Industrial relations in the steel industry - uni …edz.bib.uni-mannheim.de/daten/edz-ma/esl/05/ef0581en.pdfIndustrial relations in the steel industry ... characteristics ... This

Industrial relations in the steelindustry

4 5 TJ-68-05-341-EN

-C

Industrial relations in the steel industry examines the most important

challenges faced by the national social partners in the iron and steel

industry in 16 European countries. It focuses on the internationalisation of

the industry and the cross-border mergers and acquisitions that have

accompanied this transformation. It also looks at the structure and

characteristics of the sector, changes in employment levels and practices,

the representation and positions of trade union and employer organisations

and the structure and content of collective bargaining. It puts the spotlight

on confrontation and cooperation in the industry, especially during the

recent phase of restructuring, which is generally viewed as a serious crisis

in the steel industry

The European Foundation for the Improvement of Living and Working Conditions is atripartite EU body, whose role is to provide key actors in social policymaking withfindings, knowledge and advice drawn from comparative research. The Foundationwas established in 1975 by Council Regulation EEC No. 1365/75 of 26 May 1975.

Industrial relations in the steel industry

9 789289 709194

ISBN 92-897-0919-7


Authors: Jean-Marie Beguin, Institut des Science du Travail, France, with Mark Carley, Spire Associates,United Kingdom

Foundation project: European Industrial Relations ObservatoryResearch managers: Stavroula Demetriades, David Foden, Isabella Biletta and Christian Welz

Industrial relations in thesteel industry

Wyattville Road, Loughlinstown, Dublin 18, Ireland - Tel: (+353 1) 204 31 00 - Fax: (+353 1) 282 42 09 / 282 64 56 email: [email protected] - website: www.eurofound.eu.int

Cataloguing data can be found at the end of this publication

Luxembourg: Office for Official Publications of the European Communities, 2005

ISBN 92-897-0919-7

© European Foundation for the Improvement of Living and Working Conditions, 2005

For rights of translation or reproduction, applications should be made to the Director, European Foundation for the Improvement ofLiving and Working Conditions, Wyattville Road, Loughlinstown, Dublin 18, Ireland.

The European Foundation for the Improvement of Living and Working Conditions is an autonomous body of the European Union, created to assist in the formulation of future policy on social and work-related matters. Further information can be found on theFoundation website at www.eurofound.eu.int.

European Foundation for the Improvement of Living and Working ConditionsWyattville RoadLoughlinstownDublin 18IrelandTelephone: (+353 1) 204 31 00Fax: (+353 1) 282 42 09 / 282 64 56Email: [email protected]

Printed in Denmark

The paper used in this book is chlorine-free and comes from managed forests in Northern Europe. For every tree felled, at least one new tree is planted.

NO

RD

IC

ENVIRONMENTALLA

BE

L

Printed matter541 006

Over the two last decades, the steel sector in Europe has undergone important changes, marked byprivatisation and concentration into a small number of large multinationals. This has, in turn, ledto a transformation of working practices and major job losses in many countries. One majorconsequence of privatisation has been the internationalisation of the industry and the cross-bordermergers and acquisitions that have accompanied it. What is now acknowledged as a serious crisisin the steel industry has entailed closure of industrial sites in several countries as documented inthe recent dossier on this issue from the European Monitoring Centre on Change (EMCC).

The aim of this comparative study is to examine the most important challenges faced by thenational social partners in the iron and steel industry in 16 European countries. The study focuseson such issues as the structure and characteristics of the sector, changes in employment levels andpractices, the representation and positions of employers and trade unions, the role of governments,the structure and content of collective bargaining and the extent of confrontation and cooperation,especially during the recent restructuring in the industry.

This study presents a clear overview of the steel industry in Europe today. We hope it offers usefulpointers for policymakers in recasting a better, more competitive future for the sector.

Willy BuschakActing Director

Foreword

v

vii

Foreword v

Introduction 1

1 – Profile of the European steel industry 3

2 – Employer organisations 11

3 – Trade unions 13

4 – Role of governments 21

5 – Collective bargaining 25

6 – Industrial relations at national level 31

7 – Conclusion 35

Contents

Over the two last decades, the steel sector in Europe has undergone important changes, marked byprivatisation, internationalisation and concentration into a small number of large multinationals,accompanied by a transformation of working practices and major job losses in many countries.Looking at 16 countries, this comparative study examines: the recent development of the steelindustry; changes in employment levels and practices; the organisation, activities and views ofemployers and trade unions; the position and role of governments; and the structure and contentof collective bargaining.

Radical changes in the steel industry since the 1980s may be accounted for by two principalfactors:

■ the radical transformation of the industry as a result of technological innovation. Steelmakingtoday is a high-technology industry. More efficient production of new, lighter steel means thatless raw material is required in each finished product and hence less workers to produce it; and

■ the withdrawal of the state from its long-standing ownership and control of the iron and steelindustry in most countries and the sector’s consequent privatisation. In western Europeancountries, the process is virtually complete and it is accelerating elsewhere.

A consequence of privatisation has been the internationalisation of the industry and the cross-border mergers and acquisitions that have accompanied it. These two main factors have also ledto a radical transformation of working practices – seen as necessary to maintain a competitive steelindustry in Europe – and dramatic job losses in the European Union (EU). Recently, the seriouscrisis in the steel industry has entailed closure of industrial sites in several countries (see the recentdossier on this issue from the European Monitoring Centre on Change (EMCC) athttp://www.emcc.eurofound.eu.int).

For many years, the European Commission has been concerned about the crisis in the Europeansteel industry. The Commission has aimed at stabilising the intra-Community steel market andboosting competitiveness. Furthermore, other EU institutions see it as vital to face up torestructuring and its negative effects. In February 2003, the European Parliament adopted aresolution (EU0303202N)1 calling for measures to be taken at Community level to address thiscrisis, including:

■ use of EU funds for the vocational training and reorientation of steelworkers affected byrestructuring;

■ regulation of unfair competition from outside the EU;

■ promotion of innovation and development of new actions aimed at specialisation and qualityin the sector, and the provision of appropriate plans for retraining. The aim is to ensure that theEU maintains a strong, modern steel industry that is in a position to meet the needs ofsustainable development and job creation, while enhancing employee and consumerprotection;

Introduction

1

1 This study contains numerous references to online records on the EIROnline database (e.g. EU0303202N) which can be accessed athttp://www.eiro.eurofound.eu.int (click on ‘search’ on the home page and enter the record number).

■ adoption of a more proactive strategy in response to industrial restructuring measures and theirsocial impact, with a view to preventing their negative effects on jobs, working conditions andregional planning; and

■ promotion and strengthening of social dialogue in compliance with national and Europeanlegislation on informing and consulting workers, and adoption of effective measures to protecttrade union representatives.

In terms of EU-level social dialogue, the 1951 European Coal and Steel Community Treaty set upan ECSC Consultative Committee to provide technical assistance to the then High Authority, abody which has since merged with the European Commission. The members of the ECSCConsultative Committee were appointed by the Council of Ministers and divided equally betweenproducers, workers and consumers/dealers in the two sectors covered by the ECSC Treaty: coal andsteel. The general consensus was that the ECSC Consultative Committee performed well, playingan active role in the construction of the EU. However, the ECSC Treaty expired on 23 July 2002.Subsequently, it was decided that the ECSC Consultative Committee’s activities be wound up andits role taken over by the European Economic and Social Committee (EESC) (EU0209203N).

There had also, for some years, been a ‘mixed committee for the harmonisation of workingconditions in the steel industry’, set up by the European Commission, and made up ofrepresentatives of employer and worker organisations at national and European level. The EU levelsocial partners in the industry – the European Metalworkers’ Federation (EMF) and the EuropeanConfederation of Iron and Steel Industries (Eurofer) – have applied to develop the mixedcommittee into a full-blown official sectoral social dialogue committee, in order to continue theclose cooperation and relationship between the social partners in steel established over a period of50 years. On this point, the general secretary of EMF stated in 2002 his wish to ‘pursue asubstantial industrial and social dialogue and constructive consultations with Eurofer and theEuropean institutions’. In order to create a social dialogue committee, Eurofer needs to berecognised as a representative partner by the European Commission, as EMF already is.

In this context, the aim of this comparative study is to examine the most important challengesfaced by the national social partners in the iron and steel industry in 16 European countries. Inparticular, the study focuses on:

■ the structure and characteristics of the sector, in terms of the enterprises and groups involved,privatisation, employment structure, job losses, future perspectives, etc;

■ the representation and positions of employers in the sector;

■ the structures, positions and actions of trade unions in the sector;

■ the positions and actions of governments with regard to the sector, notably in terms ofprivatisation;

■ the importance, levels and content of collective bargaining in the sector; and

■ the extent of confrontation and cooperation in the different countries, especially during recentrestructuring in the industry.

This comparative study is mainly based on contributions from the European Industrial RelationsObservatory (EIRO) national centres in 13 of the former EU15 (Austria, Belgium, Denmark,Finland, France, Germany, Greece, Ireland, Italy, the Netherlands, Spain, Sweden and the UK),two new Member States (Hungary and Poland) and Norway.

2


Strictly speaking, the steel industry corresponds to NACE code 27.10 and the definition in theECSC Treaty, which involved the production of crude steel, semi-products, hot-rolled finishedproducts, continuously cast products, cold-rolled sheets and plates, and coated sheets. Accordingto this definition, the steel industry does not include the manufacture of steel tubes, which areincluded under NACE code 27.20, nor the initial cold processing of steel (mainly wire drawing, butalso cold drawing, laminating, profiling and shaping), which are covered by NACE code 27.30. TheECSC Treaty excludes these processes, along with cast-iron foundry products and forged, pressed,deep-drawn and cup-packed products.

Together, these three subsectors, represented by NACE 27.10, 27.20 and 27.30, constitute the‘ferrous metal sector’ which is referred to in this section. In the rest of the report, the term ‘metalindustry’ refers to a much wider sector, corresponding at least to NACE codes 27, 28 and 29.

For seven of the 16 countries considered in this study, the sector examined is more or less the steelsector as defined above. These are Austria, Belgium, Germany, Ireland, Italy, the Netherlands andSpain. However, for the other nine countries considered, the sector examined is larger andcorresponds, at least, to the ferrous metal sector. These are Denmark, Finland, France, Greece,Hungary, Norway, Poland, Sweden and the UK.

Productivity levels

The European Commission’s Panorama of European industry 1995–6 describes productivity levelsas follows:

‘In 1993, Japan was the largest producer of ferrous metals, with a production value of more than109 billion ECU. The next largest was the European Union with 74 billion ECU, and then theUnited States with 65 billion ECU. From 1984 to 1993, the European Union and the UnitedStates reduced their output while Japan increased theirs by 27%. In this sector, the output perJapanese employee was 421,243 ECU, that of the European Union employee was 140,759 ECUand that of the United States employee was of the order of 183,000 ECU.’

These production differences per employee highlight the poor position of the European steelindustry, from the outset, compared with its international competitors. They help explain why theEuropean industry is in perpetual reconstruction, in the search for higher productivity, particularlyamong those companies that have not developed a specialisation in high value-added products.

Main companies

One of the most important characteristics of the steel industry is its high degree of concentration.Today, in the majority of countries examined, a few companies account for more than 80% ofoutput and employment. This concentration is due to increasing scale of production units as wellas mergers and acquisitions between companies and groups, which have resulted in the Europeansector being dominated by a few multinational groups. The largest European-owned firms areArcelor, ThyssenKrupp, Corus and Riva.

■ Arcelor was the world’s largest steel-producing company in 2003, according to the InternationalIron and Steel Institute (IISA). It was created from the merger of Usinor (France), Arbed

Profile of the European steel industry 1

3

(Luxembourg) and Aceralia (Spain). It accounts for the majority of employment in the sector inFrance, 77% of employment in Belgium, 60% of production in Spain, 19.4% of production inGermany and owns some enterprises in Italy.

■ Corus was the world’s seventh-largest steel-producing company in 2003, according to IISA. Itwas formed by a merger between British Steel (UK) and Hoogovens (Netherlands). It accountsfor 60% of employment in the sector in the UK and 96% of employment in the Netherlands, andcontrols the Laminaciodes y Derivados SA group in Spain and a company in Norway.

■ ThyssenKrupp (Germany) was the world’s ninth-largest steel-producing company in 2003.Together with Salzgitter (Germany – the 44th-largest global producer in 2003), it accounts for51.7% of German production. ThyssenKrupp also controls the Galmed group in Spain.

■ Riva (Italy) was the 11th-largest global producer in 2003. It accounts for 50% of production inItaly, 5.4% of production in Germany and 1.7% of employment in Belgium.

Other major European steel producers include: Duferco, which accounts for 20% of sectoralemployment in Belgium, in the Walloon region; Outokumpu Steel (Finland), which has mergedwith the Swedish company Avesta Sheffield (now Outokumpu Stainless); Voestalpine in Austria;and Feralpi in Italy. A non-European group with a major presence is Ispat Europe, part of the LNMgroup, which was the world’s second-largest steel-producing company in 2003.

Privatisation

In several countries, part or all of the industry was still in the public sector in the 1980s, but hassince been privatised.

■ The first privatisation was that of British Steel in the UK, in the 1980s. It then merged with theDutch Hoogovens in 1999 to become Corus.

■ The east German steel industry was totally in the public sector before German reunification in1990, whereafter it was privatised completely.

■ In Italy, 40% of the steel industry (corresponding to 80% of output) was state controlled up until1992. The public shareholdings were sold to various national (Ilva and Riva) and foreign(ThyssenKrupp and Arcelor) groups. This privatisation was completed in 1996.

■ In Spain, the two most important steel groups were in the public sector up until 1997, the yearin which the Aceralia group was set up. It bought the public shareholdings and then mergedwith Arbed and Usinor to form Arcelor.

■ The Austrian state holding company ÖIAG formerly held shares in steel companies that itcontrolled, at least partially. In 1993, a law was passed that forced it to sell its shareholdingsand since autumn 2003 the whole sector has been in private hands. There were three integratedsteel mills in Hungary during the socialist period. In 1992, the sector was in the midst of a crisis,and this was accompanied by a series of privatisation attempts. In two regions, however,privatisations could not save the steel industry and the majority of plants were closed down.The largest Hungarian company, Dunaferr, was not privatised in the 1990s but eventually wasacquired by Donbass, a major Ukrainian firm, in 2004. With this privatisation, state ownershiphas practically ceased to exist in the sector.

4


■ In Poland, privatisation of the largest public group is underway. The four largest enterprises,which together accounted for 70% of the sector’s output, were regrouped into one company,Polskie Huty Stali SA, in 2001 and 2002. In 2003, the government decided to sell this companyto LNM Holdings NV (PL0401106F). Nevertheless, the Polish government has maintained a25% shareholding in this company and the right to influence certain important managementdecisions up to the end of 2009.

In Ireland, the state-owned Irish Steel was sold in 1995 to Ispat International (part of LNM), whichclosed it down in 2001. In Denmark, Dansteel A/S, the country’s only steel company, was in mixedprivate/public ownership before it was closed down in June 2002. In Greece, many large steelcompanies operate under state control. In recent times, there have been repeated attempts torelease these companies fully or partially from state control. In Finland, the state has had amajority, or prominent minority, share of ownership in the industry.

In Sweden, Norway and the Netherlands, the steel sector has been in the hands of privateshareholders for a long time, with none or only minor participation by the public authorities in thecompany’s capital. In Belgium, the sector has long been mainly in private hands, but the stateretains a minority interest.

Structure and volume of employment

Table 1 sets out the latest data on the volume and structure of employment in the steel sector. Thefigures are from national sources and refer to 2002, 2003 or 2004, apart from the last column,which provides data from Eurostat for 2001.

The comparison of national figures and estimates shown in the second column of table 1 and theEurostat statistics in the last column confirm that, in certain countries, the national data on whichthis study is based cover a sector which is much larger than the steel industry as defined by theECSC Treaty. This is particularly striking for France, the UK, Sweden and Greece.

The steel industry is a predominantly male and blue-collar sector; in the countries for which dataare available, around two-thirds or more of employees are manual workers, and almost all of themare men. The main reason for the low percentage of female workers is presumably the heavy anddangerous nature of the production work (in certain countries, such as Austria, the accident rate ishigher than the average across all industries). Where information is available, women occupy lessthan 10% of positions and these are mainly in administrative jobs.

In production, shiftwork is the norm, which frequently means night work. This is another reasonwhy the percentage of jobs occupied by women is so low. Nevertheless, in some countrieslegislation covering working conditions, which is generally restrictive with regard to womenworking at nights, has become somewhat more flexible, for example in Austria in 2002.

The manual labour nature of the sector has tended to diminish in certain countries, such asSweden, where high technology, automated systems have been developed, which require a higherlevel of qualification.

5

Profile of the European steel industry

Table 1 Employment in the European steel sector, latest figures

Country Employment % of total % of manual % of women No. of employees

volume sectoral workers in in sectoral in ECSC-defined

employment sectoral employment steel industry

in Europe employment in 2001

Germany 95,000 24.0% 73% 7.7% 76,454

France 60,219 15.2% nd nd 37,174

UK 50,000 12.6% nd nd 24,122

Italy 38,000 9.6% nd nd 38,433

Spain 26,670 6.7% nd nd 22,600

Poland 23,000 5.8% nd nd nd

Sweden 18,600 4.7% nd nd 9,494

Greece 18,204 4.6% nd 15% 2,242

Belgium 17,857 4.5% 71% 5.0% 20,678

Austria 13,100 3.3% 62% 7.6% 11,670

Hungary 12,000 3.0% 80% nd nd

Finland 10,600 2.7% nd 15% 13,156

Netherlands 9,900 2.5% nd nd 11,310

Luxembourg nd nd nd nd 4,182

Norway 1,600 0.4% nd nd nd

Portugal nd nd nd nd 905

Denmark 608 0.2% nd nd 1,079

Ireland 0 0.0% nd nd 179

Total 395,358 100% 273,678

nd = data not available for these countries/topics

Sources: EIRO national reports; Eurostat.

Steel is not a sector with a young workforce. In Spain and Italy, efforts have been made torejuvenate the workforce in the industry, which is sometimes associated with insecurity ofemployment for the young people recruited. Otherwise, steel is a sector where open-endedemployment contracts and full-time employment have remained the norm. There are currently notmany part-time workers and, where they exist, they are mainly women. However, it should benoted that there is a nascent tendency towards part-time working for men. In Belgium, part-timeworking has also been used as a means of redistributing work, in order to save jobs. While there islittle data on the issue available from most countries, fixed-term contracts and temporary agencywork seem relatively rare – although in Greece, a large increase in fixed-term contracts has beenobserved for new recruits. It is reported from some countries that there is little temporary agencywork in steel, mainly because of the dangerous nature of the activity (though such work isincreasingly common in the metal industry). However, in Spain, particularly at Arcelor in Asturia,recourse to subcontracting has become a common practice for internal activities, and some workersemployed by these subcontractors have the status of temporary agency workers.

Recent serious accidents at Cockerill-Sambre in Belgium have revealed that workers are employedby subcontracting companies for maintenance work in the steel industry, even though this work isdangerous.

6


Steel is a sector where weekly working time is often relatively short, standing at 33.6 to 36 hoursin many countries, although in Greece the working week is still 40 hours. In Germany, the workingweek is currently 35 hours in the west and 38 hours in the east, but a collective agreement providesfor progressive reduction of the working week in the east to 35 hours by April 2009.

Job losses in the industry

The level of employment in the steel industry has diminished considerably in all Europeancountries over the last two decades.

In 1984, the steel industry in the 10 then EU Member States, not including east Germany, provided450,000 jobs. In 1997, there were 270,000 jobs, including east Germany (according to theEuropean Commission). In east Germany, the fall in employment at the beginning of the 1990s wasof the order of 80,000. In other words, in these 10 EU countries plus east Germany, the fall inemployment in the sector was of the order of 180,000 plus 80,000, that is to say 260,000.

Table 2 Employment change in the EU15 steel sector, 1993–2001, Eurostat figures

Country No. of employees in ECSC-defined steel industry Change

1993 1995 2001 1993–2001 1995–2001

Germany 118,937 92,509 76,454 -42,483 -16,055

France 41,215 39,324 37,174 -4,041 -2,150

UK 40,190 37,930 24,122 -16,068 -13,808

Italy 50,360 42,090 38,433 -11,927 -3,657

Spain 30,117 25,297 22,600 -7,517 -2,697

Sweden nd 7,163 9,494 - 2,331

Greece 2,939 2,486 2,242 -697 -244

Belgium 24,980 23,703 20,678 -4,302 -3,025

Austria nd 13,245 11,670 - -1,575

Finland nd 14,483 13,156 - -1,327

Netherlands 14,580 12,643 11,310 -3,270 -1,333

Luxembourg 7,162 6,116 4,182 -2,980 -1,934

Portugal 3,162 2,659 905 -2,257 -1,754

Denmark 1,178 nd 1,079 -99 -45

Ireland 614 404 179 -435 -225

Total 335,434 321,176 273,678 -61,756 -47,498

nd = data not available for these countries/dates.

Source: European Commission, 2003, Steel industry – Yearly statistics – concluding edition – Data 1993–2002.

For more recent years, for the relevant EU15 countries, Eurostat provides more precise data on theloss of jobs in the steel industry – see table 2. All of these countries lost steel jobs between 1995and 2001, except Sweden. In total, the 47,498 jobs lost between 1995 and 2001 represented 15%of the employment in the European steel sector in 1995. Over this period, the fall in employmentwas particularly striking in the UK – the 13,808 jobs lost represented 36% of employment in thesector in 1995. The rates of job loss were also high in Luxembourg (-32%), Portugal (-66%) andIreland (-56%), but the number of workers concerned in these countries was significantly lower.

7


During the period 1993–1995, the EU countries concerned had already experienced significant joblosses. In two years, the total employment figure fell from 335,434 to 286,285, which was a loss of49,149 jobs, or 15% of total employment in the sector in 1993. The main job losses occurred inGermany (-22%), Italy, Spain and Portugal (-16%), Greece and Luxembourg (-15%) and theNetherlands (-13%).

Table 3 gives data provided from national sources concerning job losses in steel. It should be notedthat, for certain countries, this information covers sectors that are much larger than the steelindustry as defined by the ECSC Treaty. This explains why, for example, Greece, which lost 697jobs in the steel industry between 1993 and 2001 according to Eurostat, is shown as having gained4,311 jobs.

Table 3 Employment change in the EU steel sector, 1980–2003, national figures

Country Sectoral employment Change 1990–5 to 2002–3

1980–4 1990–5 2002–3

Germany nd 206,418 94,551 -111,867

France* nd 70,622 60,219 -10,403

Italy 100,000 nd 38,000 –

Spain 45,000 33,000 26,670 -6,330

Poland* nd 147,000 23,000 -124,000

Greece* nd 13,893 18,204 +4,311

Belgium nd 22,000 18,000 -4,000

Hungary* 60,000 31,000 12,000 -19,000

Netherlands nd 12,797 9,900 -2,897

Ireland nd 360 0 -360

nd = data not available for these countries/dates.* Countries where sector is larger than steel industry as defined by the ECSC Treaty.Source: EIRO national reports.

The most significant job losses have taken place in central eastern Europe – in east Germany,Poland, and to a lesser extent, Hungary:

■ in east Germany, the job losses occurred at the same time as the sector was privatised (seeabove);

■ in Poland, job losses took place before the privatisations of 2003. An initial rationalisation planpresented by the government led to 48,000 job losses between 1992 and 1993. Over thefollowing 10 years a further 77,000 jobs were lost; and

■ in Hungary, a crisis in 1992 led to the closure of almost all steel companies, except for Dunaferr,which managed to survive the recession that followed political and economic transition.

Other job losses of less significance also occurred at the time of privatisation:

■ in the UK, the job losses mainly took place in the 1980s, when the Conservative governmentdecided to reduce subsidies to British Steel and to privatise it. During the 1980s, approximately100,000 jobs disappeared;

8


■ in Greece, in recent times, there have been repeated attempts to free steel companies from fullor partial state control, some involving the dismissal or voluntary retirement of thousands ofworkers. In some of these attempts at privatisation, some or all planned redundancies wentahead; and

■ in Austria, from 1970, several thousand jobs were outsourced or eliminated in the former publicsteel sector in the course of its restructuring and privatisation.

Other job losses have not been linked to privatisation, but occurred following mergers oracquisitions between groups:

■ in west Germany, the merger between Krupp-Hoesch AG and Thyssen AG in 1998 resulted inthe cessation of steel production in the city of Dortmund, with the loss of 10,000 jobs;

■ in Belgium’s Wallonia region, the steel companies were bought out by foreign-owned groupsduring the 1990s and this resulted in the loss of several thousand jobs;

■ in Denmark, the closure of the mixed-ownership enterprise Dansteel in June 2002 led to theredundancy of 1,100 workers;

■ the Swedish steel industry went through its deepest crisis in the 1970s. Subsequently, duringthe 1990s the sector was hit by severe problems and several companies closed down; and

■ in Finland, there have been job losses since 2000, mainly at the Imatra and Rautaruukkicompanies.

Changes in the nature of work

In general, competitive pressure on companies in the steel sector have not only led to numerousjob losses but have also had consequences for those who have kept their jobs, mainly in terms ofa greater requirement for flexibility. Moreover, automation in the sector and the conversion ofcertain plants to higher added-value production has meant a requirement for higher qualifications.

For example, in Austria, the consequences of privatisation and restructuring have included the re-examination of social security and services for workers, the co-determination rights of workscouncils and effective equality of treatment of men and women, along with the introduction ofmore flexible working schedules. In Spain, restructuring has resulted in increases in the intensityof work, of flexibility, in functional and occupational mobility, in versatility and in shiftworking, allaccompanied by a new structure of qualifications and wages. In Finland, a move to greaterflexibility in the organisation of work, training for versatility in job functions and the possibility ofsubcontracting have all occurred as part of a continuous negotiated process.

Perspectives for the future

In most countries, following rationalisation and often difficult conversions, the steel industry seemsto be in better shape to face the future. The sector is at present going through a boom periodbecause of the demand for steel from China. There is even some hope that the level of employmentmay increase due to the current favourable economic climate.

9


However, in most countries, two questions are being asked with regard to the possibility of newrestructuring over the medium term:

■ as the western European metalworking industry, and especially the automobile sector, relocatesmore and more to central and eastern Europe, will the steel mills follow in the long term?

■ with steel still a growth sector worldwide, can the European sector be competitive at presentwith Chinese or Brazilian steel mills?

In this case, restructuring of the steel sector will go on in Europe and worldwide. Arcelor, forexample, is becoming more and more, not only a European group, but a worldwide one by, forinstance, taking shareholdings in Chinese companies and setting up joint ventures with SouthAmerican firms. At the same time, the group forecasts that, in France, 1,700 jobs will have to gobetween now and 2009 and that, in Spain, there is overstaffing to the extent of 1,500 to 1,750people, who will soon have to take early retirement.

10


Employer representation

The representation of steel industry employers in negotiations with trade unions and relations withgovernment is usually characterised by its unified structure. In eight countries considered, a singleemployers’ federation represents all steel companies. This is the case in Germany (with theexception of the Saar region), the UK, Spain, Poland, Sweden, Belgium, Hungary and Denmark.Nevertheless, it should be pointed out that, in the UK, the relevant federation represents most ofthe large companies in the sector, but not all of them and that, in Spain, the federation of steel-producing companies does not represent companies in negotiations with the trade unions, sincecollective bargaining is carried out at company level. In three other countries, Austria, Finland andNorway, the situation is a little different, but there is, for practical purposes, a unified structure foremployer representation.

In only three countries is there no unity of representation:

■ in France, two national federations and one regional represent steel companies. However, theirmembership of the same umbrella organisation for the metalworking industry means that thesebodies adopt common positions;

■ in Greece, two federations represent steel companies in negotiations; and

■ in the Netherlands, where there are only two steel companies, there is no employer federationdedicated to the sector. Collective bargaining is carried out directly at the level of these twoenterprises.

Positions vis-à-vis the government

With regard to their position vis-à-vis governments and public authorities, steel industry employerfederations are usually favourable to privatisation. In some countries, such as Austria, they haveput pressure on the government to this effect. In Hungary, however, employers have been arguingfor more intensive state intervention, especially in terms of more effective market protection.

In the view of some employer federations, particularly those in France, research and innovation areopening new horizons for the production of steel, and it falls to the companies to concentrate onproducts of high added value. National federations also look to their governments for aid withresearch and development as well as for training. Furthermore, they make requests to governmentsto ease the constraints that impede their competitive position, calling for such benefits as: anenergy-cost policy that is favourable to steel firms; a ‘realistic’ environmental policy; and a moreflexible labour market, particularly in terms of overtime.

The German steel federation has asked the European Commission to take a close look at the publicsubsidies granted to steel companies in the new EU Member States in central and eastern Europe,which it believes still need to be restructured and have their overcapacities reduced. The Italianfederation expects the Commission to protect the European steel industry from American andAsian competition, and wants it to open discussions with China to ensure that it maintains itsexports of coke to Europe at a constant level. The British steel federation believes that there is aperiodic threat of protectionism in the USA, and points out the increasing role of internationalagreements in environmental regulation.

Employer organisations 2

11

Negotiations with unions

In most countries, the steel employer federations in negotiations with trade unions are informed bythe view that the sector must be restructured in order to improve its competitive position. Thisinvolves eliminating the least efficient parts of the industry, modernising and internationalising theremaining companies and increasing the flexibility of working practices. In this context, commonpoints of concern among steel producers across Europe are the strengthening of competitivenessand a better and quicker adjustment to cyclic developments, which are becoming morepronounced and rapid – and the solution espoused by the employers is flexibility.

Employers in particular countries also have specific issues that they stress in bargaining andrelations with unions. In Spain, for, example, key issues for companies include the demands arisingfrom new occupational profiles and the elimination of additional remuneration linked to seniority.In Belgium, a priority of employers is to maintain industrial peace in the sector, observing orderlyconduct and following established procedures in the event of industrial disputes.

12


Organisational structure

In contrast to the generally unified representation of employers, steelworkers in most countries arerepresented by several trade union organisations. The UK is the only country where workers arerepresented by a single union dedicated to the steel sector (though this is now changing becauseof merger – UK0410105F). In Germany and Greece, steelworkers are also represented by a singleunion, but by a special section of the sectoral trade union for the wider metalworking industry(which is itself affiliated to the main national union confederation in the German case or the soleconfederation in the private sector in the Greek case). In Norway, steel is covered by a unionrepresenting much of private sector industry (affiliated to the largest, mainly blue-collarconfederation).

The situation in the other countries is more complex, with steelworkers being represented bymultiple unions. In three countries, different occupational categories of steelworkers are eachrepresented by a single union, which organises more widely than the steel industry alone:

■ in Sweden, three unions (affiliated to separate confederations) have competence for the steelindustry as well as for metalworking more generally, representing blue-collar workers, white-collar workers and engineers respectively;

■ in Finland, four unions (affiliated to three separate confederations) organise in the steelindustry: a union representing metalworking more widely for blue-collar workers, a unioncovering much of manufacturing industry or white-collar workers, and specific unions forprofessional and graduate engineers; and

■ in Austria, blue-collar steelworkers are organised in a union that includes the steel industry aspart of wider metalworking, while their white-collar counterparts are represented by a union thatcovers the whole private sector (both unions are affiliated to the sole national confederation).

In Denmark, workers in the steel industry are members of a variety of blue-collar (several, affiliatedto the same confederation), white-collar and professional unions, all of which cover a wider sectoror occupational area.

In the other countries, steelworkers’ representation is divided among rival trade unions affiliated toseparate union confederations (usually divided, at least originally, on various ideological lines) –though with an occupational element to the organisation of workers in countries such as Belgiumand the Netherlands. These unions organise more widely than the steel industry alone, oftencovering metalworking as a whole:

■ in Belgium, the steel industry is covered by two blue-collar metalworking unions (affiliated todifferent confederations) and by three white-collar unions with a cross-sectoral ambit (affiliatedto different confederations

■ in Finland, four unions (affiliated to three separate confederations) organise in the steelindustry: a union representing metalworking more widely for blue-collar workers, a unioncovering much of manufacturing industry or white-collar workers, and specific unions forprofessional and graduate engineers; and

■ in Austria, blue-collar steelworkers are organised in a union that includes the steel industry aspart of wider metalworking, while their white-collar counterparts are represented by a union thatcovers the whole private sector (both unions are affiliated to the sole national confederation).

Trade unions 3

13

In Denmark, workers in the steel industry are members of a variety of blue-collar (several, affiliatedto the same confederation), white-collar and professional unions, all of which cover a wider sectoror occupational area.

In the other countries, steelworkers’ representation is divided among rival trade unions affiliated toseparate union confederations (usually divided, at least originally, on various ideological lines) –though with an occupational element to the organisation of workers in countries such as Belgiumand the Netherlands. These unions organise more widely than the steel industry alone, oftencovering metalworking as a whole:

■ in Belgium, the steel industry is covered by two blue-collar metalworking unions (affiliated todifferent confederations) and by three white-collar unions with a cross-sectoral ambit (affiliatedto different confederations);

■ in France, the five nationally representative trade union confederations (one of which organisesonly managerial and professional staff) organise in the steel sector through broadermetalworking unions, most of which have a specific steelworkers’ organisation;

■ in Hungary, three unions (affiliated to separate confederations) organise the steel industry aspart of wider metalworking;

■ in Italy, the three main trade union confederations organise in the steel sector through broadermetalworking unions;

■ in the Netherlands, blue- and white-collar steel workers are represented by two broader industryunions affiliated to separate confederations), while staff in higher positions are represented bytwo other unions;

■ in Poland, five broader unions (affiliated to three different confederations) cover the steelindustry; and

■ in Spain, five unions (affiliated to separate confederations, two of which are regional) organisethe steel industry as part of wider metalworking,

Most trade unions representing steelworkers in the countries considered are members of theEuropean Metalworkers’ Federation (EMF).

Unity and divergences

This diversity in trade union representation structures in the steel sector, in some countries, maypose a problem for unity of action among the different organisations. However, in Finland, Polandand Sweden, the different unions work together at national level, which gives them greaterinfluence in the negotiations on pay and other matters. In Belgium, competition between unions isgradually giving way to more cooperation.

In Italy, on the other hand, the tradition of cooperation between the three main metalworkingunions (which include the steel industry) has been damaged recently, following the refusal in 2003of one union to sign a sectoral agreement for metalworking accepted by the other two, and attemptson the part of this union to obtain company agreements that are more advantageous than thesectoral agreement (IT0305204F).

14


Unionisation rates

Table 4 sets out, for those countries where information is available, the unionisation rate in thesteel sector (in many cases based on estimates) and the whole economy. The percentage of workersin the sector represented by unions is obviously a key factor in their weight in collective bargainingin most countries.

The table indicates that the steel industry, with its long-standing trade union tradition, in mostcases remains a bastion of unionisation. Union densities of 75% or more are reported from Austria(blue-collar workers in overall metalworking), Belgium, Denmark, Finland, Germany (steel mills),Italy, Poland, Spain and Sweden (overall metalworking). In all cases (apart from Denmark wherethe rates seem approximately equal), unionisation is higher in steel than in the overall economy.This differential is particularly notable, with steel having a unionisation rate more than twice thenational average, in Germany, Italy, Poland, Spain and the UK.

Table 4 Approximate unionisation rates in the steel industry and whole economy

Country Steel industry Whole economy

Austria 75% among blue-collar workers (much lower among white-collar workers) 40%

in whole metalworking industry

Belgium 90%-95% 70%

Denmark 85% 85%

Finland Over 90% 70%

Germany Steel mills: over 80% 30%

Steel processing-plants: 70% in west, 60% in east

Italy 90% 35%

Netherlands 42% at Corus 25%

Norway No data, but thought to be high compared with rest of private sector 52%

Poland 90% 15%

Spain 70%-80% 15%

Sweden 90% in whole metal industry 80%

UK 60% 27%

Source: EIRO. Data on the whole economy comes from the EIRO study TN0401101F, while those on the steel sector werecollected for this study. When no official or research data were available, the EIRO national centres provided their ownestimates.

Union restructuring

As part of a widespread move towards union mergers, it appears that in some countriessteelworkers are being represented through increasingly wide-ranging structures. The soleremaining specific major steelworkers’ union identified above, the UK’s Iron and Steel TradesConfederation (ISTC) became known in recent years as the Community union, as part of anattempt by the union to reinvent itself by recruiting in factories, call centres etc; in regions wherelarge numbers of steelworkers had been made redundant, such as Sheffield and South Wales. Thisorientation was reinforced in 2004 when the union decided to merge with the Knitwear, Footwearand Apparel Trades Union (KFAT).

15

Trade unions

In Austria, steelworkers were formerly included within a broader metalworking trade union, but in2000 this merged with a textile workers’ union to form the Metalworking and Textiles Union(Gewerkschaft Metall-Textil, GMT). Since 2001, white-collar steelworkers in Finland have beenrepresented by a broad union covering this category of workers in the industry in general, theUnion of Salaried Employees (Toimihenkilöunioni, TU). In the Netherlands, steelworkers withinthe Federation of Dutch Trade Unions (Federatie Nederlandse Vakbeweging, FNV) were formerlyrepresented by the Industriebond FNV industrial workers’ union, but this merged in 1999 withthree other FNV unions to become the wider-ranging FNV Bondgenoten (by far the largest unionin the Netherlands).

Political influence

The weight that trade union organisations can bring to bear on decisions depends in part on theirability to influence political circles. For example, in the UK, ISTC reportedly has good relationswith national politicians as well as those at regional level, especially in the Welsh Assembly.Nevertheless, this has not been enough to force Corus to make significant changes to its decisions,as was recently the case with redundancies at its Scunthorpe plant. In Belgium, trade unions in thesteel sector have always been influential, especially in the Walloon region, where because of thestrategic importance of the sector, they could rely on the political support from the dominantSocialist party.

Positions on employment levels

All trade unions – in steel, as elsewhere – are, in principle, opposed to reductions in employmentand to plant closures. In practice, union leaders are aware that, in the long term, it is not possibleto keep all manufacturing plants open. In the end, they have to accept restructuring when itappears to be inevitable, and when this is the case, they attach great importance to the fact thatthe conditions be negotiated with the unions in order to provide for early retirement plans,voluntary redundancies or the creation of alternative employment for surplus workers.

In certain countries, steel sector unions support certain of the employers’ strategies aimed atmaintaining their competitive position. They are aware that plants and their performances areincreasingly being compared and ‘benchmarked’ within multinational groups (recently created inmany cases). They support initiatives for research and innovation and the development of high-technology plants focused on specific high-quality market segments. This is the case in Belgium,Italy, the Netherlands and Sweden.

In other countries, the unions want the public authorities to better protect the national steel sectoragainst foreign competition. This is the case in Austria and in Greece, where the unions areopposed to privatisation, and also in Hungary.

In Poland, the unions hope that liberalisation of trade (through the World Trade Organisation),growth in the construction industry and the building of highways, and increasing demand formachines and equipment will lead to a sustained trend towards increased production and thus toan improving climate in the steel market.

16


Reaction to restructuring in multinationals

Given the extensive restructuring in the steel industry in recent years, not least withinmultinational companies, cooperation between trade unions in the various countries concerned –in some cases through the company’s European Works Council (see box on p.14) – has been bothsought and put to the test. In some cases, cross-border cooperation between unions representingsites in different countries has been strained – as recognised, for example, by the GermanMetalworkers’ Union (Industriegewerkschaft Metall, IG Metall).

A key example is the Anglo-Dutch Corus, where there have been some indications of an increaseddialogue between the unions in its various national operations. This was most evident in 2001when, faced with proposals by Corus to cut 6,000 jobs (UK0102113F), the UK’s ISTC developedregular contacts with the Dutch FNV. FNV wrote formally to the ISTC pledging its support for thecampaign to oppose the cuts, and hinted that it might support a boycott at the Ijmuden plant inthe Netherlands of any work to be transferred from the UK (UK0303105F). However, thesecontacts between ISTC and FNV reportedly resulted in little of substance, because of conflicts ofinterest between the two national workforces. When Corus unveiled plans to sell off the profitablealuminium business to the French-based Pechiney, many in the Dutch part of the business (wheremost of the aluminium business is located) resented the fact that they were going to be deeplyaffected by problems that many in the Netherlands saw as arising in the UK. Accordingly, theDutch supervisory board used its powers to block the sale, leading management at Corus to pursueever deeper cuts in the British part of the business. The issue of restructuring has been an item onthe agenda of the Corus EWC, but there is little evidence that it has been used by employeerepresentatives to shape the nature of restructuring in the firm, probably because of the tensionsand divisions between the representatives from different countries – restructuring has mainly hitthe UK plants, and not those in the Netherlands.

Dutch unions have made the following demands: there must be a sufficient number of Dutchmembers on the Corus board (in the years after the merger, many Dutch board members werereplaced by British ones); sufficient investments are to be made in the Dutch plants; profitsgenerated by the Dutch plants should not be used to safeguard outmoded production facilities inthe UK; and money stemming from the sale of aluminium plants will (at least partly) be used forinvestment in the Netherlands.

It is reported that some conflicts of interest arose at the Finnish-owned Outokumpu betweenBritish, Swedish and Finnish unions during the 2002 takeover and subsequent restructuring ofoperations at Avesta Sheffield (involving the closure of a steel mill in Degerfors and theconcentration of steel production in Sheffield and Tornio). At another Finnish firm, Rautaruukki, areorganisation of the company that has meant fusion of the formerly independent subsidiaryFundia with the main company has created some resistance from the Norwegian unions. In theserestructuring processes, the role of EWCs has reportedly been insignificant and to a large extentpassive. Only in the case of Outokumpu’s takeover of Avesta Sheffield did the union side attemptto take a more active role in shaping the new company, but this was a partial failure, apparentlydue to conflicts of interests between national unions.

On a broader level, an interesting example of cross-border union dialogue comes from Poland. Inthe course of the recent preparation of a government strategy for restructuring the iron and steel

17

Trade unions

industry, a lively debate unfolded with Germany’s IG Metall around the scaling back of productioncapacities in the sector. This debate, however, had no effect on the programme during itsformulation and its subsequent approval by the European Commission.

European Works Councils in the steel sector

All the major Europe-based steel multinationals appear to have European Works Councils(EWCs) in place. According to the European Trade Union Institute (ETUI) EWC’s database, firmsin the industry with EWCs include Arcelor, Böhler-Uddeholm, Corus, Lucchini, Outokumpu,Rautaruukki, Riva, Saarstahl, ThyssenKrupp and voestalpine. The EWCs at Corus and especiallyArcelor appear to be most developed.

The Arcelor EWC is a joint management/employee representative body, set up by an agreementsigned in May 2002 (replacing previous EWCs at Arbed and Usinor). The accord provides for 47employee representatives (from Belgium, France, Germany, Italy, Luxembourg and Spain) onthe EWC and for a representative appointed by the European Metalworkers’ Federation toparticipate in meetings as a ‘permanent guest with a consultative voice’ . The EWC meets in fullsession once or twice a year to deal with a relatively wide range of issues. The EWC’s 16-memberemployee-side ‘select committee’ meets at least once a quarter and in practice almost everymonth, and plays a central role in consultation by management. The EWC has a strongerconsultative role than many. An information and consultation network involving the differentnational trade union delegations on the EWC is reportedly becoming more developed andactive. Arcelor plans to be one of the first companies to incorporate at EU level under the termsof European Company Statute (EU0206202F), and already has a small number of trade unionrepresentatives on its supervisory board.

The Corus EWC was established by agreement in 2000 (replacing previous EWCs at British Steeland Hoogovens). It is a joint management/employee representative body and currently involves35 employee representatives (19 from the UK, nine from the Netherlands, two from Germany,and one each from Denmark, France, Norway, Spain and Sweden) and nine recognised nationaltrade union officials. The EWC meets twice a year to discuss a relatively extensive range oftransnational issues.

Since EU enlargement on 1 May 2004, EWCs in those multinationals with operations in the newMember States have been including as full members employee representatives from thesecountries (such as Poland) which were either excluded before or represented only by observers.

Trade unions in steel generally take a positive view of EWCs and their role (though see aboveunder ‘Reaction to restructuring in multinationals’ ). For example, Germany’s IG Metall uniongenerally describes the role of the EWCs that exist in every major steel company as being verypositive.

Employers’ views on EWCs are often harder to gauge. Swedish steel employers are reported tohave a positive attitude. The large steel firms operating in France, especially Arcelor, reportedlybelieve that prior social dialogue enables them to anticipate and plan for future changes, andthat the establishment of EWCs is a tool that contributes to employers being able to workalongside trade unions in forecasting changes in areas such as employment levels, training andthe group’s economic configuration. German trade union officials state that steel employers,after some initial concerns over EWCs, have adjusted themselves to these representativestructures and accept their work, in particular on issues such as health and safety.

18


The European Metalworkers’ Federation, to which most European steelworkers’ unions belong,aims to achieve better coordination of collective bargaining across Europe in order to prevent ‘wagedumping’, arguably rather than designing union strategies and/or ‘synergies’ at international levelto deal with restructuring itself.

Positions on environmental issues

The environmental pollution caused by steel production is a matter of trade union concern in somecountries. For example, the German and Italian unions take rather different positions on this point.In Germany, in March 2004, IG Metall mobilised some 9,000 steelworkers across the country todemonstrate against government plans to force steel producers to reduce CO2 emissions further. InItaly, the unions consider the introduction of pollution-reducing systems in pursuit of zeroenvironmental impact to be of priority importance, in order to maintain integrated cycle steelmanufacture, and therefore large-scale steelworks. The unions have asked the government to setup a permanent forum for discussion on industrial policies to resolve the sector’s problems in themedium to long term.

19

Trade unions

Positions on privatisation

At present, governments in all countries examined consider that steel production is theresponsibility of the private sector (see above under ‘Privatisation’). There remains, however, onecountry – Greece – where the sector is still state controlled and several countries where the statestill holds minority shareholdings in steel companies.

In Greece, many large companies still operate under state control, but the government has decidedto transfer the controlling stake in many such public enterprises to private interests or turn overtheir management to corporate joint ventures. Some German federal states (Länder) still holdminor shareholdings in some steel companies or holding companies, for example, in Bavaria,Bremen and the Saarland. In Poland, the state maintains a shareholding of 25% in the main steelproducer, and the right to influence certain important management decisions, up until the end of2009. In Belgium, the sector has always been mainly in private hands but the state has taken andmaintains minority shareholdings in certain companies. This is the case both in the Flandersregion, where the government retains a 2.7% shareholding in Arcelor, and in the Wallonia region,where the regional government retains a shareholding of 25% in two companies. In Finland, aprocess of privatisation is continuing. State ownership is already under 50% both in Outokumpuand Rautaruukki and there is further authorisation to reduce the share of state ownership to 10%and 20% respectively.

Support measures during restructuring

In the event of restructuring, many governments play a role in seeking to ensure that this causesthe least social hardship possible.

The last Steel Aid Code (SAC), in compliance with Article 95 of the ECSC Treaty, allowed certainaids in the case of plant closures. Readjustment aids, such as for early retirement, redeploymentand unemployment, were granted. These aids are no longer possible since the ECSC Treaty expiredin July 2002. The German government supported the restructuring of the sector within theframework of the ECSC, which also allowed for regional policy measures concerning therestructuring of the eastern German steel industry. Other examples of state aid for restructuring ofthe steel industry include the following:

■ In France, the state intervened actively during restructuring at the end of the 1970s, in the formof loans and taking of equity shareholdings in companies. At present, it is mainly regionalcouncils that give their support for the granting of subsidies from EU structural funds.

■ In Italy, the privatisation of the sector was accomplished by a series of legislative measures.Among them was legislation adopted in the late 1980s and early 1990s that enabled theindustry to be restructured on the basis of early retirement.

■ In May 2001, a package of regeneration measures was announced for the regions of the UKmost severely affected by restructuring, mainly in South Wales and the north-east of England.This package was worth GBP 135 million and comprised compensation payments to redundantworkers and cash support for retraining. In 2004, when Allied Steel and Wire (ASW) was goinginto liquidation, employees were going to lose their pensions, since the company pension fundwas in deficit. Under intense political pressure, the government created a GBP 400 million trust

Role of governments 4

21

fund to provide a degree of security in retirement for victims of such situations (this fund appliesacross the economy rather than just to steelworkers, but its introduction was sparked in largepart by the campaign at ASW).

■ In Poland, following legislation adopted in August 2001, the Minister for the Economy set up alist of 20 iron and steel companies, which accounted for 90% of sales turnover and 80% ofemployment. This list was subdivided into three categories: those enterprises that would benefitfrom public aid for restructuring, those that would not receive public aid for restructuring, andthose for which bankruptcy procedures had been initiated. Public aid has been extended toeight plants whose restructuring programmes guarantee fulfilment of viability criteria at the endof the restructuring period. Six plants that do not carry out typical metal-processing operationsor whose restructuring programmes do not suggest they will meet the viability criteria are noteligible for public aid, and recourse is to other instruments, e.g. privatisation processes. In threecases, the restructuring process was concluded with bankruptcy proceedings.

■ Belgian industrial policy has been regionalised. The two steel plants in the Flemish region havenot been seriously affected by major restructuring or workforce reductions. In Wallonia, thegovernment has intervened by: financing a fund for equity participation in steel companies;organising tripartite negotiations with the local management of multinationals and trade unionsto maintain and develop steel activities in the region; organising socially responsible workforcereduction by support measures, especially early retirement; and supporting the development ofnew activities.

■ The Danish government released an extra sum of money, earmarked to support those stillunemployed six months after the closure of Dansteel in 2002.

In tandem with restructuring and retraining aid, public authorities also support steel activitythrough financing research and development in universities, which work in partnership withcompanies. This is particularly the case for regional governments in Belgium.

Initiatives on CO2 emissions

A policy topic that has come to the fore in recent years is the environment. The major point ofdiscussion has been the sector’s energy use and its contribution to meeting the targets for reducingemissions of greenhouse gases set by the Kyoto protocol to the 1992 United Nations FrameworkConvention on Climate Change. In some cases, the social partners have been involved in, orintervened in, activities in this area.

For example, in March 2004, the German federal government adopted a National Allocation Plan(NAP) within the framework of the EU Emissions Trading Scheme. This plan obliges the Germansteel industry to reduce its CO2 emissions, although by considerably less than previously plannedby the Federal Ministry of the Environment. Both the German Steel Federation(Wirtschaftsvereinigung Stahl, WV Stahl) and the IG Metall trade union had lobbied againstfurther contributions towards emission reductions, arguing that other European countries wouldpermit the steel industry to increase CO2 emissions and that the USA and Russia had not evensigned the Kyoto protocol. This position was supported by the Federal Ministry for Economics andLabour. Trade unions and trade associations express satisfaction with the NAP as it was finallyadopted. The joint campaign by trade union and employers indicated that the sectoral social

22


partners, despite diverging views on bargaining issues (see below), can find common ground whenthey see the future of the industry at stake.

In Italy, the problem of the environmental impact of coke plants furnishing fuel to integrated-cyclesteelworks has been raised by local institutions concerned to protect the local community. Theyhave been backed by the judiciary, which in Genoa and Trieste has ordered the closure of cokeovens over the next few years. This has led to increases in coke imports, which exposes the sectorto the volatility of international markets and increases the difficulty of obtaining raw materials forsteel production. This difficulty has prompted the government to set up a Steel IndustryObservatory, which comprises representatives from all actors in the sector, principally theemployers’ organisation and trade unions. This inter-ministerial Observatory, which met for thefirst time in March 2004, has the task of drawing up an action plan to reduce the environmentalimpact of coke plants and establish the maximum parameters for noxious emissions.

In Belgium, the government of the Walloon region has recently signed a convention with the steelsector to increase its energy efficiency by 5.6% by 2010. In Sweden, some measures decided by thegovernment for industry as a whole also apply to steel. This is the case for recent legislation thatpermits certain tax concessions for the use of electrical energy in basic industry. In return, thecompanies concerned will adopt a government programme to encourage more efficient use ofenergy.

Relationships with social partners

In the majority of countries under consideration the state has no formal relationship with the socialpartners in the steel sector. This is the case for Denmark, Finland, Germany, Hungary, theNetherlands, Norway, Spain and the UK. However, this does not mean that there are no informalconsultations and negotiations. In France, the state maintains close relationships with the steelsocial partners, but not apparently through any formal structure.

In Italy, the government has recently set up a Steel Industry Observatory (see previous section). Itsfunction is to draw up industrial policy for the steel sector, jointly with the social partners. InPoland, legislation provides for a ‘tripartite sector team’ (PL0310105F), which provides a forum fordiscussing all issues of relevance to the sector’s restructuring and was also set up to negotiate acollective agreement, common to at least some, if not all, entities operating in the industry. Theprogramme for restructuring the steel industry has been agreed with the social partners. InBelgium, the government of the Walloon region organised tripartite negotiations in 2001 and in2003 to maintain and develop steel activities in the region (see above under ‘Support measuresduring restructuring’).

23

Role of governments

Structure and coverage

The structure of collective bargaining in the steel industry varies considerably between thecountries considered, generally following differences in national bargaining systems – see table 5.

Sectoral collective bargaining covers the steel industry in the great majority of countries, but indiffering ways. The industry has its own specific collective agreements in Belgium, Germany andPoland, and also in France but within a broader framework. The agreements in Germany areconducted at the level of bargaining regions, and agreements at regional and département levelalso play a part in France. In Austria, Denmark, Finland, France, Greece, Hungary, Italy, Norwayand Sweden, steel is included within a broader collective bargaining unit of varying scope. Steel iscoupled with the metal-processing industry in Sweden and falls within agreements for overallmetalworking in Austria, Finland, France and Italy; metal production and processing in Greece;ferrous metallurgy in Hungary; the whole of the private sector industry in Denmark; and privatemanufacturing industry and/or metalworking in Norway. General metalworking agreements alsocover a number of steel companies not covered by specific (regional) steel sector agreements inGermany and one of the Netherlands’ two major steel firms.

These broader agreements that include steel are in some countries highly influential, often leadingoff the bargaining round and setting the pace and tone for other sectors in industry or more widely– this is the case, for example, in Austria, Denmark, Norway and Sweden.

The meaning of the various sectoral agreements covering the steel industry and their relationshipwith company or lower-level bargaining differ between countries. The sectoral agreementessentially provides a framework to be built on, to varying extents, by subsequent lower-levelbargaining in Belgium, Denmark, Finland (where this level is increasing in importance), France,Norway and Poland. Italy’s two-tier bargaining system clearly delineates the issues to be coveredby sectoral and lower-level bargaining. The sectoral agreement in Hungary does not deal with paymatters, which are left to company-level bargaining. There seems to be less scope for lower-levelbargaining in Austria, Germany and Greece.

The general rule in these countries is that company agreements can only supplement sectoralagreements, and not deviate downward from their provisions. However, in France legislationadopted in 2004 (FR0404105F) allows company-level agreements, in certain circumstances, to beless favourable for employees than sectoral agreements. So far, employers in the steel/metalworkingindustry do not seem to want to challenge the existing relationship between agreements.

There is no sectoral bargaining covering any of the steel industry in Spain and the UK. In Spain,bargaining is at group or company level, while in the UK it occurs at individual plant level. Themain Dutch steel group has its own collective agreement. One company in Germany has decidedto leave the sectoral agreement and engage in company-level bargaining.

The proportion of the workforce covered by collective bargaining in the steel industry generallyappears very high. It is 100% or nearly in Austria, Belgium, Denmark, Finland, France, Germany,the Netherlands and Spain (excluding management staff), and 90% in Sweden. All these countrieshave high general bargaining coverage rates, but steel industry coverage is in most cases evenhigher than average, especially in Austria, Germany and Spain. In the UK, the steel coverage rateof around two-thirds is about twice the national average, while coverage in Hungary, while low bycomparison with most other countries considered, is relatively high in national terms.

Collective bargaining 5

25

Table 5 Bargaining structures and coverage in the steel industry

Austria Bargaining conducted at sector level, as part of overall metalworking settlement. Coverage 100% (due to compulsory

membership of signatory employers’ organisation).

Belgium There is specific sectoral bargaining for the steel industry, conducted separately in joint committees for blue-collar and

white-collar workers. Sectoral agreements provide a framework on certain matters (such as early retirement) and lay

down minimum provisions on pay and conditions, and are implemented and completed by agreements concluded in

each company in the industry. The company is the main level of bargaining. Bargaining coverage is 100%.

Denmark Bargaining conducted at sector level, as part of overall private sector industry settlement. The agreement provides a

basic framework, built on by company-level bargaining. Coverage is around 100%, with sectoral agreements influencing

those small enterprises that are not members of the relevant employers’ organisation or have their own company

agreement.

Finland Bargaining conducted at sector level, as part of overall metalworking industry settlement. There is additional lower-

level bargaining, and enterprise – and especially plant-level – negotiations are increasingly important. The coverage of

the sectoral agreement is 100%.

France Sectoral collective agreements in metalworking may be improved upon by specific agreements for the steel industry or

by agreements concluded at the level of regions and départements (especially in relation to pay). The growth of large

and highly internationalised corporations has also led to increased bargaining within these groups. Bargaining coverage

is virtually 100%.

Germany There is specific sectoral bargaining for the steel industry, conducted in three regional bargaining units: ‘West’ (covering

the western German states of Bremen, Lower Saxony and North Rhine Westphalia, where the bulk of steel industry

employment is found); Saarland; and eastern Germany. Steel companies in other western federal states are covered by

the collective agreements for the metalworking industry. Bargaining coverage is almost 100%. Only one company, the

Italian-based Riva, has decided to leave the sectoral agreement and engage in company-level bargaining.

Greece Bargaining conducted at sector level, as part of an overall settlement for metal production and processing.

Hungary A sectoral agreement for ferrous metallurgy, which includes steel, regulates various non-pay terms and conditions of

employment, covering 33 companies and about half of the whole metallurgy workforce. A special, multi-employer wage

agreement covers the 28 enterprises owned by Dunaferr and regulates the terms and conditions of 9,000 employees.

Employers and company unions conclude local collective agreements at many companies. The coverage of company-

level agreements in overall metallurgy sector is relatively high, covering 39% of the employees in 2003.

Italy Steel is covered by the national sectoral collective agreement for overall metalworking. In line with Italy’s two-tier

bargaining structure, this agreement is supplemented by agreements concluded at company and territorial level, with

the two levels of bargaining dealing with specific issues. The national agreement applies to all companies in the sector

regardless of size (small, medium or large) and ownership structure (cooperatives and artisanal enterprises are also

covered).

Netherlands Corus has its own company collective agreement, while Nedstaal is covered by the sectoral collective agreement for the

metalworking industry. Bargaining coverage is 100%.

Norway Steel is covered by a broader collective agreement for private manufacturing industry and metalworking. This

agreement provides the framework for subsequent company-level bargaining (though there are significant variations

in this regard, in particular between white- and blue-collar workers). The central level has for many years been the most

important bargaining level in manufacturing industry, because of the ‘exposed’ sector’s role in macroeconomic

governance and wage formation. Bargaining coverage is thought to be between 65% and 70%, although figures vary

according to type of data (register or survey).

Poland There is a specific multi-employer collective agreement for the iron and steel industry. Most metal-processing employers

also have in-house collective agreements.

Spain There is no sectoral collective agreement and each steel company or group has its own collective agreement. At Arcelor

(Aceralia), a group-level framework agreement covering 2003–5 lays the basis for bargaining 15 company-level

agreements. The Sidenor group also has a framework agreement. There is almost total bargaining coverage in the

sector, with only management staff excluded by legal provisions.

Sweden Three sectoral collective agreements cover the steel and metal-processing industry – these are separate agreements for

blue-collar, white-collar and professional employees. Its provisions are supplemented and adapted by local bargaining

at individual employer level. Bargaining coverage is around 90% in the whole metals sector.

UK Bargaining occurs solely at the level of individual steel plants (national bargaining within the former British Steel was

abolished in the early 1980s). Such bargaining (and union recognition) exists in most of the large plants in the sector,

especially those belonging to Corus, but not in many of the smaller plants. Bargaining coverage is estimated to be

around two-thirds.

Source: EIRO.

26


Issues

Pay is, of course, the central issue in regular collective bargaining in the steel industry. In thosecountries where sectoral bargaining occurs (see above), often on a multiannual basis (eg every twoyears in Greece, or every three years in Sweden), agreements in some cases set minimum rates thatare built on by lower-level bargaining. In countries where the metalworking industry agreementsthat often include the steel industry act as trend-setters or reference points for other sectors, this isparticularly with reference to pay.

Restructuring and job securityIn all countries, the numerous restructuring projects and redundancy plans that have affected thesteel industry have been the subject of serious collective bargaining. In most cases, thesenegotiations have not been able to maintain the level of employment, but they have been able toreduce the social hardship caused by the workforce reductions, when compared with‘uncushioned’ redundancies. The measures agreed typically include the financing of earlyretirement, the encouragement of voluntary redundancies, and the organisation of retraining andoutplacement. To take the example of Poland, where job losses have been especially severe, a‘social package’ for the iron and steel industry, agreed on a tripartite basis in 1999, has sought toensure the conflict-free elimination of excess employment by providing for: increased pre-retirement benefits for older redundant workers; state subsidies for additional benefits; severancepayments; retraining and requalification measures; and career and financial counselling.Elsewhere:

■ employment levels have been a major issue in France, with steel – like the whole metalworkingindustry – constantly losing jobs. Early retirement schemes have been negotiated (including atcompany level in larger firms) and an ‘employment agreement’ was concluded in the early1990s. 2004 witnessed the opening of talks on the career paths of workers aged over 50;

■ restructuring and workforce reductions in the Belgian industry have always been accompaniedby negotiations and the conclusion of a ‘social plan’, avoiding direct redundancies and veryoften using early retirement and non-renewal of fixed-term contracts. Preservation of the earlyretirement system is an important point for the trade unions;

■ a collective agreement to secure employment which allows the reduction of working time tosafeguard employment and avoid redundancies was first agreed in the German steel industry in1996, but at present covers only the ‘West’ bargaining region;

■ in Greece, recent structural changes have in many cases directly threatened workers’ rights andjobs. Important mobilisations occurred at the beginning of the 1990s, usually culminating incollective agreements containing mutual concessions;

■ an employment pact signed at Corus in the Netherlands in 2002 places the accent on workers’employability rather than the maintenance of employment levels. The company will do itsutmost to avoid forced redundancies, on the condition that employees display a positiveattitude towards changing jobs and training. Measures include reversing outsourcing,redeployment, promoting part-time work (especially among older employees), reducingworking-time and minimising the use of temporary agency work and fixed-term contracts; and

■ a marked generational turnover in the workforce of the Italian steel industry, with a large intakeof young labour, has been handled through recourse to short-term contracts, mainlytraining/work and fixed-term contracts but also, in some cases, temporary agency contracts.

27

Collective bargaining

Concern about restructuring does not necessarily result in bargaining on the issue. For example,the main issue that has concerned the UK’s ISTC steel union in the last few years has been theimpact of restructuring. However, the union has repeatedly complained that the employers in thesector, especially Corus, are not engaging in meaningful negotiations on this issue. This appears toobservers to exemplify a wider pattern of employers increasing their prerogative, with the scope ofcollective bargaining shrinking as a consequence.

Working timeSometimes linked to restructuring and job security, working time is a prominent bargaining issuein the steel sector in some countries (sometimes as part of the wider metalworking sector).

In terms of the duration of working time, an agreement on the reduction of working hours wassigned in French metalworking in 1998 (FR9810136N). However, it caused a serious split amongtrade unions. The accord was amended after a ruling by the courts, and the reduction of workingtime was then applied (possibly with some improvements) by numerous agreements in individualcompanies, without there being special negotiations or agreements at sector level in the steelindustry. However, across Europe in recent years, it appears that working time flexibility, ratherthan major reductions, have been the main theme of steel industry bargaining

For example, in 2000, Germany’s first sectoral agreement on ‘working-life time accounts’(Lebensarbeitszeitkonten) was signed in the steel industry’s ‘West’ bargaining region. Theagreement entitles employees to save up overtime pay and other portions of their income in specialaccounts. This capital can be used to fund early retirement or periods of time off work (sabbaticals)or – in exceptional cases – to increase pensions (DE0011290N). However, as there was noagreement reached on a general provision to safeguard working-time credits in the event ofbankruptcy, subsequent company-level talks had to take place, which have so far not led to anyagreements. In Denmark, increased flexibility in working time arrangements has been an importanttheme in sectoral agreements over the last decade, paving the way for company-level agreementson the organisation of working time schedules. Company-level bargaining on working timearrangements has also become increasingly important in the sector in Finland in recent years. InAustria, the sector’s working time arrangements are widely perceived as exemplary, since theycombine flexible use of ‘bandwidth’ models (providing for long-term reference periods of up to oneyear during which working time can be varied around an average) with generous time off and/orpay premia for employees. Nevertheless, some employers demand a further flexibilisation of theexisting working hours regulations or even an overall extension of weekly working hours fromcurrently 38.5 to 40 – the latter has been strongly rejected by unions.

Shiftwork has been a particular issue in steel in some countries. Bargaining in Finland has dealtwith the introduction of three-shift working, pay compensation and reduced working time for theworkers involved. In Italy, bargaining has concentrated on work organisation and, in particular,shiftwork, in recent years, in order to increase productivity. Numerous companies have introducedfour shifts a day, and some even five, in order to ensure that plants operate around the clock. Theincrease in shiftwork has been offset through bargaining by a reduction in individual working time.Shiftwork has also been a bargaining topic in Belgium.

28


Other issuesOther themes dealt with in recent collective bargaining in the steel industry include:

■ health and safety and the work environment, as in countries such as Belgium, Greece, Italy andSweden. In cases such as Belgium this topic has gained in importance following fatal accidentsin recent years (BE0211305F);

■ ‘atypical’ work – eg the use of various types of contract (part-time, fixed-term, temporary agency,apprenticeship, etc) in Italy, or part-time work for older employees in Austria;

■ work-life balance issues, such as maternity leave and a right for workers to time off for care ofsick children under the age of 14 in Denmark, or the protection against dismissal of employeestaking parental leave in Austria;

■ education and training, as in Austria, Belgium, Italy and Sweden. For example, the currentsectoral agreement in Sweden provides for the establishment of working groups to examine ifskill development may be carried out in ordinary working time;

■ job classifications and new grading systems, as in Belgium and Italy;

■ new forms of payment, such as performance-based pay systems in Belgium, or profit-sharingand bonus schemes at enterprise level in Finland;

■ leave systems, as in Belgium and Italy;

■ mobility, as in Belgium and France;

■ information and communication, sometimes including EWCs, as in Belgium and France; and

■ equal opportunities matters – eg for women and men in Sweden, or workers with disabilities inDenmark.

Impact of internationalisation and multinationals on collective bargaining

As noted above, the steel industry has become increasingly internationalised (though this is not anew development in countries such as Sweden) and dominated by major multinational companies,raising a number of questions for collective bargaining.

Within the European-based steel multinationals, nothing has so far developed that resemblestransnational collective bargaining. However, within Arcelor a practice of joint declarations isemerging. Together with trade unions, the group is working on a set of minimum conditions forsocially responsible restructuring and recently held a first international conference on health andsafety.

Internationalisation is not generally a specific collective bargaining issue in the steel industry.However, it is perceived to have an influence on bargaining in some countries. For example, arecent Danish study of industrial relations in the metalworking industry finds that a key effect ofinternationalisation is an ever-increasing focus on costs, which is reflected in bargaining.Furthermore, employers have repeatedly argued that in order to cope with internationalcompetition there is a need to continue the decentralisation of wage negotiations and to introduceflexibile working time schedules. These arguments have had an impact on the content of collective

29

Collective bargaining

agreements in the sector over the last decade. From the trade union point of view, the threat ofrelocation of jobs to low-cost countries has increased the need to improve access to furthereducation and training, preparing workers for new jobs demanding new skills. It is reported fromthe UK that collective bargaining plays little role in shaping the internationalisation process, butthere is an effect in the other direction: the internationalisation of companies has increased theirability to relocate production across borders and, for unions based solely at national level, thisfurther weakens their bargaining position. In the UK, this appears to have been a contributoryfactor in the ISTC union’s limited ability to shape the restructuring process at Corus and itsconsequences for employees. It is also reported from the Netherlands that the growing competitionin the sector puts some pressure on the collective bargaining process.

Another consequence of internationalisation is that the new owners of plants taken over bymultinationals may take different views of bargaining than their national counterparts – forexample, it is reported from Hungary that foreign-owned companies typically avoid involvement insectoral negotiations with unions.

French trade unions believe that internationalisation of the steel industry will, in the long term,alter the rules of bargaining, as will the recent establishment of Arcelor in the short to medium term(the setting up of an EWC in the group is seen as one step in a longer process). French unions thinkthat bargaining in groups like Arcelor will gradually come to be organised more around specifictypes of product (stainless steel, fine grain and special steel, flat products etc) than geographicalunits such as regions or countries.

As noted above, EMF seeks to coordinate collective bargaining in the metalworking industry, whilethere is also a network made up of metalworking unions from Austria, the Czech Republic,Germany, Hungary, Slovakia and Slovenia that seeks an effective transnational coordination ofcollective bargaining. However, the effect of such efforts is not always clear. For example,transnational industrial relations have been on the agenda of Norwegian trade unions for sometime and Fellesforbundet, which represents steelworkers, is one of the more active unions in thisregard, having on several occasions called for closer coordination of bargaining at both the Nordicand European levels (NO9909152N). However, it is reported that concrete initiatives to actuallycoordinate bargaining and demands have yet to materialise, and there seems to be little support inthe labour movement in general for such transnational efforts.

30


As we have seen, industrial relations in the steel sector are in most countries marked by robustsystems of collective bargaining, often at sector level, with high levels of coverage. Employers aregenerally grouped in united organisations. The metalworking industry trade unions that oftenrepresent steel industry workers are in many cases considered to be the most powerful unions intheir country and national confederation, because they are, or were, the strongest in terms ofmembership. Nevertheless, in comparison with the situation 30 years ago, this influence iscertainly less strong than it used to be, since the importance of the metalworking sector in the totaleconomy has declined.

Within this broadly similar basic framework, steel sector industrial relations differ from country tocountry in terms of the degree of cooperation and confrontation between trade unions andemployers, against the current background of restructuring. The countries do not fall into cleargroups, with some having solely cooperation-based industrial relations and others having relationsessentially run on the basis of confrontation. In practice, in those countries where there is generallystrong cooperation, often based on institutionalised systems, confrontation may arise at certaintimes over certain questions; while in those countries where there have often been confrontations,these have frequently taken place in support of negotiations and, in general, resulted incompromise agreements. Over recent years, there appears to be a general tendency to solve moreproblems by concertation than by confrontation – as indicated by table 6 on p.25, major industrialaction has been quite rare in the sector over the past 10 years.

The UK is arguably an exception here, with less concertation than elsewhere and littleconfrontation. Compared with other countries, trade unions appear to have less recognition byemployers as interlocutors with whom it is desirable to conclude collective agreements, especiallyin small and medium-sized enterprises. At the same time, there has been little large-scale,concerted industrial action in the sector in the last 10 years.

At least six countries (Austria, Denmark, Finland, Germany, the Netherlands and Sweden) can besaid to have systems of cooperation-based industrial relations in the steel industry that could bedescribed as some form of ‘co-determination’ – usually based around strong works council-typestructures or a statutory role for trade unions in cooperation, along with board-level employeerepresentation – while consensus generally rules industrial relations in a seventh (Poland). Suchsystems give workers’ representatives a series of means that enable them to participate effectivelyin discussions and carry some weight in the negotiations when companies seek to implementcompetitive strategies that may have negative consequences for employment.

Germany generally has an extensive system of co-determination though works councils and board-level representation, and the steel (and coal) industry has a specific, stronger system (known asMontanmitbestimmung). Not only do trade union and employee representatives sit on thesupervisory boards of steel companies but the chief executive for human resources (the so-calledlabour director) is effectively chosen by the trade union. In mergers, the IG Metall union has beenkeen to secure these special co-determination rights applying to the steel sector. This, however, hasbecome more complicated as traditional steel companies have changed into companies operatingin a number of sectors and therefore ceased to be covered by these special rules. In the case of theThyssenKrupp merger, IG Metall managed to secure Montanmitbestimmung for the steel activitiesof the company and negotiated special co-determination provisions for the holding company(DE9804159F).

Industrial relations at national level 6

31

In Sweden, trade unions are given company-level co-determination rights by law (and there is alsostatutory board-level representation). In restructuring and redundancy situations, the negotiationprocedure is laid down by the co-determination and employment security legislation. For example,in such cases the law gives trade unions a right to call in an adviser to provide a thorough overviewof the economic situation of the enterprise, and unions may identify alternatives that should betried out.

In the Netherlands, the position of the works council is at least as important as that of the unionsat Corus. This is partly due to the relatively strong legal rights of Dutch works councils – majordecisions on investments and restructuring have to be negotiated with the works council, whichalso has joint decision rights on social issues – but also to the expertise the works council hasgradually built up, the external experts it makes use of, the cooperative attitude of managementand the good relations with the members of the supervisory board (where there is a form ofemployee representation).

‘Co-determination-type’ systems also exist in Austria, Denmark and Finland, with works councilsor cooperation structures and procedures, along with board-level employee representation. Norwayalso falls into this group, to some extent.

In Poland, there is no system of co-determination as such, but all decisions relating to restructuringof the steel industry are discussed among the social partners, with all parties presumably accedingat least to the general direction of the transformations. The social aspects of the industry’srestructuring are mainly highlighted by trade unions, but they appear to acknowledge that changesto the sector’s collective agreements have been predicated chiefly by amendments to Polish labourlaw which, in turn, were made necessary by harmonisation with EU law and by market conditions.In Hungary, there also appears to be relatively good cooperation between employers and unions.

In three countries, Belgium, France and Italy, confrontations over steel industry restructuring havebeen more frequent at times and cooperation has been somewhat less evident (though thesecountries, like those mentioned above, do have works councils or similar structures).

In Italy, the privatisation of the steel industry has not been a painless process for industrialrelations. The transition from state control, when relations with the unions were based onoperational ‘co-management’, to ownership by large private groups at first gave rise to a climate ofhostility between the parties. The first years of the restructuring processing (the mid-1990s) were adifficult period for the unions, which opted for a defensive strategy largely based on protectingwages. Today, now that the initial impact has been absorbed, dialogue has resumed and is markedby a shared position taken up by the ‘Federacciai’ employers’ association and the unions on theindustrial policies required to relaunch the sector.

In Belgium, confrontation and negotiation have alternated or co-existed. Confrontation has takenthe form of militancy by rank-and-file union members and one-day strikes or work stoppages havebeen common in periods of a worsening social climate, caused by factors such as fatal accidents,job insecurity or blocked wage negotiations. However, in parallel, the trade unions are intimatelyinvolved in local information and consultation bodies, such as works councils or health and safetycommittees. In large companies, the unions usually also have delegates who are released from theirnormal jobs in the plant to carry out their representative duties. They are seen as being highlyprofessional and playing an important intermediate role between individual workers and the

32


human resources department. Nevertheless, it is reported that the power of the Belgian steel unionsappears to have reached its limits in the recent period, mainly as a result of confrontation with theinternational power of multinationals and the loss of members during the process of almostcontinuous restructuring in the sector. Cooperation over restructuring with the local managementof multinational steel groups is now the common practice.

In France, trade unions adjusted very painfully to the changes in the industry between the late1970s and the mid-1980s. The strategies adopted by the various trade unions divergedsignificantly, however, with some advocating head-on confrontation at times, like the metalworkingfederation of the General Confederation of Labour (Confédération générale du travail, CGT), whileothers opted for the opposite approach of bargaining and agreement, such as the metalworkingfederation of the General Confederation of Labour-Force Ouvrière (Confédération générale dutravail-Force Ouvrière, CGT-FO). For the last 10 years, while restructuring has continued, theseunion strategies have overall been maintained, albeit with the lines between them becoming moreblurred.

Spain appears to occupy an intermediate position. Steel industry restructuring has been lesstraumatic than might have been expected, with a relatively high involvement of trade unions andthe extensive use of early retirement with good conditions for the workers. The last major unionmobilisation in the sector was in 1992.

Table 6 Recent industrial action and protests in the steel industry

Austria No recent specific industrial action. Unions opposed the complete privatisation of key companies in the steel sector and

the Austrian Trade Union Federation (Österreichischer Gewerkschaftsbund, ÖGB) organised protest actions and

demonstrations in 2003, though these did not prove effective (AT0312204F). In 2003, the two main unions organising in

steel mobilised their members in a wider conflict over a pensions reform introduced by the government (AT0306201N).

Belgium Apart from one-day strikes or work stoppages, there have been three significant recent incidents of industrial action. In

1996–7, there was high-profile action surrounding the bankruptcy and takeover by Duferco of Forges de Clabecq

(BE9707109F). The movement, led by local union officials, was bypassed by the more moderate national leadership,

which negotiated a social plan connected to the takeover. A two-week strike was held by white-collar workers at Sidmar

in 2001, calling for a reduction in pressure at work, which resulted in a company agreement and the introduction of an

annual survey on job satisfaction. There was industrial action at Arcelor in 2003 over the company’s unclear investment

plans for a site in the province of Hainaut and redeployment in Liege (BE0302301N, BE0305301N, and BE0306303F).

Denmark The most recent major industrial action affecting the sector was in 1998 in connection with the breakdown of collective

bargaining in parts of the private sector, including industry – a widespread national strike across the private sector lasted

11 days and resulted in more than 3 million lost working days (DK9805168F). The steel industry is not particularly

affected by unlawful strikes, ie industrial action taken while collective agreements are in force.

Finland There were protest strikes at both Rautaruukki and Imatra during recent restructuring negotiations. Otherwise, there

has been no industrial action in the industry over the last 10 years.

Germany There have been only two strikes in the last decade or so, both in the eastern German steel industry. One took place in

1993 and was triggered by the employers’ intention to cancel a previous collective agreement on the harmonisation of

eastern German pay rates to western German standards. It ended after three weeks with a compromise resulting in a

new collective agreement. In 2003, another strike followed the breakdown of negotiations on the introduction of the

35-hour working week in the eastern German steel industry. This strike lasted four days, after which the parties returned

to the bargaining table and signed a new collective agreement on the staged introduction of a 35-hour week by 2009

(DE0307201N). In March 2004, steelworkers across the country demonstrated against government plans to force steel

producers to reduce further their CO2 emissions.

Greece Unions organised a number of major mobilisations against restructuring initiatives in the early 1990s, usually

culminating in collective agreements containing mutual concessions, though without preventing these processes.

Hungary There have been a number of protest demonstrations in the sector, mostly related to plant closures and social plans for

redundant employees.

33

Industrial relations at national level

Table 6 (continued)

Italy In early 2004, the workforces at Ilva in Cornigliano and Acciai Speciali in Terni mobilised, with the support of their local

communities (including local authorities), against the plans of their owners – respectively Riva and ThyssenKrupp – to

make major redundancies, obtaining in both cases the opening of talks over a joint solution to the dispute (IT0402203F).

In December 2004, ThyssenKrupp apparently went back on an earlier agreement with the Italian government and trade

unions by announcing the imminent closure of some of its operations in Terni. In protest, unions called a one-day strike

in all departments of the Terni steelworks, as well as a demonstration in Rome. The government convened negotiations

involving the company, unions and local institutions in an attempt to resolve the dispute (IT0501307F).

Netherlands There have been no major strikes in the industry during the last 10 years, though at Corus there have been work

stoppages to put pressure on the collective bargaining process and protests against restructuring plans. The works

council has several times threatened to go to court. In April 2004, unions in all Corus plants in Europe distributed cards

reading ‘Moffat out!’ (the group’s chief executive) among employees, to be signed and presented to the Corus board.

Poland In July 2003, the three largest union organisations at the major producer Ispat Polska Stal SA staged a demonstration in

protest against: plans to reduce employment by some 35%; alleged breaches of agreements on social issues; attempts

by the owner to force companies in the group to reduce their operating costs by 30%–60%; and continued efforts to

cut expenditure on overhaul and maintenance. During the second half of 2003, strikes were staged at the Ostrowiec

and Stalowa Wola steelworks.

UK There has been little large-scale, concerted industrial action in the sector in the last 10 years, though there have been

occasional instances of action. For example, in September 2003 the ISTC organised a series of one-day strikes over pay

at Johnson Matthey, citing an offer of a 2% pay rise while the chief executive of the company received 22%.

Source: EIRO.

34


The European steel industry has been undergoing a lengthy period of restructuring, marked byprivatisation, internationalisation and concentration into a small number of major multinationals,against the background of a need to remain competitive in a globalised market. In most countries,following an often difficult process of rationalisation and change, the steel industry currently seemsto be in better shape to face the future.

In this context, the level of employment in the steel industry has fallen considerably across Europeover the last two decades, often linked to privatisation and mergers/acquisitions. The largest joblosses have taken place in central and eastern Europe, but falls have also been significant in manywestern countries.

The steel industry is still a predominantly male and blue-collar sector, with an ageing workforce inmany countries. Open-ended employment contracts and full-time employment remain the norm.Part-time employment, fixed-term contracts and temporary agency work are not common, but thereare signs that they are becoming more widespread in some countries, as is subcontracting.Shiftwork is usual in steel production, and weekly working time is often relatively short. Overrecent years, competitive pressures have changed employment conditions and working practices inthe direction of greater flexibility, while increasing skill requirements.

The representation of steel industry employers in negotiations with trade unions and relations withgovernment is in most countries characterised by its unified structure, often through a singlefederation. In negotiations with unions, steel producers across Europe seek flexibility in order tostrengthen competitiveness and achieve a better and more rapid adjustment to changes in demand.

In most countries, steelworkers are represented by several trade union organisations (sometimesposing a problem for unity of action among the different organisations) – these are very rarelyspecific to the sector, and in most cases cover metalworking more widely. In some countries,separate unions represent different occupational categories, but more commonly steelworkers’representation is divided among rival trade unions affiliated to separate union confederations. Inalmost all cases, the unionisation rate in steel is higher than in the overall economy, sometimessignificantly so. As part of a widespread move towards union mergers, it appears that in somecountries steelworkers are being represented through increasingly wide-ranging structures.

In the face of restructuring, steelworkers’ unions are, in principle, opposed to workforce reductionsand plant closures. In practice, they tend to accept restructuring when it appears to be inevitable,attaching great importance to negotiating accompanying measures such as early retirement plans,voluntary redundancies or the creation of alternative employment. In the event of restructuringwithin multinational companies, trade unions in different countries have sought to cooperate, buttensions have emerged in several cases. All the major Europe-based steel multinationals haveEuropean Works Councils in place, and those at Corus and especially Arcelor appear to be mostdeveloped.

In the event of restructuring, many governments play a role in seeking to ensure that this causesthe least social hardship possible. In the majority of countries, the state has no formal relationshipswith the social partners in the steel sector, though this does not mean that there are no informalconsultations and negotiations, and there are some countries where there are formal structures inplace.

Conclusion 7

35

The proportion of the workforce covered by collective bargaining in the steel industry generallyappears very high. Sectoral collective bargaining covers the industry in the great majority ofcountries (Spain and the UK being the main exceptions, with lower-level bargaining only), but indiffering ways. The industry has its own specific collective agreements in a few cases, but is morecommonly covered by wider agreements, often for metalworking in general. The meaning of thesesectoral agreements and their relationship with company- or lower-level bargaining differ betweencountries, but decentralised bargaining often builds on the sectoral agreements. Alongside pay, thekey issues in steel industry bargaining currently appear to be restructuring and job security,focusing on measures such as the financing of early retirement, the encouragement of voluntaryredundancies, and the organisation of retraining and outplacement. Working time flexibility is alsoa prominent theme in many countries. The internationalisation of the sector is not generally aspecific collective bargaining issue, but it is perceived to have an influence on bargaining in somecountries.

Steel sector industrial relations differ from country to country in terms of the degree of cooperationand confrontation between trade unions and employers, against the current background ofrestructuring. While not being immune from conflicts on occasion, one group of countries can besaid to have systems of cooperation-based industrial relations in the steel industry that could bedescribed as some form of ‘co-determination’ – usually based around strong works council-typestructures or a statutory role for trade unions in cooperation, along with board-level employeerepresentation. Other countries have witnessed more confrontation over the years, but at the sametime these conflicts have often resulted in compromise agreements. Over recent years, thereappears to be a general tendency in the industry to solve more problems by concertation than byconfrontation, and major industrial action has been quite rare in the steel sector over the past 10years.

36


European Foundation for the Improvement of Living and Working Conditions


Luxembourg: Office for Official Publications of the European Communities

2005 – VIII, 36 pp. – 21 x 29.7 cm

ISBN 92-897-0919-7

EF/05/81/EN

SALES AND SUBSCRIPTIONS

Publications for sale produced by the Office for Official Publications of the EuropeanCommunities are available from our sales agents throughout the world.

How do I set about obtaining a publication?

Once you have obtained the list of sales agents, contact the sales agent of your choice andplace your order.

How do I obtain the list of sales agents?

• Go to the Publications Office website http://publications.eu.int/

• Or apply for a paper copy by fax (352) 2929 42758

Industrial relations in the steelindustry

4 5 TJ-68-05-341-EN

-C

Industrial relations in the steel industry examines the most important

challenges faced by the national social partners in the iron and steel

industry in 16 European countries. It focuses on the internationalisation of

the industry and the cross-border mergers and acquisitions that have

accompanied this transformation. It also looks at the structure and

characteristics of the sector, changes in employment levels and practices,

the representation and positions of trade union and employer organisations

and the structure and content of collective bargaining. It puts the spotlight

on confrontation and cooperation in the industry, especially during the

recent phase of restructuring, which is generally viewed as a serious crisis

in the steel industry

The European Foundation for the Improvement of Living and Working Conditions is atripartite EU body, whose role is to provide key actors in social policymaking withfindings, knowledge and advice drawn from comparative research. The Foundationwas established in 1975 by Council Regulation EEC No. 1365/75 of 26 May 1975.


9 789289 709194

ISBN 92-897-0919-7

Documents

Industrial relations in the steel industry - uni …edz.bib.uni-mannheim.de/daten/edz-ma/esl/05/ef0581en.pdfIndustrial relations in the steel industry ... characteristics ... This