What is a Collective Agreement

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What is a Collective Agreement?

• A Guide for Employers
• by
• J.M. Standaert,
• Senior Specialist for Employers Activities

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Table of Content

• ILO-definitions and principles
• What is a collective agreement
• About the contract
• About the parties
• Role of the Government
• Important modalities
• About the clause of Social Peace
• Content
• Complementary Funds for Social Security
• Extension of enforcement
• Level of authorities
• Final remarks
• Case the Unique Collective Agreement in România

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ILO-Definitions

• Collective Bargaining Convention (C 151), 1981
• Promoting free and voluntary collective
  bargaining
• no forced, compulsory negotiations, or under
  pressure

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• Collective Agreements Recommendation (R 91),
  1951
• Definition (art 2, 1)
• All agreements in writing regarding working
  conditions and terms of employment concluded
  between an employer, a group of employers or one
  or more employers organisations, on the one
  hand, and one or more representative workers
  organisations, or, in the absence of such
  organisations, the representatives of the workers
  duly elected and authorised by them in accordance
  with national laws and regulations, on the other.

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• Effects (art 3)
• bind the signatories and those on whose behalf
  the agreement is concluded.
• not allowed to include in contracts of
  employment, stipulations contrary to those
  contained in the collective agreement such
  stipulations are null and void
• exception stipulations in contracts of
  employment which are more favorable to the workers

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• Extension of Collective agreements (art 4)
• collective agreement already covers a number of
  sufficiently representative employers and
  workers
• request for extension shall be made by one or
  more organisations of workers and employers who
  are parties of the agreement
• prior to extension, employers and workers to whom
  the agreement would be made applicable, should
  have the opportunity to submit their observations

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• Interpretation of Collective agreements (art 5)
• disputes arising out of interpretation submitted
  to an appropriate procedure (established either
  by agreement, by law or by regulation)
• Supervision (art 6)
• supervision of application ensured by employers
  and workers organisations parties to agreements,
  or by existing bodies or by bodies established ad
  hoc

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• Other (art 7)
• information of the text of Collective agreement
  by employers to the workers
• registration or deposit of collective agreements

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What is a Collective Agreement?

• Contract
• Between Social Partners
• at level of state, local entity, branch or
  enterprise
• Regulate individual and collective relations
  between employers and workers at level of branch,
  a territory or at level of company, and their
  rights and duties (for example working conditions)

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About the contract

• Special law regulates some formalities to satisfy
• A collective agreement can also exists without
  satisfying to legal basis
• parties are free to define application,
  duration, content, dates, etc.
• but
• not contrary to law or international conventions
• lower level of collective agreement cannot be
  contrary to a higher level

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About the parties

• Trade unions and employers, sometimes governments
• must be competent and representative
• Members of the organisations are bound, without
  having to sign individually
• at branch level representatives of the
  organisations (in the joint committee)
• at enterprise level
• employer (manager)
• either delegate(s) of the workers organisations
  represented in the company, or the permanent
  secretary (not the works council)

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Role of the Government

• Convention 98 Right to Organise and Collective
  Bargaining (1949), art 4
• measures appropriate to national conditions
  shall be taken, where necessary, to encourage and
  promote the full development and utilisation of
  machinery for voluntary negotiation between the
  employers and employers organisations and
  workers organisations, with the view to the
  regulation of terms and conditions of employment
  by means of collective agreements
• Government (usually Minister of Labour, but
  sometimes also Prime Minister) not outsider, not
  only observer!

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• But actor encourage and promotor, by
• framework law with all formalities on
  registration and extension
• mediation and arbitration special team, with
  special capacities and competences
• neutral
• well-informed
• confidence of both parties
• capacity to unite parties!
• cost and content of new agreements in compliance
  with objectives of economic and social policy of
  the government (inflation, employment, growth,
  export, etc.)

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Role and Strategy of the Employers Organisations

• as representative of the employers clear mandate
  from your members, by informing and consulting
  them regularly (but avoid leaking)
• collective agreement is the outcome of the power
  game
• (equal or fair) balance between the cost (and
  duties) and the benefits (social peace)
• about costs avoid higher costs (and duties) than
  your main competitors (i.e. your export markets!)

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• insist on the respect of the agreements by the
  Trade Unions
• problem of sanction in case of non respect,
  violation by Trade Unions and their members (see
  clause of social peace)
• inform the members about the Collective
  Agreement, with proper comments (publication of a
  brochure with additional comments)

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Important modalities

• always written document
• signed by parties bound, and mentioned by name
  and function of the signatories
• Duration of agreement freely agreed
• fixed-term (with start and end) or
• indeterminate duration, but with possibility of
  giving a notice with min. delay

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• Field of application
• Territory
• Enterprises
• Categories of workers
• Document must be complete, clear and easy to
  understand (avoid technocratic wording)
• Clause of social peace

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About the Clause of Social Peace

• is the counterpart from the Trade Unions respect
  of the agreement! (no actions, no strike)
• usually mentioned as final clause
• during the duration of the Collective Agreement,
  no other, new claims, as well at branch level, as
  at company level
• no support to actions by workers at plant level
  for other, higher advantages

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• in case of misunderstanding or dispute about
  interpretation of the collective agreement, the
  case will be submitted to an ad-hoc body set-up
  by the signatories
• during the validity of the collective agreement,
  no support to governments initiatives which
  could increase the labour costs, disturb the
  present harmony or be contrary to the content of
  the collective agreement
• financial sanctions

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Content

• Working conditions, as
• - Wages
• - Premiums, allowances
• - Working time
• - Vacations,
• - Holidays paid and unpaid
• Transport allowances

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• Relations between employers and workers
• - Statute of Union Representatives in the
  companies
• - Funds for Social Benefits
• - Procedure for solving or preventing conflicts
  at enterprise levels
• Relations between employers or their
  organisations and a workers organisation or
  workers organisations

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Complementary Funds for Social Security

• Special fund set-up at level of joint committees
  (branch level)
• Set-up by collective agreement
• Additional, special contribution
• Special advantages for example
• Construction sector
• Metal industry temporary unemployment
  compensation
• Joint vocational training programmes
• Early retirement compensation, etc.

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Extension or enforcement

• First step, registration of CA (after check of
  the validity and conformity)
• Parties (signatories) ask for the extension to
  the government (usually Minister of Labour)
• Law must foresee such extension by a decree by
  the Government or the Minister of Labour
• Publication in the Official Journal
• Sometimes Minister can ask for some light changes
  in wording

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Level of authorities

• 1. Law
• 2. National or branch collective agreements which
  are extended
• 3. Not extended Collective agreements, in case
  the employer is member of an organisation which
  is party of the agreement
• 4. Written contract of employment

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• 5. Collective agreement of the branch to which
  belongs the employer, although he is not member
  of employers organisation which is party of the
  agreement
• 6. Labour regulations of the company
• 7. Additional legal definitions
• 8. Oral individual agreement
• 9. Usage

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Final reminders

• Collective bargaining is free and voluntary
• Written document signed by all the parties
  (responsible and competent)
• Clause of Social peace
• Freedom of parties to define the content
• fair balance between cost and benefits

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Case the Unique Collective Agreement in România

• art 3, al 4 special contribution for
  non-unionised workers unacceptable!
• art 8, al 2 unacceptable more and new favorable
  regulations cannot occur during the validity of a
  collective agreement!
• art 37, al 2 in kind should be max. 10 , not 30
  !
• art 74, al 3 4 hours/day is very very high!

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• art. 79, al 4 not-acceptable with Trade Unions
  can only be discussed about the criteria for
  dismissal
• art 82, al (b) dangerous
• art 84, al 1 not acceptable
• art 90 quid privacy of trade union-members!
• art 97 this is nefast corporatism!
• art 102 can trade unions afford the cost of
  privatization?
• Where is the clause of social peace?