Labour relations

and collective
bargaining
ISSUE BRIEF No.1

Trends in collective bargaining coverage:

Stability, erosion or decline?*

Collective bargaining over wages and other working conditions between unions and employers is a key labour market
institution in democratic societies. The coverage and impact of this institution varies over time and across countries.
This issue brief examines differences in collective bargaining coverage for 75 countries. Inclusive bargaining,
conducted by unions and employers’ organizations received significant public policy support during the interwar
Depression and after 1945. By contrast, collective bargaining has come under pressure in many countries since
the financial crisis of 2008. This followed a longer-term decline in union membership rates. Countries in which
collective bargaining coverage remained stable or increased are those that supported inclusive collective bargaining
through a range of policy measures.

Collective bargaining is a process of negotiation Measures appropriate to national conditions […] to

between independent unions and employers (or encourage and promote the full development and
employers’ organizations) to determine terms and utilisation of machinery for voluntary negotiation
conditions of employment, typically wages and between employers or employers’ organisations and
working time, and relations between the parties. workers’ organisations, with a view to the regulation
The outcome is a collective agreement, signed by of terms and conditions of employment by means of
the parties to the negotiations. It affords labour collective agreements.
protection to workers, legitimacy (of rules) and
The Collective Bargaining Convention, 1981 (No.
stability to employers, and provides public authorities
154) and the accompanying Recommendation (No.
with a form of regulation which is determined by
163) describe some of these measures including
the social partners and can thus be tailored to
the establishment of agreed rules and procedures,
their circumstances - at the same time reinforcing
processes for the resolution of disputes, and access
compliance with minimum standards.
to information for meaningful negotiations. The
Collective bargaining is predicated on respect for the Collective Agreements Recommendation, 1951 (No.
right to organize and the recognition of the right to 91) considers, where appropriate and having regard
collective bargaining. It is a fundamental principle and to national practice, that measures should be taken to
right at work, recognized as such by the international extend the application of all or certain stipulations of a
community.i The Right to Organize and Collective collective agreement to all the employers and workers
Bargaining Convention, 1949 (No. 98) is one of the included within the industrial and territorial scope of
eight fundamental Conventions of the ILO. It guarantees the agreement. Together, these instruments inform the
collective bargaining as a voluntary process between adoption of policies that promote collective bargaining
independent and autonomous parties. Article 4 calls and support the inclusive coverage of workers by
on public authorities to take: collective agreements.

* This issue brief was written by Jelle Visser, Susan Hayter and Rosina Gammarano.

i
Convention No. 98 has been ratified by 164 countries. Article 2. of the 1998 Declaration on Fundamental Principles and Rights at Work declares that all ILO
member States, even if they have not ratified the Conventions in question, have an obligation arising from the very fact of membership in the Organization to
respect, to promote and to realize, in good faith and in accordance with the Constitution, the principles concerning the fundamental rights which are the subject of
those Conventions, namely: (a) freedom of association and the effective recognition of the right to collective bargaining; (b) the elimination of all forms of forced or
compulsory labour; (c) the effective abolition of child labour; and (d) the elimination of discrimination in respect of employment and occupation.

1
Figure 1: Bargaining coverage rates, as a proportion of employees and total employment, 2013 or latest

Austria
France
Belgium
Uruguay
Finland
Iceland
Sweden
Netherlands
Denmark
Italy
Spain
Kazakhstan
Portugal
Norway
Brazil
Slovenia
Malta
Australia
Luxembourg
Germany
Serbia
Ukraine
Bosnia and Herzegovina
Switzerland
Czech Republic
Cyprus
Argentina
Macedonia, FYR
Greece
Zambia
Romania
South Africa
Ireland
United Kingdom
Canada
Bulgaria
Israel
Armenia
Slovakia
Albania
Estonia
Hungary
Russian Federation
Chile
Moldova, Republic of
Japan
Latvia
New Zealand
Poland
Venezuela, BR
Mexico
United States
Korea, Republic of
Indonesia
Lithuania
Belize
Turkey
El Salvador
Panama
Paraguay
Peru
Malaysia
Philippines
Ethiopia

0 10 20 30 40 50 60 70 80 90 100

as a percent of total employment % as a percent of employees

In a few countries, the United States, Canada, the UK and for recent years also Estonia and Finland, household or labour force surveys
contain a question about bargaining coverage; for most countries, however, we rely on administrative data, and estimates, provided by
labour ministries, employers’ organisations, trade unions or joint councils. In Germany, coverage data are derived from the annual establi-
shment survey. Differences in data collective methods, in sampling, treatment of the public sector, and registration practices, may impair
comparability. Sources for the data are available at www.ilo.org/ilostat (IRData).

2
What proportion of workers are covered
by collective bargaining?
The indicator considered in this brief is bargaining As far as possible, both rates have been adjusted for
coverage, defined as the share of employees to whom the possibility that some workers do not have the
a collective agreement applies. This coverage statistic right to bargain collectively over wages, in particular
provides a first approximation of how inclusive collective workers in the public services who may have their
bargaining is in affording labour protection. wages determined by state regulation or other methods
Data on bargaining coverage for 75 countries shows involving consultation.
a significant variation in coverage, from just about As expected, coverage rates calculated as a
1 or 2 percent of employees in Ethiopia, Malaysia, proportion of total employment (broad) are always
the Philippines and Peru to nearly 100 percent in lower than coverage rates calculated as a proportion
France, Belgium, Austria and Uruguay.ii There is of employees (narrow). In some countries the
significant variation in bargaining coverage ranging differences are very large - for instance in Zambia (6
from very low levels in Turkey, the United States, the versus 38 per cent), Venezuela (7 versus 13), Brazil
Republic of Korea and Mexico; medium-low levels in (42 versus 65), Albania (10 versus 24), Greece
Japan, Canada, the United Kingdom and South Africa; (22 versus 40), Portugal (50 versus 67) and Italy
medium-high levels in Brazil, Germany and Australia; (60 versus 80). Even in some Northern European
and high levels in Italy and France. countries with regulated labour markets, such as the
Coverage rates express the proportion of workers Netherlands, the gap is quite large (71 versus 84
whose pay and working conditions are regulated by percent) as a result of the rising numbers of own
one or more collective agreements. Although it has account workers. However, whether the coverage rate
been standard practice to calculate coverage rates for is broad or narrow, this does not affect the order of
wage and salary earners in employment, in countries countries from high to low coverage rates.iii Thus for
with a large informal economy, the formal category comparative purposes, we consider coverage rates as
of employees may be small in comparison to total a proportion of employees.
employment and high coverage rates may present a Figure 2 provides coverage rates of men and women
distorted picture about the significance of collective respectively – that is male and female coverage as a
bargaining in labour markets. proportion of male and female employees. In countries
Figure 1 presents data on collective bargaining coverage for which there is data, there is very little difference
as a share of total employment and as a share of in the rates for men and women, particularly where
employees for countries where both rates are available. collective bargaining agreements are more inclusive.

Is the variation in coverage rates due to the difference in

unionization rates?
Collective bargaining over wages and working conditions In 13 countries union density exceeds bargaining
is the core activity of most trade unions. Thus we coverage, in around half of these by a wide margin.
might expect more workers to be covered by collective There are four potential explanations for this. First,
agreements when more of them are unionized. However, measurement errors caused by administrative arrears in
this relation does not perfectly hold. union membership data, reporting errors and different
Figure 3 compares the union density (membership as a sources may distort the real picture. For example,
proportion of employees) and bargaining coverage rates data for the Russian Federation are more complete
across 60 countries for which there is recent data on and comprehensive for union membership (which
both of these indicators. While these two rates tend to includes that of minority unions) than for bargaining
move together, significant disparities can be observed coverage, which only includes agreements concluded
which include countries with high collective bargaining by member unions of the dominant federation. Second,
coverage and low union density rates (e.g. France), and union membership may be concentrated in the
countries with relative high union density rates and public services, where methods other than collective
low collective bargaining coverage rates (e.g. Moldova, bargaining (e.g. public service consultation bodies)
Philippines, El Salvador and Malaysia). may be used to determine terms and conditions of

ii
This includes data collected annually by the ILO, data collected by national correspondents and the compilation of data by Jelle Visser (ICTWSS). It is available
from the ILO, IRData (www.ilo.org/ilostat) and J. Visser, ICTWSS Database, version 5, AIAS (http://www.uva-aias.net/208).

iii
The correspondence between the two indicators is very high, with a rank order correlation coefficient (Spearman’s rho) of 0.97.

3
 Figure 2: Bargaining coverage rates for men and women

100%
Male Female
90%

80%

70%

60%

50%

40%

30%

20%

10%

0%
ay l y el es r
ria an
d
ga an ur
g lic ric
a da om ra ile
at ic
o
do ru si
a
st gu nl tu bo ub Af na gd Is Ch ex va Pe ay
Au ru Fi
r rm p Ca n St l al
U Po Ge em Re ut
h Ki d M Sa M
x te El
Lu e ch So te
d ni
Cz ni U
U

employment. Third, unions may consider their primary the incentive to join a union and to limit rivalries and
roles to be political lobbying and the administration of conflict in the workplace. This can leave unions with
social security – and not collective bargaining. Finally, a problem of free riding. In some countries unions are
employers may resist collective bargaining and unions compensated on the basis of a payroll levy that covers
may find it difficult to gain the majorities needed to be the costs of negotiating the collective agreement. The
recognized for the purposes of collective bargaining, ‘union shop’, in which workers automatically join a
yet retain their membership. union if an agreement applies, is now rare.
In 47 countries coverage rates exceed union density Finally, where employers negotiate jointly in multi-
rates, in 15 countries by more than double. This is employer bargaining arrangements for a sector and/or
possible because many if not most employers, having territory, the agreements include small and medium-
signed a collective agreement with the union, then enterprises, many of which are not unionized. As a
apply its terms and conditions to union and non- result, coverage rates will tend to exceed union density
members. In some countries employers are required to rates. Similarly, when agreements are concluded for the
do so by law (e.g. in Belgium, Brazil, the Netherlands, entire economy they include sectors that may not be
Japan, Paraguay, Indonesia and some states in the unionized, such as retail, hotel and catering, cleaning,
United States of America), however, in many others etc. In fact in all of the 15 countries in which coverage
this practice may have little to do with the law. For rates exceed union density rates by a large margin,
example, some employers may apply the terms of a bargaining takes place at the sectoral or national level
collective agreement to all workers in order to reduce (or both).

4
Figure 3: Bargaining coverage and union density rates, 2013 or latest

Iceland
Finland
Sweden
Denmark
Belgium
Norway
Malta
Kazakhstan
Cyprus
Italy
Armenia
Luxembourg
Uruguay
Bosnia and Herzegovina
Ireland
South Africa
Argentina
Moldova, Republic of
Macedonia, FYR
Serbia
Russian Federation
Austria
Canada
United Kingdom
Israel
Albania
Slovenia
Greece
Romania
New Zealand
Singapore
Mauritius
Portugal
Japan
Germany
Netherlands
Spain
Australia
Brazil
Switzerland
Bulgaria
Chile
Mexico
Slovakia
Czech Republic
Latvia
Poland
United States
Hungary
Korea, Republic of
El Salvador
Malaysia
Lithuania
Philippines
Indonesia
France
Turkey
Estonia
Paraguay
Peru

0 10 20 30 40 50 60 70 80 90 100

Collective bargaining coverage rate Trade union density %

5
How does bargaining coverage relate to the level
of bargaining?
Data on the dominant bargaining level is available This association between bargaining level and
for 57 countries.iv This provides a score from 1 bargaining coverage also holds over time. Wherever
(enterprise bargaining) to 5 (national bargaining), multi-employer bargaining breaks down and is replaced
with 3 (sectoral bargaining) in between, and two by single-employer bargaining, the coverage rate
scores (2 and 4) for mixed situations.Figure 4 shows decreases dramatically, as fewer enterprises choose
that the level of bargaining (national, sectoral, or to recognize trade unions and negotiate collective
enterprise) is the single-most important predictor of agreements.v Dramatic examples of this include the
bargaining coverage. Multi-employer bargaining at sharp contraction in bargaining coverage that followed
the sectoral or national level is the most inclusive legal changes in the United Kingdom in the 1980s
form of collective bargaining. and 90s and New Zealand in the 1990s. More recent
examples include the steep decline in Greece and
Under conditions of single-employer bargaining Romania after the end of the national pay agreement,
(plant, enterprise, company) only a limited number and in Portugal, following legal changes that stalled the
of employees tend to be covered, usually those in negotiation of new sectoral agreements.
large and medium-sized enterprises or units. Among
the 25 countries where bargaining takes place at the Collective agreements reached through multi-employer
enterprise level (lower panel Figure 4), coverage rates bargaining may be extended to all employers including
vary between 1 per cent and 35 per cent; the average is those who are not a member of the employers’
14 per cent. At the high end of this range, are countries organization that negotiated the agreement. Public
such as Canada, the United Kingdom, Ireland and authorities use this tool to establish a minimum
Romania, where employers still negotiate jointly in standard for pay, working conditions and other terms
some sectors (for example, in the state of Quebec, in of employment in enterprises operating under broadly
the health services in United Kingdom, in construction similar conditions, usually a sector or branch of the
in Ireland, or some groups of companies in Romania). economy (Visser, 2013a). In half of the countries
Under pure enterprise level bargaining, coverage does for which we have recent data on coverage and
not exceed 25 per cent. bargaining structure, the possibility of extending
collective agreements exists in law. In 14 countries
In countries dominated by multi-employer bargaining these extension provisions play a very limited role in
at the sector or national level bargaining (the upper enhancing the inclusiveness of collective bargaining
panel in Figure 4), the variation in bargaining coverage coverage, either because bargaining takes place
ranges from 49 per cent in Switzerland to 98 per cent primarily at the enterprise level, or because of
in France or Austria. For the 19 countries where sector administrative requirements such as high thresholds
or national bargaining (or some combination) prevails, for representivity or the exercise of veto rights by one
an average 76.8 per cent of employees are covered or other of the social partners. In 16 countries, the
by collective bargaining agreements. In between we extension of collective agreements plays an important
find a group of 13 countries that cannot be classified role in enhancing the inclusiveness of bargaining
under one of the two dominant types (either enterprise coverage. These are all countries in which bargaining
or sector) and, predictably, coverage rates tend to lie takes place in multi-employer bargaining arrangements
at an intermediate level. at the sectoral and/or inter-sectoral (national) level.

Why do the social partners engage

in multi-employer bargaining?
Under single-employer bargaining each employer Faced with strong industrial unions, employers may
bargains independently. Under multi-employer seek to enhance their negotiating power by forming
bargaining, employers come together in associations a united front. They may also see this as a way of
with a mandate to bargain. Whether employers prefer securing industrial peace and bringing stability to the
to come together before negotiating a collective industry (Sisson, 1987). Multi-employer bargaining
agreement with the union depends on many factors. can also save on bargaining costs for individual

iv
J. Visser, ICTWSS Database, version 5, AIAS (http://www.uva-aias.net/208).

v
It may of course be the case that some groups of employees prefer to negotiate individually, but the more frequent case seems to be that under conditions of pure
company bargaining, such as in the U.S., many workers who would prefer collective representation cannot realize their preference (Freeman and Rogers, 2006).

6
 Figure 4: Dominant bargaining level and bargaining coverage

Sector or inter-sectoral (national)

N=19, mean=76.8

Mixed (enterprise and sector)

N=13, mean=42.0

Enterprise bargaining
N=25, mean=14.0

0 10 20 30 40 50 60 70 80 90 100

enterprises, especially in homogenous industries bargaining tends to be highly coordinated and can
and in respect of small and medium-sized firms have a moderating effect on wages, benefiting more
that do not have the capacity to deal independently productive enterprises in an industry.
with unions (Godfrey, Theron and Visser, 2007). In From the point of view of workers, multi-employer
particular circumstances - such as is the case with bargaining has advantages as well as disadvantages.
temporary work agencies and in the contract cleaning Unskilled workers tend to do better under industry-wide
and private security sectors - enterprises may also or economy-wide bargaining, whereas skilled workers
engage in multi-employer bargaining as a means may gain more from company bargaining, especially
to afford inclusive and effective labour protection. where it allows for some individual pay bargaining
This was one of the key reasons, for example, that (Iversen 1999). Multi-employer bargaining tends to
established temporary agency firms in the Netherlands offer more inclusive labour protection for vulnerable
negotiated a sectoral contract with the unions and categories of workers, such as migrant workers, those
advocated its extension to non-organized firms so as in non-standard forms of employment and workers
to both limit the operation of enterprises that did not employed in small firms. It can also help to establish
pay social security contributions and prevent statutory minimum standards for working conditions in an
intervention to re-regulate the sector. Multi-employer industry or sector, taking these out of competition.

7
Multi-employer bargaining can be used by the social autonomy.vi Indeed, there are a number of countries
partners to establish a ‘common rule’ and joint in which enterprises can engage in multi-employer
regulation, reducing the need for, and costs of statutory bargaining, but choose not to and where this practice
intervention – a point that is explicitly mentioned remains limited. Enterprises may prefer to negotiate
in both Swiss and Dutch legislation. Some public collective agreements that reflect their own particular
authorities rely on multi-employer bargaining as an situation. Moreover, with the increasing heterogeneity
important regulatory tool, for instance, in regulating of enterprises within an industry or country, the costs of
flexible working hours and variable wage standards in reaching and administrating multi-employer agreements
particular industries, obtaining employer cooperation tends to rise. Unions experiencing a weakening
in training policies, and establishing and administering in the effectiveness of coordinated bargaining
voluntary pension schemes. They also support multi- may prefer to focus their collective power on the
employer bargaining through the extension of collective shop floor.
agreements reached by representative parties. This
One solution, which maintains the benefits of
can in turn act as an incentive for employers to join
coordination while allowing the tailoring of agreements,
employers’ organizations so as to have some influence
is to combine sectoral and enterprise level bargaining
over an outcome that will be binding in any event
in a multi-level bargaining system in which sectoral
(Traxler, 2000).
agreements set a framework for company bargaining
Multi-employer bargaining does restrict the ability (Jimeno and Thomas. 2011). In Europe, the practice
of individual enterprises and local unions to act of including opening clauses in national and sectoral
independently, and both may prefer to retain their agreements has been growing. These typically permit

Figure 5: Changes in bargaining coverage between 2008 and 2012/13

Australia
Netherlands
Brazil
Switzerland
Finland
Denmark
Malta
Chile
Iceland
France
Luxembourg
Italy
Belgium
Austria
Canada
Philippines
Argentina
Korea, Republic of
El Salvador
Mauritius
Japan
Turkey
Lithuania
Poland
Spain
Malaysia
United States
Norway
Mexico
Ukraine
Sweden
Estonia
New Zealand
Czech Republic
Russian Federation
Germany
United Kingdom
Bulgaria
Latvia
Ireland
Cyprus
Hungary
Israel
Slovakia
Portugal
Slovenia
Greece
Romania
-70 -60 -50 -40 -30 -20 -10 0 10

vi
The Collective Bargaining Recommendation, 1981 (No. 163) states that “measures adapted to national conditions should be taken, if necessary, so that collective
bargaining is possible at any level whatsoever, including that of the establishment, the undertaking, the branch of activity, the industry or the regional national levels.”
(para 4(1)). The ILO Committee of Experts on the Application of Standards has also noted “the need to ensure that collective bargaining is possible at all levels,” and
that “the issue is essentially a matter for the parties.” ILO, Giving globalization a human face – General Survey on the fundamental Conventions concerning rights at
work in light of the ILO Declaration on Social Justice for a Fair Globalization, 2008 (ILO, Geneva, 2012) p. 89.

8
enterprises to deviate from the terms established at a of ‘organized decentralization’, additional enterprise-
higher level through a negotiated agreement. This opens level bargaining is highly coordinated within sectoral
up the possibility, for example, to increase working time or national framework agreements with minimum
and contractual flexibility in the interest of employment provisions and dispute resolution procedures which
security (for the Netherlands, see Visser, 2013b). The help to ensure the stability of collective bargaining. In
main dividing line is between countries (or sectors) the second case, these deviations – often imposed by
where this decentralisation is ‘organized’ and those law – advance the erosion and/or breakdown of sectoral
where it is ‘disorganized’ (Traxler 1995). In the first case or national level bargaining.

How has collective bargaining coverage changed since the

recent economic crisis?
Data on changes in bargaining coverage rates from collective bargaining expanded into new sectors and/
2008 to 2013 for 48 countries shows that, on average, or collective agreements were extended (cleaning,
there has been a drop in bargaining coverage of 4.6 services, safety, etc.). In Switzerland and Norway, the
per cent, compared with an average decline in union public authorities changed their policy orientation
density in the same period and for the same group of and made greater use of the extension of collective
countries of 2.3 per cent. These averages, however, agreements to protect vulnerable workers, especially
reflect different developments across countries, as can in sectors with predominantly small businesses and
be seen from Figure 5. those employing a high proportion of migrant labour.
Table 1 presents a summary of the policy measures In Brazil the increase in the coverage of collective
of governments and strategies of the social partners bargaining resulted from the growth in employment
that either contributed to the stability, increase and together with its increasing formalization.
inclusiveness of collective bargaining coverage – Next there is a small group of countries including
or precipitated its decline. During the years of the France, Italy, Canada, Austria and Belgium, where
Great Recession bargaining coverage increased in bargaining coverage remained stable. In some of these,
10 countries, sometimes, as in Australia, owing to for instance in Belgium and France, the extension of
a change in procedural rules supporting good faith collective agreements played an important role. These
bargaining, or as in Finland, due to the conclusion are also countries in which collective bargaining was a
of a national general agreement by the social key element of the crisis response, including through
partners. In some countries, like the Netherlands, the negotiation of ‘job saving’ agreements, many of

Table 1: Policy measures of governments and strategies of social partners

Stability or increase in coverage Decrease in coverage

Social pacts or national general agreements. Cessation of national general agreements.

Policy measures to enhance inclusiveness of collective Weakening of support for multi-employer bargaining:
agreements: • Extension provisions suspended or re-regulated.
• Lowering thresholds for extension and introduction of • Increase of representivity thresholds (for recognition).
public interest considerations (e.g proportion of non-
• Limiting continuation of agreements.
standard workers, migrants or vulnerable workers).
• Application of collective agreements to posted workers.

Organized decentralization: Disorganized decentralization:

• Framework agreements facilitating articulation of issues • Legislation giving company agreements priority over
across different levels. multi-employer agreements (removal of favourability
• Conditional derogation clauses (e.g. time bound, principle).
depending on economic difficulty) allowing opt-outs by • Legislation introducing possibility for companies in
way of negotiated agreement. economic hardship to opt-out of sectoral agreements.
• Conditional exemption from extended • Recognition of (non-union) bargaining representatives
agreement for enterprises by way of negotiated at the enterprise.
agreement (with adequate minimum standards).

9
which drew on short-time working schemes. However, The sharpest decline in bargaining coverage occurred
in many cases the underlying reason for the stability in the group of European countries that suffered severe
observed is the continued willingness of employers’ economic difficulties during the crisis (lower panel of
organizations and trade unions to negotiate with each Figure 5). The bargaining coverage rate for this group of
other – and to act as social partners in the regulation of 10 countries fell by an average 21 per cent. Many of these
labour markets – in a context in which there is growing countries – Cyprus, Greece, Ireland, Latvia, Portugal and
pressure to devolve more issues to bargaining and Romania – required international financial assistance.
decision making at enterprise level. This often involves The programs accompanying the loan packages of the
the setting of framework conditions in sectoral and/ IMF, European Central Bank and European Union often
or inter-sectoral agreements allowing for subsequent required changes in wage setting.vii
enterprise-level bargaining on issues and the use of The result was the introduction, by governments, of
conditional negotiated derogations, reinforcing a changes to the collective bargaining framework that
trajectory of organized decentralization. In Denmark, gave priority to company level agreements over sectoral
for example, for the 75 per cent of employees covered and national agreements; provided for the recognition
by collective agreements, pay is set at the enterprise of other (non-union) workers’ representatives at the
level – yet coverage rates have risen as a result of the enterprise level; limited the continuity of collective
inclusive coverage of sectoral agreements. agreements beyond expiry; and either suspended or
There is a larger group of countries in which the erosion made it more difficult to apply extension provisions
of bargaining coverage began much earlier than 2008. (Marginson and Weltz, 2014). In Romania, Ireland,
The most prominent case is the erosion of collective Greece and Slovenia, national pay agreements were
bargaining in Germany after the unification of East ended in 2009 or 2010. In Greece, Portugal and
and West Germany in 1990. An increasingly restrictive Spain the favourability principle was set aside and
view on the part of employers’ organizations in the company agreements were given priority over sectoral
Collective Bargaining Committee (which confirms agreements. In Spain the validity of expired agreements
extension) led to a decline in the number of collective was limited to one year, in Portugal to eighteen months,
agreements being extended (Bispinck, Dribbusch in Greece and Croatia to three months. In Estonia,
and Schulten, 2010). Declining union membership, legislative changes required parties to agree to the
the increased use of opening clauses permitting continuation of agreements. In Greece extension was
derogations from collective agreements and the suspended for the duration of the programme, until
possibility of membership in employers’ organizations 2015. In Slovakia, Portugal and Romania it became
‘unbound by collective agreements’ (in German, ohne more difficult to extend agreements. In Ireland
Tarifbindung, or OT membership) all contributed to the extension orders (REAs) were suspended after a ruling
erosion of bargaining coverage (Haipter, 2011). In the of the Supreme Court (for details of these measures see
USA, the UK, Japan and other countries dominated Marginson and Weltz, 2014).
by enterprise bargaining, the erosion of bargaining
In these dramatic cases, the sharp decline in collective
coverage has continued over a number of decades. In
bargaining activity and coverage was not the direct
Israel, the erosion of bargaining coverage advanced as
result of employer resistance to collective bargaining
very few sectoral agreements were concluded. In all
or declining membership in unions — although this
countries, it became more difficult to renew existing
did not help the situation — but rather the result of
agreements during the recession, resulting in fewer
policy induced changes reversing support for collective
collective agreements.
bargaining.

Conclusion
The stability or increase in bargaining coverage purposes of collective bargaining. It also requires the
depends on the strategies of the social partners adoption by governments of appropriate measures
and on government policies that support collective and policies to encourage and promote collective
bargaining. This includes an enabling legal framework bargaining. Finally, there is a need to reinforce the
that ensures respect for organizational rights and foundations for inclusive collective bargaining: strong
facilitates the effective recognition of unions and and representative trade unions and employers’
employers (and/ or employers’ organizations) for the organizations.

vii
See: Cyprus, Technical Memorandum of Understanding, April 29, 2013; Greece, Updated Memorandum of Understanding, and Memorandum of Understanding
on Specific Economic Policy Conditionality, August 6, 2010 (and MOU, December 21, 2012); Ireland: Memorandum of Understanding on Specific Economic Policy
Conditionality, December 3, 2010; Latvia: Technical Memorandum of Understanding, July 27, 2009; Portugal: Memorandum of Understanding on Specific Economic
Policy Conditionality, May 17, 2011; and Romania: Technical Memorandum of Understanding, June 16, 2010.

10
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further information

Inclusive Labour Markets, Labour Relations and

Working Conditions Branch (INWORK)

International Labour Office

4, route des Morillons
CH-1211 Geneva 22, Switzerland

Tel: +41 22 799 67 54

Fax: + 41 22 799 84 51
inwork@ilo.org ISSN 2227-9334 (web)
www.ilo.org/collectivebargaining February 2017