer bargaining (e.g. Belgium) Sectoral multi-employer bargaining (e.g. South Africa – Bargaining Councils) Multi-level bargaining (e.g. Austria, France, Germany) Mixed bargaining (e.g. Tanzania: Public sector centralized; private sector enterprise-level) Enterprise-level bargaining (e.g. Japan, United States, United Kingdom) 20

21. Structure of Collective Bargaining: diverse forms of single employer (enterprise) bargaining Single Employer-Single Establishment-Single Union: Local negotiations at a single workplace (most prevalent) Single Employer-Multi-Establishment-Single Union: Negotiation of a common collective agreement across several workplaces by the same employer and union (widespread in public-sector in many countries: Wal -Mart in China?) Single Employer-Multi-Establishment-Multi-Union: Most likely in industries characterized by large employers and small craft unions (rare, e.g. railways) 21

22. Collective bargaining structures Many developing countries strengthen legislative and institutional framework (Botswana, Kenya, Namibia, Tanzania) Strengthening of industry level bargaining in some countries (Argentina, China and Uruguay) Increase in bargaining activity at enterprise-level 22

23. South Africa: Sectoral bargaining Description of bargaining structure: o Predominantly sectoral level bargaining (public and private sector) in bargaining councils and other non-statutory fora. o Collective agreements can be extended by Minister of Labour, establishing a minimum wage for the sector. o Weak coordination, some pattern bargaining o Statutory minimum wages determined by Employment Conditions Commission in other sectors. Collective bargaining coverage: o 27.3% Key trends in collective bargaining: o Bargaining agenda includes wages, working time and other issues such as HIV/AIDS (mining). o Multi-year agreements (2 – 3 years) used to ensure stability. o 2010/11 bargaining round increase in strikes. 23

24. Belgium: Articulated bargaining Description of bargaining structure: o National inter-professional framework agreement (IPA) sets “wage norm” and plays strong coordination role o Subsequent sector-wide CBA in joint committees o Enterprise level bargaining can improve on higher-level CA o Collective agreement can be extended by royal decree o Minimum wage set by CBA in joint committee Collective bargaining coverage: o 96% Key trends in collective bargaining: o 2009/10 collective bargaining key to negotiating crisis response: Temporary reduction in working time, temporary lay-offs, net pay rise without any change in nominal wages, eco-vouchers o 2011/2012 IPA: Margin for wage agreements 4.2% (inflation 3.9% plus 0.3%) Harmonizing status and benefits of blue and white-collar workers 24

25. Uruguay: Coordination and Coherence Description of bargaining structure: o Tripartite Superior Council: Wage guidelines o National Minimum Wage determined after consultation with Tripartite Superior Council o Tripartite Wage Councils at sectoral level o Bipartite collective bargaining at sectoral and enterprise levels Key trends: o Wage guidelines 2010:  Duration of agreements: 3 to 5 years  Frequency of wage adjustments: annual  Components of wage adjustments: expected inflation; 50 % weight & sectorial component; 50 % weight  Correction of inflation gaps  Safeguard clause o Wage Councils agree to increases and many use safeguard clause o CBAs at enterprise level agreed to wage increases above wage council agreements, agree to other benefits and productivity / performance 25

26. Collective bargaining trends in China Rapid quantitative expansion of trade union membership and collective bargaining coverage Until recently CB took place mostly at enterprises level, but now increasingly at regional/sectoral level Actively promoted by the government and unions not only for social stability but also for boosting domestic consumption and improving equity. Linked to tripartite social dialogue and local wage guideline within broader economic and social policy framework of 12 th 5 year plan (2011-16) While questions remain with regard to representational foundation of collective bargaining at the workplace and formalistic nature of collective bargaining, there are signs of significant improvements in this respect as well. 26

27. 1.ILO, collective bargaining and industrial relations 2.Key trends of collective bargaining 3.Collective bargaining and wage fixing 4.Crisis and collective bargaining 27

28. Collective bargaining and wage outcomes Micro (firm): Higher relative wages in organized sector Compressed wage structures and lower dispersion Reduction in working time Lower voluntary turnover and longer job tenure Increase in training Ambiguous effect on productivity. 28

29. Collective bargaining and wage outcomes Macro: Bargaining coordination (tripartite agreements, wage guidelines, centralized bargaining, employer’ or trade union coordination) associated with: Faster response to economic shocks Less wage dispersion Better labour market performance (unemployment) Where coordination linked to significant wage restraint, this may reduce wage share over time. 29

30. 1.ILO, collective bargaining and industrial relations 2.Key trends of collective bargaining 3.Collective bargaining and wage fixing 4.Crisis and collective bargaining 30

31. Collective Bargaining: Challenges 2008/2009 31 Workers Objectives: Job Security: avoid dismissals Protect income Fairness: cost- saving measures incl. management Management Objectives: Liquidity Reduce production Reduce costs Retain qualified staff 31

32. Negotiated responses to the crisis DIALOGUE Negotiated response Industrial relations system Severity of the economic crisis Public policies Strategies of social partners 32

33. Negotiating during the crisis DIALOGUE Bargaining agenda: 1.Reduce production and costs 2.Protect employment 3.Mitigate effects of redundancy 4.Protect earnings 5.Retain experience and improve skills 6.Recovery 33

34. Negotiating during the crisis DIALOGUE Working time Compensation Employment security 34

35. What have we learned? DIALOGUE Inequality fuelled distributive conflict Coordinated IR systems facilitated adjustment: -Tripartite social dialogue -Multi-employer bargaining -Procedural clauses provided certainty Interest-based negotiations facilitated innovations e.g. information sharing Public policy supported integrative outcomes e.g. short-time working schemes, training layoff schemes China: Joint Commitment Campaign ( 共同约定 行动） 35

36. Impact on collective bargaining DIALOGUE Reinforced decentralization Weakening of bargaining power Deregulation / re-regulation: –Limiting scope of CB agenda in public sector –Changes in the relationship between CBAs at different levels –Eliminating or re-regulating extension provisions –Recognition procedures and thresholds 36

37. 1.ILO, collective bargaining and industrial relations 2.Key trends of collective bargaining 3.Collective bargaining and wage fixing 4.Crisis and collective bargaining 5.A few other things before conclusion 37

38. A few things to make collective bargaining more effective for social partners and society Legal and institutional framework guarantee freedom of association and right to collective bargaining Encourage good faith bargaining Ensure adequate information Assist in preventing and resolving collective disputes Regulatory framework for collective agreements Capacity building Facilitate coordination and coherence 38

39. Collective bargaining in broader legal and policy environment forming ‘floor of rights’ Collective bargaining Universal social policy: health insurance, pension, unemployment benefits etc Universal labour standards: working hours, minimum wages, termination of employment, statutory holidays etc Human Rights Legislation: Constitutional/legal guarantee of freedom of association/right to collective bargaining, equal opportunity etc 39

40. Social dialogue at national level and information sharing/consultation at workplace level Tripartite social dialogue –influencing over legislative and policy developments –Set common parameters for collective bargaining e.g. wage guidelines Workplace consultation –Designed to facilitate workplace cooperation through regular sharing of information and consultation –Usually deal with non-distributive issues of labour relations at the workplace e.g. Works Council in Germany, Labour-Management Joint Consultation Committees in Korea and Japan 40

41. Union Power in a Global Era Strategy/ Agenda/ Union Projects & Values Workplace Union Internal Solidarity : democracy, autonomy, internal networks, workplace competencies External Solidarity & Networks: embedded & connected vertical & horizontal networks with other unions & with community Source: Christian Lévesque et Gregor Murray (Labor Studies Journal 2002) 41

42. Challenges ahead in China Accommodating new generation of young workers and their collective inspiration Reducing gaps Addressing labour market segmentations Managing expectations in good times and disappointment in bad times Labour market shortages, challenge of hiring and retaining talented workers Building dispute prevention mechanism at the workplace level Making supervisors or team leaders as backbone of workplace trade unions 42

43. A few issue Bargaining in Chinese style: Preparatory joint study between management and unions is the most important stage of collective bargaining/consultation in China Learning from Honda strike experiences –Three points demands of Honda workers –Role of better educated workforce in industrial relations transformation Learning from sectoral bargaining experiences in Zhejiang and Jiangsu 43