Literature Review Memo - Labor and Worklife Program

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Rebalancing Economic and Political Power:

A Clean Slate for the Future of American Labor Law

Literature Review Memo [Clean Slate IA – Levels of Bargaining]*

Table of Contents

1. Introduction .................................................................................................................................. 2

2. The Problem ................................................................................................................................. 4

3. U.S. Historical and Industry-Specific Parallels ............................................................................. 8

4. Supply Chain Bargaining ............................................................................................................ 15

5. Synthesis of International Sectoral Bargaining Models ............................................................... 22

6. Case Study: Mechanics of Sectoral Bargaining in Norway and South Africa ............................... 34

7. Survey of Bargaining Schemes Abroad ....................................................................................... 43

* This report was researched and drafted by Jared Odessky and Will Dobbs-Allsop in consultation with, and with contributions from, members of the Clean Slate IA group.

Research Draft prepared for Clean Slate Project - Not for Circulation, Citation, or Attribution

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1. Introduction

The overall mission of “Clean Slate” is to increase worker power in the United States. To achieve that mission, it is essential to extend collective bargaining coverage, now at the low end of industrial democracies. Over the last 65 years, U.S. private sector collective bargaining coverage has decreased from 35% to 6%. While public sector coverage has increased to 30%, it remains at the low end compared to other nations—and is under threat in the aftermath of the Supreme Court’s decision in Janus.

A legal system in which working people can gain a right to bargain only at the enterprise level is a significant cause—perhaps the most significant cause—of employer opposition to organizing and intransigence in collective bargaining in the U.S. Each employer fears that if its employees organize, it will be placed at a competitive disadvantage by the results of collective bargaining. This intransigence has been abetted by the financial markets and management compensation schemes that discount long term economic performance and social responsibilities, as well as by global product and labor markets.

A persistent aspiration of the labor movement has been to “take wages out of competition.” In other words, the labor movement seeks to prevent employers from competing by cutting wages or benefits or worsening working conditions. In a market economy, unless unions can take wages out of competition, there will be steady downward pressure on wages and benefits and employers will resist efforts to raise economic standards and working conditions, particularly through enterprise-level collective bargaining.

Stable collective bargaining leading to rising wages and expanded benefits and job security has existed in the U.S. when unions have found mechanisms to take wages out of competition. Historically these mechanisms have been multi-employer bargaining and pattern bargaining. More recently, unions have sought to use master agreements, common expiration dates, “trigger agreements” (agreements conditioning application of economic terms on reaching a set percentage of signatories in a geographic market), and the revival of tripartite wage boards (leading to government-mandated minimum or living wages).

In other counties, particularly Western Europe, bargaining has historically taken place at a “higher” level, both national and sectoral. In some of these countries, collectively bargaining agreements are “extended” across a sector when specified conditions are met.

The key question for our group is what are the legal mechanisms that would facilitate a form of collective bargaining that would effectively take wages out of competition and permit working people in the U.S. to organize, have stable representation, and effectively improve wages, benefits and working conditions for all workers?

More specifically, we will investigate:

• In what countries and historical time periods have bargaining systems been most successful, when, and by what metrics? What models have achieved the greatest collective bargaining coverage and expanded worker power in the economy and in politics? What historical factors enabled the establishment of sectoral or other higher-level bargaining bargaining?


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• How have structural characteristics—including fissuring, precariousness, isolation of workers, lack of a single physical worksite, and globalization—posed a barrier to successful collective bargaining?

• How did law historically facilitate or inhibit sectoral or supply chain bargaining in the U.S.?

• How has composition of the workforce (race, national origin, immigration status, gender) posed

a barrier to successful collective bargaining in the United States? [NB: Possibly for another group].

In countries where sectoral bargaining exists:

• To what extent does the law mandate such bargaining? To what extent is the government involved in facilitating or mandating bargaining, or in extending the fruits of bargaining?

• Who represents workers in bargaining? Who represents employers? Who decides? How are nonunion workers represented?

• How are sectors defined? Who decides? What sectors are covered? What mechanisms exist to

make bargaining inclusive of all sectors?

• What bargaining occurs at national level, regional level, sectoral level, or worksite level? That is, who participates in the different levels of bargaining and what subjects are bargained over at each level? How does sectoral bargaining interact with worksite bargaining?

• Where has supply chain bargaining been achieved? What legal mechanisms can encourage or

require it? How does it interact with sectoral or worksite bargaining?

• What other reforms aimed at increasing workers’ collective economic power, including organizing rights and strike rights, are need in order for higher levels of bargaining to succeed?


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2. The Problem

“As an increasing number of scholars and commentators have recently argued, worksite-or firm-based bargaining is often insufficient to protect workers’ interests and to redress problems of economic and political inequality.”1 Enterprise collective bargaining in the United States has contributed to some of the structural failures that plague the larger labor law regime:

● Distributional effects: Firm- and enterprise-based bargaining incentivizes companies to

“compete to keep labor costs down, whether by setting wages at a low level, skirting legal obligations, or avoiding unionization.”2

● Workplace democracy: Worksite-level bargaining can provide workers a voice at work, but it also limits worker-voice. “Non-unionized workers typically have no way to participate in decisions around wages and benefits or other questions important to their daily lives … even unionized workers are outmatched against continental-scale corporations.”3

● Policy alternatives: Administrative substitutes to large-scale collective bargaining, such as “federal and state minimum standards laws, are fairly blunt tools, as they impose identical obligations on nearly all covered companies.”4 They have proved hard to adjust and do not account for differences across industries or, in the case of the federal minimum wage, geographic region.

● Outsourcing & diffused supply chains: “Firm-level bargaining has become even less effective in recent years as companies have contracted out work and directly employed fewer people.”5 “Work that was once done in-house is increasingly scattered across multiple employers interconnected by a chain or network of contracts. This disintegration … has many baleful consequences, including the swelling of the precarious, low-wage labor market.”6

One solution to these problems is for the U.S. to transition to some type of sectoral bargaining

system, whereby workers negotiate at the “at the sectoral level—for example, among all fast food workers, all retail workers, all hotel/motel workers, all janitors—either nationally or in a given

1 KATE ANDRIAS AND BRISHEN ROGERS, REBUILDING WORKER VOICE IN TODAY’S ECONOMY 26 (The Roosevelt Inst. 2018), https://www.scribd.com/document/385584703/Rebuilding-Worker-Voices-In-Today-s-Economy#download&from_embed. 2 Id. 3 Id. at 27. 4 Id. 5 David Madland, Wage Boards for American Workers, CTR. FOR AMER. PROGRESS (last updated Apr. 9, 2018), https://www.americanprogress.org/issues/economy/reports/2018/04/09/448515/wage-boards-american-workers/. 6 MARK BARENBERG, WIDENING THE SCOPE OF WORKER POWER 3 (The Roosevelt Inst. 2015), http://rooseveltinstitute.org/wp-content/uploads/2015/10/Widening-the-Scope-of-Worker-Organizing.pdf.


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geographic region.”7 There are a few mechanisms scattered throughout U.S. labor law that enable workers to organize at a scale larger than workplace-by-workplace, but in practice these tools have been rarely used or have largely proved to be unworkable. For example, in theory multi-employer bargaining is possible, but multi-employer bargaining typically requires the assent of the companies involved.8 Historically, in the United States there have been limited examples of collective bargaining taking place at a scale higher than the firm-level9; still, “such efforts have nevertheless been the exception rather than the rule.”10

That history stands in stark contrast to the experiences in other countries, where sectoral bargaining systems have typically coincided with a far more robust labor movement. “Virtually all the European countries empower unions to negotiate employment rights for workers on a sectoral basis.”11 There, sectoral bargaining takes many forms, and often compliments – rather than replaces – labor negotiations at the enterprise level. Sectoral bargaining exists outside the European context as well. “In 1995, the new post-apartheid South African government was able to legislate sectoral collective bargaining and sectoral minimum wages as key parts of their initial economic agenda. Finance workers in Brazil bargain for their sector with employers that include all the major U.S. banks, and as a result, wage rates in the Brazilian finance sector for back-office and customer service staff are higher than those in the United States.”12 Countries that rely heavily on sectoral bargaining tend to have a higher bargaining coverage rate; in the following OECD chart, in Canada, Japan and the United States bargain is primarily at the firm level, while the United Kingdom and New Zealand are moving in that direction; in all the other countries, sectoral bargaining features prominently in the labor regime although it is under pressure across the globe.13

7 REBUILDING WORKER VOICE at 26. 8 WIDENING THE SCOPE OF WORKER POWER at 11. 9 REBUILDING WORKER VOICE at 27. 10 Id. 11 Kate Andrias, An American Approach to Social Democracy: The Forgotten Promise of the Fair Labor Standards Act 3 (forthcoming), citing STEVEN J. SILVIA, HOLDING THE SHOP TOGETHER 27-28, 38-41 (2013); Franz Traxler & Martin Behrens, Collective Bargaining Coverage and Extension Procedures, EURWORK (Dec. 17, 2002), http://www.eurofound.europa.eu/observatories/eurwork/comparative-information/collective-bargainingcoverage-and-extension-procedures [https://perma.cc/JG2D-MFMP]. 12 Larry Cohen, The Time Has Comes for Sectoral Bargaining, Vol. 27(3) NEW LABOR FOR. 10, 11 (2018). 13 OECD Table 5.1 at 175. Chart is Chart 5.1 at 173. https://www.oecd.org/els/emp/2409993.pdf.


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Many of the countries where some form of sectoral bargaining exists also receive high marks for minimizing workers’ rights violations: Austria, Belgium, Finland, Germany, the Netherlands, Norway, Portugal, Sweden and Switzerland all received one of the two best ratings on this measure in the 2018


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ITUC Global Rights Index.14 By contrast, the United States received a rating indicative of systemic violations of worker rights.15 As the Clean Slate Project begins to explore different avenues for raising the level of collective bargaining in the United States, it will be important to understand how sectoral-style bargaining has worked both domestically and abroad. To that end, what follows below is a brief summary of examples in U.S. history of labor arrangements resembling sectoral or social bargaining and an overview of the sectoral bargaining systems that exist in other countries.

14 2018 ITUC GLOBAL RIGHTS INDEX 10 (Inter. Trade Union Confed. 2018), https://da.se/wp-content/uploads/2018/06/ITUC-Global-Rights-Index-2018-EN.pdf. 15 Id.


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3. U.S. Historical and Industry-Specific Parallels The National Labor Relations Act (NLRA) creates a system of “private collective bargaining at the firm level instead of the class-based political or social bargaining that was advocated for by [some] strands of the American labor movement and that ultimately took hold in some European countries.”16 Nonetheless, there have been moments in American history and there remain practices in particular industries in which employee bargaining has approximated a sectoral model. The analysis below examines historical and industry-specific examples of multi-employer bargaining, pattern bargaining and tripartite bargaining. Multi-Employer Bargaining

Under the NLRA, the National Labor Relations Board cannot mandate multi-employer bargaining absent employer consent. Section 9(b) of the Act provides:

The Board shall decide in each case whether, in order to assure to employees the fullest freedom in exercising the rights guaranteed by this Act [subchapter], the unit appropriate for the purposes of collective bargaining shall be the employer unit, craft unit, plant unit, or subdivision thereof.

That language has been construed to render the “employer unit” the largest unit the Board can find appropriate.

Nevertheless, employers can voluntarily choose to bargaining in a multi-employer unit if they form an association and designate the association as their agent for purposes of collective bargaining. The first case to certify a unit composed of independent and competing companies was Shipowners’ Ass’n. of the Pacific, 7 NLRB 1002 (1938). The Board explained that its “jurisdiction to go beyond the individual company in deciding upon an appropriate unit of employees,” id. at 1024, depended upon the existence of a common bargaining agent having been agreed to by the group: “The Board is . . . expressly given the authority to decide that the ‘employer’ unit is the unit most appropriate for purposes of collective bargaining. The Act includes within the term employer ‘any person acting in the interest of an employer, directly or indirectly,’ and the term person ‘includes one or more . . . associations . . . .’” Id. at 1024-25 (emphasis in original). The Board concluded that the association-wide unit met the definition of an “employer unit,” because “the associations engaged in collective bargaining for the individual companies” and thus “clearly act in the interest of these various companies.” Id. at 1025.

In other words, “the essential element warranting the establishment of multiple-employer units is clear evidence that the employers unequivocally intend to be bound in collective bargaining by group rather than individual action.” Pacific Metals Company, 91 NLRB 696, 699 (1950). In “[c]ases involving the issue of multiemployer units of separate and competing employers,” therefore, “the decisive factor . . . has been the evidence of participation in the group bargaining through a committee or other representative and the lack of evidence of any desire for

16 Kate Andrias, The New Labor Law, 126 YALE L.J. 2 (2016).


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individual bargaining.” Metropolitan District Council of Philadelphia, 137 NLRB 1583, 1598-1599 (1962).

During the debates over the Taft-Hartley Act, proposals were made to limit multi-employer bargaining, but they were rejected. See NLRB v. Truck Drivers Local 449 (Buffalo Linen Supply Co.), 353 U.S. 87, 95-96 (1957).

While employer must consent to creation of multi-employer unit, neither employers nor union can withdraw from multi- employer unit during the term of an agreement or once bargaining has commenced absent consent or unusual circumstances.

In some industries, employer associations and unions negotiate master agreements for participating employers in an industry. “This practice dates back to the earliest days of collective bargaining [in the United States]. The process works to the advantage of employers seeking leverage in dealing with larger unions. Furthermore, multiemployer bargaining, if adhered to by the members, allows the employers to combat unions which engage in whipsaw tactics. Meanwhile, multiemployer bargaining potentially works to the advantage of the labor union by fostering security, creating a greater standardization of wages and working conditions under a group contract, and by enabling the union to save the time and money typically associated with bargaining with each employer on an individual basis.”17

The NLRB affords some protection to multi-employer bargaining. “When there is a history of bargaining between a union and a number of employers acting jointly, the employees who are thus represented constitute a multiemployer bargaining unit. Once such a unit has been established, any of the participating employers—or the union—may retire from this multiemployer bargaining relationship only by mutual assent or by a timely submitted withdrawal. Withdrawal is considered timely if unequivocal notice of the withdrawal is given near the termination of a collective-bargaining agreement but before bargaining begins on the next agreement.”18

Multi-employer bargaining agreements exist today in certain industries such as trucking, entertainment, and the building trades. In 1964, the Teamsters under Hoffa’s leadership first negotiated the National Master Freight Agreement, “binding nearly every large unionized trucking firm in the country to a standard labor contract that covered approximately 450,000 truck drivers.”19 The agreement continues to be negotiated by a multi-employer association to this day, but with many regional

17 https://scholarlycommons.law.hofstra.edu/cgi/viewcontent.cgi?article=1228&context=hlelj 18 https://www.nlrb.gov/sites/default/files/attachments/basic-page/node-3024/basicguide.pdf 19 https://books.google.com/books?id=ezaXJhJAHAQC&pg=PA208&lpg=PA208&dq=freight+industry+national+master+agreement+1960s+teamsters&source=bl&ots=i_rRnk0eqk&sig=D5PS9vBMbaiJbkeBaGbiuMFIl0Y&hl=en&sa=X&ved=2ahUKEwiqqs-Pt5HeAhWCg-AKHQiED64Q6AEwEHoECAEQAQ#v=onepage&q=freight%20industry%20national%20master%20agreement%201960s%20teamsters&f=false

https://scholarlycommons.law.hofstra.edu/cgi/viewcontent.cgi?article=1228&context=hlelj

https://www.nlrb.gov/sites/default/files/attachments/basic-page/node-3024/basicguide.pdf


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supplements.20 Regional building trades groups, like the Building Trades Employers Associations in Boston21 and New York22, also negotiate joint agreements with construction unions. While not governed by the NLRA, the rail industry is another site of multi-employer bargaining. “[T]he Railway Labor Act provides for craft based national bargaining, and in the rail sector bargaining occurs with multiple employers and crafts.”23 Pattern Bargaining

“In the American case, pattern bargaining probably represents the closest approximation to the sort of branch or industrial agreements that exist in countries like Germany. For example, the United Automobile Workers (UAW) long has employed the technique in its bargaining with . . . American automobile manufacturers. Used as a means to take wages out of competition, in pattern bargaining, the union concludes an agreement with one of the auto firms, and then uses its key terms as a pattern for the contracts that it will negotiate with the other manufacturers. Consistent with the grass-roots focus of American style collective bargaining, and as part of the bargaining process, local union affiliates of the UAW standardly negotiate supplemental, plant level agreements to regulate local conditions not covered by the master agreement.”24

“The practice took shape in the years after World War II. In the great strike wave of 1946 the big

industrial unions of the CIO all demanded a raise of 18.5 cents an hour. For nearly three decades pattern bargaining allowed union workers to win big wage increases and a growing array of benefits. Workers in auto, steel, rubber, coal, airlines, packinghouses, trucking, oil, telecommunications all won brand-new benefit packages, including pensions and medical insurance. For nearly two decades the wages of workers in auto, steel, rubber, and coal were within a few cents of each other. The real wages of manufacturing workers rose by more than 30 percent from 1950 through 1969. Wages stayed ahead of inflation in most years until the 1970s.

[Soon enough,] patterns were squeezed by international competition, the shift of manufacturing to the South, deregulation, and the spread of non-union rivals. Membership fell, the number of strikes dropped by almost half, new organizing stalled, and the wage gains of the past were considerably trimmed if not outright reversed.”25 The primary critique of pattern bargaining from contemporary labor activists is that rather than fulfilling its purpose of “prevent[ing] a downward slide due to wage competition and . . . creat[ing] a united force to push wages upward,” it has at times “morphed into its opposite—a conduit for concessions and negotiated retreat.”26 20 https://teamster.org/abf-contract-update/2018-2023-tentative-abf-national-master-freight-agreement-regional-supplemental 21 https://www.btea.com/about/ 22 http://www.bteany.com/ 23 http://newlaborforum.cuny.edu/2018/06/22/the-time-has-come-for-sectoral-bargaining/; http://apps.americanbar.org/labor/rwcomm/mw/papers/2003/miller1.pdf http://apps.americanbar.org/labor/rwcomm/mw/papers/2001/moore.pdf 24 https://www.jil.go.jp/english/events/documents/clls06_06usa.pdf 25 http://labornotes.org/2010/02/pattern-retreat-decline-pattern-bargaining 26 Id.

http://newlaborforum.cuny.edu/2018/06/22/the-time-has-come-for-sectoral-bargaining/

http://apps.americanbar.org/labor/rwcomm/mw/papers/2003/miller1.pdf

http://apps.americanbar.org/labor/rwcomm/mw/papers/2001/moore.pdf

https://www.jil.go.jp/english/events/documents/clls06_06usa.pdf


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Still, pattern bargaining persists in a variety of industries today. Some notable examples are

discussed below. Municipal Public Sector

“[New York] City has traditionally employed pattern bargaining to simplify the process of negotiating with so many unions. The first union to reach a settlement establishes ‘the pattern’ of wage increases; each subsequent union is expected to agree to the same raises or to a settlement that offsets higher wage increases than the pattern through productivity savings. There are two separate patterns: one for uniformed officers and one for civilian employees. . . . Pattern bargaining preserves parity between the pay scales of ranked officers in the uniformed departments, as well as between departments. It also infuses each round of collective bargaining with order and predictability, and provides assurance to the first union to settle that it will not be ‘leap‐frogged’ by subsequent contracts that achieve more favorable terms. In the past, all union contracts began and ended in the same calendar year, and this period was considered to be a ‘round’ of collective bargaining. In recent years, the end dates of some contracts were extended; as a result, ‘rounds’ of collective bargaining are now denoted less by their ties to the calendar dates and more by the pattern of wage increases that is applied.”27 Musicians

The American Federation of Musicians negotiates its Live Television agreement “with the three major networks—NBC, CBS and ABC.”28 “[T]he agreement serves as the standard for musicians appearing on nationally televised programs. Independent TV producers also sign that agreement. Its benefit, reuse, and new media provisions are modeled for other audiovisual agreements. From the 1960s through the remainder of the 20th century, when unions—including the AFM—were negotiating industry-wide agreements, progressive contract settlements were driven in large part through pattern bargaining. For many years, the AFM’s media agreements contained session wages, per-hour production and air rates, and benefit contributions that were within a few dollars of each other, despite differing schedules for residual payments and re-use patterns. In the 1980s and 1990s, progressive wage, fringe benefit, and workplace standards negotiated by major US orchestras became a model for other orchestral negotiating teams in their efforts for improved contract provisions across the symphonic field. But in the first decades of the 21st century, pattern bargaining slowed as a means of wringing improvements from employers, who sometimes turned the tables and used the pattern process for concessions.”29 Janitors

SEIU’s Justice for Janitors campaign in Los Angeles at the turn of the twenty-first century similarly employed a pattern bargaining model. “The strategy was to organize all the major cleaning companies and have them sign identical contracts [since this] would take labor costs out of competition between area cleaning service contractors.”30 [Auto is another example, see section above]. Tripartite Bargaining 27 https://cbcny.org/sites/default/files/REPORT_7ThingsUnions_05202013.pdf 28 https://internationalmusician.org/pattern-bargaining/ 29 Id. 30 https://escholarship.org/content/qt6ch053x1/qt6ch053x1.pdf

https://cbcny.org/sites/default/files/REPORT_7ThingsUnions_05202013.pdf

https://internationalmusician.org/pattern-bargaining/

https://escholarship.org/content/qt6ch053x1/qt6ch053x1.pdf


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Early Experiments “[I]n the early years of the Depression, the United States Congress, pressed by President Roosevelt, enacted the National Industrial Recovery Act (NIRA). The cornerstone of Roosevelt’s initial response to widespread poverty, labor unrest, and economic instability, NIRA gave unions, businesses, and consumers shared power to set industry codes, including minimum wages and maximum hours, while simultaneously providing workers the right to organize into unions. NIRA, however, was short-lived. Soon after its enactment, the law became mired in implementation challenges. Then, in 1935, the United States Supreme Court struck down the statute in A.L.A. Schechter Poultry Corporation v. United States, concluding that NIRA delegated too much legislative power.”31

“While Schechter Poultry is famous in the constitutional and administrative law canons as a rare exercise of the non-delegation doctrine, it is also widely understood to have ended the nation’s brief, failed experiment with a form of social democratic power-sharing in governance sometimes known as ‘tripartism’ or ‘labor corporatism.’ Tripartism is used in various forms in most industrialized democracies, particularly Europe’s social democracies; it gives worker organizations, business groups, and sometimes consumer organizations as well, a legally defined role in decisions about the direction of the economy generally and social welfare policy in particular.”32 But the conventional account is at least partly wrong: Despite Schechter Poultry, tripartism in the United States was soon temporarily revived by FLSA’s industry committees and persists today in the form isolated use of state level wage boards. FLSA Industry Committees “[T]he original FLSA was more ambitious both procedurally and substantively than the low minimum wages and overtime protections for which it is known today. It created ‘industry committees’ or wage boards composed of tripartite representatives—employers, unions, and the public—with discretion to set minimum wages on an industry-by-industry basis, within a statutorily defined range. Supporters of FLSA saw it as a means to end poverty wages, while extending the reach of unions throughout the nation and throughout the economy. Even more so than the NLRA, FLSA thus instantiated the commitment to empowering worker organizations in the political economy; in fact, many contemporaries saw FLSA as a direct outgrowth of NIRA and tripartite models abroad.”33

“[T]he industry committees were limited in important ways. They had to set minimum wages within a statutorily prescribed dollar range and time period, lacked jurisdiction over working conditions or benefits, and excluded groups of workers, in particular many African Americans in the rural south. Nor did the FLSA boards permanently alter the character of American political economy, since they did not fundamentally change common law rights of employers and employees, or the ownership of resources. Nonetheless, during their existence, the FLSA industry committees represented a high-water mark of broadly inclusive, state-supported collective bargaining.”34 State Wage Boards

31 Kate Andrias, The Forgotten Promise of the FLSA, 128 YALE L.J. (forthcoming 2019). DRAFT 32 Id. 33 Id. 34 Id.


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“[A] few states, including California, New Jersey, and New York, [still] vest the power to set wages or other standards with tripartite commissions, i.e., boards with representation from employee groups, industry groups, and the public. . . .

For example, California law provides for an Industrial Welfare Commission (IWC) composed of two union representatives, two employer representatives, and one representative from the general public. The governor appoints each of the five members with the consent of the Senate, and members serve four-year terms. The labor representatives must be drawn from ‘members of recognized labor organizations.’ The IWC’s authority goes beyond creating a basic minimum wage: It has authority to evaluate wages in ‘any occupation, trade, or industry’ to ensure they are adequate ‘to supply the cost of proper living’; it also can consider whether ‘the hours or conditions of labor’ are ‘prejudicial to the health, morals, or welfare of employees.’ If the IWC determines that wages, hours, or working conditions are inadequate, it selects a wage board—again composed of two labor and two employer representatives, along with a neutral party—to investigate and make recommendations. Recommendations that receive the support of two-thirds of the wage board’s members are incorporated into IWC proposed regulations, which are then subject to public hearings. If approved, the orders become part of the California Code of Regulation. Using this process, the IWC has issued seventeen orders: twelve industry orders, three occupation orders, an order that applies to any industry or occupation not previously exempt by the IWC’s wage orders effective as of 1997, and one general minimum wage order.

New Jersey’s tripartite Minimum Wage Advisory Commission (WAC or Commission) is

charged with annually evaluating the state’s minimum wage. As in California, the governor appoints the Commission’s members and is required to choose representatives from business and labor. To that end, New Jersey law incorporates a representative mechanism, specifying that the business representatives ‘shall be nominated by organizations who represent the interests of the business community in this State’ and that the labor representatives ‘shall be nominated by the New Jersey State AFL-CIO.’ Unlike in California, however, the Commission has no representatives from the public; instead, the Commissioner of Labor and Workforce Development fills that function and serves as the Commission’s chair. And WAC does not have authority over benefits or working conditions. The law does, however, allow the Commissioner to establish sectoral wage boards, composed of labor and business representatives, which then recommend minimum wages in particulars sectors. Wage boards can be established if the Commissioner believes ‘that a substantial number of employees in any occupation or occupations are receiving less than a fair wage.’ The law also provides for a public hearing process after which the Commissioner decides whether to approve or reject the report.

To date, the experience with state-level tripartite commissions has been mixed. Some wage

boards, including Colorado’s, appear to have been moribund for years. In other states, like California and New York, wage boards have been used successfully at times. However, no commission is actively or aggressively setting employment standards today. Indeed, the California IWC has been without funding since 2004. The California Division of Labor Standards Enforcement continues to enforce the existing wage orders, and the legislature has not repealed the IWC’s statutory responsibilities, but the current status of the IWC can be characterized as an unfunded legislative mandate. In New York, the Fight for $15 movement recently used the state wage board with success. In 2015, after growing protests and strikes organized by the Fight for $15, and at the request of Governor Andrew Cuomo, the NY labor


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commissioner exercised his authority to impanel a wage board to recommend higher wages in the fast food industry.

The Board Members—representatives from labor, business, and the general public—held hearings over the next forty-five days, across the state. Workers organized by the Fight for $15 participated in great numbers at these hearings. On July 21, the Board announced its decision: $15 per hour for fast food restaurants that are part of chains with at least thirty outlets, to be phased in over the course of six years, with a faster phase-in for New York City. The wage board order was a significant victory, followed by another victory: a bill to raise the state-wide minimum wage to $15. However, in the negotiations over the state-wide minimum, employers successfully mobilized to strip the Commissioner’s authority to establish higher minimums for particular occupations. Thus, the ultimate compromise bill curtailed the powers of future tripartite wage boards. Still, the New York experience shows how tripartite structures can be used to engage workers in setting terms of work for entire industries.

The New York example aside, where wage boards have operated, the potential for social

bargaining has often been under-realized. Unions have not frequently engaged the commissions through wide spread mobilization, testimony, and collective action. The boards, as currently conceived, also have structural limitations. The ability of workers to use wage boards to their benefit largely depends on the identity of the governor in the state; he or she influences when such boards act and who constitutes them. Thus, in California, for example, former Governor Schwarzenegger tried to use the wage board to limit the legislature’s proposal to index the minimum wage. Moreover, in most cases, the neutral representatives on the commissions effectively decide disagreements. These individuals, selected by the partisan governors, serve as the swing votes and thereby minimize the extent to which true bargaining occurs. This weakness is pronounced when there is no broader worker mobilization exerting pressure on the commissions.

Nonetheless, more could be done to use existing wage boards aggressively, as was done by the Fight for $15 in New York. In jurisdictions where worker organizations have significant political influence, and where the executive branch is amenable, workers can petition wage boards to act. Where statutes permit, they can demand sector-by-sector wage and benefit improvements, beyond minimum wage increases. They can also engage workers in collective action designed to achieve such gains, as the Fight for $15 did in New York.”35 While the United States has been home to some historical moments and specific industries experimenting with sectoral-like bargaining models, firm-level bargaining remains the American default where collective bargaining takes place at all. The next section explores the experiences of countries where sectoral bargaining and its close counterparts have played a larger role in setting the terms and conditions of work.

35 Kate Andrias, Social Bargaining in States and Cities: Toward a More Egalitarian and Democratic Workplace Law (Harvard Law School Symposium Paper), http://harvardlpr.com/wp-content/uploads/2018/01/Andrias-Social.pdf.

http://harvardlpr.com/wp-content/uploads/2018/01/Andrias-Social.pdf

http://harvardlpr.com/wp-content/uploads/2018/01/Andrias-Social.pdf


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4. Supply Chain Bargaining

Another route to explore is supply chain bargaining. This might involve requiring apex companies to bargain regarding all of the terms and conditions of their contractors and other companies in their supply chain, or requiring all companies in a supply chain to engage in multi-employer bargaining. The need for such an approach is growing: “Work that was once done in-house is increasingly scattered across multiple employers interconnected by a chain or network of contracts. This disintegration has several causes, including employers’ drive to escape or prevent unionism and to avoid legal responsibility for employment standards. And it has many baleful consequences, including the swelling of the precarious, low-wage labor market. Not coincidentally, low-wage workers shoulder much of current efforts to organize across multiple employers.”36

Types of Contractual Interconnection

Mark Barenberg has sketched the following kinds of interconnections among employers: “First is the supply chain. Imagine, for example, a single washing-machine manufacturer and distributor that once housed (1) factories producing the primary parts for washing machines, such as ignitions for washing-machine motors, (2) factories assembling secondary components for washing machines, such as washing-machine motors, (3) factories assembling the secondary components into washing machines, (4) warehouses and trucks for storing and transporting parts and assembled products, and (5) retail dealerships selling the washing machines. Suppose the corporation then spins off stages (1), (2), (4), and (5) into independent corporations, but continues to own and operate the final assembly stage, and suppose the five separate corporations are linked by exclusive supplier-purchaser contracts. (See Figure 2.) The five corporations would constitute five links in a single supply chain. [Other supply chains are labor- or service-only supply chains].

In the second and more common pattern of interconnectedness, a single supply chain interweaves with others to form a production-and-distribution network. For example, some of the goods sold by Walmart, Target, and Kmart may be produced in the same factories, transported by some of the same shipping companies to some of the same ports, unloaded by some of the same stevedoring companies, transported by some of the same trucking companies, stored in some of the same warehouses, and transported again by some of the same trucking companies to the Walmart, Target, and Kmart stores. All of these companies are nodes in the network pattern.

A third pattern is a hub-and-spoke wheel of contracts. A building owner, for example, is the hub, and enters into contracts with cleaning companies, security companies, landscapers, insurers, tenants, and others.

A pyramid is a fourth pattern. A fast-food company, for example, stands at the pinnacle of a hierarchy and franchises the many small restaurants at the bottom.

36 Mark Barenberg, Widening the Scope of Worker Organizing: Legal Reforms To Facilitate Multi-Employer Organizing, Bargaining, and Striking, ROOSEVELT INST. 3 (Oct. 1 2015, http://rooseveltinstitute.org/wp-content/uploads/2015/10/Widening-the-Scope-of-Worker-Organizing.pdf.

http://rooseveltinstitute.org/wp-content/uploads/2015/10/Widening-the-Scope-of-Worker-Organizing.pdf

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A fifth pattern exhibits no contractual interconnection among corporations but is simply a horizontal group of independent businesses in a given sector—for example, a retail sector made up of small, separately owned stores.”37

Redefining Employer and Employee

One way to facilitate bargaining along a supply chain would be to redefine terms like “employer” and “employee” to ensure that workers are protected under labor law and that all firms along a supply chain could be classified as employers.

Employer = Indirect Control and Reserved Control

“In 2015, the Obama Board issued its decision in Browning-Ferris Industries, a re-articulation of the Board’s standard for when companies can be held responsible for labor violations by other companies. The Board held that common law principles supported considering two or more entities to be joint employers based not only the exercise of actual control over workers’ terms and conditions of employment, but also indirect control or reserved authority. . . . [I]n December 2017, the Trump Board majority issued its decision in Hy-Brand, reversing Browning-Ferris and returning the Board to a standard that required proof that an employer exercised direct and immediate control in a manner that it is not limited or routine.”38

While Hy-Brand was soon vacated because of ethics issues, the Board is now engaging in rule-making that will presumably adopt its standard.

While considering an employer’s reserved authority or a company’s indirect control over the terms and conditions of work, the BFI standard does not go far enough in allowing bargaining along more than one level of a supply chain; many employers may not have reserved authority to control workers or indirectly control those farther along the chain.

Employer = Sufficient Bargaining Power

Mark Barenberg has offered the following tentative proposal: “An entity would be deemed an employer of multiple workforces if it has ‘sufficient bargaining power’ to determine the terms and conditions of all the employees in question, even if the entity is not currently exercising such power. By organizing and bargaining with that single entity, a worker organization would effectively organize and bargain with what is currently deemed a multi-employer association.

Legal reform could authorize worker organizations to unilaterally choose the scope of bargaining units, including multi-employer units. And, if the Board is called upon to select among differing units chosen by different worker organizations, the Board should define units based on the criterion of ‘maximum potential worker empowerment.’”39

37 Id. at 3, 7. 38 Sharon Block, Joint Employer NPRM: Hy-Brand Returns, ONLABOR (Sept. 17, 2018), https://onlabor.org/joint-employer-nprm-hy-brand-returns. 39 Barenberg, at 14–15.


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Employee = Presumed unless ABC

Under the ABC test adopted by the California Supreme Court in Dynamex Operations West, Inc. v. Superior Court of Los Angeles, a worker will be deemed to have been “suffered or permitted to work,” and thus, an employee for wage order purposes, unless the putative employer proves: (A) that the worker is free from the control and direction of the hiring entity in connection with the performance of the work, both under the contract for the performance of the work and in fact; (B) that the worker performs work that is outside the usual course of the hiring entity’s business; and (C) that the worker is customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed.40

Secondary/Neutral Employers

Beyond redefining the employment relationship, there are other ways in which labor law can adapt to hold firms accountable across a supply chain. Below are examples from the NLRA, the FLSA, and proposed laws.

Client Employers Under California Labor Code 2810.3

“Assembly Bill 1897 created section 2810.3 of the California Labor Code to hold businesses liable for wage theft and inadequate workers’ compensation coverage when they use staffing agencies or labor contractors to obtain workers. Under the prior law, a business could be held responsible for unfair labor practices only if the worker could prove joint employer status. Consequently, many businesses were shielded from accountability when workers were denied wages or were injured from working in substandard conditions. Workers who attempted to report the unlawful labor practices were often retaliated against by the employer without any recourse. Since businesses have increasingly exploited third-party labor suppliers to acquire low-cost, temporary workers for strenuous and dangerous jobs, without being subject to the Labor Code’s provisions governing workers’ rights, California passed AB 1897 to distribute liability between the employer and the labor contractor. As a result of this legislation, vulnerable temporary workers are protected from “adverse action” from both the employer and the labor contractor for whistleblowing and can file a civil action against an employer for any wage and workers’ compensation violations. Notably, no finding of “employer” status of the lead or client company is required.”

According to one commentator, “All California businesses with 25 or more employees that use at least 6 temporary workers, provided by a labor contractor, to perform labor within their ‘usual course of business’ must now share ‘all civil legal responsibility and civil liability’ for subcontracted workers with the labor contractor.”41

40 “ABC” laws creating a presumption of employment status have been on the books in over half of the states’ unemployment insurance laws for decades; more recently, several states have added the test to wage theft and other workplace laws. See, National Employment Law Project, Independent Contractor v. Employee (2016) https://www.nelp.org/wp-content/uploads/Policy-Brief-Independent-Contractor-vs-Employee.pdf. 41 https://www.stevenrubinlaw.com/2017/07/04/protecting-subcontracted-workers-through-ab-1897/

https://www.nelp.org/wp-content/uploads/Policy-Brief-Independent-Contractor-vs-Employee.pdf

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FLSA Hot Goods Provision

“Under the 1938 Fair Labor Standards Act (FLSA), workers must earn a minimum wage and be paid premium compensation for all overtime work. The FLSA imposes these obligations on ‘[e]very employer’ as to ‘his employees.’ But it also contains a provision known as the ‘hot goods’ clause that extends the duties to production employees along the chain of distribution of their products. The clause makes it unlawful to transport or sell ‘goods in the production of which any employee was employed in violation’ of the FLSA.

Under the hot goods provision, liability is not located in or limited to the employer of the employees but rather literally runs with the goods produced in violation of the law. The provision might be thought of as the mirror image of product liability law, with the trajectory of liability reversed. Under product liability law, courts extend responsibility for defective products back from the ultimate consumer to the producer, departing from the limiting principle that the parties in a warranty action must be in privity of contract. Under the hot goods provision, liability is extended forward from the producer toward the ultimate consumer.

The extension of liability through the hot goods provision to those who trade in goods produced in violation of the FLSA may be justified in four ways. First, it might be argued that although it is contractors who directly violate the law, their clients ultimately cause or procure the violations by promoting continuous competition among contractors who in labor-intensive industries--such as building services--can cut costs only by reducing wages already hovering at or near the minimum. Second, whether procuring the violations or not, clients benefit from them through the lower price the contractor can charge because of the violations.

Third, the advantages gained by clients from the violations allow a form of unfair competition. President Franklin D. Roosevelt underscored this point in the Message to Congress that inspired the FLSA's passage: ‘Goods produced under conditions which do not meet rudimentary standards of decency should be regarded as contraband and ought not be allowed to pollute the channels of interstate trade.’ The Supreme Court has expressly recognized the principle of unfair competition, holding that Congress intended the FLSA to ‘eliminate the competitive advantage enjoyed by goods produced under substandard conditions.’ Competitors are injured when goods produced in violation of the Act are sold whether the workers who were underpaid are hired by the seller or by some upstream producer.

Finally, by placing responsibility on client companies, the hot goods provision affords parties with unique access to information about contractors’ labor relations and with considerable economic authority over contractors an incentive to ensure that contractors comply with the law. When a client company’s goods are seized, it releases its goods by paying the workers directly, and then it can go after its subcontractors for the money. In this way, companies are incentivized to contract with above-board, capitalized subcontractors.

The FLSA gives the Secretary of Labor authority to enforce its terms and vests in employees a private right of action to remedy violations (though not for hot goods). But the Secretary cannot effectively police hundreds of thousands of workplaces, particularly those that have no fixed location


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and suddenly appear and disappear. Employees may risk more by bringing an action than they can reasonably expect to gain despite the FLSA’s ban on retaliation, and too often have trouble enticing lawyers to bring their claims in court if the dollar amounts are relatively low and class or collective action is not possible. From an enforcement perspective, client companies have both the advantages of employees in having a direct economic link to the employers and the advantages of government in being relatively insulated from retaliatory action.”42

Related to government seizure of goods produced in substandard conditions, many states also permit stop-work orders (SWO’s) in worksites where labor and employment laws are not followed.43 Typically used to ensure workers’ compensation and unemployment insurance coverage on construction sites, SWO’s can bring work in subcontracted workplaces, like hotels, construction sites and hospitals, to a standstill until the violation(s) are remedied.

Duty of Reasonable Care

In the context of FLSA, Brishen Rogers has argued that strengthening joint employer liability is an ineffective means of ensuring wage-and-hour compliance across the supply chain.44 He instead proposes a legal regime that would hold firms to a duty of reasonable care to prevent violations of wage-and-hour laws within their supply chains (one suggestion is to give employees a private right of action to enforce the hot goods provision). While not wholly relevant to multi-employer bargaining, one idea of how this might be employed in the labor law context is to hold firms to a duty of reasonable care to prevent unfair labor practices within their supply chains.

NLRA Construction and Garment Industry Provisos

“The National Labor Relations Act includes a general policy against secondary union activity-union pressure exerted against a neutral employer in order to influence the labor relations of another employer. In 1947 the Taft-Hartley Act outlawed strikes and boycotts for secondary objectives, but a loophole in the Act rendered agreements aimed at secondary objectives immune from scrutiny under the labor laws. These agreements are known as "hot-cargo" contracts, a term that arose from their original use by the Teamsters Union. In response to widespread dissatisfaction with the labor laws' tolerance of secondary agreements, Congress amended the Act in 1959 by adding section 8(e), which curtails the freedom of unions and employers to make hot-cargo agreements. The amended Act does not absolutely prohibit all secondary agreements, however. A proviso to section 8(e) gives a limited exception for subcontracting agreements between a union and an employer in the construction industry; a second proviso creates a more generous exception for the garment industry. The construction industry proviso

42 Craig Becker, Labor Law Outside the Employment Relationship, 74 TEXAS L. REV. 1527 (1996).

43 For example, in 2012, Massachusetts’ Department of Industrial Accidents issued 15 stop work orders for lack of workers’ compensation coverage. Massachusetts Department of Labor, Joint Task Force on the Underground Economy and Employee Misclassification 2012 Annual Report (August 2013), available athttp://www.mass.gov/lwd/eolwd/jtf/annual-report-2012.pdf. See also, https://www.ctdol.state.ct.us/communic/newsrels-Archives/2011-8/8-17-11Stopders.pdf

44 Brishen Rogers, Toward Third-Party Liability for Wage Theft, 31 BERKELEY J. EMPL. & LAB. L. 1, 12–15 (2010)

https://www.ctdol.state.ct.us/communic/newsrels-Archives/2011-8/8-17-11Stopders.pdf


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allows a union to agree with an employer in the construction industry to restrict subcontracting at the job site to firms employing union workers. These agreements are secondary because they use the general contractor to pressure the subcontractors to recognize the union as the representative of the subcontractor's employees.”45

Coalition of Immokalee Workers (CIW)

The CIW provides an inspiration model for supply chain bargaining, though it is important to note that, in order to achieve its victories, the organization has employed strategies of secondary activity that would be prohibited by the NLRB.

“ . . . CIW had identified the twin evils of modern day supply chains as, (1) the ability of the megacorporations at the top to demand ever-lower prices from their suppliers and the concomitant inexorable downward pressure which that placed on growers’ profits, workers’ wages, and the overall workplace environment, and (2) the lack of any requirement or desire on the part of those same corporations to put their purchasing power behind their professed desire for a responsible supply system. Having thus identified the purchasing power of corporations as the root of the evil, CIW envisioned a world in which that same power, if corporations were properly motivated, could also be the solution. Consequently, each corporation in the [Fair Food Program (FFP)], as a condition of participation, has signed a legally binding contract, called a Fair Food Agreement (“FFA”), with CIW. These contracts, which represent the first indispensable element of the FFP, have evolved over time to cover topics such as marketing, expansion, and support for the Program’s monitoring function, but each contains two fundamental provisions.

First, each corporation pays a Fair Food Premium on every pound of covered produce that it purchases from participating growers. The amount of the premium varies depending on the type of produce purchased, but it is always paid by the corporation to the grower within the corporation’s existing purchasing system. This means that some corporations pay the premium directly to the grower, while others pass it down through one or more middlemen. But once the premium reaches the grower, it must be passed on to the farm’s qualifying workers as a Fair Food bonus. Functionally, the premium helps address the historic poverty of farmworkers, exacerbated now by the downward pressure on wages caused by the corporations’ massive purchasing power. Conceptually, it represents a small step in addressing the cost/price squeeze faced by growers in the increasingly monopsonistic system that is today’s retail food market.

The other requirement of every FFA is that the corporation only purchase covered produce from participating growers who are in good standing with the Program, as determined by the FFSC, the Program’s monitoring organization. . . . [I]f a grower is suspended from the Program for failure to abide by the Fair Food Code of Conduct, participating buyers cannot purchase from that grower until it gains reinstatement. This binding provision is the sine qua non of compliance. Without it corporations could, and therefore would, walk away when confronted with a significant disruption to their existing supply

45 Michael Dreeben, Hot-Cargo Agreements in the Construction Industry: Restraints on Subcontracting under the Proviso to Section 8(e), 1 DUKE L.J. 141–42 (1981), https://scholarship.law.duke.edu/cgi/viewcontent.cgi?article=2766&context=dlj.


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chains. The fundamental social change created by the FFP is not free, and is not always easy. Only the real threat of losing sales provides the necessary motivation for growers to make the sometimes-difficult choices involved in modernizing their labor practices.”46

Bangladesh Accord

“The Accord on Fire and Building Safety in Bangladesh (the Accord) was signed on May 15th 2013. It is a five year independent, legally binding agreement between global brands and retailers and trade unions designed to build a safe and healthy Bangladeshi Ready Made Garment (RMG) Industry. The agreement was created in the immediate aftermath of the Rana Plaza building collapse that led to the death of more than 1100 people and injured more than 2000. In June 2013, an implementation plan was agreed [upon] leading to the incorporation of the Bangladesh Accord Foundation in the Netherlands in October 2013.

The agreement consists of six key components: 1. A five year legally binding agreement between brands and trade unions to ensure a safe working

environment in the Bangladeshi RMG industry 2. An independent inspection program supported by brands in which workers and trade unions are

involved 3. Public disclosure of all factories, inspection reports and corrective action plans (CAP) 4. A commitment by signatory brands to ensure sufficient funds are available for remediation and to

maintain sourcing relationships 5. Democratically elected health and safety committees in all factories to identify and act on health

and safety risks 6. Worker empowerment through an extensive training program, complaints mechanism and right to

refuse unsafe work.”47

46 Greg Asbed & Steve Hitov, Preventing Forced Labor in Corporate Supply Chains: The Fair Food Program and Worker-Driven Social Responsibility, 52 WAKE FOREST L. REV. (2017), http://ciw-online.org/wp-content/uploads/HitovAsbedArticle_AuthorCopy.pdf; see also James Brudney, Decent Labour Standards in Corporate Supply Chains: The Immokalee Workers Model, in TEMPORARY LABOUR MIGRATION IN THE GLOBAL ERA 351 (Joanna Owens & Rosemary Howe eds., 2016), https://wsr-network.org/wp-content/uploads/2017/07/CIW-and-Decent-Labour-Standards_18May2016.pdf. 47 http://bangladeshaccord.org/governance/

http://ciw-online.org/wp-content/uploads/HitovAsbedArticle_AuthorCopy.pdf

http://ciw-online.org/wp-content/uploads/HitovAsbedArticle_AuthorCopy.pdf

https://wsr-network.org/wp-content/uploads/2017/07/CIW-and-Decent-Labour-Standards_18May2016.pdf

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5. Synthesis of International Sectoral Bargaining Models MULTI-EMPLOYER BARGAINING AND CONTRACT EXTENSION “Coverage and extension are key components of national industrial relations institutions in general and bargaining systems in particular. First, there is almost by definition a close association between coverage and extension. As comparative analysis has found . . ., the extent to which extension mechanisms are used in a country is the most powerful single determinant of variations in the level of bargaining coverage across countries: coverage tends to increase significantly with the use of extension practices. Conversely, the applicability and actual use of extension mechanisms depends decisively on the nature of the bargaining system. For obvious reasons, extension rules can be implemented effectively only in connection with multi-employer collective agreements.”[1] Types of Extension Erga omnes Based on the “erga omnes” (“towards everyone”) principle, this type of extension “makes a collective agreement generally binding within its field of application by explicitly binding all those employees and employers which are not members of the parties to the agreement.”[2] Types of Erga Omnes Extension Semi-automatic: “The semi-automatic extension regime does not require a public authority to make a decision having heard representation from those likely to be affected by the decision. As long as the collective agreement is valid – and this may require a particular representivity threshold being met (e.g. Finland) – the collective agreement will be deemed to be generally applicable in its domain (France, Spain, Iceland, Finland, Greece under the national general labour agreements until 2010; and Romania until 2011). . . . Another feature of the semi-automatic regime is that it often allows the Minister to take the initiative rather than wait for the request from the negotiating parties (e.g. in France).”[3] Examples of representivity thresholds: o Finland: “The [collective agreement] must be nationwide and representative for the sector concerned (>50% employees covered).”[4] o France: “No representativeness criteria for employers. [Trade unions] need to have received >30% of votes at the last professional elections and the agreement should not be opposed by any [trade union] having received >50% votes.”[5] Supportive: “The supportive extension regime operates within the boundaries of procedural law with rules and criteria for extension. With very few exceptions, Ministers or public authorities can only extend collective agreements, and only those provisions in such agreements, for which extension has been requested by the signatory unions and employers’ associations. . . . The procedure tends to be more demanding when extension must be filed jointly, as in Germany and Switzerland. The collective agreement must cover a ‘sufficiently representative’ proportion of employees before it can be extended. The count is usually based on the representation of the employers’ association, measured by the number


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of workers employed by their member firms. But there may be additional criteria (such as a minimum number of firms represented, SME representation, union density, etc). In recent years, it has become common practice to give the Minister, or deciding authority, some discretion allowing extension where it is crucial for the survival of training and social funds linked to a collective bargaining council, where there is a high proportion of vulnerable workers (e.g. migrant or contract workers) in a sector, or where representivity criteria cannot be met by virtue of a high proportion of non-standard workers in a sector. These public interest considerations have become more important in recent years with the growing diversity of firms and work arrangements. As a rule, extension decisions are taken only after the firms and workers (or their representing ‘minority organizations’) to whom the agreement is extended are given the opportunity to submit their ‘observations” or “objections.’ The Minister or public authority may also be authorized to grant exemptions to certain firms from the extension order, on application. By 2015 the supportive extension regime applied in ten countries: Croatia, Slovenia (and probably also the other former Yugoslav republics), Germany, Switzerland, South Africa, Luxembourg, the Netherlands, Israel, Portugal and Belgium.”[6]

Restrictive: “The restrictive extension regime is different in the use of the criteria that apply in the supportive regime. Representivity criteria are more demanding than is the case in the supportive regime, and are frequently set at higher levels (requiring supermajorities, for example). A further restriction may be that extension may only be applied in sectors with foreign workers and there is the threat or reality of social dumping (e.g. Norway).”[7] Enlargement Through enlargement, “a collective agreement is extended to a specific geographic or sectoral area outside its actual scope.”[8] o “in Austria, enlargement takes the form of an 'extension order', issued by the Federal Arbitration Board (Bundeseinigungsamt). The board acts upon written requests from employers' or employees' organisations. Collective agreements to be extended in this way must be of 'prevailing importance', the working conditions in the 'adopting' sector must be similar to those in the sector where the collective agreement originates and there must not be a competing agreement; o in Portugal, enlargement procedures apply in cases where there are no bargaining partners in a given sector or where the parties do not show any initiative to negotiate a collective agreement. Enlargement is granted in the form of an extension directive (Portaria de extensão) by the Minister of Labour. Although employers, their associations, and trade unions have the opportunity to object to this decision, they do not have the power to stop enlargement of an agreement; and o in Spain, enlargement is granted only where workers and employers are prejudiced by their inability to enter into a collective agreement in their field, due to the absence of legitimate bargaining parties. In addition, the law requires a positive decision by the joint National Consultative Committee on Collective Agreements (Comisión Consultiva Nacional de Convenios Colectivos) which also needs to be approved by the Ministry of Labour. Applications for enlargement are to be filed by one or both parties to a collective agreement.”[9]


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Functional equivalents of extension Even where extension is rare or not possible by law, other practices can achieve roughly the same effect as extension. In Austria, “[e]xtensions are rarely issued. Compulsory membership to an [employer organization] for all firms works as a functional equivalent keeping [collective agreement] coverage high.”[10] In Italy, “[t]here are no formal extension mechanisms but the Constitutional obligation to pay a ‘fair wage’ is a functional equivalent because judicial practice refers to the reference [collective agreement] to determine what is the level of a “fair wage.”[11] MULTI-EMPLOYER BARGAINING WITHOUT CONTRACT EXTENSION

“The Swedish tradition of self-regulation is based on voluntary collective agreements, not agreements forced through law. In addition, Sweden has no legislation on the extension of collective agreements to whole industries. The only way to force employers to enter collective agreements is through collective action.”[12]

WAGE BOARDS

“The foundations for labour relations in Uruguay were developed in 1943 through Law 10,449, which created the wage councils. The wage councils were charged with negotiating minimum wages in each economic sector and category; their structure was tripartite, involving three representatives of the executive branch of government, two workers’ representatives, and two employers’ representatives, with their respective alternates.”[13]

[NB: We need to explore mechanisms for national and sectoral bargaining internationally].

[1] Franz Traxler & Martin Behrens, Collective Bargaining Coverage and Extension Procedures, EurWORK (Dec. 17, 2002), http://www.eurofound.europa.eu /observatories/eurwork/comparative-information/collective-bargaining-coverage-and-extension-procedures [http://perma.cc/2PWM-4HHP]. [2] Id. [3] Susan Hayter & Jelle Visser, The application and extension of collective agreements: Enhancing the inclusiveness of labor protection, International Labour Organization (2018), https://www.ilo.org/wcmsp5/groups/public/---dgreports/---dcomm/documents/publication/wcms_633672.pdf. [4] Employment Outlook 2017, Collective Bargaining in a Changing World of Work: Online Annex Chapter 4, OECD, https://www.oecd.org/els/emp/EMO2017-CH4-Web-Annex.pdf. [5] Id. [6] Hayter & Visser, The application and extension of collective agreements. [7] Id. [8] Traxler & Behrens, Collective Bargaining Coverage and Extension Procedures. [NB: need to clarify how this is different from erga omnes.] [9] Id. [10] Employment Outlook 2017, Collective Bargaining in a Changing World of Work: Online Annex Chapter 4.


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[11] Id. [12] Anders Kjellberg, Self-regulation versus State Regulation in Swedish Industrial Relations, Juristförlaget i Lund (2017), https://web.archive.org/web/20171009181150/http://portal.research.lu.se/ws/files/23904978/Kjellberg_FSNumhauserHenning_Self_Regulation_State_Regulation.pdf. [13] Graciela Mazzuchi, Labour relations in Uruguay, 2005-2008, International Labour Office (Nov. 2009), https://www.ilo.org/legacy/english/inwork/cb-policy-guide/uruguaylabourrelations2005to2008.pdf.


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Internal Variations (by chart)

1. Ultra-activity and duration of CAs48

● Ultra-activity refers to the validity of an agreement after its termination date. ● Social partners refers to representatives of employers and workers, usually employer

organisations and trade unions.

Allows ultra-activity of CAs

Does law set a maximum duration of ultra-activity?

Average duration of CAs (months)

Is there a maximum legal duration of CAs?

Australia No rule, unlimited 36 At the firm level: 48 months

Austria No rule 12 No (though in practice, wage agreements are negotiated every year)

Belgium No, but can be set by social partners

24 No

Canada No rule 43 No

France For permanent agreements, if notice is given, 15 months of ultra-activity and possibility to prolong them. For fixed-term, no limit to ultra-

- No (usually there is no end date, but in the rare cases where there is an end date, maximum five years).

48 Information from EMPLOYMENT OUTLOOK 2017, COLLECTIVE BARGAINING IN A CHANGING WORLD OF WORK: ONLINE ANNEX CHAPTER 4, OECD, https://www.oecd.org/els/emp/EMO2017-CH4-Web-Annex.pdf.


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activity.

Germany No rule - At the firm and sectoral level: if agreed to by social partners.

Norway No rule 24 Yes, by law 36 months, but the SP are free to agree on other terms of duration, usually 24 months (at firm and sectoral levels).

Portugal Yes, 12 months 43 No

Spain Yes, 12 months (social partners can deviate)

12 Yes (agreed by social partners at firm and sectoral level).

Sweden No rule 36 It is left to social partners (most have a termination date, some are indefinite). Manufacturing: 36 months.

No ultra-activity

United States - - Agreed to by social partners at firm level


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United Kingdom - - No

2. Derogations from CAs49

● Derogation refers to opening or derogation clauses which allow for lower standards, i.e. less favourable conditions for workers, in a generalised way and not specifically related to economic difficulties.

● Opt-out clauses refers to temporary “inability to pay” clauses that allow the suspension or renegotiation of (part of) the agreement in cases of economic hardship.

Derogations from CAs allowed

Scope Topics

Austria General opening clauses are possible in sector level agreements.

Wages and working time.

Belgium General opening clauses and temporary opt-out are possible in sector-level agreements. They are exceptional.

Wages.

France* General opening clauses and opt-out are granted by the law and/or possible in sector-level agreements.

General opening clauses allow derogate on working time. Opt-out on wages and working time.

Germany General opening clauses and opt-out are possible in sector-

Mainly wages, working time and temporary agency work. The collective bargaining



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level agreements. parties may also allow derogations in other topics.

Portugal Opt-out clauses are granted by law.

Wages and working time.

Spain General opening clauses and temporary opt-out are granted by the law.

Wage and working time.

No derogation permitted

Australia - -

Norway - -

Sweden - -

*See France profile for summary of recent legislative changes on this front.

3. Enforcement of sector-level CAs50

● Peace clauses, otherwise known as no-strike agreements, prohibit signatory unions and their members from lawfully striking on issues regulated in the agreement

Sector-level CAs typically include a mediation/arbitration procedure

Is it compulsory?*

Do agreements typically include a peace clause?

Austria Yes No



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Belgium Yes No

Spain Yes Yes

Sweden Yes Yes

Sector-level CAs typically do not include a mediation/arbitration procedure

France (but CAs are permitted to include them)

- No

Germany - Yes

Norway - Yes

Portugal - No (but some agreements do)

*Note that in the OECD, the Czech Republic, Finland, Hungary, the Netherlands, Slovenia, and Switzerland, sector-level CAs typically include non-compulsory mediation/arbitration procedures.


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4. Board-level employee representation in private-sector companies51

Has board-level employee representation in private sector

Size requirements for representation (# of employees)

Proportion of worker reps

Nomination and appointment process

Austria >300 1/3 of supervisory board Appointed by works council

France Compulsory >1,000 in France or >5,000 worldwide

Minimum one rep for boards of 12 or fewer, minimum two reps for boards more than 12

Shareholders choose if reps will be (1) nominated by union and elected by employees, (2) appointed by works council, or (3) appointed by union.

Germany <500 500-2,000: min. 1/3 supervisory board >2,000: 1/2 of supervisory board (note: shareholders elect chair, who has a tie-breaking vote)52

500-2,000: appointed by WC/employees, elected by employees >2,000: appointed by employees/execs/union, elected by employees or delegates

51 Information from EMPLOYMENT OUTLOOK 2017, COLLECTIVE BARGAINING IN A CHANGING WORLD OF WORK: ONLINE ANNEX CHAPTER 4, OECD, https://www.oecd.org/els/emp/EMO2017-CH4-Web-Annex.pdf. 52 European Trade Union Institute, Board-level Representation - Germany, Worker-Participation.eu, http://www.worker-participation.eu/index.php/National-Industrial-Relations/Countries/Germany/Board-level-Representation (last visited Nov. 11, 2018).

http://www.worker-participation.eu/index.php/National-Industrial-Relations/Countries/Germany/Board-level-Representation



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>1,000 in iron/coal/steel industry: 1/2 of supervisory board + de facto one member of management board

>1,000 in iron/coal/steel industry: appointed by WC or union, elected by shareholders

Norway >30 with request by majority of employees

Minimum one member up to 1/3 of board + one, based on company size

Appointed by union.

Sweden >25 and decision from local union bound by CA

<1000 employees: 2 members >1000 employees & operating in several industries: 3 members Max 1/2 of board.

Appointment by local unions bound by CA

Does not have board-level employee representation in private sector

Australia

Belgium

Canada

Portugal

Spain


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United States

United Kingdom


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6. Case Study: Mechanics of Sectoral Bargaining in Norway and South Africa

Norway:

Depending on how you look at it, bargaining in Norway is conducted at either 2 or 3 levels.53 Basic agreements: Every few years, union confederations and employer associations negotiate

nationwide basic agreements, which “complement Norwegian labour law by defining overall aims as well as a set of principles and procedures that regulate the relationship between the labour market parties in all sectors. … Among other issues, the question of sympathetic industrial action is regulated in the agreement, while the statutory obligation to maintain industrial peace for the duration of an agreement is amplified. A number of issues regarding shop stewards, employee participation, and information and consultation are also regulated in the agreement. In addition, the Basic Agreement contains a “Co-operation Agreement” that regulates the activities of various co-ordinating bodies. This latter agreement touches upon questions relating to developing the qualifications and skills needed in working life. A number of supplementary agreements are attached to the Basic Agreement, covering issues such as guidelines for initiating work studies, equality between men and women, and framework agreements regulating control measures within firms.”54

Legally speaking, basic agreements are “not a separate type of collective agreement … but

merely one form of (national level) tariffavtale in the general legal sense.”55 Basic agreements are important because they are “included in all collective agreements” at the sectoral level in the preamble;56 in essence, they establish top-level principles.

Nationwide sector agreements and firm agreements: “Predominantly, the collective bargaining of

main importance is conducted at a national level, for a branch or industry.”57 “Norwegian collective agreements have a strictly hierarchical order. The basic agreements define principal goals and lay down principles and procedures, and are included as the first part of sector-level agreements that, together with the company agreements, set out the actual provisions on wages and working conditions. Company agreements, including pay systems, cannot breach provisions in sector-level agreements.”58 “Predominantly, general agreements provide for the conclusion of local follow-up agreements at the enterprise level – commonly called særavtaler, or local subordinate collective agreements.”59 Sectoral agreements will usually set minimum standards, while local agreements might differ. For example: “For blue-collar workers, minimum wages are usually set in the nationwide collective agreement accompanied by bargaining at the local level to decide the actual wage.”

53 2006 (XIVth) Meeting of European Labour Court Judges: Collective agreements, Prof. Stein Evju Professor of Labour Law, University of Oslo, (Past President of the Labour Court of Norway) at 7.

54 Labour Relations in Norway, Espen Løken, Torgeir Aarvaag Stokke and Kristine Nergaard (Fafo 2013) at 20–21. 55 2006 at 1. 56 Labour at 20–21. 57 2006 at 7. 58 Labour at 35. 59 2006 at 1.


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“Because of the extensive obligation to maintain peace and strict regulations concerning the use of industrial action, the level of conflict has been low and is mainly associated with short-term, although sometimes large-scale, strikes during renegotiations of agreements.”60

• Who represents workers at the national level? Who decides who sits at the table? How are non-union

workers represented? Same questions for employers.

Negotiations at the national level primarily take place between the four major trade union confederations and the five major employer associations. “Where a collective agreement already exists, if a union presses for an agreement on its own, the prevailing practice is for the employer side – if acceding to the union’s claim – to conclude a collective agreement identical in substance to that already existing. In legal terms, such a “parallel collective agreement” is a separate and independent collective agreement in its own right.”61

Trade Unions: “Based on union membership statistics and the number of employees estimated by

Labour Force Surveys, the trade union density is 52% … The union density numbers vary considerably among sectors and industries … Almost all of the approximately 90 national trade unions are today affiliated to one of four confederations.”

“The Norwegian Confederation of Trade Unions (LO), founded in 1899, is by far the dominant

union force, although it has lost relative strength over recent decades as other confederations have emerged. This dominance is explained by a combination of its traditional hegemony among blue-collar workers in the private sector and its strength in the large public sector, especially the local public sector (municipalities). Today, LO represents just over half of the unionised work-force. The confederation consists of 22 different national unions with a total of 895,257 members, of whom approximately 628,000 are employed. Today, the members are fairly evenly distributed between the private and public sectors, and women constitute half of the membership.”

“There are no clear demarcations between the confederations. LO and YS can in principle

organise all kinds of employees, while Unio and Akademikerne have requirements as to educational level. Although LO and YS on the one hand, and Unio and Akademikerne on the other, generally organise different segments of the labour market based on education, they all compete.”62

Employer Associations: “There are five main actors on the employers’ side—of which two

represent private sector companies, two represent the public sector and one represents members from both sectors (mainly public) … There is a relatively clear demarcation of bargaining territories, although there have been examples of tensions and of enterprises moving their membership between associations.”63

Non-union workers: “An employer who is bound by a collective agreement as rule is considered

to be obligated, by virtue of the agreement, to apply the terms of the agreement similarly also to its non-unionised employees. In the state sector, parliament has determined that the terms of collective 60 Labour at 41. 61 2006 at 9. 62 Labour at 23–27. 63 Id. at 32.


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agreements should cover all employees, while in the municipal sector administrative law norms of equal treatment entail that differentiation is unacceptable. Private employers who are not bound by any collective agreements are under no obligation to apply collectively agreed terms and conditions.”64 • How are sectors defined? Who decides? How to cover all sectors?

The definitions of sectors are somewhat malleable in the Norwegian system. Public and

municipal sector bargaining have clearly defined sectors, but within private bargaining “the degree of co-ordination within and across sectors varies between bargaining rounds. Bargaining basically alternates between the highest intersectoral level and the industry level in the private sector. As the dominant trade union confederation, LO’s General Council decides whether negotiations are conducted centrally or by national branch organisations. This alternation provides the trade unions with flexibility in the choice of the level and form of co-ordination.”65 • What bargaining occurs at national level, regional level, versus work site level?

“There are no subjects that are mandatory or minimum requirements in order to conclude a lawful collective agreement. And there are no subjects that per se are barred from being dealt with in a collective agreement (with the proviso, of course that a collective agreement cannot lawfully provide anything that statutory law precludes.”66 “Which specifics are dealt with in the individual collective agreements and how will differ quite considerably across the many hundred different agreements at national level. To sum up, a short note is added at the end to each of the sub-headings of the Questionnaire, indicating what can be taken to be the predominant practice. Looking, then, at subjects addressed in collective agreements, a generalised grouping may be made along the classification of types of collective agreements. Typically, “basic agreements” contain provisions on the mutual recognition of freedom of association and the “peace obligation”, on the administration of collective agreements within its ambit and dispute resolution procedures, including rules on local subordinate collective agreements; on trade unions rights and facilities, etc., for elected union workplace representatives; on information, consultation and, as the case may be, “co-determination” bodies (such as “works committees”); and further on certain general aspects of terms and conditions of employment, training, workers’ rights in the enterprise including gender equality, and health and safety. General collective agreements regulate specific terms and conditions of employment (wages, hours of work, overtime, holidays and leave, pensions, etc.), and aspects of contracts of employment, health and safety, training, and workers’ welfare; and habitually contain provisions on denunciation and renewal. Local subordinate agreements, spanning a wide variety of issues in practice, typically regulate 64 Id. at 21–22. 65 Labour at 38. 66 2006 at 7.


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subjects covered by the relevant general collective agreement, mainly terms and conditions of employment, adapting and adding to the rules of the superior agreement at the enterprise level. Issues of denunciation and renewal are typically governed by rules laid down in the applicable “basic agreement”. For the most part – with the notable exception of wages – the issues referred to above are governed by legislation. This does not imply, however, that they are barred from being dealt with by collective agreements. Typically, worker protection legislation cannot be derogated from by agreement to the detriment of workers, but permits of agreement regulation more favourable to the worker and in many instances it is of a framework nature and fairly flexible, thereby rendering a wide scope for collective agreement regulation. Otherwise, as mentioned previously there are no specific limitations on the scope of bargaining issues. A distinction may be drawn, in principle, between “minimum terms” and “standard terms” collective agreements (insofar as general collective agreements are concerned, and with particular regard to the regulation of wages). This distinction is difficult to maintain in practice, however. Predominantly, general agreements allow of local, follow-up, bargaining on wages, etc., in some form or another, within more or less strictly defined bounds. Thus, even if some general collective agreements may be categorised as “standard terms” agreements at the outset, in real life it is only a small minority of agreements that are “standard terms” agreements in a strict sense.”67 • What is the role of the government in extending agreements or mandating that all parties participate?

Could prevailing wage laws provide a helpful model?

While government does not mandate much in the Norwegian system, it is important to note that both trade unions and employers’ associations are tied closely to the dominant political parties. “The Norwegian model is a corporative one in which the social partners have a central role in social governance. The employers’ associations and trade unions are closely involved in the preparation of new legal acts and labour regulations, and work in close co-operation with the government, public administration and the Members of Parliament. Co-operation also occurs at levels ranging from company to state, and over the past century, many forums have been created for union representatives and employers to meet. The state has therefore been an active part of the development of the Norwegian model, and the parties have bound themselves both to the model and to the procedure for its development.”68 Extension: “Extension of collective agreements (or forms of declaring agreements to have “general applicability”, “erga omnes effect”, etc.) essentially is not a part of Norwegian labour law.”69 Mandated participation: “Under the PSLDA the parties in the state civil service sector have a legal obligation to bargain collectively (but, self-evidently, not to come to terms and conclude a collective agreement). Within the remit of the LDA there is no legal obligation to enter into collective bargaining. A duty to bargain may ensue from a collective agreement already entered into. Otherwise, no duty to bargain exists. If need be, in order to pressure an opposite party into bargaining, through the intervention of the public mediation institution as the case may be, either party have recourse to invoke 67 2006 at 11–12. 68 Labour at 43. 69 2006 at 5.


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industrial action.”70 Wages: “There is no statutory minimum wage in Norway, but wage agreements normally contain minimum pay rates.”71 Sources: 2006 (XIVth) Meeting of European Labour Court Judges: Collective agreements, Prof. Stein Evju Professor of Labour Law, University of Oslo, (Past President of the Labour Court of Norway) Labour Relations in Norway, Espen Løken, Torgeir Aarvaag Stokke and Kristine Nergaard (Fafo 2013). Norway by Henning Jakhelln,with co-writers Kristine Fremstad Moen & Maarten Brandsnes Faret, Wolters Kluwer (2017).

70 2006 at 7. 71 Labour at 36.


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South Africa:

See the South Africa page in §7 for Jared’s overview of the country’s collective bargaining system, but a few features of South Africa’s unique system are worth mentioning here as a refresher.

Bargaining Councils: South Africa uses “bargaining councils” to perform several sector-specific

duties, including negotiating collective agreements. “A bargaining council (formerly known as an industrial council) is a body established in terms of the Labour Relations Act, 1995, by employers, employers’ organisations and trade unions in a particular industry sector or area. Half of its members come from employers or employers’ organisations which employ the majority of employees in the sector or area, and the other half from representative trade unions which have the majority of employees in the sector or area as members.”72 “Trade unions must be part of a Bargaining Council in order to sign a collective agreement at sectoral level in South Africa. The members of the Bargaining Council must be "sufficiently representative in the sector and area" in terms of s.29(4)(c) and (11) of the LRA.”73

As described below, a major advantage of collective agreements reached through a bargaining

council is that, depending on the level of representativeness, the agreement, either automatically or at the discretion of the government, can be extended to the entire sector.

Statutory Councils: “The LRA introduced statutory councils to provide a compromise between

the voluntarism of the bargaining council system and the compulsion that was demanded by COSATU. In terms of the Act a statutory council can be established on application by either a ‘representative’ trade union or employers’ organisation. A ‘representative’ trade union is a registered union (or two or more acting jointly) that has as its members at least 30 per cent of the employees in the sector and area for which it wants the statutory council established. Similarly, the member firms of a ‘representative’ employers’ organisation must employ at least 30% of the workers in the relevant sector or area. If an applicant union or employers’ organisation is representative and complies with certain formalities, the Registrar of the Department of Labour must establish the statutory council. A process then follows to get other parties to participate on the council, either through agreement or appointment by the Minister, which then leads to registration of the council.”74 “So the statutory council model introduces a certain amount of compulsion and sets a lower representivity threshold. The drawback of a statutory council is that it has a limited bargaining agenda.”75 “While the LRA provides for various steps that can be taken to appoint employer representatives once a council has been established, if employers are opposed to such a council it seems that no amount of compulsion is going to get them to participate and get the council registered.”76

72 Bargaining Councils, BREGMAN&MOODLEY, https://www.bregmans.co.za/bargaining-councils/. 73 South Africa – 2015, ILO, https://www.ilo.org/dyn/irlex/en/f?p=LEGPOL:1100:15415783855079::::P1100_THEME_ID:105092.

74 Shane Godfrey et al., The State of Collective Bargaining in South Africa: An Empirical and Conceptual Study of Collective Bargaining 13 (2007), http://www.dpru.uct.ac.za/sites/default/files/image_tool/images/36/DPRU%20WP07-130.pdf.

75 Id. 76 Id. at 36.


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“There are also non-statutory centralised structures such as those in the mining and automobile manufacturing industries, otherwise bargaining is found at company and or plant level.”77 • Who represents workers at the national level? Who decides who sits at the table? How are non-union

workers represented? Same questions for employers.

Representativeness is a key inquiry both in formation of bargaining and statutory councils, and in the extension of collective agreements.

Council Formation: “The important point to note about the establishment of a statutory council is

that only one party unilaterally applies for it (for example a trade union); it therefore does not need the agreement or cooperation of the other party (e.g. an employers’ organisation). Furthermore, the threshold for establishing a statutory council is 30 per cent on the part of the applicant, whereas the threshold for registering a bargaining council is that both parties (that is,. unions and employers) must be ‘sufficiently representative’ … The term ‘sufficiently representative’ is not defined in the Act, so it is not clear whether this sets a higher threshold than 30 per cent, but it is very likely that this is the case.”78

Extension: Extension is a major feature of the South African collective bargaining scheme. “The

Act introduces ‘hard’ measures as thresholds for representivity (as opposed to the notion of ‘sufficient representivity’ used in the 1956 LRA). So, the Minister may not extend a bargaining council agreement unless satisfied that after extension the majority of all employees covered are members of the party trade unions, and the members of the party employers’ organisations employ the majority of the employees. The section goes on to list further requirements for extension. A bargaining council agreement cannot be extended by the Minister unless he/she is satisfied that provision is made in the agreement for an independent body to hear appeals against the refusal by the council of a non-party’s application for exemption or the withdrawal of an exemption by the council. In addition, the collective agreement to be extended must contain criteria that will be applied by the independent body when it considers an appeal. These criteria must be fair and promote the primary objects of the Act. Another requirement is that the terms of the collective agreement must not discriminate against non-parties.

If the above requirements have been met the Minister must extend the agreement. In other words, the Act removes the exercise of any discretion on the part of the Minister if the relevant council meets these requirements. If, however, the council does not meet the representivity requirements, the Act gives the Minister the discretion to nevertheless extend the agreement to non-parties. The Minister may do so if the parties to the council are “sufficiently representative within the registered scope of the bargaining council” and if “the Minister is satisfied that failure to extend the agreement may undermine collective bargaining at sectoral level or in the public service as a whole”. The Minister therefore has a fairly wide discretion. The Act does not define what is meant by “sufficiently representative”, leaving this entirely

77 Renee Grawitzky, Collective bargaining in times of crisis: a case study of South Africa, INTERNATIONAL LABOUR OFFICE, INDUSTRIAL AND EMPLOYMENT RELATIONS DEPARTMENT 9 (Geneva: ILO, 2011), https://www.ilo.org/wcmsp5/groups/public/---ed_dialogue/---dialogue/documents/publication/wcms_175009.pdf.

78 The State of Collective Bargaining in South Africa: An Empirical and Conceptual Study of Collective Bargaining at 13.


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to the Minister to determine. The second criterion widens the Minister’s discretion even further, given the argument – a strong one – that the failure to extend a sectoral collective agreement will almost always undermine bargaining at that level.”79

“The bargaining council system faces some serious challenges. One major threat is the issue of representivity and the requirements in the LRA for extending collective agreements. The more employers and employees that do not join the employers’ organisations and trade unions that participate on councils, the harder it is for bargaining councils to maintain the necessary level of representivity to have their agreements extended to non-parties (that is, the firms and employees who are not members of party employers’ organisation and unions). If a council does not have its agreement extended there is a strong possibility that it will collapse in the short to medium-term. Employers that are bound by the agreement through their membership of the party employers’ organisation will be undercut by non-party competitors. The obvious response of many will be to leave the employers’ organisation so that they are no longer bound by the council’s agreement. The logic of this process will be the eventual demise of the council.”80 • How are sectors defined? Who decides? How to cover all sectors?

Sectors get defined by the establishment of bargaining councils. “A council must apply to the

Registrar of Labour Relations by describing the scope of the area or sector in which it wishes to operate and submitting a copy of its constitution. The constitution must describe how the council will function including how representatives are appointed and removed; how committees are established and how they will function; how decisions are made; the meeting procedure which will be followed; how records will be kept; how finances will be collected and administered; how disputes will be resolved; how exemptions from collective agreements will be considered; how applications for new members will be dealt with; how the constitution can be amended; and how the council will be wound up.

The registrar places a notice in the government gazette to give interested parties an opportunity

to object on the grounds that the area and sector which the council has applied to cover is not appropriate; or that the council is not sufficiently representative; or that it does not adequately provide for the interests of small and medium-sized business to be represented. NEDLAC then has 90 days to consider the application and demarcate the appropriate sector and area in which the council is registered. Once a council is registered, its right to perform its functions is subject to an annual review of how representative it is of the entire area which falls within its registered scope, even if its member unions or employers’ organisations have no members in part of that area.”81 • What bargaining occurs at national level, regional level, versus work site level?

The level of bargaining does not appear to determine the subject matter of collective agreements.

In the statutory framework, which again does not function completely as designed, there is a distinction between the bargaining subjects of collective agreements reached by a bargaining council and a statutory council. 79 Id. at 16–17. 80 Id. at 16. 81 Bargaining Councils, BREGMAN&MOODLEY, https://www.bregmans.co.za/bargaining-councils/.


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“Collective bargaining takes places and the agreement is the outcome of the negotiations. The Council agreement stipulates the minimum wages and aspects such as termination of employment notice period, sick leave and other conditions of employment. … The Statutory Council can negotiate aspects such as training and education, as well as benefit funds in the sector, in addition to dispute resolutions. Unlike with the Bargaining Council, the employers under the Statutory Council are not under any obligation to negotiate any employment conditions or wages.”82 • What is the role of the government in extending agreements or mandating that all parties participate?

Could prevailing wage laws provide a helpful model?

“Participation on a bargaining council remains voluntary but the Act provides a number of inducements for unions and employers to participate. … For example, trade union parties on a council automatically receive the organisational rights of access and stop-order facilities in all workplaces in the jurisdiction of the council. For employers, there is the inducement that councils have the power to determine matters that may not be an issue in dispute for the purposes of industrial action at the workplace … The most important attraction of a bargaining council is the ability to have its agreement extended to all employers and employees in the jurisdiction of the council.”83

Extension: See above. Additional Sources: Johann Maree, Trends in collective bargaining: Why South Africa differs from global trends, http://www.ilera-directory.org/15thworldcongress/files/papers/Track_4/Wed_P4_MAREE.pdf. P Matete, The role of bargaining councils in a collective bargaining framework in the garment industry: a lesson for Lesotho (2014), https://dspace.nwu.ac.za/bitstream/handle/10394/15404/Matete_P.pdf?sequence=1.

82 Bargaining Council, ALLARDYCE, http://www.allardyce.co.za/bargaining-council/.

83 The State of Collective Bargaining in South Africa: An Empirical and Conceptual Study of Collective Bargaining at 12–13.

http://www.ilera-directory.org/15thworldcongress/files/papers/Track_4/Wed_P4_MAREE.pdf

https://dspace.nwu.ac.za/bitstream/handle/10394/15404/Matete_P.pdf?sequence=1


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7. Survey of Bargaining Schemes Abroad

Country: Argentina ITUC worker rights rating: 4 Summary of sectoral bargaining scheme: “The Argentine system recognizes the legal existence of two kinds of workers’ association: the inscriptas (registered) unions and those that have personería gremial (trade union status). The law relating to the kind of association that the public authority will recognize as inscripta is flexible – but the personería gremial poses more difficult questions, as well as barriers to freedom of association. While the personería is the State’s recognition of the most representative union (that with the most members in a particular constituency), in theory, a second organization may arise that will eventually be granted the personería if it represents a “considerably higher” number of workers than the first. Until that time, however, the second organization will not be permitted to take part in collective bargaining, nor will it have access to union quotas from its affiliates. . . . The usual practice in Argentina . . . is that an industry-level . . . instrument is signed that sets the minimum standards, improvements to which can be negotiated at company level. This means that company-level collective bargaining is permitted . . . , resulting in agreements negotiated by company-level workers’ representatives and their employers. Eighty-two federations with personería gremial and some 1,400 first-level trade unions are registered with the Ministry of Labour, suggesting a decentralized labour movement in Argentina – but the federated structure provides that collective agreements signed at the national level by a small number of national unions (metallurgy, metal mechanics, banks, gastronomy, passenger transports) and federations (commerce, health, heavy transports) have a broad impact on the entire formal private sector. Additionally, there are industry-level confederations (transport, food and catering, the public sector), which, while weaker than the federations, may also (albeit rarely) sign national agreements that bind the entire industry. Two central federations complete the picture: the CGT (with personería gremial) and the CTA (which is still awaiting recognition). These central federations do not, however, have a formal role in collective bargaining. Among 1,400 unions, there are private and public sector unions in both national and local geographic jurisdictions. There is no representation plurality, but some activities are defined more strictly, while others have broader scope. Local unions may or may not join a federation, and at the local level, more than one federation can represent workers within the same industry according to the personería gremial of the affiliated local unions.”84 Additional Sources

84 Adalberto Cardoso and Julian Gindin, Industrial relations and collective bargaining: Argentina, Brazil, and Mexico compared (Working Paper No. 5, Industrial and Employment Relations Office, International Labour Office), http://ilo.ch/wcmsp5/groups/public/---ed_dialogue/---dialogue/documents/publication/wcms_158020.pdf

http://ilo.ch/wcmsp5/groups/public/---ed_dialogue/---dialogue/documents/publication/wcms_158020.pdf





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Carlos Lamarche, Industry-wide Work Rules and Productivity: Evidence from Argentine Union Contract Data, October 2013, http://ftp.iza.org/dp7673.pdf Graciela Bensusan, Organizing Workers in Argentina, Brazil, Chile and Mexico: The Authoritarian-Corporatist Legacy and Old Institutional Designs in a New Context Maria Victoria Murillo, Labor Unions, Partisan Coalitions, and Market Reforms in Latin America (Cambridge University Press, Comparative Politics Series, 2001)

http://ftp.iza.org/dp7673.pdf

http://ftp.iza.org/dp7673.pdf


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Country: Australia OECD union density: 14.6% OECD coverage rate: 59.2% ITUC worker rights rating: 3 Summary of sectoral bargaining scheme: First, some background. For most of the twentieth century, the wages and conditions of many Australian workers were set at the industry or sectoral level, or on an occupational basis, through a series of “awards” made by industrial tribunals under our system of compulsory conciliation and arbitration. In the early 1990s, Australia shifted to a system based primarily on enterprise-level bargaining, with awards (now supplemented by a set of statutory conditions called the “National Employment Standards”) providing a floor of minimum standards. This system facilitates single-enterprise bargaining, though there is some provision for multi-enterprise bargaining (see particularly the (little used) low-paid bargaining provisions in Div 9 of Pt 2-4 of the Fair Work Act 2009 (Cth), Australia’s federal labor statute). In a speech delivered on 4 October 2018, Sally McManus, head of the Australian Council of Trade Unions, reiterated previous calls for legislative amendments that would facilitate sectoral bargaining in Australia (see here). The precise details of the proposed sectoral bargaining regime are yet to be made clear. The Australian Labor Party, which is currently in opposition but may be in government after next year’s federal election, is open to the idea of sectoral bargaining (see here). The backlash from business groups has been forceful (see, eg, here). There will likely be further debate about sectoral bargaining in Australia in the coming months, particularly because industrial relations is expected to be a major issue at the federal election in 2019. If you are interested, I will keep you posted on these Australian developments, including any details that are released about the proposed sectoral bargaining regime. In the meantime, these articles might be of interest:

● Joe Isaac, ‘Why Are Australian Wages Lagging and What Can Be Done About It?’ (2018) 51 Australian Economic Review 175. The author, a leading Australian economist, argues for sectoral bargaining in Australia.

● Keith Ewing and John Hendy, ‘New Perspectives on Collective Labour Law: Trade Union Recognition and Collective Bargaining’ (2017) 46Industrial Law Journal 23. The authors put forward a proposal for sectoral bargaining in the United Kingdom. Some of the arguments advanced in this piece complement those made by Professor Kate Andrias in her 2016 Yale Law Journal article.

A useful overview of Australia’s labour law system is set out in the leading text, Stewart et al, Creighton and Stewart’s Labour Law (Federation Press, 6th ed, 2016) (available at the Harvard Law School Library). The following chapters might be helpful:

● Ch 3 on the traditional conciliation and arbitration system and the various iterations of the enterprise bargaining regime that have been in place since the early 1990s;

● Ch 13 on modern awards; ● Ch 14 on enterprise agreements, including multi-enterprise agreements; and

https://urldefense.proofpoint.com/v2/url?u=https-3A__www.legislation.gov.au_Details_C2017C00323&d=DwMF-g&c=WO-RGvefibhHBZq3fL85hQ&r=Ii7JvVZAn7j1UqE10yRv9EJsrNGSW0ohFsG_MBc5yWM&m=WPOnZbZUQ0oqQzw7w8ov0QCCmNZMxN3kTN5gmyP9s0M&s=OL9N5jYOZi5DfiLjRsN4E6LV_zaTka6X32ZAbc2K9BI&e=

https://urldefense.proofpoint.com/v2/url?u=https-3A__theconversation.com_actu-2Dpush-2Dfor-2Dindustry-2Dbargaining-2Dincreases-2Dpressure-2Don-2Dlabor-2D104346&d=DwMF-g&c=WO-RGvefibhHBZq3fL85hQ&r=Ii7JvVZAn7j1UqE10yRv9EJsrNGSW0ohFsG_MBc5yWM&m=WPOnZbZUQ0oqQzw7w8ov0QCCmNZMxN3kTN5gmyP9s0M&s=y2Pmb-P87Xp-T8X7FmS4hvtz60i7DIF3VH8EVYAwh6k&e=

https://urldefense.proofpoint.com/v2/url?u=https-3A__www.sbs.com.au_news_labor-2Dweighing-2Dup-2Dindustry-2Dwide-2Dbargaining&d=DwMF-g&c=WO-RGvefibhHBZq3fL85hQ&r=Ii7JvVZAn7j1UqE10yRv9EJsrNGSW0ohFsG_MBc5yWM&m=WPOnZbZUQ0oqQzw7w8ov0QCCmNZMxN3kTN5gmyP9s0M&s=Ktz7PK57BCuM1OQAna3_7tQW0w2GCU7-0269daUOtQo&e=

https://urldefense.proofpoint.com/v2/url?u=https-3A__www.aigroup.com.au_policy-2Dand-2Dresearch_mediacentre_releases_reject-2Dindustry-2Dbargaining-2D4Oct_&d=DwMF-g&c=WO-RGvefibhHBZq3fL85hQ&r=Ii7JvVZAn7j1UqE10yRv9EJsrNGSW0ohFsG_MBc5yWM&m=WPOnZbZUQ0oqQzw7w8ov0QCCmNZMxN3kTN5gmyP9s0M&s=rFh2T2oFQrl84P2cVFH2LlVWmcs3YEVC9ZcjHo7psKM&e=


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● Ch 25 on collective bargaining under the Fair Work Act (the multi-enterprise low-paid bargaining provisions are discussed at pages 908–913).


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Country: Austria OECD union density: 26.9% OECD coverage rate: 98.0% ITUC worker rights rating: 1 Summary of sectoral bargaining scheme: “Industry-level agreements dominate in Austria, and as the employers are normally represented by the chambers of commerce, to which all employers are obliged to belong, the agreements cover almost all employees.”85 These sectoral level agreements take place “between the respective trade unions (members of the ÖGB) and sectoral employer organisations. Multi-employer collective agreements are thus the norm. In addition, a few company-level agreements are negotiated. Most of the sectoral agreements cover the whole national territory. In some cases, they are also concluded at provincial level.”86 “It is not possible to derogate from collective wage agreements in order to pay wages below the collectively agreed level. However, the collective agreement sets the framework for works agreements to be concluded within company-specific regulations.”87 “Collective agreements regulate core areas such as pay and maximum working hours, whereas works agreements deal with social matters (e.g. starting and finishing times for daily working hours, distribution of working time over the days of the week, scheduling of breaks, introduction of computerised personnel information systems, and the like).”88 “The collective bargaining season traditionally starts with the influential metalworking industry in autumn. Wage bargaining is strongly coordinated across the economy. This is because a practice of ‘pattern bargaining’ prevails, in which the metalworking industry takes on a leading role as the first major sector conducting wage negotiations in the annual bargaining process. The results have a considerable signalling effect for other sectors and are taken as a role model.”89 “Collective bargaining coverage is exceptionally high and lies at 98% (in the private sector) (EC, 2014). This extremely high coverage by international standards is due to the legal framework governing industrial relations: First, all employees who are not members of the union signing the collective agreement are nonetheless covered by its provisions; and second, on the employer side, collective agreements for almost all (sub)sectors are concluded by branches of the Federal Economic Chamber (WKO), an employer organisation with mandatory membership. In effect all private sector companies are members of the WKO and hence covered by the respective collective agreements.”90

85 Collective Bargaining - Austria, WORKER-PARTICIPATION.EU (last updated 2016), https://www.worker-participation.eu/National-Industrial-Relations/Countries/Austria/Collective-Bargaining. 86 Industrial Relations in Austria: Background Summary, EUROPEAN TRADE UNION INSTITUTE, https://www.etui.org/ReformsWatch/Austria/Industrial-relations-in-Austria-background-summary. 87 Id. 88 Id. 89 Id. 90 Id.

https://www.worker-participation.eu/National-Industrial-Relations/Countries/Austria/Collective-Bargaining

https://www.etui.org/ReformsWatch/Austria/Industrial-relations-in-Austria-background-summary









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“Employee representation at board level is widespread in Austria, with the works council choosing a third of the members of the supervisory board from its own ranks.”91 “Employee representation in Austria is through the works councils, which by law can be set up in all workplaces with at least five employees, although in reality they are rare in smaller workplaces. They have important information and consultation rights, which amount to an effective veto in a few areas.”92 Additional sources: Collective Bargaining in OECD and accession countries: Austria, OECD, (last updated Sept. 2017), https://www.oecd.org/employment/emp/collective-bargaining-Austria.pdf.

91 Board Level Representation - Austria, WORKER-PARTICIPATION.EU (last updated 2016), https://www.worker-participation.eu/National-Industrial-Relations/Countries/Austria/Board-level-Representation. 92 Workplace Representation - Austria, WORKER-PARTICIPATION.EU (last updated 2016), https://www.worker-participation.eu/National-Industrial-Relations/Countries/Austria/Workplace-Representation.

https://www.worker-participation.eu/National-Industrial-Relations/Countries/Austria/Board-level-Representation

https://www.worker-participation.eu/National-Industrial-Relations/Countries/Austria/Workplace-Representation

https://www.worker-participation.eu/National-Industrial-Relations/Countries/Austria/Workplace-Representation




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Country: Belgium OECD union density: 54.2% OECD coverage rate: 96% ITUC worker rights rating: 1 Summary of sectoral bargaining scheme: The Belgian collective bargaining system is characterized by both high union membership and collective bargaining coverage. “Over 90% of employees are covered by a collective agreement, placing Belgium among the countries with the highest coverage in Europe. Also, the Belgian trade unions have a relatively high level of membership compared with the European average, with over 50% of employees belonging to a union. The same applies to the organisation rate of employers, as over 70% of employees work for an employer that is organized.”93 Bargaining takes place at the national, sectoral and firm levels. “In each case the lower level can only agree improvements on what has been negotiated at the level above and the agreements are binding.”94 “At the national level, two types of agreements are relevant. One type is the interprofessional agreements concluded every two years between the 10 main trade unions and employer representatives forming the ‘group of 10’ and covering the private sector. These agreements are not formal collective agreements but set a framework for bargaining at other levels, including a wage norm and minimum wage. The other is the intersectoral collective agreement covering all sectors nationally, concluded in the National Labour Council, comprised of the most representative interoccupational employers and workers’ organisations.”95 “At the sectoral level, joint committees (or subcommittees, or regional committees) with equal representation of employers and unions bargain on sectoral (or subsectoral or regional-sectoral) collective agreements within the framework of the interprofessional agreements. … These agreements can be made legally binding for all companies and employees in the sector by royal decree. … The sectoral agreements define the job classification system for the sector and determine which wage increases are implemented and how. They can prescribe exact wage increases and the respective modalities for the entire sector, or can set sectoral minima.”96 “At company level, collective agreements can be concluded between one or more representative trade unions and the employer. A company collective agreement applies to all employees of the contracting employer.”97 93 MAARTEN KEUNE, SECTOR-LEVEL BARGAINING AND POSSIBILITIES FOR DEVIATIONS AT COMPANY LEVEL: BELGIUM 1 (Eurofound 2011), http://csdle.lex.unict.it/Archive/LW/Data%20reports%20and%20studies/Reports%20and%20studies%20from%20EUROFOUND/20110325-015300_Eurofound_Sector_level-barg_BELGIUM_Feb11pdf.pdf. 94 Collective Bargaining - Belgium, WORKER-PARTICIPATION.EU (last updated 2016), https://www.worker-participation.eu/www.worker-participation.eu/index.php/National-Industrial-Relations/Countries/Belgium/Collective-Bargaining. 95 SECTOR-LEVEL BARGAINING AND POSSIBILITIES FOR DEVIATIONS AT COMPANY LEVEL: BELGIUM at 1. 96 Id. 97 Id.

http://csdle.lex.unict.it/Archive/LW/Data%20reports%20and%20studies/Reports%20and%20studies%20from%20EUROFOUND/20110325-015300_Eurofound_Sector_level-barg_BELGIUM_Feb11pdf.pdf


https://www.worker-participation.eu/www.worker-participation.eu/index.php/National-Industrial-Relations/Countries/Belgium/Collective-Bargaining

https://www.worker-participation.eu/www.worker-participation.eu/index.php/National-Industrial-Relations/Countries/Belgium/Collective-Bargaining








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“Wage bargaining is shaped by three main institutional factors. 1. One is that the 1996 law on the safeguarding of competitiveness requires unions and employers to take account of a wage margin amounting to the average of the expected wage increases in the country’s main neighbours and trading partners (France, Germany and the Netherlands). In practice, this norm is not taken as obligatory but does play an important indicative role (Vervecken et al, 2008). 2. Secondly, Belgium is one of the few countries in Europe with a system of automatic indexation of wages and social benefits to inflation… 3. Thirdly, as mentioned above, the interprofessionally agreed minimum wage sets a floor for all wages. The Belgian minimum wage is one of the highest in Europe.”98 “Belgium has structures at workplace level representing both all employees and trade unionists, but, with only trade unions able to nominate to the works council, the key body is the union delegation.”99 Worker representation on boards is not common, apart from in certain public companies. Additional Sources: Collective Bargaining in OECD and accession countries: Belgium, OECD, (last updated Sept. 2017), https://www.oecd.org/employment/emp/collective-bargaining-Belgium.pdf. Robert Plasman, Michael Rusinek, François Rycx. Wages and the Bargaining Regime under Multilevel Bargaining: Belgium, Denmark and Spain. European Journal of Industrial Relations, SAGE Publications, 2007, 13 (2), pp.161-180.

98 Id. 99 Workplace Representation - Belgium, WORKER-PARTICIPATION.EU (last updated 2016), https://www.worker-participation.eu/www.worker-participation.eu/index.php/National-Industrial-Relations/Countries/Belgium/Workplace-Representation.



https://hal.archives-ouvertes.fr/hal-00570960/document

https://hal.archives-ouvertes.fr/hal-00570960/document


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Country: Brazil ITUC worker rights rating: 4 Summary of sectoral bargaining scheme: “In Brazil, ‘soft’ corporatism has institutionalized a union structure that is officially hierarchic . . . , with confederations at the national level, federations at the province level and municipal unions. In practice, federations and confederations have a minor role in collective bargaining. The law permits only one union per industry or profession in a given jurisdiction, which must be at least the municipal jurisdiction; that union monopolises representation in the sector. Known as unicidade sindical (union unity), this practice means that workers are free to choose not to join a union, but not free to refuse to be represented by it: the municipal union will represent workers and deduct union dues directly from their pay cheques, whether they are union members or not. . . . . Brazil’s 1988 Constitution freed unions from State control, amending the 1939 provision according to which unions had to be approved by the Ministry of Labour, which had legal control over union affairs, including elections, budget, expenditures, etc. The Constitution provided that unions no longer had to register with the public authority; civil registration was sufficient – a provision that should hold for employers’ associations as well. Nonetheless, because workers’ and employers’ organizations were still entitled to tax their constituencies (a legacy of the Vargas era), labour courts were overwhelmed by demands from unions overlapping territorially with existing organizations. In 2003, the Supreme Court established that it was for the Ministry of Labour to decide which union would represent which workers in which jurisdiction, and hence be entitled to the ‘union tax’ and collective bargaining rights – effectively reversing the spirit of the Constitution, which had promoted freedom of association and union autonomy from State control. Since 2003, unions have again had to register with the Ministry of Labour, which has the power to ‘guarantee the monopoly principle.’ . . . The usual practice in . . . Brazil is that a . . . municipal-level . . . instrument is signed that sets the minimum standards, improvements to which can be negotiated at company level. This means that company-level collective bargaining is permitted . . . , resulting in agreements negotiated . . . by the municipal union and the firm. . . . In Brazil, the unicidade principle may suggest the prohibition of competition within the union market, but in reality, the whole system is highly fragmented and competitive. There cannot be two unions of ‘metalworkers’ in the same city – but there can be a union of drillers, one of spinning drillers, one of hammers, and also unions for bicycle assembly, car production, auto-parts’ workers, and so on. As a consequence, in 2001, the IBGE found almost 16,000 unions in the country (11,000 of which were workers’ unions), a growth of 43 per cent compared to 1991. In May 2007, the Ministry of Labour’s Union Information System (Sistema de Informações Sindicais, or SIS) counted 7,000 workers’ unions, 19 confederations and 283 federations. Most workers’ unions (46 per cent) were based on municipality. But in 2001 the IBGE census found that 89 percent of the 4,000 rural workers’ unions were municipal institutions, compared with only 39 percent of the 7,400 urban workers’ unions, meaning that unicidade at the municipality applies only to rural – not urban – unions. Meanwhile, 54 per cent of workers’


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associations had jurisdictions that exceeded the municipality, correlating with the distribution of employers’ unions, meaning that although the law favours local municipal unions, many of them have managed to encompass other municipalities. . . . [T]he Ministry of Labour defines a union’s jurisdiction – whether at industry, firm or occupational level – and a union has a monopoly over representation in that jurisdiction. For subcontractors, meanwhile, there is no mandatory provision, legal or agreed, that guarantees rights. The Rio de Janeiro Oil Workers’ Union (Sindicato dos Trabalhadores na Indústria do Petróleo do Rio de Janeiro, or Sindipetro-RJ), for example, negotiates with Petrobras, Petroquisa, Braspetro, and other oil and petrochemical companies operating in the state of Rio de Janeiro. The resulting agreements bind only the workers directly employed by each firm, and benefits would be extended to subcontractors only if they were to take part in the bargaining process – from which employers exclude them, arguing that their participation would violate the unicidade principle. Unlike Argentina, Brazilian law does not regulate work commissions or shop-floor organizations other than those related to safety at work; workers must negotiate with resistant employers to establish plant-level union representation or grass-roots workers’ organizations. As a consequence, . . . unionism has not managed to penetrate Brazil’s shop floors. In 2001 . . ., only 9 percent of workers’ unions acknowledged the existence of a ‘factory commission’, or autonomous (that is, not linked to the unions) plant-level representation in their territorial base. Only 3 percent of the urban unions had plant-level union committees, while 34 percent of all unions had ‘union delegates’ (workers that were assigned union tasks) and the mean number of stable delegates per union was eight people. Where they exist, union committees and delegates have an important role in plant-level collective bargaining, but their scarce numbers suggest that only a few unions can bargain the organization of work.”100

100 Adalberto Cardoso and Julian Gindin, Industrial relations and collective bargaining: Argentina, Brazil, and Mexico compared (Working Paper No. 5, Industrial and Employment Relations Office, International Labour Office), http://ilo.ch/wcmsp5/groups/public/---ed_dialogue/---dialogue/documents/publication/wcms_158020.pdf




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Country: Canada OECD union density: 26.3% OECD coverage rate: 30.3% ITUC worker rights rating: 2 Summary of sectoral bargaining scheme: Background on Collective Bargaining in Canada Although the American Wagner model is the foundation of labor law in Canada and the US, the law has evolved very differently throughout the two countries. According to John Godard, “..the American version is predominantly concerned with economic gain and limited state interference, whereas the Canadian version seeks to maintain order and stability through the exercise of state control. For the time being, Canada's version has proved more effective at sustaining higher levels of union density.” (see here). Canada expanded collective bargaining to most public employees in the mid-1960s. At the time, the system was among the most innovative and progressive in the West. While both public and private sector bargaining are both built upon the American Wagner model, public sector bargaining diverged in its scope of bargaining and dispute resolution. With a mind for legislature-driven public policy, the scope of negotiable issues is thus often narrower than in the private sector. For example, many public sector unions were unable to negotiate certain aspects of hiring and promotion. Public sector dispute resolution is more controversial. From the outset, the two options for resolution were either the union’s right to strike, or interest arbitration. There has been conflict between the federal and provincial governments over which option to encourage. For example, in the 1990s Quebec gave public sector unions the strike right instead of interest arbitration, resulting in massive strikes, while Ontario attempted to limit this right to provincial employees and the federal government encouraged unions to choose arbitration instead. In 1997, the federal government flipped, using special legislation to suspend arbitration. The 1990s were notable for the federal government’s frequent use of special legislation to override existing labor relations framework. (see here). Historically, Canada has been more concerned with maintaining peace and stability than in restricting personal freedoms. For example, in the 1940s, the government responded to a wave of employee organizing by the Canadian Labour Congress that was seen to threaten political stability during the war by using its wartime emergency powers to proclaim a nationwide Wagner-style collective bargaining rights (see here). This was called the Order-in-Council PC 1003, or the Wartime Labor Relations Regulations. This was the first time in Canadian history that a federal law compelled employers to bargain with representatives chosen collectively by their employees (see here). Although the Order did not directly promote the rights of workers, it did outlaw unfair labor practices by curbing the powers of management. This, in turn, made it much easier for workers to unionize. After the Order was passed, in 1948, union membership increased by 15%. Although the Order was passed as a temporary measure, it did mark a new era of Canadian industrial relations (see here). It is important to stress that these protections were temporary. In 1978, the Supreme Court of Canada saw three cases, together dubbed the “Labor Law Trilogy,” which failed to give any constitutional protection to collective bargaining or related activities (see here). However, in 2007, the province of British Columbia passed legislation nullifying terms in existing


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contracts that protected employees and provided job security. The legislation also barred employees from seeking such contract terms in the future via collective bargaining. In a rare move, the SCC overturned the Trilogy and declared that, “Freedom of association, as guaranteed by subsection 2(d), protects ‘the right of employees to associate for the purpose of advancing workplace goals through the process of collective bargaining.’” (see here). However, it is important to note that these protections do not guarantee protections of a specific kind of collective bargaining, and employees may not necessarily have the opportunity to choose amongst different choices (see here). Recent Developments: Canada’s British Columbia-Mexico Seasonal Agricultural Workers Program (SAWP) has come under recent scrutiny. Workers under this program who unionize and secure collective agreements may be less able to seek out fixed-term contracts and secure the promise of seasonal return. Thus, the structure of the SAWP may create institutionalized deportability of workers, even if they are covered by collective agreements built to minimize the possibility of unjust termination and premature repatriation. This seriously undermines the SAWP’s goal of regularizing undocumented workforces. (see here). Despite the global economic crisis, and wider spread union membership erosion due to unemployment and austerity policies, public sector unionism continued to expand. Additionally, while the SCC declared collective bargaining a constitutionally protected right in 2007, there is ongoing litigation to determine the extent to which collective bargaining is constitutionally protected. 15 of such cases were before the courts in 2014. (see here). Looking at declining political costs of legislation and recent economic turmoil, governments have been emboldened to enact legislation that permanently restricts collective bargaining rights. This explains the substantial number of recent constitutional challenges to determine the boundaries of legislative intervention into collective bargaining. This legislative trend is part of a broader evolution away from the progressive public sector bargaining model introduced in the 1960s to an increasingly constrained one. It remains to be seen if constitutional challenges to restrictive legislation prove an aid to Canadian collective bargaining. (see here). In Canada, as in the U.S., scholars are increasingly urging the necessity of a sectoral model. A forthcoming article by Sarah Slinn traces efforts to amend the law in ways that would expand sectoral bargaining and discusses the opposition such efforts have received from both business and some parts of the labor movement. Some unions have worried that broader based bargaining poses a threat to some unions’ ability to preserve their existing representation rights; they have also expressed resistance to the prospect of being required to participate in a council of unions; and have anticipated jurisdiction conflicts among unions. Articles of Interest: The following articles may be of interest:


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Ravi Malhotra, “Karl Klare's vision of democratization in the workplace and the contradictory evolution of labour law jurisprudence in the Supreme Court of Canada,” Ottawa Law Review, 2014 (Another perspective on the overturning of the Trilogy discussed above). John Godard, “Labour law and union recognition in Canada: a historical-institutionalist perspective,” Queen’s Law Journal, 2013 (Historical comparison of structures within the US and Canada to explain different results). Leila Geggie Hurst, “A New Hope, or a Charter Menace? The New Labour Trilogy’s Implications for Labour Law in Canada,” Appeal Publishing Society, 25, 2017 (Another perspective on the new labor trilogy implications). Sarah Slinn, Broader-based and Sectoral Bargaining Proposals Collective Bargaining Law Reform: An Historical Review (draft, on file with Clean Slate)


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Country: France OECD union density: 7.9% OECD coverage rate: 98.5% (2014 is last data, pre-reforms). ITUC worker rights rating: 2 Summary of sectoral bargaining scheme: The French labor regime is undergoing a period of reform, as President Emmanuel Macron has made labor issues a central priority for his administration. France’s overall scheme of sectoral bargaining remains in large intact, but important changes will impact the functioning of that system moving forward: Pre-Macron: While union coverage is quite low in France, labor statutes give unions a major role in negotiations between workers and employers. “Less than 8% of employees in France belong to a trade union, a figure that has collapsed from a high of about 30% in the 1950s. … Instead, the real source of French union strength today is the statutory powers they enjoy as joint managers, along with business representatives, of the country’s health and social-security system, and as employee representatives in the workplace. Under French law, elected union delegates represent all employees, union members or not, in firms with over 50 staff on both works councils and separate health-and-safety councils. These must be consulted regularly by bosses on a vast range of detailed managerial decisions. This gives trade unions a daily say in the running of companies across the private sector, which accounts for the real strength of their voice.”101 “Collective bargaining takes place at national, industry and company level and at each level there are detailed rules about who can negotiate and the requirements for an agreement to be valid. Industry level agreements are the most important level for negotiation in terms of numbers covered, although the rates they set are generally well below what is actually paid.”102 “The position of national level bargaining has been enhanced by the legislation, passed in January 2007, which gave unions and employers a much clearer role in the development of legislation in the areas of industrial relations, employment and training. Under its terms, when the government wishes to make changes in these areas, it must first consult with employers and unions on the basis of a document setting out its analysis of the situation, aims and potential options, and allow them, if possible, to reach an agreement on the issue.”103 “Industry level bargaining is the most important level for collective bargaining, in terms of the numbers of employees covered. The ministry of labour’s annual report on collective bargaining shows that, in 2013, 962 industry level agreements of various types were signed, although only 422 of them

101 Why French trade unions are so strong, THE ECONOMIST, Mar. 17, 2014 https://www.economist.com/the-economist-explains/2014/03/17/why-french-trade-unions-are-so-strong. 102 Collective Bargaining - France, WORKER-PARTICIPATION.EU (last updated 2016), https://www.worker-participation.eu/National-Industrial-Relations/Countries/France/Collective-Bargaining. 103 Id.

https://www.economist.com/the-economist-explains/2014/03/17/why-french-trade-unions-are-so-strong

https://www.economist.com/the-economist-explains/2014/03/17/why-french-trade-unions-are-so-strong

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dealt with pay increases and in some cases there were several pay agreements linked to the same main agreement.”104 “At company level there is also a requirement for the employer to negotiate annually on pay, working time and other issues (see below) where there is a trade union delegate – essentially companies with more than 50 employees – and in contrast to the obligation at industry level, this is backed up by penalties in case of non-compliance. However, there is no obligation to reach an agreement.”105 Other features of the French labor are worth noting: certain French companies are required by law to have worker representation on the board;106 “France has a complex system of employee representation at workplace level, through both the unions and structures directly elected by the whole of the workforce.”107 Macron’s reforms In the first years of his presidency, Macron has used a strong position within parliament to enact changes to France’s labor regime. The overall program touches on a number of labor issues, including making it easier for firms to lay off workers, but for our purposes, the following is most important: “Until now more than 90 percent of French workers were covered by collective bargaining agreements at the level of the ‘branch; or industry. The historical reasoning for this high coverage rate was to moderate competitive pressures across France. These branch agreements guaranteed a wide palette of supplementary benefits: seniority bonuses, paid family leave, and full compensation during maternity leave, among others. Macron’s labor reforms dramatically expand the possibility for firms to opt out of these branch agreements. In addition, if new firm-level arrangements violate previously agreed labor contracts, employees can refuse the changes—but the reforms make such refusal a legal cause for dismissal. Smaller firms are exempted from having to negotiate an opt-out agreement with a union. The employer has only to obtain the support of two-thirds of workers by referendum. So, for example, in a workplace with eight men and two women, such a majority might easily reach an ‘agreement’ to cancel extended maternity leave granted in the branch-level convention. Or, in a subcontracting firm, an employer may attempt to convince workers that a permanent slash in bonuses is a crucial condition for remaining competitive.”108 Additional Sources (for reform): Adam Nossiter, Macron Takes on France’s Labor Code, 100 Years in the Making, N.Y. TIMES, Aug. 4, 2017, https://www.nytimes.com/2017/08/04/world/europe/emmanuel-macron-france-economy-labor-law.html?_r=0&module=inline. 104 Id. 105 Id. 106 Board Level Representation - France, WORKER-PARTICIPATION.EU (last updated 2016), https://www.worker-participation.eu/National-Industrial-Relations/Countries/France/Board-level-Representation. 107 Workplace Representation - France, WORKER-PARTICIPATION.EU (last updated 2016), https://www.worker-participation.eu/National-Industrial-Relations/Countries/France/Workplace-Representation. 108 Phillipe Askenazy, The Contradictions of Macronoism, Winter DISSENT 88, 94 (2018).

https://www.worker-participation.eu/National-Industrial-Relations/Countries/France/Workplace-Representation

https://www.worker-participation.eu/National-Industrial-Relations/Countries/France/Workplace-Representation




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Liz Alderman, In French Labor Overhaul, Union Leader Offers a Way to Compromise, N.Y. TIMES, June 20, 2017, https://www.nytimes.com/2017/06/20/business/macron-france-labor-union-laurent-berger.html?module=inline. Peter S. Goodman, Nordic-Style Designs Sit at Heart of French Labor Plan, N.Y. TIMES, Oct. 26, 2017, https://www.nytimes.com/2017/10/26/business/france-labor-reform-economy-macron.html?module=inline.


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Country: Germany OECD union density: 17.0% OECD coverage rate: 56.0% ITUC worker rights rating: 1 Summary of sectoral bargaining scheme: Background on Levels of Collective Bargaining in Germany Labor rights and trade unions are explicitly protected in Germany’s constitutional framework. German law holds “The right to form associations to safeguard and improve working and economic conditions shall be guaranteed to every individual and to every occupation or profession. Agreements that restrict or seek to impair this right shall be null and void; measures directed to this end shall be unlawful.”109 Collective agreements are primarily negotiated at the sectoral level: in 2017, 47 percent of German workers were covered by a sectoral agreement and just 8 percent were covered by a firm level agreement.110 The employers of approximately half of employees not covered by an agreement claim to orient themselves to the sectoral agreement.111 Industry agreements are set regionally and negotiations usually take place between employers associations and the sectoral union. German union membership rates have fallen since the German reunification: 17 percent of German employees were union members in 2016.112 Unions cover broad sectors: IG Metall, the largest individual union, covers auto workers, steelworkers, electricians, woodworkers, plastic workers and several other groups. Ver.di, the second largest union, covers service sector workers in the public and private sectors. Collective bargaining is not the only form of worker power in Germany, German workers at the shop level may elect work councils (if at least 5 workers are employed in the shop). These councils are guaranteed participation rights, which require the council be informed and consulted about specific issues and gives the council the ability to make proposals to the employer.113 In larger firms, workers also can elect employee representatives to the supervisory board of the company.114 Employee representatives make up one-third of the board at companies between 500-2000 employees, and half the board of those above 2000 employees.115

109 GRUNDGESETZ [GG] [Constitution] Art. 9 Abs. 3 (F.R.G.). 110 Susanne Kohaut, Binding collective agreements: The downward trend continues, IAB Forum, https://www.iab-forum.de/en/binding-collective-agreements-the-downward-trend-continues/ (last visited Nov. 1, 2018). 111 Id. 112 Organisation for Economic Co-Operation and Development, Trade Union, OECD Statistics https://stats.oecd.org/Index.aspx?DataSetCode=TUD (last visited Nov. 1, 2018). 113 European Trade Union Institute, Workplace Representation - Germany, Worker-Participation.eu, http://www.worker-participation.eu/National-Industrial-Relations/Countries/Germany/Workplace-Representation (last visited Nov. 1, 2018). 114 European Trade Union Institute, Board-level Representation - Germany, Worker-Participation.eu, http://www.worker-participation.eu/index.php/National-Industrial-Relations/Countries/Germany/Board-level-Representation (last visited Nov. 1, 2018). 115 Id.

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Firms covered by sectoral agreements can still negotiate on some issues at the firm level. Firms must generally follow the favorability principle - only making changes that benefit employees - if deviating from binding sectoral agreements. However, other changes are possible if allowed under opening clauses in an agreement, which have increased in number since the mid-1990s.116 These changes can be implemented through works agreements between firm work councils and management or through supplemental agreements between the union and individual employers. Works councils are also free to negotiate on terms not covered by the general agreement.117

Recent Developments: In 2014, the Act on Promotion of Collective Bargaining Autonomy, which set Germany’s first statutory minimum wage, was passed into law.118[10] This act also made it easier for the state to declare sectoral bargaining agreements generally binding upon the joint request of the parties. Before 2014, sectoral agreements were required to cover 50 percent of the employees in a sector to be extended, but extensions now must simply be in the public interest. Articles of interest:

● Michael Oberfinchtner and Claus Schnabel, The German Model of Industrial Relations: Where Does it Still Exist?, JAHRBÜCHER FÜR NATIONALÖKONOMIE UND STATISTIK (forthcoming, 2018). The authors analyze trends in German industrial relations over the last 20 years, finding that in 2015 61 percent of establishments and 33 percent of employees are neither covered by a CBA nor a works council, an increase from 34 percent and 16 percent in 1996, respectively. Traditional German labor market institutions are more prominent in the public sector and in firms with larger plant sizes. ● John T. Addison et al., The Demise of a Model? The State of Collective Bargaining and Worker Representation in Germany, 38 ECON. AND INDUS. DEMOCRACY 193 (2017). This article investigates collective bargaining trends in the German private sector since 2000. It confirms that the hemorrhaging of sectoral bargaining is ongoing and that any increases in collective bargaining at firm level have been minimal in recent years. ● Thorsten Schulten & Reinhard Bispinck, Varieties of Decentralization in German Collective Bargaining, in MULTI-EMPLOYER BARGAINING UNDER PRESSURE: DECENTRALIZATION TRENDS IN FIVE EUROPEAN COUNTRIES 105 (Salvo Leonardi & Roberto Pedersini eds., 2018). The authors analyze the increasing decentralization of the Germany’s

116 Reinhard Bispinck & Thorsten Schulten, Sector-level bargaining and possibilities for deviations at company level: Germany (European Found. for the Improvement of Living and Working Conditions, 2011). https://www.eurofound.europa.eu/publications/report/2011/germany/indust rial-relations/sector-level-bargaining-and-possibilities-for-deviations-at-company-level-germany 117 European Trade Union Institute, Collective Bargaining - Germany, Worker-Participation.eu, http://www.worker-participation.eu/National-Industrial-Relations/Countries/Germany/Collective-Bargaining 118 Germany: New law promotes collective bargaining, European Found. for the Improvement of Living and Working Conditions, (Mar. 25, 2015), https://www.eurofound.europa.eu/publications/article/2015/germany-new-law-promotes-collective-bargaining; Tarifautonomiestärkungsgesetz [Act to strengthen the autonomy of collective bargaining], Aug. 15, 2014, Bundesgesetzblatt I at 1348 (Ger.), translated in Friedrich-Ebert-Stiftung, http://www.ilo.org/legacy/english/inwork/cb-policy-guide/germanacttostrengthentheautonomyofcollectivebargaining2014.pdf (2015).

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collective bargaining system through case studies of the metal and retail trade industries. They conclude that “the decentralisation process has increasingly undermined the effectiveness of sectoral collective agreements and their basic function: namely, to take wages and other working conditions out of competition.”

A useful overview of Germany’s labor law system is set out in the leading text, MANFRED WEISS & MARLENE SCHMIDT, LABOUR LAW AND INDUSTRIAL RELATIONS IN GERMANY (4th ed. 2008) (available at the Harvard Law School Library from off-site storage upon request). The following chapters in Part II might be particularly helpful: ● Chapter 2 on the organization and structure of trade unions; ● Chapter 3 on the collective bargaining system; ● Chapter 7 on the role of courts in collective labor law.


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Country: Portugal OECD union density: 16.1% OECD coverage rate: 72.3% ITUC worker rights rating: 2 Summary of sectoral bargaining scheme: Portugal is another example of a country whose collective bargaining scheme has changed as a result of the 2008 financial crisis. Pre-Crisis “Portuguese law makes provision for three types of collective bargaining at national, regional, and local level.”119 “Traditionally industry level agreements were more important, covering large numbers of workers and explaining the country’s relatively high level of collective bargaining coverage.” In the past, the government would almost “automatically” extend collective agreements, “making them binding not just on the members of the employers’ association who signed them but on the whole industry.” As a result, “company level agreements cover[ed] many fewer employers.”120 “The industry-level or sectoral agreements may cover a range of industry-specific occupations but as the system does not rule out parallelism or overlapping collective agreements a single enterprise may be covered by two or more agreements depending on the union affiliation of the workers. … Portuguese collective agreements are at once both extensive and general. They are extensive insofar as they cover many categories of worker. They are general in that they set only minimum conditions of which the most important is the base level monthly wage.”121 “Portugal has a national minimum wage, which is normally increased each year in January. In the past it generally went up in line with expected inflation.”122 Crisis reforms “As part of the agreements reached in relation to Portugal’s financial bailout, the government first agreed to establish new criteria for the extension of agreements (in May 2011) and then to use its discretion not to extend agreements until clear criteria had been defined. … The new arrangements, which were published at the end of October 2012, state that agreements can only be extended beyond the signatory parties if at least one union and one employers’ organisation request this, and that the signatory employers’ organisations must employ more than half of all the employees in the industry concerned.”123 119 JOHN T. ADDISON ET AL., UNIONS AND COLLECTIVE BARGAINING IN THE WAKE OF THE GREAT RECESSION 4 (Banco de Portugal 2015), https://www.bportugal.pt/sites/default/files/anexos/papers/wp201506.pdf. 120 Collective Bargaining - Portugal, WORKER-PARTICIPATION.EU (last updated 2016), https://www.worker-participation.eu/National-Industrial-Relations/Countries/Portugal/Collective-Bargaining. 121 UNIONS AND COLLECTIVE BARGAINING at 5. 122 Collective Bargaining - Portugal. 123 Id.

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“At first sight, the data seem to suggest that the government measures on extension agreements have had a distinct chilling effect on collective bargaining. Thus, the number of new agreements has fallen dramatically and with them the number of extension agreements. (We trace the trends in new agreements and new extensions from 2008 to 2012.) It is just a short step to argue – as have a number of observers – that Portuguese collective bargaining is in crisis mode, in part because the collective bargainers are unwilling to enter into new agreements that will not be extended.”124 There have been at least two other important changes. “One change allows unions to delegate collective bargaining to company level bodies in smaller companies than in the past. Until August 2012 these bodies, who can be works councils or company level union bodies, only had the possibility of bargaining in companies with at least 500 employees. This has now been cut to 150.”125 “The other change is that in future industry level agreements will be able to contain clauses permitting company level agreements to diverge from the industry level agreement in areas such as pay, working time and flexibility.”126 Finally, as to workplace representation: “Although in theory there are two channels of workplace representation of employees for most issues – through the workplace union representatives and through an elected works council, in practice works councils are relatively rare. They normally only exist in large companies where unions are strong. The rights of both are limited to information and consultation, with no opportunity to block management decisions.”127 Additional Sources: ALEXANDER HIJZEN ET AL., COLLECTIVE BARGAINING THROUGH THE MAGNIFYING GLASS: A COMPARISON BETWEEN THE NETHERLANDS AND PORTUGAL (IMF 2017), https://www.imf.org/en/Publications/WP/Issues/2017/12/14/Collective-Bargaining-Through-the-Magnifying-Glass-A-Comparison-Between-the-Netherlands-and-45476. Collective Bargaining in OECD and accession countries: Portugal, OECD, (last updated Sept. 2017), https://www.oecd.org/employment/emp/collective-bargaining-Portugal.pdf

124 UNIONS AND COLLECTIVE BARGAINING at 3. 125 Collective Bargaining - Portugal. 126 Id. 127 Id.




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Country: South Africa ITUC worker rights rating: 2 Summary of sectoral bargaining scheme: “In South Africa the central pillar of collective bargaining has historically been provided by the industrial and bargaining council systems. Statutory councils, an innovation of the new Labour Relations Act (LRA), appear to have more limited appeal. Outside the statutory system bargaining takes place at enterprise and plant levels, as well as in non-statutory centralised bargaining forums (some of which feed into the process of making sectoral determinations). The new LRA retained a voluntarist approach to bargaining in which the parties would determine their own bargaining arrangements through the exercise of power. The removal of the duty to bargaining was balanced by the introduction of a set of organisational rights and the concerted promotion of collective bargaining, particularly at the sectoral level. Underpinning collective bargaining is a protected right to strike that is given to unions that follow the statutory procedure. Bargaining councils remain the central pillar of collective bargaining. Participation on a bargaining council remains voluntary but the Act provides a number of inducements for unions and employers to participate, in particular the ability of a council to have its agreement extended to all employers and employees within its jurisdiction. The Act requires that the parties are representative in order to have an agreement extended, but the Minister retains the discretion to extend the agreement if the parties are only ‘sufficiently representative’ and failure to extend the agreement would threaten bargaining at the sector level. In addition, the council must have established an independent body to hear non-party appeals for exemption, and the agreement to be extended must contain the fair criteria to be used by the independent body when considering the appeal. The LRA introduced statutory councils to provide a compromise between the voluntarism of the bargaining council system and the compulsion that was demanded by Congress of South African Trade Unions (COSATU). In terms of the Act a statutory council can be established on application by either a ‘representative’ trade union or employers’ organisation, that is, only one party unilaterally applies for it and this party must meet a lower representivity threshold than for a bargaining council. The drawback is a limited bargaining agenda. The LRA also introduced the workplace forum. This institution was envisaged as a means of reducing adversarialism and promoting joint problem-solving at the workplace level, with distributive bargaining shifting to the industry level. Employers must consult the forum over proposals in respect of a wide range of issues and must disclose all information relevant to the proposals. In addition, the workplace forum has joint decision-making powers in respect of a limited list of matters. . . . Two major industries are covered in full or in part by non-statutory centralised bargaining arrangements: mining and automobile manufacturing. The pelagic fishing sub-sector also has a non-statutory centralised bargaining forum.


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The centralised bargaining forum in the mining industry exists and operates by virtue of agreements between the participants and established practice. The forum covers only members of the Chamber of Mines in the gold and coal mining sectors. Most of the gold and coal companies that are not Chamber members are covered by firm or mine-level collective agreements, as are companies in the diamond and platinum sectors. . . . Labour relations in the automobile industry were turbulent in the 1980s. But in 1990 the National Bargaining Forum (NBF) was established. . . . There are two parties to the NBF: NUMSA and AMEO (Automobile Manufacturers Employers’ Organisation) – comprising the seven OEMs (Original Equipment Manufacturers) in the country. This means that all the employers in the sector are represented on the NBF and its agreements bind the whole sector. NUMSA represents the vast majority of workers. The NBF exists just for collective bargaining. Participation is voluntary, it does not have a constitution, and it has few rules and formalities. It was formed through the power of NUMSA and that is how the forum is maintained. . . . The centralised bargaining forum for the pelagic fishing sector is at least 30 years old. The union party is Food and Allied Workers Union (FAWU) and the employer party is the South African Pelagic Fish Processors Association (comprising all but one of the major pelagic fish processors). FAWU represents about 70 percent of the workers covered. . . . Historically bargaining in the retail sector has been with individual firms, with the remainder covered by a wage determination. There has been little change: currently bargaining takes place at either the national company-level, regional level or store level, and unorganised firms are bound only by the sectoral determination. . . . There is a fairly long history of union organisation in the food manufacturing sector, as well as centralised bargaining in a variety of forums, either industrial councils, multi-employer forums, or at national level for a large company. However, industrial councils had a chequered history in food manufacturing. Most of these collapsed in the 1980s. Now bargaining councils exist only in sugar manufacturing and for grain co-operatives. There are also only two multi-employer forums left in the sector, in the fruit and vegetable canning sector and the pelagic fishing industry.”128 128 Shane Godfrey, Jan Theron, and Margareet Visser, The State of Collective Bargaining in South Africa: An Empirical and Conceptual Study of Collective Bargaining (Development Policy Research Unit Working Paper), http://www.dpru.uct.ac.za/sites/default/files/image_tool/images/36/DPRU%20WP07-130.pdf

http://www.dpru.uct.ac.za/sites/default/files/image_tool/images/36/DPRU%20WP07-130.pdf


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Country: Spain OECD union density: 13.9% OECD coverage rate: 73.1% ITUC worker rights rating: 3 Summary of sectoral bargaining scheme: Spain has also undergone labor reform in recent years, most notably as a result of the 2008 financial crisis. As a result, its one-time system of sectoral bargaining has given way to more frequent firm-level negotiations. Pre-Crisis “The basic principles of the [pre-crisis] system could be summarized in three points: a) Legitimacy of the ‘most representative union’ to participate, an issue that depends on support in the works council elections, not from the number of affiliated workers. This means that nationally only CCOO and UGT are deemed to be the "most representative unions", accompanied by some Basque and Galician smaller unions in those autonomous states. b) The principle of statutory extension. This establishes that any collective agreement higher than the company level must be applied to all companies and to all workers forming part of the geographical and industry level in question. It is irrelevant whether they have participated or not in the bargaining process. This sets the limits for further agreements, thus guaranteeing a certain set of minimums in the company level bargaining. c) ‘Ultra-activity’ refers to the following principle: if an agreement has not been renewed, it remains valid after its expiry. Negotiations take place usually between trade unions and employers’ associations. However, in specific cases they are were also signed by the government in order to provide an element of legitimacy. Different sets of dialogues may occur at four different levels: national, regional, industry, and company/organisation level, and as mentioned before they cover a broad range of issues such as training, job classification, sickness, maternity arrangements, and health and safety.”129 “Below the national level … the structure is complex and overlapping. In 2010, … three-quarters (75.0%) of the agreements were company agreements but they only covered less than one in ten (8.6%) of employees covered by collective bargaining. At the other end of the scale national industry deals made up only 1.7% of all agreements, but they covered 26.8% of employees. (Industries, like construction, banking and chemicals have national agreements.) In the middle were the provincial agreements accounting for a fifth (19.2%) of the agreements signed but just over half (53.7%) of the 129 CARLOS J. FERNÁNDEZ RODRÍGUEZ ET AL., THE REFORM OF COLLECTIVE BARGAINING IN THE SPANISH MANUFACTURING SECTOR WITH REFERENCE TO THE METAL AND CHEMICAL SECTORS: LEGACIES AND RISKS IN THE REFORM OF REGULATION SINCE 2008 (University of Manchester Business School 2014), http://www.research.mbs.ac.uk/ewerc/Portals/0/Documents/SDDTEC/Spain%20Final%20.pdf.

http://www.research.mbs.ac.uk/ewerc/Portals/0/Documents/SDDTEC/Spain%20Final%20.pdf

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employees. The remaining 10.9% of workers were covered by agreements signed at other levels, in particular regional level. “The general pattern … ha[d] been that large and medium sized companies have their own agreements, sometimes at plant level, while smaller employers ha[d] been covered by provincial agreements for their industry. The government also had powers to extend collective agreements in areas where negotiations ha[d] not taken place. However, although these powers were strengthened in 2005, they [were] very rarely used.”130 2012 Reforms “The reform gave priority to collective bargaining agreements at the firm level over those at the sector or regional level, so that collective agreements could adjust more closely to the specific needs of a firm. In addition, firms can now opt-out more easily from a collective agreement and pursue internal flexibility measures. For example employers can introduce unilaterally changes in working conditions (wages, working hours, work schedules) whenever there are objective economic, technical, production or organisational reasons. In addition, in the absence of an agreement with workers’ representatives, the employer willing to opt out may now unilaterally refer the matter to arbitration by a public tripartite body (“Comisión Consultiva Nacional de Convenios Colectivos”, CCNCC hereafter). “Finally, collective bargaining agreements can now be prolonged for a maximum period of only one year after their end date (the so-called period of ultra-activity), in order to provide incentives to social partners to renegotiate rapidly new agreements adapted to any changes in economic conditions.”131 Additional Sources: Meardi, G. (2014) ‘Employment relations under external pressure: Italian and Spanish reforms in 2010-12’, in M Hauptmeier and M Vidal (eds), Comparative Political Economy of Work. Basingstoke: Palgrave Macmillan, 332-350.

130 Collective Bargaining - Spain, WORKER-PARTICIPATION.EU (last updated 2016), https://www.worker-participation.eu/index.php/National-Industrial-Relations/Countries/Spain/Collective-Bargaining. 131 THE 2012 LABOUR MARKET REFORM IN SPAIN: A PRELIMINARY ASSESSMENT 12–13 (OECD December 2013), https://www.oecd.org/els/emp/SpainLabourMarketReform-Report.pdf.


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Country: Sweden OECD union density: 66.8% OECD coverage rate: 90% ITUC worker rights rating: 1 Summary of sectoral bargaining scheme: Sweden is known for its relatively congenial industrial relations. How much of that is cultural, as opposed to the result of structural design, is an open question. “The key level for collective bargaining in Sweden is the industry level, although around 90% of employees have part of their pay determined by local level negotiations, and 11% have all their pay determined locally. The overall level of coverage of collective agreements is high – estimated at 88%.”132 “The current situation is that the wage bargaining at national level has come to a virtual stop in the private sector and the Confederation of Swedish Enterprise does not play any part in wage bargaining. Nevertheless, a number of non-wage framework agreements between the unions and employers at national level such as the 1982 efficiency and participation agreement continue to exist and new agreements outside the area of pay continue to be signed. For example, in 2006 a new national agreement on pensions was reached for 700,000 non-manual workers in the private sector, and in September 2012 the Confederation of Swedish Enterprise began negotiations with PTK, the negotiating group that brings together TCO and Saco, on new redundancy arrangements. “However, for pay the key bargaining level is now the industry level, although there is still some co-ordination at national level, as well as a lot of room for variation at company/organisation level. Around 60 unions and 50 employers’ associations are involved in bargaining at this level.”133 “The extent to which industry level agreements set pay at local level varies substantially. At one end of the spectrum, there are those where the national agreement does not set a pay increase but leaves it entirely to local negotiations without any nationally specified amount. At the other end there are those where the national agreement fixes a common increase for all employees.”134 “There are normally separate agreements for manual and non-manual workers.”135 “During the contractual period, the parties are under obligation to maintain industrial peace. The obligation to maintain industrial peace applies during the term of the collective agreement. The peace obligation means that industrial action may not be resorted to for the purpose of changing the agreement or to obtaining benefits that are not included in the agreement. During negotiations for a new agreement industrial action is allowed. Industrial action must be duly approved by a trade union organisation in order to be regarded as permissible. According to the Co-Determination Act, a party intending to take

132 Collective Bargaining - Sweden, WORKER-PARTICIPATION.EU (last updated 2016), https://www.worker-participation.eu/www.worker-participation.eu/index.php/National-Industrial-Relations/Countries/Sweden/Collective-Bargaining. 133 Id. 134 Id. 135 Id.

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industrial action must, in due time, give advance notice in writing to the counterparty and also to the National Mediation Office.”136 “A worker who is not union member has no explicit rights under the collective agreement. But to avoid social dumping, trade unions claim that the levels of benefits laid down in the collective agreements should also be paid to non-members. This is in order to not make it more advantageous to employ a non-unionised worker than a trade union member.”137 “Collective pay agreements in Sweden are usually sectoral agreements. They are concluded between trade unions and employers’ associations. The trade unions have various sectoral agreements for different industries. It is not very common to conclude central agreements for only one company. A subisidiary agreement with the same contents as the sectoral agreement is concluded with employers who are not members of an employers’ association, but want to have a collective agreement nevertheless. Sectoral agreements are often supplemented by local collective agreements. Local collective agreements often stipulate how sectoral collective agreements are to be applied more in detail.”138 “Workplace representation for employees in Sweden is through the local union at the workplace. There is no other channel. Legislation requires the employer to inform and negotiate with the unions at the workplace before making major changes, and many of the practical arrangements for doing so, which elsewhere in Europe are fixed by law, are left in Sweden to local negotiations.”139 “Employees are represented on the boards of almost all companies with more than 25 employees (Sweden has a single-tier board system.) There are two or three employee members and they account for around one third of board members in most companies. They are chosen by the union and are generally the key figures in a whole range of employer-union relations.”140 Additional Sources: What is a Collective Bargaining Agreement, INDUSTRI ARBETSGIVARNA, http://www.industriarbetsgivarna.se/in-english/employers-information/the-swedish-labour-market/what-is-a-collective-bargaining-agreement.

136 THE SWEDISH MODEL: THE IMPORTANCE OF COLLECTIVE AGREEMENTS IN SWEDEN 2 (The Swedish Trade Union Confederation 2011), https://www.handels.se/globalassets/centralt/om-handels/english/the_swedish_model.pdf. 137 Id. at 4. 138 Id. 139 Workplace Representation - Sweden, WORKER-PARTICIPATION.EU (last updated 2016), https://www.worker-participation.eu/www.worker-participation.eu/index.php/National-Industrial-Relations/Countries/Sweden/Workplace-Representation. 140 Board-level Representation - Sweden, WORKER-PARTICIPATION.EU (last updated 2016), https://www.worker-participation.eu/www.worker-participation.eu/index.php/National-Industrial-Relations/Countries/Sweden/Board-level-Representation.

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Country: United Kingdom OECD union density: 23.7% OECD coverage rate: 26.3% ITUC worker rights rating: 3 Summary of sectoral bargaining scheme: “Less than a third of all employees in the UK are covered by collective bargaining. In the private sector coverage is lower at around a sixth of employees and the key bargaining level is the company or the workplace. In the public sector, where almost two-thirds of employees are covered, industry level bargaining is more important.”141 Private Sector “When bargaining occurs in the private sector, its most important level is at the company or individual workplace. There is still industry level bargaining in some industries, such as parts of the textile and furniture industries, but during the 1980s there was a clear move to bargaining at local level and a number of employer federations broke up or ceased to be involved in collective bargaining.”142 Public sector “Industry-wide agreements are more common in the public sector. However there are some public sector employers, which bargain at the level of a single organisation. The civil service, for example, pays different rates in different government departments. In addition some workers in the public sector, such as teachers, parts of the health service and those in the prison service, are covered by pay review bodies, rather than collective bargaining. These pay review bodies make recommendations on pay to the government, which are then normally approved.”143 “The individual PRBs are supported by a secretariat - the Office of Manpower Economics (OME) - a non-departmental body sponsored by, but independent of, the Department for Business, Energy and Industrial Strategy. The OME’s page on Gov.uk states that the PRBs currently make recommendations impacting 2.5 million workers – around 45% of public sector staff – and a pay bill of £100 billion35 While the specific PRB cycles vary somewhat, they all follow the same process year-on-year. Ministers issue PRBs with their remits; the PRBs commission research and receive representations, then evaluate this; the PRBs make their recommendations in a report submitted to Government and laid before Parliament; the Government then announces its response to those recommendations. The public sector pay policy is restated in the PRBs remits and they are expected to make recommendations within those constraints.”144 Key details 141 Collective Bargaining - United Kingdom, WORKER-PARTICIPATION.EU (last updated 2016), https://www.worker-participation.eu/National-Industrial-Relations/Countries/United-Kingdom/Collective-Bargaining#note_1. 142 Id. 143 Id. 144 DOUG PYPER ET AL., PUBLIC SECTOR PAY, CBP 8037, 14 (The House of Commons Library 2011), https://www.handels.se/globalassets/centralt/om-handels/english/the_swedish_model.pdf.


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“In any case, where industry level agreements exist they are not considered to be legally binding on the parties who sign them. Employers are not bound by an agreement signed by an employers' federation even if they are members of it. … There is no legal requirement for the employer to negotiate with the union except where there has been a legally binding decision that the unions should be ‘recognised’ for bargaining (see section on workplace representation) … However, such cases are rare and generally it is the balance of forces between union and employer at the workplace that determines whether bargaining takes place.”145 Additional Sources: TRADES UNION CONGRESS, https://www.tuc.org.uk/. Addison, John & Siebert, Stan. (2002). Changes in Collective Bargaining in the U.K, https://www.researchgate.net/publication/5138404_Changes_in_Collective_Bargaining_in_the_UK. ALEX BRYSON AND JOHN FORTH, WAGE GROWTH IN PAY REVIEW BODY OCCUPATIONS (Univ. College London 2017), https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/623810/Wage_Growth_in_PRB_Occupations_-_final_report__3_.pdf. The 2011 Workplace Employment Relations Study: First findings by Brigid van Wanrooy, Helen Bewley, Alex Bryson, John Forth, Stephanie Freeth, Lucy Stokes and Stephen Wood, 2013.

145 Collective Bargaining - United Kingdom.

https://www.worker-participation.eu/National-Industrial-Relations/Countries/United-Kingdom/Collective-Bargaining#note_1

https://www.worker-participation.eu/National-Industrial-Relations/Countries/United-Kingdom/Collective-Bargaining#note_1

https://www.tuc.org.uk/how-unions-work

https://www.tuc.org.uk/how-unions-work

https://www.researchgate.net/publication/5138404_Changes_in_Collective_Bargaining_in_the_UK

https://www.researchgate.net/publication/5138404_Changes_in_Collective_Bargaining_in_the_UK

https://www.gov.uk/government/organisations/office-of-manpower-economics/about

https://www.gov.uk/government/organisations/office-of-manpower-economics/about


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Country: Uruguay ITUC worker rights rating: 1 Summary of sectoral bargaining scheme: “Upon entering the period of redemocratization in the 1980s, there were widespread expectations among the [Uruguayan] population not only that the dismantled democratic institutions (including unions) would be rebuilt, but also that lost purchasing power would be recovered and decent jobs be created. These hopes were truncated, as although the first newly-democratic government of Julio Maria Sanguinetti made an effort to reconvene the Consejos de Salarios [sector-wide collective bargaining processes established by Law 10499 prior to the installation of the country’s authoritarian regime in 1973], the arrival of the neo-conservative leader of the National Party, Luis Alberto Lacalle, to the Presidency in 1989, marked an abandonment of policies to stimulate social dialogue and revalue salaries. . . . The possibility of reconfiguring the Uruguayan labor relations system became a reality in October 2004, when Tabare Vasquez, the candidate for the Frente Amplio/Encuentro Progresista/Nueva Mayoria coalition and ex-mayor of Montevideo, obtained 50.5% of the total votes in the presidential elections, thus securing a historic victory for the united forces of the left in a single round of balloting. . . . [O]ne of the utmost priorities of the FA after Tabare Vasquez’s inauguration in March 2005 was the reactivation of the Consejos de Salarios, something that did not require new legislation to be put into place, as the regulatory framework created by Law 10449 was still technically in force. However, to ensure the success of the new round of negotiations in the CS, several new structures were created. The Consejo Superior Tripartite and Consejo Superior Rural were formed to classify all of the economic sectors and sub-sectors into groups to facilitate collective bargaining, and to propose provisions to modernize Law 10449. The Consejo Bipartite was also created as a space for social dialogue with public employees. With this new institutional structure in place, the first round of collective bargaining processes [was] convened in 2005, divided into three levels of negotiations. The ‘macro’ level, represented by the Consejo Superior Tripartite, incorporated national leaders of the [main labor federation] PIT-CNT and employers’ organizations together with representatives of the Ministry of Labor and Social Security (MTSS, for its acronym in Spanish), who defined general parameters for all of the negotiations and also fixed the level of the national minimum wage. The ‘meso’ level involved negotiations between union leaders and employers of individual economic sectors, accompanied by representatives of the MTSS, separated into 20 groups 7 and approximately 190 sub-groups defined by the Consejo Superior Tripartite. Negotiations on the level of individual companies take place in the “micro” level, in order to address issues which may not have been agreed upon at the ‘meso’ level. It should be mentioned that the role of the State (embodied by the representatives of the MTSS) is not that of a mere observer whose principal role is to guarantee that the labor legislation is respected, but is actually quite proactive, especially in the negotiations at the ‘meso’ level, where it presents its own proposals for clauses to be negotiated in cases when employers’ and workers’ representatives cannot arrive at a consensus. … The general framework of the negotiations between the State and its employees is set by the Consejo Superior De Negociacion Publica del Sector Publico, while individual agreements in each State entity are negotiated directly in bipartite processes involving equal numbers of union and State representatives


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(in their capacity as employers). The responsibility to guarantee compliance with the agreements is given to the MTSS. In September 2009, after two years of debate, the polemical collective bargaining law for the private sector was passed by the Uruguayan Congress, due in large part to the partisan discipline of the FA members of Congress and to the intense pressure campaign launched in 2009 by the PIT-CNT. This law enshrines tripartite social dialogue as one of the pillars of the Uruguayan labor relations system, through the regulation of the functions and structure of the Consejo Superior Tripartite. This institution, comprised of nine representatives of the MTSS, six representatives of employers´ organizations, and six representatives of the PIT-CNT, has the authority to establish and modify the legal minimum wage, classify groups of economic activities in order to facilitate the collective bargaining processes that take place in the Consejos de Salarios, indicate the labor and employers’ organizations that will participate in the CS, deliberate on questions pertaining to labor and employer’s issues to be resolved bilaterally and trilaterally, and develop initiatives to advance labor relations in the country. It should be mentioned that this law allows any of the three actors represented in the Consejo Superior Tripartite to convene the CS, in this way effectively eliminating the possibility that the Executive branch of the government can unilaterally block the realization of these sector-wide collective bargaining processes, as it did during the reinstallation of a ‘voluntarist’ labor relations system during the years 1990-2004. In addition to this, the law stipulates that the agreements reached in the CS are legally binding and of mandatory compliance for all the actors involved, even if the employers refuse to participate in the negotiations. This occurred for example in 2008 in the negotiations in the CS for domestic workers, when no representative of an employers’ organization took part in the talks. Likewise, according to this new law, all collective bargaining agreements remain in force until new agreements are signed, thus giving a greater level of stability and continuity to the labor relations system.”146

146 Jana Silverman, Labor Relations in Uruguay under the Frente Amplio Government, 2005-2009: From Neoliberalism to Neocorporativism? (VII Global Labour University Conference Paper), http://www.global-labour-university.org/fileadmin/GLU_conference_2011/papers/Jana_Silverman.pdf.

Literature Review Memo - Labor and Worklife Program

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