Changing public service employment relations in the era of austerity

8/17/2019 Changing public service employment relations in the era of austerity

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Bruxelles 22-23 November 2012

European Commission Conference on Public

Sector Pay and Procurement

Changing public service employment relations in

the era of austerity

Lorenzo Bordogna

Università degli Studi di Milano

[email protected]


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Focus and Outline

• The focus is on the regulatory framework and institutionalarrangements of Public sector employment relations in the EU27

• 1. Two main features:

• a ‘mosaic of diversity’

• ‘distinctiveness’ of PS employment relations

• 2. Recent trends under the pressure of the economic crisis:

• how did they affect the diversity across countries and

the distinctiveness of PS employment relations?


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Mosaic of Diversity

• Great diversity across EU27 in many features

• Size of the public sector employment share

• divide Northern and Central European countries

• vs

• Southern and Eastern European countries

• Employment structure/workforce composition

• (female, part-time, temporary, youthemployment)

• Legal status of public employees (especially civil servants)

• Union membership/density and union fragmentation


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SIZE of THE PUBLIC SECTORPublic sector employment share on total employment (2008-11 average)

PS share on total

employment Countries

Over 29%Norway, Denmark, Sweden, Belgium, Luxembourg, France, UK,Netherlands.

25% - 28% Finland, Malta, Germany, Ireland.

20% - 24%Lithuania, Hungary, Austria, Estonia, Latvia, Greece, Slovakia,Spain, Portugal, Italy.

Below 20% Poland, Slovenia, Czech Republic, Cyprus, Bulgaria, Romania.

Source: LFS Eurostat. NACE Rev.2. Sections O, P, Q.Notice: Sections P and Q include also private sector providersO: Public Administration, Defence, Compulsory Social SecurityP: EducationQ: Health and Social Work Activities


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Share of public sector employment on total employment: comparison betweendifferent sources

Sources : 1) Eurostat LFS 2008-09-10-11, sections: O. P. Q; 2 e 3) OECD, Government at a Glance 2011, Fig. 21.1and 21.2, based on ILO, LABORSTA database; 4) EIRO: Bordogna 2007.

1. LFS-Eurostat2008-2011 average

(O+P+Q)

2. OECDGeneral Govern.

2008 (a, b)

3. OECD General Gov. +Public Corporations

2008 (a, b)

4. EIRO2004 or 2005

EU27 24.4

EU15 25.8

EU12 25.7

NO 34.7 29.6 34.5 33.9

DK 32.6 28.7 31.5 30.4

SE 32.1 26.2

BE 31.5 17.1 24.9

LU 29.8 17.6 17.6 10

FR 29.7 21.9 24.4 20.3

UK 29.7 17.4 18.6 20.2

NL 29.5 12.6 21.4 11.5

FI 27.2 22.9 22.9 27.5

MT 25.4 32.1

DE 25.1 9.6 13.6 12IE 25.1 14.8 16.7 17.9

LT 23.1 27.6

HU 22.6 19.5 19.5 20.8

AT 22.2 11.4 10.7

EE 21.7 18.7 22.3

LV 21.4 34.7

GR 21.2 7.9 20.7 22.1

SK 21.1 10.7 19.3 22.5

ES 20.5 12.3 13.0 15.2PT 20.4 12.1 15

IT 20.2 14.3 14.3 14.5

PL 19.8 9.7 21.4 26.2

SI 19.6 14.7 22.6 23.2

CZ 19.1 12.8 19.4 14.7

CY 18.8 17.3

BG 18.5 26.2

RO 13.6 10.4


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Mosaic of Diversity

• Employment structure/workforce composition

• female employment: comparatively low in the Mediterranean countries (Malta,Greece, Cyprus, Italy, Spain); very high in Baltic

countries, Nordic countries, UK, IR, Slovenia,Slovakia

• differences between PA&Defence, Education, Health

• part-time: comparatively low in 3 Mediterranean countries (Spain, Italy and Greece),Poland, Slovenia, Finland (!); astonishingly high in the NETH, but also high inthe Nordic countries, Belgium, UK, IR, Germany, Austria

• temporary: great variation: 7-8% in UK, Lux, Greece; more than 20% SP, PT, FIN;increasing in some countries (Germany, Austria, PT: search for numerical flex)

• youth employment: low young/elder ratio in Italy, Bulg, Est, Lith, FIN, Sweden;younger and temp workers harder hit by the crisis effects on agestructure, skill composition, also quality of services


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Mosaic of Diversity

• Legal status of public employees

• Career civil servants under public law (Beamte style) or with special

employment status (with restrictions in collective bargaining rights and the right tostrike)

• vs

• Employees with ordinary contracts under private law

• In some countries the area of employees under public law or withspecial employment status is large (Germany, Austria, other central

European countries, France, but also Greece, Portugal, some Easterncountries)

• in other countries is very low or disappearing as effect of reforms(Italy, Sweden, DK), or never existed (UK)

•


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Mosaic of Diversity

• Union membership/union density

• Usually (much) higher union density than in the private sector,

although to varying degree

• but clear divide old EU15 versus Eastern Europeancountries

• (this affects collective bargaining and social dialogue ingeneral)

• Also greater fragmentation than in the private sector


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Mosaic of Diversity

• Wage setting systems

• (influenced also by the legal employment status)

• Three models

• Unilateral determination by the government or public employers

• Free collective bargaining/joint regulation

• Hybrid systems, neither unilateral determination nor collectivebargaining (UK pay review bodies system)

• A different case is when to be effective collective agreements need tobe transposed into legislative measures (decree law or similars):

• if just a procedural formality de facto collectivebargaining

• if agreements not binding for the government unilateral determination (France, PT, GR, some Eastern


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Mosaic of Diversity

• Wage setting systems

• Collective bargaining is far from universally widespread in the EU27

• “the right to collective bargaining, at least for some groups of publicsector workers, is widely restricted or is embedded in specificstructures and procedures that do not allow for the same barginingrights, coverage and results as in the private sector” (Clauwert and

Warneck 2008)

• In some cases, even when the right is recognized, collectivebargaining is not practised at all because of the weakness or absence

of the trade unions (many eastern European countries)


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Distinctiveness of public sector employmentrelations

• Traditionally, distinct/separate regulation from the private sector

• Where the legal employment status under public law prevailed,no bargaining rights + special prerogatives/privileges for publicemployees (benign ‘sovereign employer’ approach)

• Where this distinction did not exist, ‘model employer’ approach

• In both cases

• - attention to uniform, national standards, and equity issues

• - importance of seniority and collective/automatic criteria incareer and remunaration systems


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• This distinctiveness has been put under pressure by two wavesof reform:

• 1960s-70s: move from unilateral regulation jointregulation/collective bargaining

• 1980s-1990s: New Public Management inspired reforms attackboth the benign ‘sovereign employer’ and the ‘modelemployer’ approaches

– reduction of special employment status and special prerogatives

– attack to uniform, national standards – decentalization of wage setting systems

– attack to collective, automatic (universalistic) criteria for pay increases andcareer promotions in favour of more discretionary, selective, individualizedsystems (PRP, merit pay)

– more confrontational attitude towards trade unions


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• NPM inspired reforms of public sector employment relationshave been adopted to different extent and with varying degree ofintensity in the EU countries

• They often produced unintended and even perverse effects(especially if adopted without appropriate institutionalarrangements)

• According to a 2007 Oecd Report:

• “decentralization of pay bargaining should be pursued only if justified bycorresponding advantages and if accompanied by appropriate financial

arrangements”

• “the potential for individualization has often been overstated. It entails highertransaction costs than uniform and collective standards and agreements, and

one should assume that a rationally acting manager will use standard contracts,standard conditions and collective pay structures unless there is a clear added

value to be gained from individualisation”


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Clusters

• Despite the above analysed great variety of employmentrelations systems across EU27, some country clusters can be

identified

1. Nordic countries (+, partly, Ireland and the Netherlands)

2. Central European countries with a Rechtstaat tradition ofPrussian or Napoleonic origin (Germany, Austria, France, partly

Belgium, Luxembourg and the Netherlands)

3. Southern European countries (Portugal, Spain, Italy, Greece,Malta and Cyprus)

4. Former communist Central and Eastern European countries(with the partial exception of Slovenia)

5. UK


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Clusters

• Nordic countries

• -very large public setor employment share, with high female presence in connection

with a dense welfare state• -significant harmonization processes between career civil servants and public

employees under ordinary contract

• -very hgh union density, although slightly declining in recent years

• -wide collective bargaining practices within a rather decentralised two-tier bargainingsystem with strong coordination mechaisms

• -significant elements of NPM doctrine (including forms of PRP) but incorporated withinadministrative systems that maintain some (neo-)weberian characteristics


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Clusters

• Central European countries with Reechtstaat tradition

• .public sector employment share high in France, Belgium, the Netherlands, but

comparatively low in Germany and Austria, with a significant component of temporaryworkers in France and Germany

• -strong component of career civil servants, which are large part of centrl governmentemployee and in France almost the totality of public employees

• -career civil servants do not have the right of collective bargaining (or a very weakright, as in France), and in some cases restriction of the right to strike

• -medium/high trade union density (with the exception of France)

• -wage setting systems trditionally very centralised in France and Germany, with somepressures to decentralisation (and fragmenttion) in Germany in recent years

• -limited elements of NPM doctrine (especially in Germany and France)


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Clusters

• Southern European countries

• .public sector employment share compartively medium-low (with partial exception of

Malta and, to a lesser extent, Greece)• -low female share (with partial exception of Portugl) and low part-time employment;

high incidence of temporary workers in Spain, Portugal and Cyprus; very lowyoung/elder ratio in Italy

• -medium/high union density

• -most of these countries used to share a strong component of career civil servantswith special employment status and limited scope for collective bargaining, but since

the 1990s Italy moved along a different trajectory, adopting several NPM precepts,privatizing the employment relationship of almost the totality of public employees and

decentralizìng the bargaining system with weak coordination mechanisms

unintended and perverse effets followed; some NPM inspired reforms also in Spain,Portugal and Greece, but smaller scope for collective negotiations


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Clusters

• Eastern European countries

• .comparatively small public sector employment share (Hungary partial exception), with

high presence of women (especially Baltic countries); Romania exception); usuallyhigh young employees share, but not in Baltic countries and Bulgaria

• -unions generally weak or very weak, with partial exception of Hungary and Slovenia

• -collective bargaining not permitted or not practised; forms of social dialogue eist, butrather weak

• -where collective negotiations are allowed and practised, often take place only atindividual employer level

•


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Clusters

• UK

• -comparatively rather large public sector employment share, with high presence of

women and part-timers, and little temporary workers• -no special status for public employees, civil servants included, no special restriction to

the right of association and to strike, with exception of some groups

• -collective bargaining widely practised, but about 35-40% of public employees underthe pay review bodies system

• -many NPM precepts adopted, but perhaps the public rhetoric exceeds reality

• .the traditional model employer approach has been abandoned, but employmentrelations in the public sector still different from the private sector

•


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Recent trends under the pressure of the economiccrisis

• The measures adopted by many EU countries in response to theeconomic crisis (but in some cases they pre-dated 2007, due todifferent reasons) have not only affected the employment levels,

salaries working conditions and pensions of public employees, butstrained the traditional regulatory system prevailing in each country

• Four trends

• Revival of unilateralism

• Recentralization of wage setting systems, as a consequence of

centrally defined, ‘blind’, horizontal measures


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Recent trends under the pressure of the economiccrisis

• Four trends

• Distinctiveness of public service employment relations: the removal of

this feature, within a program of a leaner and less distinctive publicsector, was a crucial target of the NPM approach. The effect of thegovernment measures in response to the crisis are ambivalent: returnto unilateralism, also to influence the outcomes reated to public

employees under ordinary contracts (see Germany), but ofteninstrumenta to the introduction into the public sector of private-sector-style HRM practices

• Although public sector trade unions remain the stronghold of nationaltrade union movements in many countries, their role has generallybeen weakened by the crisis, in terms of union density and evenmore in terms of capacity to infuence governments’ policies

•

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Changing public service employment relations in the era of austerity