InternationalLabourOffice

Key Features of National SocialDialogue: a Social Dialogue Resource Book

Junko Ishikawa

InFocus Programme on Social Dialogue, Labour Law and Labour Administration

KEY FEATURES OF NATIONAL SOCIAL DIALOGUE:

A SOCIAL DIALOGUE RESOURCE BOOK

Junko Ishikawa

InFocus Programme on Social Dialogue, Labour Law and

Labour Administration

International Labour Office - Geneva

November, 2003

Copyright © International Labour Organization 2003

First published 2003

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Junko Ishikawa

Key Features of National Social Dialogue: A Social Dialogue Resource Book

Geneva, International Labour Office, 2003

ISBN 92-2-114901-3

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III

Acknowledgements IV

Introduction 1

Chapter 1: What is social dialogue? 3Definition of social dialogue 3ILO working definition 3Other definitions 4Actors in social dialogue at national level 5The role of Government 5Social dialogue, tripartism and the ILO 7

Chapter 2: Conditions for constructive social dialogue 9Basic Enabling Conditions 9Pitfalls in social dialogue 12

Chapter 3: Typology of social dialogue 15Representation and issues of social dialogue 15Classification of different forms of social dialogue at national level 17Policy concertation and dialogue at national level in practice 19Cycle of policy concertation - social dialogue processes 21Role of social dialogue institutions 22National tripartite or bipartite institutions as supportive fora of social dialogue 23Variety of tripartite or bipartite fora at national level 23Fora to discuss wider economic and social policies at national level 24

Size and composition 24Functions 24

Challenges associated with well-functioning social dialogue institutions 25The role of the secretariat 25

Chapter 4: Benefits of Social Dialogue 27What can social dialogue deliver? 27

Benefits of social dialogue processes 27Benefits associated with the results of social dialogue 30

Some concluding remarks 37Policy recommendations 37

Challenges and opportunities for the Government 37Challenges and opportunities for workers’ and employers’ organizations 38Challenges and opportunities for all parties 38

References 39

Appendix 1 43Conclusions concerning tripartite consultation at the national level on economic and social policy 43

Appendix 2 45Resolution concerning tripartism and social dialogue 45

CONTENTS

IV

I would like to thank Patricia O’Donovan, Director and Giuseppe Casale, Deputy Director of the InFo-cus Programme on Social Dialogue, Labour Law and Labour Administration (IFP/DIALOGUE) who,throughout the process, encouraged me to work on this resource book and commented in detail on itsdraft version. I would also like to thank my colleagues in IFP/DIALOGUE, and in particular the SocialDialogue Team members and team leader, Shauna Olney, for their comments. I would like to expressmy special thanks to Marleen Rueda-Catry and Georges Minet who helped greatly in improving the draftby directing me to examples of social dialogue in Spanish and French speaking countries.

Sole responsibility for the opinions expressed in this text lies with the author.

November 2003 Junko Ishikawa

IFP/DIALOGUE

ACKNOWLEDGEMENTS

1

Social dialogue at the national level refers to the co-operation between social partners, i.e. workers’ andemployers’ organizations, with the Government. Itcan address a wide range of issues from labour re-lations to wider social and economic challenges.The Government may be a full partner in the dia-logue or may play the role of facilitator.

Strengthening tripartism and social dialogue is oneof the four strategic objectives of the ILO. Tripar-tism and social dialogue is one of the foundingprinciples of the ILO reflected in the Declaration ofPhiladelphia.1 Tripartite social dialogue is practisedby the ILO at the international level through the In-ternational Labour Conference and its GoverningBody. The issue of tripartism and social dialoguewas discussed at the International Labour Confer-ence in 1996 during the general discussion on Tri-partite Consultation at the National Level on Eco-nomic and Social Policy and again in 2002 when aResolution on Tripartism and Social Dialogue wasadopted.

Social dialogue at the national level has become animportant component of good governance in manycountries. Tripartite social dialogue in economicand social policy-making has a fundamental role toplay in furthering democracy, social justice and aproductive and competitive economy. The associ-ation of all three parties concerned in the designand implementation of economic and social poli-cies facilitates consensus building with a balancebetween the demands of economic developmentand social cohesion. It also provides the best pos-sible scenario for the effective and sustainable im-plementation of the policies concerned, minimis-ing the risk of industrial and social conflict.

Economic prosperity, stability, and social progresscannot be achieved by governments, employers orworkers acting alone. Social dialogue provides so-cial partners and other stakeholders2 with the op-portunity to participate in deciding their future. Theaim of this participation and cooperation is to facil-itate agreements on a socially acceptable combi-nation of wealth creation, economic and socialprogress, social security, stability and equity.

Social dialogue is regarded primarily as a meansaimed at achieving these goals. It is an effectivetool for solving collective challenges by creating thestructure and environment suitable for more effi-cient problem-solving. In other words, it is aboutfacilitating constructive interaction in order to ar-rive at social consensus/compromise among thestakeholders in a society.

The objective of this resource book is to introduceconcepts of social dialogue and enabling condi-tions for social dialogue to work effectively and todemonstrate positive features of social dialoguewith empirical examples. Though social dialoguetakes place at several levels, such as the interna-tional, national, regional, sectoral and enterpriselevels, this book focuses on social dialogue at the

INTRODUCTION

national level. However, the information given inthis book can also be applied to social dialogue atprovincial, regional or state level, especially forcountries with a federal structure.

This resource book has several sections. Chapter 1will begin with a definition of social dialogue, clari-fying the concept and which actors are involved. Italso introduces the different roles that the ILO playsin promoting national social dialogue. Chapter 2 willset out the basic enabling conditions for construc-tive social dialogue, and points out some pitfalls tobe avoided in order to arrive at meaningful results.Chapter 3 will present a typology of social dialogue,and will attempt a classification of different types ofsocial dialogue along the lines of representation andissues discussed. It then moves on to explain differ-ent institutional frameworks in which social dia-logue takes place. National fora for discussingwider economic and social policy issues are dis-cussed in more detail. Chapter 4 will clarify what so-cial dialogue can deliver by examining the benefitsof social dialogue. Benefits relating to processesand results of social dialogue are explained and il-lustrated with country examples.3 The book con-cludes with policy recommendations for Govern-ment, employers’ and workers’ organizations whenseeking to attain meaningful social dialogue.

This is a resource book for practitioners and is pri-marily aimed at providing analytical backgroundknowledge and making the case for social dialoguein plain, concrete terms, with practical examples toillustrate its points. It is, however, important to keepin mind that social dialogue arrangements andprocesses are not necessarily transferable acrossdifferent societies. What worked well in one coun-try may not work well in other countries due to dif-ferences in their industrial relations systems, tradi-tions and structural endowments. However, onecan still learn from successful attempts in othercountries. This resource book is aimed at helpingcountries to build their own national model of socialdialogue by identifying and presenting some of themain attributes which contribute to successful so-cial dialogue. ■

1. It stipulates that the ILO has “the solemn obligation… to further… programmes which will achieve… the collaborationof workers and employers in the preparation and application of social and economic measures” (paragraph III). The Declaration of Philadelphia, adopted in 1944, is part of the ILO Constitution.

2. Stakeholders are those who have stakes/interests in mattersdiscussed in national social dialogue. They are primarilyworkers’ and employers’ organizations but for wider socialissues, other groups of concerned citizens (often referred to as“civil society” or “NGOs”) may be included as stakeholders.

3. Note that the examples of the countries are not exhaustive;they are used to demonstrate a range of different practices ofsocial dialogue.

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4 Taken from paragraph 114 of ILO (1999).

5 Taken fromhttp://www.ilo.org/public/english/dialogue/ifpdial/sd/index.htm

6 The definition of concertation differs depending on scholars,or from country to country. For example, Visser (2001) usespolicy concertation and social dialogue inter-changeably anddefines it primarily as a platform for setting out a commonunderstanding of the status quo. Hermamdez Alvarez (1994)gives it a wider definition as the process of moving towardsconsensus through dialogue among the social partners. Theterm “concertation” in English-speaking countries is usuallyregarded as identical to cooperation or participation, whereasin France and Italy it is regarded as decision-making throughconsensus.

7 It should be noted that successful tripartite concertationresults in agreements, which can be internal notes or widelypublicised social pacts.

> Definition of social dialogue

There is no universally agreed definition of socialdialogue. There are, indeed, wide-ranging differ-ences in the use of the term “social dialogue”. Letus start with the ILO definition and then move on to an explanation of other usages of the term.

> ILO working definition

The ILO has a broad working definition of social di-alogue, reflecting the wide range of processes andpractices which are found in different countries.Its working definition includes all types of negotia-tion, consultation or simply exchange of informa-tion between representatives of governments, em-ployers and workers, on issues of common interestrelating to economic and social policy.4 The ILOrecognises that the definition and the concept ofsocial dialogue varies from country to country andover time. Figure 1.1 below illustrates the relation-ship among the different notions.

Figure 1.1 Social dialogue triangle

Exchange of information is the most basic processof social dialogue. It implies no real discussion oraction on the issues concerned, but it is an essen-tial starting point towards more substantive socialdialogue. Consultation is a means by which thesocial partners not only share information, butalso engage in more in-depth dialogue about is-sues raised. While consultation itself does notcarry with it decision-making power, it can takeplace as part of such a process. Collective bar-gaining and policy concertation can be inter-preted as the two dominant types of negotiation.Collective bargaining is one of the most wide-spread forms of social dialogue and is institution-

alised in many countries. It consists of negotia-tions between an employer, a group of employersor employers’ representatives and workers’ repre-sentatives to determine the issues related towages and conditions of employment. Successfulcollective bargaining results in collective agree-ments. Collective bargaining can be centralised atnational level or decentralised at sectoral, re-gional, enterprise or bargaining unit level. It canbe regarded as a useful indicator of the capacityfor social dialogue within a country to engage innational level tripartite policy concertation.5 Fol-lowing Compston (2002: 4), policy concertation6

is defined as “the codetermination of public pol-icy by governments, employers’ organizations andtrade union confederations”. Tripartite policy con-certation or “social concertation” can be regardedas the “full bloom” of social dialogue whereby“employers’, workers’ representatives and gov-ernments have developed a reflex for acting in aconcerted multifaceted manner to address allmajor national economic and social policy issuesby seeking consensus” (Trebilcock, 1994: 4).However, this is only possible when the Govern-ment fully recognises the legitimacy and con-structive functions of social partners’ participatingin national policy-making. The results of success-ful tripartite policy concertation are sometimesmanifested in social pacts.7

Any of these forms of social dialogue can be infor-mal and ad hoc or formal and institutionalised.However, in reality social dialogue often takesplace as a combination of the two. Informalprocesses are often as important as formal ones.Social dialogue exists as a tripartite process withthe Government as an official party to the dialogueor in only bipartite direct relations between labourand management with or without indirect involve-ment of government. It can take place at the na-tional, regional, sectoral or at enterprise level. Itcan be inter-professional, sectoral or a combina-tion of all these.

Negotiation

Consultation

Exchange of Information

High

Low

Intensityof dialogue

CHAPTER 1: WHAT IS SOCIAL DIALOGUE?

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8 European Commission (2002a).

9 Visser was one of the 10 members of the High Level Group.

10 European Commission (2002a).

Box 1.1. An example of regional social dialogue: “European social dialogue” in practice

The European Union has established a structured system of social dialogue among the European Commission, Coun-cil, European trade unions’ and employers’ representatives. European social dialogue covers both consultation andnegotiation on European social policy. Articles 138 and 139 of the Treaty of the European Union stipulate the Com-mission’s obligation to consult “management and labour at Community level”1 in the social policy field. Article 139also stipulates that the dialogue of social partners at Community level “may lead to contractual relations, includingagreements”.2 Such “agreements concluded at Community level shall be implemented either in accordance with theprocedures and practices specific to management and labour and the Member States, or… at the joint request of thesignatory parties by a Council decision on a proposal from the Commission”.3 Once the social dialogue process isinitiated, social partners negotiate agreements independently for not more than nine months unless social partnersand the Commission decide jointly to extend this period. When negotiation does not result in agreement after such aprocess, the Community institutions can intervene and try to overcome the deadlock by suggesting a settlement.4 Asof 2003, European negotiations have resulted in four agreements: parental leave (December 1996), part-time work(June 1997), fixed-term contracts (March 1999) and telework (May 2002).5

For other policy areas, the social partners’ involvement is mostly limited to consultation. Social partners have beeninvolved in the Community’s political processes as members of the Tripartite Social Summit for Growth and Employ-ment.6 Within the framework of this Social Summit, there are three fora of dialogue: macro economy, employment andsocial protection. Informal and confidential “macroeconomic dialogue” was established after the Cologne EuropeanCouncil for representatives of the Commission, the Council, the European Central Bank and the social partners to ex-change their views on economic and monetary policy. Dialogue on employment exists at both the technical level (theEmployment Committee) and the political level on all aspects of the European employment strategy. Dialogue on so-cial protection is promoted in conjunction with the Social Protection Committee. The Tripartite Social Summit forGrowth and Employment aims at boosting the involvement of the social partners and promoting an integrated discus-sion on economic and social policy issues. The membership of the Social Summit consists of the Council Presidencyand the two subsequent Presidencies, the Commission and social partners represented at the highest level.7

1 Article 138 (1)

2 Article 139 (1)

3 Article 139 (2)

4 This happened after the social partners failed to agree on temporary (agency) work in May 2001.

5 For more details, see European Commission (2002b)

6 The Council’s decision on 6 March 2003 (2003/174/EC) established a Tripartite Social Summit for Growth and Employment,replacing the Standing Committee on Employment.

7 For more details, see European Commission (2002b)

> Other definitions

A narrow definition was suggested by Visser(2001: 184), who clearly differentiated social dia-logue from collective bargaining. According tohim, social dialogue “is not the same as bargain-ing, but provides a setting for more efficient bar-gaining by helping to separate bargaining over‘the state of the world’ from bargaining over the di-vision of costs and benefits.” In other words, so-cial dialogue is an initial stage of finding a com-

mon understanding or framework of reference by“separating the digestion of facts, problems andpossible solutions”,8 which may lead to collectivebargaining where social partners engage in nego-tiation of their positions. His definition was en-dorsed by the European Union High Level Groupon Industrial Relations,9 which defined social di-alogue as “a process, in which actors inform eachother of their intentions and capacities, elaborateinformation provided to them, and clarify and ex-plain their assumptions”.10

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> Actors in social dialogue at national level

Social dialogue, that is all types of negotiation,consultation or information-sharing among actorsfrom different segments of society, increases sup-port for and the legitimacy of the policies agreed.Traditionally, the actors involved in social dialoguehave been the social partners, representativesfrom employers’ and workers’ organizations, withor without the involvement of the Government.This is because social dialogue has its origins inissues related to the world of work: workers’ rightsand conditions related to production have beenthe dominant themes of dialogue between em-ployers and employees, with the Governmentcoming in as facilitator, mediator, regulator andlaw enforcer.

The core actors in social dialogue at national levelare the social partners and the Government. Bi-partite social dialogue refers to dialogue betweenthe social partners11 and tripartite social dialoguerefers to that among the social partners and theGovernment. In some European countries with asocial democratic tradition, social partners wereinvolved in consultation and concertation con-cerning broader social and economic issues formany years. Since the 1990s, social dialogue onwider issues has emerged in many other coun-tries as a means of coping with economic crises,structural change in the economy, as well as re-gional integration. Participation of social partnersin the process of public policy-making will add le-gitimacy to these policies in democratic societies.The depth and scope of social representation willenable workers’ and employers’ organizations toreflect broad views beyond their immediate work-place concerns when engaged in national socialdialogue on wider economic and social issues.

Though social partners and the Government re-main major players in national social dialogue,

some countries have expanded the participationin social dialogue to other stakeholders in society.Social dialogue that includes traditional socialpartners, Government and other relevant partiesis called tripartite plus social dialogue. In Irelandand South Africa, some representatives from civilsociety participate in the negotiation of socialagreements. In Ireland, the number of negotiatingpartners in social pacts has increased with the ne-gotiation of successive pacts.12 In South Africa,social dialogue emerged after the end ofapartheid, with democratisation and the changingpolitical regime. The struggle against apartheidmeant that community interests were often highlystructured into civil dialogue. Such representativestructures continued to play an important role insocial dialogue in South Africa13 in addition toemployers’ and workers’ organizations. In othercountries, such as Austria, Belgium, India andSpain, due to the importance of the agriculturalsector in the economy, farmers have been in-volved in national social dialogue. Other forms ofrepresentation included the owners of small busi-nesses and people engaged in crafts (Belgiumand the Netherlands), representatives of cooper-atives (Denmark and Portugal) as well as con-sumer groups (Denmark and Spain). However,NGOs are not necessarily involved in the negotia-tion process, though they may sign social agree-ments. In most countries, therefore, social part-ners and Government are the main partnersparticipating in national social dialogue.

> The role of Government

Governments play a critical role in the advance-ment and sustainability of national social dia-logue. Where the Government has confidence inthe tripartite consultation process and encour-ages the pro-active participation of social partnersin policy-making processes, successful social di-alogue is more likely to be attained. Governmentis responsible for promoting and enforcing the ap-propriate legal framework by ensuring social part-ners’ independence and fundamental rights,such as freedom of association and the right tobargain collectively as stipulated in the Freedomof Association and Protection of the Right to Or-

11 In the case of the public sector, the Government is involved in bipartite social dialogue as the employer.

12 For details, see box 1.2.

13 Such community organizations include the Women’s National Coalition, the National Rural Development Forum,the South African Federal Council on Disability, the SouthAfrican National Civic Organization and the South AfricanYouth Council.

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ganize Convention, 1948 (No. 87) and the Rightto Organize and Collective Bargaining Conven-tion, 1949 (No. 98).

Lécuyer (2001) sums up the role of Governmentas that of a promoter or protagonist. As a pro-moter, in addition to the protection of the funda-mental rights described above, under ILO interna-tional labour standards governments areresponsible for promoting consultation with socialpartners by taking appropriate measures for reg-ular and effective consultation. Article 2, para-graph 1 of Tripartite Consultation (InternationalLabour Standards) Convention, 1976 (No. 144)and Article 5(c) of Tripartite Consultation (Activi-ties of the International Labour Organisation) Rec-ommendation, 1976 (No. 152) stipulate the needfor countries that ratify the Convention to under-take procedures for effective tripartite consulta-tions. Such procedures should take account ofthe national context as specified in paragraph1(1) of Consultation (Industrial and National Lev-els) Recommendation, 1960 (No. 113).

Among the government ministries, the promotionof tripartite or bipartite social dialogue is normally

the responsibility of the labour ministry. Its role isstipulated in Article 5(1) of the Labour Adminis-tration Convention, 1978 (No. 150). In order topromote tripartism, the labour administration es-tablishes suitable fora or institutions of nationalsocial dialogue. In fostering tripartite and bipartitesocial dialogue, the labour administration shouldensure that social partners enjoy freedom of asso-ciation so that employers and workers are able tostate their views independently. Paragraph 3 ofRecommendation No. 113 again stipulates theimportance of respecting national custom andpractice in establishing the fora or institutions ofsocial dialogue as follows:

“In accordance with national custom or practice,such consultation and co-operation should beprovided for or facilitated:

(a) voluntary action on the part of theemployers’ and workers’ organisations, or

(b) by promotional action on the part of thepublic authorities, or

(c) by laws or regulations, or

(d) by a combination of any of these methods”.

As a protagonist, the Government should engagein active social dialogue with its own employees,i.e. public sector workers, by respecting the prin-ciples of Labour Relations (Public Service) Con-vention, 1978 (No. 151). By doing so it not onlypromotes bipartite social dialogue in the publicsector but also helps establish a culture of socialdialogue. In response to increasing demands fortransparency and efficient delivery of public serv-ices, the internal organization of many govern-ment departments and services has been restruc-tured and their management style has beenchanged. There has been a trend towards decen-tralisation and more thorough measurement ofthe performance of public sector workers. In ed-ucation and health, in particular, elements of mar-ket competition have been introduced. Social di-alogue has a key role to play in managing suchpublic sector reforms.

In relation to social dialogue beyond the publicsector, the Government takes part in tripartite so-cial dialogue as a full partner or as a facilitator. Itis indispensable that the Government recognisesworkers’ and employers’ organizations as viablepartners capable of making valuable contribu-tions to economic and social policy formation. Ifthe Government is unwilling or reluctant to shareits power, and if it cannot protect the fundamen-tal principles mentioned above, social dialogue

Box 1.2. Tripartite plus socialdialogue at national level: theexample of Ireland

Since 1987, Ireland has been successfully negoti-ating and implementing a series of three-year so-cial partnership agreements. Irish social partner-ship is unique in its dynamism. As the issuesdiscussed in the partnership agreements ex-panded, the representative base also expanded.Prior to the negotiation of Partnership 2000, Irishsocial partners were confined primarily to the peaklevel social partners from workers’ and employers’organizations and farmers’ organizations. Since thenegotiation of Partnership 2000, a fourth group ofactors, the representatives of the community andvoluntary sector, participated in the negotiation ofagreements as full social partners. The communityand voluntary sector includes representatives of theunemployed, women, disadvantaged communities,people with disabilities, youth, the elderly and ru-ral groups. Through their representation and par-ticipation, the content of agreements has expanded,to deal more comprehensively with issues of con-cern to socially excluded and disadvantagedgroups.

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cannot flourish. Visser (1999: 88) identifies this“capacity and willingness of the public authoritiesto share regulatory authority with organizations ofcivil society that they do not administratively con-trol” as one of the most crucial factors in success-ful tripartite social dialogue.

The topics of social dialogue may go beyond thosespecified in ILO Conventions and, as listed inChapter 3, may include wider social and eco-nomic issues which are of common concern tothe Government and social partners. Social dia-logue is a dynamic process which requires con-tinuous investment/efforts to sustain it: the Gov-ernment, in cooperation with social partners,should ensure that the fora or institutions estab-lished to facilitate social dialogue at national levelare effective and sustainable.

> Social dialogue, tripartism and the ILO

Social dialogue plays a key role in promoting theILO’s Decent Work Agenda. The ILO promotes na-tional social dialogue mainly through the followingmeans:

• International labour standards• Technical cooperation• Technical assistance/policy advice

One of the major avenues by which the ILO pro-motes social dialogue is through the ratificationand implementation of international labour stan-dards. Many ILO Conventions and Recommenda-tions stipulate social dialogue as a means toachieve their respective goals. Convention No.144 as well as Recommendation No. 152 refer di-rectly to social dialogue and tripartism. They pro-mote tripartism and social dialogue by ensuringthe involvement of social partners in the ILO’sstandards-related activities. In addition, the Inter-national Labour Conference adopted conclusionsconcerning tripartite cooperation at the nationallevel on economic and social policy in 1996, anda Resolution Concerning Tripartism and Social Di-alogue in 2002.14 In addition to the international

labour standards which directly promote social di-alogue, there are other Conventions which are es-sential for effective social dialogue, including Con-ventions Nos. 87, 98 and the CollectiveBargaining Convention, 1981 (No. 154), as wellas Convention No. 150.15

The ILO implements a number of subregional andnational technical cooperation projects in whichsocial dialogue is a major component. These proj-ects generally have a time span of two to fiveyears, and develop several activities to establishand improve social dialogue processes and insti-tutions. Capacity building of social partners aswell as labour administrations are some of themost important components of these projects inAfrica, the Arab States, the Americas, Asia andEurope.16

The ILO also promotes social dialogue throughother forms of technical assistance. This assis-tance can take several forms: it can be direct pol-icy advice at the country level; conferences at thenational and the subregional level to raise aware-ness of social dialogue and training workshops inorder to meet specific needs. The ILO also dis-seminates knowledge on different practices of so-cial dialogue through its research programme. ■

14 The full texts of conclusions and the Resolution can be foundin appendix 1 and 2 respectively.

15 The ILO standards concerning social dialogue are listed onthe web page:http://www.ilo.org/public/english/dialogue/themes/sta.htm. Inaddition, the full texts of Conventions and Recommendationsare available on-line:http://www.ilo.org/ilolex/english/convdisp1.htmhttp://www.ilo.org/ilolex/english/recdisp1.htm

16 The full list of projects overseen by the InFocus Programmeon Social Dialogue, Labour Law and Labour Administrationcan be found on its web page:http://www.ilo.org/public/english/dialogue/ifpdial/proj/index.htm

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There are certain conditions that facilitate effec-tive social dialogue at national level. This chapterexamines what constitutes an enabling environ-ment for successful social dialogue at nationallevel.

> Basic Enabling Conditions

Freedom of association

First and foremost, social dialogue is built on re-spect for and implementation of freedom of asso-ciation. Freedom of association is a multi-facetedconcept, and includes:17

• the right of workers and employers to form and join organizations of their own choosing,and to do so without prior authorization;

• the free functioning of those organizations;

• the right to elect representatives in fullfreedom;

• the right of organizations to organize theirinternal administration;

• the right of organizations freely to organizetheir activities and to formulate theirprogrammes;

• the right to strike;

• the right to form federations andconfederations and affiliate to internationalorganizations of workers and employers;

• protection against anti-union discrimination;

• protection against acts of interference;

• the right to bargain collectively.

CHAPTER 2: CONDITIONS FOR CONSTRUCTIVE SOCIAL DIALOGUE

Where there is an absence of full respect for free-dom of association, the social dialogue processwill lack legitimacy, and hence cannot be sustain-able. If, for example, workers and employers arenot able to freely choose their organizations, theorganizations involved in the social dialogueprocess cannot truly be representative; or if thereis inadequate protection against anti-union dis-crimination, frank and transparent consultationsor negotiations will not be possible.

The Government plays a critical role in enactingappropriate national laws and regulations as wellas in enforcing them effectively. It should ensurethe protection of independence and fundamentalrights of employers and workers and their organ-izations, and promote social dialogue as an actoror a facilitator.

Democratic foundations

As for the broader political environment, social di-alogue needs democratic foundations. Social dia-logue can provide an effective mechanism of par-ticipation which is essential for democraticgovernance. Though social dialogue can onlyflourish in a democratic society, it can make animportant contribution to transition to democracy.

In some countries social dialogue is generally ac-cepted and promoted, but in other countries so-cial dialogue processes depend heavily on the at-titudes of the Government in power. In Europe, forexample, regardless of their political orientation,governments in Germany, Austria and the Nether-lands traditionally promote social dialogue whichis part of the established culture in their countries.In the 1990s, with a view to meeting the Maas-tricht criteria for joining the European MonetaryUnion, the Government and social partners inmany other countries recognised the need for so-cial dialogue as a means to reach consensus onmeeting these criteria.

Legitimacy through representative, transparent,accountable and cohesive workers’ andemployers’ organizations

Effective social dialogue is critically dependent onthe legitimacy of the social partners. Employers’and workers’ organizations need to be represen-tative and reflect the interests of their members.Policy–making and decision-making should betransparent.

17 For details, see Conventions No. 87 and 98 and ILO (1996a).

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Special attention should be paid to the develop-ment of the voice of women, ethnic and religiousminorities, indigenous groups, those in the infor-mal economy and other groups that have tradi-tionally found themselves on the periphery ofmembership organizations. In order to ensurebetter participation of marginalized groups, provi-sions ensuring their participation should be in-cluded in the rules or regulations of social dia-logue institutions and fora. For national levelsocial dialogue to be effective, social partnersmust also take account of issues concerning theirmembers and the general population beyond theworld of work.

Social partners must be able to marshal adequatesupport for their positions on the issues they areaddressing. In considering national social dia-logue, the presence of broad/encompassing andcohesive peak organizations contributes greatly tothe consistency of their stance and hence their in-fluence in negotiations. For example, examiningsocial partnership in Austria, Talos and Kittel(2002: 36) argue that the “institutionalisation andstrength” of peak organizations of workers’ andemployers’ organizations are the key to the long-standing success of social dialogue in Austria.Complete and voluntary unity of different workers’and employers’ organizations in a democratic so-

Box 2.1. Gender equality and social dialogueThe Malawi Labour Code explicitly provides for women’s representation in one of their main social dialogue bod-ies. The Malawi Labour Relations Act (1996) sets out the composition of the Industrial Relations Court as fol-lows:

66. (1) The Industrial Relations Court shall consist of:

(a) the Chairperson who shall be appointed by the Chief Justice (...);

(b) the Deputy Chairperson (...);

(c) five persons nominated by the most representative organisation of employees (the “employees’ panel”) andappointed by the Minister;

(d) five persons nominated by the most representative organisation of employers (the “employers’ panel”) andappointed by the Minister;

(2) At least one woman shall be represented on the panels under subsection (1) (c) and (d).

The Vietnamese Labour Code (2002) contains a specific provision on consultation with women at the enterprise-level and addresses the need for women labour inspectors:

Article 118

1. In enterprises employing a high number of women, a member of the management staff shall be assigned todeal with women’s questions; when taking a decision, which affects the rights and interests of women andchildren, consultation with representatives of the women workers shall be ensured.

2. There shall be an appropriate proportion of women inspectors in the staff of the labour inspectorate.

Many ILO technical cooperation projects at the national, sub regional and global level also emphasise the im-portance of gender equality in social dialogue. The ILO’s InFocus Programme on Social Dialogue, Labour Lawand Labour Administration (IFP/DIALOGUE) has developed a guide on “Technical Cooperation, Gender, and So-cial Dialogue”, to assist with mainstreaming gender into technical cooperation projects on social dialogue. Inaddition to this publication, IFP/DIALOGUE has also published “Gender Equality: a Guide to Collective Bargain-ing”1 and a guide on “Fostering Gender Equality in Poverty Reduction Strategy Papers through Participation” .2

1 This guide was developed jointly with the ILO’s Bureau for Workers’ Activities.

2 This guide was developed as part of a DFID (UK) funded project entitled Capacity Building for Effective Social Dialogue in the PRSP of selected low-income countries.

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ciety is extremely rare. Nevertheless, it is impor-tant to note that the presence of a unified federa-tion or multiple but cooperative/consistent confederations facilitates constructive social dia-logue.

Political will and commitment to engage in socialdialogue by all parties

Each party should enter the dialogue with a com-mon framework of reference and a common un-derstanding of the purpose of social dialogue. Allparties should have a certain level of trust in, andloyalty and commitment to the process. It is im-

portant for all participants to move towards abroad consensus on the political, economic andsocial organization of the society in which theywould like to live. This involves the acceptance ofsocial pluralism and mutual reconciliation of inter-ests. Social pluralism recognises the interdepend-ence of social partners with an appreciation oftheir divergent views and goals. The mutual rec-onciliation of interests refers to the commitmentof social partners to identify common objectivesand priorities so that they can address current is-sues together.

Social acceptance of tripartite social dialogue

Visser and Hemerijck (1997) emphasise that inaddition to the above-mentioned institutional con-ditions and legal framework, wider societal sup-port for social dialogue is crucial for its success.Societal support requires a regime where the Gov-ernment and the general public accept the socialpartners as fully-fledged legitimate partners of so-cial dialogue, where the general public supportssocial partners’ participation in policy-making,and where the Government is legitimate and po-litically relatively stable.

Technical competence

To participate in national social dialogue con-structively, it is important that the social partnershave the technical capacity to engage in debateon wider issues beyond their immediate interests.Social partners should have easy access to rele-vant information concerning the major legal, so-cial and economic issues facing their country. Inaddition, in many countries in Western Europe,workers’ and employers’ organizations have re-search institutions attached to them. These re-search institutions provide them with backgroundanalysis of complex economic and social prob-lems. They strengthen the technical capacity ofthe social partners and enable them to negotiatewith the Government on an equal footing. Socialpartners should also be trained to improve nego-tiation, communication and conflict-managementskills. This is one of the areas where the ILO hastraditionally assisted with technical expertise.

Box 2.2. Bipartite social dialoguein Costa Rica

Bipartite social dialogue in Costa Rica started in theearly 1990s and has been successful due to its fo-cus on the technical and methodological side ofsocial dialogue. With the help of the ILO and a re-search institute called Estado de la Nación (State ofthe Nation), it developed a clear social dialoguemethodology, based on team work and the assign-ment of clear responsibilities to the social partnersthroughout the process. Such methodology alsoencouraged the clarification of the objectives of so-cial dialogue through a series of bipartite agree-ments on the issues to be addressed through so-cial dialogue and on the research needed to fill thegaps in knowledge. In addition, the research insti-tute provided technical support in the main areasidentified by the social partners. A common under-standing of the problems was key for the socialpartners to be able to agree on a joint stance to-wards resolving the problems. One positive resultof bipartite social dialogue within this frameworkwas the establishment of a Joint Commission toexamine the fiscal crisis in Costa Rica. Differentsegments of society beyond the bipartite partiesparticipated in this Commission. The Joint Com-mission reached an agreement on a contingencyplan to resolve the most urgent fiscal issues. Basedon this agreement, a law was approved by Parlia-ment in 2002. In addition to such policy outcomes,the development of trust and confidence betweenthe social partners, the establishment of a method-ology of social dialogue, and enhanced capacity fordeveloping joint proposals are some of the positiveresults of successful bipartite social dialogue inCosta Rica.

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Capacity to deliver

Successful social dialogue produces results, insome countries in the form of social pacts oragreements, signed by the negotiating parties.The contents of such agreements vary from asmall number of narrowly focussed issues toagreements which include a large number of is-sues. Once such agreements are made, the par-ties involved in the negotiations should be able todeliver on what has been agreed. In most coun-tries, the responsibility for implementation restswith the relevant government ministries.18 Inother countries, such as Ireland, though the Gov-ernment has overall responsibility for facilitatingthe negotiation and implementation of the part-nership agreements, the social partners have arole in ensuring that the agreements are imple-

mented properly. It is important that the countrybuilds its capacity to implement and monitor suchagreements. Without proper implementation, so-cial dialogue might be perceived as just a talk-shop. Where appropriate, the agreements shouldbe translated into concrete policies and actionprogrammes and their implementation monitoredand evaluated. Evaluations should feed into thenext cycle of negotiation of a new agreement. InIreland, as will be elaborated in the next chapter,a number of tripartite bodies are involved in themonitoring and evaluation processes. The lessonslearned from the previous partnership agree-ments are taken into account for the next roundof negotiations.19 This has been one of the keyfactors in sustainable and successful social dia-logue in this country since 1987. The success of

social partnership itself gave an incentive for re-newed partnership agreements, which broughtabout further success.

> Pitfalls in social dialogue

The importance of the enabling conditions men-tioned above is evident upon examination of whysome attempts at social dialogue have failed. So-cial dialogue cannot start or might fail due to thelack of interest or the unwillingness of either Gov-ernment or the social partners. Unwillingnessmay come from the lack of democratic tradition,the weakness of social partners, or the absence ofsome of the other conditions pointed out in theprevious section. What other factors contribute tothe failure of social dialogue? What are the maincriticisms of social dialogue made by participantsand political observers? This section briefly intro-duces some problems associated with social dia-logue. Even if the dialogue starts, it might not suc-ceed in reaching consensus or compromise andhence cannot lead to joint recommendations oragreements.

Narrow vested interests, blocking reforms

Examining past European experiences, Auer(2000: 52) argued “at the time social dialogue ex-perienced problems, the approach was oftenmore adversarial and ideologically charged. How-ever, when it became more pragmatic and ori-ented towards problem-solving, it contributed sig-n i f i can t l y to employment success .” Aproblem-solving approach is essential for socialdialogue to result in a successful outcome.

Lack of basic agreement on economicanalysis/prescription

Denmark and Sweden, countries which tradition-ally had very institutionalised and successful so-cial dialogue in the post-war period until the1980s, have reduced the involvement of socialpartners in broader economic policy-making. InGermany, where social dialogue is entrenched, aseries of attempts to agree on a tripartite stancethrough the Alliance for Jobs was made in the1990s and 2000s. In the first tripartite session inDecember 1998, an agreement entitled “JointDeclaration of the Alliance for Jobs, VocationalTraining and Competitiveness” was reached, de-scribing the tripartite parties’ common goals withsome concrete plans on how to organize the fur-ther work of the tripartite alliance. However, this

18 This is particularly the case when agreements have a narrow technical focus.

19 For further elaboration, see the section on cycle of policy concertation in Chapter 3.

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agreement did not produce the expected resultsin overcoming the deadlock in labour market re-forms, and negotiations finally broke down in Feb-ruary 2003. What are the factors which havemade tripartite agreement difficult in these coun-tries?

A major difficulty lies in the lack of basic agree-ment on an economic analysis to solve the eco-nomic problems that each country faces. In thepost war period until the 1970s, when Keynesianeconomic policy-making occupied a hegemonicposition, all three parties in these countriesagreed on the basic economic prescriptions.Hence, social dialogue was smooth and success-ful. Since the 1980s/90s, whereas unions stillmainly believe in Keynesian analysis, govern-ments and employers have increasingly sub-scribed to monetarist or neo-liberal prescriptionsto solve economic problems. Although all threeparties agree on the problems the country faces,they disagree on the prescriptions to solve theseproblems. Unless parties agree to go beyond suchanalytical fault lines and concentrate pragmati-cally on problem-solving, it is difficult to arrive ata consensus on policy responses.

Lack of democratic accountability and legitimacy

Over-institutionalised and rigid social dialoguecan be viewed as undemocratic as the decision-making processes become opaque, and are seenas taking place “behind closed doors”. In such asituation, political parties and observers will criti-cise social dialogue as undemocratic. Accordingto Compston (2002: 319), such criticism wasmade by opposition political parties (both fromthe right and left of the political spectrum) in Aus-tria. In France, although the role of social partnersin negotiating social change is acknowledged,right of centre political parties argue that the Statealone should take decisions on economic policy,because only politicians are elected to reflect theinterests of the general population (Parsons 2002:119-120). This position is shared by the Britishand Swedish Conservative parties who perceivepolicy concertation as undermining political ac-countability and parliamentary sovereignty. In Ire-land, it has been pointed out by political observersthat policy concertation can be undemocratic inthe sense that it bypasses Parliament and espe-cially ties the hands of a newly-elected Govern-ment to initiate and implement election promises.Another criticism is that social dialogue lacks rep-resentational legitimacy, coming from minoritygroups in Austria and Ireland, protesting that theirviews are not reflected in social dialogueprocesses. ■

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This chapter examines in detail the types of socialdialogue that can be found in practice. The pat-terns of social dialogue differ depending on thespecific industrial relations regime of a country.Social dialogue is not a new phenomenon, butbuilt upon traditional social and industrial rela-tions regimes. In other words, it is embedded in acountry’s cultural, historical, economic and polit-ical context.

> Representation and issues of socialdialogue

Patterns of social dialogue can be classified alongthe following two categories:

• Representation: who participates in socialdialogue?

• Issues discussed: what issues are addressedin social dialogue?

As to the representation dimension of social dia-logue, as mentioned in Chapter 1, it can be bipar-tite, tripartite or tripartite plus. Regarding Govern-ment representation, traditionally the ministry oflabour has played a critical role in tripartite socialdialogue. Recently, due to the widening scope ofnational social dialogue, the ministry of labour isnot necessarily the exclusive representative of theGovernment. Depending on the issues discussed,broad participation by government departments,from labour to finance, education/training to jus-tice, trade to economic planning is desirable andcan be expected. In some countries, not only therelevant ministries but also the office of the headof Government participate actively in tripartite so-cial dialogue.20

CHAPTER 3: TYPOLOGY OF SOCIAL DIALOGUE

For those countries where the non-unionised in-formal economy constitutes a large share of theworkforce, alternative forms of representationshould be considered. The “Resolution concern-ing Tripartism and Social Dialogue” (2002) em-phasised the need to recognise the potential ofconstructive cooperation with NGOs that shareobjectives and values with social partners. Oneway is to widen the participation in social dialogueto NGOs and interest groups such as women’sgroups, and groups representing the youth andthe unemployed. Indeed, some countries havesuch tripartite plus social dialogue depending onthe issues discussed. It can include farmers,craftspeople, indigenous groups, NGOs, or vari-ous groups representing environmental or con-sumer interests. While these groups offer the po-tential for improving the dialogue, there are alsoconsiderable problems inherent in their inclusion,linked with the representativeness of these groups(O’Donovan 2000). There are no established cri-teria to assess the representativeness and ac-countability of NGOs.

As for the issues to be addressed, there is no limitto issues that can be covered by tripartite consul-tation. Wherever governments, employers’ organ-izations and workers’ representatives can find ar-eas of shared relevance and can establish someform of cooperation, they can engage in meaning-ful social dialogue. Social dialogue at the nationallevel is unique in addressing broader issues re-lated to economic and social policies. The follow-ing non-exhaustive list gives key subject mattersdealt with through national social dialogue:

■ Wider economic and social policy issues

• macroeconomic policy framework andeconomic growth;

• structural change and transformation of theeconomy;

• wage increases and inflation; monetarypolicy;

• employment policy;• gender equality;• education and vocational training;• productivity and economic competitiveness;• taxation and fiscal policy;• social welfare, security and protection;• economic and social strategies to deal with

externally originating pressures for reform,such as:- transition to a market economy;- regional integration;- structural adjustment programmes;- poverty reduction strategy processes.20 An example is the Prime Minister’s office in Ireland.

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■ Labour and industrial relations issues

• wage setting, including minimum wagedetermination;

• labour legislation;

• working conditions;

• labour market policy (also treated as anintegral part of wider socio-economic policyissues);

• labour dispute settlement;

• occupational safety and health.

Social partners have a stake in macroeconomicpolicy, mainly through their interest in wages andprices policy. Macroeconomic policy is often dis-cussed in the framework of wider economic andsocial policy or incomes policy. Discussion in the1990s in many European countries centredaround the tension of how best to increase thecompetitiveness of the economy without compro-mising social justice. Indeed, the issues covered

in macroeconomic dialogue were wide-rangingfrom macro to micro economic and social poli-cies, including monetary policy, exchange ratepolicy, public spending, the tax regime, wage in-creases, reform of social welfare systems, promo-tion of small and medium enterprises, enhance-ment of workplace collective rights, and thereduction of poverty. Social security and protec-tion is one of the prime public policy areas inmany OECD countries where social dialogue isused extensively.21 Social partners are involved inpolicy making and administration in Austria, Ger-many and France. With the problem of ageing be-coming acute in most developed countries as wellas in the EU accession countries in Central andEastern Europe, social dialogue is increasinglyused as a means to achieve social and economiccompromises on pension reforms. In addition tobeing a topic to be explicitly dealt with, genderequality and gender perspectives are being inte-grated into these other topics.22

21 For detailed country examples, see Reynaud ed. (2000). 22 For further details of gender mainstreaming and the ILO’stools to promote gender equality, seehttp://www.ilo.org/dyn/gender/gender.home andhttp://www.ilo.org/public/english/employment/gems/

Box 3.1. Tripartite Commissions for Equality in Employment in Southern Cone countries

Since the mid-1990s, national social dialogue in a number of Southern Cone countries has addressed gender equal-ity in relation to employment issues. In these countries, participation rates of women are relatively high, but womenworkers are still discriminated against in the area of wages and social security. Unemployment is higher among womenworkers and occupational bias hampers women workers entering certain job categories. In addition, access to train-ing for women workers needs to be improved to upgrade their skills. In order to promote equal opportunities for menand women on labour and social issues, Tripartite Commissions for Equality in Employment were established in Ar-gentina, Chile, Paraguay, and Uruguay during 1995-98. The role of these Commissions is to promote equal oppor-tunities between men and women by defining strategies and policies to deal with the challenge of gender inequalityin the labour market.

These tripartite Commissions have served as national fora for policy dialogue, in which the positions of social part-ners and the Government are effectively raised and agreements reached on issues relating to employment with a gen-der perspective. These agreements have led to a reduction in gender discrimination in labour markets in the respec-tive countries. The Commissions have become the reference point for analyses related to gender equality inemployment and the drafting of proposals on issues that affect women workers. They also promote gender main-streaming in other national bodies dealing with other issues. Galilea and Marín (2002) argued that the Commissionshave been effective national tripartite bodies with the capacity to reach consensus among social partners. They assertthat this is because gender issues are not a confrontational topic among tripartite parties, and that, in the case of gen-der, tripartite parties have clear and converging objectives. Hence, they are more willing to engage in constructive di-alogue. Source: Galilea and Marín (2002)

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labour market to engage the interests of thosewho are not active (i.e. outsiders such as theunemployed, pensioners, school leavers andpeople with disabilities). This can be extendedto include the whole range of economic andsocial policy making.

C) ‘Wide’ social dialogue

Representation: tripartite plus other relevantinterest groups

Issues discussed: wider economic and socialissues

This type of social dialogue takes place in forawhere both insiders and outsiders discuss so-cial and economic issues of joint concern. Insuch fora, representatives of young people,the unemployed, pensioners, consumers andenvironment groups among others participatealongside employers’ and workers’ organiza-tions.

Figure 3.1 below graphically explains the differ-ences in practices of social dialogue by issues onone axis and representation on the other axis.

Figure 3.1: Typology of social dialogue

As for labour and industrial relations issues, wagesetting includes minimum wages, pay structures,and the level and increase of wages including dif-ferent forms of employees’ financial participation.In many countries, such as Austria, Belgium andthe Netherlands, labour relations issues can benarrowly confined to technical matters, or theycan be treated as an integral part of broader so-cial and economic policy.

> Classification of different forms of socialdialogue at national level

Having indicated the wide range of issues that so-cial dialogue can address, this section expandson how this can be done in different forms. Socialdialogue can take many forms, from the most for-mal and binding negotiated agreements to pub-lishing merely informal recommendations, or con-sultation and information sharing. Social dialogueis a dynamic process with its structure and insti-tutions often worked out during the process of di-alogue itself.

In line with the classification made by Casey andGold (2000: 119) and Compston (2002b), the fol-lowing is intended as a simplified categorisation ofthe variety of forms and patterns of social dia-logue. It represents three basic variants in whichlabour relations issues as well as wider economicand social issues are discussed:

1. Social dialogue on labour relations issues

A) ‘Narrow’ social dialogue

Representation: tripartite or bipartite Issues discussed: labour relations issuesThis form of social dialogue takes place in forawhere employers, workers and their represen-tative bodies (conventionally termed as insid-ers) discuss ‘insider issues’ (such as pay,terms, conditions and rights at work, social se-curity) through consultation procedures orcollective bargaining.

2. Social dialogue on wider economic and social issues

B) ‘Broad’ social dialogue

Representation: tripartite or bipartiteIssues discussed: wider economic and social

issuesThis form of social dialogue takes place in forawhere insiders also discuss ‘outsider’ issuessuch as job creation measures and employ-ment policy, thus allowing those active in the

Labour relations issues (rights at work, working conditions etc.)

Narrow social dialogue

Broad social dialogue Wide social dialogue

Wider social and economic policy issues

Insider-only representation

Insider + outsider representation

Source: Adopted from Figure 4.1. From Casey and Gold (120: 2000)

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Table 3.1 above presents some examples fromWestern European countries of ‘broad’ and ‘wide’social dialogue by country and main policy areacovered.

The policy focus of social dialogue in Europe hasalso been affected by regional developments atthe EU level. In EU countries, under the terms ofthe Amsterdam Treaty (1997), the social partnersof the Member States have to draw up and imple-

ment National Action Plans for the European Em-ployment Strategy. This suggests that increasinglysubstantive ‘broad’ social dialogue is required inEU Member States. Indeed, EU affairs have pro-vided a strong impetus for national social dialoguein many Member States. Notably, the Maastrichtconvergence criteria for the qualification for Euro-pean Monetary Union became a catalyst for therevival of national social dialogue during the1990s.

Table 3.1. Some areas of broad and wide social dialogue practiced at national level in selected Western Europeancountries in the 1990s

‘Broad’ social dialogue

Austria Incomes policy, social policy, prices and wages policy, fiscal policy, monetary policy,

investment policy, industrial policy, social welfare, labour law, job creation and training,

employment

Finland Macroeconomic policy, incomes policy (wages, taxation, social security and social welfare),

employment

Germany Social insurance, labour law, health, reconstruction of East Germany

Italy Taxation, public expenditure, pensions, labour law

The Netherlands Social security, employment, labour market policy

Portugal Modernisation of the economy, macroeconomic stability, working conditions, competitiveness

and productivity, labour market policy, reformulation of collective bargaining legislation, social

security and protection

‘Wide’ social dialogue

Ireland Overall macroeconomic policy strategy, social welfare, government spending in general,

employment policy, labour market policy, social policy, regional policy, equality

Note: These examples are far from exhaustive.

Source: Compiled from information provided by Compston ed. (2002); Casey and Gold (2000); Fajertag and Pochet (1997, 2000); Trebilcock (1994)

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> Policy concertation and dialogue atnational level in practice

Having dealt with the different forms of social di-alogue in general, the representation of socialpartners and the issues of national social dia-logue, let us expand on the process of social dia-logue in practice. Different processes of social di-alogue are first of all distinguished by theirobjectives and secondly by the mechanisms/insti-tutions in which social dialogue takes place.Adapted from Compston (2002c: 316-17) andother sources, the following section represents anoverview of key patterns of national social dia-logue.

1. Bipartite, tripartite or tripartite plusnegotiations leading to social pacts

In some countries, national social dialogue iswidely used for achieving consensus leading tonational social pacts. There is no fixed institu-tional framework to support such negotiations, al-though some quasi-institutional forms havesprung up in some countries. Italian social dia-

logue, although having produced a number ofpacts, depends for its success largely on the will-ingness of the national Government. Spain agreedin the 1990s on a number of bipartite or tripartitepacts on specific issues such as industrial rela-tions/collective bargaining, social security andpensions, and employment contracts. In Ger-many, a number of initiatives were taken to movetowards social pacts, most prominently the “Al-liance for Jobs”, though no consensus wasachieved. Social pacts are not exclusively an Eu-ropean Union phenomenon: they have also beenagreed in some EU accession countries in Centraland Eastern Europe as well as in countries inAfrica and Asia, including Senegal, Mali,23 Ko-rea24 and the Philippines.

2. Bipartite, tripartite or tripartite plusnegotiations in institutions designed specificallyas fora for policy concertation and dialogue

Agreements resulting from social dialogue do notnecessarily materialise as formal social pacts.Austria, for example, has a long tradition of socialdialogue at national level, with decision-makingdominated by an informal consensual approach.Social partners are an integrative part of politicaldecision-making processes in Austria’s socialmarket economy. At the centre of tripartite na-tional social dialogue is the non-statutory JointCommission. Established in the early 1950s, thisvoluntarily constituted forum is the place for re-solving conflicts between the social partners whilejointly pursuing common interests on a widerange of policies, including incomes policy, pric-ing, tax and wage policies and subsidies.

Ireland represents an interesting case where suc-cessful national social dialogue leading to socialpacts became increasingly institutionalised. TheNational Economic and Social Council, estab-lished in 1973, has played an increasingly impor-tant role in national social dialogue. Through suc-cessive pacts, many new partnership institutionswere established to facilitate implementation andmonitoring. In other words, social pact negotia-tions in Ireland are undertaken in an environmentof both long-established revitalised institutionsand newly established fora.

In Denmark in the 1990s, unlike in the 1970s andthe beginning of the 1980s, policy concertationon macroeconomic policy did not take place.However, social partners are closely involved indiscussion and negotiation of labour market poli-cies and regulation, some of which lead to govern-ment commitments on policy. This takes place intemporary pre-legislative committees and in per-manent tripartite committees at national level(Mailand 2002: 86).

Some countries have bipartite bodies at the na-tional level to discuss labour and wider social eco-nomic issues. The bipartite Labour Foundationand the Social and Economic Council in theNetherlands both advise the Government on paypolicies, labour market issues as well as socialand economic policy.

23 See box 4.7 for details.

24 See box 4.10 for details.

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3. Tripartite dialogue within an institutionattached to government ministries

Many developing countries have tripartite consul-tative bodies attached to the Ministry of Labourwhich deal with issues such as labour law/regula-tory reform, working conditions and policy mattersrelated to labour relations. They are most com-monly called Labour Advisory Councils, and theirfunctions are mostly consultative, and advisory tothe Government. Examples of such institutionscan be found in many parts of the world. For in-stance, in Central and Latin America, the CentralLabour Council in Colombia advises the Govern-ment mainly on draft labour legislation and mon-itors the enforcement of existing legislation. InCosta Rica, the tripartite Superior Labour Councilis attached to the Ministry of Labour and SocialSecurity, and is consulted on social and economicproblems. The main functions of the Council in-clude i) carrying out studies on social and eco-nomic developments and on living and workingconditions of workers; and ii) advising on draftbills and regulations related to labour, social andeconomic issues when requested by the Ministryof Labour. In the Dominican Republic, the Consul-tative Council of Labour was created in 1999 in or-der to advise the State Secretary of Labour on is-sues relevant to the development andcoordination of relations between capital andlabour.

Many similar bodies exist in Africa, such as theNational Advisory Council of Labour and SocialSecurity in Senegal, and the Tripartite Consulta-tive Labour Council in Zambia.25 The Conseil Na-tional du Travail in Benin gives advice on the func-tioning of labour courts, on criteria fordetermining the representativeness of social part-ners, and on social security. The Commission Con-sultative du Travail in Niger, attached to the Min-istry of Labour examines issues related to labourlaw, collective agreements and their application. Itis also in charge of studies which serve as a basisfor determining minimum wages and minimumliving conditions by examining economic condi-tions in general. It is a consultative body on all is-sues related to employment and labour relations.In addition, the Commission Nationale sur le Dia-logue Social (CNDS)26 was established in Niger in2000. Its permanent secretariat is attached to theMinistry of Labour. It is a tripartite plus institutionwith representatives of the Government, socialpartners as well as civil society and cooperativeorganizations. The CNDS was established to pro-mote effective social dialogue among social part-ners and to facilitate the resolution of industrialconflicts. For other more targeted issues, tripartitedialogue within or outside the umbrella of the min-

istry of labour is common in many countries onminimum wages or general wage policy, voca-tional training, occupational safety and health,and dispute prevention and resolution.

4. Bipartite agreements (workers’ and employers’organizations) which are implemented by the State

The examples given above under three subhead-ings mainly refer to national social dialogue involv-ing tripartite or tripartite plus negotiations. Manycountries also have bipartite social dialogue at thenational level. In France and Spain, for example,

25 Trebilcock et.al. (1994)

26 ILO Programme de Promotion du Dialogue Social en AfriqueFrancophone (PRODIAF) project played an important role inestablishing the CNDS.

Box 3.2. Workers’ and Employers’Bilateral Council (WEBCOP) in Pakistan

In Pakistan, as in other South Asian countries, there isa tradition of adversarial industrial relations. On theinitiative of leaders from workers’ and employers’ or-ganizations, WEBCOP was established in 2000 withthe intention of improving cooperation between them.Upon its establishment, employers and workerssigned a memorandum of understanding stressing theneed to work together. Since then, they have engagedin bipartite social dialogue on national matters andagreed on joint positions. These were presented to theGovernment, usually in the form of memoranda sub-mitted to the Ministry of Labour or in at least one casedirectly to the President. In this way, they have tried toinfluence the Government, and have done so effec-tively. One of the main achievements of WEBCOP sofar has been the agreement on a national minimumwage for the first time in Pakistan. It set the rate at2,500 rupees per month. The Government acceptedthis except for one sector (commercial farms) andmade it legally enforceable. WEBCOP also reachedagreement on the text of the new Industrial RelationsOrdinance in an attempt to reform the law of 1969. Thereform of the 1969 law was a pressing issue becauseit violated many principles of ILO Conventions Nos. 87and 98. The Government passed the new Industrial Re-lations Ordinance in 2002. However, the law did not in-clude most of the changes suggested by WEBCOP.This does not diminish the effectiveness of bilateralsocial dialogue through WEBCOP. Yet, it shows thelimitations of bilateral social dialogue without the co-operation of or at least good understanding by the thirdparty to national social dialogue, i.e. the Government.

Discussion Negotiation

Agreement of Action Programme

Implementation

Feedback to the next round of social dialogue

Follow up / Monitoring / Evaluation

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labour laws and social provisions are often basedon the content of bipartite agreements signed bysome, though not necessarily all, workers’ andemployers’ organizations. They are implementedunchanged by the State. In some countries, bi-partite social dialogue institutions work as a pol-icy-making body in the absence of well-function-ing tripartite social dialogue. For example, theLabour Foundation (FUNTRAB) in Panama is oneof the few existing examples of institutionalised bi-partite dialogue in Latin America. In Asia, a newbipartite body was established in Pakistan in2000 to discuss matters of common concern andbuild trust among employers’ and workers’ organ-izations.

5. Dialogue within the boards of governmentexecutive agencies

So far, examples shown in the above four sectionshave dealt with consultation and concertationleading to public policy-making. In some coun-tries, social dialogue is used not only as a policyformulation process, but also to implement andadminister the policies agreed. For instance, theinvolvement of social partners in social securityadministration is common in many Europeancountries. Systems of joint administration of socialsecurity schemes for employees exist in Austria,France, Germany, and the Netherlands. In Swe-den, trade unions administer unemployment in-surance. There is policy concertation in social in-surance agencies in France, social security fundsin Germany, social insurance agencies in Italy,and employment and social security agencies inthe Netherlands (Compston 2002c: 316). Ger-many, Ireland, the Netherlands and Sweden also

have tripartite or bipartite bodies involved in theadministration of labour market policies.

> Cycle of policy concertation -social dialogue processes

For national social dialogue to be sustainable inthe medium and long term, there should be aproper cycle of social dialogue in place. Such acycle consists of a mechanism of regular consul-tation and discussions, agreeing on commonstances, and the implementation of agreementsand their monitoring/evaluation. Figure 3.2 belowshows the cycle of the different stages of the so-cial dialogue process.

Social partners can be actively involved in differ-ent stages of the social dialogue processes. Thisdoes not apply only to policy-making processeswhich lead to agreements. Social partners canalso be actively involved in the implementationand monitoring stages of social dialogue.

National social dialogue institutions often providethe platform for social dialogue. This shall beelaborated in the following sections. However, in-stitutional social dialogue is not the only way to facilitate an effective policy cycle. There is an in-teresting innovation to policy-making, implemen-tation and monitoring processes, involving socialpartners at different stages regarding the Euro-pean Employment Strategy and other social pol-icy agenda items. This new methodology is called“open method of coordination” or “soft” (i.e. notlaw-based) regulatory approach.

Figure 3.2. Cycle of social dialogue

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> Role of social dialogue institutions

Social dialogue in practice can take place eitheron an ad hoc or formally institutionalised basis asmentioned above. Formalisation or the perma-nent nature of institutions does not necessarilymean that it is functioning better than ad hoc so-cial dialogue. The two forms can be mutually re-inforcing as the case of Singapore shows.

Box 3.3. Open Method ofCoordination (OMC)OMC is a new instrument of policy making, imple-mentation and monitoring. It is a flexible, participa-tory, and an experimental methodology/system ofgovernance for social policy in Europe. First devel-oped as an instrument for the European EmploymentStrategy (EES), OMC has now been used widely onprogrammes regarding employment policy, social in-clusion, social protection and other policy areas. OMCis a process which promotes social dialogue amongstakeholders at different stages of the policy cycle. Itis also multi-levelled as the EES emphasises the im-portance of regional and local level participation andinputs which contribute to a national level document.It is designed in a way to facilitate the active participa-tion of stakeholders in formulating the guidelines, andin their implementation and monitoring processes.The Lisbon EU Summit in 2000 established OMC,based on the logic of mutual learning, benchmarking,best practice and peer pressure. OMC has translatedthe EES process into a series of methods of interven-tion. OMC in the context of EES and other social poli-cies in Europe is comprised of the following elements:common overall European-wide objectives; nationalaction plans agreed as a result of national, regionaland local social dialogue; regular annual or biennialpolicy cycles; requirements of consultation with socialpartners and representatives of civil society as well asvarious standing EU institutions; benchmarking andexchange of best practices; review of progress by theCommission; peer reviews; and the use of commonindicators. Due to its “soft regulation” nature, the no-table characteristic of OMC is the lack of formal sanc-tions for Member States which fail to deliver resultspromised in accordance with EU objectives and guide-lines. However, the lack of formal sanctions is com-pensated by other mechanisms, such as peer pressurethrough peer review processes. In addition, Régent(2002: 19) argues that the use of common indicatorsimplicates an indirect form of a sanctioning function.“The setting of parameters, referring to which MemberStates succeed or fail in their commitments, corre-sponds to a sanction even if it is soft in that it does notprovide any coercive effect.”

Box 3.4. Ad hoc vs. permanentinstitutions of tripartite socialdialogue in Singapore

In its modernisation drive, Singapore has created a va-riety of tripartite social dialogue institutions. Tripartiteinstitutions have been very effective in articulatingconflicting interests between the three parties, formu-lating and implementing social and economic poli-cies. Singapore has developed a number of well-func-tioning permanent tripartite institutions such as theNational Wage Council (NWC) and the Industrial Ar-bitration Court and National Productivity Board. TheNWC is one of the most well known tripartite institu-tions in East Asia which has contributed to harmo-nious economic growth by ensuring fair distribution ofeconomic benefits while stimulating economic growththrough a series of tripartite guidelines on wage pol-icy. But it should be noted that tripartite actors in Sin-gapore have created numerous ad hoc tripartite bod-ies to address issues of common interest whenever theneed arose. For example, the ad hoc panel on re-trenchment was created to cope with the unemploy-ment crisis after the Asian economic crisis. Other ex-amples include the Panel on the Extension ofRetirement Age, the Panel on Employment Act Review,the Panel on Workplace Health Promotion, the Tripar-tite Committee on Competitiveness and the Panel onPortable Medical Benefits.

Source: Box 5. of Lee (2002).

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> National tripartite or bipartite institutionsas supportive fora of social dialogue

Ad hoc consultations are possible and common inthe start-up phase of social dialogue, in transitionperiods, or in the case of temporary economiccrises. Well-established national social dialogueusually takes place through formally establishedbipartite/tripartite bodies. The presence of bipar-tite or tripartite institutions at national level helpsto coordinate and facilitate social dialogueprocesses. In some countries, such as Franceand Portugal, consultation with their bipartite andtripartite plus Economic and Social Councils(ESCs) on selected policy issues is a statutory ob-ligation for the Government. There are some dif-ferences in the functioning of ESCs: in France, theESC gives advisory opinions on Bills before theyare submitted to the National Assembly. Theseare formally voted on in the plenary sessions. InPortugal, any decisions made in the tripartiteStanding Committee for Social Dialogue, a part ofthe ESC, do not require the approval of the ple-nary session of the ESC. In this Committee, tripar-tite parties negotiated and signed a number of so-cial agreements.27 Austria is a unique case wherethe firmly established tripartite Joint Commissionon Prices and Wages is voluntarily established

and informally constituted. The existence of insti-tutions is a critical factor in facilitating the processof social dialogue but does not guarantee its suc-cess. Without the commitment of social partnersand the Government, social dialogue cannot besustained and cannot be constructive. Nationalsocial dialogue institutions should be regarded asa supportive framework, with success ultimatelydepending on the willingness and ability of the so-cial partners. In fact, in many countries, tripartiteor bipartite bodies exist but are not used or do notfunction effectively for social dialogue.

> Variety of tripartite or bipartite foraat national level

The structure, composition and mandate of for-mal bodies vary from country to country. They canbe bipartite, tripartite or tripartite plus. Such na-tional bodies have one or a combination of the fol-lowing functions:

• development of policy initiatives;

• advice to Government on policy issues;

• consultations on policy formulation;

• decision-making or recommendations onpolicy;

• negotiation of accords or agreements;

• administration of established policy;

• supervision of implementation of agreements.

Social dialogue has been facilitated by fora onwider economic and social policy and by foradealing only with labour relations issues related tothe world of work. As the focus of this resourcebook is national social dialogue on broad eco-nomic and social policy matters, only those insti-tutions and systems related to this function areexamined here. Before doing so, however, let usbriefly sketch out the different fora for social dia-logue on labour relations issues. Wage determina-tion and labour relations are traditional areas ofbipartite collective bargaining between employ-ers’ and workers’ organizations, or tripartite con-sultation and concertation. The Dutch Foundationof Labour, consisting of bipartite representativesof workers’ and employers’ organizations, is thekey institution of joint (with the Government) mon-itoring of collective bargaining, which is consid-ered to be a regular ingredient of social policy-making. It is considered to have been crucial tofinding a shared understanding between peakemployers’ associations and unions in the 1990s,forming the basis of the Polder model.28 In othercountries, tripartite cooperation takes place inspecific technical areas of labour relations, suchas the United Kingdom’s Advisory, Conciliationand Arbitration Services (ACAS). Other countriesset up specialised tripartite bodies such as Aus-tralia’s National Board of Employment, Educationand Training. There are other technical policy ar-eas where tripartite or bipartite cooperation takesplace through institutions. For example, advisorycommittees on occupational health and safetyhave been long standing in Finland and France.

27 For more information about the Portuguese case, see box 4.4.

28 For details of Polder model see Chapter 4, Box 4.9.

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> Fora to discuss wider economic andsocial policies at national level

Many countries have Economic and Social Coun-cils (ESCs) or national institutions with a similarname to address wider economic and social poli-cies at national level. According to the Interna-tional Association of Economic and Social Coun-cils and Similar Institutions (IAESCSI), theseinstitutions exist in almost 50 countries.29 Manycountries in Africa (predominantly North Africaand Francophone Africa), Central and EasternEurope, and to a lesser extent in Asia and LatinAmerica are members of the IAESCSI: among theover 30 members of the organization, 11 coun-tries are from Africa, two countries each from Asiaand Latin/Central America, and the rest are fromWestern, Central and Eastern Europe.

They can be bipartite, tripartite or tripartite plusbodies. Such bipartite, tripartite or tripartite plusfora have a variety of functions and mandates.They are most effective in a society where a cul-ture of cooperation and consensus seeking/build-ing among different stakeholders exists. Theyform an integral part of national political systemsand institutions, and have to be understood withinthe context of the long-standing socio-culturalregime peculiar to a country. As social dialogue isa dynamic process, they are constantly evolvingin order to meet the country’s social and eco-nomic needs. It is important to note that there isno standard or ideal model for these fora, univer-sally applicable to all countries.

Size and composition

ESCs come in varying sizes and composition ofmembership. They can be extremely large or verysmall. The Social and Economic Council inFrance has more than 200 members. The Na-tional Council for Economic and Labour Affairs inItaly has more than 100 members. Other Euro-pean countries have smaller ESCs or their equiv-alent with around or less than 50 members. Theycan meet in public or closed sessions. The size ofthe institution affects the way the ESCs operate.The larger the size of the institution, the more for-malized their procedures tend to be. For example,the French ESC sessions are public and resembleparliamentary sessions. Many ESCs have a per-manent secretariat of their own to deal with ad-ministrative affairs or to produce position papers.

Others are attached to one of the governmentunits.30 In some countries, more than one tripar-tite institution exists dealing with wider social andeconomic policies, as demonstrated in the case ofIreland. In others, ESCs contain subcommittees toaddress particular technical subject matters.

As for composition, many have a bipartite, tripar-tite or tripartite plus membership and often in-clude independent experts. A non-exhaustive listof representatives coming from outside the tripar-tite constituents, excluding independent experts,includes the following groups: farmers, owners ofsmall enterprises and crafts, representatives ofcooperatives, community groups, consumergroups, environmental associations, representa-tives of religious communities, and other groupssuch as the unemployed, youth and women.

Functions

As for their functions, many of these fora are usedpredominantly for consultation, although someare used for policy concertation.

ConsultationIn some countries, governments are legally re-quired to consult ESCs, though their opinions arenot always taken into account. In Western Europe,this applies to ESCs in France, Greece, Luxem-bourg, the Netherlands, Norway and Portugal.The Dutch Social and Economic Council is astatutory bipartite forum for consultation on socialand economic policies, and is regarded as a facil-itator of national social dialogue. Though power-ful, the French Social and Economic Council hasnot always been efficient in decision-making, be-cause the very heterogeneous representation ofinterests has made reaching consensus difficult,leaving issues to be decided by the Government.Italy’s Constitution allows the National Council forEconomic and Labour Affairs to submit Bills toparliament, but over time its de-facto influencehas diminished to lobbying and consultative func-tions. For many other countries, the dominantfunction of their ESCs remains consultative, eventhough this is not necessarily stipulated in thecountry’s legal framework. Giving opinions ondraft legislation is one of the most common formsof consultation.

29 For more information, see www.aicesis.org

30 In Austria, the Joint Commission on Prices and Wages isattached to the Federal Chancellor’s Office.

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ConcertationIn some countries, ESCs are part of the system ofpolicy concertation. In Austria and Ireland,though having a very different historical back-ground, complex institutional arrangements forpolicy concertation exist. In Austria, the JointCommission is the long-standing mechanism ofnational social dialogue. This is a tripartite plus fo-rum with the participation of social partners, farm-ers and the Government. Within the Commission,there are four technical sub-committees: one forprices, one for wages, an advisory board on eco-nomic and social issues and a committee on in-ternational issues. In the former two, in-depthconcertation takes place on price trends, compe-tition and wage developments. The decisionstaken by these sub-committees are not legallybinding. However, they have been proven to beeffective due to their historical institutional credi-bility. According to Tomandl and Winkler

(1994:107) subcommittees’ decisions have a cer-tain “trust effect”, which makes Austrian eco-nomic actors follow their recommendations. TheAdvisory Board on Economic and Social Issues isan advisory body to the Commission. Reflectingthe expert knowledge of not only social partnersbut also of advisors from academia, it plays an im-portant role in providing studies to facilitate acommon understanding of policy issues amongparticipants and proposes strategies to approacheconomic and social problems.31 More generalmacroeconomic policy issues are discussed inthe full assembly of the Joint Commission.

In Ireland, the Department of the Taoiseach(Prime Minister) is responsible for facilitating theoverall negotiation and implementation of the so-cial partnership agreements, the main form of na-tional social dialogue. There are three main tripar-

tite or tripartite plus institutions to support na-tional social dialogue processes: the National Eco-nomic and Social Council (NESC), the Central Re-view Committee (CRC) and the NationalEconomic and Social Forum (NESF). The NESC iscomposed of members representing the socialpartners, senior civil servants, government nomi-nees and the community and voluntary sector. Itprovides a forum for seeking consensus on eco-nomic and social issues, and to advise the Gov-ernment through the Taoiseach. One of the keyroles of the NESC in Irish social partnershipprocesses is to set the agenda for the negotiationof partnership agreements. It publishes a strategyreport that provides the framework for the negoti-ations on national agreements. The CRC was es-tablished by the first social partnership agree-ment, the Programme for National Recovery in1987, to oversee and monitor the implementationof the social pacts agreed. The NESF’s main taskis to develop economic and social policy initia-tives, with the remit to especially address issuessuch as equality and social inclusion. Its member-ship is wider than the traditional tripartite compo-sition, by including representatives from commu-nity and voluntary sectors and opposition politicalparties. In 2001, the National Centre for Partner-ship and Performance (NCPP) was established tosupport and promote organizational change,based on partnership, in both the pubic and pri-vate sectors.

> Challenges associated with well-functioning social dialogueinstitutions

The existence of supportive structures helps na-tional social dialogue institutions to function well.Establishing a permanent secretariat is not theonly way to achieve such an objective, but is oneof the most effective means to ensure sustainabil-ity of the institutions established.

The role of the secretariat

In the ILO guide to the creation and operation ofpermanent secretariats of national tripartite con-sultation bodies in French speaking Africa,Lécuyer (2001) lists several practical checks re-garding well functioning national social dialogueinstitutions. The permanent secretariat can be re-sponsible for administration – preparing, organis-ing and following up the activities of the social di-alogue institutions. It can also perform a research

31 Information taken from Talos and Kittel (2002), Table 2.2.

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function, providing the base documents for nego-tiation, so that those engaging in dialogue havethe same understanding and framework of refer-ence regarding the current economic and socialsituation. In reality, the secretariat of the tripartitebody dealing with labour issues is often attachedto an administrative unit of the labour administra-tion, i.e. the labour ministry. The guide draws at-tention to the practical procedures of running so-cial dialogue institutions, such as appointing themembers, electing the officers, organising ses-sions, and working methods.

Regarding the permanent secretariat, its role andfunctions need to be clearly specified. As an ad-ministrative support institution, the permanentsecretariat has the main role in planning the tri-partite meetings. It also has to coordinate theagenda and take care of other administrative mat-ters concerning convening and managing meet-ings. The secretariat should have experienced hu-man, material and monetary resources tofunction effectively. The size of the secretariat dif-fers substantially across countries.32 Whether bigand small, the budget of the secretariat must besecured. Lécuyer (2001: 19) states that “it is cru-cially important for the consultation body’s annualbudget to be based on a specific budget … thatis independent of other budget allocations withinthe supervisory administrative unit”. The secre-tariat also has to function as a reliable source ofinformation: not only is it responsible for providingbasic background documents for a constructivedialogue, but it should also serve as a referencepoint for the tripartite institution’s activities. It cando so by disseminating information in the form ofposition papers, opinions or draft resolutions ortripartite agreements. In addition to informing so-cial partners and the Government, it should raisethe awareness of the general public throughproper media coverage. The permanent secre-tariat also has a role to play in the follow-up ofagreements and their implementation.33 ■

32 For examples from EU accession countries, see Rychly andPritzer (2003).

33 For more details, see Lécuyer (2001).

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> What can social dialogue deliver?

What are the benefits associated with social dia-logue? In discussing the benefits of social dialogue,it is important to distinguish between benefits as-sociated with processes of social dialogue andthose related to the outcomes of social dialogue.Here we elaborate on the different benefits of so-cial dialogue with illustrative country examples.

Benefits of social dialogue processes

Democratisation of economic and social policy making

Social dialogue is an inclusive and democraticmeans of policy-making and decision-making.More recently, in many countries, social dialoguein its explicit or implicit form has become part of

CHAPTER 4: BENEFITS OF SOCIAL DIALOGUE

the approach to promoting economic growth anddevelopment. Tripartite economic and social pol-icy-making became a norm in many EuropeanUnion countries to reach a socially acceptablecompromise about the measures needed to meetthe requirements imposed by the MaastrichtTreaty for participation in European MonetaryUnion. Social dialogue helped to build social sup-port to implement tough economic policies tomeet the convergence criteria of the Treaty. Theimportance of the participation of stakeholdershas been increasingly recognised by the Interna-tional Financial Institutions such as the Interna-tional Monetary Fund and the World Bank in theirpromotion of economic development and povertyreduction.34

Box 4.1. South African socialdialogue

Social dialogue and partnership with civil society wasa pillar of democratisation in South Africa after theapartheid regime. The framework of social dialogueincluded representatives from the Government, em-ployers’ and workers’ organizations as well as fromcivil society. In spite of the fragile tradition of social di-alogue, the partners achieved notable results, particu-larly on labour market issues such as job creation. So-cial partners adopted a far-reaching declarationcommitting themselves to engage in social dialogueover substantive issues, including the promotion ofinvestment, decent work and development, and the re-duction of poverty. Major social and economic re-forms have been adopted through a consensus build-ing process. Discussions in institutions such as theNational Economic Development and Labour Council(NEDLAC) have successfully brought together all keystakeholders including civil society. Social dialogue inSouth Africa played a crucial role in ensuring a rela-tively smooth political and economic transition fromapartheid to democracy.

Box 4.2. Case of Panama

In Panama, national social dialogue mechanismscame with political changes in the 1990s, followingthe first democratic elections after more than twodecades of dictatorship and the return of the PanamaCanal and Canal Zone from U.S. control. These twoevents gave rise to two key social dialogue processes,known as the Bambitos and the Coronados. In the Na-tional Unity and Development Meetings, known as theBambito process, consultations between social andpolitical actors were initiated in 1993 in the run-up tothe first democratic elections in 1994. This processensured that a wide range of social actors, such asmembers of political parties, social partners and rep-resentatives of civil society discussed issues of com-mon concern. Discussions centred around economicand social challenges as well as the institutional re-forms Panama faced in the transition to democracy. Insuccessive meetings, stakeholders continued discus-sions on the consolidation and development of thedemocratic system. The Coronado meetings mainlydiscussed how different stakeholders could cooperatein the management of the Panama Canal. A series ofmeetings resulted in the agreement of a draft Bill onthe use of the canal. These meetings provided an ef-fective mechanism facilitating dialogue among socialpartners, other social actors and the Government.They helped to establish a positive climate for, andconfidence in, the process of democratisation.

34 See box 4.3. for details.

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Legitimacy and ownership

In a democratic society, any unilateral action bythe State without the consent of the social part-ners often meets with resistance from them. Un-like the top-down approach, policy-makingthrough social dialogue is regarded as a bottom-up approach. Policies made through social dia-logue are more legitimate as stakeholders in soci-ety have participated in the policy-makingprocesses and their views are usually reflected inthe outcomes. Such policies are more easily ac-cepted as stakeholders have a sense of ownershipof the policies that they have jointly developedthrough social dialogue.

Reduce social conflicts by facilitating partnershipand a problem-solving attitude

Dialogue can replace adversarial relationshipswith collaborative partnerships. It can develop ashared understanding of problems, can facilitatethe discussion of policy alternatives and their im-plications, and the finding of compromises toachieve common responses (Ebbinghaus 2001).Indeed, it is a widely shared opinion among thoseinvolved in social dialogue that policy concertationis desirable as a means of minimising conflict andpromoting social peace (Compston 2002c: 318).

Box 4.3. Poverty Reduction StrategyPapers (PRSP) launched by theWorld Bank and the InternationalMonetary FundPRSP is a relatively new approach to development in-troduced by the World Bank and the IMF to help thepoorest of the poor countries. People in recipientcountries have often perceived the traditional struc-tural adjustment programmes of the Bank and theFund as externally imposed and not addressing thecountry’s social problems, in particular poverty. PRSPhas a direct focus on poverty reduction, but it alsotakes a procedural approach different from the tradi-tional structural adjustment programmes by puttingemphasis on the importance of country ownership.The Bank and the IMF emphasise the participation ofstakeholders in policy-making processes. However, inmost PRSP consultation processes, social dialoguehas not become an explicit issue. Although participa-tion in the form of civil dialogue (dialogue betweenGovernment and the NGOs) has been achieved inmany countries, social dialogue was not practised inmost PRSP consultation processes in 2001. The ILOinitiated a project to build capacity for effective socialdialogue in the PRSP in selected IDA eligible coun-tries.1 The aim of the project is to bring social dialogueto the forefront of stakeholder involvement by directparticipation of workers and employers in the PRSPdecision-making processes. It aims to improve thequality of the participatory process by enhancing thecapacity of social partners to engage in constructivedebate through improving their technical knowledgeand negotiating skills.1 The International Development Association, IDA, is theWorld Bank’s concessional lending window. It provideslong-term loans at zero interest to the poorest of thedeveloping countries. IDA lends to countries that had a percapita income in 2003 of less than $865 and lack thefinancial ability to borrow from the World Bank. In 2003,eighty-one countries are eligible to borrow from IDA.

Box 4.4. Social dialogue in Portugal

Social dialogue processes at national level in Portugaldid not start until 1984. Following the Revolution in1974, attempts at dialogue broke down due to thewidespread climate of social confrontation and adver-sarial relations between employers’ and workers’ or-ganizations.

In preparation for Portugal’s membership of the Euro-pean Community (1985) and to facilitate structuralchanges in society and the economy, social dialoguehas become an important means of governance. Thestatus of social partners was legitimised and enhancedas they became involved in dialogue, in collective bar-gaining and in setting up institutional mechanisms ofbroad harmonisation. In 1984, the Standing Commit-tee for Social Dialogue (CPCS) was established. Theaim of the CPCS was primarily to integrate the socialpartners into the political system as a response to po-litical instability and economic recession. Though thecreation of the CPCS did not guarantee the smoothfunctioning of social dialogue, agreements on in-comes policy were adopted through dialogue in theCPCS in 1988 and 1990. A new impetus for tripartitesocial dialogue came in 1996 with a political regimechange. Through social dialogue within the CPCS, atripartite social pact was agreed, signed in January1996 by the Government, employers’ organizationsand one of the trade union federations. The pact cov-ered a wide range of topics including incomes policy,employment policy, social security reforms and regu-lation of industrial relations. In May 1996, the Govern-ment presented a negotiating document to be dis-cussed in the CPCS on a strategic dialogue for themodernisation of Portugal. The document proposed aSocial Pact on competitiveness. This initiative resultedin the creation of six working groups for strategic dia-logue within the CPCS and led to the agreement of theStrategic Social Pact in 1997.1

Source: Da Paz Ventura Campos Lima and Naumann(1997).

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Ease social tensions during economic hardshipand transition periods

Social dialogue is a very effective means to easeeconomic and social tensions during periods ofeconomic crisis or transition. In many EU coun-tries, social dialogue has been effective in copingwith tough macroeconomic adjustment in order tomeet the Maastricht criteria for entering EuropeanMonetary Union. Many Central and Eastern Euro-pean countries have managed their transitionfrom socialist to market economies through socialdialogue. Albania, Bulgaria, Czech Republic, Es-tonia, Hungary, Latvia, Lithuania, Moldova,Poland, Slovak Republic and Slovenia, amongothers, established tripartite national bodies in thebeginning of the transition period. The objectiveof these bodies was to facilitate social dialogue inorder to cope with the economic adjustments as-sociated with the move to a market economy.35

Over the decade, social dialogue was firmly estab-lished in some of these countries and has becomepart of their economic governance. Social dia-logue in the EU accession countries is increas-ingly regarded as a crucial mechanism to preparethem for full EU membership. It should be em-phasised that social dialogue should continue be-yond the transition period. The effort of the socialpartners and the Government to engage in dia-logue processes should be maintained once thecountry is out of the severe economic adjustmentphase, so as to ensure the sustainability of thepositive outcomes.

Box 4.5. The case of Kazakhstan

Kazakhstan, before achieving independence from theSoviet Union in 1991, did not have a democratic tra-dition of industrial relations. Since its independence,efforts have been made to promote social partnershipat various levels of society. The legal and institutionalframework of industrial relations has been laid out andthe State and social partners are learning to managethe economy in cooperation. At the national level,there have been discussions and negotiations involv-ing social partners and the State. Kazakhstan becamea member State of the ILO in 1993 and has ratified 15ILO Conventions, four of which are directly related tosocial partnership. The ratification of these Conven-tions provided an impetus to tripartite dialogue and ledto the adoption of the Social Partnership Act, 2000.The Act provides a legislative framework for social di-alogue by defining the form of cooperation betweenthe social partners, the structure of social partnershipat all levels as well as principles, procedures and func-tions of tripartite bodies at national, sectoral and re-gional levels. It established the National TripartiteCommission (NTC) as a permanent forum of tripartitedialogue. The NTC facilitates tripartite general agree-ments, which are the legal documents regulating so-cial, labour and related economic relations. It alsomonitors their implementation. The agreements covera wide range of issues including implementation of aprogramme to combat poverty and unemployment, re-form of social security, health and safety at work, im-proved wage payments, as well as dispute preventionand settlement related to labour and social issues. Na-tional social dialogue in Kazakhstan is still evolvingbut has proved to be a relatively effective way to dealwith the country’s economic transition and nationbuilding.

35 For details, see Casale (1999), Casale, Kubinkova and Rychly (2001).

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Benefits associated with the results of social dialogue

Social pacts

Social pacts are one of the most visible outcomesof successful social dialogue. In many Europeancountries, social pacts became an important in-strument in dealing with the economic and socialchallenges of globalisation, economic restructur-ing and monetary integration.36 However, manycountries without a tradition of policy concertationembedded in their political institutions have man-aged to agree on social pacts, representing con-sensus among the tripartite or tripartite plusstakeholders, as a result of national social dia-logue. The quality of social pacts differs fromcountry to country, ranging from a declaration ofintent to a detailed list of policy measures andmethods for action through social dialogue. Yet, insome crisis ridden or politically unstable countriesor countries without the tradition of cooperativeindustrial relations, it is to be considered anachievement in itself if one can gather social part-ners and the Government around the negotiationtable and to achieve social consensus, even if it isno more than a declaration of intent.

Box 4.6. Social dialogue in theCzech RepublicIn the Czech Republic, social dialogue at national leveldeveloped early during the transition period. The na-tional tripartite Council for Economic and Social Co-operation (RHSD) established in 1990, helped to over-come the most challenging initial period of economicreform and to avoid major social crises.

During 1990-93, the RHSD was active in discussingissues related to economic and social development,labour relations and collective bargaining, employ-ment and labour markets, wage trends, health care,education, and occupational safety and environmentproblems. Regular sessions were held and discus-sions at the RHSD became an important part of the de-cision-making process during this period. A generalagreement was reached between the social partnersand the Government once a year. Well functioning so-cial dialogue immediately following the transitionhelped the smooth transformation of the economywithout social unrest.

After the election of a new Government in 1992, the di-alogue between the Government and social partnersdeteriorated and social dialogue ceased to function in1994. The Government argued that economic transfor-mation was already complete and there was thus noreason to continue with tripartite dialogue: it encour-aged the shift from tripartite to bipartite dialogue. Fi-nally, it was agreed that tripartite dialogue could con-tinue but in a restricted manner. The new Council forDialogue between the Social Partners (RDSP) was es-tablished in 1995 but it was limited to consultation onindustrial relations issues related to labour law, collec-tive bargaining, employment and wages.There was achange in approach in 1997, in response to the deteri-oration of the economy and the collapse of the Govern-ment. The new Government saw the need to seek socialconsensus in order to be able to adopt unpopular ad-justment policies, and took a more favourable ap-proach to social dialogue. It re-established the Coun-cil for Social and Economic Cooperation (RHSD), andformally acknowledged the importance of social dia-logue in maintaining the smooth operation of a mod-ern competitive economy. Tripartite negotiations againbecame a significant platform of consultation and in-formation sharing on social and economic issues.

36 For more details about social pacts in Europe, see the ILO websitehttp://www.ilo.org/public/english/dialogue/ifpdial/sd/social_pacts/index.htm andhttp://www.ilo.org/public/english/dialogue/themes/sp.htm

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Box 4.8. Social Pacts in ChileDuring the 1990s, the Chilean tripartite parties agreedon a series of social pacts. The first formal agreementwas signed in 1989 between the Central Unitaria deTrabajo (CUT) and the Confederación de la Produc-ción y del Comercio (CPC). It was the first time inChile that national confederations of workers’ and em-ployers’ organizations had reached a national bipartiteagreement. In the agreement, they expressed a com-mon willingness to undertake immediate efforts tochange the confrontational relations which thus farhad dominated Chilean industrial relations. The moti-vation behind this historical agreement was twofold:first, to give stability to democratic transition, and sec-ond, to enhance Chile’s economic competitiveness.Both organizations shared the conviction that Govern-ment stability was an overarching common interest,since it was critical for the development of the coun-try. This declaration was the first step towards “socialpeace”. Another motivation concerned the changingperception of social partners on how to deal with ex-ternal economic transformations – the growing waveof liberalisation and globalisation. A second agree-ment was signed in January 1990 with the purpose ofsetting up the framework for a national commission oneconomic and legal issues regarding labour relations.This was then replaced by the first tripartite frameworkagreement in April 1990, signed by representatives ofCUT, CPC and the Government (the Minister of Fi-nance, Economy, Labour and Social Policy). Theframework agreement was comprehensive, stating theshared recognition of the need for economic develop-ment with a democratic and equity perspective as wellas the commitment to social peace by all tripartite par-ties concerned. It also lists concrete areas of action re-garding economic development, human resource de-velopment, improvements in education, training,social security systems, occupational safety andhealth, housing for workers, minimum wages, familybenefits, public administration and management, re-form and enforcement of labour law.

The second tripartite agreement was signed in April1991. This agreement, which replaced the first agree-ment and defined the technical criteria to be used to fixthe minimum wage, was also signed by the Confed-eración de la Pequeña Industria y Artesanado (Conu-pia), another employers’ organization representingsmall industries and handicrafts. The third social pactwas signed in April 1992. This agreement concernedthe increase of the minimum wage and family benefits.Conupia did not participate this time. The agreementalso established a tripartite commission to study is-sues such as training of the labour force, occupationalsafety, unemployment and re-integration of the unem-ployed into the labour market, information technology,application of labour standards, economic integrationand the restructuring of production. The fourth agree-ment was signed in May 1993 which amended mini-mum wages and family benefits. Social dialogue inChile has promoted democracy and social stability. Ithas established a dynamic of cooperation, replacingthe traditionally confrontational style of industrial re-lations.

Box 4.7. Social Dialogue in Senegaland Mali1

In November 2002, a National Charter on Social Dia-logue was adopted in Senegal with a view to upgrad-ing the institutional framework for social dialogue. TheCharter, which was signed by all employers’ organiza-tions, the major unions and the Government and be-came effective in March 2003, applies broadly to allsectors of the economy, including the public and theprivate sector as well as the informal economy. It em-bodies a commitment to the principles of partnership,good faith, mutual respect and willingness to adhereto agreements, and for the State and employers toguarantee the freedom of association of workers. TheCharter lays down a set of respective rules of conductfor each of the three partners – acknowledging in par-ticular labour’s stake in and contribution to businessperformance. It establishes an institutional frameworkfor dialogue at the national, sectoral and enterpriselevels. A tripartite National Social Dialogue Commit-tee is entrusted with the task of conflict prevention andresolution, the encouragement and monitoring of col-lective agreements and research on ways and meansto create an enabling environment for enterprises, in-cluding the improvement of terms and conditions ofwork. Alongside this national body, bipartite social di-alogue committees are set up at the sectoral and en-terprise levels. The Charter, concluded for an initialperiod of five years, has been designed as a tool to im-prove labour-management cooperation by providingan enabling environment for a process of dispute set-tlement and by building trust among the three partiesconcerned.

In Mali, a document embodying a national tripartiteagreement was adopted in 2001. The Pacte de solidar-ité pour la croissance et le développement commitsthe Government and the social partners (with the ex-ception of one trade union) to promote “responsiblesocial dialogue with the aim of encouraging socialconditions conducive to economic development”. Set-ting out a broad policy agenda, it lists a series ofmeasures to improve private sector development andjob creation, as well as to improve the situation of pub-lic sector employees. Concertation is to take place ona yearly basis through an ad hoc tripartite committeeto review implementation of the agenda.1 These positive results presented in this box wereaccomplished through assistance of the PRODIAF project.

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Sustainable economic and labour market reform

Social dialogue can facilitate the sustainability ofeconomic and labour market reforms. Havingreached consensus, stakeholders’ opinions arereflected in reform agreements and they have anincentive and peer pressure to support what theyhave already accepted by agreement.

Box 4.9. The “Polder Model” in theNetherlandsIn the Netherlands, a system of institutionalised dia-logue was established in the post war era. The signif-icance of national social dialogue in the Netherlandshad declined in the 1970s, but regained its importancein the 1980s. National social dialogue was renewed inthe Wassenaar Accord in 1982. Against the backdropof economic crisis and increasing unemployment,union and employers’ confederations reached anagreement to freeze wages for two years and suspendthe cost of living adjustment. In return, employersagreed to negotiate reductions in working time. TheWassenaar Accord became the precedent for a seriesof more detailed joint agreements.

A more complex phase of social dialogue occurred inthe 1990s, when the Government was planning to in-troduce a fairer balance between labour market secu-rity and flexibility – a concept which became known as“flexicurity”.1 Unions agreed to a relaxation of statu-tory protection against the dismissal of permanentworkers in exchange for increased protection for tem-porary workers. There was also a reduction in somewelfare benefits that were seen as creating an unem-ployment trap. The agreement also led to the accept-ance of reduced minimum wages to encourage labourmarket entry for young people. Visser and Hemerijck(1997) argued that the reconstituted social dialoguefacilitated widespread support for sustainable eco-nomic and labour market reform which contributed toimproved labour market performance.1 Also known as “flexisecurity”.

Box 4.10.The case of Korea

Faced with the severe consequences of the Asian Fi-nancial Crisis in 1997 and the requirements of theprogramme imposed by the IMF, the social partnersand the Government engaged in long and difficult ne-gotiations in order to find a solution to the problemsat hand, especially rising unemployment associatedwith the collapse of the financial system. The outcomeof their consultations led to a compromise on the IMFprogramme, thereby avoiding social unrest and furtherdeterioration of the situation in the country. A subse-quent Social Pact (1998) dealt with a wide range oflabour, social and economic issues. This includedworkers’ organizations’ acceptance of wage reductionsand a relaxation of the rules regarding the employmentrelationship. Employers also made efforts in terms ofjob protection and the recognition of workers’ rights.The Social Pact was extensive and covered all of thenational reform agenda and the action programmes forcrisis management. This compromise, made in themidst of a deep economic crisis, marked the turningpoint towards economic recovery of the country. Thetripartite dialogue at the national level facilitated theadoption of a set of economic and social measures tocope with the Asian crisis as well as maintaining so-cial stability in a situation of severe economic down-turn.

After the crisis period, however, tripartite social dia-logue processes were not maintained. Once again, in-dustrial relations became volatile and adversarial.With mounting job losses, workers felt that measuresundertaken by the Government were not enough tomaintain a minimum living standard for the unem-ployed. Industrial disputes increased as a conse-quence. With the recovery of the Korean economysince 1999, unemployment rates have decreased.However, the general mistrust between the Govern-ment and social partners remained. The ILO continuesto work with the Korean tripartite constituents to assistin the development of viable social dialogue. The im-mediate objectives are to restore confidence amongsocial partners and the Government and to ensuremore effective functioning of the national tripartite so-cial dialogue body.

Bringing the social dimension to the economicpolicy reform agenda

Social dialogue can integrate the social dimensioninto economic policy-making. The participation ofsocial partners in decision-making processes oneconomic and social policy means their demandswill be incorporated in policy reform. The Koreanexample below illustrates how social partnersmanaged to have their interests reflected in policy

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making and managed to modify a tough macro-economic structural adjustment programme.

National economic and social progress

Successful social dialogue can promote eco-nomic and social progress. Comparative studiesin Berger and Compston eds. (2002) found thatin Austria, Ireland and Italy the social partnersand the Government agreed that policy concerta-tion had been economically beneficial. In Austria,all parties involved in social dialogue agreed thatsocial dialogue had positive effects on unemploy-ment and inflation. In Ireland, they agreed that so-cial pacts helped to enhance the competitivenessof the Irish economy and facilitated the qualifica-tion for European Monetary Union (EMU) with re-sulting benefits from EMU membership. Similarly,all parties involved in social dialogue in Italyagreed that social dialogue helped in the stabili-sation of the Italian economy in order to qualify forEMU membership.

Through social dialogue, stakeholders can bringsocial issues to the national policy debate. Socialdialogue can ensure that economic progress canbe achieved without sacrificing social progress. InIreland, for example, successive partnershipagreements have covered a wide range of eco-nomic and social issues, including the improve-ment of living standards and the workplace envi-ronment, economic competitiveness, socialinclusion and equality. As for social inclusion andequality issues, the Programme for Prosperity andFairness (2000), for example, addressed issues ofincome adequacy (introduction of a statutory min-imum wage, tax provisions, improvement of socialwelfare payments) social inclusion of the urbandisadvantaged (through local development, thetackling of drug problems, community develop-ment programmes), rural poverty (through a localdevelopment framework), the housing shortage,pensioner poverty and equal treatment of thosesocially disadvantaged by gender, disability or so-cial status (such as refugees and travellers). In-deed, comparing earning dispersion statistics andthe Gini inequality index37 in a sample of OECDcountries,38 one can see that countries with the

tradition of social dialogue generally have less in-equality than those without. Social dialogue canhelp to bring about a fairer society through partic-ipation of a wide range of stakeholders in society.

It is, however, difficult to establish rigorously aquantitative causal relationship between social di-alogue and, in particular, economic performanceat national level. On the one hand, countries witha tradition of social dialogue such as Austria, Den-mark, Ireland and the Netherlands improved theireconomic performance (Auer 2000). On the otherhand, countries without the practice of nationalsocial dialogue, such as the United States and theUnited Kingdom, have achieved good economicgrowth and job creation in the past decade. Morefundamental problems stem from the difficultiesof quantifying social dialogue.39 Rather than con-troversial quantitative analyses, the benefit of so-cial dialogue can be presented through a qualita-tive analysis by taking account of culturaltraditions and historic-institutional differences.

As Trebilcock (1994: 12) stated, while the eco-nomic impact of tripartite social dialogue cannotbe easily measured, it can be emphasised that so-cial dialogue ensures a degree of social peaceand progress that can set the stage for healthyeconomic growth. Some evidence that social dia-logue helped to revive countries’ economic per-formances in developed and developing countriesis presented in Box 4.11 and 4.12 on the follow-ing page. ■

37 Gini index is a measure of the inequality of incomedistribution.

38 For details see OECD (1996, 1997).

39 Such difficulties originate from the following: first, as there isso much variety in the forms, issues addressed and intensityof social dialogue, it is not possible to define a universal proxy

variable which can be regressed against economicperformance in a comparative econometric analysis. Second,it is difficult to establish a firm systemic relation betweeneconomic performance and social dialogue. Good or badeconomic performance may be to do with other factors suchas the business cycle or investment levels rather than theexistence or non-existence of social dialogue.

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Box 4.11. Social dialogue and employment revival in Austria, Denmark, Irelandand the NetherlandsAfter the economic crises in the 1970s and the 1980s, economic recovery and employment growth was achieved infour small open economies in the European Union. The common factor observed among these four countries is the ex-tensive use of social dialogue in managing their economies. Social pacts were agreed in all countries except for Aus-tria, where social partners and the Government cooperated to solve the economic problems through a concerted ap-proach based on wage moderation and a boost in economic competitiveness. Although Austria has a long tradition ofsocial dialogue in policy-making processes, dominated by strong but informal consensus building, their social dia-logue does not result in formalised social pacts. Social dialogue was revived in the other three countries during the1980s and 1990s. Graphs 4.1, 4.2, and 4.3 show the economic and employment performance of these countries overthe last two decades. Economic and employment growth of Ireland and the Netherlands are particularly impressive.Both Austria and Denmark had steady levels of economic and employment growth which closely correlated with the EUaverage growth. Ireland had a drastic decrease in unemployment rates in the 1990s. Over the two decades, all othercountries had steady low levels of unemployment rates, much lower than the EU average. Auer (2000) argued that so-cial dialogue in these countries contributed to their employment success through wage moderation, a low incidence ofindustrial conflict and social partners’ support for sometimes unpopular social security and labour market reforms.

Box 4.12. The case of Barbados

Barbados has had a history of tripartite social dialogue at national level on economic and labour market issues sincethe 1970s. The introduction of the IMF structural programme in 1991 accompanied by massive retrenchments, com-pelled social partners to set up the Committee on Social Partnership in 1992. Three successive tripartite agreements -protocols – were signed between 1993 and 2001. The Protocol for the implementation of a price and incomes policy,1993-95, was designed to get the economy out of crisis through various measures to minimise layoffs and social hard-ships. The parties agreed to avoid the IMF prescription of devaluation, to focus on competitiveness and productivity,to accept wage freezes until corresponding productivity gains were achieved, and to retain jobs. The agreement facili-tated painful political processes to implement difficult economic decisions and to achieve stabilisation and economicgrowth.

The success of the first protocol was followed by the second, covering 1995-97. Against the backdrop of moderate eco-nomic growth, it sought to strengthen the role of social dialogue in addressing economic and labour market issues.The negotiating parties moved away from wage freezes to wage restraints, and focused on increasing international com-petitiveness through higher productivity. The third protocol, covering 1998-2001, sought to consolidate the perceivedgains from partnership in economic and social development. It agreed to maintain a peaceful industrial climate, to re-duce income disparities through employment promotion and implement measures on social inclusion.

The periods covered by the protocols are associated with good economic performance: an average annual economicgrowth rate of 4 per cent, an average inflation rate close to 2 per cent, and a decline in unemployment from nearly 22per cent in 1994 to 9.8 per cent in 1998. Social partners and the Government acknowledged that the tripartite protocolagreements helped to resolve a major economic crisis. In addition, continuous social dialogue on major economic andsocial policy issues helped to promote stability and economic prosperity. The Barbados model of social dialogue hasbecome a major point of reference for policy reform processes in the Caribbean region.Source: World Bank (2001), Fashoyin (2001), ILO (2002a)

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Graph 4.2. Employment Growth Rate

Graph 4.1. GDP Growth Rate

Graph 4.3. Unemployment Rate

Source: European Commission (2002c) Tables 2, 3, 10

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This resource book introduced the concepts andforms, objectives, conditions and benefits of so-cial dialogue. In other words, it addressed the fol-lowing questions:

1. What is social dialogue?

2. What are the conditions necessary formeaningful social dialogue?

3. How is social dialogue applied in differentcountries?

4. What can social dialogue deliver?

The first question was dealt with in Chapter 1through the definition of the concept of social di-alogue and a description of the actors involved.ILO activities promoting social dialogue are alsointroduced. Chapter 2 answered the secondquestion by presenting a list of enabling condi-tions as well as discussing the pitfalls to beavoided. There are certain structural prerequi-sites for social dialogue to take place, such as re-spect for freedom of association, democracy, anappropriate legal framework and legitimate socialpartners. Other factors mentioned in Chapter 2,such as cohesive social partner organizations, theGovernment’s interest in social dialogue, the po-litical will of parties, societal acceptance, techni-cal competence and capacity to deliver, are notnecessarily prerequisites for social dialogue tostart, but they are conditions necessary for sus-tainable and successful social dialogue. The thirdquestion, how to engage in social dialogue couldonly be indirectly addressed in this resourcebook. This is because it is up to each country todevelop its own social dialogue regime that corre-sponds with its existing social and industrial rela-tions. To assist this process, the question is ad-dressed in general terms in Chapter 3, where atypology of the wide variety of forms of social dia-logue that exist in practice, is presented. Differentconfigurations of national social dialogue, such asrepresentation, the issues dealt with, as well asthe intensity of dialogue and institutional arrange-ments were discussed. The fourth question iscovered by Chapter 4 which discusses the widerange of benefits associated with social dialogue.The country examples in this chapter point outthat social dialogue at national level has been use-ful in reaching decisions/compromises on a widevariety of policy measures. These included mon-etary and fiscal policies, raising competitivenessby stimulating productivity and encouraging in-vestment, stabilisation of the economy after finan-cial or economic crises, privatisation of state

SOME CONCLUDING REMARKS

owned enterprises, reduction or increase in pub-lic expenditure for social programmes, introduc-tion of labour market flexibility without eroding ba-sic security, improved management of labourrelations and collective bargaining and finally there-building of the economy and society after polit-ical turmoil. The Chapter also explains why theILO promotes social dialogue. Social dialogue canpromote economic and social progress, and facil-itate policy reforms which are sustainable both so-cially and economically. It can replace the adver-sarial and confrontational relationship betweenlabour and management and bring them to thenegotiation table to talk about their common inter-ests. It is a democratic and legitimate way of pol-icy making by taking account of the views ofstakeholders in a society. It is particularly effectiveduring economic crises and transition periods toease social tensions and economic hardship.Stakeholders in society, the social partners with orwithout other representatives of civil society, canengage in dialogue with the Government to dis-cuss what they realistically can contribute to solvethe economic and social problems that theircountry faces.

Pursuing open dialogue between the Governmentand social partners is important for a democraticsociety. Social dialogue is a dynamic processwhich can be improved continuously, as thecountry examples given suggest. Institutionalbuilding of national social dialogue is important tofirmly establish social dialogue as part of politicaldecision-making processes within a country.However, it is ultimately the willingness and theability of the core tripartite actors, the social part-ners and the Government, that make social dia-logue meaningful and successful.

Policy recommendations

Challenges and opportunities for the Government

The Government has a crucial role to play in es-tablishing the legal and political environment fornational social dialogue. The Government shouldbe democratic and it should ensure the rule oflaw, by enacting and enforcing the fundamentalrights of freedom of association and collectivebargaining, and guaranteeing the independenceof social partners. The Government should alsopromote a system of inclusive decision-making bybeing open and willing to take into account theviews of social partners in national policy-making.Such government initiative is particularly impor-tant because of its responsibility in setting and im-plementing economic policies which have widersocial implications, such as combating inflation,maintaining economic growth, restoring the bal-

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ance of payments and reducing unemployment.It should trust and recognise social partners asfully-fledged legitimate partners who can makevaluable contributions in decision-makingprocesses. It should be open to the challenge ofsharing parts of decision-making and regulatorypower with the key stakeholders in society. Socialdialogue is an important means to promote trans-parency and good governance in public policy.The Government should also make sure that theoutcome of social dialogue, whether recommen-dations or social pacts, will be translated into con-crete policies to be implemented.

It is up to each country to decide what other rolesGovernment may play. How actively the Govern-ment should involve itself in the national social di-alogue processes depends on the traditional roleof the Government in social and industrial rela-tions. Whether it actively promotes or passivelysupports social dialogue, the Government shouldcontinuously acknowledge the importance of so-cial dialogue and show persistent commitment tothe process.

Challenges and opportunities for workers’ andemployers’ organizations

Traditionally, social partners have played a keyrole in collective bargaining processes on labourrelations issues. Social dialogue at national leveldefines a relatively new role for social partners incountries without social democratic traditions.

There are certain organizational factors that socialpartners should work on in order to engage effec-tively in national social dialogue. First, social part-ners need to ensure their representative legiti-macy, accountability and transparency. Inparticipating systematically in the decision-mak-ing processes of national policy, not only the Gov-ernment but also the social partners should bedemocratic. Second, their influence in tripartitesocial dialogue is enhanced if they have broad

and cohesive confederations. Fragmentation ofworkers’ or employers’ organizations reducestheir bargaining power and credibility.

Furthermore, there are technical factors whichhelp enhance the social partners’ position in na-tional social dialogue processes. First, it goeswithout saying that social partners should partici-pate in national social dialogue with an openmind. They should move beyond their immediateinterests and think in broader terms. Rather thangetting blocked by ideological rifts, they shouldtake a problem-solving approach and try to reachacceptable solutions by compromise. Second, tomake serious contributions to national policy dis-cussions, social partners should enhance theirunderstanding of broad economic and social pol-icy issues. Wide national social dialogue requiressocial partners to be able to engage in in-depthdiscussions on various macro and micro eco-nomic issues, which go far beyond traditionalwork-related issues.

Challenges and opportunities for all parties

Once the necessary structural and organizationalfactors mentioned above are in place, the key fac-tor is the willingness of the Government and thesocial partners to get national social dialogue un-der way. Trust and respect towards each other aspartners as well as a strong commitment to theconcept and process of social dialogue will lead tomeaningful social dialogue, which can eventuallyyield positive economic and social outcomes forall concerned. ■

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> Conclusions concerning tripartiteconsultation at the national level oneconomic and social policy

1. In the present conclusions, the term “tripar-tite cooperation” is taken in a broad senseand refers to all dealings between the govern-ment and the employers’ and workers’ organ-izations concerning the formation and imple-mentation of economic and social policy.

2. Tripartite cooperation is not an end in itself. Itis basically a means of cooperation among theparties with a view to:

(a) seeking to promote the pursuit of eco-nomic development and those of socialjustice.

(b) Reconciling, where necessary, the re-quirements of economic developmentand those of social justice.

3. Meaningful and effective tripartite cooperationcannot exist without a market economy anddemocracy. It can help to sustain the effectivefunctioning of both. Tripartite cooperation canhelp to sustain the effective functioning of themarket economy by dealing with its social con-sequences. Tripartite cooperation can alsohelp to strengthen democracy by allowing thesocial partners, who represent important seg-ments of the population, to participate in vari-ous ways in the policy formation and the deci-sion-making processes regarding economicand social policy.

4. While in some cases tripartite cooperation hasnot been as effective as some or all partieswould have liked, many different forms of tri-partite cooperation in different regions of theworld have generally been recognized as be-ing effective. This is true for those forms of tri-partite cooperation that occur at the nationallevel and cover a wide range of economic andsocial issues, for those forms that occur atsectoral, regional and local levels, as well asfor those forms that occur at the national levelbut deal with specific subjects such as occu-pational safety and health. Since tripartite co-operation involves the social partners in thepolicy formation and decision-makingprocesses, it has in effect often been a posi-tive means of achieving acceptable compro-mises between economic and social impera-tives. For this reason also, such compromiseshave the greatest likelihood of being effec-tively implemented, thus promoting socialpeace and harmony.

APPENDIX 1

5. Considerable differences may arise regarding,for example, the relative importance of formaland informal tripartite cooperation, the rela-tive importance of bipartite and tripartite in-dustrial relations or even regarding how sharpa distinction the parties wish to draw betweenthe area of competence of the public author-ities and that of social partners. However, tri-partite cooperation is an instrument that isflexible enough to be adapted to the most di-verse situations, provided that all the partieshave the firm will to do so.

6. At present, the major challenge of tripartitecooperation is to contribute effectively to re-solving the problems resulting in many coun-tries from the exacerbation of economic diffi-culties and the globalization of the economy,as well as from the structural adjustment pro-grammes that both have necessitated. Giventhe seriousness of these problems, their solu-tion requires a strengthening of tripartite co-operation at the national or other appropriatelevels. One of the roles of tripartite coopera-tion should essentially be to seek to reconcilethe imperatives of social justice with those ofenterprise competitivenss and economic de-velopment. One should bear in mind that tri-partite cooperation should be used not only inadverse but also in favourable economic cir-cumstances.

7. Since the globalization of the economy limitsthe parties’ capacity to resolve economic andsocial problems at the national level, interna-tional cooperation contributes to the solutionof these problems. The main objective of thiscooperation should be to minimize the detri-mental effects of the globalization of the econ-omy. Despite the main difficulties involved inestablishing such cooperation, there is apressing need to explore the ways and findthe means by which it can be achieved.

8. The need for tripartite cooperation to adapt toits environment does not alter the fact that itseffective functioning is subject to certain fun-damental conditions. Firstly, it is indispensa-ble that there be three distinct parties, inde-pendent of one another and exercisingdifferent functions. This presupposes full re-spect for the right to organize as set out in theFreedom of Association and Protection of theRight to Organize Convention, 1948 (No.87),and the Right to Organize and Collective Bar-gaining Convention, 1949 (No. 98). Secondly,it is essential that the parties be wiling to ex-amine problems together and to seek solu-tions that are mutually beneficial to them and

44

to the national community as a whole. Thispresupposes that all parties are willing to en-gage in dialogue with a sense of responsibilitythat allows them to go further than the narrowdefence of their own interests.

9. The smooth functioning of tripartite cooper-ation depends also on the parties beingstrong enough to carry out their functions ef-fectively. In particular, this presupposes thatthe organizations of employers and workersare independent, sufficiently representativeand accountable to their members; that theyare structured so as to be able to make thenecessary commitments and to ensure thatthey are carried out; and that they have thetechnical capacity to deal knowledgeablywith the subjects under discussion. It isequally important that there be a reasonableequilibrium of strength among the three par-ties. It is recognized that the State has animportant role to play in facilitating effectivetripartite cooperation.

10. In a number of countries the existence of anenabling institutional and procedural frame-work is instrumental – and sometimes essen-tial – to the effective functioning of tripartitecooperation and, in certain cases, to theemergence and identification of employers’and workers’ organizations.

11. The International Labour Organizationshould use all appropriate means and takeall appropriate measures including the fol-lowing initiatives in order to promote tripar-tite cooperation:

(a) encourage the ratification and/or the effectiveapplication of the Tripartite Consultation (In-ternational Labour Standards) Convention,1976 (No. 144); the Tripartite Consultation(Activities of the International Labour Organi-zation) Recommendation, 1976 (No. 152);and the Consultation (Industrial and NationalLevels) Recommendation, 1960 (No. 113);

(b) promote the will of governments, employers’and workers’ organizations to use tripartitecooperation;

(c) promote tripartite cooperation at the nationalor other appropriate levels. Its efforts in thisdomain should above all seek to ensure thefulfilment of the conditions necessary for thesmooth functioning of tripartite cooperation.

In this regard, special attention should bepaid to gathering, evaluating and disseminat-ing information, raising awareness, as well asoffering assistance to strengthen the capacityof governments and employers’ and workers’organizations to participate effectively in tri-partite cooperation.

(d) undertake, in line with the wish expressed bythe Copenhagen Summit calling for interna-tional cooperation, the very special role that its“mandate, tripartite structure and expertise”bestows upon it. In this regard, it is urgent toexplore the ways and find the means by whichthe International Labour Organization can ac-complish this task. The International LabourOrganization should in any case strengthen itscontacts and develop cooperation with theWorld Bank, the International Monetary Fund,the World Trade Organization and other inter-national agencies in order to better sensitizethem to the social consequences of their ac-tion. It should also increase its efforts aimedat convincing the World Bank and the Inter-national Monetary Fund of the need to consultsocial partners nationally on proposed pro-grammes of structural adjustment and to en-courage the use of tripartite cooperation inpolicy formation and decision-makingprocesses. It should also assist the nationalsocial partners in the course of such consul-tations if so required.

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> Resolution concerning tripartism andsocial dialogue

The General Conference of the InternationalLabour Organization,

Recalling the Constitution of the InternationalLabour Organization,

Recalling Conventions Nos. 87, 98, 144, 150,151 and 154, and the Recommendations accom-panying them as well as Recommendation No.113,

Underlining the founding of the InternationalLabour Organization in 1919 as a unique tripartitestructure with the objective of “universal and last-ing peace”,

Reaffirming the importance of the tripartite natureof the International Labour Organization, which isthe only international organization where govern-ments and representatives of workers’ and em-ployers’ organizations can freely and openly ex-change their ideas and experiences and promotelasting mechanisms of dialogue and consensusbuilding,

Stressing that among the strategic objectives ofthe International Labour Organization is thestrengthening of tripartism and social dialogue,

Aware that social dialogue and tripartism haveproved to be valuable and democratic means toaddress social concerns, build consensus, helpelaborate international labour standards and ex-amine a wide range of labour issues on which thesocial partners play a direct, legitimate and irre-placeable role,

Reaffirming that legitimate, independent anddemocratic organizations of workers and employ-ers, engaging in dialogue and collective bargain-ing, bring a tradition of social peace based on freenegotiations and accommodation of conflictinginterests, therefore making social dialogue a cen-tral element of democratic societies,

Recalling the numerous challenges and opportu-nities facing the world of work in the framework ofongoing globalization and the importance ofstrengthening the collaboration between the so-cial partners and governments in order to achieveappropriate solutions at national, regional and in-ternational levels and, most pertinently, in the In-ternational Labour Organization,

APPENDIX 2

Recalling the essential role of the social partnersin stable economic and social development, de-mocratization and participative development andin examining and reinforcing the role of interna-tional cooperation for poverty eradication, promo-tion of full employment and decent work, whichensure social cohesion of countries,

Stressing that social dialogue and tripartism aremodem and dynamic processes that have uniquecapacity and great potential to contribute toprogress in many difficult and challenging situa-tions and issues, including those related to glob-alization, regional integration and transition,

Emphasizing that the social partners are open todialogue and that they work in the field with NGOsthat share the same values and objectives andpursue them in a constructive manner; recogniz-ing the potential for the International Labour Of-fice to collaborate with civil society following ap-propriate consultations with the tripartiteconstituents,

Noting the valuable contributions of civil societyinstitutions and organizations in assisting the Of-fice in carrying out its work -particularly in thefields of child labour, migrant workers and work-ers with disabilities; and recognizing that forms ofdialogue other than social dialogue are most use-ful when all parties respect the respective rolesand responsibilities of others, particularly con-cerning questions of representation;

1. Invites the governments to ensure that thenecessary preconditions exist for social dia-logue, including respect for the fundamentalprinciples and the right to freedom of associ-ation and collective bargaining, a sound in-dustrial relations environment, and respectfor the role of the social partners, and invitesgovernments as well as workers’ and employ-ers’ organizations to promote and enhance tri-partism and social dialogue, especially in sec-tors where tripartism and social dialogue areabsent or hardly exist:

(a) invites workers’ organizations to continue toempower workers in sectors where represen-tation is low in order to enable them to exer-cise their rights and defend their interests;

(b) invites employers’ organizations to reach outto sectors where representation levels are lowin order to support the development of a busi-ness environment in which tripartism and so-cial dialogue can flourish.

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2. Invites the Governing Body of the Interna-tional Labour Office to instruct the Director-General to ensure that the InternationalLabour Organization and its Office within ex-isting resources of the Organization:

(a) consolidate the tripartite nature of the Organi-zation - governments, workers and employers- legitimately representing the aspirations ofits constituents in the world of work;

(b continue to this end their efforts to strengthenemployers’ and workers’ organizations to en-able them better to collaborate in the work ofthe Office and be more effective in their coun-tries;

(c) enhance the role of tripartism and social dia-logue in the Organization, both as one of itsfour strategic objectives and as a tool to makeoperational all strategic objectives, as well asthe cross-cutting issues of gender and devel-opment;

(d) promote the ratification and application of ILOstandards specifically addressing social dia-logue, as set out in the preamble above andcontinue to promote the ILO Declaration onFundamental Principles and Rights at Work;

(e) promote the involvement of the social part-ners in a meaningful consultative process inlabour reforms, including dealing with thecore Conventions and other work - related leg-islation;

(f) carry out in-depth studies of social dialogue incollaboration with the Organization’s con-stituents with a view to enhancing the capac-ity of labour administrations and workers’ andemployers’ organizations to participate in so-cial dialogue;

(g) reinforce the role and all the functions of theSocial Dialogue Sector within the Office and inparticular its capacity to promote social dia-logue in all the strategic objectives of the Or-ganization, and recognize the unique func-tions and roles of the Bureaux for Employers’and Workers’ Activities within the Office andstrengthen their abilities to provide services toemployers’ and workers’ organizations world-wide in order to enable them to maximize theoutcome of the Office’s work;

(h) promote and reinforce the tripartite activitiesof the Organization to determine its policiesand work priorities, and further develop tech-nical cooperation programmes and other

mechanisms with the social partners and gov-ernments to help strengthen their capacities,services and representation;

(i) reiterate in headquarters and in the field theimportance of strengthening the tripartitestructure of the International Labour Organi-zation and to ensure that the Office works withand for the constituents of the Organization;

(j) ensure that the tripartite constituents will beconsulted as appropriate in the selection ofand relationships with other civil society or-ganizations with which the InternationalLabour Organization might work.

InFocus Programme

on Social Dialogue,

Labour Law

and Labour

Administration

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