Different Levels Of Collective Bargaining Agreement

In the words of R.F. Hoxie: “Collective bargaining is a way of defining conditions of employment through negotiation between an organized body of employees and an employer or employers` association that normally acts by organized agents. The nature of collective bargaining is an agreement between the interested parties and not an external decree.¬†Collective bargaining can also affect wage dispersion and income inequality (e.g. B by effects on employment, but also by their influence on company remuneration and on the tax and social benefit system at national level), on unemployment and competitiveness, and on the way in which the labour market reacts to unexpected shocks (see Chapter 3). In addition to guaranteeing these functions for workers, collective bargaining is also an important instrument of market control, that is: Limit wage competition between companies or, on the contrary, limit the power of monopson of companies which, in some cases, can benefit from a lack of bargaining power of workers. It can incentivize companies to invest in innovation if the existence of a bargaining environment prevents the possibility of increasing profits by simply reducing wages. Retroactivity: extension of the provisions of a newly signed agreement to a period prior to its signature or effective extension (usually to the period between the expiry of the previous agreement and the entry into force of the new agreement). As a rule, it involves the payment of arrears corresponding to the increase in negotiated wages. The Portuguese labour market reform, which in 2012 introduced important changes in the functioning of collective bargaining (which have since been largely reversed), making the rules on administrative extensions stricter, in particular, has been the subject of much discussion on the extent of the reduction in the coverage of collective agreements.

In fact, despite good and detailed data (Quadros de Pessoal, personal file, mandatory survey of all companies, carried out every year in October), the calculation of the coverage of collective agreements is not easy because it requires a number of assumptions. However, overall, it is important to remember that in many countries the figures for the coverage of collective agreements are uncertain and that in some countries the agreements signed no longer have new minimum legal requirements and therefore have little influence on workers` conditions. The figures should therefore be used with caution. Finally, collective bargaining can improve the quality of employment between workers and businesses. It can be a useful instrument for self-regulation between workers and employers and improving the stability of labour relations and peace at work, which can lead to more efficient allocation of resources, increased motivation and, ultimately, productivity. In more centralised and unordered countries such as France, Iceland, Italy, Portugal and Slovenia, sectoral agreements play an important role, extensions are widely used and there is rather limited room for manoeuvre to conclude agreements at a lower level to divert higher agreements. . . .

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