In Greece, a series of legislative changes in 2011 and 2012, including the possibility for agreements at company level to underestimate agreements signed at industry level, the limitation of the validity period of expired agreements and the unwinding of government power in large-scale agreements have caused collective coverage of around 65% of employees before the crisis to fall to around 10% currently i St. There are three countries – Sweden, Finland and Denmark – where high collective coverage is accompanied by high trade union density. Indeed, trade unions have the power to demand that the terms of sale of their members be negotiated, whereas in Finland agreements are normally considered binding on all employees in the sector concerned. In Belgium, coverage is high, agreements signed at sector level automatically extend to all persons employed in this sector. In Italy, there is no legislation that generally makes inter-professional agreements compulsory, but the courts have generally interpreted them in this way. Workers are not required to join a union on a given job. However, most sectors of activity with an average trade union organization of 70% are subject to a collective agreement. An agreement does not prohibit higher wages and better social benefits, but sets a legal minimum, much like a minimum wage. In addition, a national agreement on income policy is often, but not always, reached, including all trade unions, employers` organisations and the Finnish government.  However, the coverage of collective bargaining is not the whole story at all. The level of negotiation and how the different levels interact are also essential. The details of each country are presented in the different sections of the country, but it is worth drawing attention to some of the proposed variants. In Finland, collective agreements are universal.
This means that a collective agreement in a sector of activity becomes a universal legal minimum for everyone`s employment contract, whether unionized or not. For this condition to apply, half of the workers in this sector must be unionized and therefore support the agreement. One of the main topics discussed in each collective agreement is the choice between centralised and decentralised bargaining. Unions opt much more for centralized bargaining, as this usually strengthens the position of their employees. It is usually responsible for promoting greater market and employment coverage, as well as factors such as equal pay and working conditions. On the other hand, decentralised negotiations are usually the choice of employers, as they often prefer agreements at company level. Other essential features of comprehensive collective bargaining systems are, first, the existence of extension mechanisms (or functional equivalents) that ensure that collective agreements also apply to enterprises that have not signed the contract or are not members of the employers` organization that signed the contract; and, secondly, the existence of large parties to the negotiations, such as in Denmark and Sweden, where there is no legal extension mechanism and where a high coverage of the negotiations relies exclusively on the organizational strength of both parties to the negotiations. In contrast, the lowest coverage is found in countries with negotiation agreements with a single employer.
If you`d like to learn more about collective agreement mechanisms in Europe or to learn more about how Velocity Global`s global PEO solution has changed the way companies operate overseas, contact us today. While the Treaty on the Functioning of the European Union recognises the autonomy of the social partners, in particular as regards wage negotiations, EU policy nevertheless exerts considerable influence on collective bargaining and the wider system of labour relations. . . .