Guidelines on Coordination of
Collective Bargaining
Presentation
European Trade Union Institute
Sesimbra January 2003
European Trade Union Institute
Guidelines on Coordination of collective bargaining
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Presentation of the discussion

Fundamental objectives of coordination

Coordination guidelines, general concept

Proposed guideline

Determinants and use of the guideline

Situation in other experiences

Ways of implementation
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Guidelines on Coordination of collective bargaining
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Fundamental objectives of coordination

1. To have a general indication on wage bargaining which
comes from trade unions at the European level in order to
respond to the existing guidelines coming from the
Commission (Broad Economic Policy Guidelines) and the
European Central Bank.

2. To avoid social and wage dumping and wage
differentiation in the Euro-zone, as this could lead to a
deterioration of the social climate and could delay the social
convergence of the Member States.

3. To coordinate wage claims in the Single Currency area
where pay is now easily comparable and also to encourage
an upwards convergence of salary levels in Europe.
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Guidelines on Coordination of collective bargaining
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Coordination guidelines, general concepts

The guideline can be applied a posteriori, i.e. after
the conclusion of collective agreements in the
various European countries.

It does not change national practices, but it
provides a benchmark which can be taken into
account during negotiations at national level or
lower.
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Coordination guidelines, general concept
inflation
productivity
other determinants
wage increase
(at least above inflation and with
as much productivity as possible
.…)
improvement of
qualitative aspects of work
(especially where quantifiable and
calculable in terms of costs)
total labour costs
=
total value
of the agreement

broader concept of coordination
 trade-off between wage evolution and other more qualitative
aspect of work
 Qualitative elements of the agreement are difficult to evaluate
in terms of cost. Quantifiable elements should be taken into
account (working time reduction, training, early retirement,
equal pay).
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Guidelines on Coordination of collective bargaining
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Coordination guidelines, general concept

If in a given country the rise in total wage costs does not
correspond to the inflation/productivity sum, it should be able
to counterbalance its position through achieving
qualitative objectives.


Guidelines in qualitative aspects are necessary.
These could propose:
 the reduction of working time (35-hour a week),
 a certain number of training hours,
 pensions convergence,
 raising women's wages to reach the levels of men's wages
through applying a ratio.
 Or a convergence towards the levels achieved by the best
performing countries in each area (benchmarking).
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Proposed guideline: the determinants
inflation
productivity
other determinants
wage increase
(at least above inflation and with
as much productivity as possible
.…)
improvement of
qualitative aspects of work
(especially where quantifiable and
calculable in terms of costs)
total labour costs
=
total value
of the agreement

Inflation: Harmonised Index of Consumer Prices
(HICPs, preferably to National Consumer Index)

Productivity: national average productivity (defined as
GDP/head or preferably GDP/hour worked)

Other determinants: according to the national practice
(convergence towards EU average, redistribution…)
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Determinants of the guideline - inflation
inflation
productivity
other determinants
wage increase
(at least above inflation and with
as much productivity as possible
.…)
improvement of
qualitative aspects of work
(especially where quantifiable and
calculable in terms of costs)
total labour costs
=
total value
of the agreement

Inflation: HICPs should be preferred.

European single rate is impossible to be implemented: still too
many differences between EU countries

National rates might be used because neither wages nor
workers should be used to reduce the differentials in inflation
rates. Furthermore, it is not clear that full convergence of
inflation rates amongst member states will be achieved in the
near future, despite the single currency.
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Guidelines on Coordination of collective bargaining
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Determinants of the guideline - productivity
inflation
productivity
other determinants
wage increase
(at least above inflation and with
as much productivity as possible
.…)
improvement of
qualitative aspects of work
(especially where quantifiable and
calculable in terms of costs)
total labour costs
=
total value
of the agreement

Productivity: national rates should be preferred

Nevertheless, any type of productivity rate is to be chosen from
amongst national and sectoral rates according to the level of
discussion within that country, may also be allowed, under the
responsibility of national and sectoral unions. However,
reference to national rates has to be done, particularly for
sectors without a sectoral rate (e.g. the public sector)

Other determinants: according to the national practice
(convergence towards EU average, redistribution…)
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Use of the guideline: wages first

Wage aspect:
It is important that wages increase faster than
inflation, in order to maintain purchasing power.
The (nominal) increase in wages must pass the
inflation rate in all cases.
Similarly, an important part of productivity should
compensate workers for their contribution towards
its increase. This part should be as large as
possible.
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Use of the guideline: then, qualitative aspects
Qualitative
aspects:
Preferably those which can be quantified and which
give rise to a cost for the company should be taken
into account.
These include:
equal opportunities,
measures to achieve equal pay between women and
men,
measures to improve the position of low paid
workers, life-long learning,
reduction in working time,
progressive retirement...
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Use of the guideline: qualitative aspects, specific
focus
The part of productivity not allocated to wages should go towards
improving qualitative aspects of collective agreements.
Although national and sectoral organisations need to determine
their own priorities, European guidelines could also be
proposed for specific subjects (as some of the EIFs and the
Doorn group are doing) in order to help evaluation and the
comparison of the results achieved.
We shall pay particular attention in the evaluation of the guideline
to measuring progress in:


Access to training and life long learning for all workers
Eradicating low pay and promoting equal pay between men
and women
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Situation in other experiences: EIFs
Sources
Guideline
How is it used?
ETUC proposal
Inflation
+ national average productivity
Total value of the agreement
(wages plus qualitative aspects of
the agreement)
EIFs
EMF
Guideline
Inflation minimum
+ Productivity (balanced share)
ETUF-TCL
(with OSE)
Inflation minimum + full national
average productivity if sectoral
productivity is exceeding
national average, otherwise
share of productivity
Inflation
+ Sectoral Productivity
(balanced share)
Inflation
+ participation in productivity
Inflation minimum
+ national average productivity
(balanced share)
How is it used?
Total value of the agreement
(wages plus qualitative aspects of
the agreement)
Total value of the agreement
(wages plus qualitative aspects of
the agreement)
ECF-IUF
Uni-europa
EPSU
Other initiatives
Doorn
Guideline
Inflation
+ productivity
European Trade Union Institute
Total value of the agreement
(wages plus qualitative aspects of
the agreement)
?
?
How is it used?
Total value of the agreement
(wages plus qualitative aspects of
the agreement)
Guidelines on Coordination of collective bargaining
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Situation in other experiences: Doorn
Country
Year
Inflation
A
Productivity Distributio
n margin
B
A+B=C
Wage
rise
D
Utilisatio
n
D–C=
E
Belgium
1999
2000
99/2000
1.1
1.4
2.5
1.2
2.2
3.4
2.3
3.6
6.0
2.5
3.6
6.2
0.2
0.0
0.2
1999
2000
99/2000
0.6
1.6
2.2
0.8
2.5
3.3
1.4
4.1
5.6
3.1
2.3
5.5
1.7
-1.8
-0.1
1999
2000
99/2000
1.0
2.9
3.9
2.2
2.0
4.2
3.2
5.0
8.3
3.1
4.5
7.7
-0.1
-0.4
-0.6
1999
2000
99/2000
1.7
2.0
3.7
0.8
2.0
2.8
2.5
4.0
6.7
2.7
3.5
6.3
0.2
-0.5
-0.3
Germany
Luxembourg
Netherlands
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The challenge of the implementation of the
coordination guideline

In order to be effective, a system of follow-up of the
coordination guideline should be implemented. This would
make it possible for the coordination guideline to become a
"rule of thumb" when negotiation is conducted at national or
sub-national levels.

A system of review should be established, with reports being
submitted by ETUC affiliates on the evolution of the wages
and/or total value of the agreements compared with the
aggregate "inflation + productivity + other determinants".

We propose that for the wage elements such a review should be
carried out be the CBC and the Executive Committee annually.
For the qualitative elements, a similar review should take place
every two years.
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Guidelines on Coordination of collective bargaining
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Guidelines on Coordination of
Collective Bargaining
Presentation by Emmanuel Mermet
European Trade Union Institute
Madrid, 18 October 2001
European Trade Union Institute
Guidelines on Coordination of collective bargaining
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