Pasar al contenido principal

Collective bargaining coverage

Publicado:
15 Diciembre 2022
Actualizado:
15 Diciembre 2022

According to the OECD (Organisation for Economic Co-operation and Development) definition, collective bargaining coverage is an indicator of the extent to which the terms of workers’ employment are influenced by collective negotiation. It is the coverage rate, that is, the number of employees covered by the collective agreement, divided

European Industrial Relations Dictionary

Definition

According to the OECD (Organisation for Economic Co-operation and Development) definition, collective bargaining coverage is an indicator of the extent to which the terms of workers’ employment are influenced by collective negotiation. It is the coverage rate, that is, the number of employees covered by the collective agreement, divided by the total number of wage and salary earners.

Background and status

Measuring collective wage bargaining coverage

Measuring the extent of collective bargaining coverage is difficult, as many Member States do not keep central registers of collective agreements. Available national data from such sources are therefore often incomplete, and owing to different methodologies applied they do not tend to be comparable across countries. There are two EU-wide surveys that can be used to estimate collective bargaining coverage in a harmonised way: the Structure of Earnings Survey and the European Company Survey (ECS). Both of these target company management and include a question asking if employees in a company or establishment are covered by any form of collective wage agreement. Some drawbacks of the statistics these surveys provide are that they do not cover the smallest companies or establishments, and exclude certain sectors and even, as in the case of the Structure of Earnings Survey, certain countries. A further limitation of this type of survey is that not all collective agreements set wages. Another source is the ICTWSS (Institutional Characteristics of Trade Unions, Wage Setting, State Intervention and Social Pacts) database hosted by the OECD, which compiles national-level statistics from both registers and surveys.

According to an analysis of data from the ECS 2019 carried out by Eurofound and Cedefop (European Centre for the Development of Vocational Training), managers in 61% of establishments in the EU27 reported that the wages of at least some of their employees were set by a collective bargaining agreement. Eurofound’s analysis of collective agreements and bargaining coverage in the EU based on the survey found that country differences are extremely large. One group of countries have almost complete coverage: Italy (97%), Austria (94%), Spain (91%), Finland, France (both 90%) and Sweden (89%). At the other end of the spectrum, another group have hardly any coverage: Estonia (6%), Czechia (9%), Lithuania, Malta, Poland (all 10%), Slovakia (12%) and Hungary (13%). The rate tends to be low in countries where the main level of collective bargaining is the company. The highest rates can be found in countries where multi-employer sector-level collective bargaining is dominant, and, in particular, where there is a pervasive extension mechanism.

Using the results of the 2019 ECS, Eurofound identified four broad groups of collective bargaining systems based on their pattern of bargaining arrangements:

1. those with decentralised, predominantly company-based bargaining

2. those in which company- and sector-level bargaining co-exist, with neither dominating

3. those with predominantly sector-level bargaining

4. those in which articulated bargaining (between sector and company levels) is the predominant form and there is also a high degree of sector-level bargaining

Declining collective bargaining coverage

According to Eurofound’s 2022 report Moving with the times: Emerging practices and provisions in collective bargaining :

Since the beginning of 2000, collective bargaining systems and processes in the EU have been undergoing changes, a process accelerated by the 2007–2008 financial crisis. The main indicators of these changes are more rapidly declining coverage rates and regulatory changes in a number of collective bargaining practices and processes, particularly with regard to the extension of collective agreements, shifting functional hierarchies and the growing importance of company-based bargaining processes.

According to a Commission staff document, the collective bargaining coverage, based on the ICTWSS database, fell from an estimated EU average of about 66% in 2000 to around 56% in 2018, with particularly strong declines in central and eastern Europe.

Commentary

In the framework of the European social partners’ consultation on the proposal for a directive on minimum adequate wages, the need to strengthen collective bargaining, especially at sector and cross-sectoral levels, was emphasised by the European trade unions. They proposed that Member States should take action to increase the collective bargaining coverage rate when it is below 70%. Reflecting the pressure from the European Parliament, the directive on adequate minimum wages, adopted in October 2022, asks ‘[e]ach Member State with a collective bargaining coverage rate below 80% to provide a framework of enabling conditions for collective bargaining, and establish an action plan to promote collective bargaining to progressively increase the collective bargaining coverage rate’. However, the threshold of 80% is not compulsory and ‘should only be construed as an indicator triggering the obligation to establish an action plan’. The directive emphasises that Member States with a high collective bargaining coverage tend to have a small share of low-wage workers, high minimum wages and less wage inequality.

Related dictionary terms

Collective bargaining collective industrial relations coordination of collective bargaining European social dialogue right of collective bargaining social dialogue

Eurofound (2022), Collective bargaining coverage, European Industrial Relations Dictionary, Dublin