June 17, 2024
This chapter focuses on investigating Industrial Relations (IR) and trust in banking and finance, metal, and transport sectors across eight countries with a wide range of IR national regimes. These sector are examined in Sweden, Austria, Ireland as well as Central and Easter European countries as Czechia, Slovakia, Lithuania, Romania and Serbia.
First, the organised corporatism IR regime in Sweden (SE – North cluster) is characterised by high union density (65%) – the highest union density amongst the selected countries- and very high (88%) bargaining coverage as a result of sectoral bargaining with some adjustments at the company level.
A degree of variation in bargaining coverage across sectors does exist, ranging from 65% in banking to 90% in the metal sector, and almost 100% in the public transport sector (the overall transport sector including also the private part has a coverage of 87%, Kjellberg 2023). In addition, the presence of two or more social partners in each sector could make it difficult to maintain trust during joint regulations, despite a tradition of organised corporatism.
Second, the social partnership IR regime in Austria (AT) is part of the Centre-west cluster. Although union density is relatively low (26%), the compulsory membership to employers’ associations and the statutory extension of collective agreements result in almost 100% bargaining coverage in each sector. Accordingly, the statutory regulations and the social partnership tradition facilitate the development of relatively high levels of (mutual) trust between social partners in Austria.
Third, the liberal pluralist IR regime in Ireland (IE) is part of the West cluster. Although union density is similar to Austria, the voluntarist tradition resulted in bargaining coverage of only 35%. Moreover, as collective bargaining takes place at the company level in the selected sectors, there is variation in bargaining coverage ranging from circa 20% in metal to 30-40% in banking and 90% in the public transport sector.
Despite a voluntary social partnership between 1987 to 2008, the tradition of distributive bargaining associated with the ‘them and us’ attitude of the social partners combined with a lack of ‘statutory beneficial constraints’ to facilitate long-term cooperation makes it very difficult to develop mutual trust between social partners (Trif and Brady 2013).
Finally, the remaining five CEE countries have state-centred and fragmented IR regimes. Although only 11% of the labour force is unionised in both Czechia (CZ) and Slovakia (SK) and bargaining coverage is similar to other CEE countries (35% in Czechia and 24% in Slovakia), only in these two countries, which are part of the embedded liberal subcluster, some multi-employer bargaining still existed in the late 2010s (e.g. banking and transport in Czechia, and metal and transport in Slovakia).
There is also low(er) fragmentation of social partners in Czechia and Slovakia, which could make it easier to develop trust between these social partners than in the other CEE countries.
In the neo-liberal subcluster, the bargaining coverage varies from 30% in Serbia (RS) to 27% in Lithuania (LT) and 15% in Romania (RO). There was a surge in bargaining coverage from 14% in 2019 in Lithuania, as a result of negotiating new collective agreements in the public sector in 2021 (Blažiene 2023). In contrast, there was a steep decline during the 2010s in the two countries that had the highest bargaining coverage during the 2000s, namely Romania (from over 90%) and Slovakia (from over 50%) due to the undermining of the legal support for collective bargaining in the aftermath of the 2008 Great Recession (Trif et al. 2016).
It would be interesting to find out whether these major changes in bargaining coverage influence trust between social partners. Overall, there is greater variation in bargaining coverage across the selected sectors in the CEE cluster and Ireland than in Austria and Sweden.
The banking and finance sector roughly employs around 10% of the labour force in most selected countries (Ireland has a higher share), and large variation exists in the bargaining coverage across countries (Eurofound 2019).
First, in Austria, Slovakia, and Sweden, most employees were covered by either multi-employer and/or single-employer collective agreements before 2019 (table 6). Second, in Czechia and Ireland, between a third and a half of employees were covered mostly by single-employer agreements. Third, in Lithuania and Romania, a minority of employees (under 15%) were covered by collective (single employer) agreements.
Nevertheless, in Romania, a multi-employer agreement regulating wage increases and remote work was concluded in 2022, which increased bargaining coverage (UNI Europa 2022). Overall, the level of fragmentation of social partners is relatively low in the banking sector, as one or two unions and employers’ associations exist in most selected countries (except Ireland and Sweden) (Eurofound 2019). Finally, in terms of conflict, only Slovakia has experienced recent strikes in the banking sector (source: national project teams).
The metal sector roughly employs around 20-30% of the labour force in most of the selected countries (Ireland has a lower share), and there is a large variation in the collective bargaining coverage across the selected countries (Eurofound 2018b). First, in Austria and Sweden, over 90% of employees were covered by multi-employer and/or single-employer agreements.
Second, in Romania, half of employees were covered. Third, in Ireland, Slovakia and Czechia, only a minority of employees (20% or less) were covered by collective agreements. The fragmentation of trade unions in the metal sector is higher than in the banking sector in most countries, except in Lithuania and Slovakia (Eurofound 2018b). Finally, there have been recent strikes in Czechia, Slovakia, and Sweden in the metal sector (Source: national project teams).
The railway and urban public transport sector is employing less than 4% of the total labour force in each country, and there are more similarities than differences across the selected countries regarding the IR indicators that affect trust (Eurofound 2017). In the context of a high share of workers employed in large state-owned companies, bargaining coverage varied from 100% in Austria and Sweden to 80-90% in each of the other countries (Eurofound 2017).
Moreover, there was a relatively high fragmentation of trade unions (three or more organisations) in each country (Eurofound 2017). Furthermore, there have been recent strikes in the transport sector in most selected countries, except Serbia (according to the national teams; in Sweden, there were sympathy actions to support metal workers).
Overall, in the context of the weakening of IR institutions over the last three decades in most countries (Waddington et al. 2023), it is not surprising that there is great variation across the selected sectors, except in Austria and to some extent Sweden.
Given the IR sectoral features, one could expect that there would be more similarities across countries regarding trust between the social partners in the (public) transport sector compared to banking and finance, and metal, where there is greater variation across countries in the contextual aspects that affect trust. Nevertheless, there could be variation contingent on the sub-sector investigated in each country, particularly in the transport sector, as bargaining coverage is likely to be lower in the private (sub)sectors.
In summary, this chapter shows that there is still a degree of variation in IR features across the five clusters identified by Visser (2009), despite the weakening of IR institutions over the last few decades in most countries.
Still, in contrast to the prediction that IR regimes in CEE will ‘transition’ towards those in Western Europe, two decades after the first eastwards enlargement in 2004, this cluster has retained its unique characteristics with strong state intervention and relatively weak social partners with a capacity of mobilisation (Czarzasty 2024).
Furthermore, somewhat surprisingly, IR regimes in Western Europe clusters have become more similar to those in the Centre-East. The adoption of neo-liberal policies since the 1990s across Europe (Baccaro and Howell 2011) combined with increased government interventions to address external shocks, such as the 2008 financial crisis and the 2020 COVID-19 pandemic followed by the inflation crisis in 2021-2022, resulted in increased state intervention in IR.
This has weakened joint regulations by social partners in many countries across all five clusters (Waddington et al. 2023). Although a degree of variation still exists, it is unclear to what extent the decline in union density and collective bargaining coverage in Europe has affected the trust between social partners. However, it would be expected to find the highest (mutual) trust between social partners in the countries belonging to the North cluster, followed by Centre-West and the lowest in the Centre-East cluster.
Source: Bengt Larsson, Margaret Heffernan & Aurora Trif (2024), Preliminary conceptual and contextual report.
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