employment relations in germany and sweden
TRANSCRIPT
Andreea Nan | Kristina StoiberAnna Zillner | Wenjamin Button
Presentation 5: October 17th, 2016
EmploymentRelations inGermany andSweden
Our AimDiscuss the historical development and major characteristics of German and
Swedish employment relations in the context of Globalisation andEuropeanisation processes.
Agenda
01GermanyHistorical Development
Key Actors within Employment Relations
The Dual System
Effects of Globalization
Effects of Europeanisation
Consequences
Agenda
02SwedenKey Actors within the tripartite system
Overall Timelime
Employment Relations Outcome
The Laval Case
Historical Development
Core features of German employment relations have their roots in the timeof the Weimar Republic.
German industrial relations system was not established until thereconstruction of the country after the Second World War.
The Constitution of the Federal Republic of Germany guaranteed the right tobuild associations for collective bargaining free from state interference.
German industrial relations can be considered a ‘late developer’:
Germany industrialization occurred comparatively late (1830–73) Major key elements of the German model of employment relations did notcome into being before the mid-1950s.
1919
1945
1949
Historical Development
1950
1960
1970The Economic Miracle involved high productivity, highadded value, high wage model based on highly skilledworkforce which lasted until 1970s.
Wirtschaftswunder[Economic Miracle]
Key actors within the German systemof
Employment Relations
Trade Unions Employers Government
____________________________________
____________________________________
Trade Unions
11.8 million
6.2 million
__________________________________________________________________________
Fading appeal of unions within the public debate.
Increased mobility of capital and workers.
More flexible work organization.
Low level of perceived effectiveness of unions.
Changes in the composition of workforcecharacteristics.
1991
2011
WHY?
Trade Unions
1990s2000s Union membership in Germany is now fairly concentrated in a small
number of organizations such as:Ver.Di, IGMetall, GDL and Cockpit.
Unclear labor market flexibility, deregulations and structural changes ineconomy led to a merger mania which has replaced the system of industrialunionism with now 8 unions from the DGB.
Union membership in the past reflected a skilled, male, full-time workers inmanufacturing or public sector.
That leaves out a lot of other employees in atypical jobs, women, foreign workers,younger employees, highly educated and qualified employees, private sector
under-represented!
Unions were forced to re-organize.
Employers
More than of all member companies have the ‘bargaining-free’ status.
membership status was introduced [OHNE TARIFBINDUNG]
Associations offer an opt-out clause to their membership.
Employer's Associations :
Represent firms by:
1990s:
2010:
social policy labor market interests collective bargainingemployment relations
OR
42%
OT
Government
Characterized by high degree of juridification but
After World War 2
Employee Relations
German unions were reconstructed as a uniform movement (Einheitsgewerkschaft) without separatepeak confederations.
State’s ability to interfere with issues of collective bargaining is limited by the German Constitution and thefamous concept of ‘bargaining autonomy’.
Government Interference is LIMITED.
Government
Constitution
The Government Role in Germany:
The Constitution: guarantees all individuals the right of freedom of association and that unions andemployers associates can engage in collective bargaining without any active state interference.
UnemploymentInsurance
System
Pension System
Health Insurance
SocialCare
Insurance
Important Government Passed Laws
Works Constitution Act Collective Agreement Act
Social Security ActCo-Determination Act
THE D
UAL S
YSTE
M
.CO‐DETERMINATION01
The WorksConstitution Act
Definition of Co-Determination:
Legal Basis of Co-Determination:
The Act Doesn't Apply to: Partially covers:
The Works Constitution Act: It gives work councils a set of rights. e.g. redundancies androstering.
Cooperation between management and workers in decision-making, especially by therepresentation of workers on management boards.
Work Councilsvs. Unions
Work councils can’t or pursue
Work councils are expected to work with management in a spirit of mutual trust for the goodof the employees and of the establishment.
new membersmonitor the implementation of collective agreements at the enterprise levelinformally assist in industrial action
STRIKE COLLECTIVE BARGAINING.
Work councils are detached from the quantitative issues of pay and income distribution.
Unions provide WCs with important services such as information, training and a lot ofcouncilors are union members.
Unions depend on work councils to get:
Work CouncilsRights
WORK COUNCIL RIGHTS
Right to Information Right to initiate and negotiate
matters with genuine co
determination between
employer and the WC
Right to Inspect Documents
Right to make recommendations
and give adviceRight to be consulted and object
Right to veto a decision
Weak Strong
Work CouncilsDevelopment
After negotiations the WC and employer might sign a work agreement and has a binding effect for allemployees.No agreement? - The conciliation committee decides the solution.
TRICK: Work Councils are mandatory but employers are not obligated to imitate it, thus employeeshave to initiate the start of the WC.
Only 1/4 of the eligible businesses have work councils.
Less than of the private sector workforce.
There has been a growing trend towards round tables orstaff spokespersons.
50%
Source: Ellguth & Kohaut (2013)
ChannelGermany is a two-tier country: supervisoryboard and management board [Vorstand].
Two channels of co-determination:
through work councilsemployee representatives onsupervisory board.
.COLLECTIVE BARGAINING02
CollectiveAgreements
Unions and Employers’ associations engage in collective bargaining in order to regulate pay and otherworking conditions. under the THE COLLECTIVE AGREEMENT ACT.
Pay Agreements [fix pay and periodic increases]
Umbrella agreements [regulate all other conditions of employment, over time, holidays,working time]
Framework Agreements [specify payment systems]
3 Types of Collective Agreement
CollectiveAgreements
THE COLLECTIVE AGREEMENTS: Industry wide and Regional.
Although multi-employer agreements are the most common
form of collective agreement, agreement also determine:
INDUSTRY WIDE
SINGLE EMPLOYER
Industry wide agreements have decreased to an extent that its decline is known as the
SMEs conclude their own agreements rather than follow the industry wide agreements.
the wageshours working conditions of a significant number of employees.
erosion of industrial relations.
CollectiveAgreements
Second Threat
Why does it work?
Main change incollective bargaining?
Acid escape from collective agreements.
Unions and WC keep quiet to save scarcejobs in the high unemploymentenvironment.
Decentralization and Labor MarketRestructuring
Source: Ellguth & Kohaut (2013)
Summary
The most prominent feature of
Employment Relations in Germany is the
Dual System.
The dual system of employment relations
promotes long-term cooperation and
mutual trust.
The Dual System
Co-DeterminationCollective Bargaining
Globalisationand
Europeanisation
Diversity
There’s more diversity in employment relations and the sizes of businesses.
Trend towards diversity happened due to:
Internal Factors
External Factors
Unification Huge transfer of financial resource to easternstates Change in models of work and productionNew management strategies
Europeanization [integration into EU]Globalization
Current and Future Issues
01. The decentralization of collective bargaining.
Decentralization different forms:
organized (controlled) decentralization: deliberate delegation of bargaining tasks to the lower level (first originated in the mid-1980s)
disorganized (wildcat) decentralization: involved either outright labour market deregulation or the withdrawal of key collective actors and happened due to inability of Employers Associations of maintaining members
__________________________________________________________________
"The difference between industry level bargaining and co-determination atenterprise level has become blurred"
Current and Future Issues
02.Change in the Public Sector
The State makes a clear distinction between PUBLIC EMPLOYEES and CIVIL Servants.
Public Employees: Benefit of the same rights as private employees Civil Servants : Cannot strike or bargain collectively.
We see a decentralization of bargaining as now, the state, the federal state and municipalities bargainseparately.
Strict stability criteria established for countries participating in the EuropeanMonetary Union led to a decline in employment.
Privatization was not as strong as in other countries [UK]
__________________________________________________________________
{1990s
State: Germany's Largest Employer
Current and Future Issues
03. Introduction of statutory minimum wage
Until it was seen as unnecessary as collective bargaining coverage
was extensive, now though, it has changed since collective bargaining has declined.
The phenomenon of the was unknown in Germany before.
Now it has become an issue not only thru atypical and part-time workersbut also those with a lesser degree among full-time employees.
__________________________________________________________________
Mid- 2000sInstated on: 1 January 2015
“working poor”
Current and Future Issues__________________________________________________________________
04.Increase in Labour Flexibility
Schröder administration:
Reforms Included
Development:
Demand
series of labour market reforms were passed knownas HARTZ laws.
Secondary scheme adopted Hartz IV’Other measures were adopted like raising the retirement age.
Since 1980s, flexibility was requested because:
an easing of the rules surrounding agency workcuts in unemployment benefits for some recipientsincreasing demands on the unemployed to seek new employment
changing condition of labour and product markets new patterns of work organization less of standardized mass production
Average Weekly Working time:37.7 hours
Part-time increased to26% of the total workforce
Current and Future Issues__________________________________________________________________
05.Growth in Atypical Employment
Standard employment:
Atypical Employment
Consequences:
Conditions
Full-Time, continuing employment
Growth of dual labour markets (unionised vs. non-unionised)
Part-timeSelf-employmentFixed-term ContractsMini-Jobs
Lower payLess job securityLower union coverage
Europeanisation
European Social Model:
European‐level Legislation Focuses:
Since the 1990s:
Second Phase of Europeanisation: Freedoms of the EU
combination of fundamental principles within the policy domains of the following rights:to work, to social protection and to civilized standards in the workplace.
Free movement of GOODS, CAPITAL, SERVICES AND PEOPLE.
1. Implement basic social standards2.Provide new institutions to accompany the ongoing transnationalisation.
European Level exchange of information on collective bargainingJoint targets to be followed in national collective bargaining
Consequencesof
Globalisation and Europeanisation
German High Road Model
Growing Low-Wage Sector
Increase in Mini-Jobs Lack of Key Institutions
Increasing inequality
Decline in collective bargaining
02
Key actors withinthe
Tripartite Corporatist Sytem
Trade Unions Employers'Organisations
Government
____________________________________
____________________________________
Tripartite System
1930
1945
1973
1990
Tripartite corporatist system / Basic Agreement in 1938.
Following World War 2 – strong economic growth.
Oil Crisis (1973-1979) – rising inflation, rising unemployment.
Economic crisis break with centralized wage bargaining .
Trade Unions
Established in
Union Density Reached peak
Ghent System
Drop to 73%
1898.1993. 2007.
1934.
Trade Unions
Swedish trade unions face problems due to:
Decline in union density
Decline in public support
Weaker link to social democratic party
A European labor market which is based on individual legal rights ratherthan on national collective agreements.
Employers'Organisations
Coordinated by:
IndustryOrientation:
2001:
the Confederation of Swedish Enterprise.
developed from a negotiating organization to a lobbying organization
Export oriented and internationallyexposed.
Government
1930
1973
1982
Government would keep its distance – collective bargaining andemployment disputes left to trade unions and employers‘organizations.
Oil Crisis (1973-1979)
Economic Growth Unemployment
Social Democratic Party back in power.
EmploymentRelationsOutcome
1973:Break with centralizedbargaining
Today: social partnersbargain independentlyfrom governmentinfluence
The Laval Case
Latvian Workersposted near Stockholm
Swedish Building WorkersUnion gave notice of industrialaction
Latvian companysuing for damages
European Court of Justice
FINAL RULING
Trade unions had violated the fundamental marketfreedom of Laval to offer its services in Sweden.