Europeanization of Collective Bargaining. Centralization Costs and Optimal Wage Bargaining Area

The Treaty of Maastricht (1993) and the Treaty of Amsterdam (1999) strongly institutionalised and formalised the relationship between the social partners at the level of the European Union (EU). It is self-evident that notion of social dialogue also includes collective bargaining, the conclusion of agreements between the social partners. Collective bargaining, however, is a delicate flower. Indeed, quite a number of questions pop up over which opinions, especially between the social partners, diverge. Then there is the reality of the power relationship between the European socials partners; the European trade unions are nearly powerless when it comes to pushing the employers to the bargaining table. The social partners were empowered, within the social dialogue, to negotiate agreements, which the European Commission can subsequently adopt as directives (Article 137 to 139 EC). This formalised process, termed ‘bargained legislation’ by Biagi (1999), grants the social partners a mandate to initiate legislation in certain areas. Although many other substantial rights and regulations, such as a labour dispute law, are lacking at the European level, the process of ‘bargained legislation’ is a stronger instrument to influence legislation than most social partners in the European Union member states have at their disposal (BIAGI 1999). Notwithstanding this potential, however, at the inter-industry level only three agreements, affecting substantial portions of the European workforce, have to date been concluded. These covered minimum standards on parental leave, part time work, and fixed-term work (HORNUNG-DRAUS 2001). Since the European Commission introduced some of these topics into the social dialogue as early as 1990, the number of successful agreements must be considered extremely low, and it is only fair to conclude that the new framework did not boost the Europeanisation of industrial relations. Similar observations can be made about the organisation of industrial relations interests at the European level. On the one hand, transsectoral organisations such as the ETUC or UNICE as well as a great and growing number of European sectoral employer organisations and unions have been established in the past. On the other hand, these European umbrella organisations, consisting of the corresponding national organisations, are poorly endowed by their members with financial and personnel resources. Moreover, the national organisations delegate little or no bargaining authority to the European level organisations (KELLER 1995; BOOCKMANN 1999). These findings suggest two related questions: Why don’t the social partners utilise the institutional framework provided by the Treaty of Amsterdam to a larger extent? And why are the European-level umbrella organisations so poorly endowed with resources and authority by their national member organisations? In order to analyse these issues we will give an overview of European Industrial Relations focussing on Collective Bargaining. By doing so, the process of the Europeanisation of collective bargaining will be described. The result of this process can only be understood by considering the institutional and legal framework including the organisational structure of the social actors in the different EU-countries. These more or less institutional arguments will be complemented by the microeconomic analysis of the social actors’ behaviour within a rational choice framework These Discussion Papers partly represent preliminary work. They are published to encourage comment and to participate in current discussions. Use should take account of its provisional character.