RCN June 14 th 2013 The impact of austerity on collective bargaining and employee participation: The local government experience Stephen Bach King’s College,

RCN June 14th 2013

The impact of austerity on collective bargaining and employee

participation: The local government experience

Stephen Bach

King’s College, London [email protected]

Presentation structure • EC funded research project:

- Czech Republic; Denmark, France, Italy, Netherlands, UK

• Findings:- Comparative data: drivers and outcomes - UK: national/local picture

• Themes- can social partnership survive austerity?- variations between countries and within - restriction, resilience and reconfiguration

Research Questions 1. What have been the main drivers and

measures of austerity adopted in each country?

2. How have these changes been implemented and to what extent has social dialogue contributed to the change process at national, sectoral and workplace level?

3. How have institutions of social dialogue influenced industrial relations processes and outcomes in the public services?

Austerity Outcomes•Employment reductions•Wage cuts•Pay freezes•Pension reform•Work intensification

Austerity Measures• Budgetary cuts • Staffing policies (e.g. replacement ratios)• Alterations in wage fixing

Drivers of Austerity • External/ Internal•High/ Low pressure

Social Dialogue• Tripartism

• Collective bargaining•Joint consultation

•Cross-border

Social Dialogue• Tripartism

• Collective bargaining•Joint consultation

•Cross-border

ReconfigurationResilience Restriction

Drivers: General Government Consolidated Gross Debt

EU 27 CZ DK FR IT NL UK27.0

37.0

47.0

57.0

67.0

77.0

87.0

97.0

107.0

117.0

127.0

20082009201020112012

% GDP

Drivers: General Government Deficit/ Surplus

EU 27 CZ DK FR IT NL UK-11.8

-9.8

-7.8

-5.8

-3.8

-1.8

0.2

2.2

4.2

20082009201020112012

% GDP

Market Reaction

Italy

Market Reaction

Italy

Coalition for change

Czech Republic Netherlands

UK

Coalition for change

Czech Republic Netherlands

UK

Lagged Response

France

Lagged Response

France

Steady State

Denmark

Steady State

Denmark

Source of pressure

Degree of pressure

Low High

External

Internal

Drivers of Austerity : retrenchment pressures

Outcomes

Pay Freeze

France (2010-2012 index point value)

Netherlands (2011-13 central govt; education)

UK (2011-2013)

Pay Cuts

Czech Republic 10%Italy 5-10% (linked to

earnings)

Pension Reform

Czech Republic DenmarkFrance

ItalyNetherlands

UK

Employment reductions

Czech Republic (5.5% 2009-12)

Denmark (2%: 2010-12)France (5% state

administration 2008-10)Italy (10% 2008-14)

Netherlands (cuts planned up to 2014)

UK (12% 2008-12)

Social Dialogue: 3 scenarios

• Restriction – interruption & shift to unilateralism

• Resilience – institutional maintenance of dialogue - process often more closed/conflictual

• Reconfiguration – reform of institutional practice: redirected to different ends

• Variation: between and within national cases

Resilience and Reconfiguration

• Denmark • France • Netherlands

• Influences on findings: - employer and trade union strategy - different institutional/legal traditions e.g. works councils

Restriction

• National: austerity programmes/pay freezes:- little input from employers and unions - ‘hollowing out’ of IR: time scales- legislative/budgetary instruments dominate

• Czech Republic• Italy • UK

• More engagement at sectoral/enterprise level

UK Restriction

• Austerity measures 2010- - 2010-15/16 expenditure reductions - 27% local government

• Coalition policy: marketisation & fragmentation - 2 year wage freeze (2011-13); 2013- 1% award - civil service: facility time; review of T&Cs- NHS: resilience e.g. social partnership forum

• Outcomes – employment, disputes

Public Sector Employment by main Industry

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012300

500

700

900

1,100

1,300

1,500

1,700

UK

head

coun

t (th

ousa

nds)

, sea

sona

lly a

djus

ted

Public Administra-tion

NHS

Of Which: Civil Ser-vice

Other health & social work

Source: Office for National Statistics

Education

Consequences: Disputes

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 20130

20

40

60

80

100

Working days lost in the Public Sector

Working days lost in the Private Sector

Number of stoppages in the Public Sector

Number of stoppages in the Private Sector

Average

thou

sand

s, no

t sea

sona

lly a

djus

ted

Source: ONS

Local govt: differing role for social dialogue

Coastal City Mid-Town

Background Unitary Council; Conservative: 2008- 2012, Labour: since 3 May 2012

District Council2004-2010: NOC Labour 2010 – present

Population 236,900 (2011 Census) 151,900 (2011 Census)

Workforce Size (Headcount)

6,550 (4,940 FTE) as of 2012 Q2 1,206 (1,140 FTE) as of 2012 Q2

Social Dialogue Limited Extensive

Union exclusion High Low

Employment Reduction

Many Few

Pay Reductions Yes, unilaterally imposed Yes, removed increment; introduced partnership payment

Changes to terms & conditions

Yes, unilaterally imposed Yes, by local collective agreement

Industrial action Yes No

• Social dialogue: restriction after 2010

• Conservative led council proposed: - pay cuts on a sliding scale (2-5.5%)- aim: 400 fewer job losses

• Issues: - trust in employer – job losses/lack of dialogue - unilateral change in terms and conditions

• Local elections in 2012:- wage cuts partly reversed after Autumn 2012 - dispute ended – despite job loses (temp staff)- further cuts anticipated

Coastal 2010-2012

• Externalisation: - reinforced low trust ER climate - procedural errors enabled union legal action (lack of HR expertise)

• Unilateralism: wage cuts

• Trade union strategy: - recognised dispute of national significance - selective ‘smart’ strikes - legal action (built on employer errors)- political campaign in local election

Coastal Themes

Mid-Town Resilience and reconfiguration

• Social dialogue: Intensive - conversion: from joint consultation to partnership forum

• Employer approach: - in-house services retained and refocused - support for living wage provision in supply chain

• Partnership payment agreed 2011-2013:- freeze contractual increments - bonus: 2011/12 – @£400 linked to outturn - employee eligibility: attendance and appraisal

Mid-Town Implications

• Scope for social dialogue:- limited institutional requirements for dialogue - mixture of direct and indirect involvement

• Resilience and reconfiguration: - influence of lack of national pay award - built workforce acceptance for change (choice?)- reconfiguration around progression/increments: individualised performance - attendance, appraisal

• Implications for national framework

Conclusions

• Findings: - political domain/scope for unilateralism/centralism- adverse effects for public service IR: - driver of change but also limits modernisation - an employer of choice? – shortages, engagement

• Issues:- Are challenges to social partnership & shift to unilateralism temporary or more long-term?

- How can social partnership be reformed and strengthened to meet new challenges? - HR role (visibility/influence)

References/Further information

• Project website:• http://www.kcl.ac.uk/sspp/departments/management/

Social-Dialogue-and-Austerity-EU.aspx

• IR in Europe Report 2012: (focus on public services)• http://ec.europa.eu/social/keyDocuments.jsp?type=0

&policyArea=0&subCategory=0&country=0&year=0&advSearchKey=IRIE&mode=advancedSubmit&langId=en