Title: Labour Relations in Austria
1Labour Relations in Austria
-
- Fundacion Ideas Friedrich Ebert Stiftung
- February 8, 2010 Madrid
- Successful Labour Relations Models in Europe
- the German, Austrian and Danish Models
-
2 Labour Relations in Austria
- Labour Relations (Sozialpartnerschaft)
- Have contributed to make Austria one of the
richest - countries in the world and still are an
important pillar. - Have contributed to cope with challenges and to
mitigate the impact of the crisis in Austria - But they are challenged by globalisation, new
capitalism, - and the subsequent shifts in power.
- Confidence in Social Partners is (very) high.
-
3 Austria catches up
- Austria catches up and ranks high in
- Wealth, Growth and Competitiveness
- Living standards and quality of life
- Employment (relatively low unemployment)
- Public opinion citizens satisfied, despite
concerns - Attractiveness to others migration, tourism,
business leaders..
4 and faces (new) challenges
- Globalisation and new capitalism lead to
- Increasing pressure on living and working
conditions, - On social protections systems,
- Public Services (privatizations),
- Rising inequalities
- And Austria faces (new) challenges
- The crisis gt Jobs jobs - jobs
- Rising inequalities, Education, Innovation,
insufficient RD, Tax structure - Sustainable Growth Model
5Catching up - Real GDP p.C. multiplies x 5
6The Economy growsbut growth rates decrease
7Unemployment rates are higher since the 1980s
8 Incomes grow a lot less since the 1980s
9 ..and the wage share decreases with a
regressive impact of taxes
10Austria moves towards the Service Society
11 Tourism is an important sector
12Austria is competitive and exports rise(Austria
ranks 14th 17th in WCR 2003 2010)
13Taxes and Social Security Contributions
grow(Austria ranks 6th in EU on Social
Protection Exp./GDP SSR 2009)
14 ..but expenditures (still) reflect high quality
public services and have a strong
redistributional impact
15 Life expectancy increases
16 and population grows - at varying
rates(composition changes older age-groups vs
younger)
17 Very few strikes in Austria except 2003
18Austrians have varying degrees of confidence in
institutions with Chamber of Labour ranking
first
-
-
- Source Market-Marktforschung, October 2008,
Vertrauen ist ungleich verteilt
http//www.vmoe.at/rte/upload/news_vertrauen_ist_u
ngleich_verteilt_.pdf
19Austrians are more satisfied, confident and
optimistic than Europeans on average
- Eurobarometer Nr. 72, December 2009 some
contrast with other polls - Comparing Austria and EU A EU
- Satisfied with life 85 78
- Satisfied ec. Situation 43 23
- Confidence Government 54 29
- Confidence political parties 36 16
- Austria
- 2/3 see no impact of crisis on personal situation
- 20 expect improvements
20At the same time, they feel increasing pressure
on their living and working conditions (stress gt)
- Index of Working Climate 2009
(Arbeitsklimaindex AKOÖ) -
21And they are quite critical towards the EU
although the crisis has changed attitudes
- Referendum 1994 66 in favour of EU Accession
-
- Source ORF 2.12.2009 Poll ÖGfE
-
22How did we get there?
- Despite no significant resources, small country,
lack of capital, .. - But skills, small country (cf Nordics),
institutional setup and cooperation, - Success Factors
- Political Consensus learning from the past
- Labour Relations negotiations replace conflict
- Mixed Economy Private Public SGI Welfare
State - Austro-Keynesianism and Reforms 1970s
- Technology Follower
- European Integration and Enlargement
- (New) Challenges globalisation and new
capitalism change logic and shift power
23 Labour Relations in Austria - an important
success factor
- From Confrontation Conflict to Cooperation and
Consensus - Institutional setup
- How does it work?
- Key success factors
- The Social Partners Recent Agreements
- The Chambers of Labour
- Challenges ahead
24Labour Relations in AustriaFrom
ConfrontationConflict to CooperationConsensus
- Institutions created 19th / 20th century
- But lack of political and institutional
conditions for cooperation (classgroup interests
gt common goals) - Political and economic crises created a
willingness to cooperate and negotiate from 1945
on - Guided by the principle of solving conflicts of
interest primarily at the negotiating table
rather than through industrial action (strikes,
lock-outs) - To ensure economic reconstruction and social
equality in the postwar-period - Discussions and temporary setback 1980s 1990s
2003
25Institutional Setup The System
- The Austrian System of Economic and Social
Partnership - Works on different levels, based on different
grounds (legal, voluntary, bargaining) - General level The Austrian Social Partners
- Sectoral Level Sectoral Unions and Federations
(Economic Chamber) - Company Level Works Councils and Management
- Aims Strengthening Competitiveness and
stability, preserving and improving social
standards and protecting the ecological bases of
existence
26Institutional Setup The Social Partners
- The Austrian Social Partners
- The Economic Chamber (WKÖ)
- The Chamber of Labour (BAK)
- The Chamber of Agriculture (LKÖ)
- The Austrian Trade Union Federation (OGB)
27 How does it work the Framework
- The Institutions
- Strong Participatory and Representative Democracy
- Strong, Independent, Representative Organizations
- Self-Governed (Elections)
- Chambers based on law
- Multi-level cooperation and interaction
- informal
- voluntary
- historically grown
- between the organizations and with the government
28How does it work Basic Principles
- Common long-term economic and social policy aims
- E.g. growth of real incomes and wealth, social
security, full employment, equal distribution of
wealth, price stability ... - Dialogue, co-operation and co-ordinated action
more beneficial for everybody than open conflict - No denying or ignoring of conflicts ...
- ... but seeking solutions and balance of interest
that benefit all participants
29How does it work - Critical Success Factors
- Culture and Political Will
- "... a special kind of discussion and negotiation
culture ... - Trust, common goals, balance of interests
- Macro-economic perspective
- Compromise as a contribution to success
- ... the willingness to enforce compromises
internally as well as externally, and - to represent different interests with due regard
to medium-term joint objectives and the overall
interests of society ...
30Institutional Set up the Chambers
- Established by law, compulsary membership
- Representing professional, social and cultural
interests - Chamber of Labour also represents the interests
of consumers, unemployed, retired workers,
apprentices - Politically/financially autonomous/independent
- Self-governed (elections) and largely
decentralised
31Institutional Setup The Chambers
Responsibilities
- Go far beyond mere industrial relations, lobbying
and services for members - Are engaged in legislation, administration,
social security system - Have the right to evaluate legislative drafts and
to submit amendments - Fulfill public tasks/providing public goods
(education, working conditions, labour market
policy ...) - Send members in many advisory bodies / committees
- Informal negotiating and problem solving
competency - Formal co-operation in social partnership
institutions
32Institutional Setup Commissions, Councils and
Committees
- Parity Commission and its successors
- (top representatives of government and of 4
major social partnership organizations) - With 4 Sub-Committees
- Advisory Council for Economic and Social Affairs
- Subcommittee on International Issues
- Subcommittee on Wages
- Subcommittee on Competition and Prices
-
-
33Advisory Council for Economic and Social Affairs
- Basics
- Created 1963 - based on informal agreement of
4 large social partnership organizations - No legal basis, no legal personality
- No own budget, no building, no staff
- Publishes studies and reports on economic and
social policy issues - ... containing joint (unanimous) recommendations
to policy makers
34Advisory Council for Economic and Social Affairs
- Organisation
- Think tank" of 21 top experts of social
partners' bodies - President chairs meetings and represents outside
- Presidency rotating on 6-month basis
- 2 Secretaries General "organizational backbone"
- No written rules of procedure
- All activities are unpaid (costs shared by 4
organizations) - Mandate unlimited
- Meetings once a month
35Advisory Council for Economic and Social Affairs
- Procedures
- 4 Social Partners' presidents ask for opinion
- Council establishes working group including
external experts from all areas - Working group submits draft to Council
- Council negotiates to formulate unanimous wording
and recommendations - 4 Social Partners' Presidents sign and release
- Report is published - forwarded to government and
media
36Advisory Council for Economic and Social Affairs
- Outcome
- Profound expert knowledge of policy oriented
scientists close to real life - Aims at consensual views among all social
partners about basic facts, figures and contexts - Concentrates on facts, common concern and
interests - Keeping political differences out of discussion
- Giving unanimous recommendations
37The Social Partners - Recent Agreements (1)
- Action plan for older employees (2008)
- Elements of a long term climate policy (2008)
- Safeguarding the future of the public health
insurance (2008) - A modern legal basis for European statistics
(2008) - The future of the labour market 2010 (2007)
- Agreement on combat against social dumping and
social fraud (2007) - Basic concept for a policy for Lifelong Learning
(2007) - Agreement on minimum wages (2007)
38The Social Partners - Recent Agreements (2)
- Agreement on better compatibility of job and
family (2007) - New law on regulation of working time flexibility
(2007) - Declaration Fifty years of the Treaties of Rome
(2007) - Proposals for economic growth and full employment
(2006) - Austria 2016 Declaration of the Social Partners
(2006) - Conference proceedings The challenges facing
participatory democracy in an enlarged Europe
(2006) - The macro-economic policy and the Lisbon strategy
of the EU (2005)
39The Chambers of Labour A special institution
- Created in 1920 (first request in 1872) on
pressure by unions and social-democrats to
protect and extend social achievments - Public body based on Law on Chambers of Labour
- Broad Mandate To represent and promote the
social, economic, professional and cultural
interests of workers and employees( 1) -
-
40 The Chambers of Labour Tasks Outcome
- Participation in legislation and administration
- Research studies (think tank)
- Training of works councils and union
Representatives - Services for members free of charge
information, legal advice including
representation in court in labour disputes - 2 mio consultations per year
- Education and culture subsidies, BFI - BBRZ
- Outcome 1 Euro paid 3 Euros back (total of
services, OÖ)
41The Chambers of Labour -Membership and Resources
- Membership compulsory - 3,3 mio members
- Workers, apprentices, unemployed, parental leave
(ex civil servants, agriculture) interests of
retirees are represented - Financed by contributions
- (0,5 of Gross Salary - max. 19, 20)
- More than 80 spent on direct services for
members - advice on labour and social law 72,
- tax law 6,7,
- consumer issues 19,8,
- education 1,5,
- Staff 2.400 (incl. Brussels Office)
42The Chambers of Labour Organisation Governance
- 1 Federal Chamber (umbrella)
- 9 Regional Chambers
- Brussels Office
- Self-governed public corporations
- Members elect a Parliament of Workers for five
years (equal, secret, direct vote), political
groups - Bodies
- President, Vice-Presidents (elected by plenary),
- Governing Body, Committees,
- Plenary
- Staff 2.400
43The Chambers of LabourCooperation with Trade
Unions (1)
- The task of the Chambers of Labour is to advise
the voluntary professional bodies empowered to
make collective agreements and the bodies
dedicated to the representation of company
interests, to support them in the promotion of
the social, economic, professional and cultural
interests of workers and employees, and to work
jointly with them. ( 6)
44The Chambers of Labour Cooperation with Trade
Unions (2)
ÖGB
- Agreements on wages and salaries,
collective bargaining
- Support and backup for works councils
Division of labour and co-operation
- Focus of the representation of interests
vis-a-vis industry and sector
45The Chambers of Labour History and Public Opinion
- Created in 1920 at the request of unions (first
requ.1872) - Liquidated in 1938 re-established in 1945
- Political attacks in the 1990s led to strategic
overhaul reorientation professionalisation
more direct services - Referendum 1996 91 of members want Chamber
as a legal public organisation to defend their
interests (71 participated) - Polls Chamber ranks first in citizens
confidence 80 (followed by President and other
institutions) - 87 AK is important 67 very important
- 85 (very) satisfied with services
-
-
46The Chambers of LabourSkills Development and
Vocational training
- BBRZ Group,
- A company built by the labour movement in 1960
- To help people getting back to work
- By skills development, vocational
rehabilitation, education, training and placement - For different target groups and markets
- A common task enhance education, employment and
vocational integration - Oriented upon requirements of economy and
labour-market - International Activities EU Twinning
- Staff 4.300 (OÖ)
47The Chambers of Labour Skills Development and
Vocational training
- BBRZ group (contd)
- Vocational Education for individuals and
companies - Vocational Rehabilitation Prevent work-related
problems, rehabilitate and reintegrate after
accident or illness, - Prepare for and help with reintegration by
special employment and training projects - Clients Individuals, Companies, Regions
(Länder), Communities, Social Security
Institutions (PV, UV, KV), Bundessozialämter,
Employment Agencies
48Challenges for Social Partners- in Austria and
Beyond
- The International Dimension
- Globalisation and New Capitalism change the logic
and shift power - This requires new approaches to corporate,
national and global governance - Cross-border, European and international
cooperation need to be strengthened - Social Partners and other stakeholders need to be
involved on all levels and in all organsations
including the international level - Building on existing cooperation, institutions
and procedures Cross-Border, EU-Social Dialogue,
EESC, AICESIS, - The impacts of the crisis
49How does Austria cope with the crisis
50Unemployment increases but is second-lowest in
Europe (EU-method)Source Chart 6 EU employment
situation and social outlook, Monthly Monitor,
January 2010
51 and is lower than OECD total
- Unemployment (OECD Nov. 2009)
-
-
52Austrias fiscal balance deteriorates but less
than OECD
- Austria Fiscal Balance (OECD Nov. 2009)
-
-
53.. And inflation is lower but positive in 2009
- Austria Inflation (OECD Nov. 2009)
-
-
54 How does Austria fight the crisis?
- Economic Stimulus Packages, Tax Reform and Wage
increases (negotiations 2008, effective 2009)
maintain 41.500 jobs and dampen increase in
unemployment by 0,7-points - Labour Market Packages I-II¹ maintain 45.000 jobs
- Active Labour Market Policy² 10.000 jobs
- Actions for young 3.000 jobs
- Total 100.000 jobs³
- Expenditure for PES 2009 38,5 2010
- 1 Short-Time work, Part-Time for older workers,
Solidarity bonus, Training leave New,
EPU-Förderung - 2 Action 4.000, Sozialökonomische Betriebe,
Employment Projects - 3 Calculations WIFO
55Unemployment and Short-Time Work in Austria
- Growth of Unemployment in selected Sectors
compared to last month - Short-Time Work Persons per Month
-
-
56And what is the role of Labour Relations?
- Social Partners involved on all stages
- Continuous and ongoing cooperation among social
partners and with government - To identify common ground and win-win-situations
- Ongoing meetings on different levels (Presidents,
SGs, experts) continuously develop common
positions which allow for quick action when
necessary - E.g.  Ischler Dialog - yearly conference of
Social Partners where they issue a paper on a
previously chosen issue, which is then negotiated
with government. October
2010 employment and migration
57And what is the role of Labour Relations?
- Key the culture of permanent and ongoing contact
and cooperation which allows for continuous
adjustment of positions and views - Results in common proposals such as
- Social Partner Proposal  LM 2010 in 2007
(before the crisis) - Negotiations with Government resulted in
- Extension of Training via PES (Public employment
Service) - Youth Package (Education Guarantee for Young
helps a lot in the crisis)
58And what is the role of Labour Relations?
- The Crisis Packages
- were negotiated in detail between the ministries
concerned and AK, ÖGB and WKÖ - Bills were drafted after these negotiations
- In parallel Social Partners negotiated Short-time
Work - Government waited for results and included them
in the bill taking into account budgetary
restraints - In addition Social Partners are part of the
Governing Bodies of PES (Public Employment
Service) - Plus negotiations on company level trade unions
and works councils e.g. Short-time work needs
an agreement on company level plus agreement by
the sector union - The result is a compromise agreed upon and
accepted by all participants
59And what is the role of Labour Relations?
- Short-time Work in Austria
- The instrument is very selective
- Wage compensation 90 - subsidized by PES
- Approval upon key elements (conditions), among
others - Employer contributes substantially to costs
- Agreement by social partners on company level
plus sector union - Employers get flexibilisation of short-working
time, PES pays employers contribution to social
security - Consequences only sound companies can afford,
they only keep key people - Effect no adverse structural effect (cf OECD)
- Result 30.188 persons (10 of unemployed) in
254 companies by 16.1.2010 (BMASK - paper)
60 Labour Relations in Austria and the fight
against Unemployment
61Fighting unemploymentThe most important measures
(p.1 of 16)
- Supra-Company apprenticeship-Training
- For young people without appr.places
- Including older young, disadvantaged and slow
learners - Training capacities created 12.300 places
2009/10 - Participation Dec. 2009 10.000
-
-
62Fighting unemployment The most important
measures (p.2 of 16)
- Future for Youth Action Programme (1.4.2009)
- Facilitiate integration into LM and opening
career-perspectives for 19 24 year-olds - Includes job offer, tailored training measure or
subsidised employment - Funding 120 mio in 2009 and 2010
- Result 83.108 young included 138.191 were
employed -
-
63Fighting unemployment The most important
measures (p.3 of 16)
- Youth Foundation (Labour Foundation for young,
1.4.2009) - Offer tailor made measures up to 3 years
- Assistance and training
- Previous employer contributes 1.000
- Participants receive unemployment benefits
-
-
64Fighting unemployment The most important
measures (p.4 of 16)
- Short-time working Scheme (1)
- Most important measure in terms of budget and
participants - Includes a fixed-term reduction in normal working
time - Based on an agreement between social partners
(works council and sector union) - To maintain employment in times of temporary,
non-seasonal economic difficulties -
-
65Fighting unemployment The most important
measures (p.5 of 16)
- Short-time working Scheme - new rules by March
2009 (LM Package 1) - Greater flexibility in fixing hours of employment
(between 10 and 90 of working time) - Benefits granted für 6 months, up to 18 months
under certain conditions, up to 24 months (since
1.7.2009) - Skills enhancement benefits for training measures
agreed by social partners -
-
66Fighting unemployment The most important
measures (p.6 of 16)
- Short-time working Scheme - new rules by July
2009 (LM Package 2) - Social security contributions of employers fully
refunded by Public Employment Service from 7th
month of short-time work. - Maximum period for short-time work 24 months (if
it begins before 31.12.2010) - Result 30.188 persons (10 of unemployed) in
254 companies by 16.1.2010 (forecast) -
-
67Fighting unemployment The most important
measures (p.7 of 16)
- Amended solidarity Bonus Scheme (1.8.2009)
- PSE supports empoyers who offer inhouse-Training
for employees (whose working hours are reduced)
or unemployed or apprentices - Employers are thus given a cost-effective option
to train their future skilled workers in-house -
-
68Fighting unemployment The most important
measures (p.8 of 16)
- Subsidies to single-person businesses
- PSE pays 25 of gross wage for one year when
single-person businesses hire an employee for
first time - Targets young unemployed and job seekers 19 - 30
-
-
69Fighting unemployment The most important
measures (p.9 of 16)
- Action 4.000 (1.9.2009)
- Promotes employment opportunities for
LT-unemployed in municipalities or charitable
organisations - PES gives wage subsidy of 2/3 of labour costs
- Target 4.800 persons by end 2010
-
70Fighting unemployment The most important
measures (p.10 of 16)
- Action 6.000 (LMP III 1.1.2010)
- young gt 25 who cannot find a job after graduation
(due to lack of qualification and/or work
experience) - PSE pays 50 of wage and non-wage labour costs
for 6 months for - Starting 01 2010
- Targets 6.000 young
71Fighting unemployment The most important
measures (p.11 of 16)
- Amended further training leave programme
(1.8.2010) - Facilitates access to training leave by
- reducing previous minimum employment from 12 to 6
months - And minimum training period from 3 to 2 months
-
72Fighting unemployment The most important
measures (p.12 of 16)
- Reform of part-time allowance scheme for older
workers (1.9.2009) facilitates access by - Postponing increase of minimum eligibility age
until 2010 - Abolishing prereuisite of recruiting a
replacement worker - The scheme
- gives older employees the opportunity to reduce
their working time with partial wage compensation
prior to retirement - Preserving the entitlements for retirement,
unemployment and health insurance - Favours working time reduction over block time
reduction
73Fighting unemployment The most important
measures (p.13 of 16)
- Revalorisation of the assessment base of
unemployment benefits (1.9.2010) - To compensate for inflation
- Health insurance for persons not receiving
unemployment assistance due to partners income
(1.9.2009) - Duplication of places in regional skilled
personnel training to 10.000 (LMP III, 2010) - Offers training for low skilled to upgrade skills
(e.g. complete apprecnticeship training) - of women will amount to 54
74Fighting unemployment The most important
measures (p.14 of 16)
- Integration Initiative (LMP III, 2010)
- Will be expanded
- PES offer German language courses to 21.500
people - Targets persons with little command of german,
registered as job-seekers for at least 2 months
or seasonally employed - Future-oriented jobs in health care and welfare
(LMP III, 2010) - Employment in these sectors rises
- PES offers training and skills development for
6.000 persons
75Fighting unemployment The most important
measures (p.15 of 16)
- More and better job orientation and educational
counselling (LMP III, 09-2010) - All pupils of 7th or 8th grade shall spend one
day in Vocational Information Centre - 30 additional Employees in the centers
- To offer new training and job perspectives, esp.
girls - Focus on women (LMP III, 2010)
- Women 40,8 of unemployed, but 49,5 of
beneficiaries of LMP measures - Participation of women will be intensified
76Fighting unemployment The most important
measures (p.16 of 16)
- Electronic applications for handling unemployed
benefits at the PES (LMP III, 1.7.2010) - Possibility to apply electronically for
unemployment benefit - To avoid queues at PES
- To free capacities at PES for counselling and
placement instead of administration - Increase PES staff for crisis management (LMP
III, 1.9.2010) - 200 additional advisors in 2009
- More staff in sept 2009 (to cope with
means.tested minimum income)
77 Labour Relations in Austria and the fight
against Unemployment
- Labour Market EU-accession and Enlargement
- Enlargement transitional arrangements 2004 -
2011 - Aims prevent sudden increase of labour supply
and pressure on wages, gradual transition to full
freedom of movement for workers, ease
restrictions step by step, make Austria fit for
expiry of transition arrangements - Results successful, some evidence blue collar
workers from new MS wages 20 lower. - Share of foreigners in dependent employment
8,8(1973), 5,4(1988), 12,7 (2007) - Special regulatons/easier access for some groups
seasonal workers, posting of workers,
self-employed, special skills, nurses, newspaper
deliverers. - (Chaloupek/Peyrl).
78Pension Reform 2003Government Proposals and
Strikes
- Pensions in Austria - Paygo still most important
- 95 of Workers 90 of Pensions - 2nd and 3rd
pillar - Reform in 2003
- More Pillars, Increase effective Retirement Age
and reduce Pensions - Pensions -38 after 40 years, -27 after 45 years
- Short transition periods
- Strikes and manifestations
- Strike 6.5.2003 500.000
- Manifestation 13.5.2003 200.000
- Strike 3.6.2003 1 mio Workers
-
-
-
79Pension Reform 2003Social Partners Proposal and
Results
- Pension Reform 2003 Proposal by Social Partners
- Key Results of negotiations with government
- Combination of measures
- Long transition periods 3 parallel systems
- Retirement age 65m / 60w gt 65 between 2024
2033 - Incentives for working longer
- Reductions max. 10 (can be cancelled by simple
majority in Parliament) - Hacklerregelung (2013)
- In addition building 2nd and 3rd Pillar
(subsidies)
80Pensions and the crisis
- Pensions and the crisis
- Funded Systems hit severely
- Assets -25, -54 trn
- Paygo Systems hit by reduction in wages and
contributions (Latvia -23) - Pensionskassen lost -18 in 2009
- And 40 over last 10 years (ORF 2.2.1010)
- Pension Fund Returns in 2009 vs neg. growth
- Impact of Ageing 10x impact Crisis
81Companies in Austria and the crisis(FORBA 2009
Auswirkungen der Wirtschaftskrise auf die
Beschäftigten in den TOP-300 Unternehmen in
Österreich)
82Companies in Austria and the crisis(FORBA 2009
Auswirkungen der Wirtschaftskrise auf die
Beschäftigten in den TOP-300 Unternehmen in
Österreich)
83Companies in Austria and the crisis(FORBA 2009
Auswirkungen der Wirtschaftskrise auf die
Beschäftigten in den TOP-300 Unternehmen in
Österreich)
84Companies in Austria and the crisis(FORBA 2009
Auswirkungen der Wirtschaftskrise auf die
Beschäftigten in den TOP-300 Unternehmen in
Österreich)
85 Companies in Austria and the crisis(FORBA 2009
Auswirkungen der Wirtschaftskrise auf die
Beschäftigten in den TOP-300 Unternehmen in
Österreich)
86 Labour Relations in Austria and the fight
against Unemployment