EurWORK European Observatory of Working Life

New conflict resolution procedures discussed for labour disputes

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Country: 
Germany
Author: 
Stefan Zagelmeyer, IW Köln

A recent analysis of international labour dispute data for the period 1970-96 shows that the volume of industrial action was relatively low in Germany compared with other countries. Furthermore, Germany has seen a general decline in labour dispute over the last three decades. Nevertheless, in March 1998, employers launched discussions on a reform of conflict resolution procedures in the metalworking sector.

This feature addresses the issue of labour disputes and industrial conflict, and their regulation in Germany by: defining the terms industrial conflict and labour disputes/industrial action; describing the relevant regulations on industrial conflict and industrial action; reporting on the volume of labour disputes in Germany during the period 1970-96; and introducing the latest proposals on reform of conflict resolution procedures.

Industrial conflict and labour disputes I: the terms defined

It is important to be clear about the meaning of different concepts such as labour dispute/industrial action, industrial conflict, or social conflict, which are often used in close connection, even synonymously, but which address different issues.

The term industrial conflict denotes the clash of interests, and resulting disputes of varying intensity, between individuals, groups and organisations in the industrial relations system. The relationship between the owners/managers and the workers/employees is frequently one of conflict. Conflicts may exist latently or manifest themselves overtly at every level of industrial relations. The overt forms of conflict are various and include absenteeism, sabotage, go-slows, work-to-rule, restriction of output, non-cooperation and industrial action (strikes, lock-outs, boycotts). Industrial conflict may centre around differences in values and objectives, and relationships in terms of power, status and distribution. Whereas industrial conflict and peace refer to industrial relations issues, social conflict and peace refer to issues in the wider political and social sphere. There are numerous theories on the source of industrial conflict, ranging from radical class-oriented Marxist views to theories views which attribute conflict to the clash of economic interests in the employment relationship, because workers/employees and managers have different interests with regard to wages and effort.

The term industrial action refers to a situation where the employers' or the employees' side takes collective action to exert pressure on the other collective bargaining party in order to achieve its goals. The term is often used synonymously with labour dispute. Forms of industrial actions include strikes by employees, lock-outs by employers, and boycotts. Industrial action can be measured in three dimensions:

  • the number of strikes and lock-outs (frequency of industrial action);
  • the number of affected workers (extent of industrial action); and
  • the number of working days lost (volume of industrial action).

It is much disputed whether industrial action as a means of coercion is necessary to the conclusion of a collective agreement and whether its availability is a necessary precondition for free collective bargaining. Some argue that strikes are just accidents in faulty negotiations or exist to show that the trade unions' weapons are not becoming rusty. Others argue that the right to bargain collectively presupposes that the social partners can establish and maintain a balance of bargaining power by resorting to industrial action. Still others argue that strikes serve as filtering and information mechanisms whereby the union receives information on the profits of the employer and the employer receives information on union militancy. As a consequence, more profitable employers will settle more quickly, implying higher wage rises for the unions, whereas low levels of profit will lead to long strikes and low settlements.

Industrial conflict and labour disputes II: the German Model

In the German model, the juridification and institutionalisation of industrial relations regulate the solution of conflicts in detail. Very important is the strict distinction between conflicts of rights, which concern the interpretation of the collective agreements, and conflicts of interests concerning the terms of new agreements. Conflict of rights are subject to legal regulation and have to be resolved with peaceful means by conciliation committees or, as the last resort, the labour courts. Only conflicts of interest can be resolved by means of "industrial warfare". Furthermore, a complex system of mediation, arbitration, labour court procedures and peace obligations provides the conflicting parties with rights and duties and permits little space for ambiguity.

As regards industrial action, German statute law does not give a definition, neither does any systematic interpretation of the concept emerge from several treaties under international law (European Social Charter, European Convention for Protection of Human Rights and Fundamental Freedoms, ILO Convention No. 87 on the Freedom of Association and Protection of the Right to Organise). Its treatment is therefore based almost entirely on judge-made law. However, there are a number of regulations governing strikes: the strike must not violate the peace obligation deriving from an existing collective agreement; the union must follow the strike procedure laid down in its standing orders; the strike must represent the last resort as a means of achieving the aim in dispute (the so-called ultima ratio principle); and lastly, the fairness principle must be observed. There is a distinction between an all-out strike, a partial or selective strike and a general strike according to the tactics used, and between an official strike and an unofficial strike according to the basis on which it is organised. Political strikes directed against Parliament or Governments are deemed to be contrary to law. This is regarded as a means to ensure social peace. Recently, the Council of Europe recommended that the German Government amend its legal provisions on industrial action in order to fulfil standards of the European Social Charter (DE9802253N).

In the interest of the uninterrupted flow of goods and services, efforts are made to keep industrial conflicts to an unavoidable minimum. In order to avoid industrial action, the bargaining parties may establish joint dispute resolution boards by collective agreement (joint dispute resolution agreements) to which they refer their disputes of interest. If the board fails to reach a compromise proposal, or the proposal is not accepted by both sides, the procedure is deemed to have been exhausted unsuccessfully, the peace obligation ceases to exist and industrial action may commence. If the parties agree on a compromise, it is regarded as constituting a new collective agreement.

Labour disputes in Germany 1970-96

According to a recent comparative analysis of labour disputes by the Institut der deutschen Wirtschaft (" Arbeitskämpfe im internationalen Vergleich", C Schnabel, in IW-Trends 1/1998) the number of working-days lost per 1,000 employees due to strikes and lock-outs varies considerably across industrialised countries. A comparison of 23 OECD countries shows that in the period 1970-96 Italy, Spain, Greece and Canada recorded exceptionally high volumes of labour disputes. In contrast, industrial action levels were particularly low in Switzerland, Austria, the Netherlands and Germany, countries where bargaining is traditionally conducted in a cooperative manner. Most countries, including Germany, have seen a general decline in their labour dispute activities over the last three decades.

Industrial action activity in Germany for the period 1970 to 1996, measured in working days lost per 1,000 employees, is displayed in table 1. It is especially noteworthy that industrial action peaks seem to occur cyclically, with a cycle length of about six to eight years.

Table 1: Working days lost due to industrial action, Germany* 1970-96
Year Working days lost per 1,000 employees
1970 4.29
1971 202.84
1972 2.96
1973 24.79
1974 46.71
1975 3.13
1976 24.28
1977 1.07
1978 190.86
1979 21.06
1980 5.49
1981 2.50
1982 0.65
1983 1.79
1984 246.09
1985 1.49
1986 1.20
1987 14.12
1988 1.76
1989 4.14
1990 14.56
1991 6.03
1992 60.30
1993 18.33
1994 7.15
1995 7.73
1996 3.10

* Before 1993, western Germany only.

Sources: Federal Statistical Office ; OECD; IW Köln .

When calculating the annual average of working days lost per 1,000 employees for the last three decades, the picture emerges that the extent of economic damage measured in working days lost, has continually been declining since the 1970s - see table 2.

Table 2: Working days lost due to industrial action, Germany* 1970-96
. 1970/79 1980/89 1990/96 1970/96
Working days lost (annual averages in 000) 1,164.2 639.8 461.5 804.4
Working days lost per 1,000 employees (annual averages) 52 28 17 28

* Before 1993, western Germany only.

Sources: ILO ; Federal Statistical Office; IW Köln.

In the 1970s, an average of 52 working days were lost per 1,000 employees and year due to labour disputes. In the 1980s, this figure declined to 28 working days, although this decade saw the largest post-war strike - on working time reduction in the metalworking sector in 1984. In the 1990s, the working days lost per 1,000 employees due to labour disputes further declined to 17.

This trend can be partly explained by the following:

  • Structural change resulting in a falling employment share of traditionally strike-prone industries (such as mining and manufacturing). Connected to this is the increase in employment in the service sector and white-collar jobs, where employees are regarded as being less adversarial and as having different attitudes towards labour disputes.
  • Changes in workers' attitudes in the direction of individualism and away from collectivism, traditional institutions and instruments of collective interest representation like trade unions and labour disputes.
  • The general rise in unemployment that increases the risk of becoming unemployed and reduces the propensity to strike.

If one compares the figures for western and eastern Germany (see table 3), in all years between 1994 and 1996 the extent of working days lost, in total numbers as well as per 1,000 employees, was higher in western than in eastern Germany. Only in 1993 was the east was more strike prone, due to a labour dispute in the east German metalworking industry.

Table 3: Working days lost due to industrial action, western and eastern Germany 1993-96
. 1993 1994 1995 1996
Working days lost (000) . . . .
West 84.3 216.7 231.4 95.1
East 508.7 12.7 16.1 3.0
Germany (total) 593.0 229.4 247.5 98.1
Working days lost per 1,000 employees . . . .
West 3 8 9 4
East 89 2 3 1
Germany (total) 18 7 8 3

Sources: ILO; Federal Statistical Office; IW Köln.

New Gesamtmetall proposals on joint dispute resolution

On 5 March 1998, the national metalworking employers' association, Gesamtmetall, adopted a paper on new peaceful forms of conflict resolution (Positionspapier zur friedlichen Lösung von Tarifkonflikten).

According to the paper, Gesamtmetall fully respects the right of the trade unions to conduct labour disputes, but aims to conclude a collective agreement with the metalworkers' union, IG Metall, on new joint conflict resolution procedures in order to minimise the probability of industrial action. The paper lists a number of issues that Gesamtmetall proposes to include in such an agreement.

  1. A continuing dialogue on collective bargaining issues between the collective bargaining parties, which should take place regularly at central and regional levels.
  2. Measures to improve the bargaining procedures- future negotiations should be supported by a third-party consulting committee (Beraterausschuß) of external consultants, which has to be consulted during the bargaining procedure. After four weeks of negotiations have passed unsuccessfully, and at the latest one month before the current agreement expires, the negotiations should be supported by an impartial chair who is a member of the consulting committee and who then directs the negotiations without a vote. If the disputed topic is already an issue in collective agreements, then Gesamtmetall wants the trade union and the employers' organisation to open negotiations by submitting their claims three months before the current agreement expires. If no agreement is reached before the current one expires, the consulting committee may extend the negotiations (including the peace obligation) for another three months.
  3. More effective joint dispute resolution procedures - Gesamtmetall wants the current joint dispute resolution agreement, signed in 1980, to be amended. Joint dispute resolution (during which a peace obligation is imposed on the bargaining parties) should become obligatory if one party declares the failure of the negotiations after the current agreement has expired, or after the extension of the negotiation period has passed. Unanimous or majority votes within the joint dispute resolution board in favour of the dispute resolution proposals should be binding for the collective bargaining parties. If the original joint resolution procedure fails, both parties may agree on "pendulum" arbitration under an impartial chair.
  4. Labour disputes as a means of last resort ("ultima-ratio principle") - if the joint resolution procedure fails and if there is no pendulum arbitration, industrial action should be permitted. The same applies after the negotiation period, if there is no joint dispute resolution procedure. The consulting committee can stop a labour dispute for a week to give the bargaining parties a chance to restart negotiations.

Although IG Metall signalled that it would be interested in talks on reforming the conflict-prone collective bargaining relations in the metalworking sector, its chair Klaus Zwickel rejected proposals to change the joint resolution procedures and to establish an independent consulting committee as being counterproductive to entering a new form of partnership. He stated that IG Metall had always used strikes only as a last resort.

Commentary

Conflicts in employment and industrial relations are a complex matter and there are a numerous factors affecting their latent presence and the propensity to conflict. The relatively low volume of labour disputes in Germany may be attributed to the "juridification" of industrial relations, and to institutions about which there is a joint consensus among the bargaining parties. Both provide the framework for a detailed allocation of certain substantive issues to different institutions within the dual system - ie, collective bargaining (unions and employers' associations) and workers' representation at establishment level (works councils). Negotiation and co-determination under the legal obligation of "social peace" and "trustful cooperation" lead to the neutralisation of the workplace by moving conflict from the workplace to the industry level. These mechanisms channel and depoliticise conflicts, encourage professionalisation of conflict management, lead to a higher predictability of behaviour and in the end serve the purpose of containing and dampening conflict.

Despite the relatively low volume of labour disputes by international standards, the reform of conflict resolution procedures is frequently appearing on the agenda. How come?

First, the specific pattern of German collective bargaining includes some form of sectoral pilot agreement, which in the metalworking sector, for instance, is usually concluded in the bargaining district of Nordwürttemberg-Nordbaden. Pilot agreements are usually concluded after some form of industrial action has taken place. As in most cases it is the same bargaining district in the sector which is repeatedly hit by strikes, it is understandable that the parties in this district wish to have more peaceful conflict resolution procedures.

Second, an integrating international economy with increasing competition forces the social partners to improve and adjust their institutions. Companies as well as the social partners are looking for examples of "best practices". The discussion on reform of collective bargaining in the German metalworking sector is one example (DE9712240F). In case of Gesamtmetall's proposals, there is an explicit reference to potentially successful models of peaceful conflict resolution procedures in other European countries, such as Sweden (SE9709139N and SE9704111F). (Stefan Zagelmeyer, IW Köln)