Abstract
Debates on flexicurity have largely focused on national policies and legislative frameworks, overlooking the role of sub-national regulation including collective bargaining at sector and company levels. Drawing on findings from a cross-national study of collective bargaining in metalworking since the late 1990s, the article demonstrates its distinctive contribution. Agreements mainly support internal forms of flexibility and promote employment, income and combination security. Collective bargaining’s capacity to address flexibility and security differs according to the institutional arrangements governing bargaining. Important differences are identified between multi- and single-employer arrangements and, under multi-employer arrangements, according to the presence and nature of effective mechanisms articulating the sector and company levels.
Introduction
Recent contributions to debates on flexicurity have criticised the near exclusive focus on the role of national-level public policies and legal frameworks governing labour markets and social protection, and called for attention to be paid to the role of sub-national levels, including sector and company, and to other modes of governance, including collective bargaining (Burroni and Keune, 2011; Ibsen and Mailand, 2011; Wilthagen et al., 2013). The contribution of collective bargaining, a cornerstone of labour market regulation in many European countries, at sector and company levels to the recent development of forms of flexicurity remains underexplored. Ways in which the bargaining agenda had been extended to address questions of flexibility and of security were, however, the focus of analysis of the agreements over employment and competitiveness which rose to prominence during the 1990s (Sisson and Artiles, 2000).
This article draws on the findings of a cross-national study of collective bargaining in metalworking, an internationally exposed sector widely seen as exercising a pattern-setting role in bargaining developments (Marginson et al., 2003; Traxler et al., 2008), to identify the ways in which collective bargaining has addressed questions of flexibility and security. The countries concerned are Denmark, Germany, Italy, the Netherlands and Slovakia – all of which have multi-employer bargaining leading to the conclusion of sector agreements, but with important institutional differences between them – and the UK, where single-employer bargaining, at company level, prevails. The time frame commences at the end of the 1990s, a point at which the emergence of agreements on, or ‘pacts for’, employment and competitiveness (PECs) was attracting considerable attention (Sisson and Artiles, 2000), and ends in early 2011 as collective bargaining in metalworking was grappling with the consequences of the crisis (Glassner et al., 2011). The data do not systematically allow the nature of any trade-offs between flexibility and security to be established; rather, by drawing on the framework proposed by Wilthagen and Tros (2004), the aim is to establish which forms of flexibility and which forms of security have been the more prominent in the agreements concluded between employers and trade unions over a 10-year period.
Criticism of the wider literature on flexicurity, and its lack of attention to collective bargaining, together with existing work on collective bargaining over flexibility and security, and the associated issues of competitiveness and employment, are reviewed first. The design of the research, method of analysis and data are then introduced. The findings are presented in a third main section, taking the sector agreements first, then the UK’s company agreements (which focus on the automotive segment of the sector) and following these with a cross-country comparison. The fourth section discusses the findings in the light of expectations identified in the literature review, and the final section concludes.
Collective bargaining over flexibility and security
One main thrust of Burroni and Keune’s (2011) critique of the substantial existing literature on flexicurity is the reductionist view taken of the sources of flexibility and security, limiting itself to national policies and legislative frameworks. Sub-national regulation at the regional, local territorial, sector, company and occupation levels, and associated infra-national variation, is largely overlooked. As a result the role of forms of governance other than the law and public policy instruments in framing flexicurity, including collective bargaining but also company policies and territorial networks, has also been neglected. This matters because the nature and extent of flexibility and security in particular countries will be influenced by actors and institutions at different sub-national levels, and by the forms of governance adopted (Crouch and Keune, 2012). Wilthagen et al. (2013: 356) refer to flexicurity as a ‘policy strategy’, ‘where policies also refer to practices at lower levels of authority such as the sector and company’. Some recent work has anticipated Burroni and Keune’s call for research on the various sub-national levels and governance mechanisms. Ibsen and Mailand (2011) and Schils and Houwig (2010) demonstrate the capacity of collective bargaining at sector level to contribute to flexibility and security, whilst Ilsøe (2012), on the issue of working time, and Pulignano and Keune (2014), in the case of multinational companies, do so for bargaining at company level. Company policies towards flexibility and security have also been the focus of recent enquiry (Eurofound, 2012; Rydell and Wigblad, 2011).
Whilst the literature makes reference to the positive role that social dialogue can play in developing flexicurity policies (e.g. European Commission, 2007; Wilthagen and Tros, 2004), the evidence produced is illustrative, mainly refers to the national level and relates to a few countries only. Wilthagen and Tros do observe that alongside decentralisation of labour market policy, decentralisation of collective bargaining arrangements in Denmark and the Netherlands has contributed to flexicurity outcomes in the two countries. Nonetheless, systematic research on social dialogue, and more particularly the role of collective bargaining at sector and company levels, remains a ‘missing link in flexicurity research’ (Ibsen and Mailand, 2011: 165). This is somewhat surprising since collective bargaining occupies an intermediate position between two other prominent modes of labour market governance, market regulation – which emphasises flexibility but which is weak in terms of security, and legal regulation in the form of labour law – which emphasises security but has traditionally been less accommodating of flexibility (Crouch, 2012). Moreover, the capacity of collective bargaining to address issues of flexibility and security has previously been established in work analysing the ‘pacts for employment and competitiveness’ (PECs) negotiated during the second half of the 1990s (Freyssinet and Seifert, 2001; Sisson and Artiles, 2000).
The origins of the predominantly company-level phenomenon of PECs lay in the search for new kinds of response to the economic and employment effects of the sharp recession of 1993–1994. PECs had two main, interrelated objectives: to minimise reductions in, or preserve or stabilise employment; and to reduce organisations’ costs and/or improve their ability to adapt to changes in market conditions. A key feature was some kind of commitment on employment in exchange for competitiveness enhancing measures. Amongst the range of issues which commonly featured on the agenda of PECs (see Appendix Table A1) were various measures to enhance working time, wage and functional flexibility and strengthen employment security. As a result, the bargaining agenda was enlarged to include issues such as work organisation and headcount which had, in a number of countries, tended to fall under managerial prerogative. The great majority of agreements were concluded at company or establishment level: measures on employment and competitiveness were found to feature in relatively few sector agreements (Sisson and Artiles, 2000).
According to Andersen (2005), the conduciveness of collective bargaining to generate outcomes which address both flexibility and security should be particularly apparent under the ‘organised’ (Traxler, 1995) or ‘centralised’ (Due et al., 1994) decentralisation which characterises the sector-based multi-employer bargaining arrangements found in much of Western Europe. By providing common standards on core issues such as actual or minimum wage rates and working time, sector agreements provide security for employees and, by placing a floor under competition between employers, for employers also. Flexibility is provided by the scope entailed for variation in application at company level according to business requirements within a common sector framework and/or the elaboration of a degree of choice for employees over working hours or between alternative forms of remuneration (pay, time off, deferred income). Furthermore, bargaining between employers and trade unions over decentralisation can, as in Denmark, result in compromises under which enhanced flexibility at company level is offset by broadening the scope of the sector-level agenda on security to social policy issues (Andersen, 2005).
Ibsen and Mailand (2011) demonstrate the capacity of sector-level collective bargaining to address flexibility and security and generate outcomes which combine both dimensions. They frame their study of printing and electrical contracting in three countries with differing collective bargaining institutions, Denmark, Spain and the UK, with reference to Wilthagen and Tros’s (2004) flexicurity matrix. This identifies four types of security – job, employment, income and combination – and four forms of flexibility – external numerical, working time, functional and wage – which by mapping the two dimensions against each other generates a 16-cell matrix. The focus of most empirical research concentrating on the national level has been on the sub-set of these cells concerning external forms of flexibility, and in particular on the link between labour market mobility and employment and income security. Ibsen and Mailand (2011) contend that examination of the role of collective bargaining is likely to bring to the fore the internal dimensions of flexibility, and hence draw attention to other cells in the matrix. Analysing the two most recent agreements concluded up to 2008 in each sector and country, their findings show that issues of flexibility and security were prominent on the agenda in Denmark and the UK, but noticeably less so in Spain where legislative provisions curtail the scope of the agenda and reduce the incentive to negotiate. As anticipated, agreements in all three countries engaged with the different forms of internal flexibility, and also with employment (except Spain), income and combination security.
In accounting for differences between the three countries, Ibsen and Mailand point to the role of institutional arrangements, such as the differing boundary between legal regulation and collective bargaining. More generally, institutional differences in bargaining arrangements are likely to result in cross-country variation in the extent to and ways in which flexibility and security feature on the bargaining agenda. Three kinds of institutional variation amongst sector-based, multi-employer bargaining arrangements are potentially relevant (Arrowsmith and Marginson, 2008; Ilsøe et al., 2007; Nergaard et al., 2009). First is whether multi-employer arrangements specify procedural mechanisms which enable the sector level to effectively govern developments at the company level. Effective articulation mechanisms are a feature of arrangements in central Western and Nordic Europe, but – with the exception of Italy – not amongst the Mediterranean countries of Southern Europe. Where effective articulation mechanisms are in place, the sector-level parties can be expected to come under more pressure from their respective constituencies to address issues of flexibility and security than where such mechanisms are weak or non-existent, and negotiators at company level have greater scope to pursue their own agendas.
Second, there is an important difference in the form that articulation mechanisms take. Ilsøe et al. (2007) contrast the ‘controlled’ and ‘centralised’ forms of decentralisation which characterise Germany and Denmark, respectively, and relate this to the distinction between dual and single channel representation systems. Nergaard et al. (2009) similarly contrast Austria and Norway. Under ‘controlled’ decentralisation trade unions are cautious about devolving negotiating competence to independent works councils over which they can exercise no formal influence. Scope for negotiation at company level is restricted or controlled, typically through the use of opening clauses in the sector agreement. Articulation is achieved through ‘delegation’. Under ‘centralised’ decentralisation the union is the representative agent of the workforce at both sector and company levels, and there is a two-way relationship between the different levels. Unions are more confident about devolving negotiating competence to company level, particularly given widespread presence of union representatives in companies (as in Denmark and other Nordic countries). Devolution has resulted in two-tier bargaining, with some areas of bargaining competence moving to the company level, whilst others are retained at sector level. Articulation is achieved through ‘demarcation’, supplemented by the strength of the two-way relationship between the central and local union levels. Italy, where the 1993 cross-sector agreement (revised in 2011) specifies the respective bargaining competence of the sector and company levels, represents another instance of two-tier bargaining with articulation realised through ‘demarcation’. An important difference with the Nordic countries is that union representatives are much less widespread at company level in Italy, and representative structures are ‘de facto’ rather than ‘de jure’ single channel (Baccaro and Pulignano, 2011), making unions relatively more cautious about devolving negotiating responsibility to company level. In sum, under delegated arrangements, a more restrictive bargaining agenda on flexibility and security might be expected than under demarcated arrangements, because of union caution under the dual channel representation associated with the former.
Third, in some countries, such as Germany, sector agreements are issue-specific, with separate agreements on different issues, whereas in others, including Denmark and the Netherlands, there is a single ‘package’ agreement in which the range of issues are addressed. Package agreements are likely to provide greater scope for trade-offs between flexibility and security measures.
A further institutional difference is that between multi-employer and single-employer bargaining, where by definition the procedural security afforded by a sector agreement is missing and outcomes are much more dependent on local power (im)balances than under multi-employer bargaining. As with poorly articulated multi-employer bargaining arrangements, trade unions might be more reluctant to engage in negotiations over flexibility and security because of the greater downside risk involved. Alternatively, where agreements are concluded, employers may be able to secure a more advantageous balance between flexibility-enhancing measures and security commitments.
Research design and methods
The research involved studies of developments in collective bargaining, including on flexibility and security, in the metalworking sector in six countries: Germany, Denmark, Italy, the Netherlands, Slovakia and the UK. In terms of developments at company level, the focus was on negotiations in the automotive manufacturing part of the sector. Flexibility and security were already prominent on the negotiating agenda in automotive manufacturing by the end of the 1990s, with all the major European- and North American-owned companies negotiating PECs at major sites across Western Europe (Zagelmeyer, 2001). Multi-employer bargaining resulting in sector-level agreements takes place in the first five countries, but not in the UK, where the sector agreement was terminated in 1990. Collective bargaining coverage ranges from over 90% of the workforce in Italy (until Fiat’s 2011 withdrawal from the agreement) and the Netherlands, as a result of de facto and de jure extension practice respectively, through 85% in Denmark, 67% in western Germany (50% in the east) to just under 20% in Slovakia. Coverage in the UK is about 35%. The data were derived from analysis of documentation, including sector agreements themselves and published analyses of these and of company agreements, and interviews with employers’ association and trade union officials and industry experts. The aim was to track the development of collective bargaining at sector or, in the UK, company level from the end of the 1990s up until early 2011.
The institutional arrangements governing collective bargaining in metalworking in the six countries are shown in Table 1. The five countries in which there is sector-level bargaining covering metalworking present variation in the institutional arrangements of multi-employer bargaining identified above, whilst the UK provides a contrasting case of single-employer bargaining. First, there are well-specified procedural rules and/or conventions governing the relationship between bargaining at the sector and company levels in Germany, Denmark, Italy and the Netherlands: in other words, there are effective articulation mechanisms which ‘organise’ decentralisation. These are determined by the sector-level employers’ associations and trade unions in Germany, Denmark and the Netherlands, but by the cross-sector employers’ and trade union organisations in Italy. In Slovakia, however, there are no formal rules governing the relationship between negotiations at the sector and company levels, hence decentralisation cannot be said to be ‘organised’. Second, articulation between levels is achieved in differing ways: through delegation in Germany and the Netherlands, but through demarcation under two-tier arrangements in Denmark and Italy. Third, sector agreements take the form of ‘package’ deals in Denmark, the Netherlands and Slovakia but are issue specific in Germany. Italy had separate agreements for wages and for other matters including job classifications and wage structures until 2009; there is now a single agreement.
Institutional arrangements governing collective bargaining.
There are some further differences relating to the sectorial application of, and the non-adherence of some large employers to, agreements between the five countries, although these are not expected to be an important influence on the findings. In Germany, Italy and the Netherlands a single (set of) agreement(s) covers the breadth of the sector, whereas in Slovakia there are separate agreements for the mechanical and electrical engineering parts of the sector: findings relate to mechanical engineering. In Denmark, metalworking comes under the agreement covering the wider manufacturing sector. The Netherlands is characterised by separate agreements for larger (> 30 employees) and smaller companies: findings relate to the former. There is no such differentiation in the other four countries. Prominent large companies stand outside the sector agreement in each of the countries, although the scale and implications of this vary. In Germany, VW has its own company agreement whilst the same applies to Philips in the Netherlands and, outside of metalworking but within manufacturing, Novo Nordisk in Denmark: in practice there is informal coordination between developments in these large companies and those in the sector agreement. In Italy, as of 2011, Fiat removed its car manufacturing operations – and those of some of its suppliers – from the sector agreement, with the situation very much in flux. In Slovakia, Asian-based vehicle manufacturers are amongst a larger number of bigger companies which stand outside of the sector agreement: there is no informal coordination.
The approach taken is to track the introduction of new provisions or changes to existing provisions in agreements relating to different dimensions of flexibility and security, respectively. The findings therefore reveal the direction of travel of sector- and company-level collective agreements over the 2000s. They do not indicate the ‘state of play’ on a particular dimension of either flexibility or security: a provision which is of relevance to one or the other (or both) and which is longstanding will not register, since there has been no new development over the period. This approach addresses what would otherwise constitute a substantial problem: any assessment of the ‘state of play’ would also have to take account of the extent to which the different dimensions of flexibility and security are the subject of legal regulation, and hence less open to collective negotiation. This would have extended the remit of the study beyond what was feasible given the resources available. In practice, differences in legislative influence on the scope for collective bargaining amongst the six countries in the present study are not that great. Slovakia’s extensive labour code might suggest an exception, but reforms since 2000 have weakened provisions on security whilst enabling contractual flexibility. Nonetheless, a complicating factor is that legal regulation can, and does, change: the research was sensitive to instances where this occurred and identified ‘knock on’ effects in terms of subsequent changes to collective agreements.
The provisions in collective agreements on flexibility and security were classified according to a schema adapted from Ibsen and Mailand (2011). Six substantive categories were specified, each relevant to flexibility and/or security: pay; working time; training and education; employment measures; life-course measures/social entitlements; provisions for workers on atypical contracts. A seventh substantive category, capturing crisis-response measures, overlapped with the other six. Table 2 indicates the seven substantive categories and the flexibility and/or security dimensions most likely to be associated with each. In addition, any procedural changes to the agreements over the period were identified.
Classification of collective agreement provisions relating to flexibility and security.
Source: Adapted from Ibsen and Mailand (2011).
Findings
Sector agreements
Findings from the five countries with sector agreements are reviewed first, before introducing those from the UK where single-employer bargaining prevails. A first main finding is that sector-level agreements do indeed address issues of flexibility and security: these featured in agreements in all five countries. Table 3 indicates the agreements in the five countries addressing each of the seven substantive categories and indicates whether the provisions address flexibility and if so which form, security and if so which form, or both flexibility and security, again indicating which forms. 1 The pattern is summarised in Table 4.
Forms of flexibility and/or security addressed by agreements on seven substantive issues.
Note: The assumption is that unless otherwise indicated, the agreements reported provide for enhanced flexibility and improved security. (-ve) highlights agreements where the flexibility is constrained or the type of security is weakened.
Agreements addressing flexibility and/or security on seven substantive issues.
F = flexibility dimension.
S = security dimension.
F-S = both flexibility and security dimensions.
Featuring in automotive manufacturers company-level agreements.
more than one agreement signed in the same year.
Whether agreements address primarily one form of flexibility and/or one form of security varies across the six substantive categories (crisis-induced measures are considered separately below). Those involving provisions on pay concern either wage flexibility or income security but not both, whereas those addressing working time involve working time flexibility or combination security or both. Provisions on training and education all address both functional flexibility and employment security. Most of the provisions on employment measures address both flexibility (variously wage, working time and functional) and security (variously income and employment), although three agreements are focused on (employment) security only. Provisions on life-course measures and social entitlements all focus solely on security, either combination and/or income. Provisions relating to atypical workers concern either flexibility (external numerical) and security, or the latter only (employment and income). The two categories which are most likely to feature provisions addressing forms of both flexibility and security are employment measures and training and education, found in all five and four (excepting Slovakia) of the countries, respectively.
Over time, discernible trends are evident in two of the five countries. Successive agreements in Germany have progressively opened up wage flexibility (Table 4). A particular feature in Italy is provisions in recent agreements which have effected deterioration in income and combination security (Table 3).
Second, concerning flexibility, Table 5 shows that provisions addressing internal forms are prominent. The most prevalent forms addressed are working time and functional flexibility, which feature in agreements in all five and four of the countries (excepting Slovakia), respectively. Provisions enhancing wage flexibility are largely confined to Germany. External forms of flexibility do also feature, although much less so than internal forms. Agreements in three countries have addressed external forms, in contrasting ways: improving terms and conditions of temporary (agency) workers (Italy and the Netherlands) and according priority to insiders under recession conditions (Slovakia).
Forms of flexibility and/or security addressed by agreements in six countries.
Featuring in automotive manufacturers’ company-level agreements.
more than one agreement in the same year.
○ = no agreement signed addressing the specific flexibility or security dimension.
• = agreement signed cOntaining the specific flexibility Or security dimensiOn.
Third, turning to security, Table 5 indicates that provisions addressing income, employment and combination security are widespread, being found in all five countries. Combination security can be negatively affected by measures enhancing working time flexibility, with examples of this in agreements in both Germany and Italy (Table 3). As anticipated, job security does not feature in agreements in any of the countries. Comparing the top and bottom panels of Table 5, the security dimensions are addressed more extensively by provisions in agreements than the flexibility ones.
Fourth, sector agreements have been mobilised in all five countries to elaborate measures aimed at addressing the effects of the economic crisis, confirming previous findings for the period up until mid-2010 on the comparatively high incidence of crisis-induced negotiations at sector level in metalworking (Carley and Marginson, 2011). Amongst the crisis-induced measures, the agreements address either security only (employment or income) or both flexibility (variously wage, working time and functional) and security (employment and/or income). Wage and working time flexibility feature in three countries (Germany and Slovakia in relation to short-time working and Italy in relation to the introduction of a hardship clause), whilst employment security features in all five, although linked to a variety of measures.
Fifth, changes in statutory provision to life-course measures and social entitlements (variously childcare arrangements, parental leave and pay, pregnancy leave and phased and early retirement) with implications for provisions in agreements had occurred in Denmark, Germany, the Netherlands and Slovakia, whilst Italy saw changes in statutory provisions on the utilisation of and quotas for temporary workers with implications for provisions in the sector agreement. Three types of response were evident: clauses in the sector agreement were dropped, since these had been overtaken by changes in statutory provisions (childcare arrangements [Netherlands 2007], unpaid parental leave [Slovakia 2005] and regulation of temporary workers [Italy 2008]); provisions in agreements were introduced or strengthened to compensate for a deterioration in statutory entitlement (phased and early retirement: Germany 1998, 2000 and the Netherlands 2006); and improvements were negotiated to provisions in the agreement to keep them in advance of improvements to statutory entitlement – an ‘escalator’ effect (parental leave and pay; pregnancy leave: Denmark 2004, 2007).
Sixth, procedural flexibility has increased in Germany, Italy and the Netherlands. The changes have tended to reinforce the respective principles of delegation or demarcation on which organised decentralisation is based. In Denmark there was already a high degree of procedural flexibility (since 1993 actual wage levels in manufacturing have been negotiated at local level, with the sector agreement specifying minimum and fall-back wages) and this has been maintained, whereas in Slovakia there is no mechanism articulating the sector and company levels. The 2004 Pforzheim agreement in Germany introduced the largest procedural changes in 20 years, changes which involved a double movement. The agreement established a general framework for opening clauses and time limited the scope of derogations for employment preservation reasons, and reasserted control by the parties to the agreement over the use of opening clauses. In other words it re-regulated de facto developments at company level. In Italy, the 2009 inter-sector agreement – which was contested (and not signed) by the largest trade union confederation – redrew the demarcation between the negotiating competence of the sector and company levels to give greater emphasis to the latter, a development subsequently confirmed in the 2011 inter-sector agreement signed by all the parties. Meanwhile 2010 saw the introduction of a clause allowing companies to derogate from the wage provisions of the sector agreement in case of financial hardship. The Netherlands has seen growth in the number of clauses in the agreement open to derogation, although take-up has been low.
Company agreements: The UK
Table 3 additionally includes provisions of agreements amongst major companies in the automotive part of the UK’s metalworking sector. 2 The pattern is summarised in the final column of Table 4. As in the other five countries, issues of flexibility and security have been substantially addressed. There are multiple examples of agreements addressing each of the first six categories of substantive measures, but with a noticeable emphasis on four: pay, working time, employment measures and life-course measures and social entitlements. In contrast to the other five countries, some of the pay measures address functional and working time flexibility, as well as wage flexibility, reflecting the possibility under single-employer bargaining of linking general wage increases to a range of flexibility outcomes. Working time measures are more heavily focused on flexibility only than in the other five countries and, if anything, associated with a deterioration in (combination) security. Training and education measures are relatively thin on the ground, in contrast to the other countries, and relate to (employment) security only. Similar to the other five countries, employment measures involve varying combinations of forms of both flexibility and security, and life-course measures and social entitlements address combination security. Provisions on atypical workers concern either flexibility only (external numerical) or both flexibility and security (employment). Employment measures are the category where provisions most often concern both flexibility and security.
Over time four developments are apparent: forms of wage flexibility, including lower rates of pay for new starters and introduction of individual performance-related pay, have been further enhanced; working time flexibility has been further widened; employment measures concluded as part of package agreements have extended beyond internal flexibility measures to external ones (outsourcing); and reform of pension schemes has become a focus of negotiation, with negative effects on combination security.
Concerning flexibility, the final column of Table 5 indicates that provisions addressing internal forms are prominent with a particular emphasis on wage flexibility, followed by working time and functional flexibility. External forms of flexibility do also feature, and extend to employment measures as well as those on atypical workers. As to security, the emphasis is on employment security. Combination security also features, including provisions which affect it negatively as well as others which strengthen it. In contrast to the other countries, there are no provisions relating to income security. In common with them, job security does not feature.
Collective bargaining was extensively mobilised to introduce measures which addressed the effects of the economic crisis. Under single-employer bargaining wages are negotiated at company level: reflecting this, pay freezes (wage flexibility) were a widespread feature, and in a number of cases part of a package of measures which also involved increasing working time flexibility and providing employment security. Statutory improvements to social entitlements also occurred in the UK, and resulted in negotiated improvements to provisions on maternity leave and pay in agreements in some companies, as occurred with parental leave and pay in Denmark.
Cross-country comparison
Amongst the five countries with sector-level negotiations, the bargaining agenda on issues of flexibility and security – as indicated in Table 4 by the number of agreements and their range across the six substantive issues – is most extensive in Denmark, Italy and (slightly less) in the Netherlands, somewhat less so in Germany and least extensive in Slovakia. The agenda in company-level negotiations in the UK is also extensive. Institutional differences in multi-employer bargaining arrangements amongst the first five countries help account for the varying extent of the bargaining agenda over flexibility and security. The contrast between Denmark, Germany, Italy and the Netherlands, on the one hand, and Slovakia, on the other, relates to the presence of effective articulation mechanisms which, in different ways, organise decentralisation in the first four and the absence of these in the latter. A particular feature of the more limited bargaining agenda in Slovakia is the relative lack of attention to the flexibility dimension (Table 5). This is consistent with forms of flexibility at company level being unconstrained by any provisions in the sector agreement. Working time flexibility features only as part of a package of measures concluded to address the effects of the crisis. In contrast, in the presence of effective articulation mechanisms, sector agreements in the other four countries serve to both constrain and facilitate negotiations over flexibility and security at the company level. The extent to which they do so is, however, shaped by the form that organised decentralisation takes.
Table 5 indicates that sector-level bargaining addressing flexibility and security is more extensive in Denmark and Italy, where articulation between the sector and company levels is achieved through demarcation, than it is Germany, where it is secured through delegation. The difference between demarcation and delegation is not, however, clear cut, as the Netherlands, where delegation also applies, is closer to the first two countries than the last. Flexibility dimensions have not featured quite as prominently in the Netherlands as in Denmark and Italy. In Germany, the security dimensions have featured less prominently than in the other three countries, whilst wage flexibility is prominent and functional flexibility less so. The expectation that union caution associated with dual channel representation, under delegated arrangements, leads to a more restrictive bargaining agenda on flexibility and security than where single channel representation and demarcation apply receives support in the case of Germany. As between Italy and Denmark bargaining on the security dimension is most extensive in the latter. The difference might arise from the differing substantive scope accorded to the sector level in the two countries, which in addition to working time duration, training, sickness pay and pensions in both, includes minimum wages and maternity and parental leave in Denmark, and general, cost-of-living, wage increases in Italy.
Whether collective agreements are issue-specific, as in Germany, or ‘package’ deals, as in Denmark and the Netherlands, helps to further account for cross-country differences. Training and/or life-course measures, which enhance employment and combination/income security respectively, feature as elements in periodic wage agreements on a regular basis in both Denmark and the Netherlands. In contrast, in Germany, where such linkages are not possible in wage agreements, life-course measures in particular are less in evidence. Here the security dimensions are comparatively less prominent than in the other three countries, and measures on wage flexibility have become increasingly prominent. In Italy too, such linkages are not as evident, reflecting the fact that until 2009 wage negotiations at sector level were separated from those on other matters.
The fundamental institutional contrast between single-employer and multi-employer bargaining arrangements is reflected in four main differences between the UK, on the one hand, and – setting Slovakia to one side – the four countries where multi-employer arrangements are based on clear procedural rules articulating the sector and company levels, on the other. First, package agreements, including the periodic renewal of PECs, are more common under company bargaining in the UK than under sector bargaining in the other four countries (Table 4). Second, the nature of package deals where pay is involved differs. In the UK pay is an integral part of company-level package deals which typically also address flexibility (Table 3). Prior to 2009, this involved wage increases above the rate of inflation in exchange for enhanced internal (and external) flexibilities. In contrast, insofar as pay features in package deals concluded at sector level, as in Denmark and the Netherlands, it is linked to measures which address security. The package involves wage moderation (limiting wage increases to at or near inflation) in exchange for improvements in combination and/or income and/or employment security. Third, measures on training are relatively absent on the company-level bargaining agenda in the UK, as compared with the sector-level agenda in the other four countries (Table 4). This might be accounted for in terms of the nature of the training involved, with sector agreements focusing on more general skills and competencies which are portable – aspects which are difficult to address in company-level negotiations, and which are notoriously under-provided for where, as in the UK, training is largely company-based and focused. Fourth, improvements to security seem a less prominent outcome amongst company-level agreements in the UK, than is the case amongst sector-level agreements in the other four countries (Table 5). This relates to pay, rather than security, being a more prevalent focal point against which increased flexibilities are negotiated.
Discussion
By demonstrating the capacity of collective bargaining to address issues of flexibility and security, at sector and company levels, the findings confirm the importance of this significant mode of sub-national regulation as a source of both flexibility and security in the labour market. The findings on the outcomes of sector negotiations in Denmark, Germany, Italy and the Netherlands (and to less extent Slovakia) confirm the capacity of sector agreements to address these issues. In doing so, these findings from metalworking corroborate those of Ibsen and Mailand (2011) concerning sector agreements in two other sectors, but differ from those of the earlier studies analysing PECs which concluded that the contribution of sector agreements was limited (Freyssinet and Seifert, 2001; Sisson and Artiles, 2000). The present findings on the outcomes of company bargaining in the UK are consistent with those from the work on PECs, and underline its continued potential to address issues of flexibility and security.
One possibility in accounting for the discrepancy over the role of sector agreements between the two sets of studies is that issues of flexibility and security have only featured on the agenda of sector negotiations in recent years. This can, however, be discounted since there are relevant provisions in agreements in Denmark, Germany and the Netherlands which date back to the late 1990s. More plausible is that the focus on package deals, including measures addressing both competitiveness and employment, in the literature on PECs led to role of sector agreements being discounted. As the present findings show, whilst package agreements addressing forms of both flexibility and security are not unknown at sector level (and became prominent in response to the economic crisis), they are less widespread than at company level. Conversely, a sector agreement which includes improvements in one or other forms of security as an offset to a moderate wage increase will have featured in the present analysis, but is unlikely to have been deemed a PEC in the earlier work.
As anticipated, internal forms of flexibility are prominent amongst the measures specified in collective agreements. Consistent with Ibsen and Mailand’s (2011) findings, this underlines the capacity of collective bargaining to address the sub-set of cells in Wilthagen and Tros’s (2004) flexicurity matrix which relate to different forms of internal flexibility (wage, working time, functional) as distinct from those concerning external flexibility, which has tended to be the focus of much flexicurity research. Concerning security, provisions relating to employment security were the most prominent, with those on combination and income security also widespread. This differs slightly from Ibsen and Mailand’s (2011) findings, which indicated provisions on combination and income security to be more widespread than those on employment. This can be attributed to two factors: sectoral differences and time frame. Restructuring – which is likely to exacerbate concerns over employment security – has been a central, ongoing feature of the metalworking sector throughout the 2000s. Arguably it has been more extensive, and intensive, than in Ibsen and Mailand’s printing and electrical contracting sectors. The crisis has also elevated concerns over employment security, and its impact is captured in the present findings. The finding that job security does not feature amongst the measures specified signals the extent to which mobility within the firm, or the sector, or the wider labour market has become the accepted norm amongst negotiators. Debate and research over national-level public policies have tended to focus on employment and income security and the link with labour mobility (external flexibility) (Burroni and Keune, 2011). In contrast, measures addressing combination security – involving inter alia maternity and parental leave and pay, pensions and early and phased retirement – emerge as an important focus of collective bargaining at sector and company levels. This is consistent with the growing role that collective bargaining is assuming in addressing social policy issues (Glassner and Keune, 2012).
Collective bargaining at sector and company levels was mobilised to address the effects of the crisis, which was particularly acute in metalworking during 2009 and 2010. The relevant agreements included a range of provisions, and are notable for the extent to which they address considerations of both flexibility (foremost wage and working time, but also functional) and security (above all employment, but also income), through a package of measures. In three of the countries – Germany, Italy and Slovakia – a further element of packages aimed at maintaining employment through shorter working time was statutory funding to companies which cushioned the impact of the shorter hours worked on pay (Glassner et al., 2011). This statutory element was conditional on prior collective consultation or agreement with workforce representatives, indicating how regulation at sub-national level – in this case collective bargaining – can play an important role in effecting public policy measures. More generally, the findings throw interesting light on the relationship between statutory provision and collective bargaining. Faced with changes to statutory provision, collective agreements can either act as a substitute – with clauses which address issues now subject to statutory provisions being dropped, or improvements to the provisions of agreements where statutory provision is weakened – or as a complement – with collectively agreed provisions improving on strengthened statutory provision. Schils and Houwig (2010) draw attention to a further possibility, which is the introduction of statutory provisions which invoke collective negotiation as a mechanism to vary the standards specified, as under the Netherlands’ 1999 employment contract law.
The findings underscore the impact that institutional arrangements for collective bargaining have in shaping its capacity to address issues of flexibility and security. The contrast between outcomes under multi-employer bargaining, where there are effective procedural rules governing the relationship between the sector and company levels, and those under single-employer bargaining bears out the expectation that employers may be able to secure a more advantageous balance between flexibility-enhancing measures and security commitments under the latter. This is for two reasons. First, because outcomes under single-employer bargaining are much more dependent on local power (im)balances and the position of unions is less secure in the absence of the protection that a sector agreement can provide. Second, measures addressing security, such as training related to employability and social entitlements such as parental leave, typically pose a collective action problem for individual employers because of risks such as poaching of workers with general skills or incurring relative labour cost disadvantage. Addressing such issues at sector level, through a multi-employer agreement, overcomes the collective action problem. Accordingly, company agreements in the UK tend to feature flexibility measures more, and security ones less, than their sector-level counterparts in Denmark, Germany, Italy and the Netherlands.
Amongst the five countries where multi-employer sectorial agreements are concluded a crucial distinction is between those with effective procedural mechanisms articulating the sector and company levels (Denmark, Germany, Italy and the Netherlands) and Slovakia, where there is no such mechanism. As a result, bargaining over flexibility and security issues is less developed in Slovakia than in the other four countries, and largely absent in respect of flexibility. Outcomes at company level, which are unconstrained by provisions in the sector agreement, are hence dependent on local power (im)balances in much the same way as under single-employer bargaining in the UK. A similar contrast emerges from Nergaard et al.’s (2009) study of collective bargaining and variable payments systems in metalworking, which drew a contrast between Austria and Norway, on the one hand, which both have clear procedural rules governing the relationship between the sector and company levels, and Spain on the other, which does not. In the absence of any effective mechanisms articulating the two levels, trade unions in Spain have been markedly more reluctant to embrace the prospect of variable payments systems in sector negotiations than their Austrian and Norwegian counterparts, and outcomes at company level have been shaped by local power relations in much the same way as under single-employer bargaining in the UK, which was also included in the study. Possibly, this might become the case in metalworking in Italy, following Fiat’s exit from multi-employer bargaining arrangements in metalworking (and nationally) in late 2011 (Pedersini, 2012): as yet it is too early to assess the extent of the disruptive effects.
The present study builds on Nergaard et al.’s (2009) analysis by differentiating between types of articulation mechanism, distinguishing between countries where these take the form of delegation under single-tier bargaining, as in Germany and the Netherlands, and those where mechanisms are based on demarcation under two-tier bargaining, as in Denmark and Italy. Delegation is associated with dual channel, whereas demarcation is associated with single channel representation. Nergaard et al. found that under the dual channel arrangements which prevail in Austria, because trade unions are unable to exercise formal control over separately constituted works councils at local level the sector agenda concerning variable pay is more restricted, and provisions are subject to stricter controls by the sector parties, than under Norway’s single channel representation arrangement. Similar findings on working time, comparing Germany’s dual channel arrangements with Denmark’s single channel, are reported by Ilsøe et al. (2007). As anticipated, the bargaining agenda over flexibility and security issues is more extensive under demarcation in Denmark and Italy than under delegation in Germany, but this is not also the case for the Netherlands where the bargaining agenda is more similar in its breadth to those in Denmark and Italy. This similarity may well reflect the influence of a further consideration, which is whether sector negotiations can result in package deals, as in the Denmark and the Netherlands (and more recently Italy), or whether agreements are constrained to be issue-specific, as in Germany.
Conclusions
The extensive literature on flexicurity has been criticised for its reductionist view of the sources of flexibility and security in the labour market, restricted to national policies and legislative frameworks (Burroni and Keune, 2011). By demonstrating the extent to and evolving ways in which a key sub-national mode of labour market governance, collective bargaining at the sector and company levels, has addressed issues of flexibility and security over the period since the late 1990s, the article complements the findings of other recent work on the role of collective bargaining at these levels (Ibsen and Mailand, 2011; Pulignano and Keune, 2014). Whilst clauses in agreements do not of themselves guarantee extensive uptake, they do signal the intentions of employers and trade union negotiators to foster both flexibility and security. As such, the findings support the thrust of Burroni and Keune’s critique. They do so for a sector, metalworking, which is highly exposed to international competition within and beyond Europe – thereby putting a premium on adaptability – but which is also characterised by workforce skills which are costly to replace and a workforce which is relatively well organised – also placing a premium from the perspective of both employers and workers on security.
The findings underline that collective bargaining brings internal forms of flexibility to the fore, as compared to the emphasis on external forms which results from focusing on national policies and legislative frameworks. The contrast recalls that between status and contract as, respectively, internal and external sources of flexibility, incisively elaborated by Streeck (1987) a quarter of a century ago. The preoccupation in prevailing debates on flexicurity with contract as a source of flexibility has been at the expense of failing to recognise the potential offered by collective bargaining, which depends on status rights and, in turn, is adept at delivering forms of flexibility resting on status-based exchanges. Regarding security, the centrality of employment security amongst the issues addressed in sector agreements reflects the need to address the social consequences of the widespread and ongoing restructuring which characterises metalworking. For similar reasons, measures addressing income security are also relatively prominent. For both, the instruments mobilised in collective agreements are different to those which characterise national labour market and social welfare policies, with relatively more emphasis on measures to sustain (current) employment and maintain (wage) income under collective agreements, reflecting the influence of status considerations, in contrast to the more contractual emphasis on employability and income replacement under national policies. The security provisions of collective agreements also differ in the extent to which life-course measures and social entitlements, and therefore combination security, has become a focal point. This underlines the potential of collective bargaining to address social policy, as well as economic and employment, issues (Glassner and Keune, 2012). In the language of contract and status, it has demonstrated a capacity to strengthen a newer range of status entitlements.
The salience of institutional arrangements to the outcomes of collective bargaining has been highlighted. The findings show that the fundamental distinction between multi- and single-employer bargaining carries important implications for the balance between flexibility and security in the agreements that result. Under single-employer bargaining outcomes are more orientated towards flexibility, and less towards security, than under most kinds of multi-employer arrangement. This reflects the asymmetry which arises when outcomes are dependent on local power (im)balances, as is the case under single-employer bargaining: whereas unions are more likely to be disadvantaged than advantaged in the absence of the protection that a sector agreement provides, the opposite is the case for employers (Traxler, 2003). The exception, in terms of multi-employer bargaining arrangements, is where there are no procedural rules governing the relationship between sector and company levels, as in Slovakia in the present study but also Spain, Portugal and Greece. Employers are unconstrained and thereby in an equivalent position to their counterparts under single-employer bargaining. A further difference in institutional arrangements under multi-employer bargaining matters too, concerning whether the relationship between sector and company levels is governed by the principle of delegation or that of demarcation. The findings thereby contribute to recent work which has paid attention to the implications of the form that multi-employer bargaining institutions take (Arrowsmith and Marginson, 2008; Nergaard et al. 2009; Visser, 2005), implications which shape the capacity of a central institution of European labour market governance to influence both flexibility and security.
Footnotes
Appendix
Possible contents of PECs.
| Employment |
- guarantees of employment and/or no compulsory redundancy (often time-limited) - investment for particular establishments - transformation of precarious into more stable jobs - additional employment for specific groups (e.g. youth, long-term unemployed) - relocation of workforce within the company - introduction of ‘work foundations’ to improve employment prospects for workers made redundant |
| Working time |
- temporary or long-term reduction in the working week - greater variability in, and extension of, working hours without overtime premium - extension of operating hours (e.g. weekend work) - increased use of part-time work |
| Cost reduction |
- reduction in elements of pay and associated benefits - lower starting rates for new employees - commitments to moderate pay demands |
| Productivity and adaptability |
- conditions for use of fixed-term contracts, temporary work and contracting out - new forms of work organisation (e.g. team work) - training and development |
Source: Adapted from Sisson (2001).
Funding and acknowledgements
This research was part of the larger GUSTO project, ‘Meeting the Challenges of Economic Uncertainty and Sustainability Through Employment, Industrial Relations, Social and Environmental Policies in European Countries’, funded by the European Commission Framework Programme 7 SSH-225301. The article draws on findings from country studies compiled as part of the GUSTO collaboration by Reinhard Bispinck, Heiner Dribbusch, Marta Kahancova, Maarten van Klaveren and Kea Tidjens, as well as those undertaken by the authors. Søren Kaj Andersen and colleagues at FAOS facilitated data collection for Denmark.
The authors would like to thank Christian Ibsen and the two anonymous referees for their insightful comments.