Negotiations to renew the collective bargaining agreement for Luxembourg woodworkers were thrown into chaos on 22 March 2011, when the employer association pulled out. The two trade unions involved say they discovered what happened through the press. The talks had begun in January 2011 and affect 2,000 employees. Deadlock over index-linked pay lies at the heart of the disagreement, with the unions saying it is essential, and the employers refusing to make concessions.
Background
The original collective bargaining agreement for this sector was signed in October 2005 by the Independent Trade Union Confederation of Luxembourg (OGB-L), the Luxembourg Confederation of Christian Trade Unions (LCGB), and by The Association of Woodwork Employers of the Grand-Duchy of Luxembourg (APM).
It expired on 31 December, 2007, but stayed in effect because the social partners had agreed that, unless any of them wanted it to end, it would stay in force until the parties negotiated a new one. This was provided for under Article 22 of the agreement (in French, 114Kb PDF). Signatories were also obliged to give three-months notice before breaking the agreement and to provide the other parties with written proposals for amendments or renewal.
A succession of missed opportunities
The failure of tripartite talks at national level about index-linked salaries, which trade unions feel should not be tampered with, in spring 2010 (LU1007021I) affected woodwork companies by leading to a freeze in social dialogue.
The OGB-L and LCGB objected to what they considered deliberate delaying actions by APM and sent an ultimatum to the employer organisation to start negotiations.
The first meeting was finally held in January 2011 and, according to the trade unions, parties agreed to meet again in April 2011.
However, on 22 March, APM pulled out of the agreement. OGB-L and the LCGB expressed surprise in a joint press release, where they maintained that they had discovered through the media that the negotiations were over, and that the collective contract was broken.
Deadlock caused by wage scale
The deadlock was caused by the conventional wage scale. The employers feel they cannot concede fixed, periodic increases in pay in the current economic climate, and refused to make any concessions. The trade unions criticised the unwillingness of APM to negotiate a new collective agreement, which had caused a deterioration in wage scales and working conditions.
The LCGB and the OGB-L have pointed out that the legal minimum social wage has finally come so close to the starting salary for woodworkers it has not been updated.
One workforce, two categories of workers
The collapse of the agreement will divide the sector into two categories of workers. According to a press release (in French) by APM on 22 March 2011, some workers will remain covered by the collective agreement and will therefore preserve the acquired rights. However, workers hired after 1 July 2012 will benefit only from the Labour Code.
This change is all the more significant since the agreement has been generally binding since 2007.
APM’s decision means the end of the harmonisation of working conditions, but there are also issues over how the sector will be regulated in the absence of a new agreement. The 2005 agreement was intended to be used to fight unfair competition, undeclared work, the undercutting of prices, and to preserve the social peace required for the sectoral companies’ prosperity. The forthcoming tripartite debate will not be without pitfalls.
Guy Castegnaro and Ariane Claverie, Castegnaro Cabinet d’Avocats