Negociación Porindustria Internacional

Negotiating Our Way Up
COLLECTIVE BARGAINING IN A CHANGING WORLD

OF WORK
COLLECTIVE BARGAINING IN A CHANGING WORLD

OF WORK
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Please cite this publication as:

OECD (2019), Negotiating Our Way Up: Collective Bargaining in a Changing World of Work, OECD Publishing, Paris,
https://doi.org/10.1787/1fd2da34-en.
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ISBN 978-92-64-36257-4 (pdf)
Photo credits: Cover © Sidonie Milon.
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3
Foreword
Negotiating Our Way Up provides a comprehensive assessment of the functioning of collective bargaining
and workers’ voice in OECD countries as well as new insights on their effect on labour market performance
and their role in a changing world of work. Combining a large variety of sources and data, the report
analyses the challenges that collective bargaining systems are facing in OECD countries, as well as their
role to promote more inclusive labour markets. Collective bargaining is a key institution to promote rights
at work. At the same time, collective bargaining and workers’ voice are unique instruments to reach
balanced and tailored solutions to the challenges facing OECD labour markets. However, fruitful
exchanges between social partners are not a given and collective bargaining systems need to be designed
in ways that allow balancing inclusiveness and flexibility. Negotiating Our Way Up provides a useful
resource for policy makers, trade unions and employers’ organisations interested in understanding how to
make the most of these instruments.
The report consists of three main thematic parts. After an overview of the report’s main messages in
Chapter 1, the first part of the report provides a detailed review of the key actors and functioning of
collective bargaining institutions and workers’ voice arrangements across OECD countries. The second
part, analyses the role of collective bargaining systems for employment, job quality and labour market
inclusiveness. It notably steps into relatively unchartered territory, namely the relationship between
collective bargaining, workers’ voice and the non-monetary aspect of job quality, such as the quality of the
working environment. Finally, the last part of the report discusses how collective bargaining can be adapted
to address emerging challenges such as those related to automation, globalisation and ageing. It identifies
the type of government intervention that may be required to support this adaptation, including by ensuring
that the increasing share of non-standard workers can access collective voice and bargaining.
Negotiating Our Way Up builds on the work done on collective bargaining by the OECD Directorate for
Employment, Labour and Social Affairs since 2016. Chapters 2, 3 and 5 build on the OECD Employment
Outlook 2017, the OECD Employment Outlook 2018 and the OECD Employment Outlook 2019. The report
was edited and drafted by Sandrine Cazes, Andrea Garnero, Sébastien Martin and Chloé Touzet under
the supervision of Stefano Scarpetta, Mark Pearson and Stéphane Carcillo. Alexander Hijzen and Oliver
Denk contributed to Chapter 3. Andrea Bassanini provided helpful comments and suggestions. Editorial
assistance was provided by Natalie Corry and Duniya Dedeyn.
This report was produced with the financial assistance of the German Ministry of Labour and Social Affairs.
It could not have been prepared without the co-operation of the Labour and Employment Ministry staff in
OECD and accession countries, as well as of the staff of many national employer associations and unions
who completed the OECD policy questionnaires on collective bargaining. The report has also greatly
benefited from helpful discussions and suggestions from the participants at several meetings of the OECD
Employment, Labour and Social Affairs Committee, the OECD Working Party on Employment, the
Business at OECD ELSA Committee, the Trade Union Advisory Committee (TUAC) to the OECD Working
Group on Economic Policy and on Education and Skills as well as at three OECD expert meetings on
collective bargaining. In particular, Professor Jelle Visser’s wisdom, knowledge and friendly support all
along the work have been an enormous help.
NEGOTIATING OUR WAY UP © OECD 2019

4
The views expressed herein cannot be taken to reflect the official opinion of the OECD member countries
nor of any of the people, organisations and governments that helped the Secretariat during the research
and drafting process.

5
Table of contents
Foreword 3
Acronyms and abbreviations 10
Executive summary 12
1 Overview: Collective bargaining and workers’ voice can be strong enablers of
inclusive labour markets 14
1.1. How do collective bargaining systems and workers’ voice arrangements function in OECD
countries? 15
1.2. What role does collective bargaining play in labour market performance? 16
1.3. How can collective bargaining and workers’ voice contribute to improve job quality? 17
1.4. How can collective bargaining systems be adapted to remain fit for purpose in a changing
world of work? 18
1.5. Making the most of collective bargaining and workers’ voice to address old and new
challenges: The road ahead 20
References 21
2 Collective bargaining systems and workers’ voice arrangements in OECD countries 22

In Brief 23
Introduction 25
2.1. The functions and features of collective bargaining systems 26
2.2. The actors of collective bargaining 28
2.3. Why has trade union density been declining in the last decades? 33
2.4. The scope of collective bargaining 44
2.5. Unpacking the complex machinery of collective bargaining 54
2.6. Workers’ voice at workplace and company level 69
2.7. How do national collective bargaining systems compare? 73
Conclusions 76
References 77
Annex 2.A. Decomposing effects of change in employment composition on union density 86
Annex 2.B. Data sources used in the decomposition analysis 87
Annex 2.C. Decomposition analysis: Additional material 92
Annex 2.D. Additional material on youth and collective actions 97
Notes 100
3 The role of collective bargaining systems for labour market performance 105
In Brief 106

6
Introduction 108
3.1. The role of collective bargaining for labour market performance: An overview 108
3.2. The role of collective bargaining for employment and wage inequality: New evidence from
macro-data 110
3.3. The role of collective bargaining for inclusiveness and flexibility: New evidence from micro-
data 115
3.4. Balancing inclusiveness and flexibility in collective bargaining systems 127
Conclusions 134
References 136
Annex 3.A. A taxonomy of collective bargaining systems 143
Annex 3.B. Macro-data analysis: Variable description and additional material 149
Annex 3.C. Collective bargaining, wages and productivity: Additional material 157
Notes 160
4 A Hard Day’s Night: Collective bargaining, workers’ voice and job quality 164
In Brief 165
Introduction 167
4.1. Collective bargaining, workers’ voice and job quality: A framework 168
4.2. Collective bargaining, workers’ voice and the quality of the working environment 171
4.3. Unpacking the effect of collective bargaining and workers’ voice on the main sub-
dimensions of the quality of the working environment 181
Conclusions 204
References 205
Annex 4.A. Definition and sources of Job Quality indicators 216
Notes 225
5 Facing the future of work: How to make the most of collective bargaining 229
In Brief 230
Introduction 231
5.1. Collective bargaining in a changing world of work 232
5.2. Adapting regulations to more diverse forms of employment 238
5.3. How can social partners enhance collective bargaining and workers’ voice in non-standard
and new forms of work? 240
5.4. Increased pressure and new challenges have led to the emergence of non-traditional
initiatives 246
Conclusions 250
References 251
Annex 5.A. Union density and forms of employment: Sources and additional material 256
Notes 260
Glossary 265
FIGURES
Figure 2.1. The main building blocks of collective bargaining systems 28
Figure 2.2. Trade union density by group 30
Figure 2.3. Employer organisation density 32
Figure 2.4. Trends in union density 34
Figure 2.5. Trend in union density among youth in selected OECD countries 36
Figure 2.6. Individual values and support for collective action among young people 37
Figure 2.7. Trust and perceived necessity of trade unions among young people aged 20-34 38

7
Figure 2.8. The contribution of composition changes to the decline in union density is generally small and
varies across countries 41
Figure 2.9. Assessing the relative effect of various composition changes on trade union density 42
Figure 2.10. Propensity to unionise by cohort varies considerably across countries 43
Figure 2.11. Trends in collective bargaining coverage rate 46
Figure 2.12. Collective bargaining coverage rate by industry and firm size 47
Figure 2.13. Detailed bargaining level 56
Figure 2.14. Trends in industrial disputes 66
Figure 2.15. Quality of labour relations 68
Figure 2.16. Representative voice in Europe 72
Figure 3.1. Collective bargaining, labour market performance and inclusive growth 109
Figure 3.2. Collective bargaining systems and employment outcomes 114
Figure 3.3. Collective bargaining and wage dispersion 115
Figure 3.4. Composition-adjusted wage dispersion by level of collective bargaining 118
Figure 3.5. Wage returns by level of collective bargaining 119
Figure 3.6. Accounting for the differences in wage dispersion with and without collective bargaining 120
Figure 3.7. Wage premium by level of collective bargaining 121
Figure 3.8. Elasticity of wages with respect to productivity across sectors: Country estimates 123
Figure 3.9. Elasticity of wages with respect to productivity across sectors: The role of collective bargaining 124
Figure 3.10. Negotiated wages in the euro area 125
Figure 4.1. Collective bargaining and job quality 169
Figure 4.2. Quality of the working environment in European countries 174
Figure 4.3. Job demands and job resources by collective bargaining systems in Europe 176
Figure 4.4. Workers’ voice arrangements and the quality of the working environment are statistically
correlated, but causality remains unclear 180
Figure 4.5. Correlations between occupational safety and health (OSH) measures and workers’ voice
arrangements 184
Figure 4.6. Correlations between working time measures and workers’ voice arrangements 189
Figure 4.7. Number of firms covered by a collective agreement including training provisions, 2010-2015 191
Figure 4.8. Training aspects covered by staff representatives/committees by firm size 192
Figure 4.9. Correlations between measures of workplace organisation and workers’ voice arrangements 197
Figure 4.10. Correlations between measures of intimidation and discrimination and various forms of workers’
voice arrangements 202
Figure 5.1. Non-standard workers are underrepresented by trade unions 234
Figure 5.2. Access to collective bargaining for different forms of employment, current situation 236
Annex Figure 2.B.1. Sensitivity analysis for Mexico 91

Annex Figure 2.B.2. Sensitivity analysis for the United States 91
Annex Figure 2.C.1. Effects of demographic changes are generally small 95
Annex Figure 2.C.2. Effects of job characteristics are generally small 95
Annex Figure 2.C.3. Effects of non-standard forms of employment are generally small 96
Annex Figure 2.D.1. Trend in union density among youth aged 20-34 in selected OECD countries 97
Annex Figure 2.D.2. Trust in trade unions 99
Annex Figure 2.D.3. Perceived necessity and trust in trade unions 99
Annex Figure 3.C.1. Collective bargaining coverage rates: A comparison of SES and ICTWSS 157
Annex Figure 3.C.2. Negotiated wages in selected OECD countries 158
Annex Figure 4.A.1. Change in the quality of the working environment by collective bargaining systems in
Europe 219
Annex Figure 4.A.2. Change in subcomponents of the quality of the working environment by collective
bargaining systems in Europe 220
Annex Figure 5.A.1. Estimated trade union density for standard workers 258
Annex Figure 5.A.2. Non-standard workers in the private sector are also underrepresented by trade unions 259
TABLES
Table 2.1. Use of erga omnes clauses, 2018 49

8
Table 2.2. Scope and coverage of extensions (or functional equivalent) mechanisms in place in OECD
countries, 2018 50
Table 2.3. The duration, ultra-activity and retroactivity of collective agreements, 2018 54
Table 2.4. Use of the favourability principle, 2018 57
Table 2.5. Scope and actual use of derogations and opt-out, 2018 58
Table 2.6. Forms of co-ordination across OECD countries, 2018 62
Table 2.7. The enforceability of collective agreements, 2018 65
Table 2.8. Association between on-site union representation and direct voice and quits and collective disputes
in 2011 70
Table 2.9. Existing forms of representative voice in the workplace, 2018 71
Table 2.10. Dashboard of collective bargaining systems, 2018 75
Table 4.1. More money or more time off? 187
Table 4.2. How much are social partners’ involved in training programmes in OECD countries? 193
Table 5.1. Collective agreements for temporary work agency workers 245
Annex Table 2.B.1. Decomposition analysis: data sources 88

Annex Table 2.B.2. Variable definition: demographics and atypical employment 89
Annex Table 2.B.3. Variable definition: Job characteristics and other factors 90
Annex Table 2.C.1. Change in workforce composition explains generally a small part of change in trade union
density 92
Annex Table 2.C.2. Effect of various composition changes on trade union density 93
Annex Table 2.D.1. Trust in trade unions: Sources and definitions 98
Annex Table 3.A.1. A taxonomy of collective bargaining systems in OECD countries, 1980-2015 145
Annex Table 3.B.1. Effect of collective bargaining systems on labour market performance 152
Annex Table 3.B.2. Effect of collective bargaining systems on unemployment outcomes by group and wage
dispersion 153
Annex Table 3.B.3. Effect of centralisation and co-ordination of collective bargaining systems on labour market
performance 154
Annex Table 3.B.4. Effect of centralisation and co-ordination of collective bargaining systems on
unemployment outcomes by group and wage dispersion 155
Annex Table 3.B.5. Effect of CB systems on employment and unemployment rates: country tournament 156
Annex Table 3.C.1. Correlation of wages and productivity across sectors: The role of collective bargaining:
Detailed results 159
Annex Table 3.C.2. Collective bargaining and productivity growth: A sector-level approach 159
Annex Table 4.A.1. Definition of job demand and job resource variables 216
Annex Table 4.A.2. Definition of workers’ voice arrangements and measures of the quality of the working
environment 222
Annex Table 5.A.1. Non-standard forms of employment included in Figure 5.1. 257

9
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10 
Acronyms and abbreviations
ISO code Country label ISO code Country label

AUS Australia AUT Austria
BEL Belgium CAN Canada
CHL Chile CZE Czech Republic
DNK Denmark EST Estonia
FIN Finland FRA France
DEU Germany GRC Greece
HUN Hungary ISL Iceland
IRL Ireland ISR Israel
ITA Italy JPN Japan
KOR Korea LVA Latvia
LTU Lithuania LUX Luxembourg
MEX Mexico NLD Netherlands
NZL New Zealand NOR Norway
POL Poland PRT Portugal
SVK Slovak Republic SVN Slovenia
ESP Spain SWE Sweden
CHE Switzerland TUR Turkey
GBR United Kingdom USA United States
AES Australian Election Study

CASEN Encuesta de Caracterizacion Socioeconomica Nacional
CAWIE Collectively agreed wages in Europe
COE Characteristics of Employment survey
CPS Current Population Survey
CPS-MORG Current Population Survey Merged Outgoing Rotation Group
CVTS Continuing Vocational Training Survey
EAPS Economically Active Population Survey
ECB European Central Bank
ECS European Company Survey
EEBTUM Employee Earnings, Benefits and Trade Union Membership
EEH Employee, Earnings and Hours survey
ENIGH Encuesta Nacional de Ingresos y Gastos de los Hogares
ENOE Encuesta Nacional de Ocupación y Empleo
EPL Employment protection legislation
ESS European Social Survey
EU-KLEMS EU-level analysis of capital, labour, energy, materials and service inputs data
EU-LFS European Union Labour Force Survey
EWCS European Working Conditions Survey
FWLB Finnish Working Life Barometer

 11
GEIH Gran encuesta integrada de hogares

GSOEP German Socio Economic Panel
HILDA Household, Income and Labour Dynamics in Australia
IAB Institut für Arbeitsmarkt- und Berufsforschung
ICTWSS Institutional Characteristics of Trade Unions, Wage Setting, State Intervention and Social Pacts Database
ILO International Labour Organization
IMF International Monetary Fund
ISCO International Standard Classification of Occupations
ISSP International Social Survey Programme
JMP Juhn-Murphy-Pierce
KLIPS Korean Labor and Income Panel Study
LFS Labour Force Survey
NAICS North American Industry Classification System
OECD Organisation for Economic Co-operation and Development
OLS Ordinary Least Squares
PEC Pacts for employment and competitiveness
PIAAC Programme for the International Assessment of Adult Competencies
PISA Programme for International Student Assessment
QNHS Quarterly National Household Survey
REPONSE Enquête Relations professionnelles et Négociations d'entreprise
SES European Union Structure of Earnings Survey
SMEs Small and medium-sized enterprises
SOC Standard Occupational Classification
SRCV Enquête statistique sur les ressources et conditions de vie
STAN OECD Structural Analysis Database
WERS Workplace Employment Relations Study
WSI Wirtschafts- und Sozialwissenschaftliches Institut
WVS World Value Survey

12 
Executive summary
Collective bargaining systems are key and complex labour market institutions
In all OECD countries, workers and employers associate to express their interests and concerns, as well
as to bargain over the terms and conditions of employment. However, over the last decades, the share of
workers who are trade union members and the reach of collective agreements even beyond union
membership have significantly declined. Despite these trends, collective bargaining, together with workers’
voice, continues to play a key role in the labour market in many OECD countries. Collective bargaining
systems are generally based on a complex set of rules and practices, partly written in national laws and
partly based on longstanding traditions. In order to understand their functioning and role, it is necessary to
look at their different building blocks, and their interactions. These include: The actual level of bargaining
(i.e. the level at which bargaining takes place, firm vs. sectoral level, and the margins firms have to
derogate or to opt out from higher-level agreements); the degree of co-ordination across sectors and
bargaining units; the effective enforcement of collective agreements, and the overall quality of labour
relations.
Co-ordination in wage bargaining is a key ingredient for good labour market

performance
Wage co-ordination across sectors and bargaining units is a particularly important dimension of collective
bargaining. Bargaining systems characterised by a high degree of wage co-ordination across bargaining
units are associated with higher employment and lower unemployment for all workers, compared to fully
decentralised systems. This is because co-ordination helps the social partners to account for the
business-cycle situation and the macroeconomic effects of wage agreements on competitiveness. The
actual level of centralisation is another crucial dimension: Organised decentralised and co-ordinated
systems (i.e. systems where sector-level agreements set broad framework conditions but leave detailed
provisions to firm-level negotiations and where co-ordination is rather strong) tend to deliver good
employment performance and higher productivity. By contrast, the lack of flexibility at firm level, which
characterises centralised bargaining systems, may come at the expenses of lower productivity growth. At
the individual level, there is a wage premium for employees who are covered by firm-level bargaining
compared with those not covered or those covered only by sectoral bargaining while wage dispersion is
on average smallest among workers who are covered by sector-level bargaining compared with systems
based on firm-level bargaining only.
Collective bargaining systems and workers’ voice arrangements also matter for
job quality
This publication also explores the link between collective bargaining systems, workers’ voice
arrangements, and the non-monetary aspects of job quality. In particular, it analyses social partners’

 13
engagement in occupational safety and health, working time, training and re-skilling policies, management
practices, and the prevention of workplace intimidation and discrimination. The quality of the working
environment is higher on average in countries with well-organised social partners and a large coverage of
collective agreements. At firm level, both “direct” and “mixed” forms of voice (where workers’
representatives coexist with direct dialogue between workers and managers) are associated with a higher
quality working environment (compared with the absence of voice). By contrast, the presence of workers’
representatives in firms where there are no parallel means of direct exchange between workers and
managers is not associated with a better quality working environment. These correlations are not evidence
of a causal relationship. They might reflect the fact that employers and managers who create channels of
direct dialogue with their employees are also more likely to engage in improving the quality of the working
environment. By contrast, the presence of solely representative arrangements for voice could be
characteristic of poor social dialogue contexts, where employers are unwilling to engage in direct
exchanges with workers.
Collective bargaining and workers’ voice play an important role in preventing

inequalities in a changing world of work, but they need to adapt
As innovation, globalisation and population ageing transform the world of work, collective bargaining, when
it is based on mutual trust between social partners, can provide a means to reach balanced and tailored
solutions to issues of common concerns. It can ensure that all workers and companies benefit from the
current transformations. It can help formulate solutions to emerging issues (e.g. the use of technological
tools, or work-life balance), and complement public policies in skills needs anticipation, or support to
displaced workers. However, collective bargaining faces old challenges (such as declining collective
bargaining coverage and falling union density) as well as new ones, such as the increasing prevalence of
workers in non-standard employment (i.e. temporary part-time and self-employment) who might not have
access to collective bargaining. In this context, governments might need to intervene to keep bargaining
systems fit for purpose. Fighting misclassification is of particular importance. However, a significant
number of workers may still fall in a “grey zone” between the definitions of employee and self-employed,
where genuine ambiguity exists about their employment status. Regulations might need to be adapted to
extend collective bargaining rights to those workers, who share vulnerabilities with salaried employees,
and to some self-employed workers in unbalanced power relationships.
Making the most of collective bargaining and workers’ voice to address old and
new labour market challenges
This publication argues that, despite undeniable difficulties, collective bargaining and workers’ voice
remain important and flexible instruments that should be mobilised to help workers and companies face
the transition and ensure an inclusive and prosperous future of work. The need for co-ordination and
negotiation mechanisms between employers and workers is heightened in the changing world of work.
Whether considering key issues such as wage inequality, job quality, workplace adaptation to the use of
new technologies, or support for workers displaced by shifts in industries, collective bargaining and
workers’ voice can complement public policies to produce tailored and balanced solutions. The alternatives
to collective bargaining are often either state regulation or no bargaining at all, since individual bargaining
is not always a realistic option as many employees are not in a situation to effectively negotiate their terms
of employment with their employer. Negotiating Our Way Up provides a resource for policy makers, trade
unions and employers’ organisations interested in understanding how collective bargaining and workers’
voice can be used to complement public regulation in shaping evolving labour markets.

14 
1 Overview: Collective bargaining and

workers’ voice can be strong
enablers of inclusive labour
markets
Sandrine Cazes, Andrea Garnero and Chloé Touzet
Collective bargaining and workers’ voice are key labour rights and important
labour markets institutions that matter for job quality. Collective bargaining,
providing that it has a wide coverage and is well co-ordinated, fosters good
labour market performance. Collective bargaining and workers’ voice have
however been under increasing pressure over the past decades, as trade
union density and collective bargaining coverage declined, non-standard
forms of work developed, and employment relationships became more
individualised. Despite these challenges, collective bargaining and workers’
voice still have a role to play in preventing inequalities in a changing world of
work. To this end, collective bargaining systems need to be adapted to better
balance flexibility and inclusiveness.

 15
Collective bargaining and workers’ voice are key labour rights, but also enablers of inclusive labour market.
Yet, their capacity to deliver is being increasingly questioned by the general weakening of labour relations
in many countries, the flourishing of new − often precarious – forms of employment and a tendency towards
the individualisation of employment relationships. At the same time, the labour market is in a flux. The
digital transformation, together with globalisation and demographic changes are re-shaping it, offering new
job opportunities but also creating challenges for many workers to navigate these deep and rapid changes.
In this context, how can collective bargaining and workers’ voice contribute to promote better labour market
outcomes, including for those in new forms of employment and business?
Since the 1980s, collective bargaining systems have been under increasing pressure. Trade union density
(the share of workers who are union members) has declined across OECD countries losing more than half
of its reach from 33% on average in 1975 to 16% in 2018. This long-standing decline is observed in a large
majority of countries, although union density increased in two countries, Iceland and Belgium, and was
relatively stable in Canada, Korea and Norway. Similarly, the share of workers covered by a collective
agreement shrank to 32% on average in the OECD area in 2017 from 45% in 1985. The drivers of the
decline in union density are numerous and vary between countries and over time. Contrary to a commonly
held belief, the combined contributions of demographic changes and structural shifts, such as the shrinking
of the manufacturing sector, are small and leave most of this declining trend unexplained. However, while
there is no single storyline of union density decline across OECD countries, the weakening of social
partners poses the common risk for all countries: that they find themselves without relevant and
representative institutions to overcome collective action problems and strike a balance between the
interests of workers and firms in the labour market.
The risk is all the more serious given that the conflicts and aspirations that collective bargaining and
workers’ voice were first developed to address may deepen in the future. Providing that institutions are
well designed, collective bargaining systems can help employers and unions find mutually beneficial
solutions and establish a level-playing field for all companies and workers. However, fruitful exchanges
between social partners are not a given and collective bargaining systems need to strike a balance
between inclusiveness and flexibility. Without underestimating the challenges ahead, this report argues
that collective bargaining can and should be mobilised to address issues emerging in the changing world
of work; in fact, these changes also offer social partners opportunities to revitalise collective representation
and actions.
1.1. How do collective bargaining systems and workers’ voice arrangements

function in OECD countries?
In OECD countries, 82 million workers were members of trade unions in 2018 and about 160 million were
covered by collective agreements concluded at national, regional, sectoral, occupational or firm level.
Trade union density varies considerably between OECD countries, ranging from 4.7% in Estonia to 91% in
Iceland in 2018. The latest data available show that, on average, 59% of workers in OECD countries were
employed in a firm that was a member of an employer organisation and this share has been relatively
stable over the past 15 years. Medium-sized and large firms are more likely to be represented by
employers’ organisations than small firms in most countries. Collective bargaining coverage is generally
high and stable in countries with multi-employer bargaining (i.e. where agreements are signed at sectoral
or national level), where the share of firms that are members of an employer association is high, or where
mechanisms exist to extend coverage to employees beyond those working for firms that are members of
a signatory employer association. In countries where collective agreements are signed mainly at firm level,
coverage is lower and goes hand-in-hand with trade union density. Workers in small firms are less likely
to be covered as these firms often do not have the capacity to negotiate a firm-level agreement, often
because there is no worker representation in the workplace.

16 
Beyond these general patterns, Chapter 2 of this report shows that it is essential to examine the complex
machinery of national bargaining systems in detail and account for their diversity across countries. Notably,
it considers four main building blocks of collective bargaining systems: i) the level of bargaining at which
agreements are negotiated (e.g. firm, sector or national level); ii) the flexibility to derogate or opt-out from
parts of higher-level agreements; iii) the degree of co-ordination between social partners; and iv) the
capacity of social partners to enforce collective agreements and the quality of labour relations in
OECD countries.
In two-thirds of OECD countries, collective bargaining takes place predominantly at firm level. Sectoral
agreements play a significant role in continental European countries. Beyond the so-called “predominant”
level of bargaining, countries differ in the degree of centralisation or decentralisation of their bargaining
system, i.e. the scope for firm-level negotiations to modify the terms set out in higher-level agreements.
Collective bargaining systems also differ greatly in the degree of co-ordination between bargaining
units – essentially the extent to which common (wage) targets are pursued and/or minor players follow
what major players decide. Co-ordination is strong, at least in certain sectors, in Austria, Denmark,
Germany, the Netherlands, Norway, Sweden and Japan but tends to be weak (or absent) in other
OECD countries.
The quality of labour relations as assessed by senior executives and the degree of trust in trade unions by
people aged 15 or more vary across OECD countries. Managers consider labour relations most
co-operative in Switzerland and least co-operative in Korea. At the same time, 40% of persons aged 15 or
more declare that they trust trade unions across OECD countries, from 65% in Finland and Denmark to
25% in the United States, Slovenia and Mexico. Interestingly, there is no clear link between these findings
and any specific bargaining model nor do they show any clear trend over the past 10-15 years. The number
of workdays lost due to strikes and lockouts has decreased markedly since the 1990s in most OECD and
accession countries.
Beyond collective bargaining, OECD countries also vary in terms of workers’ voice arrangements at
workplace or company level. “Voice”, in this context, corresponds to the various institutionalised forms of
communication between workers and managers to address collective problems. Voice also provides
employees with an opportunity to solve issues emerging in the workplace through communication with
management. Voice is often mediated through representative institutions, such as local trade union
representatives, works councils or workers representatives, or it can materialises at the workplace through
the organisation of direct exchanges between workers and managers (e.g. via regular town hall meetings
and/or direct consultations). A key difference between “direct” and “representative” forms of voice is the
legal protections and rights attached to the status of workers’ representatives, notably the protection
against retaliation and firing, and information and consultation rights. Therefore, direct and representative
forms of voice are not substitutes. In European countries, “mixed” forms of voice, combining both
representation and direct dialogue are the most prevalent. The proportion of workers covered by
mixed-voice systems is higher in well-coordinated multi-level bargaining systems.
1.2. What role does collective bargaining play in labour market performance?
Most of the early empirical work looking at the effect of collective bargaining on labour market and
economic performance is based almost exclusively on summary-level indicators such as the predominant
level of bargaining and the degree of wage co-ordination. However, these analyses do not capture the
complexity and diversity of bargaining systems described in Chapter 2. For instance, while wages are
typically negotiated at sectoral level in Denmark, Germany, France, Portugal or Italy, there are large
differences across these countries in the use of extensions, derogations and opt-out clauses as well as in
co-ordination practices that all contribute to significantly different labour market outcomes.

 17
Using the best micro- and sector-level data available and a new categorisation of collective bargaining
systems based on the analysis in Chapter 2, Chapter 3 analyses the link between bargaining systems and
employment, wages and productivity. At the individual level, the chapter shows the presence of a wage
premium for employees who are covered by firm-level bargaining compared with those not covered or
those covered only by sectoral bargaining. By contrast, wage inequality is higher in countries with firm-level
bargaining only or no collective bargaining, compared with countries where workers are covered by
sectoral bargaining.
At country level, the chapter highlights the key role of wage co-ordination as a tool to help the social
partners account for the business-cycle situation and the macroeconomic effects of wage agreements on
competitiveness. Co-ordinated bargaining systems are linked with higher employment and lower
unemployment (including for young people, women and low-skilled workers) than systems where
bargaining happens only at firm level. Systems where bargaining takes place predominantly at sectoral
level and where there is no co-ordination are somewhat in between. In countries where wage co-ordination
is strong and stable, it tends to be supported by employers’ associations, since it contributes to moderate
wage growth, but also by trade unions, since it ensures high levels of employment.
Chapter 3 also shows that bargaining systems that leave little scope for firms to tailor the conditions set in
higher-level agreements tend to be associated with lower productivity growth, if coverage of agreements
is high. This result suggests that the lack of flexibility at firm level, which characterises centralised
bargaining systems, may come at the expense of lower productivity growth. By contrast, strong wage
co-ordination notably in the form of pattern bargaining (where the target for wage negotiation is set by one
leading exposed sector, and followed by others) in systems that are not centralised does not have such
adverse effect on productivity.
While many OECD countries have taken steps towards decentralisation in the past two decades, Chapter 3
shows that the best outcomes in terms of employment, productivity and wages seem to be reached when
sectoral agreements set broad framework conditions but leave detailed provisions to firm-level
negotiations. However, other forms of decentralisation that simply replace sectoral with firm-level
bargaining, without co-ordination within and across sectors, tend to be associated with somewhat poorer
labour market outcomes.
Therefore, the main challenge for social partners and governments is to adjust collective bargaining
systems to achieve better outcomes in terms of employment, job quality and inclusiveness, while leaving
scope for firms to adapt agreements to their own situations. The exact nature of this challenge and the way
it is addressed will differ from country to country and depend to an important extent on existing national
collective bargaining traditions. Chapter 3 provides a thorough discussion of the options available as well
as their strengths and weaknesses.
1.3. How can collective bargaining and workers’ voice contribute to improve job
quality?
The link between collective bargaining and wages has been widely investigated. By contrast, the
relationship between, workers’ voice arrangements and the non-monetary aspects of job quality have not
been thoroughly investigated, largely because of lack of comparable data on these aspects of job quality.
This is an important issue, not only for workers and for unions, but also for employers since poor quality
jobs may result in increased labour turnover, absenteeism, more health problems, and lower productivity.
Beyond negotiations on wages, social partners are involved in many other areas that matter for job quality.
By providing support, guidance and access to up- and re-skilling for workers who lose their jobs in the
event of restructuring and mass-layoffs, they can improve workers’ labour market security (the risk of job
loss and its economic cost for workers). Chapter 4 explores how collective bargaining systems and the

18 
variety of existing workers’ voice arrangements shape one key pillar of job quality, namely the quality of
the working environment.
Data limitations prevent the empirical assessment of country-level relationships between the quality of the
working environment and collective bargaining systems beyond a simple descriptive analysis. Measures
of the quality of the working environment developed following the OECD Job Quality Framework are on
average higher in countries with well-organised social partners and a large coverage of collective
agreements – where the number of job resources available to workers (e.g. autonomy at work, training
and working time flexibility), in particular, is higher.
Limitations apply to the empirical assessment of the effect of workers’ voice arrangements on job quality
at the firm level. The direction of causality between the two is hard to discern from a theoretical perspective.
Indeed, if the presence of workers’ voice arrangements can theoretically increase job quality, strained
workers with poor working conditions might also self-select into unions. Unions themselves might
self-select into firms where working conditions lag behind and can be improved through union action.
Bearing these caveats in mind, Chapter 4 shows that both direct and “mixed” forms of voice (where
workers’ representatives coexist with direct dialogue between workers and managers) are associated with
a higher quality of the working environment (compared with the absence of voice). By contrast, the
presence of workers’ representatives in firms where there are no parallel means of direct exchange
between workers and managers is not associated with a better quality of the working environment. Similar
correlations are found when focusing on measures related to occupational safety and health, working time
or management practices. These correlations cannot be taken as evidence of causal link between workers’
voice arrangements and non-monetary job quality. The positive association between mixed voice and
quality of the working environment might reflect the fact that employers and managers who create channels
of direct dialogue with their employees are also more likely to engage in improving the quality of the working
environment. By contrast, the presence of solely representative arrangements for voice could be
characteristic of poor social dialogue contexts, where employers are unwilling to engage in direct
exchanges with workers, but are either mandated by law to have representative institutions, or facing
strained workers seeking representation to express their discontents, while benefiting from the legal
protections attached to representative voice.
The chapter also presents qualitative evidence on trade unions’ and employers’ involvement in five
dimensions of the quality of the working environment: occupational safety and health, working time,
training, work organisation and management practices, and the prevention of intimidation and
discrimination. The implementation of high standards of safety and health provisions, as well as training or
work organisation and management practices, remains more challenging in small and medium-sized
enterprises. The chapter includes examples of how social partners and policy makers in OECD countries
have tried extending best practices to all types of firms, which could inspire similar initiatives in other
contexts.
1.4. How can collective bargaining systems be adapted to remain fit for purpose
in a changing world of work?
In addition to the long-standing decline of trade union density mentioned above, the growing prevalence
of various forms of non-standard employment (i.e. temporary , part-time and self-employment) in a number
of countries poses a new challenge to collective bargaining, as non-standard workers (i.e. workers without
a permanent contract) are less likely to be unionised than standard workers. This is the case even when
controlling for composition effects (linked to gender, age, education, industry, occupation, firm size and
part-time vs. full-time employment).

 19
This under-representation partly reflects the practical difficulties of organising non-standard workers (who
might be more fearful of retaliation when joining a union or have limited attachment to a particular
workplace because of frequent job moves), as well as the fact that collective bargaining has historically
developed around standard employees. It also results from legal obstacles to collective bargaining for
some non-standard workers such as the self-employed. While labour law gives all salaried
employees – whether in a standard or non-standard relationship – an undisputed legal right to collective
bargaining, extending this to workers usually classified as self-employed may be seen as infringing
competition law, and in particular anti-cartel legislation. Yet the share of self-employed (often own-account)
workers who might thus be barred from accessing collective bargaining, has substantially increased in a
number of OECD countries in recent years (OECD, 2018[1]).
These practical and legal barriers to collective bargaining pose a serious problem since collective
bargaining is a particularly useful tool to address the challenges arising from mega-trends that are
transforming labour markets – digitalisation, globalisation and population ageing. Collective bargaining can
indeed ensure that all workers and companies, including small and medium-sized enterprises, reap the
benefits of technological innovation, organisational changes and globalisation, in a context of increased
competition and fragmentation of production. It can help formulate solutions to emerging issues, such as
the use of technological tools, or work-life balance. And it can complement public policies in enhancing
labour market security and adaptability, particularly through social partners’ role in the anticipation of skills
needs or support to workers who lose their jobs.
Therefore, collective bargaining systems can help smooth the transition to an increasingly complex labour
market. But making the most of collective bargaining in the future world of work will require some
governmental intervention, notably to lift the legal barriers to collective bargaining. As the incidence of false
self-employment is rising (OECD, 2019[2]), enforcing the correct classification of workers is of particular
importance to ensure that workers benefit from the protection and rights to which they are entitled. A
significant number of workers may still fall in a “grey zone” between the usual definitions of employee and
self-employed, where genuine ambiguity exists about their employment status. For those workers, who
share vulnerabilities with salaried employees, and for some self-employed workers in unbalanced power
relationships, it may be necessary to adapt existing regulations in order to extend collective bargaining
rights to them. In fact, several OECD countries have already sought to grant collective bargaining rights to
some of these workers through specific adjustments to labour law or explicit exemptions to laws prohibiting
cartels.
Beyond government actions, there are many examples showing that social partners can − and actually
do − adjust, develop new strategies and reshape existing institutions, to adapt to changing labour markets.
For instance, some unions have reacted to the rising prevalence of non-standard forms of employment by
adapting their own structures, changing their legal status to allow self-employed workers to join, or setting
up dedicated branches for non-standard workers. They have diversified their strategies, e.g. by engaging
in corporate campaigns for recognition in certain companies or the legal battle against workers’
misclassification. And collective bargaining has actually taken root in some sectors with a high prevalence
of non-standard work, such as the cultural and creative industries.
New vehicles for representing workers’ interests have developed in some OECD countries, such as Worker
Centers or the Freelancers Union in the United States, or workers’ co-operatives in some European
countries. Yet while these forms of workers’ organisations can improve links and communications between
non-standard workers, they cannot replace unions. In particular, they do not have the legal mandate to
bargain collectively on behalf of their members or the ability to deliver on negotiated agreements.
Therefore, they can complement unions rather than be a substitute to them, and co-operation between
traditional and new forms of workers’ organisation is now emerging in some contexts.
Employers’ organisations are also being tested by changes in the world of work. They have an interest in
ensuring a level-playing field for their members in the face of new competitors, such as digital platforms,

20 
which often circumvent existing labour regulations by claiming that they are matchmakers rather than
employers. Yet a few innovative collective agreements have also recently been signed between unions
and companies – including digital platforms – in European OECD countries, although they remain very
limited. Platforms have also taken some initiatives to allow workers to express their concerns, to pre-empt
the introduction of new legislation on the way they operate.
Chapter 5 highlights several policy directions that can help policy makers to support the efforts of social
partners to expand their membership and to ensure that collective bargaining can be fully mobilised to face
the challenges emerging in the future world of work. These notably include enforcing the correct
classification of workers and reviewing labour market and competition policies to allow access to collective
bargaining for some self-employed workers.
1.5. Making the most of collective bargaining and workers’ voice to address old
and new challenges: The road ahead
Despite undeniable difficulties, this report argues that, if well designed and implemented, collective
bargaining and workers’ voice remain important instruments to deal with both old and new challenges in
the labour market. The need for co-ordination and negotiation mechanisms between employers and
workers has, if anything, increased in the changing world of work.
The past few decades have shown that in many cases, the alternatives to collective bargaining are often
either state regulation or no bargaining at all, since individual bargaining is not always a realistic option as
many employees are not in a situation to effectively negotiate their terms of employment with their
employer. Whether considering issues of wage distribution, job quality, workplace adaptation to the use of
new technologies, or support for workers who lose their jobs following shifts in industries, collective
bargaining and workers’ voice arrangements remain unique tools enabling governments and social
partners to find tailored and fair solutions. To make the most of this tool, state regulations need to leave
space for collective bargaining, and local representative structures and promote (or not at least not
discourage) self-organisation by workers and employers. The latter is a precondition for an inclusive and
flexible labour market.
However, to maintain the effectiveness of collective bargaining, national systems need to be adapted to
the new challenges and the right balance has to be found between inclusiveness and flexibility for
stakeholders to adapt rules and regulations to their specific conditions. An important question is what role
governments can and should play in shaping the evolution of collective bargaining systems. Experience
shows that even apparently well-crafted reforms of collective bargaining may be partially or totally
ineffective if they fail to change practices on the ground and the overall bargaining culture. Or, they may
sometimes lead to major and often unintended shifts in bargaining behaviour (e.g. a total blockage of
collective bargaining), even if the initial intention was only to change specific elements of the system. The
issue of how to design and implement collective bargaining reforms in particular contexts and to ensure
that workers, unions and employers adhere to the reforms, thus guaranteeing their effectiveness, should
be a major focus for future work. This report aims to lay the groundwork for this task.

 21
References
OECD (2019), OECD Employment Outlook 2019: The Future of Work, OECD Publishing, Paris, [2]
https://dx.doi.org/10.1787/9ee00155-en.
OECD (2018), Good Jobs for All in a Changing World Of Work: The OECD Jobs Strategy, OECD [1]
Publishing, Paris, https://doi.org/10.1787/9789264308817-en.

22 
2 Collective bargaining systems and

workers’ voice arrangements in
OECD countries
Sandrine Cazes, Andrea Garnero, Sébastien Martin and Chloé Touzet
This chapter provides a comprehensive and up-to-date review of collective

bargaining systems and workers’ voice arrangements across
OECD countries. Despite the fall in trade union density and collective
bargaining coverage in the last 40 years, collective bargaining remains a key
labour market institution. Yet, the understanding of this key institution is
limited by the fact that collective bargaining systems are often described with
crude indicators and oversimplified in the literature. This chapter describes
in more details the features of collective bargaining systems that are
particularly important for labour market outcomes.
such data by the OECD is without prejudice to the status of the Golan Heights, East Jerusalem and Israeli settlements
in the West Bank under the terms of international law.

 23
In Brief
Key Findings
Across OECD countries, workers and employers can associate to express their interests and concerns,
as well as to bargain over the terms and conditions of employment. However, in the last decades, this
process of collective representation and negotiation has been tested by a series of challenges. Policy
reforms have modified the scope and functioning of collective bargaining systems. At the same time,
the coverage of collective bargaining, and the number of workers who are members of trade unions
have fallen.
When not simply overlooked, the role of collective bargaining as a labour market institution is often
based on crude indicators of trade union density. Building on a rich set of survey and administrative
data, going back to the 1960s, this chapter sheds new light on collective bargaining systems currently
in place in OECD countries, taking into account their diversity, their complexity and their internal
institutional complementarities. In particular, this chapter shows that:
 In 2018, about 82 million workers were members of trade unions in OECD countries, and about
160 million were covered by collective agreements concluded either at the national, regional,
sectoral, occupational or firm level. Trade union density, the proportion of employees who are
union members, varies considerably across OECD countries, ranging from 4.7% in Estonia to
91% in Iceland in 2018.
 On average, 16% of employees were members of trade unions in 2018, down from 33% in 1975.
While this decline characterises a majority of countries, union density has been relatively stable
since the mid-1970s in Canada, Korea and Norway, and has increased in Iceland and Belgium.
 Decomposition analyses reveal that trade union density decline is a multi-faceted phenomenon
that varies across countries and time: there is no single story of union density decline across
OECD countries. Future research on the issue should focus on country-specific analyses.
 In particular, contrary to a commonly held belief, the contribution to union density decline of
demographic transformations affecting the composition of the workforce, and of changes
affecting the labour demand (such as the shrinking of the manufacturing sector) is small. It
leaves the bigger part of the observed decline unexplained. Neither is union density decline
linked to a declining propensity to unionise with passing generations in most countries studied.
 The latest data available for OECD countries show that, on average, 59% of workers were
employed in a firm that is member of an employer organisation and this share has been relatively
stable over the last 15 years. Medium and large firms tend to be better represented by employer
organisations than small firms, while sectoral coverage varies significantly across countries.
 Declining union density has been accompanied by a reduction of the share of workers covered
by a collective agreement, which has shrunk to 32% in 2017 from 46% in 1985 on average in
OECD countries. The decline was strongest in Central and Eastern European countries, with
steep decreases also observed in Australia, New Zealand and the United Kingdom, and, more
recently, in Greece. Coverage has been relatively stable in most continental European countries,
except for Germany where it has decreased significantly since reunification in 1990.
 Overall, collective bargaining coverage is high and stable only in countries where multi-employer
agreements (i.e. at sectoral or national level) are negotiated and where the share of firms that

24 
are members of an employer association is high, or where agreements are extended also to
workers working in firms which are not members of a signatory employer association. In
countries where collective agreements are signed mainly at firm level, coverage tends to go
hand-in-hand with trade union density. Workers in small firms are generally less likely to be
covered, as these firms often do not have the capacity to negotiate a firm-level agreement, or a
union or another form of worker representation is absent in the workplace.
Using detailed information collected through OECD policy questionnaires addressed to Labour
Ministries and social partners, the chapter provides a detailed picture of collective bargaining systems
by unpacking their different building blocks. In particular, the chapter shows that:
 In two-thirds of OECD countries, collective bargaining takes place predominantly at firm level.
Sectoral agreements play a significant role only in continental European countries. However,
this does not tell the whole story about the actual degree of centralisation or decentralisation as
countries differ greatly in terms of the flexibility for firm-level agreements to modify the terms set
out in higher-level agreements. In some contexts (particularly Scandinavian countries), sectoral
agreements define the broad framework but leave considerable scope for bargaining at the firm
level. In other countries (such as Germany and Austria and more recently Spain), sectoral
agreements dominate but they leave room for firm-level agreements to apply less favourable
terms for employees, either in a generalised way or only temporarily in case of a crisis. In a third
group of countries (including Italy, Slovenia and, despite the 2012 reform, Portugal), firm-level
bargaining remains limited and in most cases strictly regulated by higher-level agreements.
 Collective bargaining systems across OECD countries also differ greatly in the degree of
co-ordination between bargaining units – essentially the extent to which common (wage) targets
are pursued and/or minor players follow what major players decide. Co-ordination is a key factor
behind macro flexibility (i.e. the ability of the economy to adjust to macroeconomic shocks) and
is strong, at least in certain sectors, in Austria, Denmark, Germany, the Netherlands, Norway
and Sweden, and also in Japan.
 Workers’ voice is often mediated through representative institutions – such as local trade union
representatives, works councils, and/or workers’ delegates – whose prerogatives range from
information, to consultation and co-determination in some contexts. At company level,
employees’ and/or trade unions’ can also be present in supervisory and management boards.
Beyond representation, voice also materialises in practice through the organisation of direct
exchanges between workers and managers (e.g. via regular town hall meetings and/or direct
consultations). The two forms of voice, however, are not substitutes, notably because the legal
protections and rights attached to the status of workers’ representatives are absent in direct
voice. In European countries, mixed forms of voice, combining both representation and direct
dialogue are the most prevalent. The proportion of workers with access to mixed-voice systems
higher in well-co-ordinated bargaining systems.
 There is significant variation across countries in the overall quality of labour relations as
assessed by senior executives and the trust in trade unions among the population at large.
These factors are not apparently linked to any specific model of bargaining nor do they show
any clear trend over the last 10-15 years. In most OECD countries, the number of workdays lost
due to strikes and lockouts has decreased markedly since the 1990s.
There are no comparable and comprehensive indicators on the level of enforcement of collective
agreements across countries. However, where estimates are available, compliance with negotiated
wage floors is shown to be far from perfect.

 25
Introduction
About 82 million workers are members of trade unions in OECD countries, and about 160 million1 are
covered by collective agreements concluded either at the national, regional, sectoral, occupational or firm 2
level. In all OECD countries, workers and employers associate to express their interests and concerns and
to negotiate the terms and conditions of employment. This process of collective representation, negotiation
and decision-making is a key labour market institution and, together with the “right to organise”, is a
“fundamental principle and right at work” set by the ILO Convention No. 98 and a key pillar of social
dialogue3 at national level.
In the last four decades, collective bargaining systems have weakened. The long-standing decline in union
membership rates and increasing individualisation of employment relationships combined with policy
reforms fostering the decentralisation of collective bargaining, have severely tested existing collective
bargaining systems. Yet as traditional institutions of labour relations are under increasing pressure, the
need for mechanisms to overcome conflicts and reach a balance between the interests of workers and
employers’ will not fade away. Individual bargaining is not a realistic alternative to collective bargaining as
only few employees can effectively negotiate their terms of employment with their employer. Rather, in the
absence of functioning collective bargaining, countries are faced with a choice between no negotiation
mechanisms at all (which could be particularly problematic in situations where some employers have
monopsony power) and state regulation (which might not always allow reaching the best compromise
between a diversity of interest).
Even though these general patterns have been widely noted, there is a lack of detailed, comprehensive
and comparable information on the evolving nature and scope of collective bargaining in OECD countries.
For example, reliable and up-to-date information on the membership of unions and employer organisations
and collective bargaining coverage across countries and sectors is limited. Up-to-date and systematic
analyses of the drivers of trade union density decline across OECD countries are also missing.
Moreover, standard cross-country analyses of collective bargaining and the summary indicators they
typically rely on often do not provide as precise an indication of the actual functioning of collective
bargaining as would be desirable. Most of the early empirical work on collective bargaining has been
conducted at the macroeconomic level, with an almost exclusive focus on the predominant level of
bargaining and the degree of co-ordination. For example, the policy assessment and recommendations of
the original and reassessed OECD Jobs Strategy (1994 and 2006, respectively) largely focused on the
degree of centralisation of wage bargaining and co-ordination among unions and employer association.
The Jobs Strategy suggested that both centralisation and decentralisation could perform well, while a
system dominated by sectoral bargaining lacking co-ordination may deliver worse results, as previously
had been argued by Calmfors and Driffill (1988[1]).
However, the evidence of recent decades demonstrates the need for a more nuanced picture of how
institutional settings in collective bargaining affect labour market and economic outcomes. Indeed, formally
similar systems can lead to very different outcomes, depending on the specific ways the system works in
practice. For instance, in Denmark, Germany, France, Portugal or Italy, wages are typically negotiated at
the sectoral level, but the large differences in the rules and uses of extensions, derogations and opt-out
clauses and co-ordination practices lead to significant differences in labour market outcomes, but also in
the level of trust in the national collective bargaining system and its functioning.
Therefore, this chapter sheds new light on collective bargaining by providing an updated and
comprehensive review of the main features of collective bargaining going beyond the usual indicators,
while also documenting recent trends and exploring their causes. The analysis relies on the detailed
information collected through the OECD policy questionnaires that were addressed to Labour Ministries,
trade unions and employer organisations (see Box 2.1 for more information) and on a rich set of survey
and administrative data. The more finely grained description of collective bargaining that emerges will

26 
enable better analyses of how collective bargaining affects labour market performance. The chapter is
organised as follows: Section 2.1 introduces the main functions and building blocks of collective bargaining
systems in place in OECD countries. Section 2.2 presents a detailed and up-to-date portrait of the actors
and the scope of bargaining systems. In particular, it provides comparable estimates of trade union density
and employer organisation density by country, but also by sector, firms’ and workers’ characteristics.
Section 2.3 looks into the drivers of trade union density decline across OECD countries. Section 2.4
provides comparable estimates of collective bargaining coverage by country. It discusses the application
of agreements beyond the signatory parties through erga omnes clauses and administrative extensions as
well as those regulating the duration of collective agreements. Section 2.5 unpacks collective bargaining
systems into their various components. It considers the degree of centralisation, the mechanisms linking
different bargaining levels and the use of derogations and opt-out clauses. The different modes and degree
of bargaining co-ordination found in OECD countries are also explored together with the actual
enforcement of agreements and the quality of labour relations. Section 2.6 describes the types of workers’
voice arrangements that are present at firm level. Section 2.7 provides a summary comparison of the
different national collective bargaining systems in OECD countries. It intends to provide a detailed portrait
of the system as a whole, rather than just as the sum of its parts. Finally, the last section concludes by
discussing the main challenges ahead for collective bargaining systems.
2.1. The functions and features of collective bargaining systems
2.1.1. The functions of collective bargaining
From the perspective of workers, collective bargaining aims at ensuring a fair sharing of the benefits of
training, technology and productive growth (inclusive function), at maintaining social peace (conflict
management function), and at guaranteeing adequate conditions of employment (protective function). 4
Indeed, while often considered mainly as a wage setting institution, collective bargaining also plays an
important role for setting other conditions of employment such as job security, working-time regulation,
occupational safety and health, provision or access to training (Chapter 4 explores in more details the
effect of collective bargaining on these non-monetary aspects). Unions and employer organisations also
provide important services to their members such as legal support or public advocacy.
Collective bargaining can also have an impact on wage dispersion and income inequalities (e.g. by
affecting employment but also through its influence on management pay at firm level and the tax and
benefit system at country level), unemployment levels and competitiveness as well as the way labour
market responds to unexpected shocks (see Chapter 3).
Finally, collective bargaining can improve the quality of the employment relationship between workers and
firms. It can be a useful tool for self-regulation between workers and employers and bring more stable
labour relations and industrial peace, leading to a more efficient allocation of resources, greater motivation
and ultimately productivity.
Beyond ensuring those functions for workers, collective bargaining is also a key tool of market control,
i.e. reining in wage competition between companies or, on the opposite, limiting the monopsony power of
firms which in some cases may profit from a lack of bargaining power of workers. It can increase incentives
for companies to invest in innovation, if the presence of a bargaining setting prevents the option of
increasing profits by simply reducing wages.
Collective bargaining can also help correcting market failures (such as asymmetry of information and of
bargaining power between workers and employers, possibly reflecting monopsony and other labour market
frictions). It reduces transactions costs involved in individual bargaining. It can ensure that workers’

 27
requests for pay to increase with productivity are heard therefore preventing excessive turnover of staff,
and limiting the extent of costly procedures for handling grievances and complaints.
By contrast, economic theory argues that collective bargaining can introduce market distortions (e.g. “rent
seeking behaviour”) by strengthening the power of insiders – both workers (e.g. those with full-time
permanent contract) and firms (e.g. companies already operating in the market). When it comes to
workers, the logic is that unions are less likely to take the interests of outsiders (e.g. less-skilled, temporary
or young workers or young/small firms) into account. However, empirical evidence backing this theory is
scarce. Research based on the content of collective agreements shows that the extent to which concerns
from outsiders are taken into account does not depend on membership composition (Benassi and Vlandas,
2016[2]). Research in Canada showed that union wage premiums are in fact significantly larger for women,
Indigenous persons, non-standard workers, young workers, and new immigrants; while union wage
premiums have declined in general over the last two decades in Canada, they have grown amongst
women, non-standard workers, and young workers (Gomez and Lamb, 2016[3]). Finally, the recourse to
non-standard workers (e.g. temporary workers or agency workers) is found to be higher in unionised
workplaces in some studies (Salvatori, 2009[4]), but not in others (Gramm and Schnell, 2001[5]; Autor,
2003[6]). Besides, these associations, where observed, do not back the insider/outsider theory insofar as
they do not disentangle between the effect of union and management in hiring decisions.
The overall effect of collective bargaining on economic performance largely depends on the specific
features of the system of each country, how they interact with other key parameters of labour market
institutions, such as employment protection or minimum wage legislation, but also on prevailing
macroeconomic and labour market conditions and policies. Chapter 3 explores the effect of collective
bargaining on labour market performance in more details.
Finally, social dialogue can constitute an efficient tool to promote effective consultation and implementation
of structural reforms. When social dialogue is well organised and representative, it can help manage and
reduce the extent of any trade-offs between different policy objectives.
2.1.2. The building blocks of collective bargaining
Collective bargaining systems are generally characterised solely based on the (predominant) level at which
collective agreements are negotiated (firm level, sector/branch level and the national/cross-sectoral level),
and the degree of co-ordination within and between social partners. This is not sufficient to reflect the
granularity of the different systems, especially among those where bargaining predominantly takes place
at the sectoral level. Beyond bargaining level and coordination, other building blocks of collective
bargaining systems need to be integrated to the analysis. Figure 2.1 sketches these key components of
collective bargaining systems, which should be taken into account for a comprehensive comparison of
national systems:
First, the representativeness of trade unions and employer organisations, measured as the share of
workers (firms) who are members of trade unions (employer organisations), as well as the share of workers
covered by collective agreements, are key indicators of the strength of social partners and the scope of
the bargaining systems. However, they are not enough on their own: the rules governing the administrative
extension of collective agreements beyond the signatory parties, and the frequency with which these
extensions are used, are also critical determinants of the coverage of collective agreements.
Second, while the predominant level of bargaining (e.g. firm level, sector/branch level or
national/cross-sectoral level) defines where parties negotiate, it does not fully capture the actual degree of
centralisation or decentralisation. The latter also depends on the rules governing the hierarchy between
the different levels, and the possibility for firms to derogate from higher-level agreements or to opt-out of
their own agreement in case of economic difficulties. In particular, systems based on sectoral or
national/cross-sectoral level bargaining are not necessarily centralised. They can be, if they leave no or

28 
little room to modify the terms of agreements to lower-level agreements; or they can be decentralised but
in an organised way when firm-level agreements have a significant role in determining the terms of
employment but are subject to specific conditions set either by law or by the social partners themselves.
Third, the presence and degree of different forms of co-ordination within and between social partners is
also very important to differentiate between systems producing totally independent and atomised
negotiations, and those ensuring some synchronisation of different bargaining units when setting their
strategy and targets.
Finally, the quality of labour relations, in particular the level of trust between social partners, as well as the
enforcement capacity of the terms set in collective agreements, and the ability of employer organisations
and trade unions to control the behaviour of their constituency at lower levels, can make a difference
between formally similar systems.
Figure 2.1. The main building blocks of collective bargaining systems

Degree of centralisation
Level(s) of bargaining Firm Sectoral National

Representativeness of social partners
Degree of flexibilty
Organised
(extensions, opt-out and Decentralisation Centralisation
Bargaining coverage
decentralised
favourability principle)
Degree of co-ordination No co-ordination Co-ordination

Governance
Enforcement capacity Poorly enforced Enforced and/or high

and quality of labour and/or low quality of quality of labour
relations labour relations relations
2.2. The actors of collective bargaining
2.2.1. Trade unions
Trade (or labour) unions are voluntary organisations of workers that are present in all OECD countries.
Sixteen per cent of employees are members of a union on average across OECD countries. However,
trade union density, the proportion of employees who are union members, varies considerably across
OECD countries, going from 4.7% in Estonia, to about 65% in Sweden, Denmark and Finland and 91% in
Iceland.
Trade union density also varies considerably across workforce groups (Figure 2.2). On average across
OECD countries, public administrations workers are those most likely to be unionised (Panel A) but only
represent 13% of total union members (Panel B). Those working in the good-producing sector (mining,

 29
manufacturing, constructions and energy and electricity supply) and in social and personal services
(including education and health) respectively represent 25% and 35% of total union members. There are
however significant differences in terms of composition across countries: correcting for the various sectors’
weight in the economy, employees in the good-producing sector still represent a much higher proportion
of union members in Germany and the Netherlands than in Portugal or the United Kingdom – see Annex
4.A1 in OECD (2017[7]).
Box 2.1. The OECD policy questionnaires on collective bargaining

The description of the functioning of collective bargaining systems in OECD countries that is presented
in this chapter mainly relies on information provided by the responses to the detailed policy
questionnaires that were sent to Labour Ministries, employer organisations and trade unions in 2016
(and partly updated in late 2018). The information reported in the chapter (unless otherwise stated)
represents the situation in 2018. The focus is on collective bargaining practices in the private sector. In
the case of institutional differences across sectors, the answers focus on what is applicable in the
agreement that prevails for the manufacturing sector (in case of differences within the manufacturing
sector, for the metal workers). Unless otherwise stated, the information in the chapter refers to the entire
economy, even if the actual application and use of certain instruments may differ across sectors. The
questionnaire addressed to Labour Ministries focused on: i) the architecture of collective bargaining
(e.g. structure of bargaining, hierarchy between levels, wage co-ordination, use of extensions,
derogations, duration of agreements, etc.); ii) labour relations at firm level (e.g. presence and role of
works councils and of other forms of employee representation bodies in the workplace 5, rules for unions
activity at firm level); iii) the topics covered by collective bargaining (e.g. if and where wages, hiring and
firing rules, occupational health and safety, working time are set by collective bargaining and if collective
agreements also cover training and/or unemployment insurance); iv) collective bargaining and non-
standard forms of work (if and how social partners and collective bargaining also cover flexible forms
of work); and v) recent changes (if any) in collective bargaining. The questionnaires addressed to social
partners were intended to complement the information provided by Labour Ministries and focused on:
i) the actors of collective bargaining (e.g. functioning and membership of employer organisations and
unions); ii) the topics of collective bargaining (same as for Labour Ministries); iii) the quality of labour
relations; iv) collective bargaining and flexible forms of work (same as for Labour Ministries); and
v) recent changes in collective bargaining. All OECD countries have filled in the questionnaire. Canada
has sent detailed answers for the federal level and the four biggest provinces (Alberta, British Columbia,
Ontario and Québec). The information collected via the policy questionnaires has been complemented
and cross-checked with existing data sources (in particular using data from ICTWSS, Eurofound,
European Commission, ILO and various individual- and firm-level surveys and administrative data) and
the relevant research literature and updated in 2019.

30 
Figure 2.2. Trade union density by group

OECD weighted averages, 2013
A. Trade union members as a share of the total number B. Share of each group among the total union members
of people employed in the group
Good-producing sector Good-producing sector
Business services Business services
Industry
Industry
Public administration Public administration
Social and personal services Social and personal services
Private sector Private sector
Sector
Sector
Public sector Public sector
Small firms Small firms
Firm size
Firm size
Medium-sized firms Medium-sized firms
Large firms Large firms
Men Men
Gender
Gender
Women Women
Youth (aged 15-24) Youth (aged 15-24)
Age groups
Age groups
Prime-age workers (aged 25-54) Prime-age workers (aged 25-54)
Older workers (aged 55-64) Older workers (aged 55-64)
Low-skilled Low-skilled
Education
Education
Medium-skilled Medium-skilled
High-skilled High-skilled
Permanent contract Permanent contract
contract
contract
Work
Work
Temporary contract Temporary contract
40 30 20 10 0 0 20 40 60 80 100
% %
Note: Trade union density by group presented in this figure has been adjusted for the overall trade union density shown in Figure 2.4 by using
the share of each individual group in total union membership and total number of employees. For further details on definition, country covered
and data sources, see Annex Figures 4.A1 to 4.A7 in Annex 4.A1 in OECD (2017[7]), “Collective bargaining in a changing world of work” in
OECD Employment Outlook 2017, https://dx.doi.org/10.1787/empl_outlook-2017-8-en.
Source: Annex Figures 4.A1 to 4.A7 in Annex 4.A1 in OECD (2017[7]), “Collective bargaining in a changing world of work” in OECD Employment
Outlook 2017, https://dx.doi.org/10.1787/empl_outlook-2017-8-en.
StatLink 2 http://dx.doi.org/10.1787/888934026905
Only 7% of employees in small firms belong to a union on average across OECD countries, as union
members tend to work in large and medium firms. Yet patterns differ across countries: employees in small
firms represent a larger share of trade union members in Belgium and Sweden while unions in Japan have
no affiliates at all in small firms. Women and men show little difference in terms of their likelihood to be
union members when employed (Panel A) but since employment rates are higher for men than women,
unions have on average a more masculine membership (Panel B). In 15 OECD countries women
outnumber men among union members – see Annex 4.A1 in OECD (2017[7]). Prime age workers constitute
the core of trade union affiliates but as a share of the working population, older workers are those more

 31
likely to be union members. Youth only represent 7% of total union members in the OECD area, and are
the age group least likely to unionise in all countries (see specific discussion on youth and unions in
Chapter 2. Union members tend to be medium or high skilled (around 40% of total union members in each
group). Finally, union members in all OECD are overwhelmingly workers with a permanent contract, with
only 9% being temporary workers.
2.2.2. Employer and business organisations
Employers, business and employer organisations are the other key actors of collective bargaining. In most
OECD countries outside Europe, employer associations represent the interests of business (i.e. lobby and
voice) but do not bargain collective agreements, with most – if not all – bargaining taking place at the firm
level. However, the role of employer organisations in wage bargaining processes is institutionalised in
many European countries.
Compared with union density, much less is known about the membership and representativeness of these
organisations across OECD countries. Representativeness, in particular, is very difficult to assess: official
and up-to-date statistics on the number of workers covered, as distinct from the number of affiliated firms,
are very limited, partial and often based only on self-reported data. Further difficulty in providing a precise
assessment arises also from the possibility for firms to belong to several employer associations.
Using available information, Figure 2.3 shows the share of employees in the private sector working in firms
affiliated to an employer organisation. On average, employer organisation density in the
25 OECD countries for which data are available is close to 60%. Like trade union density, employer
organisation density varies considerably across OECD countries: it is very low in Central and Eastern
European countries and Korea, but up to about 80% in the Belgium, Luxembourg, the Netherlands and
Sweden (and at 100% in Austria due to compulsory affiliation for all firms).
Membership rates and membership composition are not the (only) elements to gauge the influence and
legitimacy of unions and employer organisations. In fact, these rates are closely interlinked with collective
bargaining system themselves and often reflect long-term historical patterns. However, they are still good
proxies to measure the ability of unions and employers to represent a broad base of workers and firms or
in contrast, merely a narrow segment of them.
Differences across OECD countries in employer organisation density partly mirror those in trade union
density (the correlation between trade union density and employer organisation density is
0.55 – Annex 4.A1 in OECD (2017[7]). In Austria, Finland, Sweden or Belgium both trade union and
employer organisations display high rates, while in Central and Eastern European countries, Korea or
Turkey both memberships rates are low. However, based on the number of employees covered, Denmark
combines one of the highest union densities among OECD countries with an average employer
organisation density; and France has a high employer organisation density together with one of the lowest
trade union densities among OECD countries.
In most OECD countries, the share of employees working for a firm that is part of an employer organisation
is larger in the good-producing sector compared with the service sector. Employer organisations also tend
to be more representative of medium and large firms.
Employer organisations density has been quite stable in the last decades. Most countries (at least for those
for which time series are available) show a remarkable stability. Brandl and Lehr (2016[8]) argue that
employer associations have been able to adapt their organisational structure as well as their activities to
the changing needs of business (for instance by offering negotiation training, legal representation,
industrial information, health and safety advice, wage surveys and marketing).

32 
Figure 2.3. Employer organisation density
A. Employer organisation density by country

Percentage of employees in the private sector, 2000 or closest year1 and latest year available2
Latest year (↗) 2000 or closest year

%
100
80
60
40
20
B. Employer organisation density and shares 3 by industry4 and firm size,5 2013
Share of each group among the total employees in firms affiliated to employer organisation
Employees in firms affiliated to employer organisation as a share of total employees
%
70
60
50
40
30
20
10
0
Good-producing sector Business services Other services Small firms Medium-sized firms Large firms
Industry Firm size
1. 2000 for Austria, Finland, Norway, Slovenia and Sweden; 2002 for Belgium, the Czech Republic, Denmark, Estonia, France, Germany, Italy,
Luxembourg, Latvia, Netherlands, Portugal and Spain; 2004 for Hungary; and 2005 for Israel. No data for Greece, Ireland, Korea, Lithuania,
Poland, the Slovak Republic and the United Kingdom.
2. 2008 for Greece, Ireland and Portugal; 2009 for Korea; 2012 for Denmark, France and Italy; 2013 for the Netherlands, Slovenia and Spain;
2014 for Belgium, the Czech Republic, Finland, Germany and Luxembourg; 2015 for Estonia and the Slovak Republic; 2016 for Norway, Sweden
and the United Kingdom; and 2017 for Austria. No data for Hungary, Israel and Latvia.
3. Statistics refer to establishments of the private sector with ten or more employees in all economic sectors except agriculture, activities of
households as employers and activities of extraterritorial organisations. Unweighted average of 24 OECD countries (not including Australia,
Canada, Chile, Israel, Japan, Korea, Mexico, New Zealand, Norway, Switzerland and the United States).
4. All sectors reported in Panel B refer to the private sector. Good-producing sector refers to manufacturing (including mining and utilities) and
construction; business services refers to commerce and hospitality, transport and communication and financial services and real estate; other
services refers to remaining social and personal services excepted activities of households as employers and activities of extraterritorial
organisations.
5. “Small firms” refers to firms with fewer than 50 employees; “Medium-sized firms” to firms with 50 to 249 employees; and “Large firms” to firms
with 250 employees or more.
Source: Panel A: J. Visser, ICTWSS Database version 6.0. Amsterdam: Amsterdam Institute for Advanced Labour Studies (AIAS), University
of Amsterdam. June 2019. Panel B: OECD estimates based on the third Eurofound European Company Survey (ECS 2013).

 33
2.3. Why has trade union density been declining in the last decades?
The stability of employer organisations density sharply contrasts with trends in trade union density. Trade
union density has been declining in most OECD countries over the last four decades. On average across
OECD countries, it went from 33% in 1975, to 16% in 2018 (Figure 2.4).
This average downward trend, however, masks important cross-country variations in terms of initial
unionisation levels, the actual direction of trends, and, in countries where it happened, the pace, intensity
and timing of the decline.6 First, trade union density in the mid-1970s varied from around 75% in Sweden,
to around 20% in France and just above 10% in Korea. Second, while union density declined in a majority
of countries, it increased in Iceland and Belgium and was relatively stable over the last four decades in
Canada, Korea and Norway. Third, decline was much faster and more abrupt in some countries than in
others. In the 1990s, Eastern European countries 7, Israel, and New Zealand experienced a fall of at least
30% of union density (Turkey in the 2000s is another example) over a relatively short time-span. By
contrast, decline was much more gradual (and much smaller) in countries like Denmark, Switzerland or
Chile – where it was more akin, in fact, to a progressive erosion than to a drop. Finally, the timing of decline
also differs: it starts in the 1980s in several countries, but already in the 1960s in the United States, Austria
or the Netherlands, and much later – in the 1990s-in several Nordic countries. Changes in union density
accelerated at various points in time over the period, with individual countries exhibiting specific spikes.
This heterogeneity of the evolution of union density across countries suggests that it may be the result of
a combination of country-specific factors rather than global forces – although some drivers might be
common across countries or groups of countries.
2.3.1. A literature review of the potential drivers of changes in union density
Globalisation, demographic changes in the workforce, de-industrialisation and the shrinking size of the
manufacturing sector, the fall of public sector jobs and the spread of flexible forms of contracts are among
the most common hypotheses explored in the literature to explain trade union density decline.
The role of economic globalisation and the related increase in competitive pressure faced by firms is
frequently mentioned as a driver of union density decline. For instance Vachon and Wallace (2013[9]) argue
that global competition reduces unions’ bargaining capacity, while dependence on Foreign Direct
Investments decreases workers’ organising capacity, and immigration affects union density, as non-
citizens workers might feel too vulnerable to join them.
Among demographic factors, the increasing participation of women to the labour market used to be
considered as a potential driver of decline, as women had lower unionisation rates. Yet, recent empirical
studies find that the gender gap in unionisation has closed in many countries, and even reversed in some
(Visser, 2006[10]; Schnabel and Wagner, 2007[11]). The rising proportion of workers with a university degree
is also discussed as a potential driver of density decline (Morisette, Schellenberg and Johnson, 2005[12]) –
but theoretical expectations on this issue in the literature are contrasted. Finally, changes in the age
composition of the workforce could also explain the decline in union membership. Blanchflower (2007[13])
argues that the probability of being unionised follows “an inverted U-shaped pattern in age, maximising in
the mid-to-late 40s”. As shown in Figure 2.5 above, young workers across OECD countries are less
unionised than older ones.

34 
Figure 2.4. Trends in union density

Percentage of employees, 1960-2018
A. English-speaking and "firm-level B. Nordic and "Ghent system" C. Northern and central European
% bargaining" countries % countries % countries
100 100 100
90 90 90
80 80 80
70 70 70
60 60 60
50 50 50
40 40 40
30 30 30
20 20 20
10 10 10
0 0 0
1960 1970 1980 1990 2000 2010 1960 1970 1980 1990 2000 2010 1960 1970 1980 1990 2000 2010
Australia Austria
Canada Belgium Denmark
Ireland Germany
Japan Finland Iceland Luxembourg
Korea
New Zealand Norway Sweden Netherlands
United Kingdom Switzerland
United States OECD
OECD OECD
D. Southern European countries E. Eastern European countries F. Other countries
% % %
100 100 100
90 90 90
80 80 80
70 70 70
60 60 60
50 50 50
40 40 40
30 30 30
20 20 20
10 10 10
0 0 0
1960 1970 1980 1990 2000 2010 1960 1970 1980 1990 2000 2010 1960 1970 1980 1990 2000 2010
Czech Republic
France Greece Estonia Chile Israel
Hungary
Latvia
Italy Portugal Lithuania Mexico Turkey
Poland
Slovak Republic
Spain OECD Slovenia OECD
OECD
Note: OECD is the employee-weighted average of the 36 OECD Member countries.

Source: OECD/ICTWSS database on trade union density.

 35
This age effect could also hide a cohort effect, if younger generations of workers have a systematically
lower propensity to unionise than previous generations. This lower propensity to unionise could stem from
various factors, including changes in preferences, or changes in the institutional environment of collective
bargaining. Workers coming of age and “learning” about the labour market in an environment where
unionisation is more constrained, less efficient because unions have less power, or less socially valued,
might have a lower propensity to unionise as a result (Bryson and Davies, 2018[14]; Visser, 2002[15]). Most
empirical studies find that changes in preferences do not explain much of the decline in density (see
Box 2.2 below). However, studies show that individuals’ willingness to join a union rises after workers have
“sampled” membership at work or experienced “unionism by proxy through social interaction” (Bryson and
Gomez, 2005[16]; Bryson and Davies, 2018[14]). In that sense, the fall in union density could be a snowballing
phenomenon: after an initial fall, further decreases might be the consequence of workers from younger
cohorts being less exposed to the benefit of unionisation, and to unionism by proxy.
Another frequent explanation of union decline is that it stems from shifts in the structure of the economy,
and in particular from the shrinking of the generally heavily unionised manufacturing sector, and the
concomitant rise of the service sector, where workers tend to be less unionised (Gilfillan and McGann,
2018[17]; Farber and Krueger, 1992[18]; Visser, forthcoming[19]). Some studies also find that reduction in
average firm size, a corollary of the disappearance of large manufacturing plants, had a negative impact
on unionisation (Peetz, 1990[20]; Schnabel, 2013[21]). However, there is also long-standing8 and mounting
empirical evidence showing that decline in unionisation within industries is in fact more important in
explaining the overall union density decline than industrial re-composition between industries (Schnabel,
2013[21]; OECD, 1991[22]). Another common hypothesis relates the decline in union density to the
decreasing share of public sector jobs (Schnabel, 2013[21]; Lesch, 2004[23]).
The increasing prevalence of non-standard forms of employment, such as part-time, fixed term contracts,
or employment through temporary work agencies, is another potential driver of density decline
(Ebbinghaus, Göbel and Koos, 2011[24]; Fitzenberger, Kohn and Wang, 2011[25]). Across OECD countries,
non-standard workers have a lower unionisation rate compared with standard ones (see Figure 5.1 in
Chapter 5). Increasing shares of non-standard forms of employment might therefore drive unionisation
down. Higher job turnover and smaller average job tenure, resulting in workers’ limited attachment to
workplaces, could also reduce their incentives to join unions as well as their opportunities to do so.
Changes linked to social partners themselves could also explain density decline. Numerous studies point
to increases in management resistance as a potential cause, especially in countries where unions have to
be certified at the workplace level (Legree, Schirle and Skuterud, 2014[26]). Forms of employers’ resistance
to unionisation include the use of union avoidance consultants, threats to close workplaces, or illegal firings
of workers’ representatives (Bronfenbrenner, 2009[27]). The use of individualised performance
management systems, of incentive-based pay structures and other employer-driven changes to work
organisation which participate to the individualisation of the working relationship are also evoked as
potential causes of union density decline (Bennett and Kaufman, 2002[28]). Authors also point to the
inefficiency of unions’ recruitment strategies, arguing that they have failed to expand their reach into
growing sectors of the economy (Visser, forthcoming[19]). Inter-union competition for members and union
fragmentation are also identified as potential drivers of union decline. Conversely, union amalgamation
into larger, less responsive confederations could also foster membership decline (Wooden, 1999[29]).

36 
Box 2.2. Are young workers turning their noses up at unions?

Trade-union density is particularly low among young workers and has fallen by more than the rate for older
workers since 2000 in close to half of the countries shown in Figure 2.5. According to some, this pattern
reflects the different preferences of younger generations (Blanchflower, 2007[13]). Young workers have been
described as more individualistic than older ones (Berry and Mcdaniel, 2018[30]), less attached to a given
firm, and less prone to engage in collective action. Alternatively, some say that they favour environmental
and consumer organisations, thus crowding out unions (Inglehart, 1997[31])). Yet another argument is that
younger workers find unions unattractive and old-fashioned.
Figure 2.5. Trend in union density among youth in selected OECD countries
Young-to-adults ratio of union density, 2000's and latest year available (%)
Latest year (⭧) 2000's

%
100
90
80
70
60
50
40
Note: Trade union density by age group for Austria, Belgium, Denmark, Finland, Germany, Norway and Sweden have been adjusted for the
overall trade union density by using the share of age groups in total union membership and total number of employees. Estimates based on
the European Social Survey (due to size of the sample or of subcategories in certain countries) may be imprecise and are only reproduced
to illustrate common patterns across OECD countries. 2000's refers to 2000 for Australia, Canada, Estonia, Sweden, the United Kingdom
and the United States; 2001 for Germany; 2002 for Austria, Belgium, Denmark, Finland and Norway; 2003 for Ireland; 2004 for Hungary
(second quarter) and Korea; and 2005 for Mexico. The latest year available is 2014 for Denmark; 2015 for Germany and Hungary (second
quarter); 2016 for Austria, Belgium, Finland and Norway; 2017 for Canada, Estonia, Ireland, Sweden and the United Kingdom; and 2018 for
Australia, Korea, Mexico and the United States. Youth refers to employees aged 20-34 and adults to those aged 35-54.
Source: OECD estimates based on the European Social Survey (ESS) for Austria, Belgium, Denmark and Norway, the Labour Force Survey
(LFS) for Canada, the Finnish Working Life Barometer (FWLB) for Finland, the German Socio-Economic Panel (SOEP) for Germany, the
Quarterly National Household Survey (QNHS) for Ireland, the Encuesta Nacional de Ocupación y Empleo (ENOE) for Mexico, and the
Current Population Survey Merged Outgoing Rotation Groups (CPS-MORG) for the United States. Data provided by national statistical
authorities based on the Survey of Employee Earnings, Benefits and Trade Union Membership (EEBTUM) and the Characteristics of
Employment (COE) Survey for Australia, the Labour Force Survey (LFS) for Estonia, the Labour Force Survey (LFS) for Hungary, the
Economically Active Population Survey (EAPS) for Korea, the Labour Force Survey for Sweden, and the Labour Force Survey for the United
Kingdom.
Could systematically different preferences among young workers explain their lower rates of unionisation?
Using available longitudinal survey data on attitudes, it is hard to find clear evidence supporting this
hypothesis. As shown in Figure 2.6 (Panels A and B), in a majority of countries, respondents aged 20 to 34
are more attached to both individual freedom and solidarity with others than those aged 35-54. Young

 37
respondents are also more supportive of collective actions such as attending a demonstration or raising
funds for a social or political cause than their older peers in most countries (Panels C and D). Finally, the
proportion of 20-34 year olds who are members of environmental (8.4%) or consumer organisations (6.5%)
is on par with that of older respondents (9.5% and 7.7%) (World Value Survey, 2010-2014). In addition,
contrary to the “crowding out” hypothesis, Ebbinghaus et al. (2011[24]) find that such engagement is in fact
positively associated with union membership.
Figure 2.6. Individual values and support for collective action among young people
Young-to-adults ratios
A. Individual freedom, 2018 B. Solidarity, support for others, 2018
FRA GBR
BEL PRT
SVN NLD
PRT FIN
CZE EST
ESP IRL
AUT DEU
EST LTU
NLD ITA
LVA BEL
SWE GRC
DEU CZE Young people
Young people
IRL AUT are more
LUX are more SWE attached to
ITA attached to SVN
ESP solidarity and
SVK individual
support for
HUN freedom as a LUX
GRC SVK others as a
DNK value than POL value than
POL adults DNK adults
LTU HUN
GBR LVA
FIN FRA
0.4 0.6 0.8 1 1.2 1.4 1.6 1.8 0.4 0.6 0.8 1 1.2 1.4 1.6 1.8
C. Take part in a demonstration, 2014 D. Donate money or raise funds, 2014
NLD HUN
CZE SVK
JPN NLD
NOR CZE
SVK ESP
KOR DEU
BEL ISL
ESP KOR
ISL NOR
DEU DNK
DNK SWE
GBR BEL Young people
HUN Young people FRA are more
FRA are more AUT supportive of
AUS CHL
LTU supportive of USA donating money
CHE participating in CHE or raising funds
FIN demonstrations FIN
ISR TUR than adults
TUR than adults SVN
SVN GBR
SWE POL
POL JPN
USA AUS
AUT LTU
CHL ISR
0.4 0.6 0.8 1 1.2 1.4 1.6 1.8 0.4 0.6 0.8 1 1.2 1.4 1.6 1.8
Note: Statistics in Panels A and B are based on a question about respondents’ three most important personal values. In Panels C and D,
statistics refer to individuals who ever participated or might participate in particular collective actions. See Annex 2.D for further details.
Source: OECD calculations based on the Standard Eurobarometer 89, March 2018 (Panels A and B) and the International Social Survey
Programme (ISSP) 2014, Citizenship module II (Panels C and D).
Moreover, in contrast with commonly held ideas about young workers disliking unions, confidence in trade
unions is higher among young workers than among older ones in 23 out of 32 countries (Figure 2.7,
Panel A). These measures are consistent with various country case studies: for instance, Bryson et al.
(2005[32]) found a substantial frustrated demand for unionisation among young workers in Canada, the
United Kingdom and the United States.

38 
In these latter two countries, higher trust in trade unions among young workers is associated with a higher
perception of unions’ indispensability in protecting workers’ rights. However, in two-thirds of the countries
represented in Figure 2.7 (Panel B), young workers appear less convinced than older ones that workers
need strong unions to protect their interests. This leads to a surprising pattern in countries like Denmark,
France, Latvia, Lithuania, Slovenia, or Sweden, where young respondents are more confident in unions than
older respondents but less convinced that workers need them to protect their rights. Explaining these
contradictory patterns is beyond the scope of this box. However, these data do not support strong claims
about young workers’ weaker interest in collective action driving the age related membership differential.
Figure 2.7. Trust and perceived necessity of trade unions among young people aged 20-34
Young-to-adults ratios
A. Relative trust in trade unions B. Relative perceived necessity of trade unions
% of persons confident in trade unions, latest year % of persons agreeing that workers need strong unions
available to protect their interests, 2015
Korea New Zealand
New Zealand
Chile Young Czech Republic
Japan people are
Greece less Sweden
Slovak Republic confident
Turkey than adults Slovenia
Italy
Denmark
Estonia
Young people
Luxembourg Israel are less
Mexico convinced of
Poland Lithuania union's
Germany indispensability
Czech Republic Latvia
Portugal
Norway
Finland
Belgium France
Australia Young people
are more
Hungary confident than Iceland
Denmark adults
Austria Belgium
Ireland
Lithuania Chile
Sweden
Japan
Colombia Young people
France Switzerland are more
Slovenia convinced of
United States Finland union's
Latvia indispensability
Netherlands United Kingdom
United Kingdom
United States
Spain
0.7 0.8 0.9 1 1.1 1.2 1.3 0.7 0.8 0.9 1 1.1 1.2 1.3
Note: Youth refers to persons aged 20-34 and adults to those aged 35-54. The latest year available in Panel A refers to 2010 for Japan and
Korea; 2011 for Chile, New Zealand and the United States; 2012 for Colombia and Mexico; 2016 for Australia; and 2018 for all the European
countries. In Panel B, Belgium refers to Flanders only and age groups for Denmark refer to youth aged 26-35 and adults aged 36-55. For
further details, see Annex 2.D.
Source: Panel A: OECD calculations based on the Australian Election Study (AES) for Australia, Eurobarometer 89.1, March 2018 for the
European countries, and the World Value Survey (WVS) for all other countries. Panel B: OECD calculations based on the International
Social Survey Program (ISSP) 2015, Work Orientation module IV and the Pew research Center Poll (March 2015) for the United States.

 39
If not preferences, then what could explain the membership differential between younger and older
workers? Structural labour market factors are good candidates for an explanation. Indeed, young workers
tend to work in sectors characterised by weak union presence, which limits their opportunity to join unions
in the first place. They are also disproportionately employed on non-standard contracts, which reduces
the benefits and increases the costs of union membership (Ebbinghaus, Göbel and Koos, 2011[24]). Annex
Figure 2.D.1 shows that composition effects provide a partial answer to the puzzle of young people’s lower
unionisation. When controlling for various factors including gender, educational level, type of contract
(temporary vs open-ended), industry, public vs. private sector, occupation, firm size and full time vs.
part-time employment, the gap in young-to-adult union membership is reduced in all countries studied.
However, it is closed in none. Composition effects significantly close the gap in the United States, Canada,
or France but explain relatively little in the United Kingdom or Germany – while a differential of around
30% remain in these last three countries. While non-standard employment has developed in the last two
decades, composition effects are not explaining a larger part of the membership differential in recent years
compared with the 2000s.
Another prevalent explanation in the literature is that union density is lower among young workers because
they have not yet had a chance to evaluate the benefit of union membership. Exposure to union benefit
and union membership would be part of one positive self-reinforcing loop (Givan and Hipp, 2012[33]). Yet
because of their limited labour market experience, young workers might have a limited awareness of
unions and their purpose (Keune, 2015[34]) – in other words the probability that they have not yet entered
that loop is high. This is consistent with Bryson et al. (2005[32])’s description of union membership as an
experience good: it can only be properly valued after one has been exposed to it.
Young workers also face higher entry barriers to unionisation. Supply-side constraints such as employers’
resistance to unionism, the lack of dedicated recruitment efforts from unions (Vandaele, 2012[35]), or the
relatively high cost of membership rates might also explain the lower unionisation of young workers.
A last group of hypotheses considers the role of institutional change. First, a large number of studies point
to reforms of national legislations regulating collective bargaining as important determinants of density
decline. Some policy reforms have made it harder for unions to recruit members. For instance, in Sweden,
policy-mandated increases in membership fees have driven membership down (Kjellberg, 2011[36]). In
some countries, the move towards firm-level bargaining has contributed to reduce union bargaining power
and as a result their relevance and attractiveness to workers (Australian Bureau of Statistics, 2000[37];
Legree, Schirle and Skuterud, 2014[26]). Second, the deterioration or erosion of institutions that historically
favoured unionisation could explain part of the density decline. For instance, while the existence of
insurance funds administered by union-affiliated institutions9 historically encouraged workers’ unionisation,
their erosion – following reforms or the development of private alternatives – might explain part of the
decline in union density (Cohen, Haberfeld and Mundlak, 2007[38]; Ebbinghaus, Göbel and Koos, 2011[24]).
Böckerman and Uusitalo (2006[39]) show that the erosion of the Ghent system in Finland following the
development of private insurance funds explains density decline there – see also Høgedahl and Kongshøj
(2017[40]). Third and finally, other labour market institutions could have crowded out unions by granting
workers protections and thus decreasing the need for unions. Legislative progress in matters of
employment protection, benefit duration, or indexation clauses (Checchi and Lucifora, 2002[41]) as well as
the use of mandatory extension provisions and/or the presence of a minimum wage could decrease
workers’ demand for union protection (Flanagan, 2005[42]). The development of alternative means of
meeting workers’ demand for voice, such as employee involvement initiatives could also generate a
crowding out effect (Morisette, Schellenberg and Johnson, 2005[12]).

40 
2.3.2. Contrary to an enduring notion, demographic and structural shifts in the economy
explain only a marginal part of the fall in trade union density
Available data10 do not allow undertaking reliable analyses on the role of economic globalisation, changes
characterising social partners themselves, and institutional change on a cross-country basis.11 The
relevance of these macro-level drivers can only be properly assessed through longitudinal country-specific
analyses; these should be the object of future research. This chapter focuses on what can be done using
individual-level data, and tests the effect of: i) demographic changes; ii) changes in jobs characteristics
(changes in the size of sectors/industries and the development of non-standard jobs); and iii) generational
replacement (i.e. the replacement of older cohorts by younger ones).
A multivariate decomposition analysis is used to test the first two hypotheses (see Annex 2.A for details
on the method, the data, the model specification, and the time-periods covered by this analysis).12 Changes
in trade union density are decomposed in two parts. The first part (“workforce composition effect”) is linked
to changes in the relative size of particular groups of workers, such as female workers, highly educated
workers, or workers on particular type of contracts, who are characterised by different propensities to
unionise. The second part (“unionisation effect”13) is linked to changes in individuals’ propensity to unionise
within groups. Using a multivariate decomposition approach allows identifying the effect linked to changes
in the relative size of each particular group in the workforce.
Figure 2.8 below presents results from this analysis. Transformations affecting the composition of the
workforce are no silver bullet explanatory factors of union decline across OECD countries. They contribute
a small amount to a decrease of trade union density in 8 out of the 15 countries studied (Austria, Belgium,
Denmark, Germany, Israel, Mexico, the United Kingdom and the United States), but to an increase in
others. In Australia, Finland, Germany, the United Kingdom, and the United States, the contribution of
composition changes to density decline is very small. Composition changes contributed substantially to
union density decline (Annex Table 2.C.1) in Austria (45% of the 9 percentage point drop in union density
over the observed period) and Israel (59% of a 11.6 percentage point drop). In Belgium and Denmark,
composition changes explain a substantial part of what is a relatively small decline in union density (58%
of a 2.8 percentage point drop and 36% of a 3.2 percentage point drop respectively).
Looking at particular factors in more details, the effect of demographic changes is generally very small
(Figure 2.9). Demographic changes contributed to increasing, rather than decreasing, trade union density
in 12 out of 15 countries studied. No clear cross-country pattern emerge when looking at the effect of
particular demographic drivers (Annex Figure 2.C.1). Increases in the share of women in the workforce
resulted in small decreases of union density in Austria, Belgium, Norway and the United Kingdom (1994-
2007). Changes in education levels contributed to decreasing union density in Austria, Belgium, Denmark,
Israel, Korea, the Netherlands, the United Kingdom (1994-2007) and the United States.14 Finally, changes
in the age composition of the workforce contributed to decreasing union density over the whole period
considered in Canada, Israel, Mexico (2005-18) and the United Kingdom (1994-2007).15 Effects also vary
when considering different sub-periods (Annex Table 2.C.2). For instance, demographic changes
contributed negatively to changes in union density between 1994 and 2007 in the United Kingdom, but
positively after that. Overall, these results suggest that demographic changes are a (minor) part of the
equation in some countries and in particular sub-periods, but did not drive density decline in all countries
over the whole period considered.
Changes in job characteristics (i.e. industry, sector, occupation) contributed a relatively bigger but still
minor part to union density decline. Overall changes in job characteristics contributed to the decrease in
trade union density in 8 out of 15 countries. Occupational shifts and industrial re-compositions contributed
to union density decline in 10 countries (Annex Figure 2.C.2). Changes in average firm size contributed to
decrease in union density over the observed period in Israel, Mexico (2005-18) and the Netherlands. 16
Finally, changes in the size of the public sector contributed to small decreases of union density in Australia,

 41
Germany, Mexico, the United Kingdom (2007-17) and the United States.17 Again, these effects vary across
time within countries (Annex Table 2.C.2).
Figure 2.8. The contribution of composition changes to the decline in union density is generally
small and varies across countries
Percentage-points change in union density
Workforce composition effect ("between effect") Unionisation effect ("within effect") Change in union density (↗)
p.p
4
2
0
-2
-4
-6
-8
-10
-12
-14
-16
Note: Multivariate decompositions analysis based on probit regressions including control for sex (female), age groups, education, migrant
workers, job tenure, type of contract (part-time), contract duration (temporary jobs), occupation, industry, quintiles of the hourly earnings, sector
(public sector) and firm size. See Annex 2.A for further details on the methodology and Annex 2.B for details on definitions and variables included
in the analysis.
Source: See Annex Table 2.B.1.
Finally, increases in the share of non-standard forms of employment, and in particular the increasing
incidence of part-time employment, contributed a minor part to union density decline in some countries
(Annex Figure 2.C.3). Changes in the proportion of part-time employment18 contributed a little to union
density decline in Australia, Belgium, Denmark, Finland, Germany, Ireland, Israel, Korea, Mexico
(1992-2002) and the Netherlands. The effect of changes in job tenure could only be tested for a limited
number of countries. Changes in job tenure contributed a little to union density decline in Germany and
the United Kingdom (1994-2007). Shifts in the proportion of temporary vs. permanent workers contributed
to small decreases in union density in 11 cases. 19 However, again, these changes leave the bigger part of
union density decline unexplained.

42 
Figure 2.9. Assessing the relative effect of various composition changes on trade union density
Percentage-points change in union density explained by workforce composition effect (“between effect”)
Atypical employment Sex, age and education Job characteristics Other factors Workforce composition effect (↗)
p.p
4
-2
-4
-6
-8
in the analysis.
2.3.3. Density decline is not linked to generational replacement in most countries

studied
As explained in the literature review above, union density decline could be a cohort effect, if workers from
younger cohorts have a systematically lower propensity to unionise than their older peers. This third
hypothesis is tested through a regression analysis using individual-level data on unionisation. Results are
presented in Figure 2.10, which shows, again, a contrasted picture across countries: differences in
propensity to unionise between the cohort of workers who came of age in the 1960s and later cohorts are
statistically significant in some, but not all contexts. Further, workers’ propensity to unionise appears to
have decreased over time in some countries, but increased in others.
In a limited number of contexts, changes in the propensity to unionise in later cohorts compared to that of
workers socialised20 in the 1960s coincide with movements in trade union density, and could potentially be
explained by generational replacement. In Germany notably, union density started falling in the early
1990s, and Figure 2.10 shows that cohorts of workers socialised in the 1990s and the 2000s were
significantly less likely to unionise than colleagues who preceded them. By contrast, cohort effects are
unlikely to be involved at all in the explanation of density decline in Ireland, where workers’ propensity to
unionise continuously increased since the generation of those socialised in the 1960s, while trade union
density started falling in the 1980s. Cohort effects in Korea are also continuously positive (and increasing)

 43
since the 1960s. In Austria, differences in propensity to unionise between cohorts are never statistically
significant.
Figure 2.10. Propensity to unionise by cohort varies considerably across countries

Percentage-point difference relatively to those aged 20 in the 1960's
Aged 20 years old in 1970's Aged 20 years old in 1980's Aged 20 years old in 1990's
Aged 20 years old in 2000's Aged 20 years old in 2010's (↘)
A. Increasing propensity to unionise
p.p
1.6
***
1.4
1.2 ***
1
*** ***
0.8
0.6 ***
0.4 *** *** ** ** *** *** *** ***
*** *** * *** **
**
0.2 ***
n.a
0
-0.2 *** ***
Korea United Kingdom Ireland United Kingdom Canada Mexico (ENOE) Australia Mexico (ENIGH)
(LFS) (BHPS)
B. Decreasing propensity to unionise

p.p
0.5

0
***
*** *** ** *

-0.5
** **
**
***
-1 * **
** *** *
**
-1.5
-2 ***
United States Israel Austria Germany Netherlands Belgium Finland Norway Denmark
Note: Logit regressions on trade union density controlling for cohorts (as reported), sex (female), age groups, education, migrant workers, job
tenure, type of contract (part-time), contract duration (temporary jobs), occupation, industry, quintiles of the hourly earnings, sector (public sector)
and firm size. See Annex 2.B for details on definitions and variables included in the analysis. n.a: not available.
However, in countries where union density decline looks like a cohort phenomenon, it is unclear whether
generational replacement itself is the driver or trade union density decline, or whether both phenomenon
(declining union density and the cohort effect) are caused by another factor, e.g. institutional changes
characterising the moment when workers from younger cohorts were socialised. For instance, the negative
effect on unionisation observed for German workers socialised in the 1990s and 2000s might at least partly
reflect the effect of German reunification on workers who were 20 years old in the 1990s. If union density

44 
decline is indeed a snowballing phenomenon as suggested above, declining propensities to unionise in

younger cohorts might in fact be consequences of earlier falls. For instance, in Finland, negative cohort
effects appear after the start of trade union density decline. Finally, even in cases where generational
change could have fostered union density decline, the exact mechanisms driving the decline in unionisation
in younger cohorts remains unclear.
2.3.4. Country-specific research is necessary to understand the variety of union density

decline stories unfolding across country and time
Four main messages emerge from the analyses presented above. First, contrary to a commonly held belief,
the cumulative contribution of transformations affecting the composition of the workforce and the nature of
jobs supplied is relatively small: it leaves the bigger part of the phenomenon unexplained. Hypotheses that
could not be tested to characterise this unexplained component (related to the changing attitudes of social
partners, an increasing exposure to global competition, or institutional changes ranging from the erosion
of institutions favouring unionisation, to changes in collective bargaining legislation) appear like promising
avenues for future research.
Second, union density decline is not linked to generational replacement in most countries studied. Where
density decline looks like a cohort phenomenon, the precise mechanism driving down unionisation in
younger cohorts remains to be explored; it is likely to vary across countries.
Third, trade union density appears to be a largely multifaceted phenomenon, which varies across countries
and time. Behind the apparently common trend characterising OECD countries, there appears to be a
collection of country-specific stories. Within countries, trade union density decline is likely to be the
cumulative product of a variety of smaller episodes of decline at particular points in time, driven by
particular causes.
These three messages point to a fourth one, namely that future research should focus on country-specific
analyses. This would also allow properly testing the hypotheses related to institutional change, which are
largely context-specific.
2.4. The scope of collective bargaining
2.4.1. Collective bargaining coverage
The share of employees covered by collective agreements (the collective bargaining coverage 21) also
declined significantly over the past 30 years. This indicator is key for comparing the relative strength of
collective bargaining across countries since it captures the extent to which workers’ employment conditions
are actually influenced by collective negotiation. On average across OECD countries, it shrunk by a fourth,
from 45% in 1985 to 32% in 2017 (Figure 2.11). With the exception of some of the countries which passed
major labour market reforms during the last five years, the recent economic crisis did not represent a
particular turning point and coverage continued to decline.
As with trade union density, the decline was the strongest in Central and Eastern European countries
where the collapse of the old regimes led to abrupt changes in the role of trade unions and collective
bargaining. Steep decreases were also observed in Australia, New Zealand and the United Kingdom where
deep reforms took place in the 1980s. Coverage has been relatively stable in most continental European
countries except for Germany and coverage also decreased more recently in Greece. The drop in collective
bargaining coverage in Portugal during the crisis years is the subject to methodological controversies which
are discussed in Box 2.3.
All in all, collective bargaining coverage is high and stable only in countries where multi-employer
agreements (mainly sectoral or national) are negotiated (even in several of the Southern European

 45
countries where trade union density is quite low). A second key element which matters for bargaining
coverage is the relative strength, and willingness to negotiate, of employer organisations since they
negotiate and sign collective agreements which in most countries then apply to all workers of their affiliated
firms.22 Indeed in countries where employers’ density is high, coverage is also relatively broad and
vice versa (with a correlation of 0.90; see Annex Figure 4.A1.11 in OECD (2017[7])). The relationship with
trade union density is weaker (correlation of 0.64) and collective bargaining coverage is significantly higher
than trade union density as in most countries agreements also apply to non-union members (see below
the detailed discussion on erga omnes clauses and administrative extensions).

46 
Figure 2.11. Trends in collective bargaining coverage rate

Percentage of employees with the right to bargain, 1985-2017
A. English-speaking and "firm-level B. Nordic and "Ghent system" C. Northern and central European
% bargaining" countries % countries % countries
100 100 100
90 90 90
80 80 80
70 70 70
60 60 60
50 50 50
40 40 40
30 30 30
20 20 20
10 10 10
0 0 0
1985 1990 1995 2000 2005 2010 2015 1985 1990 1995 2000 2005 2010 2015 1985 1990 1995 2000 2005 2010 2015
Australia Austria
Canada Belgium Denmark
Ireland Germany
Japan Finland Iceland Luxembourg
Korea
New Zealand Norway Sweden Netherlands
United Kingdom Switzerland
United States OECD
OECD OECD
D. Southern European countries E. Eastern European countries F. Other countries
% % %
100 100 100
90 90 90
80 80 80
70 70 70
60 60 60
50 50 50
40 40 40
30 30 30
20 20 20
10 10 10
0 0 0
1985 1990 1995 2000 2005 2010 2015 1985 1990 1995 2000 2005 2010 2015 1985 1990 1995 2000 2005 2010 2015
Czech Republic Chile
France Greece Estonia
Hungary Israel
Latvia
Italy Portugal Lithuania Mexico
Poland
Slovak Republic Turkey
Spain OECD Slovenia
OECD OECD
Note: OECD is the employee-weighted average of the 36 OECD Member countries.

Source: J. Visser, ICTWSS Database version 6.0. Amsterdam: Amsterdam Institute for Advanced Labour Studies (AIAS), University of
Amsterdam. June 2019, http://uva-aias.net/en/ictwss.

 47
On average across OECD countries, collective bargaining coverage is slightly higher in the good-producing
sectors (manufacturing, constructions and energy and electricity supply) than in business services or other
sectors (Figure 2.12). However, firm size matters: 26% of workers are covered by a collective agreement
in small firms while 34% are covered in large firms. In small firms, the probability of being covered by a
collective agreement is much lower in the absence of a multi-employer agreement at sectoral or national
level as small firms are much less likely to negotiate and sign a firm-level agreement. Indeed, in Chile,
Estonia or Turkey collective agreements cover a negligible share of small firms, contrary to what happens
in Nordic or continental European countries.
Figure 2.12. Collective bargaining coverage rate by industry and firm size
Percentage of employees in the private sector, latest year available1
%
40
35
30
25
20
15
10
0
Good-producing sector Business services Other services Small firms Medium-sized firms Large firms
Industry² Firm size³
Note: Statistics refer to the private sector only and to all firms for Australia and Canada excepted firms with less than five employees for Chile,
firms with less than ten employees for Belgium, Greece, Italy, Slovenia and Sweden, and firms with less than 11 employees for other countries.
OECD weighted average of 30 OECD countries (not including Israel, Japan, Korea, Mexico and New Zealand) for statistics by industry and
29 OECD countries (not including countries previously listed and the United States) for statistics by firm size.
1. Statistics refer to 2013 for Belgium, Greece, Iceland, Ireland, Italy, Slovenia and Sweden; 2014 for Chile and all other European countries;
2015 for Canada and the United States; and 2016 for Australia.
2. Good-producing sector refers to manufacturing (including mining and utilities) and construction; business services refers to commerce and
hospitality, transport and communication and financial services and real estate; other services refers to remaining social and personal services
excepted activities of households as employers and activities of extraterritorial organisations.
3. “Small firms” refers to firms with fewer than 50 employees; “Medium-sized firms” to firms with 50 to 249 employees; and “Large firms” to firms
with 250 employees or more.
Source: OECD calculations based on the Survey of Employee Earnings and Hours (EEH) for Australia, Labour Force Survey for Canada,
administrative data for Chile, the Current Population Survey (CPS) for the United States, the third Eurofound European Company Survey (ECS
2013) for Belgium, Greece, Iceland, Ireland, Italy, Slovenia and Sweden, and the 2014 Structure of Earnings Survey (SES 2014) for all other
European countries.

48 
Box 2.3. Computing collective bargaining coverage: Stock or flows?

In the wake of the Portuguese labour market reform that introduced in 2012 significant changes to the
way collective bargaining works (largely reversed since then), making notably the rules for
administrative extensions more rigid, there has been much debate on the extent of bargaining coverage
decrease. Indeed, computing collective bargaining coverage is not straightforward, despite good and
detailed data (Quadros de Pessoal, Personnel Records, a compulsory survey of all firms, conducted
annually in October) as it requires a series of assumptions.
An ILO report (ILO, 2014[43]) for instance argues that the 2012 reform led to a 80% decrease in coverage
based on the drop of the number of sectoral and firm-level agreements between 2008 and 2012 (from
300 down to 85) bringing the number of workers covered by these agreements from 1.9 million down
to 300 000.
Addison et al. (2016[44]) counter that these figures mix stocks and flows. In particular they point out that,
while the flow of new agreements considerably slowed down after the reform, the stock of workers
covered by collective agreements barely changed between 2008 and 2012 (at around 90%), as many
workers remained covered by the former agreements. This stability has also been confirmed using more
recent data for 2014 (OECD, 2017[45]).
National estimates based on Quadros de Pessoal published by the Portuguese Labour Ministry in its
recent Green Paper on Labour Relations (Ministério do Trabalho, 2016[46]) show a decrease in the stock
of workers covered from 85.4% in 2010 to 80.5% in 2014 and a large decrease in terms of flows of
workers covered, from 54.1% in 2010 to 10% in 2014.
Data from the Institutional Characteristics of Trade Unions, Wage setting, State Intervention and Social
Pacts (ICTWSS Database) are less dramatic than those of ILO report, but they also find a significant
fall of coverage rate from 84.9% in 2007 to 72.2% in 2013. These estimates are based on the same
numerator (i.e. stock of workers covered by collective agreements) as Addison et al. (2016) but use a
different denominator (e.g. OECD employment data to include temporary, part-time and agricultural
workers, yet excluding employees in the public sector whose terms of employment are not set by
collective agreements).
However, Visser (2016[47]) argues that even the ICTWSS estimates should be taken with great caution
given that many workers are actually covered by old agreements whose wage floors may not be binding
anymore as they are probably below the minimum wage level (but non-wage conditions still apply).
Fougère et al. (2016[48]) report the same for France. Naumann (2018[49]) finds that, in 2013, at least half
of valid collective agreements in Portugal have more than eight years and around 30% of employees
covered by collective agreements have not had their contracts renewed since 2009. While similar
computing problems are encountered in France for instance, in the Netherlands expired agreements
are removed from the register and no longer counted (with one year delay).
In conclusion, providing clear-cut estimates of effective collective bargaining coverage is far from easy,
in Portugal as in most of other countries. Using only flow data (new agreements) is not correct as it
would lead to ignore workers who are still covered by old agreements. At the same time, using stock
data is also problematic, as in some cases agreements may not be binding anymore, or only partially,
leading to an overestimation of coverage. Changes in average duration of agreements and possible
retroactivity of agreements further complicate the estimation. Furthermore, the choice of the
denominator is also crucial in the computation, especially in light of the widespread use of non-standard
forms of employment, not systematically well covered in standard surveys.

 49
2.4.2. Extensions and erga omnes provisions
In many OECD countries, the share of workers covered by collective agreements is significantly higher
than the share of workers who are member of a trade union. At the same time, collective bargaining
coverage patterns have been much more stable than trade union membership. This difference is
sometimes somewhat improperly referred to as “excess bargaining coverage” and used as a proxy for
administrative extensions of collective agreements, while it is actually the result of both erga omnes
(literally in Latin, “towards everybody”) clauses and administrative extensions.
In principle, an agreement between unions and an employer or employer organisations applies only to the
signatory parties (“double affiliation principle”). Erga omnes clauses extend the terms set in a collective
agreement to all workers, not only to the members of signatories unions. Erga omnes clauses are usually
embedded in the law. However in most countries where agreements are legally binding only for members
of the signatory trade unions (Table 2.1), employers often voluntarily provide the same or similar conditions
for all employees within the company (sometimes because employers do not know who is a union
member). Erga omnes clauses simplify the system (since the same terms apply to all workers), increase
fairness, limit rivalries and help social peace and reduce transaction costs. However, erga omnes clauses
may also represent a disincentive for workers to become members of a union (a typical free-rider problem).
Table 2.1. Use of erga omnes clauses, 2018

Sectoral agreements
Not applicable Erga omnes1 Double affiliation2
(de jure or de facto)
Firm-level All workers Australia Austria Israel Greece
agreements Canada (BC, ON and QC) Belgium Italy
Costa Rica Canada (AB) Latvia
Poland Czech Republic Lithuania
United Kingdom Denmark Luxembourg
United States Estonia Mexico
Finland Netherlands
France Norway
Hungary Slovak Republic
Iceland Slovenia
Ireland Spain
Only union members Colombia Germany
New Zealand3 Korea
Japan
Chile*
Portugal*
Sweden
Switzerland*
Turkey
Note: AB: Alberta; BC: British Columbia; ON: Ontario; QC: Québec.
1. Erga omnes: agreements cover all workers, not only members of signatory unions. This is fixed either by the law (de jure) or is a standard
practice (de facto).
2. Double affiliation: agreements cover only workers who are member of a signatory union working in a firm member of a signatory
employer association.
3. Workers can opt in at firm level. In New Zealand, employers and unions can agree that collective terms and conditions may be passed on to
other employees or unions, which would include non-union members.
Source: OECD Policy Questionnaires.
Extensions (or administrative extensions) go one step further and cover workers in all firms within an
industrial sector, including also firms that have not signed the agreement or are not affiliated to an employer
organisation which signed the agreement. Extensions are usually an “act of public policy based on an

50 
explicit legislation mandating the government, a public agency or in some cases a court to apply the
collective agreement beyond its signatories” (Visser, 2018[50]). Extensions, or their functional equivalent, 23
are present in two-thirds of OECD countries. However, their specific functioning is extremely diverse: in
some countries agreements are extended by default (e.g. in Iceland, Italy and Spain where agreements
cover all firms), in some quasi automatic (e.g. in France), in others very rare (e.g. Japan or Central and
Eastern European countries). In some countries they are subject to some criteria. In Germany, for instance,
any extension decision has to pass a binding advice of the tripartite committee in the Labour Ministry (until
2015 there was also a threshold of 50% of workers covered by signing firms) and is de facto subject to a
veto from employers. Table 2.2 summarises the frequency of extensions and the criteria used to grant
them across OECD countries. The figures in parenthesis refer to the additional coverage rate (as a
percentage of employees) provided by extension measures.
Table 2.2. Scope and coverage of extensions (or functional equivalent) mechanisms in place in
OECD countries, 2018
Subject to relatively binding criteria Subject to relatively mild criteria Not subject to any criteria
Common Finland (16.0% in 2014) Belgium (14.0% in 2008) Iceland1
Netherlands (10.8% in 2016) France (25.0% in 2012) Italy1
Slovenia (9.4% in 2013) Portugal Spain1 (6.0% in 2008)
Switzerland (13.7% in 2013)
Uncommon Austria Estonia (1.0% in 2012) Korea
Czech Republic (5.4% in 2014) Lithuania (0% in 2013)
Germany (0.4% in 2008) Luxembourg
Hungary (2.5% in 2012) Mexico
Israel Poland
Japan
Latvia
Norway
Slovak Republic (0% in 2011)
Turkey
Note: Extension mechanisms do not exist in Australia, Canada (except in Québec where they are rare), Chile, Colombia, Costa Rica, Denmark,
Greece (until September 2018), Ireland, Korea, New Zealand, Poland, Sweden, the United Kingdom and the United States. Figures in
parenthesis refer to the additional coverage rate (as a percentage of employees) due to extension measures. For Belgium, France, Iceland,
Ireland, Portugal, Slovenia and Spain, the figures refer to the difference between the coverage rate and the organisation rate of employers.
1. No formal administrative extensions but functional equivalent are in place. Compulsory membership to an employer association in Austria
can also be considered a functional equivalent.
Source: OECD Policy Questionnaires and J. Visser, ICTWSS Database version 6.0. Amsterdam: Amsterdam Institute for Advanced Labour
Studies (AIAS), University of Amsterdam. June 2019, http://uva-aias.net/en/ictwss, for additional coverage rate.
Extensions are often issued out of fairness considerations to ensure the same treatment and standards to all
workers in the same sector, in particular for workers for foreign firms or service providers, and migrant and
posted workers (Hayter and Visser, 2018[51]). By doing so, extensions can level the playing field across firms
and ensure a fair competition.24 Extensions also reduce the transactions costs linked to lengthy and detailed
negotiations over the terms of employment, especially for small firms that lack the resources (or do not have
workers representation) to engage in firm-level bargaining in which case workers would never be covered by
an agreement (Blanchard, Jaumotte and Loungani, 2014[52]). In some cases, extensions are also issued in
order to guarantee the stability of the collective bargaining system and the sustainability of some forms of
“public goods” such as sectoral training and mobility schemes that are funded via collective agreements (De
Ridder and Euwals, 2016[53]; Hayter and Visser, 2018[51]). Finally, extensions also contribute to spread best
practices in terms of personnel management, training, health and safety, technology usage, insurance,
retirement packages, or performance-related incentives.

 51
On the opposite, extensions can become a tool of unfair competition, for instance when extensions are
used by “insider” firms to drive competitors out of the market (Haucap, Pauly and Wey, 2001[54]); Magruder,
(2012[55]); Martins (2014[56]). More in general, extensions may also have a negative impact when the terms
set in the agreement do not account for the economic situation of a majority of firms in the sector: for
instance, when the employer association is representative only of large and relatively more productive
firms (and hence willing to pay higher wages), it may agree on wage floors and other components that are
not sustainable for smaller and less productive firms. Finally, delayed extensions that require the payment
of sizeable pay arrears can also severely affect the labour market during a period of liquidity constraints
for firms – see Hijzen and Martins (2016[57]) for the case of Portugal.
In order to partly alleviate these concerns, extensions may be issued when the “collective agreement
already covers a number of the employers and workers concerned which is, in the opinion of the competent
authority, sufficiently representative”, as stated in the ILO Recommendation on collective agreements
(No. 91). In several OECD countries administrative extensions are subject to threshold representativeness
criteria (more details in the detailed tables available online 25): collective agreements can only be extended
if they are signed by employer organisations representing a minimal share of workers (most often the
majority). A few countries also request that signing unions represent a majority of workers. However, while
these criteria may be important, a more important concern is to ensure that signing employer organisations
do not only represent a few selected firms. In most countries these thresholds are checked only at the
moment of signing the agreement or issuing the extension. An exception is in Switzerland, where they
must hold for the entire duration of the agreement; therefore if coverage drops below the 50% threshold,
the extension must expire (Visser, 2018[50]). Introducing representativeness criteria in countries where they
do not exist is not straightforward. As the 2012 Portuguese reform shows, it is not easy to define criteria
that are sufficiently strict to be meaningful, while easy to be fulfilled hence allowing an effective role for
extensions. Hijzen et al. (2019[58]) suggest opting for a gradual increase of the thresholds over time to
ensure that non-representative extensions are eliminated and give time to employer associations to
increase their membership levels, especially amongst smaller firms.
Having reliable and up-to-date statistics on trade unions’ and employer organisations’ membership is in all
cases a necessary condition in order to have meaningful representativeness criteria. Portugal was able to
swiftly introduce representativeness criteria in 2012 (then removed in 2017) thanks to the detailed
information on firms’ membership of an employer organisation contained in the Quadros de Pessoal.
However, this is rather an exception across OECD countries. Membership figures of both trade unions and
employers, as well as other indicators such as, for instance, the votes obtained at social elections, can be
used as an indicator of the relative bargaining power of social partners and influence government actions.
Bargaining parties may thus have an incentive to inflate statistics in search of influence power, in particular
since official, detailed and up-to-date statistics on unions, employer organisations and collective bargaining
are not widespread. Therefore, enhancing the reliability and accessibility of such data would help inform
and improve the policy debate on collective bargaining.
Representativeness criteria based on thresholds may prove too rigid and unhelpful when the stability of
the collective bargaining system or of common funds is at stake. Partly for these reasons, the threshold of
50% in Germany have been dropped. Alternatively, a possibility to derogate from the representativeness
criteria could be left open in certain circumstances. In Switzerland, for instance, when unions can prove to
public authorities that in a specific sector it is particularly complicated to organise workers (for instance,
because of a high presence of foreigners or because of security issues that restrain the possibility to reach
and organise workers on their workplace) there is a possibility to derogate from the criterion requiring that
signing unions represent a majority of workers.
OECD countries could also submit the extension of collective agreements to a test of public interest, by
which extensions could be denied if the social and economic circumstances do not warrant extending the
terms beyond the signatory parties or, on the opposite, issued to safeguard the public interest (for instance
to stabilise the collective bargaining system or avoid free-riding in common funds such as for training). As

52 
argued in OECD (2017[45]), while the exact definition can vary, it is important that the criteria of public
interest are announced well in advance by the government so that social partners can take them into
account during the negotiation. Hijzen et al. (2019[58]) report that in the Netherlands, political actors
frequently call upon public interest concerns to limit extensions, but do not use it so much in practice, being
reluctant to interfere in the bargaining process. 26 In Norway, extensions are granted if it is proven that
foreign workers work or could work under employment conditions that are worse than those set by national
agreements for the trade or industry in question or what is common for the place and occupation. In France,
the 2017 labour market reform introduced the possibility to block otherwise semi-automatic extensions out
of public interest considerations, notably the risk of negative effects on competition. Public interest criteria
could help introducing some degree of qualitative evaluation in the decision of granting or not an extension,
above and beyond strictly threshold representativeness criteria, but may be more difficult to action and be
more subject to partisan considerations. So far they are not used to any major extent in any of the
OECD countries.
While representativeness criteria (and, if used, public interest clauses) aim to reflect as much as possible
the situation of a wide set of firms, they cannot account for their full diversity. Few countries, therefore,
also allow for exemptions from extensions. In the Netherlands clearly pre-defined criteria for exemptions
are even a condition for extension. Moreover, firms can request an ad hoc exemption from the ministry if
they can justify dispensation.27 Hijzen et al. (2019[58]) report that, between 2007 and 2015, 191 requests
of ad hoc exemptions were presented by Dutch firms, but only 58 were accepted. In Switzerland, although
there are no formal rules for exemptions, in one case in 2012 firms with an annual turnover lower than
1.2 million Swiss francs (around EUR 1.2 million) were exempted (Visser, 2018[50]). Another option to
better reflect the heterogeneity of firms and avoid the “one-size-fit-all” limit of extensions would be to
encourage a differentiation within agreements as is done in the Dutch metal industry where, in practice,
two agreements are signed, and extended, one for firms with 35 and more employees and one for firms
with less than 35 employees. The French 2017 reform also conditioned the extension of a sectoral
collective agreement to a differentiation of its content between large and small companies. 28
Finally, existing statistics on collective bargaining coverage may underestimate the real extent of coverage,
with or without extensions, due to “orientation”, e.g. the possibility for firms to follow the terms set by the
collective agreement of their reference sector while not being formally bound to it or to formally “opt-in”, to
reduce transaction costs and reduce the risks of conflicts. Opt-in is even sometimes suggested as a better
alternative than allowing firms to “opt-out” from collective agreements. This option would hold if the main and
sole rationale for issuing extensions would be a reduction of transaction costs; however several other reasons
motivate in practice the use of extensions (such as levelling the playing field) and, therefore, opting-in cannot
be considered a perfect functional equivalent. Moreover, even in countries where opt-in is relatively common,
such as Germany, it does not appear to be a brake to declining coverage of collective agreements.
Based on establishment data,29 Addison et al. (2016[44]) show that half of the German establishments which
are not covered by a sectoral agreement still orient themselves to it. This partly cushions the effects of a
declining coverage of sectoral agreements: between 2000 and 2013, while coverage decreased by
10.7 percentage points, from 60% to 49.3% of establishments, orientation increased by 4.1 percentage
points, from 16% of establishments to 20.1%. Orientation, however, is a weak policy tool as firms can
withdraw from the terms set in the agreement at any time or just pick-and-choose the elements of the
agreement they like (a formal opt-in is a stronger tool as firms cannot withdraw easily, but as a consequence
it is also potentially less appealing for firms). Addison et al. (2016[44]) find that wages in establishments not
covered by sectoral agreements are indeed lower than those in covered firms. Orienting establishments pay
better than non-orienting (and therefore fully uncovered) ones, but still not as much as covered
establishments. Hence, orientation (or opt-in) fills some of the gaps left by a decreasing coverage but far from
completely.

 53
2.4.3. Duration, ultra-activity and retroactivity
The length of collective agreements, their validity beyond termination date (the so-called “ultra-activity”) or
before their entry into force in case of delays (the so-called “retroactivity”) also influence bargaining
coverage as noted earlier. In some OECD countries, collective agreements do not expire until they get
replaced by new ones. This ensures the continuity of the system and prevents voids when collective
agreements expire. In countries where the law leaves large, or total, room to collective bargaining (for
instance in countries with no statutory minimum wage), expiration without any replacement or ultra-activity
effects would leave workers totally uncovered. Clearly, a long, and even indefinite, duration of agreements
strengthens workers’ bargaining power by keeping them covered, even when employers are unwilling to
negotiate new terms, and is ultimately contributing to increase stability and social peace. On the other
hand, indefinite, or long, duration of agreements can make it more difficult for employers to renegotiate the
terms of the agreement in times of crisis or deflation with potentially a negative effect on employment. Or
they may lock workers in an outdated agreement (as pointed in the discussion on the estimation of the
bargaining coverage in Portugal, Box 2.3), especially in times of higher inflation. Without co-ordinated and
swift actions, indefinite duration of collective agreements may thus ultimately reduce the resilience of the
labour market to unexpected shocks.
Table 2.3 shows where the maximum duration is specified in the law, fixed by social partners or not
specified. Collective agreements of indefinite duration are typically negotiated in France, but they are also
common in Belgium (and before the economic crisis of 2008, agreements had an indefinite duration or
long ultra-activity in Greece and Spain as well). Countries which set a maximum duration by law, typically
limit it to 36 months. Table 2.3 also shows that most OECD countries do not specify a maximum duration
for the ultra-activity of an expired agreement, but leave it for negotiation between social partners. Among
OECD countries, Luxembourg, New Zealand, the Slovak Republic, Slovenia and Spain (unless agreed
otherwise) limit ultra-activity to 12 months. Limits to the duration of agreements beyond their termination
date also exist in Greece. In addition, collective agreements can be terminated unilaterally by one of the
signatory parties, in some countries such as Chile, Estonia, Poland or Switzerland. In most other countries,
the union or the employer can ask for the termination of an agreement within a predefined notice period
and the agreement has to be renegotiated while the terms of the former agreement remain valid.
Across OECD countries, collective agreements are renewed on average every 12-24 months, or three
years in Australia,30 Chile, and Sweden. Canada and Portugal are outstanding exceptions with an average
duration exceeding 40 months (see detailed tables available online31).32

54 
Table 2.3. The duration, ultra-activity and retroactivity of collective agreements, 2018
Limits to (or no) ultra- Unlimited ultra-activity Limits to ultra-activity and Unlimited ultra-activity and
activity and no retroactivity and no retroactivity possibility of retroactivity possibility of retroactivity
Maximum duration Luxembourg Chile1 Greece Australia1
fixed by the law New Zealand Japan Korea
Latvia
Netherlands
Maximum duration Slovak Republic Austria Portugal1 Colombia
fixed by social Costa Rica Spain1 Denmark2
partners
Czech Republic Turkey Germany
Estonia United States Italy
Iceland1 Norway
Israel
Mexico
Sweden1
Switzerland
No rule France Belgium Canada1
Slovenia2 Finland
Hungary
Ireland
Lithuania
Poland
United Kingdom
1. Average duration of collective agreements exceeds two years. For Australia, a collective agreement continues to apply until it is terminated
or replaced.
2. Only for the manufacturing sector in Denmark and in the metal sector in Slovenia.
Finally, Table 2.3 also shows that collective agreements can be applied retrospectively, i.e. before their
signature date, in order to ensure the continuation of rights and obligations in case of late renewal. Most
OECD countries leave the decision on the payment of arrears to social partners. In some cases,
retroactivity applies to all firms and workers, including those covered by administrative extensions (or their
functional equivalent). For instance, this happens, to different extents, in Belgium, Italy and Spain.
Including in the retroactivity of the agreement also firms subject to the extensions contributes to levelling
the playing field (and this is consistent with the spirit of sectoral bargaining and the logic behind extensions
as argued by Hijzen, Martins and Parlevliet (2019[58]). Retroactivity is unlikely to have a significant
economic effect in normal times as far as extensions can be anticipated. However, it may become a major
burden for firms in case of liquidity constraints, by constraining them to pay sizeable arrears in a relatively
short period of time. Hijzen and Martins (2016[57]) suggest that the negative effects on employment of
extensions in Portugal before the 2012 reform was probably driven by the burden posed by the payment
of arrears by cash-strapped firms.
2.5. Unpacking the complex machinery of collective bargaining
2.5.1. Centralised and decentralised bargaining systems
Levels of bargaining and favourability principle
The predominant level of bargaining as a proxy of the degree of centralisation occupied most of the
attention of early studies on collective bargaining and macroeconomic performance. According to the

 55
corporatist view which dominated in the 1980s, performance would increase with centralisation, as
centralised regimes would be able to internalise the potentially adverse effects of wage increases on
unemployment and competitiveness (Cameron, 1984[59]). The centralisation argument was however
challenged by the “hump-shape” or “U-shape” thesis of Calmfors and Driffill (1988[1]), which was very
influential in the 1990s and early 2000s and argued that both centralisation and decentralisation could
actually perform well in providing either aggregate flexibility or micro flexibility, since decentralisation would
allow wages to adjust to productivity across firms. In any cases, sectoral bargaining was found to deliver
the worst outcomes. Empirical studies have not provided much backing for this simplistic view, and showed
that even seemingly similar bargaining structures work differently while the degree of co-ordination seems
a more important variable in explaining different labour market outcomes across countries (OECD, 2004[60];
OECD, 2012[61]). This suggests that a comprehensive discussion of centralised versus decentralised
systems needs to go beyond the bargaining level as the sole variable of interest, and instead address the
full complexity of bargaining structures.
Since the late 1980s, several reforms promoted the decentralisation of collective bargaining in many OECD
countries, i.e. gave more space to negotiations at the level of the company, the establishment or the
workplace. Decentralisation typically occurred in two ways: either directly through a replacement of
national/sectoral agreements by enterprise agreements, or through a process of articulation/devolution
within the national/sectoral agreements (Visser, 2016[47]) allowing firm-level agreements to negotiate wage
and working conditions within a general framework negotiated at higher level. Traxler (1995[62]) first coined
these configurations as respectively “disorganised decentralisation” and “organised decentralisation”.
Organised decentralisation (or controlled form of decentralised collective bargaining) takes two main forms
in European countries (Ibsen and Keune, 2018[63]). In a first case, national or sectoral agreements define
the broad framework but leave large scope for bargaining at the firm/establishment level (notably in
Scandinavian countries or the Netherlands): sectors can either set minimum or standard terms of
employment which employers can complement or deviate from at firm level; or allow workers and
employers to choose “à la carte” and trade-off, if they want, wages against working conditions. A second
form of organised decentralisation is the one where national or sector agreements allow and define the
conditions for deviations at lower levels via the so-called opening or opt-out clauses (Germany is probably
the most notable example). However in other countries, formal regulatory changes in the bargaining
structure have not resulted in a real shift of power 33 to the firm level but rather in two-tier bargaining
structures (Boeri, 2014[64]): in this case higher-level agreements still dominate, leaving to firm-level
bargaining only the possibility to improve the standards set in national or sectoral level (“in melius”)
agreements, firm-level agreements being subject to the “favourability principle” which states that a
lower-level agreement can only take precedence over a higher-level agreement if it improves the terms of
employment for workers.
Figure 2.13 provides a first suggestive overview of bargaining levels across OECD countries. Sector or
industry level bargaining continues to dominate in most continental Western European countries, while in
Canada, Chile, Ireland, Japan, Korea, Mexico, Turkey, New Zealand, the United Kingdom, the United
States, most Central and Eastern European countries, as well as the three OECD accession countries,
bargaining predominantly takes place at firm or enterprise level. In Belgium, Finland (until 2015) and
Norway, national unions and employer organisations engage predominantly in cross-sectoral bargaining
at central level but, even if not always well reflected in the data, also at sectoral and company level. Finally,
Israel, Luxembourg and the Slovak Republic are mixed cases with an almost equal combination of sectoral
and firm-level negotiations.34
While the predominant level of bargaining allows for a rapid characterisation of collective bargaining
systems across OECD countries, it also risks conveying an overly simplistic picture. Figure 2.13 clearly
shows that countries with the same predominant level of bargaining differ substantially in terms of their
actual structure: even in countries where sectoral bargaining is the predominant level, firm level bargaining
can have a very significant role and vice versa.

56 
Figure 2.13. Detailed bargaining level

Percentage of employees covered by a collective agreement1 in the private sector,2 2013 or latest year available3
Agreement at company level only (↗) Both agreement at company and higher level Agreement at higher level only
%
100
90
80
70
60
50
40
30
20
10
0
Portugal⁴
Spain⁴
New Zealand⁵
Colombia
Greece⁴
Latvia
Korea
Germany
Netherlands
Luxembourg
Lithuania
Turkey
Japan
Mexico
Ireland
United Kingdom
Austria
Italy
Estonia
Poland
Czech Republic
Finland
Iceland
Belgium
France
Norway
Slovak Republic
Chile
Costa Rica
Hungary
Australia
United States
Switzerland
Sweden
Slovenia
Denmark
Predominantly at company level Predominantly at higher level
Note: Countries are ordered by ascending order of the proportion of employees covered by agreement taking place at the company level and
company and higher level for each predominant level of collective bargaining. Collective agreements are only at company level in Chile,
Colombia, Costa Rica, Japan, Korea, Mexico and the United States.
1. Statistics based on the Structure of Earnings Survey (Norway and Switzerland) refer to the type of pay agreement covering at least 50% of
the employees. This could be explained why data reported for Norway do not reflect the two-tiered bargaining system based on a hierarchical
system (i.e. basic agreement covering several industries/sectors sector agreement and company level agreement). Statistics based on the third
European Company Survey (all other European countries) refer to employees in firms with at least ten employees.
2. Data for Australia include employees of the public sector and relates to the federal enterprise agreement system only.
3. 2014 for Norway and Switzerland; June 2014 for Chile; 2015 for Australia; and 2015-16 for New Zealand.
4. Greece, Spain and Portugal undertook deep reforms of their collective bargaining systems around the year of observation of the data (see
Box 2.4). The figures may therefore reflect a mix of the legacy of the previous system and the early effects of the new one.
5. Ten percent of private sector collective agreements in 2016 were multi-employer collective agreements. While such agreements are not
sectoral or industry collectives, they do represent agreements that are with more than one company.
Source: OECD calculations based on the third Eurofound European Company Survey (ECS 2013) for all European countries except Norway
and Switzerland, the Structure of Earnings Survey 2014 (SES 2014) for Norway and Switzerland, the Workplace Agreements Database for
Australia, administrative data from the Labour Department of the Ministry of Labour for Chile and Bargaining Trends & Employment Law Update
2015/2016 for New Zealand and OECD questionnaires for Colombia, Costa Rica, Japan, Korea, Mexico and the United States.
A critical element which defines the hierarchy between bargaining levels and the difference among systems
is the existence of the so-called “favourability principle” which states that lower-level agreements can only
improve the standards set in higher level agreements.35 In most continental European countries
(e.g. Austria, Belgium, Germany, Italy, etc.), the favourability principle has traditionally applied and in
practice continues to be the rule (Table 2.4 and detailed tables available online36).37 In the Scandinavian
countries, Hungary, Korea, Latvia and the Netherlands, it is left to the negotiating parties which are then
free to set lower standards if necessary. The 2012 reform in Spain, and to a lesser extent with a series of
reforms starting in the 1980s in France, particularly in 2004 and 2008, the favourability principle has been
inverted, i.e. giving precedence to firm-level agreements (in France, this is limited to specific topics as
working time). In Greece, the favourability principle was abolished in 2012 following the adjustment
programme that reversed the hierarchy of agreements (since, it has been reintroduced in September
2018). In all other countries with single-level bargaining, it does not apply (e.g. Australia,38 Canada,39 Chile,
Colombia, Costa Rica, Japan and the United States).

 57
Table 2.4. Use of the favourability principle, 2018

Favourability principle always applies Application of the favourability principle is Favourability principle does not apply
entirely a matter for the bargainers
Austria Denmark Greece2
Belgium Finland Spain
Czech Republic France1
Estonia Hungary
Germany Korea
Ireland Latvia
Israel Netherlands
Italy Norway
Mexico Portugal
Poland Sweden
Slovak Republic
Slovenia
Switzerland
1. On wage, occupations, complementary social security and training funds, the use of fixed-term contracts (temporary and project work), gender
equality, trial period and transfer of work between two companies the favourability principle always applies.
2. Until September 2018.
Note: Favourability principle is not relevant for the following countries: Australia, Canada, Chile, Colombia, Costa Rica, Iceland, Japan, Lithuania,
Luxembourg, New Zealand, Turkey, the United Kingdom and the United States.
Derogations and opt-out clauses
A second key element which can differentiate countries with the same predominant level of agreement is
the use of deviations practices. Controlled forms of derogations have been one of the main factors in the
shift of collective bargaining away from centralisation towards an “organised decentralisation” in some
European countries over the last two decades. Temporary opening clauses have become rather popular
during the crisis (Eurofound, 2015[65]; Visser, 2016[47]), following the German practice which allowed firms,
together with other tools such as short-time working schemes, to better adapt to the deep crisis of 2008-
09 (Dustmann et al., 2014[66]).
As shown in Table 2.5, in most European countries agreements at firm level can deviate from the terms
set in the collective agreements. In a third of OECD countries, agreements can also deviate from the
standards set in law, most often to make variations to working-time arrangements (when comparing
countries, however, one should consider that in some countries there is hardly any law from which to
deviate, for instance where most of labour regulations are fixed by collective agreements, while in other
countries the labour code is very detailed). Deviations from higher-level agreements can be distinguished
in general opening clauses40 and temporary opt-out clauses (also called hardship clauses, or
inability-to-pay clauses). General opening clauses allow firm-level agreements to deviate from the minima
or the standards set in higher-level agreements (for instance to decrease collectively-agreed wage floors,
increase working time or change work organisation). Temporary opt-out clauses allow the suspension (or
renegotiation) of the terms of agreements (even firm-level agreements) in cases of economic difficulties.
In most countries general opening clauses and temporary opt-out clauses are subject to the rules and
procedures specified in higher-level agreements by social partners themselves and to an agreement at
firm level. Finally, in some cases (e.g. Spain) derogations can be obtained without union involvement if no
agreement is reached with worker representatives by referring the matter to an external tripartite body.

58 
Table 2.5. Scope and actual use of derogations and opt-out, 2018
Derogations from the law Derogations/opt-out from higher level agreements
Common - Austria
Germany1
Greece1,2
Netherlands1
Spain1
Switzerland1
Limited Austria Belgium
Belgium Finland
Estonia France1
Finland* Hungary
Germany Iceland
Hungary Italy
Japan Ireland1
Netherlands Lithuania1
Norway Poland1
Slovenia Portugal1
Sweden Slovenia1
No derogations Australia Latvia Canada
Canada Lithuania Chile
Chile Luxembourg Czech Republic
Colombia Mexico Denmark
Costa Rica New Zealand Estonia
Czech Republic Poland Israel
Denmark Portugal Latvia
France Slovak Republic Luxembourg
Greece Spain Norway
Iceland Switzerland Slovak Republic
Ireland Turkey Sweden
Israel United Kingdom Turkey
Italy United States United Kingdom
Korea
1. Derogations possible in case of economic difficulties (referred in the text as opt-out). In Switzerland the information refers to the manufacturing
sector.
Note: Derogations/opt-out from higher-level agreements not applicable in Australia, Colombia, Costa Rica, Japan, Korea, Mexico, New Zealand
and the United States.
The use and relevance of permanent or temporary derogations from higher-level agreements is closely linked
to the presence of a clear and strict hierarchy between levels of negotiations (as noted in the discussion on
the favourability principle) and the use of administrative extensions. Indeed, in countries where there is no
favourability principle (or is up to negotiators) and no administrative extensions, such as in Northern European
countries, there is no need of derogations since unions and firms are free to negotiate agreements that set
lower standards than the sectoral agreement. In Denmark, for instance, nothing limits the possibility of
temporarily lowering standards.
Opening clauses are among the main adjustment tools of collective bargaining systems where the hierarchy
of agreements is subject to the favourability principle and extensions are used. Indeed, opening clauses
– and particularly, temporary hardship clauses – are often referred to as “safety valve” (Visser, 2016[47]) to
avoid the “one-size-fit-all” sectoral agreements, notably to adapt to local or specific permanent conditions, or

 59
to respond swiftly to an unexpected shock and keep high the support for wide-reaching collective bargaining
systems.41 However, if not regulated, they can result in a downward competition between firms and even
undermine the regulatory capacity of collective agreements. Moreover, if derogations and opt-outs are used
only, or mainly, by large firms which have the resources to conclude firm-level agreements and/or to process
the paperwork required to request the opt-out and which are often also the most productive, they risk losing
their role of “safety valve”. Small firms, which may be those most in need of some derogations from the terms
set by collective agreements they have not negotiated, most often are not able to make use of derogations
and opt-out clauses because they lack the capacity and/or worker representation. In a possibly extreme, but
not totally unlikely scenario, large firms may even use opt-outs as an anti-competitive tool by negotiating first
relatively generous conditions in sectoral agreements and then opt-out to improve the terms in their favour,
leaving competitors bear the brunt of the generous terms they have negotiated.
Opening clauses in higher level agreements were introduced in Germany as a temporary solution, 42 limited
first to working time, then from 1995 extended to wages (Brändle, Heinbach and Maier, 2011[67]). Initially only
unions could agree to revise the terms of the agreement, but quickly collective agreements also allowed
“Pacts for employment and competitiveness” (PECs) with the works councils (with or without formal
involvement of a union). These have become increasingly widespread and began being used independently
of the specific economic situation (Seifert and Massa-Wirth, 2005[68]). Kohaut and Schnabel (2006[69]), based
on data from the IAB Establishment Panel, also report that, in 2005, 13% of establishments and 29% of
employees in Germany were covered by a collective agreement with scope for an opening clause. Around
half of the involved/concerned establishments (53% in the West, 50% in the East) had made use of such a
clause, mostly to modify working-time arrangements, and only one third to change basic pay or annual
bonuses. Data from the WSI Works Council Survey (Schulten and Bispinck, 2014[70]) and from the IAB
Establishment Panel (Addison, 2016[71]) do not show yet any particular trend over the last ten years, except
an uptake during the crisis.
As mentioned before, the 2012 Spanish labour market reform made it easier for firms to opt-out from higher-
level agreements and extended the possibility for employers to unilaterally modify wages, working hours and
work schedules referring the matter, if disagreement persists, to arbitration by a public tripartite body. In the
years until 2015, estimates of the Spanish Labour Ministry show that less than 5% of firms, mainly large ones,
have opted-out. Data collected by the Wage Dynamics Network Survey and reported by Izquierdo and
Jimeno (2015[72]) show that in 2013, 3.7% of firms opted-out from a sectoral agreement and 1.9% from their
own firm-level agreement. Opt-outs were mainly used by large firms opting out from a sectoral agreement
(5.9% of firms with more than 200 employees) and even more from their own firm-level agreement (16.6%
of firms with more than 200 employees). As SMEs constitute the bulk of the Spanish economy, the use of
opt-outs in Spain remains therefore limited. Moreover, since the Spanish reform also facilitated internal
flexibility, firms have other adjustment options beyond opting-out from collective agreements. The German
experience, moreover, shows that it takes time before firms learn how to make full use of these instruments.

60 
Box 2.4. The reforms of collective bargaining during the crisis

Spain, Portugal, Greece and France passed encompassing labour market reforms during or following
the crisis that also changed the way collective bargaining works. All reforms were aimed at
strengthening firm-level bargaining and giving more flexibility to employers in case of economic shocks
but were, in some cases, partly reverted in the recent years.
In Greece – see ILO (2014[73]) and OECD (2018[74]) for more details – the collective bargaining was
completely overhauled during the crisis. The favourability principle was suspended giving priority to
firm-level agreements. Moreover, new provisions allowed “associations of persons” (i.e. association of
workers, not necessarily affiliated to a union) to sign firm-level agreements on top of trade unions.
Extensions of collective agreements to non-signatory firms were also suspended and limits to the
duration and the ultra-activity of collective agreements were introduced. Finally, the system of unilateral
recourse to arbitration was abolished. Since Greece exited the European Stability Mechanism stability
support programme (i.e. the financial support programme set up during the crisis) in September 2018,
the favourability principle and the possibility of extending sectoral collective agreements signed by
representative parties have been re-introduced. Since September 2018, 12 sectoral or local collective
agreements have been extended, covering in total more than 200 000 workers (European Commission,
2019[75]). The unilateral recourse to arbitration has also been re-instated by a Council of State ruling in
2014 but some incentives for a consensual solution have been introduced. The new Greek Government
elected in June 2019 has expressed the intention to again limit unilateral appeals to arbitration and the
use of extensions as well as to introduce opt-out mechanisms from sectoral agreements.
In Spain – see OECD (2014[76]) for more details and a preliminary review – the 2012 reform inverted
the favourability principle giving priority to firm-level agreements over those at sectoral or regional level.
The reform also made it easier for firms to opt-out from higher-level agreements or firm-level
agreements either upon an agreement with worker representatives or by unilaterally referring the matter
to arbitration by a public tripartite body. For the time being, Spanish firms do not appear to have made
a significant use of these new provisions.
In Portugal – see OECD (2017[45]) for more details and a preliminary review – successive reforms
between 2011 and 2015 initially froze extensions of collective agreements and then granted them only
if the signing employer organisations met certain criteria. The duration and ultra-activity of collective
agreements was reduced. Works councils in firms with at least 150 employees (down from 500) were
allowed to negotiate firm-level agreements upon a mandate from unions and a possibility was
introduced for employers to temporarily suspend a collective agreement in case of crisis. Since 2015,
these reforms have been partly reversed: in 2017 a tripartite pact removed the representativeness
criteria for extensions and set a limit of 35 days for their issuance to avoid the usual and long pre-reform
delays. Limits to ultra-activity were suspended for 18 months between 2017 and 2018 to create stability
for negotiating a tripartite agreement to amend the Labour Code. Sectoral bargaining has now resumed.
By contrast, despite the new provisions that are still valid, there has been a very limited take-up on the
possibility to negotiate at company level.
In France – see Carcillo et al. (2019[77]) for more details and a preliminary review – two main reforms
took place in the recent years. In 2016, the Labour Law (Loi El Khomri) strengthened the role of firm-
level agreements in defining working time, leave and rest period. It also increased the threshold to
define which trade unions are representative and allowed to sign firm-level agreements and introduced
the possibility of approving the agreements via an internal referendum. Opt-out clauses in case of
economic difficulties, with the objective of safeguarding employment have also been introduced (but
not on wages). In 2018 the Law ratifying the September 2017 Ordonnances went further to promote
firm-level bargaining by allowing negotiations even in the absence of a union in firms with less than 50

 61
employees. Moreover, in companies with less than 20 employees the employer can submit a proposal
of agreement directly to an internal referendum. The reform also sought to make extensions of sectoral
agreements less automatic by conditioning them to the presence of different provisions by firm size and
by introducing the possibility to block them out of public interest considerations (in particular, if an
agreement is used as an anticompetitive tool against non-signatory companies) based on the evaluation
of an ad hoc experts group. Two years after the Ordonnances, however, no request of extension has
been refused and no agreement has included different provisions for large and small firms. The
Ordonnances reform also merged and streamlined different firm-level workers’ representation bodies
into a single one with the goal to simplify dialogue at firm level.
2.5.2. Co-ordination, enforceability and the quality of labour relations
Co-ordination
Co-ordination is the other key pillar of collective bargaining systems. Co-ordination refers to the “degree to
which minor players deliberately follow what major players decide” (Kenworthy, 2001[78]; Visser, 2016[47]).
Co-ordination can happen between bargaining units at different levels (for instance when sectoral or firm-
level agreements follow the guidelines fixed by peak-level organisations or by a social pact) or between
units at the same level (for instance when some sectors or companies follow the standards set in another
sector/company).
Many studies have found in different co-ordination practices a main factor behind wage developments and
macro flexibility, namely the ability of the economy to adjust to macroeconomic shocks (Soskice, 1990[79];
Nickell, 1997[80]; OECD, 1997[81]; OECD, 2004[60]; OECD, 2012[61]; Blanchard and Wolfers, 2000[82]). While
conceptually different, co-ordination and centralisation can be thought of as two different ways to reach
the same objective, and strong co-ordination has been found to be a functional equivalent of centralisation
in some cases (Soskice, 1990[79]; Traxler, 1995[62]; Teulings and Hartog, 2009[83]). However, co-ordination
can also ensure that either organised, but also disorganised decentralisation does not result in totally
independent and atomised negotiations and allow for a certain degree of synchronisation of different
bargaining units when setting their strategy and targets. Co-ordination can play a particularly important
role at the macroeconomic level as a critical tool to strengthen the resilience of labour markets by
increasing the responsiveness of real wages to changes in macroeconomic conditions (OECD, 2012[84];
IMF, 2016[85]; OECD, 2017[86]). But co-ordination can be a key instrument in pushing up wages when
needed. Co-ordination is also important to ensure that the competitiveness of the export sector in a country
is not endangered by what is negotiated in the non-tradable sector which does not suffer from international
competition but is often a critical input for the tradable sector.
Wage co-ordination takes different forms across OECD countries. Table 2.6 presents the degree and mode
of co-ordination among OECD countries. It follows Kenworthy (2001[78]) and Visser (2016[47]) by
distinguishing between the mode of co-ordination (state-imposed, pattern bargaining, etc.) and the degree
of co-ordination (whether pervasive and binding or not). Co-ordination is strongest when it is based on
strict statutory controls (this is called state-imposed co-ordination, and it occurs via indexation rules,
binding minimum wages and/or rules for maximum uprates). Currently only Belgium falls in this category:
wages are indexed to increases in living costs but capped by a “wage norm” which takes into account
(weighted) wage developments in France, Germany and the Netherlands on top of a statutory minimum
wage negotiated between social partners. Until 2015, Finland was the country closest to Belgium since
central agreements played an important role in guiding what lower-level agreements could negotiate (state-
induced co-ordination). In France, the relatively high minimum wage also severely restricts the room of
manoeuvre of social partners and renders many wage floors irrelevant (Fougère, Gautier and Roux,
2018[87]). In Nordic countries, as well as in Austria, Germany and the Netherlands co-ordination takes the
form of the so-called pattern bargaining where a sector sets the targets first (usually the manufacturing

62 
sector exposed to international trade) and others (or at least some of them) follow. Pattern bargaining also
takes place in Japan where collective agreements are negotiated only at company level (see Box 2.5 for
more details). Finally, co-ordination can also take the form of inter- or intra-associational guidelines where
peak level organisations either set some norms or define an intra-associational objective that should be
followed when bargaining at lower levels. This takes place more or less formally in several countries but it
is usually binding only in countries where peak level trade unions or employer organisations are relatively
strong and centralised (typically Nordic countries and to a significantly lower extent France and Italy). In
most Central and Eastern European countries, OECD accession countries and other decentralised
systems, bargaining systems are uncoordinated.
Table 2.6. Forms of co-ordination across OECD countries, 2018

Mode of co-ordination
Pattern bargaining State imposed/induced Inter/Intra-associational
Degree of co-ordination Strong Austria Belgium Austria
Denmark Finland
Finland Japan
Germany Netherlands
Japan Norway
Netherlands Sweden
Norway Switzerland
Sweden
Limited France France
Iceland
Italy
Portugal
Slovenia
Spain
Note: Forms of co-ordination are not relevant for the following countries: Australia, Canada, Chile, Colombia, Costa Rica, the Czech Republic,
Estonia, Greece, Hungary, Ireland, Israel, Korea, Latvia, Lithuania, Luxembourg, Mexico, New Zealand, Poland, the Slovak Republic, Turkey,
the United Kingdom and the United States.

 63
Box 2.5. Wage co-ordination in a decentralised system: The Japanese Shunto or Spring
Offensive
Collective bargaining in Japan is highly decentralised: most of the bargaining takes place at the
company level without national or sectoral agreements. Yet, a co-ordination mechanism for wage
bargaining is launched every spring by the peak unions to supplement the limitations of bargaining
power of firm-levels unions. This co-ordination system, called Shunto (the trade unions’ nation-wide
Spring Offensive), is entirely left to the social partners.
Introduced in 1955 by one of the major national trade unions in a context of weak, fragmented and
highly politicised unions, over time Shunto became the quintessential example of integration and
synchronisation in wage bargaining in combining pragmatism, flexibility and efficiency. Annual
negotiations for wage increases on a national scale are given a precise framework through separate
internal co-ordination by both unions and employer organisation (Togaki, 1986[88]; Shirai, 1987[89]). The
co-ordination mechanism takes place both within and across sectors. Typically, the negotiations with
large companies start in winter, when Rengo, the national Japanese trade union confederation, sets
the intra-associational guidelines with wage increase target to be further specified by each sectoral level
trade union federations. Taking this minimum wage increase as a benchmark, firm-level unions
negotiate over wages, bonuses and working conditions. Parallel efforts to co-ordinate the bargaining
policy of employers are also made by employer organisations and the major enterprises, ensuring a
large convergence with unions’ requests.
The importance of information sharing for a co-operative relationship between unions and employers
and efficient negotiation process was pointed out by Morishima (1991[90]) as a critical ingredient of
success of the Shunto system over time. For instance, following the 1973 oil crisis, the national trade
union centre changed strategy drastically after heated management-labour discussions, and decided
to self-restrain wage increases to prevent causing hyperinflation. A similar pragmatism was observed
in 2001, after the ICT bubble crisis in Japan, as national-level social partners jointly declared that unions
would restrain their requests to allow employers to preserve jobs. More recently, unions compromised
on the wage increases with employers in exchange for employment protections (2% wage increases in
2016). Some observers have argued however that this wage moderation policy may have led to a
weakening of unions’ bargaining power during the Lost Decades. Moreover, Kato (2016[91]) suggests
that in recent decades wages started to fall behind productivity growth and Shunto has become less
relevant, losing in part its efficacy in synchronising wage negotiations.
Source: This box was prepared in collaboration with Yoshie Shigiya.
Enforcement of collective agreements and the quality of labour relations
The ability of the employer organisations and trade unions to control the behaviour of their constituency at
lower levels is key for ensuring that decisions taken at higher levels are actually reflected at lower levels
and effectively implemented. Co-ordination and centralisation without compliance and enforcement are
simply ineffective (Nickell and Layard, 1999[92]; Traxler, 2003[93]). The evidence discussed in Box 2.6 shows
that, for countries where estimates are available, even compliance to the lowest levels of the negotiated
wage floors is far from perfect.

64 
Box 2.6. Compliance and enforcement of collective agreements

Primarily a legal issue, the actual level of enforcement of the standards set by collective agreements is
critical to judge the effectiveness of the bargaining systems, notably in terms of fairness for workers and
level-playing field for firms. However, available empirical evidence on compliance to labour market
regulations is quite scarce and almost inexistent for collective bargaining. In fact, measuring the extent
of non-compliance is very difficult to do in a practical way, given data limitations and measurement
error. Garnero, Kampelmann and Rycx (2015[94]) provide a first estimate of non-compliance to wage
floors fixed by collective agreements in seven European countries. They find that on average in
2007-09, the share of workers paid less than the negotiated wage floors was 13% in Italy, 8% in
Germany, 4% in Austria and Belgium, and around 2% in Finland and Denmark.
More recent estimates on the incidence and depth of non-compliance to minimum wages fixed by
collective agreements in Italy between 2008 and 2015 using a range of survey and administrative data
are provided by Garnero (2018[95]). He finds that non-compliance is indeed non-negligible: on average,
using Labour Force Survey data, around 10% of workers in the country are paid one fifth less than the
reference hourly wage floor (7% using data declared by employers themselves in the Structure of
Earnings Survey which however excludes micro firms and the agriculture sector; and 2.7% using social
security data which however are unlikely to report non-compliance as they are based on official
company records and limited to monthly wages, therefore not considering extra unpaid time, and to
full-time full-month employees only). Not surprisingly, all data sources show that non-compliance is
particularly high in the south of Italy and in micro and small firms and it affects especially women and
temporary workers. Moreover, all data sources show that wages in the bottom of the distribution in Italy
appear to be largely unaffected by wage floor increases. The exact estimates vary according to the data
used but all show that non-compliance significant and pervasive.
In addition to more effective labour inspections, Garnero (2018[95]) suggests a series of relatively
cost-free tools for improving compliance to negotiated wage floors, and to the terms of collective
agreements more in general. In countries where the number of collective agreements is very high, a
smaller number of collective agreements and minimum wages would make the system more transparent
for both employers and workers. Where it is not the case, ensuring that agreements are signed by
representative unions and employer organisations is key to avoid that complacent, poorly
representative social partners or “yellow” unions (unions dominated or heavily influenced by an
employer) undermine existing standards.
Making the text of collective agreements and a summary of its main elements publicly and easily
available is an essential precondition to ensure that workers and employers are well informed about
their rights and duties. In most countries it is difficult to get access to the text of collective agreements.
Finally, awareness and “name and shame” campaigns have been proven quite effective in increasing
compliance with the statutory minimum wage in Costa Rica (Gindling, Mossaad and Trejos, 2015[96])
and the United Kingdom (Benassi, 2011[97]) and could be used as a relatively cost-effective tool also in
the case of collective agreements.
There are no comparable indicators on the level of enforcement across countries. However, the capacity
of enforcement of each system – sometimes also referred to as “governability” – see Traxler (2003[93]); and
OECD (2004[60])43 – is likely to be related to the functioning of collective bargaining, historical
developments and overall trust among social partners (Table 2.7). The “enforceability” of agreements can
also be fostered by regulating industrial actions with “peace clauses” ruling that unions which have signed
an agreement, and their members, cannot lawfully strike on issues regulated in the agreement). In some
countries peace clauses are not or rarely used (for instance, Belgium and France, Mexico, Chile) on the

 65
grounds that a peace obligation would interfere with the right to strike. In other countries (e.g. Italy and
Spain), peace clauses are common but given that the strike is an individual right, workers can always strike
as the agreement is binding only for the collective signatory parties. Therefore, even a small group of
workers is enough to limit the enforcement of the agreement undermining the governability of the system.
In other countries (typically the Nordic countries) peace clauses are used and enforced thanks to the strong
role of unions and relatively high level of trust between and in social partners.
Mediation and arbitration procedures can also play a significant role in smoothing conflicts and helping
finding an agreement within the framework of collective bargaining and therefore contribute to strengthen
the overall governability of the system. Mediation and arbitration procedures in sectoral and firm-level
agreements are present in about half of OECD countries and in around two-thirds of the cases a mediation
procedure is compulsory. In other countries, for instance in Norway, mediation mechanisms exist outside
the agreements. The Norwegian National Mediator mediates in conflicts of interests between employer
and employee organisations, i.e. when the negotiations on renewal or establishment of an agreement have
broken down. The purpose of mediation is to avoid work conflict which, in fact, cannot legally be started
before mediation has been tried. The Labour Court of Norway is a special court for resolving labour
disputes concerning the interpretation, validity and existence of collective agreements, cases of breach of
collective agreements and the peace obligation and cases of claims for damages arising from such
breaches and unlawful industrial action.
Table 2.7. The enforceability of collective agreements, 2018

Sectoral agreements
Nothing or not applicable Peace clause Mediation Both
Firm-level agreements Nothing Canada (AB) Austria1 Denmark1
Japan Slovenia Latvia1
Korea
Slovak Republic
Peace clause Japan Iceland Estonia
Luxembourg Greece1
Norway Lithuania1
Netherlands
Switzerland
Mediation Australia Czech Republic
Chile France
Colombia1 Hungary
United Kingdom Mexico
Portugal
Both Canada (BC1, ON1 and QC) Ireland1 Australia
Costa Rica Belgium1
New Zealand Finland
Turkey Germany
United States1 Israel1
Italy1
Spain1
Sweden1
Note: AB: Alberta; BC: British Columbia; ON: Ontario; QC: Québec.
1. Compulsory mediation.

66 
Figure 2.14 shows the trends in industrial disputes (strikes and lock-outs) across OECD countries. Data
should be interpreted however with caution as the number of strikes is likely to be affected by how they are
regulated at national level and may thus not reflect the actual level of strife in the workplace. Furthermore,
existing statistics are plagued by considerable differences in definitions and measurement which severely
limit the comparability of the data (see note under Figure 2.14 and, for further details, see detailed tables
available online44). Notwithstanding these caveats, Figure 2.14 shows that industrial disputes as well as the
degree of variation across countries have gone down considerably since the 1990s (a notable exception is
Belgium where days lost because of strikes have steadily increased since the 1990s).
Figure 2.14. Trends in industrial disputes

Annual averages of work days lost per 1 000 salaried employees
1990s 2000-07 2008-18 (↗)
219 309 697 2,774 223
200
581
160
120
80
40
0 Korea
Latvia
France⁵
Norway
Germany
Turkey⁴
Japan
Lithuania
Austria
Portugal
United Kingdom
Slovak Republic
Poland
Ireland
New Zealand
Estonia
Italy
Netherlands
Israel²
Finland
Belgium
Switzerland
Mexico¹
Sweden
United States
Slovenia
Chile
Canada
Spain
Hungary
Australia
Denmark
Costa Rica³
All sectors Private sector or particular
industries
Note: International comparability of data on strikes is affected by differences in definitions and measurement. Many countries exclude from their
official records small work stoppages, and use different thresholds relating to the number of workers involved and/or the number of days lost.
Strikes statistics in some countries may also exclude stoppages in particular industries, such as the public sector (as in Austria, Belgium, France,
Germany, Latvia, Portugal and Turkey) or of a particular type, such as political and unauthorised strikes (as in Chile, Costa Rica, Estonia,
Hungary, Israel, Korea, Latvia, Lithuania, Mexico, Turkey, the United Kingdom and the United States). Conversely, some countries may include
workers indirectly involved (i.e. those who are unable to work because others at their workplace are on strike) as in Costa Rica, Denmark,
Estonia, Finland, France, Hungary, Ireland, Lithuania, the Netherlands, New Zealand, Poland, the Slovak Republic, Switzerland, Turkey, the
United Kingdom and the United States or work stoppages caused by the shortage of materials supplied by firms involved in strike. In general,
forms of industrial action that do not involve full-work stoppages, such as “go-slows”, silent and other protests in the workplace are not included.
For further details, see online annex at http://www.oecd.org/employment/collective-bargaining.htm.
2008-18 refers to 2008 only for Italy (this indicator is no longer available for this country), 2012 only for Slovenia, 2008-15 for Turkey, 2008-17
for Chile, Costa Rica, France, New Zealand, Portugal and the Slovak Republic.
1. The statistics concern strikes at establishments and enterprises covered by federal jurisdiction. As a result, strikes at enterprises under local
jurisdiction are not included.
2. The ratio reached 581 and 697 work days lost per 1 000 salaried employees in the 1990's and in 2000-07, respectively.
3. Average in 2008-18 is mainly driven by a strike in 2014 taking place in the Ministry of Education and involving 75 000 workers during 29 days.
The annual average set at 34 days lost per 1 000 employees otherwise.
4. The following branches of economic activity or sectors are excluded: life or property saving, funeral and mortuary, production, refining and
distribution of city water, electricity, natural gas and petroleum as well as petrochemical works, production of which starts from naphtha or natural
gas; banking services; in workplaces operated directly by the Ministry of National Defence, General Command of Gendarmerie and Coast Guard
Command, firefighting and urban public transportation services carried out by public institutions and in hospitals.
5. Due to a major break in series, data prior to 2005 are not reported in this Chart.
Source: ILOSTAT and national statistical offices for working days not worked and OECD Annual Labour Force Statistics Database and national
statistical offices for total number of employees.

 67
Since Blanchard and Philippon (2004[98]) tried to establish a link between conflictual labour relations and
high unemployment, there has been an increasing focus on the quality of labour relations and trust
among social partners. Blanchard et al. (2004[98]) argued that “trust appears to be just as important in
bringing macro flexibility as the structure of collective bargaining” as the effectiveness of co-ordination,
in particular, is likely to be closely linked to relatively peaceful and co-operative industrial relations. IMF
(2016[85]) shows that unemployment rose less following the global financial crisis in those countries
where trust was high.
Panel A in Figure 2.15 shows the degree of co-operation in labour relations as assessed by senior
business executives in a survey published by the World Economic Forum. Among OECD countries,
managers consider labour relations most co-operative in Switzerland and least co-operative in Korea.
The degree of perceived co-operation appears to have been largely unaffected by the crisis: if anything,
labour relations have slightly deteriorated in countries where they were already relatively poorer.
The trust that citizens have in unions also varies considerably across countries (data on trust in employer
organisations are not available) and is correlated with the national level of trust in institutions more
generally. In 2010 on average, 40% of respondents across OECD countries declare that they trust trade
unions, but the share of people trusting unions varies from 65% in Finland and Denmark to 25% in the
United States, Slovenia and Mexico. Between 2000 and 2010 trust in unions has increased markedly in
Central and Eastern European countries where it was initially very low while it has decreased quite
significantly in countries that have been deeply hit by the crisis, Greece, Ireland and Spain.
The quality of labour relations as assessed by senior executives and the degree of trust in trade unions
by the general population are positively, yet not perfectly, correlated. In some countries, such as France,
executives report a low quality of labour relations, but trust in unions is higher than average (a similar
gap is found also in Korea, ranked among the lowest by executives and close to the OECD average by
people). The opposite case is found in the United States, where executives consider labour relations
well above the OECD average, while only 25% people declare that they trust unions.

68 
Figure 2.15. Quality of labour relations
A. Co-operation in labour-employer relations as assessed by senior executives
2017-18 (↗) 2006-07 2010-11
B. Trust in trade unions among total population
2010 (↗) 2000 2005

%
80
70
60
50
40
30
20
10
0
Note: Statistics shown in Panel A refer to the average weighted national score based on a scale from one (“generally confrontational”) to seven
(“generally co-operative”) to the following question: “In your country, how would you characterise labour-employer relations?” In Panel B, the
statistics refer to the share of persons tending to trust trade unions for the European countries (not including Norway and Switzerland) and the
share of persons who are greatly or quit a lot confident in trade unions for all other countries (including Norway and Switzerland). OECD is the
unweighted average of OECD countries shown (not including Canada, Colombia, Iceland, Israel, Norway and Switzerland in Panel B).
Source: Panel A: The Global Competitiveness Index Historical Dataset © 2005-2014 and © 2007-2017 World Economic Forum. Panel B:
Eurobarometer for all European countries (not including Norway and Switzerland) and World Value Survey
(http://www.worldvaluessurvey.org/WVSOnline.jsp) for all other countries (including Norway and Switzerland).
The quality of labour relations and trust in unions, in line with the findings by Blanchard and
Philippon (2004[98]), are found to be negatively correlated with the unemployment rate and with earnings
inequality: on average across OECD countries, higher trust goes hand in hand (but the direction of the
causality is not clear) with lower unemployment and lower earnings inequality45 – see Annex Table 4.A1.1 in
OECD (2017[7]).
The level of co-operation and trust is the result of decades of history and is deeply rooted into broader societal
and cultural factors. The evidence on the issue is very limited-see Addison (2016[71]) for a summary, but some
of the features of collective bargaining systems themselves can help promoting more co-operative relations.

 69
Fragmented and poorly representative social partners are likely to be less inclusive and increase the level of
strife. Therefore promoting co-operation between social partners (or at least not incentivising excessive
competition) could have a positive effect on the quality of labour relations. More in general co-operation in a
range of areas, involvement in committees, reforms, and institutions at higher levels, together with employee
involvement and co-operation at the firm level can help building trust and a common understanding of
challenges, solutions, and positions. Moreover, objective criteria, in particular with respect to opt out and
extension requests, the availability of accurate information on the representativeness of social partners and
the presence of an independent body to mediate and settle disagreements, can also contribute to improve
labour relations. Hijzen et al. (2019[58]) also suggest that incentives for regular renegotiation might enhance
trust (unless they force the conclusion of an agreement when there is no shared willingness to reach it).
Mechanisms that ensure the actual enforcement of the terms of collective agreements (see Box 2.6) are also
likely to strengthen the accountability of social partners and therefore reciprocal trust. Finally, institutional
stability usually helps social partners by creating shared and mutual expectations (Brandl and Ibsen, 2016[99]).
Repeated piecemeal reforms are likely to increase adaptation costs and shorten the outlook over which social
partners plan their negotiation strategies. Generally, ensuring the autonomy of social partners is likely to
enhance trust between them.
2.6. Workers’ voice at workplace and company level
Beyond collective bargaining, countries also vary when it comes to the presence and role of various forms of
workers’ voice arrangements organising the collective expression of workers’ interests at workplace or
company level. Voice is made of the various institutionalised forms of communication between workers and
managers that offer an alternative to exit (i.e. dissatisfied employees quitting) in addressing collective
problems. Voice provides employees with an opportunity to solve issues emerging in the workplace through
communication with management (Willman, Gomez and Bryson, 2009[100]). The need for workers’ voice is
described as inherent to working life (Gomez, Bryson and Willman, 2010[101]). Box 2.7 delves into the
influence of various workers’ voice arrangements on the “voice vs. exit” behaviour of workers, comparing the
cases of France and the United Kingdom.
Voice is often mediated through representative institutions (in this report referred to as “representative voice”),
such as local trade union representatives (either appointed by the trade union or elected by the employees),
works councils (established bodies elected or appointed by all employees in a firm, irrespective of their
membership of a trade union),46 or workers representatives (either union members or independent). The
prerogatives of the representative entities differ largely across OECD countries, ranging from information, to
consultation and co-determination (De Spiegelaere et al., 2019[102]). This variation in the rights granted to
structure of representative voice means that apparently similar institutions are likely to yield different results
in different legal contexts.47
In most OECD countries, several representative institutions can cohabit in one workplace. This often depends
on the firm’s size and related legal thresholds above which representation is mandatory. In several OECD
countries bodies/councils dedicated to occupational health and safety issues are also present in the
workplace. Until a 2017 reform, firms with more than 50 employees in France combined a works council
(comité d’entreprise), union representatives (délégué syndical and/or représentant de la section syndicale),
worker representatives (délégué du personnel) and a relatively powerful health and safety committee – see
Askenazy and Breda (2019[103]) for more details. The 2017 reform (Ordonnances) merged these bodies in a
single one, the Comité Social et Économique. Table 2.9 shows the diversity of situations across OECD
countries. In Austria, Germany, Luxembourg, the Netherlands and Switzerland, works councils are the sole
eligible employee representative structure; this does not however prevent unions from playing any role, as
they often have reserved seats in the works councils. In Canada, the United States, Sweden or Turkey trade
unions are the sole representative body.

70 
Box 2.7. Voice or exit? The role of employees’ expression and representation in the workplace
Workers, when not satisfied with their working conditions, have essentially two main options:
exit (i.e. quit their job); or, voice their concerns (Hirschman, 1972[104]). Freeman and Medoff (1984[105])
brought some evidence that unions, by giving employees the opportunity to express their concerns and
improve their situation, contribute to reduce voluntary quits, ultimately reducing labour turnover – even
if the process of reaching resolutions may be conflictual and disruptive. This may thus benefit not only
workers, but also firms, as lower turnover and longer tenure can reduce hiring and training costs and
increase productivity.
Amossé and Forth (2016[106]) have recently tested the “exit-voice” dichotomy using comparable
establishment surveys for France (REPONSE) and Great Britain (WERS). They assess if Britain is an
“exit” country and France a “voice” one, given their respective historical differences in the degree of
regulation and influence of the unions (while trade union density is lower in France, union
representatives at the workplace level are much more prevalent). They also test if the presence of a
union representatives in the workplace or arrangements for direct voice reduce quits and contribute to
an increase in collective disputes.
Table 2.8. Association between on-site union representation and direct voice and quits and
collective disputes in 2011
Average Net effect of union Net effect of direct voice
representative arrangements1
in Britain in France in Britain in France in Britain in France
Quits 9.7 3.4 -2.3** -1.0*** +2.2** +0.1
(% of employees employed 1 year
before)2
Collective disputes 1.8 20.5 +4.8* +18.3*** -0.1 +1.7
(% of workplaces)3
**, ***: statistically significant at the 5 and 1% levels, respectively.

1. Direct voice arrangements include: regular departmental meetings, employee attitude survey, and the use of suggestion schemes.
2. Quits are based on workplaces with 50 or more employees.
3. Collective disputes are based on workplaces with 11 employees or more. In France disputes refer to the last three years; and to the last
year in Britain.
Source: Excerpt from Table 3.5 in Amossé and Forth (2016[106]), “Employee Expression and Representation at Work: Voice or Exit?”,
https://doi.org/10.1057/978-1-137-57419-0_3, based on the establishment surveys WERS and REPONSE.
The results by Amossé and Forth (2016[106]) in Table 2.8 show that, as expected, voluntary quits are on
average more frequent in Britain than in France. In both countries the presence of a union
representative in the workplace is associated with a lower quit rate, as already found by Bryson
and Forth (2010[107]) and Bryson et al. (2013[108]) for Britain. The effect is robust also when controlling
for other factors.
This result suggests that unions or worker representatives on site reduce exit by offering stronger
collective voice. On the contrary, direct voice arrangements (regular departmental meetings, employee
attitude surveys, suggestion schemes) have no statistically significant association with the quit rate in
France, while they are positively correlated with quits in Britain. Whilst Freeman and Medoff (1984[105])
suggested that voice may reduce exits, they also recognised that the articulation of voice (typically in

 71
the form of complaints) would be likely to lead to a degree of overt conflict in the workplace, whilst
issues were being discussed and resolved.
The establishment data from WERS and REPONSE indicate that disputes in the workplace are much
more common in France and that union presence is strongly and positively associated with a more
frequent occurrence of collective disputes in both countries (this is also confirmed by managers’
subjective rating of the social climate in the workplace as reported in the establishment surveys). Overall
thus, the recent analysis by Amossé and Forth (2016[106]) confirms that, at least in the case of France
and Great Britain, the presence of a union representative effectively contributes to reduce turnover as
suggested by Hirschman (1972[104]) and Freeman and Medoff (1984[105]), but also increases collective
disputes.
Table 2.9. Existing forms of representative voice in the workplace, 2018

Country
Works council Austria
France
Germany
Luxembourg
Netherlands
Union or union representatives Australia Japan
Canada Mexico
Chile New Zealand
Colombia Sweden
Costa Rica Turkey
Iceland United States
Israel
Both but works council predominant Hungary
Italy
Slovak Republic
Spain
United Kingdom
Both but union predominant Belgium Lithuania
Czech Republic Norway
Denmark Poland
Estonia Portugal
Finland Slovenia
Greece Switzerland1
Ireland
Korea
Latvia
1. In the manufacturing sector.

Note: Non-union worker representatives can be present in Australia, Costa Rica, Finland, France, Greece, Japan, Korean and Latvia.
Source: OECD Policy Questionnaires and Eurofound (2011).
Representative voice can also materialise at company level, through employees’ and/or trade unions’
presence in supervisory and management boards (Gold, 2011[109]; Kleinknecht, 2015[110]).48 Board-level
employee representation is a form of workers’ voice that also tends to strengthen workers’ bargaining
power and potentially enhance co-operative attitudes by allowing workers to engage in the strategic
choices of the company (De Spiegelaere et al., 2019[102]).49 Employees’ right to be represented on the
board depends on the nature of the company ownership, its size, and its legal status. Again, beyond the

72 
presence of workers’ representatives on the board, the latter are also granted varying degrees of rights
and prerogatives, which is likely to influence their impact (Conchon, 2011[111]). Among OECD countries (for
more details see detailed tables available online50), Austria, Denmark, Finland, France, Germany,
Hungary, Luxembourg, Netherlands, Norway, Poland, the Slovak Republic, Slovenia, and Sweden have
such provisions, allowing worker representatives to sit on the boards of private companies in firms above
a certain size.51 In Chile, Greece, Ireland, Israel, Poland, Portugal and Spain worker representatives can
sit on the boards of state-owned enterprises only. Supervisory boards are a particularly essential feature
of workers’ voice in Germany, and an important arena where the quality of the working environment is
influenced (Scholz and Vitols, 2019[112]) (see Chapter 4).
Figure 2.16 displays the share of employees covered by any form of worker representation as reported in
the European Working Conditions Survey. The results show that on average, at least for European
countries, the coverage of firm-level representation is not particularly higher in countries where firm-level
bargaining dominates, although institutions of workers representation are indispensable pillars of collective
bargaining in single-employer systems. Representation tends to be relatively high in multi-employer
bargaining systems, with complementary effects between the two levels (notably in the Nordic countries,
Germany or the Netherlands). On the other hand, the coverage of employees’ representation is low in
countries where firm-level bargaining is very limited, like in Greece or Portugal even after the recent
reforms.
Figure 2.16. Representative voice in Europe

Share of employees with access to representative voice, 2015
%
100
90
80
70
60
50
40
30
20
10
0
Source: OECD calculations based on the 6th European Working Conditions Survey 2015 (EWCS 2015).
In practice, beyond representation, voice also materialises at the workplace through the organisation of
direct exchanges between workers and managers (e.g. via regular town hall meetings and/or direct
consultations, in this report referred to as “direct voice”). 52 A key difference between direct and
representative forms of voice is the legal protections and rights attached to the status of workers’
representatives, notably the protection against retaliation and firing, and information and consultation
rights. Therefore, direct and representative forms of voice are not substitutes. However, this distinction is
useful in capturing the different ways in which communication between workers and managers de facto
materialises (or fails to) across OECD countries.53

 73
Finally, in “mixed” systems of voice, both direct and representative arrangements for workers’ voice
cohabit. According to data from the European Working Conditions Survey, these systems are the most
common: in 2015, about 37% of European workers had access to both representative and direct voice
arrangements, while 18% had access to voice arrangements of the “direct type”54 only and 14% had access
to solely representative voice arrangements.
The proportion of workers who have access to mixed-voice arrangements is higher in well-coordinated
bargaining systems; by contrast, the proportion of workers in firms with no workplace voice arrangements
at all is highest in decentralised and weakly coordinated bargaining systems. Access to these different
forms of workers’ voice arrangements also varies based on workers’ characteristics. According to the same
data, while 46% of highly educated workers in Europe had access to mixed systems of voice in 2015, this
was the case for only 26% of low-skilled workers. Moreover, 44% of low-skilled workers had access to no
voice arrangements at all, compared with 19% of high-skilled workers. Data by type of contracts and firm
size display significant differences as well, with 43% of workers on temporary contracts, against 27% of
those on permanent contracts without access to any form of voice. 53% of workers in small firms (less than
10 employees) do not have access to any form of voice, while 40% of those in firms above 10 employees
have access to both direct and representative forms of voice.55
While in a number of countries, voice historically developed in its representative version, with unions
playing a prominent role, systems of direct voice have become more prominent in recent decades (Bryson
and Green, 2015[113]). Willman, Gomez and Bryson show that the “collapse of union voice” in the United
Kingdom coincided with the expansion of direct voice mechanisms often initiated by employers (Willman,
Gomez and Bryson, 2009[100]). However, as explained above, these two mechanisms are not substitutes,
since many of the legal guarantees accompanying workers’ representation are absent in direct voice
arrangements. The rise of direct forms of voice in the United Kingdom has been associated with more
collaborative relationships with managers and with more consultation, but also with less actual negotiation
and with a weakening of representation itself, as workers’ representatives act more as managerial
assistants than as independent and influential stakeholders (Charlwood and Forth, 2009[114]).
2.7. How do national collective bargaining systems compare?
The previous sections have detailed the scope, building blocks and adjustment devices characteristic of
national bargaining systems across OECD countries, in order to capture as much as possible their
granularity, complexity and diversity. However, national collective bargaining systems should not be
considered as just a sum of different elements but as a system with complex interactions between the
different components. In this context it is useful to “zoom-out” so as to obtain an overarching view of each
bargaining system.
Table 2.10 provides a summary of all the key features identified in Figure 2.1, a sort of dashboard of the
different national collective bargaining systems. It clearly shows that collective bargaining coverage is high
(above 50%) only in countries which have at least some forms of sectoral bargaining. In these countries
high coverage either results from high employer organisation density or from a widespread use of
administrative extensions. However, Table 2.10 emphasises that there is no single model of sectoral
bargaining. Indeed, countries under this broad group differ greatly in terms of the degree of co-ordination
and the room left to lower-level agreements to change the terms of employment. In particular:
 In Belgium (and Finland until 2015 and in other countries in the 1980s and 1990s), a rather
centralised and co-ordinated country, sectoral agreements play an important role, while leaving
some room for lower-level agreements to change the standards set in higher-level agreements.
The specific feature of this system is the strong form of state imposed (or induced) co-ordination.
 In rather centralised and uncoordinated countries such as France, Iceland, Italy, Portugal and
Slovenia, sectoral agreements play a strong role, extensions are used extensively and there is

74 
rather limited room for lower-level agreements to derogate from higher-level ones. Moreover, in
these countries co-ordination tend to be generally weak.
 Spain and Switzerland are in many respects similar to the previous group but in Spain the recent
reform has made it somewhat easier for lower-level agreements to derogate from higher-level
agreements (but derogations are only rarely used for the time being) while in Switzerland co-
ordination still plays a non-minor role.
 Austria, Denmark, Finland (after 2015), Germany, the Netherlands, Norway and Sweden have an
organised decentralised and co-ordinated bargaining system: in these countries sectoral
agreements, even in the case of extensions, leave significant room for lower-level agreements to
set the terms of employment by leaving up to bargaining parties the design of the hierarchy of
agreements (Denmark, Finland, the Netherlands, Norway and Sweden) or by allowing for the
possibility to opt-out (Germany and Austria). In these countries co-ordination is relatively strong (at
least in certain sectors), and usually takes the form of pattern bargaining.
In countries where bargaining takes place predominantly at company level, collective bargaining coverage
is typically below 20% (the Czech Republic and Ireland are the only exceptions). In these countries
coverage tends to go hand in hand with trade union membership since having a trade union or worker
representation in the workplace is a necessary condition to be able to negotiate a collective agreement.
Higher-level agreements (or similar regulation mechanisms such as “Modern Awards” in Australia or
“Sectoral Employment Orders” in Ireland) can set some general minimum wage and work organisation
standards and thus limit coverage erosion to some extent. Finally, among countries with dominant firm-
level bargaining Japan stands out due to the significant and unique degree of co-ordination (Shunto).
Finally, in all countries where co-ordination is strong, trust is medium/high. Trust is indeed a key
precondition for co-ordination to be effective. By contrast, the quality of labour relations is not systematically
related to level of collective bargaining, with very high quality labour relations observed among both
decentralised and centralised systems.

 75
Table 2.10. Dashboard of collective bargaining systems, 2018

Countries ordered by predominant level of collective bargaining, degree of centralisation, co-ordination, trade union
density in the private sector, collective bargaining coverage, employer organisation density and quality of labour
relations
Predominant level Degree of Co- Trade union Employer Collective Quality of
centralisation/ ordinati density in the organisatio bargaining labour
decentralisation on private sector n density coverage relations
rate
Costa Rica Company Decentralised No Less than 5% .. 5-10% Medium
Colombia Company Decentralised No Less than 5% .. 5-10% Low
Turkey Company Decentralised No Less than 5% .. 5-10% Low
Estonia Company Decentralised No Less than 5% 20-30% 10-20% Medium
Lithuania Company Decentralised No 5-10% .. 5-10% Medium
Mexico Company Decentralised No 5-10% .. 10-20% Medium
United States Company Decentralised No 5-10% .. 10-20% High
Korea Company Decentralised No 5-10% 10-20% 10-20% Low
Poland Company Decentralised No 5-10% 20-30% 10-20% Low
Latvia Company Decentralised No 5-10% 30-40% 10-20% Medium
Hungary Company Decentralised No 5-10% 60-70% 20-30% Low
Chile Company Decentralised No 10-20% .. 10-20% Medium
New Zealand Company Decentralised No 10-20% .. 10-20% High
Canada Company Decentralised No 10-20% .. 20-30% High
United Kingdom Company Decentralised No 10-20% 30-40% 20-30% High
Czech Republic Company Decentralised No 10-20% 60-70% 40-50% Medium
Ireland Company Decentralised No 20-30% 60-70% 40-50% Medium
Japan Company Decentralised High 10-20% .. 10-20% High
Israel Company/Sectoral Decentralised No 10-20% 40-50% 20-30% Medium
Slovak Republic Company/Sectoral Decentralised No 10-20% 30-40% 20-30% Low
Greece Company/Sectoral Decentralised1 No 10-20% 50-60% 40-50% Low
Australia2 Company/Sectoral Decentralised No 10-20% .. 50-60% Low
Luxembourg Company/Sectoral Decentralised No 20-30% 80-90% 50-60% High
Spain Sectoral Organised decentralised Low 10-20% 70-80% 70-80% Low
Switzerland Sectoral Organised decentralised High 10-20% .. 40-50% High
Germany Sectoral Organised decentralised High 10-20% 60-70% 50-60% High
Netherlands Sectoral Organised decentralised High 10-20% 80-90% 80-90% High
Austria Sectoral Organised decentralised High 20-30% 90% or 90% or
High
more more
Norway Sectoral Organised decentralised High 30-40% 70-80% 60-70% High
Finland Sectoral Organised decentralised High 50-60% 60-70% 80-90% Medium
Denmark Sectoral Organised decentralised High 60-70% 60-70% 80-90% High
Sweden Sectoral Organised decentralised High 60-70% 90% or
80-90% High
more
Slovenia Sectoral Centralised Low 10-20% 50-60% 60-70% Medium
Iceland Sectoral Centralised Low 80-90% .. 80-90% High
France Sectoral Centralised Low 5-10% 90% or
70-80% Low
more
Portugal Sectoral Centralised Low 10-20% 60-70% 60-70% Medium
Italy Sectoral Centralised Low 20-30% 60-70% 80-90% Low
Belgium Sectoral/National Centralised High 50-60% 90% or
80-90% Medium
more
..: not available.

76 
Note: Statistics on trade union density in the private sector are based on figures shown in the Annex Figure 4.A1.5 in OECD (2017[7]), those on
collective bargaining coverage on figures shown in Figure 2.11 and those on employer organisation density on figures shown in Panel A of
Figure 2.3. Quality of labour relations is based on a ranking of the average national scores as shown in Panel A of Figure 2.15.
2. In Australia the classification company/sector refers to the use of Modern Awards which are industry-wide regulations providing a fair and
relevant minimum safety net of terms and conditions. A proper sectoral bargaining does not exist in Australia.
Source: OECD elaboration based on the OECD Policy Questionnaires, ICTWSS data and national sources (for further details see Figure 4.4,
Figure 4.5, Figure 4.9 and Annex Figure 4.A1.6 in OECD (2017[7]), “Collective bargaining in a changing world of work” in OECD Employment
Outlook 2017, https://dx.doi.org/10.1787/empl_outlook-2017-8-en).
Conclusions
This chapter has documented the granularity, diversity and complexity of national collective bargaining
systems in OECD countries. The analysis confirms the need to go beyond standard macroeconomic
indicators of collective bargaining: indeed, standard indicators of coverage, trade union density, or
centralisation hide a wide variation in collective bargaining systems.
Capturing that variation implies accounting in a more precise way for the institutional set-ups and practices
characterising collective bargaining systems. In particular, beyond considering the representativeness of
social partners and the coverage of collective agreements (including by considering the role of extension
mechanisms), the chapter identified four different building blocks into which collective bargaining systems
can be decomposed. Those are the actual degree of centralisation (taking into account both the
predominant level of bargaining but also the institutional flexibility for lower-level agreements to derogate
from higher-level agreements), the degree of co-ordination between bargaining units, the overall quality of
labour relations as well as the level of enforcement of collective agreements.
This granular approach allows re-thinking old debates such as the one concerned with the optimal degree
of bargaining centralisation. While full centralisation can ensure high coverage and inclusiveness at the
expense, however, of flexibility, at the opposite extreme full decentralisation while leaving flexibility to
individual firms, can result in low coverage and has clear limits in terms of inclusiveness. The chapter
suggests that the articulation between sectoral and firm-level bargaining, the content of collective
agreements at sectoral level, the use of extensions and of “escape valves” such as opening clauses and
exemptions from extensions, are some of the key tools to find the right balance between flexibility and
inclusiveness. Co-ordination mechanisms across sectors and firms are also key elements for ensuring
inclusiveness and flexibility.
Grasping the full complexities of bargaining systems also allows distinguishing between systems which
are only apparently similar, but which in fact largely vary in practice, and are therefore likely to yield
contrasted outcomes. The next chapters build on this exercise, to assess whether and how collective
bargaining can promote a high level of employment, labour market inclusion and labour market resilience
(Chapter 3), as well as whether it has any bearing on the non-monetary aspects of job quality (Chapter 4).
Priorities for further research also emerge from this chapter. First, future work should focus more on
understanding the increasing heterogeneity of collective bargaining systems within countries. The
functioning of collective bargaining can vary significantly within the same country across sectors, yet the
extent, drivers and effects of this divergence have not been studied in details so far. Second, while this
chapter highlights the importance of co-ordination, formulating clear policy measures to effectively promote
co-ordination remain difficult since the latter largely relies on traditions, unwritten practices and personal
relationships where trust is fundamental. This is an important topic for future study.

 77
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86 
Annex 2.A. Decomposing effects of change in

employment composition on union density
In order to analyse the role of employment composition effects on the evolution of trade union density a
nonlinear multivariate decomposition method is conducted on individual microdata on union membership
This technique uses the output from probit regression model to partition the components of year differences
in a statistic, such as a mean or proportion, into a component attributable to the employment composition
changes and a component attributable to differences in unionisation by employment characteristics.
For each year t, the probability of employee i to be unionised is regressed on four vectors accounting for
employment composition:
Pr{𝑈𝑛𝑖𝑜𝑛𝑖,𝑡 = 𝑦𝑒𝑠} = 𝐹(𝛽𝑋𝑖,𝑡 ) (1)
Where F is the probit function defined as the cumulative normal distribution function Φ(𝛽𝑋𝑖,𝑡 ), and 𝑋𝑖,𝑡 the
employment composition vector grouped as follows: demographics (sex, age groups and educational
attainment), job characteristics (industry, occupation, public/private/sector and firm size), atypical
employment (temporary/ permanent contract, part-time/full-time job and job tenure) and other factors
(migration status and quintile of the hourly earnings).
Then, the mean difference in union density between two years (indices T for the last year and 0 for the
base year) is decomposed as:
̅̅̅̅̅̅̅̅0 = ̅̅̅̅̅̅̅̅̅̅
̅̅̅̅̅̅̅̅𝑇 − 𝑈𝑛𝑖𝑜𝑛
𝑈𝑛𝑖𝑜𝑛 𝐹(𝛽𝑇 𝑋𝑇 ) − ̅̅̅̅̅̅̅̅̅̅
𝐹(𝛽0 𝑋0 ) (2)
= {̅̅̅̅̅̅̅̅̅̅
𝐹(𝛽𝑇 𝑋𝑇 ) − ̅̅̅̅̅̅̅̅̅̅ ̅̅̅̅̅̅̅̅̅̅̅
𝐹(𝛽𝑇 𝑋0 )} + {𝐹(𝛽 ̅̅̅̅̅̅̅̅̅̅̅
𝑇 𝑋0 ) − 𝐹(𝛽0 𝑋0 )} (3)
𝐸 𝐶
The first component of equation (E) refers to the part of the differential attributable to changes in
employment composition and the second component (C) refers to the part of the differential attributable to
differences in unionisation by group.
The contribution of each employment characteristics to the employment composition effect (E) can be
decomposed by the mean of weighting factors 𝑊∆𝑋𝑘 derived from 𝛽𝑇 ̅𝑋̅̅𝑇̅ and 𝛽0 ̅̅̅
𝑋0 as:
𝐾
̅̅̅̅̅̅̅̅
𝑈𝑛𝑖𝑜𝑛 𝑇 − ̅̅̅̅̅̅̅̅
𝑈𝑛𝑖𝑜𝑛0 = 𝐸 + 𝐶 = ∑ 𝑊∆𝑋𝑘 𝐸 + 𝐶
𝑘=1
𝛽𝑇𝑘 (𝑋̅𝑇𝑘 − 𝑋̅0𝑘 )
𝑊∆𝑋𝑘 = ∑𝐾 ̅ ̅
, where ∑𝐾
𝑘=1 𝑊∆𝑋𝑘 = 1
𝑘=1(𝑋𝑇𝑘 − 𝑋0𝑘 )
Thus, the composition weights 𝑊∆𝑋𝑘 reflect the contribution of the k th covariate to the linearization of E as
determined by the magnitude of the group difference in means weighted by the reference group’s effect.

 87
Annex 2.B. Data sources used in the

decomposition analysis
The analysis of employment composition effects on trade union density has been conducted on 16
countries based on 18 data surveys (two for Mexico and the United Kingdom, respectively) for which
question on trade union affiliation and a sufficient number of employment characteristics was available
(see Annex Table 2.B.1).
Labour force surveys, that are official national sources to estimate trade union density, have been used for
Canada, Ireland, Mexico (2005-18), the United Kingdom (2007-17) and the United States. In the case of
Mexico, the panel data survey (ENIGH) and the labour force survey (ENOE) are not recognised as an
official source to estimate the degree of unionisation among employees. However, in the absence of
alternative data source, estimates based on these two survey are integrated into the OECD/ICTWSS
Database on trade unions. It is worth to note that for international comparison purpose, the incorporated
self-employed for Canada and the United States are included in the OECD/ICTWSS database what is not
the case in this analysis.
Panel data surveys for Australia (HILDA), Germany (SOEP), Korea (KLIPS) and the United Kingdom
(BHPS in 1994-2007).and data from the European social survey (ESS) for some European countries
(Austria, Belgium, Denmark, Finland, Israel, the Netherlands, Norway and Sweden) complete this analysis.
For the latter, the results for these countries should be interpreted with cautious due to the relative small
sample sizes of this survey and the restriction applied as a consequence of small sample sizes for some
categories (agriculture and persons aged 65 or more has been excluded).

88 
Annex Table 2.B.1. Decomposition analysis: data sources

Country Survey Sample Note Trade union membership
Name Data type Time period
Australia HILDA Panel data 2001-2016 Employees aged Data adjusted on official Trade union and other
15 or more TUD. professional association
membership (ABS definition only
available since 2009)
Austria, ESS Social 2002-2016 Employees aged Data adjusted on official Trade union density relatively
Belgium, survey 15-64 excl. TUD. consistent with official data
Denmark, Agriculture
Finland, Israel,
Netherlands,
and Norway
Canada LFS Labour 1997-2015 Employees International definition of Trade union membership
force survey (excl. ISE) aged employees (CISE-93) (consistent with official data)
15 or more includes incorporated
self-employed (ISE).
Germany SOEP Panel data 1998-2015 Employees aged Data adjusted on official Trade union density relatively
15 or more TUD. consistent with official data
Ireland QNHS Labour 2003-2017 Employees aged Trade union membership
force survey 15 or more (consistent with official data)
Korea KLIPS Panel data 2002-2016 Employees aged Data adjusted on official Trade union density relatively
15 or more TUD. consistent with official data
Mexico ENIGH Household 1984-2004 Employees aged Sector is available in Trade union membership
panel data 15 or more 1992-2002 only. (consistent with official data)
ENOE Labour 2005-2018 Employees aged
force survey 15 or more
United BHPS Panel data 1994-2007 Employees aged Data adjusted on official Trade union density relatively
Kingdom 16 or more TUD. consistent with official data
UKLFS Labour 2007-2017 Employees aged Trade union membership
force survey 16 or more (consistent with official data)
United States CPS- Labour 1983-2018 Employees International definition of Trade union membership
MORG force survey (excl. ISE) aged employees includes (consistent with official data)
16 or more incorporated self-
employed (ISE).
Note: BHPS: British Household Panel Survey; CPS-MORG: Current Population Survey Merged Outgoing Rotation Groups; ENIGH: Encuesta
Nacional de Ingresos y Gastos de los Hogares; ENOE: Encuesta Nacional de Ocupación y Empleo; ESS: European Social Survey; HILDA:
Household Income and Labor Dynamics in Australia; KLIPS: Korean Labor and Income Panel Survey; LFS: Labour Force Survey; QNHS:
Quarterly National Household Survey; SOEP: Socio-Economic Panel. ISE: Incorporated self-employed.
As indicated in Annex 2.A, the analysis includes the main dimensions of employment that potentially drive
the change in trade union density. However, all of these dimensions are not always available in the survey
or are only available for a limited number of years. While almost all countries include the demographic
variables, migration status (based on country of birth), temporary employment, job tenure, public sector,
firm size and the quintiles of the hourly wage are frequently absent (Annex Table 2.B.1 and Annex
Table 2.B.2). For the purposes of the analysis and to take into account as many dimensions as possible,
the period covered for some countries has been restricted: this is the case for Germany and Korea to
integrate temporary employment, reducing the analysis to the period 1998-2015 instead of 1985-2015
and to the period 2002-16 instead of 1998-2016, respectively.
Another issue relates to the comparability of some variables over time due to a change in classification
as for educational attainment, industry or occupation. The data for the United States are clearly affected
by this problem given the long period covered by the CPS-MORG (1983-2018). In particular, both industry
and occupation classifications changed at the turn of the century: in this case, a simple mapping based
on years 2000-02 (for these years, variables are double coded into both classifications) has been applied

 89
to maintain the comparability over time. The same problem arise with the countries covered by the
European Social Survey (industry classification changed in 2008 from NACE Rev. 1.1 to NACE Rev. 2
and occupation in 2012 for ISCO-88 to ISCO-08). Nevertheless, as the number of observations is too
small to conduct the analysis on detailed categories of industry and occupation, both variables have been
recoded into broad categories that limits the effects of breaks in series.
Annex Table 2.B.2. Variable definition: demographics and atypical employment

Country Data source Demographics Atypical employment
Gender Age groups Education Contract Contract Job tenure
duration (FT/PT
(temporary/ national
permanent) definition)
Australia HILDA ● ● ● ● ● ●
Austria, ESS ● ● ● ● ●1
Belgium,
Denmark,
Finland, Israel,
Netherlands
and Norway
Canada LFS ● ● ● ● ● ●
Germany SOEP ● ● ● ●2 ● ●
Ireland QNHS ● ● ● ● ● ●
Korea KLIPS ● ● ● ●2 ● ●
Mexico ENIGH ● ● ● ● ●1
ENOE ● ● ● ● ●1 ●
United BHPS ● ● ● ● ● ●
Kingdom UKLFS ● ● ● ● ● ●
United States CPS-MORG ● ● ●3 ●
Quarterly National Household Survey; SOEP: Socio-Economic Panel.
1. Part-time defined as employees usually working less than 30 hours per week for countries covered by the ESS and usually working less than
35 hours per week for Mexico.
2. This variable is only available since 1996 for Germany and 2002 for Korea.
3. Educational attainment in five groups to be consistent over the entire period.

90 
Annex Table 2.B.3. Variable definition: Job characteristics and other factors
Country Data source Job characteristics Other factors
Industry1 Occupation1 Sector Firm size Migrants Quintiles of
(public/private) hourly
earnings
Australia HILDA ● ● ● ● ● ●2
Austria, ESS
Belgium,
Denmark,
● ● ● ●
Finland, Israel,
Netherlands
and Norway
Canada LFS ● ● ● ● ●
Germany SOEP ● ● ● ● ● ●
Ireland QNHS ● ● ●
Korea KLIPS ● ● ● ● ●
Mexico ENIGH ● ● ● ●
ENOE ● ● ● ● ● ●
United BHPS ● ● ● ● ● ●
Kingdom UKLFS ● ● ● ● ● ●
United States CPS-MORG ● ● ● ●3 ●2
Quarterly National Household Survey; SOEP: Socio-Economic Panel.
1. Break in series for countries covered by the ESS and the United States. Industries are classified into five broad industries: Manufacturing
including mining and utilities, business services, public administration and other services and occupations into three groups: low-skilled
occupations (codes 1, 2 and 3 of both ISCO-88 and ISCO-08), medium-skilled occupations (codes 4, 6, 7 and 8) and high-skilled occupations
(codes 5 and 9) for the ESS countries. Industries are recoded into NAICS 2002 (Census codes) and SOC-2000 before 2000 for the United
States.
2. Variable based on gross weekly earnings.
3. Country of birth is only available since 1994. The inclusion of this additional control do not change significantly the decomposition over the
period 1994-2018.
The decomposition analysis for Mexico and the United Kingdom are conducted on two sub periods based
on two different surveys. While, the regressions are based on the same number of controls for the United
Kingdom in both surveys, the analysis in Mexico for the period 1992-2002 (ENIGH) is based on a reduced
number of controls. A simple comparison of the employment composition effects using the same number
of controls based on the ENOE shows that the conclusion remains the same except that the demographic
factors (gender, age and education) play a more significant and positive role (Annex Figure 2.B.1). In the
case of the United States, the inclusion of migrant workers in the analysis for the period 1994-2018 does
not really change the results (Annex Figure 2.B.2).

 91
Annex Figure 2.B.1. Sensitivity analysis for Mexico

Percentage-points change in change in union density explained by workforce composition effect (“between effect”)
Atypical employment Sex, age and education Job characteristics

Other factors Workforce composition effect
A. ENIGH B. ENOE C. ENOE
Same controls as in the analysis Full controls
conducted with the ENIGH
p.p p.p p.p
3 3 3
2 2 2
1 1 1
0 0 0
-1 -1 -1
-2 -2 -2
-3 -3 -3
1992- 1992- 1996- 2005- 2005- 2007- 2010- 2005- 2005- 2007- 2010-
2002 1996 2002 2018 2007 2010 2018 2018 2007 2010 2018
Note: Multivariate decompositions analysis based on probit regressions including control for sex (female), age groups, education, type of contract
(part-time), contract duration (temporary jobs), occupation, industry, quintiles of the hourly earnings and sector (public sector) for ENIGH and
migrant workers, job tenure and firm size for the ENOE. See Annex 2.A for further details on the methodology and Annex 2.B for details on
definitions and variables included in the analysis.
Source: OECD Estimates based on the Encuesta Nacional de Ingresos y Gastos de los Hogares (ENIGH) in 1992-2002 and the Encuesta
Nacional de Ocupación y Empleo (ENOE) in 2005-18.
Annex Figure 2.B.2. Sensitivity analysis for the United States

Percentage-points change in change in union density explained by workforce composition effect (“between effect”)
Atypical employment Labour supply Labour demand

Other factors Workforce composition effect
A. Without control for migrant workers B. Control for migrant workers
p.p p.p
0.4 0.4
0 0
-0.4 -0.4
-0.8 -0.8
-1.2 -1.2
1994-2018 1994-2006 2006-08 2008-18 1994-2018 1994-2006 2006-08 2008-18
Note: Multivariate decompositions analysis based on probit regressions including control for sex (female), age groups, education, type of contract
(part-time), occupation, industry, quintiles of the hourly earnings and sector (public sector). See Annex 2.A for further details on the methodology
and Annex 2.B for details on definitions and variables included in the analysis.
Source: OECD Estimates based on the Current Population Survey Merged Outgoing Rotation Groups (CPS MORG).

92 
Annex 2.C. Decomposition analysis: Additional

material
Annex Table 2.C.1. Change in workforce composition explains generally a small part of change in
trade union density
Workforce composition Unionisation effect
Change in union density Share of between effect
effect (“between effect”) (“within effect”)
Country Period Percentage-points Percentage of the
Percentage-points Percentage-points
change change in union density
change change
Australia 2001-16 0.7 -10.8 -10.1 6.0
Austria 2002-16 -4.1 -5.0 -9.0 44.9
Belgium 2002-16 -1.6 -1.2 -2.8 58.0
Canada 1998-2015 0.7 -2.5 -1.9 21.2
Denmark 2002-14 -1.1 -2.0 -3.2 35.5
Finland 2002-16 0.0 -8.7 -8.7 0.1
Germany 1998-2015 -0.8 -7.6 -8.4 9.7
Ireland 2003-17 2.2 -13.7 -11.5 13.9
Israel 2002-16 -6.8 -4.8 -11.6 58.8
Korea 2002-16 1.6 -2.9 -1.3 35.8
Mexico 1992-2002 -0.6 -5.7 -6.3 9.5
Mexico 2005-18 -2.1 -2.7 -4.8 43.7
Netherlands 2002-16 1.0 -5.3 -4.3 16.4
Norway 2002-16 1.1 -3.5 -2.4 24.0
United Kingdom 1994-2007 -0.1 -8.3 -8.4 0.6
United Kingdom 2007-17 -0.1 -4.7 -4.8 1.5
United States 1983-2018 -1.2 -8.2 -9.5 13.0
in the analysis.

 93
Annex Table 2.C.2. Effect of various composition changes on trade union density
Percentage-points change in union density
Workforce
Atypical Sex, age and
Country Period composition effect Job characteristics Other factors
employment education
(“between effect”)
Australia 2001-2016 0.68 0.20 0.33 0.23 -0.07
2001-2005 0.60 0.06 0.06 0.45 0.03
2005-2008 -0.14 0.29 0.09 -0.50 -0.01
2008-2009 0.77 0.33 -0.02 0.47 -0.01
2009-2010 -0.24 -0.07 0.03 -0.16 -0.03
2010-2012 -0.35 -0.14 0.13 -0.30 -0.04
2012-2014 -0.32 -0.08 0.02 -0.22 -0.03
2014-2016 0.65 0.02 0.07 0.55 0.01
Austria 2002-2016 -4.06 0.56 -0.13 -4.28 -0.22
2002-2004 1.53 -0.24 2.66 -1.66 0.77
2006-2014 -0.90 5.42 -1.18 -1.21 -3.94
2014-2016 -0.44 0.08 0.20 -0.86 0.13
Belgium 2002-2016 -1.64 -0.16 0.61 -1.77 -0.32
2002-2004 -1.56 0.09 -0.48 -1.10 -0.06
2004-2006 -1.82 0.00 -0.62 -1.20 0.00
2006-2010 0.58 -0.05 -0.24 0.72 0.15
2010-2012 -0.82 0.04 -0.28 -0.49 -0.10
2012-2016 1.00 0.02 0.13 0.80 0.06
Canada 1998-2015 0.68 0.06 -0.07 0.69 0.00
1998-1999 -0.10 -1.16 -0.14 1.84 -0.63
1999-2001 0.11 -0.02 -0.01 0.12 0.02
2001-2003 0.11 0.09 -0.03 0.27 -0.22
2003-2008 0.04 -0.02 -0.02 0.02 0.07
2008-2012 0.47 0.24 -0.02 0.35 -0.09
2012-2015 0.01 0.00 0.00 0.00 0.00
Denmark 2002-2014 -1.12 -0.69 0.58 -0.75 -0.27
2002-2008 -5.43 -1.26 -3.20 -0.63 -0.35
2008-2012 1.24 0.02 1.62 -0.55 0.16
2012-2014 -0.16 0.12 0.11 -0.35 -0.04
Finland 2002-2016 0.01 -0.01 0.07 -0.04 -0.01
2002-2014 -1.25 0.00 1.17 -2.08 -0.33
2014-2016 -0.34 -0.43 0.00 -0.03 0.12
Germany 1998-2015 -0.81 -0.42 0.37 -0.65 -0.11
1998-2007 -0.51 0.01 -0.09 -0.39 -0.03
2007-2015 -0.60 -0.23 0.25 -0.55 -0.07
Ireland 2003-2017 2.21 1.86 0.31 1.35 -1.31
2003-2007 -0.36 -0.49 0.09 0.58 -0.53
2007-2009 2.25 1.21 0.33 0.77 -0.06
2009-2011 1.52 1.08 0.11 0.34 -0.02
2011-2015 0.20 -1.09 0.05 1.11 0.13
2015-2017 -0.55 -0.19 0.02 -0.22 -0.16
Israel 2002-2016 -6.81 -0.94 -0.04 -6.13 0.30
2002-2012 -11.30 -4.98 -2.66 -3.40 -0.26
2012-2016 0.85 -0.26 4.36 -3.37 0.12

94 
Workforce
Atypical Sex, age and
Country Period composition effect Job characteristics Other factors
employment education
(“between effect”)
Korea 2002-2016 1.60 1.37 -0.04 0.13 0.14
2002-2005 0.89 0.55 -0.46 0.80 0.00
2005-2007 0.14 -0.02 -0.02 0.13 0.05
2007-2010 -0.33 1.81 -0.38 -1.90 0.14
2010-2013 0.31 0.40 -0.23 0.07 0.07
2013-2016 -0.02 -0.01 -0.01 -0.01 0.00
Mexico (ENIGH) 1992-2002 -0.60 -0.60 0.08 -0.10 0.02
1992-1996 1.13 -1.10 0.14 1.65 0.45
1996-2002 -1.61 -0.92 0.19 -0.91 0.02
Mexico (ENOE) 2005-2018 -2.09 -0.12 -0.13 -1.82 -0.02
2005-2007 -0.28 0.00 -0.02 -0.21 -0.06
2007-2010 -0.38 -0.01 0.00 -0.44 0.07
2010-2018 -1.39 -0.20 -0.13 -1.06 0.00
Netherlands 2002-2016 1.04 -0.48 1.38 0.13 0.02
2002-2004 0.85 -0.22 1.10 0.05 -0.08
2004-2008 0.78 0.19 0.40 0.19 0.00
2008-2010 1.08 -0.62 0.51 1.16 0.03
2010-2016 1.39 -0.03 0.47 0.97 -0.03
Norway 2002-2016 1.10 0.18 0.58 0.23 0.11
2002-2006 1.10 -0.73 1.15 0.74 -0.06
2006-2008 0.46 0.27 0.51 0.11 -0.42
2008-2010 -0.32 1.86 0.56 -2.56 -0.19
2010-2012 -0.83 -0.73 -0.28 0.35 -0.17
2012-2014 2.54 1.02 0.93 0.73 -0.13
2014-2016 -0.90 -0.11 0.25 -0.95 -0.10
United Kingdom (BHPS) 1994-2007 -0.05 -0.19 -0.38 0.48 0.04
1994-1997 -2.18 0.01 0.00 -2.10 -0.10
1997-2007 1.60 0.25 0.62 0.68 0.05
United Kingdom (LFS) 2007-2017 -0.07 0.23 0.51 -0.65 -0.17
United States 1983-2018 -1.23 0.20 0.25 -1.73 0.05
1983-1993 -0.80 0.10 -0.09 -0.84 0.01
1993-2006 -0.68 0.10 0.15 -1.06 0.13
2006-2008 0.00 0.00 0.00 0.00 0.00
2008-2018 -0.75 0.00 -0.09 -0.72 0.06
in the analysis.

 95
Annex Figure 2.C.1. Effects of demographic changes are generally small

Percentage-points change in union density explained by changes in sex, age and education (“between effect”)
Age Education Sex Overall demographic changes (right-side scale, ↗)
% p.p.
100 2
75 1.5
50 1
25 0.5
0 0
-25 -0.5
-50 -1
-75 -1.5
-100 -2
in the analysis. Diamonds represent the contribution of overall demographic change to the change in union density (“between effect”’). This
overall contribution is decomposed in the relative effect of changes in sex, age and education (bars).
Annex Figure 2.C.2. Effects of job characteristics are generally small

Percentage-points change in union density explain by changes in job characteristics (“between effect”)
Public sector Firm size Occupation Industry Overall changes in job characteristics (right-side scale, ↗)
% p.p
100 8
75 6
50 4
25 2
0 0
-25 -2
-50 -4
-75 -6
-100 -8
in the analysis. Diamonds represent the contribution of changes in job characteristics to the change in union density (“between effect”’). This
overall contribution is decomposed in the relative effect of changes in public sector, firm size, occupation and industry (bars).

96 
Annex Figure 2.C.3. Effects of non-standard forms of employment are generally small
Percentage-points change in union density explained by changes in atypical employment (“between effect”)
Part-time job Temporary job Job tenure Overall changes in atypical employment (right-side scale, ↗)
% p.p
100 2
75 1.5
50 1
25 0.5
0 0
-25 -0.5
-50 -1
-75 -1.5
-100 -2
in the analysis. Diamonds represent the contribution of changes in atypical employment to the change in union density (“between effect”’). This
overall contribution is decomposed in the relative effect of changes in part-time jobs, temporary jobs and job tenure (bars).

 97
Annex 2.D. Additional material on youth and

collective actions
Annex Figure 2.D.1. Trend in union density among youth aged 20-34 in selected OECD countries
Young-to-adults ratio of union density, 2000's and latest year available (%)
Actual ratio Adjusted ratio

103
100
90
80
70
60
50
40
2013
2003
2017
2005
2018
2017
2001
2015
2001
2016
2000
2018
2000
2017
2017
2004
2014
2002
2016
2002/04
2014/16
2002/04
2014/16
2002/04
2014/16
2002/04
2014/16
2002/04
2014/16
FRA IRL MEX GBR AUT DEU AUS USA CAN NOR CHL KOR SWE DNK FIN BEL
Note: The adjusted ratio for individual characteristics is based on the marginal effect of youth (aged 20-34) relatively to adults (aged 35-54) from
a probit regression controlling for temporary job (excepted for the United States), sex, educational levels, industry, public vs private sector
(except for Austria, Belgium, Ireland, Norway and Sweden), occupation, firm size (except for the United States) and full-time vs. part-time
employment. Youth in education have been excluded in the different samples used in the regressions (although this was not possible for Finland,
the United States, and countries with estimates based on the European Social Survey as a source). Countries are ordered by ascending order
of the actual ratio for the latest year available.
Source: OECD estimates based on the Household, Income and Labour Dynamics in Australia (HILDA) for Australia, the labour force survey
(LFS) for Canada, the Encuesta de Caracterización Socioeconómica Nacional (CASEN) for Chile, the Finnish Working Life Barometer (FWLB)
for Finland, the Enquête statistique sur les ressources et conditions de vie (SRCV) for France, the German Socio-Economic Panel (SOEP) for
Germany, the Quarterly National Household Survey (QNHS) for Ireland, the Korean Labor and Income Panel Study (KLIPS) for Korea, the
Encuesta Nacional de Ocupación y Empleo (ENOE) for Mexico, the Labour Force Survey (LFS) for the United Kingdom, the Current Population
Survey (CPS), May Supplement for the United States and the European Social Survey (ESS) for Austria, Belgium, Denmark, Norway and
Sweden.
Statistics shown in Figure 2.6 Panels A and B are based on the occurrence of “individual freedom” and
“solidarity and support for others” taken from the list of the three most important personal values of youth
aged 20-34 and adults aged 35-54. The Question is labelled as follows in the Eurobarometer: “In the
following list, which are the three most important values for you personally?”
Statistics reported in Figure 2.6 Panels C and D are calculated as the proportion of youth aged 20-34 and
adults aged 35-54 who declared either that they engaged in the past / in the recent past / or that they would
in the future engage in the following actions: attending a demonstration, donating money or raising funds
for a particular social or political cause. The question in the ISSP 2014, Citizen Module II is labelled as
follows: “Here are some different forms of political and social action that people can take. Please indicate,
for each one, whether you have done any of these things in the past year, whether you have done it in the

98 
more distant past, whether you have not done it but might do it or have not done it and would never, under
any circumstances, do it”. For the two following forms or political and political actions: “Took part in a
demonstration (any kind of demonstration)” and “Donated money or raised funds for a social or political
activity”.
Figures on perceived necessity of trade unions (Figure 2.7, Panel B) refer to the share of persons who
consider that “workers needs strong trade unions to protect their interest”. For the United States, this
corresponds to the percentage of persons feeling that the decline in union representation over the last
20 years has been mostly bad for working people (“As you may know, over the past twenty years there
has been a large reduction in the percentage of workers who are represented by unions. Do you think this
reduction in union representation has been mostly good for working people or mostly bad for working
people?”). Age groups correspond to persons aged 20-34 for youth and aged 35-54 for the adults, except
for Denmark (26-35 and 36-55, respectively). Belgium refers to Flanders only.
Trust and perceived necessity of trade unions
Annex Table 2.D.1. Trust in trade unions: Sources and definitions

Country Source Year Question used Possible answers Statistics
reported
(% of persons)
Australia Australian 2016 How much confidence Scale in four A great deal or
Election Study do you have in trade categories: quite a lot of
unions? 1. A great deal of confidence
confidence; 2. Quite a
lot of confidence; 3. Not
very much confidence;
4. None at all
Austria, Belgium, the Eurobarometer 2018 Could you please tell Scale in four Very positive or
Czech Republic, Denmark, 89.1 me for trade unions, categories: fairly positive
Estonia, Finland, France, whether the term brings 1. Very positive; 2.
Germany, Greece, Hungary, to mind something very Fairly positive; 3. Fairly
Ireland, Italy, Latvia, Lithuania, positive, fairly positive, negative; 4. Very
Luxembourg, the Netherlands, fairly negative or very negative
Poland, Portugal, the negative?
Slovak Republic, Slovenia, Spain,
Sweden, Turkey and the United
Kingdom
Chile, Colombia, Japan, Korea, World value 2010 (JPN, How much confidence Scale in four A great deal or
Mexico, New Zealand and the Survey KOR); 2011 you have in labour categories: quite a lot of
United States (CHL, NZL, unions? 1. A great deal of confidence
USA); 2012 confidence; 2. Quite a
(COL, MEX) lot of confidence; 3. Not
very much confidence;
4. None at all

 99
Annex Figure 2.D.2. Trust in trade unions

Percentage of population by age group
Youth aged 20-34 (↗) Adults aged 35-54

%
100
90
80
70
60
50
40
30
20
10
0
Note: For further details, see Annex Table 2.D.1. OECD-30 is the unweighted average of countries shown (not including Canada, Colombia,
Iceland, Israel, Norway and Switzerland).
Source: OECD calculations based on the Australian Election Study (AES) for Australia, Eurobarometer 89.1, March 2018 for the European
countries, and the World Value Survey (WVS) for all other countries.
Annex Figure 2.D.3. Perceived necessity and trust in trade unions

A. Perceived necessity of trade unions by age group B. Trust and perceived necessity of trade unions
% of persons agreeing that workers need strong unions to Young-to adults ratio
protect their interests, 2015 Perceived necessity of trade unions, 2015
1.3
% Youth aged 20-34 (↗) Adults aged 35-54
1.2 USA
100 GBR
90 FIN
1.1 JPN
CHL LTU
80 BEL
1
70 FRA LVA
60 0.9 CZE SVN
50
0.8 NZL SWE
40 DNK
30 0.7
0.7 0.8 0.9 1 1.1 1.2 1.3
Trust in trade unions, latest year
Note: Youth refers to persons aged 20-34 and adults to those aged 35-54, except for Denmark (26-35 and 36-55, respectively). Belgium refers
only to Flanders. For further details on trust in trade unions, see Annex Table 5.B.1.
Source: OECD calculations based on the International Social Survey Programme (ISSP) 2015, Work orientation module IV and the Pew
Research Center, March 2015 Political Survey for the United States.

100 
Notes
1
Estimate based on collective bargaining coverage rate and total number of employees from OECD ALFS.
2
In this report, “firm” and “company” are used interchangeably.
3
Social dialogue comprises collective bargaining, workers’ voice, as well as social partners’ lobbying and
engagement in tripartite negotiation/ consultation surrounding national legislation. The last one is not a
focus of this report.
4
This is adapted from Visser (2016[47]).
5
In this report, “plant”, “establishment” and “workplace” are used interchangeably.
6
Another important country variation comes from the comparison of trends in union membership and union
density. In some countries, the decline in density is only relative: the share of unionised workers in the total
working population is falling, while union membership is stable or even increasing in absolute terms. These
cases might stem from employment growth outpacing unionisation; or density might increase following a
recession if mostly non-unionised jobs disappear. For instance, the increase in trade union density in Spain
during the early phase of the financial crisis is likely to amount to a composition effect. The destruction of
jobs in 2008-10 was mainly in temporary employment, where union density is lower. The destruction of
these less unionised jobs could explain the increase in overall union density over the period. In other cases,
the trends in union density and union membership align downwards: there, the fall in density might indeed
correspond to a decrease in union membership.
7
The dramatic trends observed in Central and Eastern European countries must be understood in the
context of the fall of central planning.
8
Already in 1991, research by the OECD concluded, based on shift-share analyses covering the 1970s
and 1980s, that “the change in aggregate unionisation rates resulting from changes in the structure of
employment (…) only accounts for a small part of the decline” (OECD, 1991[22]). These results are
consistent with results presented in this chapter, covering the 1990s and 2000s (see Section 2.3).
However, the notion that structural shifts and in particular industrial composition is a major driver of union
density decline is a die-hard one: despite mounting evidence to the contrary, it remains strongly engrained
in public opinion and keeps infusing policy discussion of the issue.
9
Examples of union-managed insurance funds include e.g. the “Ghent” unemployment systems in
countries like Denmark, Finland, Iceland, Sweden, Norway and Belgium - which has a quasi-Ghent system
since the government also plays a role in administering unemployment insurance, or the health insurance
system in Israel before 1995.
10
Although available data on trade union density goes back to the 1960s, data limitations for other macro-
level covariates significantly reduce the maximum period of analysis. At best, a macro-level regression
analysis covers the 1985-2013 period. This is reduced to 1993-2013 when including control variables for

 101
education and occupation. The number of years covered by the macro-level regression is thus very limited
for some countries.
11
Despite data limitations highlighted in endnote 10, an exploratory macro-level analysis was conducted,
testing for several specifications. Only a very small number of results were robust to basic changes in
specification (adding controls or using different variable definitions). In addition, to test the possibility that
independent variables had differentiated effects for different groups of countries, interactions between
independent variables and dummies for particular country groupings were introduced. Results were not
robust to the introduction of these interactions. In other words, this exploratory macro-level analysis
produced only volatile and unreliable results.
12
The period of analysis varies from 1983 to 2018 for the United States, to 2002-2016 for some European
countries.
13
In the terminology of shift-share analyses, this is the “within groups” effect.
14
The share of high-skilled workers increased by 8.6, 9.8, 7, 7.2, 21.3, 11.9, 15 and 23% for those
countries, respectively.
15
The share of youth employed (aged 15-24) decreased by 1.1, 3.4, 4.3 and 1.6%, respectively, while the
share of older workers (aged 55-64) increased by 7.7, 4.8, 2.2 and 3.3%, respectively during the same
periods.
16
The share of small firms increased by 8% in Israel, the share of large firms increased by 0.2% in Mexico
and the share of medium-sized firms by 2.5% in the Netherlands.
17
The fall in the share of public sector employment was relatively modest in Australia (-0.3%), Germany (-
1.7%) and the United States (-1.6%) but relatively sizeable in, the United Kingdom (-3.2%) between 2007
and 2017. In Mexico public sector employment decreased by 0.08%between 1992 and 2002 and by 0.97%
between 2007 and 2018.
18
Between 1985 and 2015, the share of part-time workers has been rising in most OECD countries for
which data are available. The increase was particularly sizable in some contexts, such as Austria (13%),
Belgium (16.1%), Germany (15.2%), Ireland (16.4%), Italy (13.3%), Japan (10.9%), Luxembourg (11.6%),
and the Netherlands (26.2%). The rise of part-time employment was more modest, but still important in
Finland (7.3%), France (7.9%), the United Kingdom (5.5%), Greece (4.2%) and Korea (8.1%). The share
of part-time workers only decreased in two of the countries for which data are available, namely Sweden
and Norway.
19
In average in OECD countries, the share of temporary workers increased from 9.2% in 1980 to 11.7%
in 2018.
20
Workers “socialised” in the 1970s are those who were in their 20s in the 1970s, and who therefore had
their first formative experience in the labour market then. These experiences are likely to have influenced
their opinions about labour market institutions.
21
Collective bargaining coverage is usually computed as the number of employees covered by the
collective agreement, divided by the total number of wage and salary-earners.
22
In Germany, in order to prevent membership losses the German employer associations have created a
special form of membership whereby companies are not bound by collective agreements (so called OT
(Ohne Tarifbindung)-Mitgliedschaft), see Schulten and Bispinck (2014[70]).
102 
23
Functional equivalent to extensions are legal provisions that make agreements valid for all firms and
workers (such as in Iceland, Italy and Spain) but, in a way, also compulsory membership to an employer
association as in Austria.
24
The increasing fuzziness around the definition of “employer”, “employee” and “place of work” is a
challenge for the capacity of extensions to be an effective tool to guarantee fairness and a level-playing
field.
25
Available at the following link http://www.oecd.org/employment/collective-bargaining.htm.
26
Visser (2018[50]) reports that it was used only once in 2004 but the government had to back down under
pressure.
27
The exemption is subject to have concluded a firm-level agreement with a union.
28
In practice, two years after the reform, nothing has changed and extensions are still de facto automatic.
No extension has been refused and no agreement has included different provisions for large and small
firms.
29
The IAB Establishment Panel data allow identifying firms engaging in multi- or single-employer collective
bargaining and firms simply orienting themselves to a sectoral agreement.
30
In Australia a collective agreement continues to apply until it is terminated or replaced.
31
Available at the following link http://www.oecd.org/employment/collective-bargaining.htm
32
But this may be driven by some outliers, i.e. few agreements not renewed since many years.
33
As a result of unions’ opposition to full decentralisation and employer associations (dominated by large
firms) resistance to more competition in wage setting. And also because of lack of capacity and worker
representation to negotiate firm-level agreements.
34
Occupational and regional (state, provincial) bargaining level play more minor role and are a variant of
sectoral bargaining: regional level is relevant in Austria, Germany, Spain and France, but adds little to
decentralisation in these countries, since bargained wage rates tend to be harmonised across regions in
the same sector. There has been also recently a move towards integration of blue-and white collar
agreements.
35
The hierarchy between standards principle states that: i) legislation and regulations take precedence
over collective agreements; ii) national, cross-sectoral agreements take precedence over sectoral
agreements, and sectoral over firm-level agreements.
36
37
In the case of Italy there is a tension between the rules set by social partners autonomously, which define
a hierarchical relationship between bargaining levels, and jurisprudence, according to which a firm-level
agreement can always depart from sectoral agreements.
38
Australia’s enterprise level agreement arrangements are underpinned by a safety net of minimum
employment entitlements and condition.
39
Except for Quebec where it always applies and is established in Labour Law.

 103
40
The term “opening clause” comes from the German term Öffnungsklausel where, since the 1990s they
have been increasingly used.
41
In the Netherlands, for instance, derogations are used with the stated aim of not undermining the
currently favourable support for the extensions of sectoral agreements.
42
And are still, under the German Law, only allowed when the bargaining partners explicitly make
provisions for them.
43
Traxler (2003[93]) developed the “contingency thesis of collective bargaining” which states that the
performance of a collective bargaining system critically hinges on the ability to enforce the terms of
agreements.
44
45
Gould and Hijzen (2016[115]) provide evidence for the United States and European Union countries that
increasing inequality undermines trust.
46Moreover, in the European Union, European Works Councils can be established, upon the initiative of
the employer or the employees, in multinationals operating in more than two countries of the European
Economic Area if they employ at least 1 000 employees in the EEA and at least 150 employees in two
member states.
47
Ideally, analyses of the effect of various forms of workers’ voice should take account of this variation in
the rights granted to representative institutions, to arrive at nuanced and precise assessments.
Unfortunately, comparative data with this level of precision are largely missing. Further data collection
efforts on this dimension are needed.
48Ideally, analyses of the effect of representative voice should take account of structures existing at the
workplace and at the company level. However, data on this issue at the firm and worker level are not
available for a large number of countries. Further work in this area, both in terms of data collection and
analysis, would be welcome.
49
An extensive review of the literature by Conchon (2011[111]) of the impact of board-level employee
representation on company performance (mainly based on studies in Germany) shows that there is no
clear correlation (nor causal evidence) between the presence of board-level employee representatives and
better or worse company performance.
50
51
For instance in Germany, in firms with more than 500 employees, more than 300 employees in Austria,
more than 35 employees in Denmark, more than 30 employees in Norway and more than 25 employees
in Sweden.
52
The adjective “regular” is of importance here: “direct voice”, as conceptualised in this report, should not
be confused with freedom of speech at the workplace. Rather, it corresponds to cases where workers’
voice takes the form of institutionalised, regular meetings between employers and workers, which purpose
is that workers express their concerns. The contrast with representative forms of voice comes from the
presence or absence of a representative intermediary between workers and managers. The distinction
between direct and representative forms of voice is a regular feature in the literature – see e.g. Duran and
Corral (2016[116]), Gallie and Zhou (2013[117]), Bryson et al. (2013[108]).

104 
53
Beyond this descriptive interest, it also provides analytical leverage in trying to measure the effect of
workers’ voice arrangements on a variety of outcomes in a fine-grained manner.
54 Therefore, the average of 52% of European workers with access to representative voice depicted in
Figure 2.16 corresponds to the total of 37% of workers with access to “mixed voice” and 18% with access
to solely representative voice.
55Data from the European Working Condition Survey for 2010 and 2015. Proportions are calculated over
the pooled data for both years, excluding non-OECD countries from the list of countries covered in EWCS,
and using individual weights

 105
3 The role of collective bargaining

systems for labour market
performance
Oliver Denk, Andrea Garnero, Alexander Hijzen and Sébastien Martin
This chapter assesses the role of collective bargaining for labour market
performance in OECD countries. It builds on the detailed characterisation of
collective bargaining systems and practices presented in the previous
chapter. Using a rich mix of country-, sector-, firm- and worker-level data, this
chapter investigates the link of different collective bargaining settings with
employment, wages, wage inequality and productivity. It then discusses how
broad-based employee and employer organisations, administrative
extensions, organised forms of decentralisation and wage co-ordination may
contribute to better balance inclusiveness and flexibility in the labour market.

106 
In Brief
Key findings
This chapter provides an assessment of the role of collective bargaining systems for labour market
performance and inclusive growth. It looks at how collective bargaining matters for some of the policy
objectives that policy makers and citizens care most about: employment, wages, inequality and
productivity. The chapter brings empirical analyses, using the best macro- and micro-data available and
the characterisation of collective bargaining systems developed in the previous chapter, together with
country experiences and case studies to support policy makers and social partners themselves in
identifying directions for reform.
The main elements that are used in this chapter to characterise collective bargaining systems are the
following:
 Collective bargaining coverage – the share of workers covered by collective agreements – which
is linked to membership of signatory employer organisations and trade unions, but also to
extensions of agreements to other firms and workers in a sector.
 The level of bargaining at which collective agreements are negotiated: firm level, sectoral level
or even national level. Multi-level bargaining involves a combination of firm- and higher-level
collective bargaining.
 The degree of flexibility for firms to modify the terms set by higher-level agreements. This ranges
from centralised systems, in which there is little or no room for firms to derogate from sectoral
or national-level agreements, to fully decentralised systems, where collective bargaining can
take place only at the firm level. Between these two extremes, organised decentralisation allows
sectoral agreements to set broad framework conditions but leaves detailed provisions to firm-
level negotiations.
 The role of wage co-ordination between sectoral (or firm-level) agreements, such as the setting
of common wage targets, to take account of macroeconomic conditions. Co-ordination might
also occur as regards working conditions, for example training and occupational health and
safety.
The main empirical findings are as follows:
 At the individual level (within countries), there is a wage premium for employees who are covered
by firm-level bargaining compared with those not covered or those covered only by sectoral
bargaining.
 Comparing collective bargaining systems across countries, co-ordinated systems – including
those characterised by organised decentralisation – are linked with higher employment and
lower unemployment (also for young people, women and low-skilled workers) than fully
decentralised systems. Predominantly centralised systems with no co-ordination are somewhat
in between.
 Collective bargaining also tends to affect wage dispersion, with greater dispersion in systems
with no collective bargaining or where firms set wages independently. By contrast, wage
dispersion is on average smallest among workers who are covered by sectoral bargaining. The
lower dispersion in wages associated with sectoral bargaining in part reflects lower returns to
education, seniority and potential experience for workers covered by collective agreements.

 107
 The effect on wages also transits through the relationship of collective bargaining with
productivity growth. Centralised bargaining systems tend to be associated with lower productivity
growth if coverage of agreements is high. This result suggests that the lack of flexibility at the
firm level, which characterises centralised bargaining systems, may come at the expense of
lower productivity growth. By contrast, higher coordination in decentralised systems is not found
to have adverse effects on productivity.
 Many OECD countries have taken steps towards decentralisation in the past two decades.
Overall, organised decentralisation as described above tends to deliver good employment
performance, better productivity outcomes and higher wages for covered workers. By contrast,
other forms of decentralisation that simply replace sectoral with firm-level bargaining without co-
ordination within and across sectors tend to be associated with somewhat poorer labour market
outcomes.
The chapter also provides a detailed discussion of how wage co-ordination works and the features that
make organised decentralisation capable to simultaneously achieve good labour market outcomes,
provide some flexibility to firms and support adaptability to structural change. The main conclusions are:
 Co-ordination in wage bargaining helps take into account the macroeconomic effects of wage
agreements by ensuring that these agreements do not undermine external competitiveness and
are set in line with the business-cycle situation. This may be one factor behind the empirical
association of co-ordinated systems with higher aggregate employment. The strongest form of
wage co-ordination establishes a wage norm that defines the maximum for the collectively-
agreed wage increase in every sector.
 In countries where co-ordination works well, it tends to be strongly supported by employer
associations since it moderated wage growth and trade unions since it ensured high levels of
employment. To be effective, co-ordination requires strong and self-regulated social partners as
well as effective mediation bodies.
 The effectiveness of the articulation of firm-level arrangements within framework agreements,
which characterises organised decentralisation, hinges to an important extent on the degree of
collective worker representation at the firm level.
 In some countries, trade unions and employer organisations engage in sectoral initiatives that
aim to enhance labour market adaptability by facilitating job transitions and providing workers
with the skills needed in a changing world of work.
Collective bargaining can only contribute to labour market inclusiveness and have a significant
macroeconomic effect if it covers a large share of workers and companies:
 Well-organised trade unions and employer organisations with a broad support base tend to be
the best way to attain high coverage. At sector level, they ensure representativeness in wage
negotiations. At firm level, they are the basis for social dialogue between workers and employers.
 In systems with sectoral bargaining and no broad-based representation, administrative
extensions can help cover companies and workers not participating in collective bargaining. To
avoid harming the economic prospects of start-ups, small firms or vulnerable workers,
extensions need to be well designed to ensure that the parties negotiating the agreements
represent the collective interest of a large group of firms and workers. This can be achieved by
subjecting extension requests to reasonable representativeness criteria and a meaningful test
of public interest and providing well-defined procedures for exemptions and opt-outs of firms in
case of serious economic hardship.

108 
Introduction
This chapter provides new insights on the role of collective bargaining for good labour market performance.
This assessment of collective bargaining contributed to the new OECD Jobs Strategy (OECD, 2018[1]),
which identified three main policy goals for successful labour market policies: i) more and better jobs;
ii) labour market inclusiveness; and iii) resilience and adaptability. Collective bargaining has the potential
to play a central role in all three. The chapter considers a variety of outcomes related to good labour market
performance, including employment, wages, inequality and productivity, while the role of collective
bargaining for resilience was already investigated in OECD (2017[2]).
The chapter uses a variety of approaches including quantitative analyses and country case studies and
mobilises both micro and macro data sources. The next section sets the scene by outlining a framework
to illustrate how collective bargaining may matter for labour market performance and inclusive growth.
Section 3.2 proceeds with a macroeconomic analysis of the role of collective bargaining for employment
and inequality using a novel characterisation of collective bargaining systems. This allows going beyond
previous macro-studies, which usually concentrated on the degree of collective bargaining coverage and
the level of bargaining, by also taking account of the flexibility of firms to tailor the conditions of sectoral
agreements to their needs and of the co-ordination of wages across bargaining units. Section 3.3 uses
worker- and sector-level data to study the relationship of collective bargaining with wages, wage
distribution and productivity, shedding light on some of the mechanisms behind the relationships found at
the macro level. Drawing on a series of country case studies and the broader industrial relations literature,
Section 3.4 discusses some policy options that social partners and governments may want to consider to
make collective bargaining systems more flexible and more inclusive.
3.1. The role of collective bargaining for labour market performance: An overview
Collective agreements signed by employers and unions primarily determine wage levels (or wage
increases) and non-wage working conditions, including working time, leave arrangements, training,
employment protection, and health and safety provisions (Figure 3.1). Re-negotiations of contracts by
particular firms or employees may increase wages above the rate agreed at higher levels (or, in some
cases, reduce wages below the negotiated rate). Outcomes such as employment or productivity are usually
not part of the collective agreement, although they may be taken into account in the negotiations. The way
collective bargaining influences labour market performance depends on the bargaining strategies of social
partners, the structure of product and labour markets and the nature of collective bargaining institutions.
The academic literature has focused on two broad classes of bargaining strategies. In the so-called
“right-to-manage” model (Leontief, 1946[3]), unions bargain exclusively over wages, leading to lower
employment relative to the perfect competition benchmark. Union members, usually referred to as
“insiders” in this literature, are viewed as gaining at the cost of “outsiders”, unemployed individuals or
individuals in vulnerable jobs not covered by collective bargaining (Lindbeck and Snower, 1986[4]). The
cause of the presumed inefficiency is that employment is not accounted for in the negotiations. This could
have the additional downside of reducing the resilience of the labour market against adverse
macroeconomic shocks.
In practice, however, unions might not only be concerned about wages but also employment and
macroeconomic resilience. This has motivated the “efficient bargaining” model (McDonald and Solow,
1981[5]).1 Furthermore and as mentioned in Chapter 2, the insider/outsider theory is not backed up by much
empirical evidence.2
The effect of collective bargaining depends also on the structure of the market and the degree of
competition. With perfect competition in product and labour markets, raising wages above the market
equilibrium wage induces unemployment. However, when product market competition is imperfect

 109
(i.e. when firms have some degree of monopoly or oligopoly power), higher wages may not induce greater
unemployment but be simply the result of workers appropriating a greater share of the rents. Moreover, in
imperfectly competitive labour markets, higher bargaining power and higher wage floors can increase
employment. This would be the case in the presence of monopsony power, which enables firms to offer
wages below the market wage, for example because workers have limited opportunities to change their
employer or would incur high costs if they did so. 3
Figure 3.1. Collective bargaining, labour market performance and inclusive growth
Inclusive growth and well-being
Quality of the Wages

Resilience and
working (levels and Employment Productivity
adaptability
environment distribution)
Non-wage working
Negotiated wages
conditions
Degree of
Level Collective flexibility
(firm vs. bargaining (opt-outs,
sectoral/national) favourability
principle)
Coverage
(unions, employers Co-ordination
and extensions)
Finally, the role of collective bargaining for labour market performance also depends on the functioning of
the institutional system. Chapter 2 documented that collective bargaining systems differ considerably
across OECD countries, even among those sharing similar characteristics. For example, the systems in
the Netherlands and Portugal4 or those in Australia and the United States, although formally similar in
many respects, differ substantially in the way they function. The main elements that are used in this chapter
to characterise collective bargaining systems are the degree of coverage, the level of bargaining, the
degree of flexibility and the role of wage co-ordination:
 Degree of coverage: Collective bargaining coverage, rather than only trade union density, is
essential to measure the relevance of the system. Collective agreements covering a large share of
workers can have a more sizeable macroeconomic effect – positive or negative – on employment,
wages and other outcomes of interest than agreements confined to a few firms.
 Level of bargaining: This defines the unit at which parties negotiate and may refer to the firm, sector
or country. Sectoral or national agreements can be expected to reduce wage inequality relative to
decentralised systems, by lowering wage differentials not only between workers in the same firm,
but also between workers in different firms and, in the case of national bargaining, in different

110 
sectors. Firm-level agreements, by contrast, allow paying more attention to firm-specific conditions,
potentially raising productivity.
 Degree of flexibility: Sectoral or national agreements may differ substantially in the degree of
flexibility they provide to firms. For example, the possibility of opt-outs or leaving the application of
the favourability principle to social partners can increase the flexibility of the system and allow for
a stronger link between wages and firm performance, with on the upside higher employment and
productivity, but on the downside higher wage inequality.
 Wage co-ordination: Wage co-ordination between sectoral agreements (or as in the case of Japan
between firm-level agreements) helps negotiators internalise the macroeconomic effects of the
terms set in collective agreements. This is typically achieved by keeping wage increases in the
non-tradable sector in line with what can be afforded by the tradable sector or by strengthening the
ability of the system to adjust wages or working time in the face of a macroeconomic downturn.
Co-ordination can therefore serve as an instrument for wage moderation and earnings flexibility
over the business cycle, with potential benefits for employment and resilience.
Social partners affect labour market outcomes and hence inclusive growth and well-being also by
influencing and, sometimes, negotiating or even managing other labour market institutions, such as the
minimum wage, labour laws (in particular employment protection legislation), unemployment benefits,
active labour market policies, payroll taxes, and family and pension policies. Further, any effects of
collective bargaining systems also depend on the other policies and institutions in place. For instance, if
decentralisation increases wage inequality, the magnitude of the effect on the broader concept of
disposable income inequality depends on the extent to which the tax-and-transfer system offsets the rise
in wage inequality. While sometimes important, these issues go beyond the scope of this chapter.
3.2. The role of collective bargaining for employment and wage inequality:
New evidence from macro-data
The economic literature has long debated the role of collective bargaining for labour market performance,
but paid little attention to the system of collective bargaining as a whole. Studies have mostly examined
the presence or relevance of collective bargaining rather than its functioning. For example, many analyses
of countries with predominantly firm-level bargaining, such as the United Kingdom or the United States,
have focused on the role of trade union membership.5 Union membership is a reasonable proxy of
collective bargaining coverage in countries with predominantly firm-level bargaining. But it is not sufficient
for measuring the scope of collective bargaining, as many workers who are not affiliated to a trade union
are also covered by collective bargaining – via erga omnes clauses and, in countries with sectoral or multi-
level bargaining, administrative extensions.6 Bargaining coverage is therefore in general a more
appropriate proxy for the relevance of collective bargaining.7
However, to capture the role of collective bargaining for labour market performance, it is important to go
beyond coverage by looking at its main features and actual functioning. Collective bargaining coverage in
Italy is comparable to that in the Netherlands or the Nordic countries. Similarly, Australia and Germany
have comparable coverage. As Chapter 2 shows, these systems are nevertheless very different. It is
therefore important to also consider the characteristics of the system itself. This echoes Aidt and Tzannatos
(2008[6]) in their review of trade unions, collective bargaining and macroeconomic performance in which
they concluded that, more than trade union density or coverage, what matters most is the functioning of
the “entire package”.
In terms of main features, most attention has been directed to the role of centralisation, i.e. the predominant
level of bargaining. In the early 1980s, the corporatist view suggested that by guaranteeing that
wage-setters recognise broader interests, centralisation, intended as national bargaining, can deliver
superior outcomes in terms of macroeconomic and labour market performance (Cameron, 1984[7]).8

 111
However, opponents pointed out that wage increases would be restrained or resource allocation would be
more effective if market forces were allowed to play a larger role, bringing the example of the United States
or the United Kingdom after Thatcher to support this view.
To reconcile these opposing views, Calmfors and Driffill (1988[8]) proposed the influential “hump-shape”
hypothesis, which suggested that both centralisation and decentralisation perform well in terms of
employment while the worst outcomes may be found in systems with an intermediate degree of
centralisation, i.e. sectoral bargaining. In this intermediate case, organised interests are “strong enough to
cause major disruptions, but not sufficiently encompassing to bear any significant fraction of the costs for
society of their actions in their own interests” (Calmfors and Driffill, 1988[8]). The paper by Calmfors and
Driffill had the merit to suggest that the relationship between the degree of centralisation and performance
does not need to be monotonic. This hypothesis was behind the critical stance on sectoral bargaining
systems in the 1994 OECD Jobs Strategy (OECD, 1994[9]) which recommended decentralising collective
bargaining given the impossibility to have full centralisation of bargaining systems.9 However, later
empirical studies did not provide much backing for this hypothesis – see OECD (1997[10]), Traxler,
Blaschke and Kittel (2001[11]), Aidt and Tzannatos (2002[12]), Bassanini and Duval (2006[13]) and Eurofound
(2015[14]).
Another key feature of collective bargaining systems is the degree of wage co-ordination across bargaining
units. Soskice (1990[15]) suggested that co-ordinated systems of sectoral bargaining may be as effective
as national bargaining systems at adapting to aggregate economic conditions. Subsequent studies found
that co-ordination plays a key role in improving the performance of sectoral bargaining – see the review in
Aidt and Tzannatos (2002[12]) as well as the evidence in Elmeskov et al. (1998[16]), OECD (2004[17]),
Bassanini and Duval (2006[13]), OECD (2012[18]) and Eurofound (2015[14]). The 2006 Reassessed OECD
Jobs Strategy (OECD, 2006[19]) embraced this “augmented” version of the Calmfors-Driffill hypothesis
which entailed that decentralised and centralised or co-ordinated bargaining systems result in better
employment performance than sectoral bargaining systems.10
More recently, Boeri (2014[20]) revived the debate by suggesting that “two-tier” bargaining systems
(i.e. where firm-level bargaining can only top up sectoral bargaining) are worse than fully centralised and
fully decentralised systems, as they are not able to respond appropriately either to a microeconomic shock
or a macroeconomic one.11
All in all, the characterisation and estimation of the economic effects of collective bargaining systems have
proven to be a major challenge, leading to a proliferation of indicators for centralisation and co-ordination
as well as econometric specifications.
3.2.1. New country-level evidence based on a taxonomy of collective bargaining systems
The role of collective bargaining for labour market performance should be analysed by looking at
bargaining systems as a whole, rather than simply at the sum of their components. This section therefore
uses a new taxonomy of collective bargaining systems for studying the links with employment and
inequality.
The taxonomy of collective bargaining systems is taken from the dashboard in Chapter 2. This proposed
a classification scheme based on two main aspects: i) the degree of centralisation as characterised by the
predominant level of bargaining as well as the rules and use of extensions, derogations, opt-outs and the
favourability principle; and ii) the degree of wage co-ordination between sectoral agreements. Annex 3.A
provides further details. The following five categories of collective bargaining systems were identified: 12
 Predominantly centralised and weakly co-ordinated collective bargaining systems: Sectoral
agreements play a strong role, extensions are relatively widely used, derogations from higher-level
agreements are possible but usually limited or not often used, and wage co-ordination is largely

112 
absent. In 2015, France, Iceland, Italy, Portugal, Slovenia, Spain and Switzerland fell in this
group.13
 Predominantly centralised and co-ordinated collective bargaining systems: As in the previous
category, sectoral agreements play a strong role and the room for lower-level agreements to
derogate from higher-level ones is quite limited. However, wage co-ordination is strong across
sectors. In 2015, Belgium and Finland were part of this group.
 Organised decentralised and co-ordinated collective bargaining systems: Sectoral agreements
play an important role, but they also leave significant room for lower-level agreements to set the
standards – either by limiting the role of extensions (rare and never automatic or quasi-automatic),
leaving the design of the hierarchy of agreements to bargaining parties or allowing opt-outs. Co-
ordination across sectors and bargaining units tends to be strong. In 2015, Austria, Denmark,
Germany, the Netherlands, Norway and Sweden were in this group.
 Largely decentralised collective bargaining systems: Firm-level bargaining is the dominant
bargaining form, but sectoral bargaining (or a functional equivalent) or wage co-ordination also play
a role. Extensions are very rare. Australia with its “Modern Awards” (see Box 3.5 for details) and
Japan with its unique form of co-ordination (Shunto) were in this group in 2015, as well as Greece,
Luxembourg and the Slovak Republic. Since the enactment of the Industrial Relations
(Amendment) Act of October 2015, which re-introduced “Sectoral Employment Orders”, Ireland is
also part of this group.
 Fully decentralised collective bargaining systems: Bargaining is essentially confined to the firm or
establishment level with no co-ordination and no (or very limited) influence by the government. In
2015, Canada, Chile, the Czech Republic, Estonia, Hungary, Korea, Latvia, Lithuania, Mexico,
New Zealand, Poland, Turkey, the United Kingdom and the United States were part of this group.
The country classification in 2015 was extended backwards to 1980 using information in the Institutional
Characteristics of Trade Unions, Wage Setting, State Intervention and Social Pacts (ICTWSS) database.14
The time variation in the resulting taxonomy of collective bargaining systems for OECD countries over the
period 1980-2015 is considerable – see Annex 3.A. It reflects, in large part, the strong trend towards
decentralised collective bargaining, but it also captures many country-specific changes in collective
bargaining practices. These differences in the time variation are exploited in the analysis to estimate the
relationship between systems of collective bargaining and indicators of labour market performance.
The analysis compares labour market outcomes under different collective bargaining systems relative to the
fully decentralised system, while controlling for the level of bargaining coverage as well as the possible role
of the business cycle, the characteristics of the workforce and persistent country-specific features (using
country fixed effects).15 The results also account for other policy reforms that occurred at the same time, in
the areas of labour taxation, product market regulation, job dismissal regulation, minimum wages and
unemployment benefits. The relationships estimated in this section may nevertheless be influenced by the
state of the labour market over and above the business cycle or other potentially important factors not
controlled for; hence, care should be taken not to give the results a strict causal interpretation.
Co-ordinated bargaining systems are associated with higher employment and lower unemployment relative
to fully decentralised systems (Panel A of Figure 3.2). This is particularly the case for predominantly
centralised systems, while for organised decentralised systems the result on unemployment is somewhat
smaller and less robust. Centralised but weakly co-ordinated systems and largely decentralised systems hold
an intermediate position, with better employment outcomes than in fully decentralised ones but similar
unemployment outcomes. The difference between the employment and unemployment results suggests that
such systems are linked with higher employment and labour force participation. On average across all
regimes, higher bargaining coverage is associated with lower employment rates (Annex 3.B). Given that in
centralised and co-ordinated systems more workers tend to be covered, the extent to which these systems
are linked with better employment outcomes could thus be somewhat lower than is displayed in the figure.

 113
Empirically, the relative underperformance of fully decentralised systems is identified from variation in three
countries (Ireland, New Zealand and the United Kingdom), which all undertook very significant collective
bargaining reforms. The finding does not appear to be specific to these three countries, as it remains
unchanged when country fixed effects are omitted from the regression. The results overall are qualitatively
robust to two further sensitivity checks – see Annex 3.B for details. First, they are similar when more
traditional collective bargaining indicators for centralisation and co-ordination (from the ICTWSS database)
are used instead of the new taxonomy indicators.16 Second, the results with respect to collective bargaining
regimes are effectively unchanged when collective bargaining coverage is not controlled for.
As mentioned above, some models have argued that collective bargaining delivers good labour market
outcomes for “insiders” (notably prime-age male full-time workers with a permanent contract) at the expense
of jobs for “outsiders”, such as youth, women and low skilled – see Saint-Paul (1996[21]) and Bertola (1999[22]).
According to these models, by pushing the interests of “insiders”, unions may accept or even contribute to
the proliferation of non-standard forms of employment as a buffer for its members, thereby reducing the
inclusiveness of the labour market. In particular, unions may make temporary contracts indirectly more
attractive for firms, by increasing the labour cost of “insiders”, for instance through bargaining over severance
pay or assisting workers faced with the risk of dismissal.
The evidence, however, suggests that, in most cases, co-ordinated systems – either centralised or organised
decentralised – are associated with better labour market outcomes for vulnerable groups (Panels B and C of
Figure 3.2). The unemployment rates of youth, women and low-skilled workers appear to be consistently
lower (or at least not higher) in co-ordinated systems than in decentralised ones. Co-ordinated and organised
decentralised systems are also associated with a lower share of involuntary part-time workers. While the
share of temporary employment is higher in countries with higher bargaining coverage – see Annex 3.B –
which is in line with findings in Salvatori (2009[23]), this finding is not corroborated in studies looking at agency
work in the United States – see e.g. Gramm and Schnell (2001[24]) and Autor (2003[25]).
Collective bargaining systems that are not fully decentralised are also correlated with lower wage inequality
for full-time employees (Figure 3.3), as measured by the D9/D1-ratio, i.e. the ratio of the wage at the 9th decile
of the wage distribution to the wage at the 1st decile. This association is present both in the lower and upper
half of the wage distribution.17 Similar results are obtained when replacing the taxonomy indicators with
indicators for centralisation and co-ordination – see Annex 3.B.
Strengthening the bargaining power of low-wage workers is one of the core missions of collective bargaining,
so it is not surprising that empirically collective bargaining is associated with lower levels of inequality.
Detailed pay scales, where they are defined, can compress wages in the middle and top of the distribution to
compensate for higher wages at the bottom; Leonardi, Pellizzari and Tabasso (2015[26]) provide evidence of
wage compression within Italian firms. These mechanisms are particularly relevant when bargaining covers
a substantial share of the working population. Section 3.3 provides further evidence on the positive role of
collective bargaining for wage equality based on matched employer-employee and sector-level data. The
inequality results in this chapter complement previous findings that point in the same direction, from earlier
studies by Blanchflower and Freeman (1993[27]), Blau and Kahn (1999[28]), Card, Lemieux and Riddell
(2004[29]) and DiNardo and Lee (2004[30]) to more recent ones including OECD (2011[31]), ILO (2015[32]) and
Jaumotte and Buitron (2015[33]).
In conclusion, using country-level data on labour market outcomes for 35 OECD countries between 1980 and
2016 and a novel characterisation of collective bargaining systems, co-ordinated systems are shown to be
associated with higher employment, lower unemployment, a better integration of vulnerable groups and less
wage inequality than fully decentralised systems. Weakly co-ordinated, centralised systems and largely
decentralised systems hold an intermediate position, performing similarly in terms of unemployment to fully
decentralised systems, but sharing many of the positive effects on other outcomes with co-ordinated systems.

114 
Figure 3.2. Collective bargaining systems and employment outcomes

Difference in percentage points with respect to fully decentralised systems
A. Labour market outcomes
Employment rate Unemployment rate

p.p.
6
*** ***
4 ***
***
2

0

-2 *
***
-4
Predominantly centralised and Predominantly centralised Organised decentralised Largely decentralised
weakly co-ordinated and co-ordinated and co-ordinated
B. Unemployment rate by group
Youth Women Low skilled

p.p.
4
2 **

0
-2
*** ** *
-4 ***
***
-6
*** ***
-8
C. Temporary and part-time employment
Incidence of temporary Incidence of part-time Incidence of involuntary part-time employment

p.p.
2
**
1

0

-1

-2 *** ***
-3
-4
Note: ***, **, *: statistically significant at the 1, 5 and 10% levels, respectively. Results are based on OLS regressions including country and year
dummies, collective bargaining coverage, log of average years of education, female employment share and institutional variables: (tax wedge,
product market regulation, employment protection legislation (both temporary and permanent), ratio of minimum wage to median wage and
gross unemployment benefit replacement rate).
Source: OECD estimates. Details on sources and definitions can be found in Annex 3.B.

 115
Figure 3.3. Collective bargaining and wage dispersion

Difference in percentage points with respect to fully decentralised systems
D9/D1 D9/D5 D5/D1

Point difference
0
-0.05
*** **
-0.1 *** *** *** ***
***
-0.15
-0.2
***
-0.25 *** ***
-0.3 ***
-0.35
Note: ***, **, *: statistically significant at the 1, 5 and 10% levels, respectively. Results are based on OLS regressions including country and year
dummies, collective bargaining coverage, log of average years of education, female employment share and institutional variables: tax wedge,
product market regulation, employment protection legislation (both temporary and permanent), ratio of minimum wage to median wage and
gross unemployment benefit replacement rate. Earnings inequality measures are based on gross earnings of full-time wage and salary workers.
D1, D5 and D9 stand for the first, fifth and ninth decile of the wage distribution.
Source: OECD estimates. Details on sources and definitions can be found in Annex 3.B.
3.3. The role of collective bargaining for inclusiveness and flexibility: New
evidence from micro-data
By centralising or co-ordinating negotiations over wages and working conditions, collective bargaining has
a tendency to compress pay differences among workers. As a result, it weakens the link between individual
performance, wages and working conditions. In the context of firm-level bargaining, overall firm
performance necessarily becomes the main reference for negotiations on pay increases rather than
individual performance. Similarly, in the context of sectoral bargaining, overall industry performance
becomes the main contextual factor for pay increases. In the same vein, centralisation and co-ordination
place a greater emphasis on macroeconomic performance and therefore competitiveness and resilience.
Collective bargaining may manifest itself in a lower dispersion of wages, by defining common criteria for
wages of workers, firms or sectors. But by the same mechanism, it may also lead to stronger rigidities in
wages over time, as negotiating partners are less flexible to tailor wages to the individual worker, firm or
sector. The effects of such rigidities are likely to depend on the context in which they occur. In some cases,
they may be benign, for example when they reduce the scope for discriminatory practices or serve a
specific economic purpose as in the case of co-ordination, while in others they may raise concerns, for
instance when they weaken incentives for skill acquisition.
This section uses worker- and sector-level data to shed further light on the relationship between collective
bargaining institutions, wage equality, productivity growth and the way wages are set in line with
productivity in firms and sectors. In doing so, the analysis provides useful insights into the mechanisms
that may drive some of the macroeconomic relationships documented in Section 3.2.

116 
3.3.1. Collective bargaining and wage dispersion
In many countries, the wages of some workers are principally determined by a collective pay agreement
(collective bargaining), while those of others are not (individual bargaining). This may, or may not, introduce
forms of injustice or unfairness between the two groups of workers, depending on what collective
bargaining actually does. Empirically, the fact that some workers are covered by collective agreements
while others are not allows comparing the level and dispersion of wages between workers in different
bargaining schemes, without having to rely on country-to-country comparisons that might be influenced by
aspects other than collective bargaining.
Worker-level data on collective bargaining coverage are available for 21 OECD countries. Besides
distinguishing workers covered by collective bargaining from those who are not, the micro-data separately
identify workers whose wage is primarily determined by a firm- as opposed to a sectoral agreement.18 This
creates the possibility of distinguishing three bargaining levels: i) individual or no collective bargaining;
ii) firm-level bargaining; and iii) sectoral bargaining. The three co-exist in the dataset for seven of the
21 countries; in the others two co-exist. Labour earnings are defined per hour and include bonus payments.
As in Section 3.2, dispersion is measured as the ratio of wages at the 9th decile to the 1st decile.
When comparing wage dispersion between workers who are covered by collective bargaining and those
who are not, it is important to account for possible sample selection: For instance, if collective agreements
cover mainly men, or certain industries, wage dispersion may be lower with collective bargaining because
wages tend to be more similar among men only, or among certain industries, than in the entire working
population. Different empirical techniques can be applied to adjust for these compositional differences
between bargaining groups. The one used in this section goes back to Juhn, Murphy and Pierce (1993[34])
and has been widely used since.19 For each country and bargaining level, separately a standard hourly
wage regression is run on a large number of explanatory variables: age, gender, education, firm size,
contract type, years employed in the firm, industry and occupation. Differences in composition are then
corrected by replacing the coefficients and residuals in each bargaining level with those for the group of
workers who are not covered. Box 3.1 describes the empirical approach in detail.
On average, earnings dispersion is lower with collective bargaining, when accounting for compositional
differences (Figure 3.4). In the first group of countries where all three bargaining levels co-exist, wage
dispersion is highest among workers not covered by collective bargaining, followed by firm-level and then
sectoral bargaining. By contrast, for the second group of countries where there is no sectoral bargaining,
wage dispersion among workers covered and those not, at least on average, is the same. A cross-country
comparison of the averages for the first two groups suggests that firm-level bargaining is only effective in
lowering wage dispersion when it comes on top of sectoral bargaining. One possible explanation for this
may be that companies characterised by firm-level bargaining are in most cases also covered by sectoral
bargaining. Firm-level bargaining may then not fully undo the inequality reduction due to sectoral
bargaining. In five countries (Hungary, Korea, Mexico, Norway and Portugal), the results go in the opposite
direction. Nevertheless, overall, they appear consistent with those in the previous section which suggested
that the economy-wide distribution of wages is less equal in systems without scope for sectoral or higher-
level bargaining (see Figure 3.3).

 117
Box 3.1. Empirical approach to adjust wages and wage dispersion for differences in
composition
Differences in wages and wage dispersion between workers covered by collective bargaining and those not could,
in part, be due to differences in composition. A standard way to adjust for these compositional differences is
provided by Juhn, Murphy and Pierce (1993[34]). Applying this method in the present context, for each country and
bargaining level 𝑏 (no collective bargaining, firm-level bargaining, sectoral bargaining) separately, the following
regression is run:
log(𝑤𝑖𝑏 ) = 𝑥𝑖𝑏 𝛽𝑏 + 𝜀𝑖𝑏 .
The wage of worker 𝑖 is measured per hour, and weights in the survey are used to better align the sample with the
actual working population. Control variables, 𝑥𝑖𝑏 , include dummies for age, gender, education, firm size, contract
type (permanent or temporary), job tenure, industry and occupation. A few control variables are not available for
some countries. Comparing estimated coefficients, 𝛽̂ , for the same variables allows examining, for instance,
differences in the gender gap or education premium between workers covered by collective bargaining and those
who are not.
The empirical approach to adjust a wage statistic, 𝑓(𝑤𝑏 ), such as the average wage or D9/D1-ratio, for
compositional differences is as follows. Workers whose wages are not governed by collective bargaining, 𝑏1 , are
taken as the benchmark. In Belgium, France and Spain where data for workers not covered are not available, firm-
level bargaining is taken as the benchmark. The counterfactual wage of worker 𝑖 covered by collective bargaining,
𝑏2 , is then calculated as
𝑥
log(𝑤𝑖𝑏2
) = 𝑥𝑖𝑏2 𝛽̂𝑏1 + 𝜀̂𝑖𝑏1 (𝑝̂𝑖𝑏2 |𝑥𝑏2 ),
with the last expression denoting the residual from the regression for workers not covered that is at the same
percentile 𝑝̂𝑖𝑏2 as worker 𝑖’s residual. The assumption is that, had a covered worker become uncovered while
maintaining the same characteristics, the new residual of the worker would have belonged to the same percentile
of the distribution of the residuals in the uncovered sector as the percentile the old residual belonged to in the
distribution of the covered sector.
The difference in the desired wage statistic using the raw data is
𝑓(𝑤𝑏2 ) − 𝑓(𝑤𝑏1 ),
which after adjusting for differences in composition becomes

𝑓(𝑤𝑏2 ) − 𝑓(𝑤𝑏𝑥2 ).

118 
Figure 3.4. Composition-adjusted wage dispersion by level of collective bargaining

Ratio of the 9th to the 1st earnings decile
No collective bargaining Firm-level bargaining Sectoral bargaining
Note: Results are based on Juhn-Murphy-Pierce decompositions using workers without a collective agreement as the reference group and
controlling for gender, age groups, educational attainment, industry, occupation, firm size, type of contract and job tenure. Countries are ordered
in ascending order of the D9/D1-ratio for employees not covered by a collective agreement, where D1 and D9 stand for the 1st and 9th decile of
the wage distribution. Data are from 2012-16, depending on the country (2006 for Germany). The first group of countries allows comparing wage
dispersion among workers not covered by collective bargaining with that among workers covered by firm-level agreements and that among
workers covered by sectoral agreements. The second group compares wage dispersion among uncovered workers with that among workers
with a firm-level agreement. The third group compares wage dispersion among uncovered workers with that among workers with a sectoral
agreement. The final group allows comparing wage dispersion among workers with a firm-level agreement with that among workers with a
sectoral agreement. “Sectoral bargaining” for Australia refers to the use of Modern Awards (see Box 3.5). A proper sector-level bargaining does
not exist in Australia.
Source: OECD calculations based on the European Structure of Earnings Survey for European countries, the Household, Income and Labour
Dynamics survey for Australia, the Labour Force Survey for Canada, the Labour and Income Panel Study for Korea, the National Survey of
Occupation and Employment for Mexico and the Current Population Survey Merged Outgoing Rotation Groups for the United States.
3.3.2. What accounts for the lower wage dispersion with collective bargaining?
Empirically, two categories of factors may account for the lower wage dispersion with collective bargaining:
differences in the returns to characteristics (technically, the coefficients) and unexplained differences (the
residual). This issue is investigated here by focusing on the two largest country groups for which data are
available: the first with seven countries (which have three collective bargaining types) and the second with
nine countries (which have two types: firm-level bargaining and no collective agreement).
Four characteristics are studied to analyse the extent to which collective bargaining may compress their
returns (Figure 3.5): a higher age, being male, a better education and seniority at work (measured by the
number of years in the firm). All four typically exhibit increasing returns in micro-level analyses, meaning
that older, male, more educated and more experienced workers tend to earn more.

 119
Figure 3.5. Wage returns by level of collective bargaining

Unweighted averages across countries, 2014
No collective bargaining Firm-level bargaining Sectoral bargaining
A. Countries with three bargaining types B. Countries with two bargaining types
% %
20 20
18 18
16 16
14 14
12 12
10 10
8 8
6 6
Age Male Education Seniority Age Male Education Seniority
Note: Results are based on OLS regressions controlling for gender, age groups, educational attainment, industry, occupation, firm size, type of
contract and job tenure. Data are from 2012-16, depending on the country (2006 for Germany). The age premium is calculated relative to
20-29-year-olds, the education premium relative to workers with no high school education and the seniority premium relative to workers who
have worked for their current employer for less than one year. The categories for the comparison groups (different age groups, education
categories and brackets for number of years in the firm) are weighted by the proportion of workers in these categories. The countries with three
bargaining types are Australia, the Czech Republic, Germany, Luxembourg, Portugal, the Slovak Republic and the United Kingdom. The
countries with two bargaining types are Canada, Estonia, Hungary, Korea, Latvia, Lithuania, Mexico, Poland and the United States.
Compared with uncovered workers, the age premium is lower for people who are covered by firm-level
bargaining and even more so for those covered by sectoral bargaining. Collective bargaining thus lowers
wage inequality, in part by flattening the distribution of wages among people of different ages. By contrast,
no evidence is detected that collective bargaining compresses the gender pay gap on average. If anything,
men’s wage premium over women is slightly larger among workers covered by collective bargaining than
those who are not.
The benefit of better education, in terms of higher pay, is lower with firm- and even more so sectoral
bargaining. A lower payoff from education, while reducing inequality, may also negatively affect productivity
growth if this leads to lower investment in education. Finally, monetary rewards for seniority are also found
to be an explanatory factor for why in countries with firm- and sectoral bargaining wage dispersion is lower
with collective bargaining than without, although the picture is the opposite in the group of countries with
only firm-level bargaining.
Even if reduced returns to age, education and seniority go some way towards explaining the lower wage
dispersion with collective bargaining, overall it is mainly unobserved factors that reduce wage dispersion
(Figure 3.6).

120 
Figure 3.6. Accounting for the differences in wage dispersion with and without collective
bargaining
Change in the ratio of the 9th to the 1st earnings decile relative to employees not covered by collective bargaining
(adjusted for composition), 2014
Returns to observable criteria Unobservable differences Adjusted earnings dispersion (↗)
A. Sectoral bargaining B. Firm-level bargaining

Point difference Point difference
1 1
0.5 0.5
0 0
-0.5 -0.5
-1 -1
-1.5 -1.5
-2 -2
-2.5 -2.5
Slovak Republic
Slovak Republic
Portugal
Germany
Luxembourg
Luxembourg
Portugal
Latvia
Lithuania
Korea
United Kingdom
Germany
United Kingdom
Czech Republic
Czech Republic
Estonia
Poland
Mexico
Average
Average
Canada
United States
Hungary
Average
Australia
Australia
Countries with three bargaining types Countries with three bargaining types Countries with two bargaining types
controlling for gender, age groups, educational attainment, industry, occupation, firm size, type of contract and job tenure. Data are from 2012-
16, depending on the country (2006 for Germany). For countries with three bargaining types, data are available for firm- and sectoral bargaining
and no collective bargaining. For countries with two bargaining types, data are available for firm-level bargaining and no collective bargaining.
“Sectoral bargaining” for Australia refers to the use of Modern Awards (see Box 3.5). A proper sectoral bargaining does not exist in Australia.
3.3.3. Collective bargaining wage premium
This section has so far focused on wage dispersion within each bargaining type, i.e. wage dispersion
among workers not covered by collective agreements and wage dispersion among workers covered by
collective bargaining. Results can be interpreted as illustrating what would happen to wage inequality if in
a country collective bargaining moved from inexistent to full coverage or from full to no coverage. This
naturally seems extreme. When considering less extreme scenarios, account should also be taken of pay

 121
differences which may exist between workers covered by collective agreements and those not. Such pay
differences are sometimes referred to as the collective bargaining wage premium.
Workers are paid more with firm-level bargaining, while sectoral bargaining is not associated with relatively
higher pay on average (Figure 3.7). This is not surprising as firm-level negotiations can often only raise
wages relative to sectoral agreements. The differences in wages may also signal higher productivity in
companies with firm-level bargaining. The results are in line with a large body of the literature which finds
that sectoral bargaining is not linked with higher wages on average – see Dell’Aringa and Lucifora
(1994[35]), Hartog, Leuven and Teulings (2002[36]), Rycx (2003[37]) and Cardoso and Portugal (2005[38]). The
variation for sectoral bargaining across countries is large, with a positive premium in some countries and
a negative one in others. By contrast, wages of workers covered by firm-level agreements are higher than
those of uncovered workers in all countries except Latvia. In countries with low collective bargaining
coverage, wage inequality can thus rise as firm-level bargaining expands to include more workers, even if
wage dispersion is smaller among workers covered by firm-level bargaining than among those who are
not.
Figure 3.7. Wage premium by level of collective bargaining

Composition-adjusted difference in average wages relative to no collective bargaining, 2014
A. Sectoral bargaining B. Firm-level bargaining

% %
20 20
15 15
10 10
5 5
0 0
-5 -5
-10 -10
-15 -15
-20 -20
Germany
Germany
Latvia
Lithuania
Korea
Portugal
United Kingdom
Netherlands
United Kingdom
Slovak Republic
Czech Republic
Luxembourg
Portugal
Czech Republic
Slovak Republic
Luxembourg
Estonia
Poland
Mexico
Norway
Canada
United States
Australia
Average
Average
Australia
Average
Hungary
Average
Countries with three bargaining types Countries with Countries with three bargaining types Countries with two bargaining types
two bargaining
types
controlling for gender, age groups, educational attainment, industry, occupation, firm size, type of contract and job tenure. Data are from 2012-
16, depending on the country (2006 for Germany). “Sectoral bargaining” for Australia refers to the use of Modern Awards (see Box 3.5). A proper
sectoral bargaining does not exist in Australia.

122 
3.3.4. Collective bargaining and wage-productivity misalignment
The analysis above has shown that collective bargaining tends to be associated with lower wage
dispersion. The stronger wage compression with collective bargaining may reflect a more pronounced
misalignment of wages with a firm’s or sector’s productivity, because centralisation or co-ordination of
negotiations makes pay in part determined by factors other than the firm or sector. In this sense, lower
wage flexibility at the sub-national level and lower wage dispersion could be seen as two sides of the same
coin.20
The extent to which wages in a particular firm or sector correspond to the productivity in the firm or sector
can be estimated with available data. By comparing countries with one another, the analysis that follows
provides suggestive evidence that wages tend to be less aligned with labour productivity in countries where
collective bargaining institutions have a more important role. 21
The analysis relies on insights using sector-level data, examining the correlation between wages and
productivity across sectors. Sector-level data have the advantage that they cover the same number of units
(i.e. sectors) for many countries over a long period of time. They are available for 28 OECD countries from
1980 to 2014, covering 24 sectors. Box 3.2 describes the estimation approach.
Box 3.2. Empirical approach to estimate the role of collective bargaining for wage-productivity
alignment
The alignment of wages with productivity is estimated through the strength of the correlation of the hourly wage
rate with hourly labour productivity. The baseline regression uses sector-level data and is as follows:
log(𝑤𝑠𝑐𝑡 ) = 𝛽𝑐 log(LP𝑠𝑐𝑡 ) + 𝛼𝑐𝑡 + 𝜀𝑠𝑐𝑡 .
If wages, 𝑤𝑠𝑐𝑡 , and labour productivity, LP𝑠𝑐𝑡 , are positively correlated across sectors in country 𝑐, 𝛽𝑐 > 0. The
inclusion of the country-year fixed effects, 𝛼𝑐𝑡 , ensures comparing sector 𝑠1 in a given country and year to other
sectors in the same country and year. When investigating the relative roles of wage co-ordination, centralisation
and bargaining coverage, productivity is interacted with indicators for co-ordination, centralisation and bargaining
coverage.
The approach comes down to studying the role of collective bargaining for the distribution across sectors of the
labour share, i.e. the share of value added going to workers. Schwellnus, Pak and Pionnier (2018[39]) use
sector-level data to study the role of, among others, collective bargaining for the size of the labour share.
Countries show marked differences in the degree to which wages and productivity are aligned for different
sectors (Figure 3.8). The correlation is relatively high in many Eastern European countries (the
Czech Republic, Estonia, Hungary, Latvia, Lithuania and Poland). It is also high in Korea, Portugal, Spain
and the United Kingdom. By contrast, misalignments of wages with productivity appear to be strong in
some Nordic countries (Denmark, Finland, Norway and Sweden), as well as Belgium, Greece, Luxembourg
and Slovenia.
Several features of collective bargaining could affect the flexibility of firms in a sector to set wages in line
with sector-level productivity. Possibly the most natural candidate is wage co-ordination across sectors,
which actively seeks to limit differences in pay across sectors by establishing some cross-sectoral wage
norm for the purposes of collective bargaining. This is borne out in the data. Wages and productivity at
sectoral level are more aligned in countries without co-ordination in wage-setting. The difference is stark:
On average across countries, the elasticity of wages with respect to productivity is 0.26 without and
0.16 with cross-sector wage co-ordination. This means that if productivity is 10% higher in some sector
than another, wages tend to be 2.6% higher in this sector in co-ordination countries and 1.6% higher in
non-co-ordination countries.22

 123
Figure 3.8. Elasticity of wages with respect to productivity across sectors: Country estimates
High wage co-ordination across sectors No or low wage co-ordination across sectors
0.5
0.4
0.3
0.2
0.1
Note: Results are based on Ordinary Least Squares (OLS) regressions of the log hourly wage on log hourly labour productivity across sectors.
The regressions include country-year dummies. Co-ordination is classified as high for a country if in the majority of the years in the sample it is
classified as high.
Source: OECD estimates based on OECD Annual National Accounts database completed with OECD Structural Analysis (STAN) database,
EU-level analysis of capital, labour, energy, materials and service inputs data (EU-KLEMS) and Institutional Characteristics of Trade Unions,
Wage Setting, State Intervention and Social Pacts (ICTWSS) database.
Wage co-ordination is correlated with other features of collective bargaining such as coverage rates and
the degree of centralisation. Centralisation may matter for wage-productivity alignments because in
industries with stronger trade unions workers may appropriate a greater share of the production surplus.
Coverage may matter since without coverage wage co-ordination and centralisation have no role.
Moreover, in countries with no explicit wage co-ordination but high coverage and centralised bargaining,
negotiations in one sector may nevertheless serve as an implicit benchmark for others. Thus, some cross-
sectoral co-ordination can happen even if co-ordination is not institutionalised.
Sectoral wages are set less in line with sectoral productivity in systems with cross-sector wage co-
ordination, even when differences in coverage rates are accounted, or controlled, for (Figure 3.9). As
coverage rates tend to be higher in countries with wage co-ordination, taking account of this reduces the
difference in the wage-productivity-correlation between countries with and without co-ordination.
Centralisation, too, is found to be related with a weaker alignment between wages and productivity across
sectors – see Annex 3.B for the full regression results.

124 
Figure 3.9. Elasticity of wages with respect to productivity across sectors: The role of collective
bargaining
A. Wage co-ordination across sectors B. Collective bargaining coverage
0.3 0.3
0.25 0.25
0.2 0.2
0.15 0.15
0.1 0.1
0.05 0.05
0 0
No co-ordination Low co-ordination High co-ordination Low coverage Medium coverage High coverage
Note: Results are based on Ordinary Least Squares (OLS) regressions of the log hourly wage on log hourly labour productivity across sectors.
The regressions include country-year dummies and interactions of log productivity with wage co-ordination dummies and collective bargaining
coverage. Low, medium and high collective bargaining coverage are defined by the averages for the bottom third, middle third and top third in
the distribution of coverage rates in the sample.
Source: OECD estimates based on OECD Annual National Accounts database completed with OECD Structural Analysis (STAN) database,
EU-level analysis of capital, labour, energy, materials and service inputs data (EU-KLEMS) and Institutional Characteristics of Trade Unions,
Wage Setting, State Intervention and Social Pacts (ICTWSS) database.
Co-ordination, collective bargaining coverage and centralisation jointly predict lower wage-productivity
alignment. The empirical evidence, which is based on cross-country comparisons, is not enough for
proving that such features of collective bargaining are the driving, or causal, factors behind the differences
across countries in wage-productivity alignments. It is nonetheless suggestive that collective bargaining
has an important role for how wages in a sector correspond to sector performance.
The analysis in this subsection has focused on sector-level data. In related work, and in line with the results
in this section, Berlingieri, Blanchenay and Criscuolo (2017[40]) show, based on harmonised micro-
aggregated firm-level data covering many countries, that trade union density and co-ordination in wage-
setting tend to be associated with a lower dispersion of average wages across firms and a weaker link
between productivity and average wage dispersion across firms in the same sector.
This section has used data on actual wages in different sectors in the economy. Typically, however,
collective bargaining sets negotiated wages which may depart from actual wages. In the euro area,
negotiated wages have grown at a lower rate since 2000 than actual wages and labour productivity
(Box 3.3). Negotiated wages have tended to follow productivity only with a considerable lag, which appears
to have induced a misalignment of wage and productivity growth rates at the macroeconomic level in the
short run.

 125
Box 3.3. Negotiated wages in euro area countries

Analyses on wage developments and collective bargaining almost exclusively focus on actual wages.
However, collective agreements usually define contractual wages which in most countries apply only to
a subset of workers. Actual wages also reflect the trends among non-covered workers as well as
supplements at the company, plant or individual level (such as bonus or overtime pay). The difference
between the actual wage outcome and the negotiated wage is generally referred to as the “wage drift”,
i.e. the movement of wages above the negotiated floor.
Data on negotiated wages are not easily available and when available not easily comparable. The
European Central Bank (ECB) provides “experimental” statistics on the evolution of negotiated wages
for the euro area as a whole (European Central Bank, 2002[41]),23 while the CAWIE (Collectively Agreed
Wages In Europe) database developed by the European network of Trade Union related Research
Institutes (TURI) provides the underlying national statistics. 24 Similar data are also collected and
published by Eurofound (2017[42]).
Figure 3.10 shows the trends in negotiated wages, actual wages and labour productivity in real terms
for the euro area as a whole from 2000 to 2016 using the ECB data. The aggregate data show that, on
average, negotiated wage growth has been relatively limited, or at least well below productivity growth
both before and after the crisis. Actual wage growth exceeded negotiated wage growth but remained
below productivity growth, reducing the labour share. Only during 2008-09 negotiated (and actual) wage
growth increased above productivity growth due to the unexpected deflationary shock of the crisis and
the staggering of collective agreements. Staggering refers to the inability to renegotiate agreements
signed under more favourable economic conditions, which can amplify the aggregate shock, as shown
by Diez-Catalan and Villanueva (2015[43]) for Spain.
Figure 3.10. Negotiated wages in the euro area

Base 100 in 2000
Labour productivity Negotiated wage Actual wage
116
114
112
110
108
106
104
102
100
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Note: Negotiated and actual wages are deflated using the private final consumption price index.
Source: OECD calculations based on ECB data on collectively agreed wages and Eurostat National Accounts data.

126 
Country-specific data (Annex 3.C) show that in all countries (except in Italy, as a result of dismal
productivity growth, not “excessive” wage increases) negotiated wages have grown in line with, or often
less than, labour productivity growth, apart from 2008-09. Interestingly, negotiated wages in the
Netherlands have barely moved since 2000 – in fact, negotiated wages in the Netherlands are
practically unchanged since the 1970s in real terms (de Beer and Keune, 2017[44]) – but thanks to a
sizeable wage drift actual wages have grown in line with productivity. By contrast, in Germany actual
wages have grown considerably less than productivity and less than negotiated wages, showing a
negative “wage drift”. This unique trend of negative wage drift (at least among the European countries
for which data are available) means that actual wages are not bound by negotiated wages, which is
probably the result of decreasing bargaining coverage in Germany and the use of opening clauses
which allow companies to deviate from sectoral agreements (Schulten, 2013[45]).
Overall, in countries where wage co-ordination has an important role or wages are more centralised at
sectoral level, the correlation of wages with productivity at the sub-national level is weaker. This suggests
that wage co-ordination “works”, in the sense that it co-ordinates wages and, by partially delinking wages
from productivity, may end up in a less dispersed wage distribution. Centralisation and co-ordination may
also affect how wages can respond to individual firm performance. In the longer term, such delinking of
wages from productivity could have potentially important implications for productivity growth. It could
reduce incentives for workers to innovate, work hard and move to a better-paid job. However, stronger
misalignments of wages from productivity do not need to have such negative effects; for example, they
may even increase innovation incentives, if firms would reap the full benefits of productivity gains. Box 3.4
summarises the existing literature on collective bargaining and productivity. It also provides exploratory
evidence that certain forms of sectoral bargaining may come at the expense of lower productivity growth
within sectors.
Box 3.4. Collective bargaining and productivity growth

How does collective bargaining influence productivity? Theory suggests that effects could go either
way. On the one hand, collective bargaining can increase aggregate productivity by setting higher wage
floors (and making it more difficult to cut costs through lower wages) which may force unproductive
firms to exit the market (Braun, 2011[46]). More rigid wages may also increase the incentives of the firms’
owners to innovate, as they would reap the full benefits of productivity gains – see Acemoglu and
Pischke (1999[47]) and Haucap and Wey (2004[48]). Other ways through which collective bargaining could
promote productivity growth are higher “efficiency” wages, better non-wage working conditions and the
possibility for workers to voice concerns.
On the other hand, a more compressed wage structure may reduce the incentives to work hard and
move to a more productive firm, harming firm productivity and the efficient reallocation of workers. Union
power could also allow workers appropriating the benefits of investments by employers, giving rise to
the so-called “hold-up” problem (Malcomson, 1997[49]) and reducing investment incentives for firms.
Further, limitations to adjustments in the organisation of work (such as in working time, shifts or leave)
could lower productivity. Finally, decentralisation of bargaining may promote productivity through a
more frequent use of incentive schemes (such as performance pay).
The empirical literature has examined quite extensively the role of union coverage for productivity.
According to a meta-analysis (Doucouliagos, Freeman and Laroche, 2017[50]), the evidence overall
suggests that union coverage increases productivity in non-manufacturing industries, but not in
manufacturing industries. Some papers studied empirically the relevance of collective bargaining for
the “hold-up” problem and investment, with inconclusive results overall. Card, Devicienti and Maida
(2014[51]), using matched employer-employee data from Italy’s Veneto region, obtain little evidence of

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hold-up. Based on sector-level data for OECD countries, Cardullo, Conti and Sulis (2015[52]) find that
union coverage reduces investment in sunk-capital-intensive industries relative to others.
The results in this section suggest that certain collective bargaining systems can be associated with
stronger misalignments of pay and productivity, with possible consequences for productivity growth.
However, few papers have directly studied the role of different features of bargaining systems, such as
centralisation or co-ordination, for productivity, in part due to lack of suitable data. Andreasson (2017[53])
finds that in Sweden companies for which wage-setting is more decentralised have higher value added
per employee and higher productivity. Similarly, Garnero, Rycx and Terraz (2019[54]) obtain a positive
link between decentralised bargaining and productivity, using Belgian firm-level data. For developing
countries, Lamarche (2013[55]; 2015[56]) argues that firm-level instead of sectoral agreements could yield
productivity gains. However, Hibbs and Locking (2000[57]) document that decentralisation in Sweden in
the 1980s reduced aggregate productivity growth by slowing down the exit of inefficient firms. Taking
the evidence from these papers together, decentralisation appears to improve firm productivity, while it
may slow down the cleansing effect of higher wages and therefore, due to composition effects, not
translate in higher aggregate productivity growth.
To study the links of centralisation and co-ordination with productivity growth, the following variant of
the sector-level approach by Rajan and Zingales (1998[58]) is used. The premise is that collective
bargaining reforms tend to affect sectors more where collective bargaining coverage is high and
therefore productivity growth in these sectors should be affected more. The estimating equation is:
PG𝑠𝑐𝑡 = 𝛽1 Coverage𝑠𝑐 × Centralisation𝑐𝑡 + 𝛽2 Coverage𝑠𝑐 × Coordination𝑐𝑡 + P𝑠𝑐𝑡−1 + 𝛼𝑐𝑡 + 𝛾𝑠𝑐 + 𝜀𝑠𝑐𝑡 .
The dependent variable, PG𝑠𝑐𝑡 , indicates productivity growth in sector 𝑠, country 𝑐 and year 𝑡. The
lagged level of productivity, P𝑠𝑐𝑡−1 , accounts for convergence. Regressions are run for total factor and
labour productivity. Estimation of the coefficients of interests, 𝛽, requires variation in coverage across
sectors and centralisation or co-ordination across time. This is the case for seven countries with
available data: Austria, Denmark, Finland, France, Germany, the Netherlands and Spain.
Centralisation is linked with lower productivity growth, both for total factor and labour productivity – the
full set of empirical results is available in Annex 3.C. Productivity growth is higher in high compared with
low coverage sectors when collective bargaining is more decentralised. No association is estimated for
wage co-ordination. The estimation, which relies on sector comparisons, does not readily allow
conclusions on aggregate productivity growth. It also does not rule out issues of endogeneity, despite
relying only on within-country variation. Yet, the results suggest that centralised bargaining may come
at the expense of lower productivity growth, although analysis beyond these empirical explorations is
needed to examine the links between bargaining regimes and productivity further.
3.4. Balancing inclusiveness and flexibility in collective bargaining systems
The future of collective bargaining, its relevance and function, will depend on how it will adapt to changing
labour market conditions. Social partners and governments should aim to reap the benefits of collective
bargaining for employment and inclusiveness while avoiding that collective bargaining becomes a
straitjacket, by ensuring that firms are able to adjust wages and working time when their business situation
requires it.
This chapter has put forward new evidence based on a range of data sources (country-, sector-, firm- and
worker-level data) that suggests that, to a certain extent, collective bargaining has historically meant a
trade-off between inclusiveness and flexibility. In countries and periods when collective bargaining was not
confined to firm-level bargaining (or simply absent), wage inequality has been lower and employment,
including of vulnerable groups, has been higher. Wage co-ordination can also have the benefit of

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strengthening the resilience of the economy against business-cycle downturns (OECD, 2017[2]). This
chapter and the literature, however, have also provided evidence that more centralised bargaining at
sectoral or national level may come at the cost of reduced flexibility to adjust pay and working conditions
in line with business conditions for the individual sector or firm, with potentially adverse implications for
productivity.
This section discusses possible pathways going forward, through the combined use of tools that help
promote inclusiveness (Section 3.4.1) and tools that help promote flexibility (Section 3.4.2). Inclusiveness
in this context is to a large extent about being represented; hence, a strong emphasis is placed on broad-
based collective bargaining and social dialogue. Flexibility can be attained in many ways, but the challenge
is to nest it within systems that deliver broad-based coverage. Organised decentralisation (which leaves
space for firm-level agreements to set the terms of employment within a broader framework of sectoral
agreements), high levels of representation at the local level and wage co-ordination across sectors are
among the elements that hold most promise to effectively balance inclusiveness with flexibility.
3.4.1. Promoting broad-based collective bargaining and social dialogue
Broad-based employer and employee organisations tend to be the best way for countries to
attain high collective bargaining coverage
For collective bargaining to have meaningful macroeconomic effects, it needs to involve and cover a large
share of workers and companies. Well-organised social partners – unions and employer organisations with
a broad support base – are often the condition for attaining high coverage. Declining coverage rates in
several countries have reduced the potential role of collective bargaining for promoting earnings equality
and social cohesion. In countries where coverage has held up but trade union density has declined,
questions about the legitimacy and representativeness of trade unions are sometimes raised.
Currently, the union membership rate is above 50% only in OECD countries with the so-called “Ghent
system”, i.e. where union-affiliated institutions administer unemployment benefits (Denmark, Finland,
Iceland, Sweden and partly Belgium), and in Norway. However, even the Ghent system has been gradually
eroded through the development of private insurance funds. The use of administrative extensions and erga
omnes clauses that extend collective agreements to non-unionised workers and non-covered companies
may have weakened the incentives to join a union (as non-union members enjoy the same rights as union
members). Several countries use fiscal incentives to promote trade union membership. Norway, for
instance, subsidises union membership through tax breaks. Barth, Bryson and Dale-Olsen (2017[59]) show
that the increase in the generosity of the subsidy from 7% of the average membership fee in 2001 to 21%
in 2012 was important for slowing the decline in trade union density. Other examples are Sweden, which
has just reintroduced a subsidy for union members that had been abolished in 2007, and Finland, where
union membership fees and employer confederation fees are tax-deductible.
Affiliation to employer organisations is significantly higher (50% on average) and has been quite stable
over the last few decades, in contrast to the strong decline in union membership. An extreme case is
Austria where membership to the sectoral branch of the chamber of commerce (Wirtschaftskammer
Österreich or WKÖ) in each region (Bundesland) is compulsory for all companies. Sectoral agreements
signed at the regional or in some cases national level therefore necessarily cover all firms in the sector,
obviating the potential need of formal extension measures by the government. Studying the trends in 13
European countries, Brandl and Lehr (2016[60]) argue that employer organisations have been able to
remain relatively strong by adapting their organisational structures and activities to the changing needs of
businesses. Moreover, the use of administrative extensions of collective agreements in many countries
strengthens the incentives for membership to employer organisations since the terms of agreements also
apply to non-members (whose objectives may be different to those of members).

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Even in countries where company-level bargaining plays a significant role, it is often mostly confined to
large and medium-sized enterprises. To extend social dialogue to all segments of society, some
governments have tried to promote social dialogue in small firms. One example is the 2017 labour market
reform in France. This introduced the possibility for companies with less than 20 employees to call workers
to vote on a company-level agreement even in the absence of a union delegate, provided at least two-
thirds of employees support the agreement. It also allowed companies with 20 to 50 employees to negotiate
with an elected representative even if not explicitly mandated by the unions. Unions fear that these
initiatives to promote social dialogue in small businesses will in fact lead to abuses by employers who have
stronger bargaining power than employees. However, in France the role of firm-level bargaining remains
quite tightly defined by sectoral agreements which, very often (at least until the 2017 reform), explicitly
block renegotiations and derogations at the firm level on most topics. Another example comes from Italy,
where the government in 2017 increased tax incentives to promote negotiations on performance-related
pay and welfare provisions at the firm level with the stated aim of extending firm-level bargaining also to
medium and small firms and strengthen the link between productivity and wage increases at the firm level
(D’Amuri and Nizzi, 2017[61]).
The rise of non-standard and new forms of work represents a major challenge for collective bargaining
systems (see Chapter 5). The meaning of “employer”, “employee” and “place of work” becomes
increasingly blurred, impeding the ways in which employers and employees have negotiated traditionally.
Unions are making efforts to reach out to workers in new forms of work. Non-union labour movements to
defend workers’ interests are also emerging. Technology and social media help workers organise by
facilitating building communities and engaging in protests, boycotts and petitions. Moreover, direct forms
of voice such as regular meetings, team briefings and problem-solving groups may contribute to fill in for
unions and representative bodies (Bryson, Forth and George, 2012[62]; Bryson et al., 2017[63]).
Such alternative forms of collective organisation are a tool for preserving some form of workers’ voice at
times of rapid changes to work relationships. But these new bodies are often not entitled or may not even
want to engage in direct negotiations with employers. Hence, some employers fear that these alternative
forms of organisation represent a threat to the traditional forms of collective bargaining that have been
based on negotiations and industrial peace. Moreover, some restrictions to worker and employer
organisation may come from labour and competition laws which are often based on traditional concepts of
“employer” and “employee”. For instance, in the case of platform workers, but also of the self-employed
more generally, a key challenge is that bargaining collectively on wages would be against the traditional
interpretation of competition rules which tend to consider them as “undertakings” (Daskalova, 2017[64]).
This highlights the importance of legal reform to clarify the scope for collective bargaining and support the
emergence of new forms of social dialogue.
Extensions can be an alternative to support wide coverage of collective agreements when

social partners are weak, but have to be well regulated
In the absence of broad-based social partners, another way of making collective bargaining coverage more
inclusive is through the use of administrative extensions. These extend the coverage of collective
agreements beyond the members of the signatory unions and employer organisations to all workers and
firms in a sector. Extensions level the playing field across firms in a sector and reduce the burden
associated with lengthy and detailed negotiations, which can be particularly relevant for small firms. In
addition, they support the sustainability of “public goods”, including sectoral training and mobility schemes
funded by collective agreements. However, extensions can also have downsides, as they may be used as
a tool for unfair competition and harm the economic prospects of those not represented at the negotiation
table, such as start-ups, small firms or vulnerable workers – see Haucap, Pauly and Wey (2001[65]),
Magruder (2012[66]) and Hijzen and Martins (2016[67]).

130 
To avoid or minimise the potential negative effects, it is important that the parties negotiating the agreement
represent the interests of a wide range of firms and workers and leave some “escape valves” for specific
cases. This can be achieved by requiring reasonable representativeness criteria and a meaningful test of
public interest, while establishing well-defined procedures for exemptions and opt-outs in case of serious
economic hardship.25
As discussed above, extensions may weaken incentives for trade union membership. This, in turn, may
have adverse consequences for the quality of labour relations but also make it harder to introduce more
flexibility in the system through the use of decentralised organisation (see Section 3.4.2). Extensions
therefore can play a useful role for ensuring that all employees in a sector are covered but do not provide
a one-to-one substitute for collective organisation.
Extensions of collective agreements can only be used in countries with some form of sectoral agreements.
The case of Australia, where a government body determines minimum standards for each sector,
represents an alternative approach for ensuring basic terms of employment among all firms in a sector
(Box 3.5). The main challenge of this system is the difficulty to establish appropriate sectoral standards,
as this presupposes detailed knowledge of the sector which may often require a strong involvement of the
social partners.
Box 3.5. An alternative to sectoral bargaining? The case of Modern Awards in Australia
Australia does not have sectoral bargaining, but a form of industry- or occupation-wide regulations, so-
called Modern Awards, which set industry-specific wage floors that vary by skill level. While some 36%
of employees are covered directly by collective agreements, another 23% are covered by awards only.
That is, around three-fifths of employees have wages that are not determined by the employer and the
individual employee but instead either through collective bargaining or an external regulator. This is well
above the average rate of collective bargaining coverage across the OECD. The system has been in
place for several decades and a similar organisational arrangement was in place in New Zealand until
1991 – see Peetz and Rasmussen (2018[68]) for a detailed analysis of the functioning of Modern Awards.
Awards in Australia set sectoral minimum wages that vary according to the skill level of the job, with
provisions for night and weekend premiums (“penalty rates”), overtime pay, working time and other
dimensions of working conditions. A Modern Award covers a whole industry in most states and
territories (some states have retained their workplace relations practices). Australia also has a “national
minimum wage”, but this is usually fixed at the lowest rate in any award and adjusted every year at the
same time as the rest of the award pay structure.
Awards are set by a federal tribunal, the Fair Work Commission, whose members are chosen by the
government and selected among employer bodies, unions, lawyers and government officials. Unions
and employers make submissions on the content of Modern Awards and then the Fair Work
Commission decides. The Commission is also tasked with revising, after consultations, wage rates
(recently every four years). Outside these reviews, the relationship between awards is quite stable and
award wage increases in one industry rarely outpace, or fall behind, those in other industries.
With the support of employees, employers can deviate from the terms set in the awards, in particular
those relating to working hours, through specified processes, but workers should still be better off
overall. Mechanisms exist to adjust to temporary, special circumstances, but these are not widely used.
Modern Awards do not represent a form of sectoral bargaining, but they create a set of industry-specific
skill-varying wage floors which, while significantly different, can be compared with the use of
administrative extensions in countries with sectoral bargaining.

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3.4.2. Ensuring that collective bargaining systems are able to respond to changing and
unexpected challenges
Collective bargaining and social dialogue should also support strong economic outcomes, which may
require ensuring that working conditions are sufficiently well-aligned with economic conditions. This can
be achieved by allowing some degree of flexibility at the firm or worker level or through the use of
mechanisms to co-ordinate bargaining outcomes across sectors or firms with a focus on macroeconomic
performance. Moreover, social partners can play a key role in supporting job transitions and ensuring that
workers are equipped with the skills needed.
Leaving more scope for company-level bargaining does not require disavowing sectoral
bargaining
Debates on collective bargaining have largely focused on the level of negotiation. The introduction of
flexibility in predominantly sectoral systems has therefore often been considered as requiring a shift from
sectoral to firm-level bargaining. While such a shift would indeed provide more flexibility to firms, it may
also induce a decline in coverage, undermining the inclusiveness of the system. 26 However, experiences
from a number of countries show that less radical options, typically referred to under the heading of
“organised decentralisation” (Traxler, 1995[69]), are available. These have the advantage of preserving
sectoral bargaining, while enabling a closer link between productivity and working conditions at the firm
level.
Organised decentralisation occurs within the framework provided by sectoral agreements, while explicitly
allowing elements of working conditions and work organisation to be negotiated or determined at the
company or even worker level under certain conditions through specific procedures. In principle, the
sectoral framework should preserve collective bargaining coverage and give firms and workers more
freedom to set working conditions. Decentralisation usually takes place through company collective
agreements with trade unions, but in some cases also through agreements by the management with non-
union worker representatives (such as works councils) or individual employees. For Traxler (1995[69]), who
coined the term, organised decentralisation stands in contrast to “disorganised decentralisation”, a system
where firm-level agreements entirely replace sectoral agreements and many workers are left without
representation.
Organised decentralisation can take several forms – see Ibsen and Keune (2018[70]) for more details. In a
first model, sectoral agreements provide a general framework but leave room for lower-level agreements
to tailor the terms of employment. This approach is thus predicated on multi-level bargaining and strong
local representation (or extensions) and can be found in Denmark, Norway and Sweden, for instance. In
these countries, the favourability principle is not set in the law but entirely left to the bargaining parties who
decide whether and in which case it applies. In this first form of organised decentralisation, sectoral
agreements can take the following forms or a mix of them:
 Minimum agreements: They set minimum standards but leave the setting of actual wages and
working conditions up to company agreements, with the condition that they respect the minimum
standards.
 Corridor agreements: They set the boundaries (minimum and maximum) between which the terms
of employment in company-level agreements can be set.
 Default agreements: They set wages and working conditions, but these come only into force in
case local parties do not find an agreement. Hence, company agreements can also set wages and
working conditions below the default levels.
 Figureless agreements: They contain no wage standards which are entirely left to the company
level.

132 
In practice, few “pure” agreements exist, as even default agreements may include some common
standards.
Sectoral agreements can also allow for a different type of decentralisation where working conditions are
not set by a company agreement but by individual workers. Such à-la-carte arrangements offer individuals
the option to exchange, within predefined limits, wages, working time and free time. In some cases,
company-level agreements introduce this option for the workforce (“mandated à-la-carte”). In others, this
is done in the sectoral agreement, regardless of a company-level agreement (“un-mandated”). À-la-carte
arrangements tend to be important in the Netherlands where the scope for bargaining at the firm in addition
to the sectoral level tends to be limited beyond certain industries and larger firms, given relatively low levels
of local representation (Visser, 2016[71]).
In a second model of organised decentralisation, notably present in Germany and Austria, sectoral
agreements set the standard terms of employment and allow for exceptions to the favourability principle
via opt-out or derogation clauses. These clauses, often also known as competition, hardship or opening
clauses, allow company-level agreements to deviate downwards from wages and working conditions set
in a sectoral agreement. Traditionally, such clauses were intended to apply to companies in serious
economic problems for a temporary time period under predefined conditions. 27 Since 2004 in Germany,
opening clauses have been used more generally by companies to reduce labour costs. Some clauses
allow companies to postpone or cancel parts of the sectoral agreement, notably wage increases,
depending on the type or economic situation of the company.
In Germany, opening clauses are usually contingent upon an initial agreement between the signatory social
partners in the industry or region. There is some leeway in designing the clause, in terms of what
substantive issues it includes (wages, working time, employment guarantees, etc.) and under what
conditions and according to which procedures the derogation can be made. According to Schulten and
Bispinck (2017[72]), company-level parties (management and works council) usually make a joint
application to the signatory parties at sectoral level which take the final decision. It is, however, also
possible to derogate the final decision-making competence to the company-level parties. According to a
recent study (Amlinger and Bispinck, 2016[73]), derogation agreements concern mainly working time (14%
of all companies covered by a collective agreement), wages (10%), allowances (10%), annual bonuses
(10%) and apprenticeship pay (3%). The clauses in sectoral agreements mainly define the rules and
conditions under which the derogation can be made, in particular:
 Companies have to disclose their financial information to justify a derogation;
 Parties at the company and industry level need to have the time to scrutinise the company’s
financial status and the measures taken;
 The duration of the derogation should be limited to ensure terms and conditions will return to the
standards in the sectoral agreement;
 Derogations are conditional on the safeguarding of jobs or investment plans to make the company
more viable.
In addition to these bi-partite procedures, unions have instated their own procedural requirements to avoid
that derogations are agreed between local parties without workers getting something in exchange.
According to Haipeter and Lehndorff (2014[74]) and Schulten and Bispinck (2017[72]), such internal union
procedures have helped ensure a controlled use of opt-outs. Baccaro and Benassi (2017[75]) are less
optimistic, as control through internal procedures is only strong in some sectors, notably metalworking
where unions are still strong locally. In the German retail sector, by contrast, decentralisation has been
less “organised”, since unions and works councils are less prevalent and employers have rather opted for
non-binding membership to the employer association or no membership at all. With limited use of
extensions, this has led to a substantial decrease in bargaining coverage.

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Although strict conditions on the use of opening clauses help ensure that the decentralisation process
remains organised, they may also severely diminish their role. Where opening clauses exist, opt-outs are
mostly used by large firms which are not necessarily those most in need. Small firms are often not able to
make use of derogations and opt-out clauses because they lack the capacity or worker representation. In
a possibly extreme, but not totally unlikely scenario, opt-outs with very strict conditions may become an
anti-competitive tool: Large firms could first negotiate relatively generous conditions in sectoral agreements
and then opt out to improve the terms in their favour, leaving competitors to bear the brunt of the generous
terms they negotiated.28
Overall, organised decentralisation appears to be able to increase the flexibility of the system, at least to
some extent, without being accompanied by a substantial decline in the number of workers being
represented. This is the case in countries where well-regulated extensions help attain high collective
bargaining coverage (as in the Netherlands), where membership of trade unions is high (as in the Nordic
countries) and where employer association density is high (as in Austria). In Germany, the introduction of
opening clauses has been accompanied by a reduced use of extensions and a decline in bargaining
coverage. Special forms of membership with the employer association (so-called Ohne Tarifbindung-
Mitgliedschaft), which do not bind companies to collective agreements, have added to the disengagement
of employers from bargaining. The experience of Germany exemplifies the difficulty of organised
decentralisation in a context where the degree of local representation is relatively weak. In such a context,
the scope for opt-out is limited for some firms, increasing incentives for disengaging from employer
associations altogether, contributing to the decline in collective bargaining coverage. In the end,
decentralisation in Germany represents a combination of organised and disorganised elements, as Visser
(2016[71]), Oberfichtner and Schnabel (2017[76]) also noted.
Several countries, especially in Southern Europe in the wake of the euro area crisis, introduced reforms to
increase the flexibility of their collective bargaining systems along the lines of the German model. Examples
are Spain (OECD, 2014[77]), Portugal (OECD, 2017[78]) and, to a different extent, Greece (OECD, 2016[79]).
Special attention should be paid in the coming years to a careful evaluation of the introduction of opening
clauses in countries which did not have them and their possible interaction with other elements of the
collective bargaining system. The absence of strong worker representation at the local level in the form of
unions or works councils limits the scope of such reforms and may increase incentives for firms to leave
an employer association in the absence of extensions or to opt for less organised forms of collective
bargaining.
Wage co-ordination can strengthen flexibility to macroeconomic conditions
OECD (2012[18]) and OECD (2017[2]) have found that wage co-ordination across sectors can contribute to
labour market resilience in the aftermath of an economic downturn thanks to greater flexibility in earnings
(i.e. working time and wages) and better employment outcomes based on wage moderation. The new
evidence reported in Section 3.2 on the link between collective bargaining systems and employment
provides further support for these results.
Co-ordination works either by having sectoral or firm-level agreements following the guidelines fixed by
peak-level organisations or a social pact or by identifying a leading sector (or group of companies) which
sets the mark for others to follow (“pattern bargaining”).
Guidelines by peak-level organisations define norms or objectives that should be followed when bargaining
at lower levels. They are present in several countries but they tend to be binding only in countries where
peak-level unions or employer organisations are relatively strong and centralised (in the Nordic countries
and to a significantly lower extent in France and Italy).
A social pact is a peak-level deal over a comprehensive policy package that is negotiated between the
government, trade unions and employer organisations. By bringing all parties to the same table at the
national level, it helps devising a widely shared response, especially in the case of macroeconomic shocks.

134 
This therefore represents a strong form of co-ordination. As argued in OECD (2017[2]), peak-level co-
ordination and social pacts can reduce transaction costs involved in the negotiation of temporary wage
and working-time reductions and make them more acceptable to workers by ensuring that they are widely
shared.
The objective of pattern bargaining is to support macroeconomic performance based on international
competitiveness, both in good and bad times. A concrete example of pattern bargaining is Sweden, where
the tradable sector (mainly manufacturing) sets the “cost mark” (an increase in the wage bill for that year),
looking at productivity and wage developments in other countries. The cost mark represents a reference
ceiling for the other sectors. In this case, the role of firm-level bargaining is mainly called to decide on the
distribution of wage increases within the firm (with exceptions). 29 Pattern bargaining, in different forms, is
also present in Austria, Denmark, Germany, Japan, the Netherlands and Norway.
A precondition for a well-functioning co-ordination of wage bargaining is to have strong and representative
employer and employee organisations. Wage co-ordination requires a high level of trust in and between
the social partners and the availability of objective and shared information on the labour market situation.
Enforcing maximum wage targets is not straightforward, especially if some non-tradable sectors can afford
more than the agreed “cost mark”. Ibsen (2016[80]) highlights the role of mediation bodies for the functioning
of pattern bargaining in Denmark and Sweden. In Denmark, the mediation institution can call for the
approval of all agreements into one majoritarian union ballot, which effectively forces potential defectors
into the agreement. In Sweden, the mediation process works rather through persuasion and naming and
shaming. Conversely, the lack of effective mediation bodies is considered as one of the reasons behind
the decline of pattern bargaining in Germany. The unique degree of self-regulation by the social partners
makes co-ordination fundamentally different from centralisation which is commonly written in laws or
regulations.
A further consideration is that the share of manufacturing in total employment and GDP has been
decreasing in most countries, putting into question its role as leading sector in pattern bargaining and the
sustainability of co-ordination through pattern bargaining in the future. In the Swedish context, the Labour
Market Policy Council highlighted that, if this situation were to persist, there is a risk of a collapse of the
current co-ordination system (Arbetsmarknadsekonomiska rådet, 2017[81]). This could make it more difficult
to secure wage moderation. One way to prevent this may be to take account of productivity and price
developments in all tradeable sectors beyond just manufacturing when setting the “cost mark”.30
All in all, co-ordination remains a unique tool to strengthen the resilience of the labour market and increase
the inclusiveness of collective bargaining, while safeguarding the competitiveness of the national economy.
However, co-ordination not only requires strong social partners at national and local levels, but it also faces
increasing challenges to remain effective in a changing economic structure.
Conclusions
Using a mix of available cross-country micro-and macro data and a new characterisation of collective
bargaining systems based on the main elements identified in Chapter 2, i.e. collective bargaining
coverage, the level of bargaining the degree of flexibility and the role of wage co-ordination, this chapter
has shed light on the link between bargaining systems and employment, wages and productivity.
The results show that co-ordinated collective bargaining systems are associated with higher employment,
lower unemployment, a better integration of vulnerable groups and less wage inequality than fully
decentralised systems. This highlights they role of wage co-ordination as a tool to ensure that collective
agreements are set taking into account their macroeconomic effects without undermining the external
competitiveness of the country as well as accounting for the business-cycle situation. In countries where
there is wage co-ordination, it tends to be strongly supported by employer associations, since it contributed
to moderate wage growth, and trade unions, since it has ensured high levels of employment.

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At the individual level (within countries), there is a wage premium for employees who are covered by firm-
level bargaining compared with those not covered or those covered only by sectoral bargaining. Moreover,
wage dispersion is greater in systems with no collective bargaining, or where firms set wages
independently. By contrast, wage dispersion is on average smallest among workers who are covered by
sectoral bargaining. Centralised bargaining systems tend to be associated with lower productivity growth
if coverage of agreements is high. This result suggests that the lack of flexibility at the firm level, which
characterises centralised bargaining systems, may come at the expense of lower productivity growth. By
contrast, higher co-ordination in systems that are not centralised is not found to have adverse effects on
productivity.
While many OECD countries have taken steps towards decentralisation in the past two decades, the best
outcomes in terms of employment, productivity and wages are reached when sectoral agreements set
broad framework conditions but leave detailed provisions to firm-level negotiations. By contrast, other
forms of decentralisation that simply replace sectoral with firm-level bargaining, without co-ordination within
and across sectors, tend to be associated with somewhat poorer labour market outcomes.
Therefore the main challenge for social partners and governments is to adjust collective bargaining
systems, as to use it to reach better outcomes in terms of employment, job quality and inclusiveness, while
leaving scope for firms to adapt rules to their own realities. The exact nature of this challenge and the way
it is addressed will differ from country to country and depend to an important extent on the existing national
collective bargaining traditions.

136 
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Annex 3.A. A taxonomy of collective bargaining

systems
In order to provide an overarching view of the functioning of collective bargaining systems while, at the
same time, capturing as much as possible the granularity, complexity and diversity across countries, a
novel taxonomy of collective bargaining is used to conduct the empirical work, notably to investigate the
link between the main features of collective bargaining systems and labour market performance at macro
level. Three main aspects are considered to group countries based on the conceptual framework
developed in Chapter 2: the level of bargaining, the degree of actual centralisation or organised
decentralisation as defined by the rules and use of extensions, derogations, opt-out, and the presence of
the favourability principle with respect to wages, and the degree of wage co-ordination. Grouping countries
necessarily requires some simplifications and therefore the detailed discussion in Chapter 2 should be kept
in mind when comparing and assessing the functioning of the different bargaining systems across
countries.
The dashboard in Chapter 2 based on the answers to the OECD policy questionnaires allowed identifying
five main groups of countries:
 A first group includes countries with predominantly centralised and weakly co-ordinated collective
bargaining systems. In this group of countries, sectoral agreements play a strong role, extensions
are relatively widely used and derogations from higher-level agreements are either limited or not
often used. In 2015 France, Iceland, Italy, Portugal, Slovenia, Spain and Switzerland fell in this
group.
Note: In Chapter 2 Spain and Switzerland were mentioned in an intermediate group
between the rather centralised and organised decentralised ones. The number of
observations between 1980 and 2015 for such an intermediate group, however, is
too small to be used for econometric purposes.
 A second group includes countries with predominantly centralised but co-ordinated collective
bargaining systems. In this group of countries, sectoral agreements play a strong role as well and
the room for lower level agreements to derogate from higher-level ones is also quite limited.
However, wage co-ordination is quite binding. In 2015 Belgium and Finland were part of this group.
 A third group is composed by countries with co-ordinated, organised decentralised bargaining
systems. In these countries, sectoral agreements play an important role but also leave significant
room to lower agreements to set the standards – either by limiting the role of extensions (rare and
never automatic or quasi-automatic in this group), or by leaving up to bargaining parties the design
of the hierarchy of agreements (the “favourability principle”) or by allowing for the possibility to
opt-out. Moreover, in this group of countries co-ordination is strong. In 2015 Austria, Denmark,
Germany, the Netherlands, Norway and Sweden composed this group.
 A fourth group includes countries with collective bargaining systems where firm-level bargaining is
dominant but sectoral bargaining also plays a role or there are some forms of regulation
mechanisms or some degree of wage co-ordination by peak-level organisations. Extensions are
very rare. Australia with its “Modern Awards” (see Box 3.5 in the Chapter), Ireland with the “Sectoral
Employment Orders”, or Japan with its unique form of co-ordination (Shunto) were included in this
group in 2015 as well as Greece, Luxembourg and Slovakia.
 The fifth group covers countries where bargaining is essentially confined to the firm/establishment
level with no co-ordination and no (or very limited) influence of the government. In 2015 Canada,

144 
Chile, Czech Republic, Estonia, United Kingdom, Hungary, Ireland, Korea, Lithuania, Latvia,
Mexico, New Zealand, Poland, Turkey, United States were part of this group.
The taxonomy is then reconstructed backwards until 1980 using information on the level of bargaining
(four levels: central or intermediate between central and industry bargaining; sectoral; intermediate
between sector and company bargaining; company level, from ICTWSS), the degree of organisation by
identifying changes in use of extensions, derogations, opt-out, and the existence of the favourability
principle (as reported in ICTWSS complemented with information on policy reforms and major agreements
using information from LABREF, Eurofound and the available literature) and co-ordination (defined as
strong when COORD in ICTWSS takes the value of 5 and 431, and weak or absent otherwise and
smoothing for one year blips, i.e. excluding changes in the variable COORD which occur in a single year).
Annex Table 3.A.1 shows the taxonomy for all OECD countries between 1980 and 2015 (central and
eastern European countries only available after 1990).

 145
Annex Table 3.A.1. A taxonomy of collective bargaining systems in OECD countries, 1980-2015
2015 2014 2013 2012 2011 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001 2000 1999 1998 1997 1996 1995 1994 1993 1992 1991 1990 1989 1988 1987 1986 1985 1984 1983 1982 1981 1980
Australia LD LD LD LD LD LD LD LD LD LD LD LD LD LD LD LD LD LD LD LD PCW PCW PCW PCW PCC PCC PCC PCC PCC PCC PCC PCC PCC PCW PCW PCW
Austria ODC ODC ODC ODC ODC ODC ODC ODC ODC ODC ODC ODC ODC ODC ODC ODC ODC ODC ODC PCC PCC PCC PCC PCC PCC PCC PCC PCC PCC PCC PCC PCC PCC PCC PCC PCC
Belgium PCC PCC PCC PCC PCC PCC PCC PCC PCC PCC PCC PCC PCC PCC PCC PCC PCC PCC PCC PCC PCC PCC PCC PCC PCC PCC PCC PCC PCC PCC PCC PCC PCC PCC PCC PCW
Canada FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD
Chile FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD
Czech Republic FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD LD LD LD LD
Denmark ODC ODC ODC ODC ODC ODC ODC ODC ODC ODC ODC ODC ODC ODC ODC ODC ODC ODC ODC ODC ODC ODC ODC ODC ODC ODC ODC ODC ODC PCW PCW PCW PCW PCW PCW ODC
Estonia FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD
Finland PCC PCC PCC PCC PCC PCW PCW PCW PCW PCC PCC PCC PCC PCC PCC PCC PCC PCC PCC PCC PCW PCW PCW PCC PCC PCC PCW PCW PCC PCC PCC PCC PCC PCC PCW PCW
France PCW PCW PCW PCW PCW PCW PCW PCW PCW PCW PCW PCW PCW PCW PCW PCW PCW PCW PCW PCW PCW PCW PCW PCW PCW PCW PCW PCW PCW PCW PCW PCW PCW PCW PCW PCW
Germany ODC ODC ODC ODC ODC ODC ODC ODC ODC ODC ODC ODC ODC ODC PCW PCW PCW PCW ODC ODC ODC ODC ODC PCC PCC PCC PCC PCC PCC PCC PCC PCC PCC PCC PCC PCC
Greece LD LD LD LD LD PCC PCC PCC PCC PCC PCC PCC PCC PCC PCC PCC PCC PCC PCC PCC PCC PCC PCC PCC PCC PCC PCC PCC PCC PCC PCC PCC PCC PCC PCC PCC
Hungary FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD LD LD LD
Iceland PCW PCW PCW PCW PCW PCW PCW PCW PCW PCW PCW PCW PCW PCW PCW PCW PCW PCW PCW PCW PCW PCW PCW PCW PCW PCW PCW PCW PCW PCW PCW PCW PCW PCW PCW PCW
Ireland FD FD FD FD FD FD FD PCC PCC PCC PCC PCC PCC PCC PCC PCC PCC PCC PCC PCC PCC PCC PCC PCC PCC PCC PCC PCC PCC FD FD FD FD FD FD PCC
Israel LD LD LD LD LD LD LD LD LD LD LD PCW PCW PCW PCW PCW PCW PCW PCW PCW PCW PCW PCW PCW PCW PCW PCW PCW PCW PCW PCC PCC PCC PCC PCC PCC
Italy PCW PCW PCW PCW PCW PCW PCW PCW PCW PCW PCW PCW PCW PCW PCW PCW PCW PCW PCW PCW PCW PCW PCW PCW PCW PCW PCW PCW PCW PCW PCW PCC PCC PCW PCW PCW
Japan LD LD LD LD LD LD LD LD LD LD LD LD LD LD LD LD LD LD LD LD LD LD LD LD LD LD LD LD LD LD LD LD LD LD LD LD
Korea FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD
Latvia FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD
Lithuania FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD
Luxembourg LD LD LD LD LD LD LD LD LD LD LD LD LD LD LD LD LD LD LD LD LD LD LD LD LD LD LD LD LD LD LD LD LD LD LD LD
Mexico FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD
Netherlands ODC ODC ODC ODC ODC ODC ODC ODC ODC ODC ODC ODC ODC ODC ODC ODC ODC ODC ODC ODC ODC ODC ODC ODC PCW PCW PCW PCW PCW PCW PCW ODC ODC ODC PCW PCW
New Zealand FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD PCW PCW PCW PCW PCW PCW PCW PCW PCW PCW PCW PCW
Norway ODC ODC ODC ODC ODC ODC ODC ODC ODC ODC ODC ODC ODC ODC ODC PCC PCC PCC PCC PCC PCC PCC PCC PCC PCC PCC ODC ODC ODC PCW PCW PCW PCW PCW ODC ODC
Poland FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD
Portugal PCW PCW PCW PCW PCW PCW PCW PCW PCW PCW PCW PCW PCW PCW PCW PCW PCW PCW PCC PCC PCW PCW PCW PCW PCW PCW PCW PCC PCC PCC PCW PCW PCW PCW PCW PCW
Slovak Republic LD LD LD LD LD LD LD LD LD LD LD LD LD LD LD LD LD PCW PCW PCW PCW PCW PCW

146 
2015 2014 2013 2012 2011 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001 2000 1999 1998 1997 1996 1995 1994 1993 1992 1991 1990 1989 1988 1987 1986 1985 1984 1983 1982 1981 1980
Slovenia PCW PCW PCW PCW PCW PCW PCC PCC PCC PCC PCC PCC PCC PCC PCC PCC PCC PCW PCW PCC PCC PCC PCC PCC PCW PCW
Spain PCW PCW PCW PCW PCW PCW PCW PCC PCC PCC PCC PCC PCC PCC PCW PCW PCW PCW PCW PCW PCW PCW PCW PCW PCW PCW PCW PCW PCW PCC PCC PCC PCC PCC PCC PCC
Sweden ODC ODC ODC ODC ODC ODC ODC ODC ODC ODC ODC ODC ODC ODC ODC ODC ODC ODC PCW PCW PCW PCW PCW ODC ODC PCW PCW PCW PCW PCW PCW PCW PCW PCW PCW PCW
Switzerland PCW PCW PCW PCW PCW PCW PCW PCW PCW PCW PCW PCW PCW PCW PCW PCW PCW PCW PCW PCW PCW PCW PCW PCW PCW PCW PCC PCC PCC PCC PCC PCC PCC PCC PCC PCC
Turkey FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD
United Kingdom FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD LD LD LD LD LD LD LD PCW PCW PCW PCW PCW PCW PCW
United States FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD FD
Note: Acronyms in the Table refer to the following country groupings:

PCW. Predominantly Centralised and Weakly co-ordinated
PCC. Predominantly Centralised and Co-ordinated
ODC. Organised Decentralised and Co-ordinated
LD. Largely Decentralised
FD. Fully Decentralised
Co-ordination in Switzerland in 2015 was marked as high in OECD (2017[2]), OECD Employment Outlook 2017, http://dx.doi.org/10.1787/empl_outlook-2017-en. The ICTWSS database, however, classifies
it at an intermediate level similar to that of other countries marked as “low”. To ensure consistency back in time co-ordination Switzerland has been reclassified to “low” in 2015. Spain and Switzerland in
2015 should be considered as an intermediate group. However, the number of observations between 1980 and 2015 for such an intermediate group is too small to be used for econometric purposes.
Source: OECD elaboration using the OECD policy questionnaires, ICTWSS, Eurofound, LABREF and related literature.

 147
What is behind the changes in the taxonomy?
The main features of wage bargaining in Canada, Chile, Estonia, France, Iceland, Italy, Japan, Korea,
Latvia, Lithuania, Luxembourg, Mexico, Poland, Turkey and the United States appear constant between
1980 and 2015 in the proposed taxonomy.
On the opposite changes in the level of bargaining and the degree of actual centralisation have been
registered in the following countries:
 Australia: in 1993, the Australian Government passed the Industrial Relations Reform Act which
replaced centralised wage setting with enterprise-level collective bargaining. In 1996 the Federal
Government introduced the Workplace Relations Act, which introduced individual statutory
contracts into the federal system. These individual agreements were abolished in 2009;
 Germany: in 1993 the first hardship agreement and “restructuring clauses” were introduced in the
German bargaining system;
 Greece: in 2011 the reforms led to a decentralisation of wage bargaining;
 Ireland: between 1987 and 2008 wage bargaining was rather centralised and co-ordinated;
 New Zealand: in 1992 the Employment Contract Act decentralised wage bargaining;
 Norway: 2001 was the first year without a central agreement;
 Sweden: in 1980s central agreements played a significant a role before being rolled out;
 United Kingdom: a series of reforms in the 1980s by the Thatcher government reduced the role of
unions and decentralised collective bargaining first to an intermediate level (1987-1993), then to
company level.
Less dramatic, but still notable changes have been observed in:
 Czech Republic: between 1991 and 1994 bargaining was at an intermediate level, after it has taken
place mainly at firm-level (source: ICTWSS);
 Hungary: between 1990 and 1992 bargaining was at an intermediate level, after it has taken place
at firm-level (source: ICTWSS);
 Israel: in the 1990s bargaining slowly decentralised. Starting in 2005 bargaining level as
intermediate between sectoral and company bargaining (source: ICTWSS);
 Slovak Republic: in 2009 bargaining moved to an intermediate level between sectoral and firm-
level bargaining (source: ICTWSS).
No change in the level of bargaining and the degree of actual centralisation is observed in France, Italy
and Portugal since, as discussed in Chapter 2, collective bargaining over wages in these countries remain
quite centralised. This may seem surprising as over the last decades the favourability principle was inverted
in France and other reforms promoted firm-level bargaining. However, as argued in Chapter 2,
decentralisation in France only covered non-wage working conditions while wage bargaining remained
strictly in the hands of sectoral bargaining. In Italy, the scope for firm-level bargaining was also widened
but it remains a tension between the rules set by social partners autonomously, which define a hierarchical
relationship between bargaining levels, and jurisprudence, according to which a firm-level agreement can
always depart from sectoral agreements. All in all wage bargaining has remained quite centralised over
the period of observation. Finally, the recent reforms in Portugal have changed considerably the functioning
of the bargaining systems but were also partly rolled back. At this stage, wage bargaining seems still rather
centralised.
The degree of co-ordination, as measured in the ICTWSS database (variable COORD), also varied
significantly over time:

148 
 Australia: between 1981 and 1982 and 1992-1995 co-ordination was weak.
 Belgium: in 1980 co-ordination was weak.
 Denmark: between 1981 and 1986 co-ordination was weak.
 Finland: Several periods when co-ordination was weak.
 Germany: in 1998-2001 co-ordination was weak.
 Italy: 1983-1984 co-ordination played a somewhat significant role (in 1983 “accordo Scotti” to fight
against inflation and in 1984 “Decreto di San Valentino” which abolished the “scala mobile”, the
automatic indexation of pay scales, thus reducing the role of “state-induced” wage co-ordination).
 Netherlands: in 1980-1981 and 1985-1991 co-ordination was relatively weak.
 Norway: in 1982-1987 co-ordination was weak.
 Portugal: in 1986-1988 and 1996-1997 co-ordination was weak.
 Slovenia: in 1992-1996 and 1999-2009 co-ordination played a somewhat significant role.
 Spain: in 1980-1986 and 2002-2008 co-ordination played a somewhat significant role.
 Sweden: in 1980-1990 and 1993-1997 co-ordination was weak
 Switzerland: between 1980 and 1989 co-ordination played a somewhat significant role.

 149
Annex 3.B. Macro-data analysis: Variable

description and additional material
Labour market performance
Employment rate: Employment-to-population ratio of persons aged 25-64.

Incidence of temporary employment: Number of temporary employees as a percentage of total employees
aged 25-64. Further details on country-specific definitions of temporary employees can be found at:
www.oecd.org/els/emp/lfsnotes_sources.pdf.
Incidence of part-time employment: Number of part-time workers (national definition) as a percentage of
total employment of persons aged 25-64.
Incidence of involuntary part-time employment: Number of involuntary part-time workers defined as part-
time workers (based on national definition) who could not find full-time work as a percentage of total
employment of persons aged 25-64.
Unemployment rate: Number of unemployed persons as a percentage of the labour force of persons aged
25-64.
Female unemployment rate: Number of unemployed persons as a percentage of the labour force of women
aged 25-64.
Youth unemployment rate: Number of unemployed persons as a percentage of the labour force of persons
aged 15-24
Source: OECD Employment Database, http://www.oecd.org/employment/emp/onlineoecdemploymentdatabase.htm
Low-skilled unemployment rate: Number of unemployed persons as a percentage of the labour force of
persons aged 25-64 having attained below upper secondary education.
Source: OECD (2019[82]), "Education at a glance: Educational attainment and labour-force status", OECD Education Statistics (database),
http://dx.doi.org/10.1787/889e8641-en.
Earning dispersion indicator: Estimates of earnings used in the calculations refer to gross earnings of full-
time wage and salary workers. However, this definition may slightly vary from one country to another.
Further information on the national data sources and earnings concepts used in the calculations can be
found at: www.oecd.org/employment/outlook.
Source: OECD Earnings Distribution Database, www.oecd.org/employment/emp/employmentdatabase-earningsandwages.htm
Hourly labour productivity: Hourly labour productivity refers to the ratio of real GDP over total hours worked.
Source: OECD (2018), "GDP per capita and productivity growth", OECD Productivity Statistics (database), http://dx.doi.org/10.1787/data-00685-
en

150 
Collective bargaining system
Collective bargaining coverage rate: Collective bargaining coverage rate corresponds to the ratio of
employees covered by collective agreements, divided by all wage earners with the right to bargain.
Source: OECD http://stats.oecd.org/Index.aspx?DataSetCode=CBC and ICTWSS database (Institutional Characteristics of Trade Unions, Wage
Setting, State Intervention and Social Pacts), http://www.uva-aias.net/en/ictwss/.
Centralisation: Actual level of centralisation (CWB in ICTWSS) computed as:
LEVEL - (fAEB+OCG)/4 + (Art+DR-1)/5
where LEVEL is the predominant level at which wage bargaining takes place (from 1 for company-level
bargaining to 5 for central/cross-industry-level bargaining), fAEB is the frequency or scope of additional
enterprise bargaining (from 0 when not happening to 3 when frequent), Art is the articulation of enterprise
bargaining (from 0 when absent to 3 when disarticulated) and DR is possibility of setting aside the
favourability principle in higher-level agreements (from 0 when the favourability principle is inversed to 3
when the favourability is anchored in law and strictly applied without derogations.
Co-ordination: Degree of co-ordination of wage-setting derived from the variable coord in ICTWSS and
recoded as no co-ordination (for values 1 and 2 of the variable coord), low co-ordination (for value 3 of the
variable coord) and high co-ordination (for values 4 and 5 of the variable coord).
Source: ICTWSS database (Institutional Characteristics of Trade Unions, Wage Setting, State Intervention and Social Pacts), http://www.uva-
aias.net/en/ictwss/.
Institutional controls
Tax wedge: The tax wedge considered in this chapter is the wedge between the labour cost for the
employer and the corresponding net take-home pay of the employee for single-earner couples with two
children earning 100% of average worker earnings. It is expressed as the sum of personal income tax and
all social security contributions as a percentage of total labour cost.
Source: OECD Taxing Wages Database.
Product market regulation: The aggregate indexes of anti-competitive product market regulation come from
the OECD Regulatory Database. They vary from 0 to 6 from the least to the most restrictive.
Source: OECD Indicators of Product Market Regulation, http://www.oecd.org/eco/growth/indicatorsofproductmarketregulationhomepage.htm.
Employment protection legislation: The aggregate indexes on regulations with respect to the dismissals of
workers on open-ended contracts (including additional provisions for collective dismissals) and the use of
temporary contracts Separate employment protection EP indicators come from the OECD Indicators of
Employment Protection (www.oecd.org/employment/protection). Both indicators vary from 0 to 6 from the
least to the most stringent.
Source: OECD Employment Database, http://www.oecd.org/employment/emp/onlineoecdemploymentdatabase.htm.
Minimum wage: Statutory minimum wage as a percentage of median wage of full-time workers.

 151
Gross unemployment insurance replacement rate: UB generosity is measured on the basis of average
replacement rates, defined as average unemployment benefit replacement rate across two income
situations (100% and 67% of average worker earnings), three family situations (single, with dependent
spouse, with spouse in work) and three different unemployment durations (first year, second and
third years, and fourth and fifth years of unemployment).
Source: OECD (2018), "Taxes and benefits", OECD Social and Welfare Statistics (database), http://dx.doi.org/10.1787/data-00201-en.
Demographic controls
Share of female employment: Number of women employed as a percentage of total employment

Average years of education: Number of years spent in education of person aged 25-64.
Source: D. Cohen and M. Soto, Growth and human capital: good data, good results, completed with Barro-Lee Educational Attainment Data
(2013 update); http://www.barrolee.com/.

152 
Annex Table 3.B.1. Effect of collective bargaining systems on labour market performance
OLS regressions using taxonomy of collective bargaining systems
Employment rate Incidence of temporary Incidence of part-time Incidence of involuntary Unemployment rate
employment employment part-time employment
[1] [2] [1] [2] [1] [2] [1] [2] [1] [2]
Bargaining coverage rate -0.074*** 0.037* 0.063*** -0.034*** 0.010
(0.016) (0.022) (0.014) (0.009) (0.016)
Predominantly centralised and weakly co- 3.373*** 1.719*** 0.984 1.568** 1.120** 2.621*** -0.470 -1.244*** -0.225 0.008
ordinated (0.630) (0.650) (0.685) (0.628) (0.487) (0.431) (0.443) (0.358) (0.568) (0.512)
Predominantly centralised and co-ordinated 4.598*** 2.630*** 0.886 1.590** -0.180 1.570*** -0.788 -1.692*** -2.187*** -1.911***
(0.691) (0.682) (0.782) (0.642) (0.538) (0.475) (0.495) (0.402) (0.643) (0.556)
Organised decentralised and co-ordinated 4.618*** 2.734*** 0.659 1.343** -0.798 0.900 -1.337*** -2.210*** -1.105* -0.841
(0.715) (0.704) (0.727) (0.628) (0.711) (0.631) (0.484) (0.444) (0.657) (0.577)
Largely decentralised 1.948*** 1.546** -0.304 -0.305 0.637 0.974* -1.464*** -1.688*** 0.841 0.897
(0.658) (0.650) (0.705) (0.782) (0.501) (0.537) (0.384) (0.340) (0.673) (0.631)
Observations 931 931 702 702 858 858 746 746 931 931
R-squared 0.944 0.942 0.912 0.911 0.953 0.952 0.797 0.791 0.816 0.815
Note: ***, **, *: statistically significant at the 1, 5 and 10% levels, respectively. Robust standard errors in parentheses. OLS regressions including country and time dummies, institutional variables
(Tax wedges, PMR in seven sectors, EPL (both temporary and permanent), minimum wage/median wage and gross replacement rate) log of average years of education and female employment share.
Source: OECD estimates. For further details on sources and definitions see variable description above.

 153
Annex Table 3.B.2. Effect of collective bargaining systems on unemployment outcomes by group and wage dispersion
OLS regressions using taxonomy of collective bargaining systems
Youth unemployment Female unemployment Low-skilled Earnings inequality: Earnings inequality: Earnings inequality:
rate rate unemployment rate D9/D1 D9/D5 D5/D1
[1] [2] [1] [2] [1] [2] [1] [2] [1] [2] [1] [2]
Bargaining coverage rate 0.041 0.006 0.003 -0.002 -0.001* 0.000
(0.031) (0.019) (0.023) (0.002) (0.001) (0.001)
Predominantly centralised and -3.982*** -3.054*** 0.337 0.462 -1.025 -0.957 -0.234*** -0.289*** -0.074*** -0.098*** -0.064*** -0.055***
weakly co-ordinated (1.142) (1.040) (0.560) (0.485) (0.833) (0.680) (0.067) (0.049) (0.023) (0.018) (0.024) (0.016)
Predominantly centralised and co- -5.868*** -4.764*** -2.481*** -2.331*** -3.286*** -3.209*** -0.243*** -0.308*** -0.078*** -0.107*** -0.058** -0.046**
ordinated (1.363) (1.149) (0.683) (0.547) (0.949) (0.780) (0.075) (0.056) (0.026) (0.020) (0.029) (0.020)
Organised decentralised and co- -5.459*** -4.403*** -0.661 -0.518 -2.486** -2.414*** -0.283*** -0.350*** -0.084*** -0.114*** -0.072*** -0.060***
ordinated (1.37) (1.207) (0.657) (0.560) (1.054) (0.908) (0.072) (0.051) (0.024) (0.017) (0.027) (0.019)
Largely decentralised -2.271* -2.046* 1.415** 1.445** 0.537 0.544 -0.211*** -0.228*** -0.034 -0.042* -0.074*** -0.071***
(1.195) (1.132) (0.710) (0.659) (1.243) (1.222) (0.060) (0.058) (0.023) (0.022) (0.019) (0.018)
Observations 931 931 931 931 746 746 747 747 747 747 747 747
R-squared 0.848 0.847 0.820 0.820 0.893 0.893 0.957 0.957 0.970 0.970 0.940 0.940

154 
Annex Table 3.B.3. Effect of centralisation and co-ordination of collective bargaining systems on labour market performance
OLS regressions using centralisation and co-ordination variables
Employment rate Incidence of temporary Incidence of part-time Incidence of involuntary part- Unemployment rate
employment employment time employment
[1] [2] [1] [2] [1] [2] [1] [2] [1] [2]
Bargaining coverage rate -0.077*** 0.037* 0.028** -0.033*** 0.018
(0.013) (0.021) (0.012) (0.010) (0.014)
Centralisation of wage bargaining 3.015*** 1.775*** 1.469* 1.853** 2.577*** 3.047*** -0.494 -1.017*** -0.249 0.036
(0.489) (0.552) (0.814) (0.818) (0.486) (0.472) (0.339) (0.300) (0.449) (0.440)
Centralisation of wage bargaining -0.311*** -0.165** -0.188 -0.228* -0.216*** -0.271*** 0.056 0.118*** -0.043 -0.076
(squared) (0.066) (0.074) (0.119) (0.121) (0.065) (0.064) (0.044) (0.040) (0.064) (0.062)
Co-ordination 0.673*** 0.495** -0.100 -0.075 -1.259*** -1.194*** -0.051 -0.111 -1.149*** -1.108***
(0.187) (0.194) (0.283) (0.280) (0.227) (0.223) (0.116) (0.120) (0.196) (0.198)
Observations 931 931 702 702 858 858 746 746 931 931
R-squared 0.947 0.944 0.912 0.912 0.955 0.955 0.787 0.781 0.827 0.827

 155
Annex Table 3.B.4. Effect of centralisation and co-ordination of collective bargaining systems on unemployment outcomes by group and
wage dispersion
OLS regressions using centralisation and co-ordination variables
Youth unemployment rate Female unemployment Low-skilled Earnings inequality: Earnings inequality: Earnings inequality:
rate unemployment rate D9/D1 D9/D5 D5/D1
[1] [2] [1] [2] [1] [2] [1] [2] [1] [2] [1] [2]
Bargaining coverage rate 0.082*** -0.077*** 0.010 0.006 -0.004*** -0.002*** 0.000
(0.026) (0.015) (0.022) (0.002) (0.001) (0.001)
Centralisation of wage bargaining -4.798*** -3.484*** 1.078* 1.245** -0.202 -0.105 -0.121** -0.204*** -0.030 -0.070*** -0.045** -0.038**
(0.940) '(0.915) (0.574) (0.548) (0.666) (0.590) (0.061) (0.052) (0.020) (0.018) (0.020) (0.016)
Centralisation of wage bargaining 0.481*** 0.326*** -0.229*** -0.249*** -0.055 -0.067 0.017* 0.027*** 0.005* 0.010*** 0.005* 0.004*
(squared) (0.125) '(0.123) (0.086) (0.081) (0.093) (0.085) (0.009) (0.007) (0.003) (0.003) (0.003) (0.002)
Co-ordination -1.722*** -1.534*** -1.756*** -1.732*** -1.198*** -1.185*** -0.004 -0.020 0.001 -0.007 0.002 0.003
(0.473) (0.471) (0.253) (0.252) (0.319) (0.319) (0.025) (0.023) (0.006) (0.006) (0.010) (0.009)
Observations 931 931 931 931 746 746 747 747 747 747 747 747
R-squared 0.860 0.858 0.835 0.835 0.895 0.895 0.956 0.956 0.969 0.969 0.940 0.939

156 
Annex Table 3.B.5. Effect of CB systems on employment and unemployment rates:

country tournament
Employment rate Unemployment rate
Predominantly centralised Organised decentralised Predominantly centralised Organised decentralised
and co-ordinated and co-ordinated and co-ordinated and co-ordinated
Full sample 4.598*** 4.618*** -2.187*** -1.105*
Excluding:
Australia 4.813*** 4.838*** -2.671*** -1.519**
Austria 4.494*** 4.666*** -2.163*** -1.121*
Belgium 4.584*** 4.806*** -2.124*** -1.095*
Canada 4.565*** 4.687*** -2.051*** -1.149*
Chile 4.584*** 4.606*** -2.103*** -1.036
Czech Republic 4.589*** 4.604*** -2.139*** -1.035
Denmark 4.560*** 4.390*** -2.186*** -1.048
Estonia 4.573*** 4.630*** -2.229*** -1.133*
Finland 4.695*** 4.556*** -2.525*** -1.241*
France 4.550*** 4.568*** -2.245*** -1.231*
Germany 4.110*** 3.819*** -2.258*** -1.501**
Greece 4.853*** 4.922*** -2.621*** -1.624***
Hungary 4.521*** 4.572*** -2.399*** -1.284*
Ireland 2.915*** 3.109*** -0.453 0.451
Israel 4.839*** 4.888*** -2.488*** -1.447**
Italy 4.551*** 4.686*** -2.056*** -1.139*
Japan 4.464*** 4.562*** -2.177*** -1.083
Korea 5.095*** 5.160*** -2.450*** -1.381**
Latvia 4.669*** 4.557*** -2.206*** -1.050
Luxembourg 4.437*** 4.621*** -2.107*** -1.068
Mexico 4.598*** 4.618*** -2.187*** -1.105*
Netherlands 4.679*** 4.594*** -2.211*** -1.098
New Zealand 4.909*** 4.896*** -2.589*** -0.011
Norway 3.289*** 2.302*** -1.704** -0.579
Poland 4.584*** 4.571*** -2.061*** -0.915
Portugal 4.934*** 4.792*** -2.339*** -1.224*
Slovak Republic 4.693*** 4.703*** -2.186*** -1.089
Slovenia 4.944*** 5.047*** -2.415*** -1.355**
Spain 4.220*** 4.492*** -1.224* -0.627
Sweden 4.379*** 4.842*** -2.096*** -1.372**
Switzerland 4.584*** 4.515*** -2.167*** -0.995
Turkey 4.425*** 4.562*** -1.882*** -0.919
United Kingdom 5.217*** 5.327*** -3.545*** -2.663***
United States 4.776*** 4.658*** -2.220*** -1.086*
Ireland and 2.907** 3.127** -2.303** -1.481
United Kingdom
Note: ***, **, *: statistically significant at the 1, 5 and 10% levels, respectively. OLS regressions including country and time dummies, institutional
variables (Tax wedges, PMR in seven sectors, EPL (both temporary and permanent), minimum wage/median wage and gross replacement rate)
log of average years of education and female employment share.

 157
Annex 3.C. Collective bargaining, wages and

productivity: Additional material
Annex Figure 3.C.1. Collective bargaining coverage rates: A comparison of SES and ICTWSS
Percentage of employees with the right to bargain, 20141
SES data with no exclusion

SES data excluding firms with 10 employees or less
SES data excluding public administration
SES data excluding public administration and firms with 10 employees or less
SES microdata
100
Belgium
90 France
Spain
Portugal
80
Norway Netherlands
70
60 Slovak Republic Luxembourg
50
Czech Republic
Germany
United Kingdom
40
Poland
Latvia
30
45° line
Lithuania
20
Hungary
10 Estonia
0
0 10 20 30 40 50 60 70 80 90 100
ICTWSS data
1. 2006 for Germany.

Source: OECD calculations based on the European Structure of Earnings Survey and OECD/ICTWSS Database
(https://stats.oecd.org/Index.aspx?DataSetCode=CBC).

158 
Annex Figure 3.C.2. Negotiated wages in selected OECD countries

Base 100 in 20001
Hourly labour productivity Negotiated wage Actual wage
Euro area Australia Austria Belgium

130 130 130 130
120 120 120 120
110 110 110 110
100 100 100 100
90 90 90 90
Canada Czech Republic Finland France

130 180 130 130
120 160 120 120

140
110 110 110
120
100 100 100
100
90 80 90 90
Germany Italy Netherlands Portugal

130 130 130 130
120 120 120 120
110 110 110 110
100 100 100 100
90 90 90 90
Slovak Republic Spain Sweden United Kingdom

180 130 130 130
160 120
120 120
140
110 110 110
120
100 100 100 100
80 90 90 90
Note: Negotiated and actual hourly earnings are deflated using the private final consumption price index. Hourly labour productivity refers to real
GDP divided by total hours worked and actual wage to total wages divided by total hours worked of employees.
Australia: Negotiated wage refers to the average weekly total cash earnings.
Belgium: Negotiated wage refers to all private sector employees registered at the National Social Security Office.
Czech Republic: Negotiated wage includes only agreements with nominal wage changes agreed.
1. Base 100 in 2003 for the Slovak Republic.
Source: Negotiated wage: OECD calculations based on TURI data and Eurofound, Database of wages, working time and collective disputes
for the European countries, ABS Cat No. 6306.0 Employee Earnings and Hours for Australia and StatCan, Employment and Social Development
Canada, Major Wage Settlements for Canada. Hourly productivity and actual wage: OECD calculations based on annual national accounts
data.

 159
Annex Table 3.C.1. Correlation of wages and productivity across sectors: The role of collective
bargaining: Detailed results
Log hourly wage rate
[1] [2] [3] [4] [5] [6]

Log hourly labour productivity 0.161*** 0.286*** 0.231*** 0.252*** 0.313*** 0.260***
(0.031) (0.042) (0.063) (0.072) (0.052) (0.079)
Interactions of log hourly labour productivity with:
Collective bargaining coverage - - - 0.001 -0.001 -0.001
(0.001) (0.001) (0.001)
Centralisation - -0.033** -0.020 - -0.016 -0.012
(0.014) (0.019) (0.021) (0.022)
Low co-ordination 0.024 - -0.024 0.027 - -0.016
(0.046) (0.043) (0.045) (0.039)
No co-ordination 0.101** - 0.059 0.053 - 0.046
(0.043) (0.052) (0.049) (0.054)
Joint significance of interaction coefficients (F-test, p-value) 0.06* 0.01** 0.03** 0.10* 0.04** 0.07*
Country-year fixed effects Yes Yes Yes Yes Yes Yes
Observations 17 729 16 889 16 889 17 729 16 889 16 889
R-squared 0.98 0.98 0.98 0.98 0.98 0.98
Note: ***, **, *: statistically significant at the 1, 5 and 10% levels, respectively. To judge the statistical significance of collective bargaining
institutions as a whole, the focus should be on the F-test, which tests the joint significance of all coefficients on the interactions with log hourly
labour productivity. Standard errors (in brackets) are clustered at the country-industry level.
Source: OECD estimates based on OECD Annual National Accounts database completed with OECD STAN and EU-KLEMS data and ICTWSS
database.
Annex Table 3.C.2. Collective bargaining and productivity growth: A sector-level approach
Difference in log productivity
Total factor productivity growth Labour productivity growth

[1] [2] [3] [4] [5] [6]
Collective bargaining coverage x centralisation -0.042** -0.043** -0.050*** -0.047* -0.044* -0.053**
(0.020) (0.020) (0.019) (0.025) (0.026) (0.026)
Collective bargaining coverage x low co-ordination - -0.015 -0.016 - 0.027 0.022
(0.035) (0.034) (0.034) (0.033)
Collective bargaining coverage x no co-ordination - 0.176 0.002 - 0.552 0.379
(0.359) (0.262) (0.518) (0.451)
Lagged level of log productivity -7.071*** -7.066*** -5.793*** -5.617*** -5.573*** -4.404***
(2.194) (2.195) (1.690) (1.793) (1.793) (1.386)
Country-year fixed effects Yes Yes Yes Yes Yes Yes
Country-industry fixed effects Yes Yes Yes Yes Yes Yes
Observations 2 733 2 733 2 640 2 733 2 733 2 640
R-squared 0.238 0.238 0.305 0.236 0.237 0.300
Note: Productivity is measured per hour worked. Sample of countries: Austria, Denmark, Finland, France, Germany, the Netherlands and Spain.
No other countries for which data are available experience variation both in coverage rates across sectors and in centralisation over time.
Columns 3 and 6 exclude observations for manufacturing of coke and refined petroleum products, many of which take extreme values. ***, **,
*: statistically significant at the 1, 5 and 10% levels, respectively. Standard errors (in brackets) are clustered at the country-industry level.
Source: OECD estimates based on EU-KLEMS data, 2017 version, http://www.euklems.net/.

160 
Notes
1
In “efficient bargaining” models, employers and unions bargain jointly on wages and employment in a
way that maximises the surplus after deduction of their outside options.
2
While temporary employment is higher in countries with higher bargaining coverage, and some studies
show that unionised workplaces are more likely to use temporary employment – see
e.g. Salvatori (2009[23]), this does not constitute support to the insider/outsider theory. Indeed it remains
unclear whether the higher rate of temporary employment results from unions influence or rather from
union-avoidance strategies from management (since temporary workers with a lower attachment to a
single workplace are less likely to join unions). In addition, these results are contrasted by others; for
instance, Gramm and Schnell (2001[24]) and Autor (2003[25]) do not find corresponding evidence when
looking at temporary agency work in the United States.
3
Recent evidence from the United States and other countries suggests that monopsony power may be
higher than previously thought – see, among others, Azar, Marinescu and Steinbaum (2017[97]),
Benmelech, Bergman and Kim (2018[95]) and Chapter 4 in OECD (2019[101]).
4
See Hijzen, Martins and Parlevliet (2019[103]) for a detailed comparative analysis of the collective
bargaining systems in these two countries.
5
For OECD countries, Freeman (1988[90]) found no effect of unionisation on unemployment, while Nickell
(1997[85]) and Nickell and Layard (1999[86]) found a positive correlation. Scarpetta (1996[84]) suggested that
a high unionisation rate tends to reinforce the persistence of unemployment. Other papers exploited policy
reforms in particular countries to study the relationship of unionisation with employment: Blanchflower and
Freeman (1993[27]) used the Thatcher reforms in the United Kingdom, finding no effect on unemployment
and the probability of leaving unemployment. Maloney (1997[88]), by contrast, found that the reform in
New Zealand that led to a sharp reduction in unionisation caused a significant increase in employment.
6
Erga omnes (literally in Latin, “towards everybody”) refers to the extension of agreements to all workers
in the same firm, not only the members of signatory unions. Erga omnes differs from the administrative
extension of a collective agreement which refers to the extension of a collective agreement at sectoral
level to workers in firms which have not signed the agreement or are not affiliated to an employer
organisation which signed the agreement.
7
Nickell and Layard (1999[86]), for instance, find a positive effect of coverage on unemployment and a
negative one on employment, while Baker et al. (2005[96]) find insignificant effects. At the OECD-level, de
Serres and Murtin (2014[94]) find that bargaining coverage, especially if larger than union coverage, can
lead to rigid adjustments in wages and may be detrimental to employment. Several studies have also used
the difference between bargaining coverage and trade union density, the so-called “excess bargaining
coverage”, to study the effect of administrative extensions, while in fact this measure mixes erga omnes
clauses and administrative extensions. For example, Murtin, de Serres and Hijzen (2014[87]) study the
interaction of extensions and the tax wedge and find a negative effect of the tax wedge on unemployment
in countries with higher “excess coverage”. Gal and Theising (2015[89]) find a negative effect of “excess
coverage” on employment, but the effect appears to be driven by Germany, New Zealand and Spain. Égert
and Gal (2017[91]) also find that higher “excess coverage” is associated with lower employment rates.

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8
Corporatism is a “system of social organisation that has at its base the grouping of men according to their
community of their natural interests and social functions, and as true and proper organs of the state they
direct and co-ordinate labour and capital in matters of common interest” (Cameron, 1984[7]).
9
In the original Jobs Strategy, centralised or co-ordinated bargaining arrangements were viewed more
positively than sectoral bargaining but not explicitly supported. While countries with such systems typically
managed to sustain relatively high employment levels, the empirical evidence based on country panels
was judged to be weak. Moreover, strong employment performance in those countries reflected, to an
important extent, developments in the public rather than the private sector. More fundamentally, the ability
to foster fully centralised bargaining systems or systems that are effectively co-ordinated so as to promote
resilience and contain wage spirals was put in doubt.
10
The Reassessed Jobs Strategy also acknowledged that collective bargaining arrangements are deeply
embedded in countries’ social fabric and this was seen as the main reason why so little progress was made
since the original Jobs Study of 1994.
11
However, it is not clear whether the result by Boeri (2014[20]) is driven by the “two-tier” structure of the
system or the lack of wage co-ordination in those countries that have a two-tier structure.
12
Classifying countries in these categories of collective bargaining systems necessarily comes with some
simplification. The detailed discussion in Chapter 2 should thus be kept in mind when comparing and
assessing the functioning of the different bargaining systems across countries.
13
In Chapter 2 Spain and Switzerland were mentioned in an intermediate group between the
predominantly centralised and organised decentralised ones. The number of observations between 1980
and 2015 for such an intermediate group is, however, too small to be used for econometric purposes.
14
The ICTWSS database is available at http://www.uva-aias.net/en/ictwss.
15
To avoid a reduction in the sample size, missing values among control variables have been redefined
at zero and dummies for missing observations have been included among the controls.
16
Separately controlling for the degrees of centralisation and co-ordination delivers qualitatively similar
results (see Annex 3.B): Centralisation is associated with lower employment rates (although the
relationship is not monotonic as it becomes weaker for extreme forms of centralisation) and not related
with the unemployment rate. Wage co-ordination is linked with higher employment rates and lower
unemployment rates.
17
While decreasing wage inequality among full-time workers, collective bargaining may increase earnings
inequality between full-time employees and other workers, in the spirit of an insider-outsider model (but
see endnote 2 above on the limited empirical backing of such model). Since the data in this analysis are
based on hourly wages of full-time workers, they cannot be used to study effects on overall earnings
inequality among all workers.
18
For European countries, the bargaining variable that is reported in the data is a characteristic that is
associated with the firm, not the individual. Hence, all workers in one firm are classified in the same way,
whether or not this type of bargaining applies to every single worker in the firm. The data only indicate the
agreement that is the most relevant, even if both a sectoral and a firm-level agreement are in place. For a
few other countries, even if the variable is not missing, there is no within-country variation in the data, and
the data are therefore not used.

162 
19
Compared with an OLS regression that includes one or two collective bargaining dummies, the Juhn-
Murphy-Pierce (JMP) decomposition has the advantage that it nests all the different parts of the analysis
in this section. The alternative to the JMP decomposition would be to employ reweighting methods, such
as those popularised by DiNardo, Fortin and Lemieux (1996[92]). These reweighting methods are, however,
especially sensitive to the problem of lack of common support, i.e. characteristics being common in one
collective bargaining scheme, but not in another. For this reason, they cannot be used in this context.
20
Misalignment of wages and productivity may come at an efficiency cost, in particular weaker productivity
growth. The possible link between efficiency, wage-productivity alignment and wage dispersion gives
collective bargaining, potentially, a central role in the productivity-inequality nexus – see OECD (2016[98])
and OECD (2016[100]).
21
In a frictionless economy, wages in one sector should equal marginal productivity in this sector. The
analysis uses average rather than marginal productivity, as marginal productivity is more difficult to
measure. With a standard Cobb-Douglas production function, marginal productivity equals average
productivity. In practice, however, the parameters of the production function may not be constant across
sectors, competition may be imperfect and the distribution of sectoral wages may not be aligned on that of
average productivity also for reasons that have nothing to do with collective bargaining (e.g. because of
differences in capital intensity across sectors and over time; see, for example, Chapter 2).
22
When annual growth rates of wages and productivity are analysed instead of their levels, the results are
similar. With growth rates capturing more short-run adjustments, this suggests that collective bargaining
may influence the way wages are set both in the short and longer term.
23
The euro area aggregate statistics are based on non-harmonised data for ten countries which include
all larger countries and cover more than 95% of the euro area (Schulten, 2013[45]). The ECB labels as
“experimental” those data for which compromises in terms of harmonisation, coverage and methodological
soundness of the source data have to be made.
24
For a methodological note on CAWIE data, see Van Gyes and Vandekerckhove (2015[83]); for policy
analyses, see Schulten (2013[45]) and Delahaie, Vandekerckhove and Vincent (2015[93]). Compared to the
discussion in this chapter, Schulten (2013[45]) also examines sectoral developments of negotiated wages
but does not find clear patterns across European countries.
25
See Chapter 2 for a detailed discussion of the pros and cons of the different options and OECD
(2017[102]) for an application in the context of France, where extensions up to the recent reform used to be
semi-automatic.
26
In systems where bargaining predominantly happens at the firm level, workplace representation and the
coverage of collective agreements go hand-in-hand. At the same time, Chapter 2 shows that in these
countries, the proportion of workers covered by any form of employee representation in the workplace is
lower (while it tends to be high in multi-level systems characterised by complementarity between sectoral
and firm-level agreements). Therefore, the shift towards firm-level bargaining could result in lower
coverage.
27
A special type of opening clauses concerns the short-time working scheme Kurzarbeit which allows
companies in times of economic crisis to put part of their workforce temporarily on unemployment benefits.
These measures are meant to preserve valuable personnel for a company in crisis. It differs from the
“normal” opening clauses in that generally the government has a key role in these measures, since it
regulates the use of unemployment benefits.

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28
In a few other countries (including France, Italy and Portugal), company-level bargaining plays a
sometimes significant role, but either due to a strict application of the favourability principle or the practice
of social partners to “lock” the content of sectoral agreements, firm-level agreements can de facto only
improve the standards set at national or sectoral level. In principle, these two-tier structures could still allow
balancing high coverage, macroeconomic stability and some margins of adjustment at the firm level.
Indeed, the main advantage of such a system is that it does not rely on local representation in small or less
productive firms. However, Boeri (2014[20]) argues that these regimes “combine the rigidity in pay of
centralised systems with a lack of consideration of macroeconomic constraints” (Boeri, 2014, p. 17[20]).
This may be because those who can afford more favourable agreements at the company level impose
generous working conditions on others through their involvement in the negotiation of sectoral agreements.
But it could also reflect the absence in those countries of a proper system of wage co-ordination which has
been proven to be key for macroeconomic flexibility (OECD, 2017[2]).
29
For example, during the bargaining round in 2016 the “cost-mark” was set at about 2.5% but assistant
nurses received an agreed wage raise of about 3.5%. All social partners agreed on this exception due to
many years of comparatively small wage increases for assistant nurses despite labour shortages in their
profession.
30
The IMF (2017[99]) in its Article IV review for Sweden called on social partners to find ways to make
wages more responsive to Swedish conditions at both the macroeconomic and sectoral level.
31
5 = maximum or minimum wage rates/increases based on:
a) centralised bargaining by peak association(s), with or without government involvement,
and/or government imposition of wage schedule/freeze, with peace obligation
b) informal centralisation of industry-level bargaining by a powerful and monopolistic union
confederation
c) extensive, regularised pattern setting and highly synchronised bargaining coupled with co-
ordination of bargaining by influential large firms
4 = wage norms or guidelines (recommendations) based on:
a) centralised bargaining by peak associations with or without government involvement
b) informal centralisation of industry-level bargaining by a powerful and monopolistic union
confederation
c) extensive, regularised pattern setting coupled with high degree of union concentration

164 
4 A Hard Day’s Night: Collective

bargaining, workers’ voice and job
quality
This chapter analyses the role that collective bargaining and workers’ voice
play in promoting job quality, with a particular focus on its non-monetary
dimension, i.e. the quality of the working environment. The chapter first builds
a simplified framework to analyse the theoretical links between different
forms of bargaining systems and workers’ voice and the quality of the working
environment. In the second part, it provides an overview of the quality of the
working environment across different bargaining regimes and types of
workers’ voice using a mix of country-level and worker-level data. Finally, the
chapter reviews what unions, workers’ voice and employers can do to
improve the quality of the working environment in five key dimensions:
occupational safety and health, working time, training and re-skilling policies,
management practices, and the prevention of workplace intimidation and
discrimination.

 165
In Brief
Key findings
Having fair and good conditions of employment is an important priority for workers and a primary goal
for unions. It also matters for employers, since low job quality is associated with higher absenteeism,
more physical and mental health problems, increased labour turnover and, in the end, lower productivity
and firm performance. Improving job quality can thus be both welfare enhancing and economically
efficient.
National laws often set minimum working conditions provisions such as e.g. minimum safety
requirements, or maximum hours of work. Nonetheless, collective bargaining at all levels, and workers
voice arrangements at firm level (both representative institutions such as union delegation or works
councils, and direct forms of dialogue such as regular participatory meetings) can help governments,
employers and unions to find mutually beneficial solutions.
The role of social partners in setting wages has been studied extensively (see Chapter 3), but their
impact on non-monetary aspects of job quality such as the quality of the working environment has been
less explored. Beyond the minimum standards set in the law, social partners can play a role in shaping
working conditions through several channels. First, by negotiating and ensuring the enforcement of
sectoral or firm-level collective agreements (which can derogate from the law, but also extend provisions
in domains such as training or the adoption of new management practices and technologies). Second,
by organising the expression of workers’ voice through representative institutions in the workplace (such
as union delegates or works councils). These can improve working conditions by bringing workers’
concerns to the attention of management and leading to the development of collaborative solutions.
Third, by improving standards set by the law through advocacy, lobbying and, in some cases,
negotiations with governments.
Assessing the influence of social partners on job quality is empirically complicated. First, when designing
a measure of quality of the working environment, data availability is an important constraint. Moreover,
studying the link between national collective bargaining systems and measures of job quality would
require long time series that are not available. Finally, when it comes to the impact of workers’ voice
arrangements on job quality at firm level, the assessment is complicated by reverse causality issues
(e.g. union representation might affect working conditions, but poor working conditions might also
motivate workers to join unions; unions themselves might primarily focus on firms where working
conditions are most in need of improvement). Bearing these caveats in mind, this chapter shows that:
 At country level, measures of the quality of the working environment developed in the OECD
Job Quality Framework are higher on average in countries with well-organised social partners
and a large coverage of collective agreements – where the number of job resources available
to workers (e.g. autonomy, training and flexibility of working time), in particular, is higher.
 At firm level, voice can be mediated by representative institutions, with prerogatives varying from
information to consultation and co-determination, and/or it can materialise through the
organisation of regular direct exchanges between workers and managers. Direct and
representative forms of voice, however, are not substitutes: the protections against retaliation
and firing, and the information and consultation rights attached to the status of workers’
representatives are absent in the case of direct voice.

166 
 Across European countries, the existence of direct dialogue and of mixed forms of voice (where
representative institutions co-exist with direct forms of voice) are associated with a higher quality
of the working environment (compared to the absence of voice arrangements). By contrast,
workers with access to representative voice arrangements, but no direct voice, are on average
more strained (and, in particular, they are in more demanding jobs) than workers in firms with
no voice arrangements. Similar correlations are found when focusing on safety and health,
working time, management practices and intimidation and discrimination. These correlations do
not allow the existence or direction of any causal link to be established. The positive association
between mixed voice and quality of the working environment could reflect the fact that employers
and managers who create channels of direct dialogue with their employees are also more likely
to engage in improving the quality of the working environment. By contrast, the presence of
solely representative arrangements for voice could be characteristic of poor social dialogue
contexts, where employers are unwilling to engage in direct exchanges with workers, but are
either mandated by law to have representative institutions, or facing strained workers seeking
representation to express their discontents, while benefiting from the legal protections attached
to representative voice.
Recognising empirical limitations in dealing with these questions quantitatively, this chapter presents
detailed qualitative data on the influence of collective bargaining systems and different forms of workers’
voice arrangements on five key pillars of the quality of the working environment − occupational safety
and health; working time; training and re-skilling policies; management practices; and the prevention of
workplace intimidation and discrimination. The main results are as follows:
 Occupational safety and health (OSH): In all OECD countries, the law often contains very
detailed minimum provisions and collective agreements cannot deviate from the terms set in the
legislation. However, collective agreements and workers’ voice arrangements, particularly
dedicated health and safety representatives, are helpful in: i) increasing the amount of
information available to workers; ii) acting as a communications channel for emerging problems
and enabling solutions to be devised in partnership with management on the ground; iii) further
improving standards; and iv) guaranteeing enforcement − which is often challenging in small
firms and in sectors with a high share of non-standard forms of employment.
 Working time: While international and national regulations set the basic standards, collective
agreements on working time typically contain margins of adjustment so that firms can adapt
specific conditions to their situations, even in countries where wage setting remains more
centralised. For instance, social partners often shape normal working hours at sector level or
bargain over the flexibility of working time arrangements. Interestingly, recent agreements in
some OECD countries show that the issue of work-life balance is becoming more important as
a topic of negotiations and campaigning.
 Training and re-skilling policies: Unions and employers’ organisations are currently involved in
the management of training funds, as well as skills assessments and the anticipation of skills
needs, in a majority of OECD countries. The presence of any type of voice arrangements is
positively associated with workers’ access to training. Access to life-long training for workers is
an increasingly important issue in collective bargaining agreements, as some landmark
agreements in Denmark or Italy show. Yet, on average in OECD countries, only about 15% of
firms are covered by an agreement including provisions on training.
 Management practices: Work organisation and management practices are primarily the
responsibility of management. However, unions and workplace representatives strive to be
involved in their definition to ensure that workers also have a say in them. In line with the general
findings mentioned above on the role of workers’ voice, direct and mixed forms of workers’ voice

 167
are consistently associated with higher work autonomy and a higher incidence of practices such
as teamwork, task rotation and self-assessment of own-work.
 Intimidation and discrimination prevention: While workplace discrimination has not historically
been at the forefront of unions’ agendas, this has changed in recent decades. Unions have
carried out internal re-organisations to take account of equality concerns, negotiated specific
clauses to prevent discrimination and better represent a diverse workforce in collective
agreements, and developed initiatives to prevent discrimination at workplace level. The full
extent of harassment at work has recently gained more prominence. Data for European
countries show that direct and mixed forms of workers’ voice arrangements are associated with
a lower incidence of various forms of intimidation and discrimination.
Introduction
One of the key objectives of collective bargaining is to ensure fair and good conditions of employment. The
link between collective bargaining and wage determination or inequality has been largely investigated in
the economic literature (see Chapter 3 for a detailed review). By contrast, more attention may be needed
on the association between workers’ voice arrangements and collective bargaining on non-monetary
aspects of job quality. To fully grasp social partners’ contributions to job quality, it is essential to consider
the diversity of topics covered by collective agreements, and also addressed through workplace
cooperation and consultation. Workers’ voice arrangements and collective bargaining are not only
institutional means of articulating and pressing demands for higher wages. They also provide a platform
for collective communication between governments, workers and employers, and cover other issues
(Freeman and Medoff, 1984[1]).
For example, social partners can help to improve workers’ labour market security by providing support,
guidance and access to up- and re-skilling for workers who lose their jobs in the event of restructuring and
mass-layoffs (see Chapter 5). In some cases, they are also involved in the design and management of
unemployment benefit systems. Social partners can also shape a number of other aspects of non-
monetary working conditions in sectoral and firm-level agreements: they often participate in the design and
implementation of occupational health programmes; they can help improve work organisation. Moreover,
at firm level, workers’ voice can help address conflicts and foster exchanges between workers and their
employers. In other words, collective bargaining and workers’ voice institutions can significantly affect both
the monetary and non-monetary dimensions of jobs.
While the non-monetary aspects of job quality are clearly a primary concern for workers and unions, they
also matter for employers (Saint-Martin, Inanc and Prinz, 2018[2]; Eurofound, 2017[3]). A poor quality of the
working environment is, for instance, associated with higher absenteeism, more health problems while at
work, health-related early retirements and increased labour turnover, all aspects likely to have a direct
effect on workers’ productivity and firms’ performance. Thus, ensuring a good working environment is both
welfare enhancing and economically efficient and an area in which employers and unions can find mutually
beneficial solutions.
Based on the premise that job quality is an inherently multi-dimensional concept,1 which is critical for
workers, firms and society, the OECD has developed a framework for measuring the quality of
employment. This framework, which has been adopted by the G20, identifies three key complementary
dimensions of job quality: the quality of earnings, labour market security and the quality of the working
environment, which captures non-monetary aspects of job quality (OECD, 2014[4]). Building on this
framework, this chapter looks at the relationship between collective bargaining, workers’ voice and job
quality. It starts by providing a simplified framework of the theoretical links between collective bargaining

168 
institutions, types of workers’ voice, and the quality of jobs (Section 4.1). It then provides a descriptive
overview of how the quality of the working environment (the third dimension of job quality in the OECD
framework) compares across different collective bargaining regimes and forms of workers’ voice
(Section 4.2). Finally, Section 4.3 discusses how social partners might be able to improve the quality of
the working environment through their ability to negotiate and influence regulations in five domains:
occupational safety and health; working time; training and re-skilling policies; management practices; and
the prevention of workplace intimidation and discrimination.
On average, some collective bargaining regimes seem to perform better than others in terms of the quality
of the working environment, although no statistically significant links are evident between the two. When
comparing measures of the quality of the working environment across collective bargaining systems,
however, it is not possible to pinpoint the specific levers available to social partners to affect these
measures. Beyond provisions negotiated in collective agreements, workers’ voice arrangements in the
workplace may also shape job quality outcomes, notably those linked to the working environment.
In order to gain a more detailed understanding of how social partners affect job quality and the mechanisms
at play, the chapter looks in more depth at the main components of the quality of the working environment.
It explores how the five aforementioned dimensions of the quality of the working environment are
influenced through both the bargaining and voice functions. Therefore, the chapter provides a picture of
the actual extent of bargaining and workers’ voice in these fields, sheds light on how collective bargaining
and workers’ voice can deliver good outcomes for job quality, and identifies good practices at country and
sector level.
4.1. Collective bargaining, workers’ voice and job quality: A framework
The jobs people hold are one of the most powerful determinants of well-being, as most people spend a
substantial part of their time at work and work for a significant part of their life. Building on international
measurement efforts to provide a benchmark for policymakers (ILO, 2012[5]; Eurofound, 2012[6]; UNECE,
2015[7]), the OECD has developed an operational framework for measuring and assessing job quality
through three objective and measurable dimensions of job quality. These are both important for worker
well-being and relevant for policy. Together, these dimensions provide a comprehensive assessment of
job quality.
The first dimension, earnings quality, refers to the extent to which the earnings received by workers in their
jobs contribute to their well-being. While the level of earnings provides a key benchmark for assessing their
contribution to material living standards, the distribution of earnings across the workforce also matters for
well-being. The OECD measure of earnings quality therefore accounts for both the level of earnings and
their distribution across the workforce. The second dimension, labour market security, captures those
aspects of economic security that are related to the probability of job loss and its economic cost for workers.
The measure of labour market security is thus a function of the risk of unemployment (which encompasses
both the risk of becoming unemployed and the expected duration of unemployment) and of the extent of
compensation in case of job loss (which takes into account both the coverage of benefits and their
generosity). The third dimension, the quality of the working environment, captures non-monetary aspects
of job quality related to the nature and intensity of the work, access to training, working-time arrangements,
management practices, etc.
How can collective bargaining shape job quality outcomes? A number of institutional theories have linked
job quality outcomes to different institutional models.2 Figure 4.1 sketches the main transmission channels
through which collective bargaining regulation and workers’ voice can influence the three key dimensions
of the OECD Job Quality Framework. Collective bargaining does not affect all of these dimensions equally.
For instance, employment protection is less directly affected by collective bargaining, though union
advocacy related to legislative initiatives will have some impact. By contrast, collective bargaining has a

 169
direct impact on earnings (see Section 4.1.1) and working conditions. The dark blue part of the figure
outlines in particular how social partners could improve job quality through their ability to intervene in five
areas that are constitutive of the quality of the working environment (and for which some data can be
mobilised). These are occupational safety and health, working time, training, management practices, and
the prevention of workplace intimidation and discrimination (see Section 4.2.2 for a more detailed
discussion about the role of these domains for the quality of the working environment).
Figure 4.1. Collective bargaining and job quality
Earnings Labour Market

Security Quality of the Working Environment
Quality
Negotiated wage Employment Reskilling / Training Working Occupational Management Intimidation

protection time safety and practices and
health discrimination
Collective bargaining
and
worker’s voice arrangements
4.1.1. Collective bargaining and earnings quality
Chapter 3 of this publication provides detailed and up-to-date results on the link between collective
bargaining and wage levels and dispersion, the two components of earnings quality. The main findings are
summarised below.
Because unions have long been considered primarily as “wage setting institutions” in economic models,
the link between collective bargaining and wage outcomes has been widely explored. Earnings quality
accounts for both average earnings and their distribution. Collective bargaining, through fixing detailed pay
scales for a large share of workers, has a direct effect on these two components.
From a theoretical point of view, unions can affect wage levels and dispersion in several ways -see Bryson
(2014[8]) for a detailed discussion of potential mechanisms. Unions draw their bargaining power from their
representativeness and the legal right to strike: the threat to stop work can be used to negotiate higher
wages or to resist wage cuts. Unions can also have an effect on wages by providing a “voice” to workers
and a counterpart to employers to resolve disputes, reduce “exit” (i.e. voluntary quit rates) and thus provide
an incentive for more investments in the human and physical capital of the firm. Even in the absence of a
union, the threat of unionisation may lead employers to raise wages to reduce workers’ incentive to
organise. Moreover, unions and collective bargaining also have an effect on wage distribution. By setting
wages and working conditions for many workers, bargaining at the firm level covers individuals who may
not have the power to negotiate individually and, therefore, compresses pay differences within firms. When
undertaken at sectoral level, collective bargaining, by centralising or co-ordinating negotiations across a
large number or firms and/or sectors, reduces pay differences among a larger pool of workers – and hence
further reduces overall wage inequality.
The empirical evidence on the role of unions and collective bargaining on wages and wage distribution is
largely dominated by studies of English-speaking countries where there is no or little sectoral bargaining,
and where union organisation at the firm or workplace level is the only way to negotiate wages collectively.

170 
A review of the literature for the United States and the United Kingdom points to a union membership wage
premium of between 10% and 15% (Bryson, 2014[8]). In Canada, the union wage premium has been found
to be around 12.5% in wages and 15% in benefits when compared against non-union members (Benjamin
et al., 2012[9]) – and is even larger for women, Indigenous persons, non-standard workers, young workers,
and new immigrants (Gomez and Lamb, 2016[10]). Union representation has also been found to significantly
reduce wage dispersion – see, among many, Blanchflower and Freeman (1993[11]), Blau et al. (1999[12]),
Card, Lemieux and Riddell (2004[13]) and DiNardo and Lee (2004[14]).
The evidence in countries where bargaining happens at other levels is more limited. However, collective
agreements at the firm level have also been found to have a clear positive effect on wages in the context
of multi-level bargaining systems. This is not surprising, as firm-level agreements either complement
existing sectoral agreements – and hence can often only raise wages – or provide the only cover for
workers who would otherwise not be covered by any agreement. By contrast, on average across OECD
countries, workers covered by a sectoral agreement do not necessarily enjoy a wage premium (see
Chapter 3). These results are in line with a large body of the literature which finds that sectoral bargaining
is not linked with higher wages on average – see Dell’Aringa and Lucifora (1994[15]), Hartog, Leuven and
Teulings (2002[16]), Rycx (2003[17]), Cardoso and Portugal (2005[18]) and Eurofound (2015[19])– and may
reflect the wage moderation role played by wage co-ordination at sectoral level. They are also in line with
other findings in Chapter 3, namely that wage dispersion is greater in systems with no collective bargaining
or where firms set wages independently, and smallest among workers who are covered by sectoral
bargaining.
4.1.2. Collective bargaining and labour market security

Social partners also affect the degree of labour market security. In the OECD Job Quality framework, labour
market security is defined as a function of the risk of becoming unemployed coupled with the financial risk
associated with staying unemployed. It is therefore a function of the financial compensation in case of
unemployment. Social partners can affect labour market security through negotiating wages and sometimes
hiring and firing rules, as well as through their role in managing unemployment benefits in some contexts 3.
In addition, social partners aim to increase labour market security by limiting the use of involuntary non-
standard forms of employment.4
In the literature, the role of unions and collective bargaining for labour market security is a more controversial
subject than their role for earnings quality. Economic theory predicts that unions risk generating
unemployment if they bargain exclusively over wages (Leontief, 1946[20]), set wages above the market
equilibrium, or neglect the interest of outsiders (e.g. the unemployed, low-skilled, youth, and those in non-
standard employment) – for instance by accepting the development of temporary and part-time employment
as a buffer for their members (Saint-Paul, 1996[21]; Lindbeck and Snower, 1986[22]; Bertola, 1999[23]).
However, if both wages and employment are covered in the negotiations – in what has been termed “efficient
bargaining” (McDonald and Solow, 1981[24]), employment is not reduced. If bargaining also includes the level
of unemployment insurance or severance payment, bargaining is described as strongly efficient and
employment reaches its optimal level (Cahuc, Carcillo and Zylberberg, 2014[25]).
In addition, when product market competition is imperfect (i.e. when firms have some degree of monopoly or
oligopoly power), higher wages may not induce greater unemployment but rather a rebalancing as workers
exert bargaining power to increase the labour share. In cases where employers have the power to unilaterally
set wages below the competitive wage, maximising profits at a lower level of employment than in the purely
competitive framework, stronger bargaining power and higher wage floors can increase employment. Indeed,
with higher wage floors profits will be maximised at a higher level of employment (Cahuc, Carcillo and
Zylberberg, 2014[25]).
Overall, the actual effect of collective bargaining on employment is likely to depend on the behaviour of actors
and the structure of the market. As mentioned in previous chapters, insider-outsider theories suggesting that

 171
unions tend to neglect the interest of outsiders do not receive much support in the findings of other chapters
in this publication or in recent empirical evidence (Gramm and Schnell, 2001[26]; Autor, 2003[27])- see also
OECD (2018[28]).
For OECD countries, Freeman (1988[29]) finds no effect of unionisation on unemployment, while Nickell
(1997[30]) and Nickell and Layard (1999[31]) find a positive correlation. Scarpetta (1996[32]) suggests that a high
unionisation rate tends to reinforce the persistence of unemployment. However, when looking beyond union
membership and analysing the role of bargaining systems as such, the previous chapter, as well as other
research (Aidt and Tzannatos, 2008[33]; Elmeskov, Martin and Scarpetta, 1998[34]; Bassanini and Duval,
2006[35]) has shown that sectoral bargaining systems where wage co-ordination plays a significant role are
associated with lower unemployment relative to fully decentralised systems. Co-ordination in wage
bargaining helps to account for the macroeconomic effects of wage agreements by ensuring that these
agreements do not undermine external competitiveness and are set in line with the business-cycle situation,
thus strengthening labour market security (OECD, 2017[36]). Such systems, therefore, allow the internalisation
of macroeconomic constraints better than fully decentralised ones.
The degree of labour market security is not only determined by the risk of unemployment but also by the
existence of an unemployment protection scheme to mitigate the economic cost associated with job loss.
Historically, unions and other forms of workers’ organisations developed the first forms of mutual insurance
and increasingly mobilised for the expansion of social rights (Boeri, Brugiavini and Calmfors, 2001[37]). In
most OECD countries, many of the insurance functions that unions provided are now provided by the State.
However, in Denmark, Finland, Iceland, Sweden and partly Belgium, social partners still play a significant
role in the administration of unemployment insurance (so-called “Ghent systems”). While increasingly
challenged by the emergence of private insurance funds that do not require union membership, union-
affiliated funds still play a major role in strengthening labour market security in the countries where they are
present. Moreover, in non-Ghent system countries, collective agreements sometimes include specific
provisions on social security and employer contributions to pension, disability and unemployment funds that
contribute to improve labour market security beyond the minimum levels established by the law. In Canada,
for instance, a tripartite commission (the Canada Employment Insurance Commission) administers certain
aspects of the employment insurance scheme such as premiums.
Finally, in addition to ex post support in case of job loss, trade unions and employer organisations also engage
in ex ante initiatives to re-skill and re-train workers, facilitate transitions in the labour market, and reduce the
risk of long unemployment spells.
4.2. Collective bargaining, workers’ voice and the quality of the working
environment
4.2.1. An assessment usually based on job satisfaction and plagued with issues of
reverse causality
The literature on the relationship between collective bargaining and job quality, and notably its non-monetary
dimensions, has developed along two main lines. First, a few studies have looked at the effect of the presence
of trade unions in the workplace on specific aspects of the quality of the working environment, such as working
time arrangements, occupational safety and health measures, or training. Second, other – more
numerous – studies have focused on the impact of trade unions and collective bargaining on subjective well-
being outcomes, such as job satisfaction.
While unions operate to improve working conditions, the theoretical predictions of the link between trade unions
and job satisfaction are not clear-cut. On the one hand, unionised workers should feel more protected, with
more control over their working conditions and a stronger feeling of organisational commitment, and hence
overall they should be more satisfied. On the other hand, unsatisfied workers or those in jobs of lower quality

172 
are also more likely to decide to join a union to express and address their dissatisfaction. In the absence of a
union and lacking a possibility to voice their concerns, dissatisfied workers might be more likely to quit - as
predicted by the exit-voice model (Hirschman, 1963[38]). By contrast, dissatisfied workers are more likely to stay
in firms where unions are present. In addition, union members may be comparatively less happy at work than
non-members because they hold employers to higher standards of behaviour and obligations (Ross, 1953[39];
Bryson, Forth and George, 2012[40]).
Most empirical papers exploring the relationship between unions and workers’ well-being actually find that
unionised workers are less satisfied with their jobs than non-unionised workers – see review by Hammer and
Avgar (2005[41]) and meta-analysis by Laroche (2016[42]). However, most of these studies suffer from problems
of reverse causality. The negative correlation observed in many studies is probably due to selections effects,
whereby dissatisfied workers self-select into unions – rather than to a negative effect of unions per se on job
satisfaction. Looking at the United Kingdom and the United States, Bryson and Freeman find that poor job
quality and bad management indeed increase desire for union representation among surveyed individuals
(Bryson and Freeman, 2013[43]). Another issue comes from the fact that unionisation, through offering
employees an opportunity to address poor job quality via bargaining and voice, prevents the exit of dissatisfied
workers (Bryson and Green, 2015[44]). Finally, reverse causality issues may also be due to a reporting effect,
facilitated by the existence of a voice channel in unionised workplaces, which is likely to increase the reporting
of dissatisfaction and incidents that would otherwise go unreported.
A closer look at the literature (Laroche, 2016[42]) reveals that only 14 out of 59 surveyed studies properly deal
with these issues. Among the 14 studies that do attempt to address reverse causality and selection, only eight
use panel data to control for unobserved, time-invariant confounding factors and to determine the direction of
the causal relationship. When focusing only on these studies, the negative effect of union membership on job
satisfaction disappears – see e.g. Bender and Sloane (1998[45]), Bryson et al. (2004[46]), Bryson and White
(2016[47]).
Beyond the difficulties of properly accounting for selection issues and confounding factors, using workers’
satisfaction with their job creates other limitations. The major drawback of using job satisfaction as an indicator
of the quality of the working environment is that it captures many other dimensions of the job (such as earnings)
that are not related to the working environment. Furthermore, there are often discrepancies between objective
observable characteristics of a job and reported job satisfaction due to individual expectations and comparison
with reference points: individuals may not only refer to previous jobs, to reference groups or to other jobs
available, but also adapt their expectations to poor quality jobs, thereby reducing gaps between job quality and
job satisfaction. Overall, these drawbacks imply that job satisfaction is not a good indicator to compare the
quality of the working environment across individuals, countries, or over time (OECD, 2017[48]).
4.2.2. Towards an objective measure of the quality of the working environment

As outlined above, several important aspects of non-monetary job quality – such as workers’ autonomy in their
jobs, or their learning opportunities, are essential to assess accurately the quality of employment. Good
relationships with colleagues matter as well, as do practical aspects such as working time arrangements and
flexibility. When jobs and workplaces cumulate these factors, people are more able to manage work pressure
and difficult tasks; they also tend to be healthier, more satisfied and committed, and possibly more productive
(Cazes, Hijzen and Saint-Martin, 2015[49]).
The OECD measures the quality of the working environment in a manner that is inspired by models developed
in the occupational health literature, and notably job strain models. In those models, job strain results from an
imbalance between high demands (work-related stress factors) and the insufficient resources workers have at
their disposal. This imbalance has potentially detrimental effects on health. The OECD Job Quality Framework
builds on the “Job Demands-Job Resources Model” developed by Bakker and Demerouti (2007[50]); the latter is
applicable to a wide range of occupations, which is important for cross-country comparisons given countries
differing occupational compositions (Box 4.1).

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Box 4.1. Quality of the working environment and workers’ well-being: The main models
Policy interventions aimed at fostering non-monetary aspects of job quality have primarily concentrated
on the quality of the physical working environment, notably to prevent and curb accidents at work. Yet
emerging evidence on the existence of other types of risks (psychosocial ones), with equally detrimental
consequences on workers’ health and well-being, has broadened the scope of research to the overall
quality of the working environment and its determinants.
Three theoretical models have been particularly influential in accounting for the rise of the “risks for
mental, physical and social health, created by employment conditions and the organisational and
relational factors that can interact with mental functioning” (Gollac and Bodier, 2011[51]): the
Demand-Control model; the Effort-Reward imbalance model; and the Job demands-Resources model.
According to the seminal work by Karasek (1979[52]) who developed the Demand-Control model (DCM),
the primary source of job stress is caused by the joint effects of work environment factors –and notably
the combination of high job demands (such as work intensity and time pressure) and low control over
how individuals meet these demands (workers’ latitude in taking decisions).
An alternative model is the Effort-Reward Imbalance model (ERI), which emphasises the importance of
ensuring fairness in rewards (rather than job control) in a context of high demands (Siegrist, 1996[53]).
In this model, efforts in the workplace are exchanged with socially recognised occupational rewards
such as adequate salary, recognition, promotion prospects and job security. One tenet of the model is
that the severity of the consequences of an effort-reward imbalance increases with workers’ difficulty to
change jobs. Given that low-skilled workers have few exit options, in particular in a context of tight
labour market, they represent a particularly exposed group to an effort-reward imbalance.
The third main model, the Job Demands-Resources (JD-R) model (Bakker and Demerouti, 2007[50])
builds on a more flexible and comprehensive model, which considers that every occupation may have
their specific underlying risk factors. The JD-R model expands the definition of Karasek’s (1979[52])
model by considering as demands all those physical, psychological and organisational aspects of the
job that require sustained physical and/or psychological effort. Job resources, on the other hand, include
those job attributes that may reduce job demands, be instrumental in achieving work goals or stimulate
personal accomplishment. Hence, beyond work autonomy or job reward, they also include opportunities
to learn, support from colleagues and managers, well-defined work goals and appropriate feedback on
the work performed. The central premise of the model is that, irrespective of the occupation, job
demands may generate a strain or health impairment process, whereas job resources induce a
motivational one.
All three models differ in their scope of explanatory factors, and the extent to which they include personal
factors. The DCM model, for instance, focuses exclusively on the nature of the working environment,
while the ERI adds a personal component based on expectations, attitudes and perceptions. Moreover,
the DCM model, due to the emphasis on job control5, tends to categorise manual/low skilled jobs as
high strain jobs whereas the ERI model tends to classify fixed term jobs, or jobs without a career ladder,
as high-strain jobs. Overall, both the DCM and ERI models devote a lot of attention to work overload
and control, neglecting other types of drivers potentially crucial for well-being. The JD-R model, on the
other hand, seeks to give an explanatory role to a broader range of factors and individual characteristics,
and presents clear advantages for cross-country analyses. First, it can be applied to a wide range of
occupations, which is important given countries differing occupational compositions. Second, it focuses
on aspects of work, rather than on dimensions related to workers’ personality; as such it is more directly
related to job quality. Finally, it considers aspects of jobs such as achieving work goals and stimulating
personal development that are likely to matter for workers’ well-being. For these reasons, measures of
quality of the working environment in the OECD Job Quality Framework follow a JD-R model.

174 
The range of potentially relevant job demands and job resources to be included in a JD-R model is very
large. Schaufeli and Taris (2014[54]) list for instance 30 different types of job demands and 31 types of job
resources. However, when designing a measure of quality of the working environment, data availability is
an important limitation. The imperatives of cross-country and longitudinal comparability are additional
constraints. Striking a balance between the comprehensiveness of the measure and its applicability across
time and countries , this chapter considers five different job resources (autonomy at work, training, working
time flexibility, social support and good management practices) and five job demands (task monotony,
hard physical work, work intensity, unsocial work schedule and intimidation and discrimination) 6. These
ten demands and resources are related to five domains that are key pillars of the quality of the working
environment, namely occupational safety and health, working time, training and re-skilling policies,
management practices, and the prevention of workplace intimidation and discrimination. 7 Annex 4.A
provides a summary of the definitions and sources used to build these data.
Various indicators of the quality of the working environment that account for both the cumulative aspects
of job demands and the potential compensating effects on an individual’s physical and mental well-being
can be considered. Figure 4.2 displays the distribution of job demands exceeding job resources and
therefore generating job strain, as well as the share of workers experiencing job strain. On average across
OECD countries, 30% of workers experienced job strain in 2015, with a differential of one demand more
than resources for about half of them, and at least two demands more than resources for the other half.
The incidence of job strain is lowest in Norway, where about 17% of workers are “strained”, by one excess
demand compared to resources for over 60% of them. By contrast, the incidence of job strain is
highest – close to 50% – in Turkey, where over half of strained workers experience a differential of at least
two demands more than resources. Across countries, a positive relationship between the incidence of job
strain and its intensity (i.e. the size of the differential between job demands and job resources) can be
observed. In other words, countries with a large share of workers in strained jobs tend to display also more
severe job strain levels than countries where the majority of workers enjoy good quality working
environment.
Figure 4.2. Quality of the working environment in European countries

Distribution of job demands exceeding job resources and incidence of job strain, employees aged 15-64, 2015
One job demand more than job resource Two job demands more than job resources
Three job demands more than job resources Four job demands more than job resources
% %
Five job demands more than job resources Job strain (right-side scale)
100 50
80 40
60 30
40 20
20 10
0 0
Note: Average is the unweighted average of countries shown. Survey weights are used.
Source: OECD estimates based on the 6th European Working Conditions Survey (EWCS).

 175
4.2.3. Do some collective bargaining systems perform better than others in terms of the
quality of the working environment?
Differences in collective bargaining systems can contribute to explaining differences in the quality of the
working environment. For instance, a large coverage of collective agreements can diffuse best practices
across a large number of companies. Moreover, strong social partners can help ensure a high degree of
compliance with provisions spelt out in legislation or collective agreements. Figure 4.3 shows the incidence
of job strain as well as the average number of job demands and job resources across collective bargaining
regimes using the taxonomy developed in Chapter 3, which identified five categories of collective
bargaining systems:
 Predominantly centralised and weakly co-ordinated collective bargaining systems, such as France,
Italy or Spain, where sectoral agreements play a strong role, derogations are limited and wage co-
ordination is largely absent.
 Predominantly centralised and co-ordinated collective bargaining systems, such as Belgium (and,
until 2015, Finland), where sectoral agreements play a strong role but wage co-ordination is strong
across sectors.
 Organised decentralised and co-ordinated collective bargaining systems, such as the Nordic
countries or Germany, where sectoral agreements leave significant room for lower-level
agreements to set the standards.
 Largely decentralised collective bargaining systems, such as Australia, Japan or Greece, where
firm-level bargaining is the dominant bargaining form, but sectoral bargaining (or a functional
equivalent such as Modern Awards in Australia) or wage co-ordination also play a role.
 Fully decentralised collective bargaining systems, such as Canada, Korea, the United States and
most Eastern European countries where bargaining is essentially confined to the firm or
establishment level.
The figures in Panel A show that, on average, job strain in 2015 was lower in organised decentralised and
co-ordinated systems, as well as in predominantly centralised and co-ordinated ones, and higher in fully
decentralised, largely decentralised and predominantly centralised and non-coordinated systems.
Organised decentralised and co-ordinated systems, as well as centralised and co-ordinated ones have in
common both a strong degree of organisation of social partners and a large coverage of collective
agreements. Predominantly centralised and non-coordinated systems are also characterised by relatively
high coverage of collective agreements but social partners are in several cases relatively weak. On the
other hand, fully and largely decentralised systems are characterised by low coverage and weak social
partners. Analysis for previous years show similar patterns (see Annex 4.A).
Unpacking the factors of job strain, Panels B and C show that lower job strain in organised decentralised
and co-ordinated systems, as well as in centralised and co-ordinated ones, corresponds in particular to
higher job resources (autonomy, training and flexibility of the working time). The pattern in job demands is
however less clear, with organised decentralised and co-ordinated systems, as well as centralised and co-
ordinated ones showing a lower incidence of monotonous tasks but also a higher degree of reported
intimidation or discrimination. This latter descriptive result could be explained by the “reporting effect”
discussed above: the strong degree of organisation of social partners that is characteristic of these systems
is likely to imply that better systems are in place to record cases of intimidation and discrimination – as
reflected in an apparently higher number of cases.

176 
Figure 4.3. Job demands and job resources by collective bargaining systems in Europe
Unweighted averages across countries, employees aged 15-64, 2015
A. Quality of the working environment outcomes
Average number of job demands Average number of job resources Incidence of job strain (right-side scale)
Number %
4 40
3 30
2 20
1 10
0 0
Average Fully decentralised Largely decentralised Organised Predominantly Predominantly
decentralised and centralised and centralised and weakly
coordinated coordinated co-ordinated
B. Job demands
Ratio of incidence base 1 for the overall average across countries
Fully decentralised Largely decentralised
Organised decentralised and coordinated Predominantly centralised and coordinated
Predominantly centralised and weakly co-ordinated
1.3
1.2
1.1
0.9
0.8
0.7
Hard physical conditions Intimidation or discrimination Work intensity Unsocial work schedule Monotonous tasks
C. Job resources
Ratio of incidence base 1 for the overall average across countries
Fully decentralised Largely decentralised
Organised decentralised and coordinated Predominantly centralised and coordinated
Predominantly centralised and weakly co-ordinated
1.8
1.6
1.4
1.2
0.8
0.6
Social support at work Management support Work autonomy Training Flexibility of working time
(at least 5 days per year)
Note: Average is the unweighted average of all European countries shown. Survey weights are used. For further details on definitions and
constructions of the indicators, see Annex Table 4.A.1. and for a description of the taxonomy of collective bargaining systems, see Annex 3.A.
Source: OECD calculations based on the 6th European Working Conditions Survey (EWCS), 2015.

 177
While these figures suggest that there might be some positive patterns linking specific collective bargaining
systems and the quality of the working environment, they are only descriptive. They do not lead to clear
conclusions on whether any particular collective bargaining system is systematically performing better in
terms of the quality of the working environment.
Looking at the link between collective bargaining systems and individual sub-dimensions of the quality of
the working environment reveals a similar pattern. For instance, there is no clear “best-performer” among
existing types of collective bargaining institutions in terms of occupational safety and health outcomes.
Rather, different combinations of collective bargaining and regulations, involving different types of
collective bargaining institutions, can lead to the same results in terms of health and safety performance.8
4.2.4. The role of workers’ voice
Beyond provisions negotiated in collective agreements, the presence of institutional arrangements for
workers’ voice in the workplace, may also participate in shaping job quality outcomes, notably those linked
to the working environment.
Most studies of the effect of worker’s voice on various non-monetary job quality outcomes primarily
consider subjective measures of job quality such as job satisfaction. For instance, Holland et al. (2011[55])
find that direct voice is positively associated with subjective job satisfaction. Voice, in general, when
facilitating employee involvement, is found to lead to better outcomes in terms of subjective perception of
risk of employment loss, of unfair treatment, or of job-status loss (Felstead, Gallie and Green, 2015[56]).
The presence of union onsite representatives is also positively associated with employees’ subjective
perception of job content, work-life balance and job stress (Hoque et al., 2016[57]).
Theoretically, the link between voice and objective measures of the quality of the working environment
remains ambivalent. On the one hand, for instance, firm-level organisational changes are more likely to be
negotiated with workers where systems of employee representation are in place (Felstead, Gallie and
Green, 2015[58]; Wood, 2008[59]). This leads one to expect a positive relation between voice and the quality
of the working environment. On the other hand, the desire for voice, and in particular for representative
forms of voice, might arise from poor job quality and bad management in the first place (Bryson and
Freeman, 2013[43]), leading one to expect a negative relationship.
Only a few studies have attempted to measure the effect of workers’ voice in its different forms on objective
measures of job quality. The absence of voice, for instance, is associated with higher absenteeism and
turnover (Gomez, Bryson and Willman, 2010[60]), while representative forms of voice are associated with
lower quit rates than direct voice (Brown et al., 2009[61]). Bryson and Green (2015[58]) report evidence that
union representatives facilitated innovation through the adoption of productivity-enhancing high
involvement management practices encouraging workers’ engagement, such as autonomous team
working. Other studies highlight a negative association between the presence of workplace union
representatives and hours of unpaid overtime, and a positive association with the likelihood of receiving
on-the-job training (Bryson and Forth, 2017[62]).
This section considers the links between objective measures of the quality of the working environment
discussed in Section 4.2.2 above, and the various forms of workers’ voice arrangements identified in
Section 2.6 in Chapter 2. As explained in that chapter, workers’ voice arrangements across
OECD countries vary considerably, both in terms of nature and prerogatives (De Spiegelaere et al.,
2019[63]). At the workplace level, voice is often mediated by representative institutions, such as local trade
union representatives (either appointed by the trade union or elected by the employees), works councils
(established bodies elected or appointed by all employees in a firm, irrespective of their membership of a
trade union), or workers representatives (either union members or independent). Representative voice can
also materialise at company level, through employees’ and/or trade unions’ presence in supervisory and
management boards. Importantly, prerogatives attached to representative entities vary from information,

178 
to consultation and co-determination. This variation in strength is likely to affect the effect of representation,
including on outcomes related to the quality of the working environment9 (see Chapter 2 for more details).
Beyond representation, voice also materialises at the workplace through the organisation of direct
exchanges between workers and managers (e.g. via regular town hall meetings and/or direct
consultations).10 Direct and representative forms of voice should not be considered as substitutes, notably
because of the protections against retaliation and firing, and the information and consultation rights that
are attached to the status of workers’ representative, and absent in the case of direct voice. However, this
distinction is useful in capturing the different ways in which communication between workers and managers
de facto materialises (or fails to) across OECD countries. In addition, this distinction, which can be captured
in the data, at least for European countries, allows going beyond a crude distinction between cases with
and without any form of voice when trying to assess the effect of workers’ voice on job quality outcomes.
Using available data for European countries, Chapter 2 distinguished between three cases. First, 18% of
European workers in 2015 had access to solely direct forms of voice (i.e. they had access to regular
participatory meetings between workers and managers, but not to representative institutions). Second,
14% of European workers in 2015 has access to representative voice institutions (this includes cases of
union representation as well as non-union representation such as that provided by elected employee
delegates or statutory works councils), but did not have access to direct voice in the form of regular formal
exchanges between workers and managers. Finally, 37% of European workers had access to both direct
and representative forms of voice (i.e. they were in mixed voice arrangements).
For European countries, and based on the European Working Condition Survey data for 2015, Figure 4.4
shows that both direct voice and mixed forms of voice are associated with lower job strain (compared to
the absence of voice arrangements). In particular, workers with access to these forms of voice have more
job resources on average, compared with workers in firms with no voice arrangements at all. By contrast,
workers with access to representative voice arrangements, but no direct voice, are on average more
strained (and, in particular, they are in more demanding jobs) than workers in firms with no voice
arrangements.
These results suggest that the type of reverse causality discussed in Section 4.2.1 above, whereby
strained workers seek representation to express their discontents, might be at play. In particular, workers
in more demanding jobs might seek representation to express their concerns while benefiting from the
legal protections attached to representative voice. 11 Alternatively, strained workers might be more
concentrated in firms where the means to express their discontent exist, compared to firms where exit
might be the only option – as explained above, representative forms of voice are associated with lower quit
rates than direct voice (Brown et al., 2009[61]). However, this logic does not explain why mixed forms of
voice perform better than solely representative voice arrangements in Figure 4.4.
In addition, workers cannot self-select into direct voice arrangements, since the organisation of regular
exchanges is not in the hands of workers but largely hinges on employers’ willingness. Similarly, workers
cannot self-select into representative voice arrangements in countries where workers’ representation is
mandated by law above particular firm size thresholds (such as Austria, Belgium, France, or the
Netherlands).12 Therefore, workers’ self-selection is not a plausible explanation in many of the cases
recorded in the European Working Conditions Survey data and shown in Figure 4.4.
However, results in Figure 4.4 could be linked to employers self-selecting into specific voice arrangements.
Indeed, employers willing to improve job quality might be more likely to engage into direct exchanges with
workers and organise direct voice systems, potentially on top of legally mandated representative ones.
This means that the mere presence of direct voice arrangements potentially signals a cooperative
environment for employer-employee relations, which is likely to be conducive to a higher quality of the
working environment. By contrast, cases of solely representative voice could be characteristic of poor
social dialogue contexts, where employers are mandated by law to have representative institutions, but
are unwilling to engage in direct exchanges with workers.13 Because such contexts are unlikely to be

 179
conducive to high quality of the working environment, employer self-selection effect could explain the
results observed above.
While this explanation cannot be robustly tested, it is coherent with the results presented in Panels B and C
in Figure 4.4, which show associations between forms of representation and the detailed list of job
demands and job resources considered in this chapter. Representative-only forms of voice are not only
positively associated with the number of job demands, but they are also negatively associated with
management support at work and work autonomy – which is expected in contexts of adversarial industrial
relations. By contrast, mixed forms of voice are not significantly related to most job demands, but they are
positively related to most job resources. Direct-only forms of voice are negatively related to most job
demands, and positively related to all job resources.
More generally, this explanation is also coherent with results in the literature showing that in the absence
of a proper commitment by both workers’ representatives and employers to engage in a meaningful
dialogue, mandatory representative voice institutions might not succeed in improving job quality. Research
from Canada, for instance, shows that health and safety committees (mandatory under most Canadian
labour legislation) operate well in unionised environments but are much less effective in non-union
workplaces where there is a lack of both employer buy-in and employee engagement (Bernard, 1995[64];
Milgate, Innes and O’Loughlin, 2002[65]; Yassi et al., 2012[66]).

180 
Figure 4.4. Workers’ voice arrangements and the quality of the working environment are
statistically correlated, but causality remains unclear
Percentage, employees aged 15-64, 2015
Mixed voice (dircect and representative voice) Representative voice (union and non-union) Direct voice
A. Overall measures
%
20
*** ***
15
10 ***
***
5
-5
**
*** ***
-10
***
-15
Job strain Number of job demands Number of job resources
B. Job demands
%
5
** **
4 ***

3
2
1

0
-1
-2
-3
-4
** *** **
-5 **
Hard physical conditions Intimidation or discrimination Work intensity Unsocial work schedule Monotonous tasks
C. Job resources
%
20
***
***
15
***
10 ***
***
***
*** *** ** **
5 **

0

-5
**
-10 ***
Social support at work Management support Work autonomy Training Flexibility of working time
(at least 5 days per year)

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Note: Results are based on probit regressions (OLS regressions for the number of job demands and job resources in Panel A) including
additional controls for age, education, gender, type of contract (permanent or temporary contract), occupation, job tenure, firm size, industry,
sector (public and private) and country dummies. The chart reports marginal effects, i.e. percentage change in the outcome variable following a
discrete change in the relevant explanatory variable from the base level (no workers’ voice arrangements). For further details on definitions and
constructions of the indicators, see Annex Table 4.A.1. *,**,***: statistically significant at the 10%, 5%, and 1% level, respectively.
Source: OECD estimates based on the 6th European Working Conditions Survey (EWCS), 2015.
4.3. Unpacking the effect of collective bargaining and workers’ voice on the main
sub-dimensions of the quality of the working environment
The empirical associations between different collective bargaining systems and different types of workers’
voice suggest that both can play an important role in ensuring a higher quality of the working environment,
but that accounting for the diversity of bargaining configurations and voice arrangements is essential.
However, the available data do not allow disentangling the specific channels driving the relationship
identified above or the presence of potentially confounding factors such as the high degree of trust and co-
operation that characterises countries where wage co-ordination is strong or workplaces where workers’
voice is most fruitful.
A qualitative analysis is necessary to understand better what unions, workers’ representatives and
employers actually do on the ground and what levers can be mobilised to improve the quality of the working
environment. The rest of the chapter analyses in details the role of unions, collective agreements and
different forms of workers’ voice arrangements in five domains that are key pillars of the quality of the
working environment. These are occupational safety and health, working time, training and re-skilling
policies, management practices, and the prevention of workplace intimidation and discrimination
4.3.1. Occupational safety and health
Occupational safety and health (OSH) is a crucial component of the quality of the working environment. It
spans a large range of issues, and notably the prevention of accidents. According to Eurostat data, the
standardised incidence14 of non-fatal workplace accidents was 1 483 per 100 000 workers on average
across the European Union in 2016, down from 2138 in 2008 (for fatal accidents the average rate went
from 3.78 to 3.03 over that same time period) – signalling the continued importance of the issue of
prevention. Yet the latter is only one aspect of occupational safety and health, which also includes other
subjects such as workers’ mental health.
In most OECD countries, the issue of occupational safety and health is primarily based on legislation,
rather than on collective agreements. Many European and Anglo-Saxon countries have had dedicated
laws on occupational safety and health since the 1970s. In the European Union, the Framework Directive
of 198915 has been transposed into national law in a majority of member states (Menéndez et al., 2009[67]).
In the United States, the Occupational Safety and Health Act of 1970 sets out the reference terms on
issues of workplace safety. Since 1981, the ILO Convention 155 also guarantees workers a basic
framework of rights and protections on issues of health and safety. This means that the scope for collective
bargaining to guarantee workers’ occupational safety and health may seem reduced at first. Indeed, in no
OECD country can collective agreements derogate from the law in matters of health and safety – they can
only add to provisions in the law. Neither can individual firms opt out from collective agreements on this
issue.
Yet, for instance, 75% of collective agreements in the retail and commerce sector in the European Union16
contain at least one clause on health and safety issues. Collective agreements are often ahead of the law
on some issues: for instance in Spain, the General Chemical Industry agreement signed in 2004

182 
guaranteed evaluation of workplace psychosocial risk factors while it was not yet required by law
(Menéndez et al., 2009[67]). Agreements also frequently contain provisions extending guarantees beyond
the legal minimum, for instance through increasing resources available to workplace safety
representatives, extending consultation and participation rights, or promoting arrangements to enforce
compliance by management.
More generally, Walters and Nichols (2009[68]) find that OSH law has been evolving from prescriptive to
process-based regulations over time, encouraging “regulated self-regulation”. In the European Union, this
movement towards process-regulation, prominently featuring workers’ consultation and representation in
matters of occupational safety and health, including in countries with a relatively weak tradition of collective
bargaining, is an outcome of the harmonising effect of the Framework Directive of 1989. More generally,
this tendency was prompted by the progressive recognition of the necessity to engage workers and their
representatives in the regulation process.
Indeed, beyond formal bargaining, the importance of workers’ voice and in particular of workplace
representation in upholding standards of occupational safety and health is well documented. In the domain
of safety and health, workplace representation goes beyond the presence of shop floor representatives. In
many OECD countries, there are dedicated occupational health and safety representatives at the
workplace level. The latter can be appointed by unions, but can also be directly elected by workers, or
integrated in existing institutions like work councils.
These safety representatives are engaged in a variety of activities. First they are often in charge of ensuring
the implementation of existing protections and of controlling the quality of health and safety conditions
(Eurofound, 2011[69]). They provide information about available guarantees and increase workers’
awareness of workplace risks. They also facilitate the enforcement of existing regulations through regular
workplace-level control. Second, they participate in the development of enhanced protections, for instance
in identifying potential issues and bringing these to the attention of managers (Menéndez et al., 2009[67]).
Finally, they also participate in elaborating innovations enhancing safety in collaboration with management.
At a more macro level, unions are engaged in lobbying for new regulations implementing higher safety
standards or answering to emerging risks (Li, Rohlin and Singleton, 2017[70]; Donado, 2015[71]; Eaton and
Nocerino, 2000[72]; Morantz, 2009[73]). In the United States, union support of national occupational safety
and health legislation contributed to the enactment of the Occupational Safety and Health Act of 1970 and
the establishment in 1971 of the regulatory body in charge of occupational safety and health, the
Occupational Safety and Health Administration (OSHA) (Barth and Mendeloff, 1980[74]).
When it comes to health and safety outcomes, results from studies looking at the effect of union workplace
representation can be ambiguous at first sight. In Donado and Wälde (2012[75])’s review of the literature, a
majority of empirical studies show a positive link between unionisation and the number of reported
accidents and injuries. However, this is likely to be an instance of reverse causality, as identified and
discussed above. Workers in more dangerous establishments are more likely to unionise to obtain safer
working conditions. Moreover, workers in unionised workplaces are more likely to have knowledge of
legislative health and safety standards, and therefore they are more likely to recognise a legal violation
(Adams, 2008[76]; Weil, 1999[77]). Reporting is also likely to be better where representation guarantees the
existence of efficient grievance mechanisms. Employers themselves are more likely to report accidents in
unionised workplaces (Li, Rohlin and Singleton, 2017[70]). By contrast, researchers identify dedicated
health and safety representation as having a countervailing effect to employers’ tendency to under-report
work accidents (Amossé et al., 2012[78]).
In an attempt to get around these potential biases, Li, Rohlin and Singleton (2017[70]) exploit the timing and
results of union elections (comparing unions which succeed or fail by a very small margin) to assess the
effect of union presence and occupational and safety outcomes in manufacturing plants in the
United States.17 Their results indicate that union elections improved occupational safety as measured by
accident rates and number of workplace inspections.

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Results are also contrasted when looking at the effect of different forms of voice more generally.
Representative forms of workers’ voice are associated with lower exposure to risks than direct forms of
voice. Using data from the Workplace Employment Relations Study in 2011 in the United Kingdom, Bryson
and Forth (2017[62]) show that the presence of health and safety representatives was associated with
workers being exposed to lower health and safety risks than in cases where health and safety was dealt
with through direct consultation between management and employees.
Menéndez et al. (2009[67]) argue that the presence of workers’ health and safety representatives allows for
a more systematic organisation of prevention. Yet the authors add that the presence of safety
representatives constitute a necessary but not sufficient condition to ensure better health and safety
outcomes. Representatives must be given enough time to complete their duties, as well as appropriate
training. Yet according to the Continuing Vocational Training Survey (CVTS) covering 19 European
countries, in 2015, workers had access to occupational health and safety training of at least three hours in
only 14.5% of firms.18 In addition to a technical approach to health and safety issues, appropriate training
for safety and health representatives includes training in participatory methodologies to equip
representatives with the adequate skills for the task of relaying the concerns and problems of workers on
the ground. In that regard, the constitution of networks of representatives supported by dedicated union
institutions providing logistical support as well as technical information to workplace representatives is
identified in the literature as a best practice. Management commitment also emerges as an important
determinant of the efficiency of health and safety representatives. In particular, the efficiency of prevention
policies seems to hinge on active engagement from both management and workers’ representatives
(Menéndez et al., 2009[67]; Walters and Nichols, 2009[68]). Finally, other complementary institutions are
necessary to ensure the effectiveness of workplace safety representatives. In particular, health and safety
inspectorates have an important role to play in ensuring regulatory enforcement.19
Results also vary by outcomes studied. Having dedicated health and safety representatives in the
workplace is associated with improved physical working conditions and a reduced rate of accidents. The
effect on injury rates is found to increase with the representatives’ level of health and safety training (Eaton
and Nocerino, 2000[72]). By contrast, representatives’ effect on health-issues related to work organisation
and the introduction of technological changes is more limited (Walters and Nichols, 2009[68]).
Occupational health and safety rights remain more hindered in practice in small firms, and in sectors with
a relatively high share of non-standard employment, where workers’ representation remains more limited
(Menéndez et al., 2009[67]). Following trade union campaigning, legislation was introduced in Spain in 2006,
which requires employers in the construction industry to inform safety representatives about their
subcontracting arrangements. Sector-level agreements can provide for the training of a joint safety
representative for subcontracted workers and direct employees on the same work site. In the case of small
firms, solutions such as the Swedish network of regional safety representatives have proven to be efficient
(see Box 4.2 below). Yet there remain challenges to ensure that occupational health and safety regulations
cover all workers, especially as new forms of work emerge, which might be harder to reach for labour
inspectorates and unions (Walters, 2017[79]), and might present new and specific risks. For example, the
development of platform activities in the transport sector increases exposure to the risk of accidents
(Barrios, Hochberg and Yi, 2018[80]).
Beyond the case of non-traditional workers, small firms, and new forms of work, Bryson and Forth (2017[62])
highlight a more general weakening of workers’ representation in health and safety issues in Europe. The
authors attribute this trend to deregulatory trends and managerial policies – see Walters and Wadsworth
(2017[81]). In France, following the 2018 Law ratifying the Ordonnances reform, the various workplace
representation institutions p (with particular mandates ranging from e.g. safety and health, to more general
employee representation) have been merged into one unique institution (the Comité social et économique,
CSE). This was motivated by a willingness to avoid the multiplication of legally mandated institutions and
to simplify the system. This reform is still being implemented and therefore has not been evaluated yet.
The suppression of institutions dedicated to health and safety has raised concerns amongst social dialogue

184 
experts (Chamboredon and Daniel, 2018[82]), as possibly representing a loss of specific expertise on the
issue of occupational health and safety. In addition, the existence of an institution with a dedicated mandate
tends to guarantee that representatives have sufficient time for the job of reporting on the safety and health
situation, as well as proximity with concrete on the ground issues (Vogel, 2015[83]).
Figure 4.5 shows the correlations between various types of workers’ voice and various occupational safety
and health measures. The picture emerging from this analysis is consistent with the pattern of reverse
causality discussed in commenting Figure 4.3 above. Namely, representative-only forms of voice are
positively associated with workers’ perception that their work negatively affects their health and that their
health is at risk because of work. This cannot plausibly be explained by an increase in awareness of risks
due to representation, since at the same time these representative-only institutions are negatively
associated with access to information about occupational safety and health risks. They are also positively
associated with frequencies of health-related leave and work-related health problems. This might be
interpreted as signalling a self-selection phenomenon, whereby in the absence of direct channels of
dialogue, workers making use of representative forms of voice are likely to be those with worse
occupational health. By contrast, mixed and direct-only forms of voice are positively associated with
workers’ access to information, and with their perception that work has a positive effect on their health.
Finally, the presence of a dedicated health and safety delegate or committee is positively associated with
workers’ access to information, with their perception that their health is at risk because of work, and with
frequencies of health-related leave. This could be explained by the fact that the presence of a dedicated
institution increases workers’ awareness of risks and of the possibility to take health-related leave.
Figure 4.5. Correlations between occupational safety and health (OSH) measures and workers’
voice arrangements
Safety and health delegate or committee Mixed voice (direct and representative voice)
% Representative voice (union and non union) Direct voice

12
*** ***
10 *** ***
8
***
6
*** **
4 ** * ***
***
2

0
-2

-4
**
-6 **
-8
Information about health Perception that work Perception that health is Health-related leave (at Absence resulted from Work-related health
and safety risks positively affect health at risk because of work least 10 days per year) accident at work (at problem (at least 10
least 10 days per year) days per year)
Note: Results are based on probit regressions including additional controls for age, education, gender, type of contract (permanent or temporary
contract), occupation, job tenure, firm size, industry, sector (public and private) and country dummies. The chart reports marginal effects,
i.e. percentage change in the outcome variable following a discrete change in the relevant explanatory variable from the base level (no workers’
voice arrangements). For further details, see Annex Table 4.A.2. “Perception that work positively affect health” refers to the following question:
“Does your work affect your health?”. “Perception that health is at risk because of work” refers to the following question: “Do you think your
health or safety is at risk because of your work?”. *,**,***: statistically significant at the 10%, 5%, and 1% level, respectively.

 185
Box 4.2. Extending workplace representation to small firms: the case of the Swedish regional
safety representatives
The notion that health and safety representatives in the workplace have a positive impact on
occupational health is relatively consensual among practitioners and researchers. However, it can be
materially challenging to implement in small workplaces (Walters and Nichols, 2009[68]). A solution to
this issue has been found in Sweden, where, since the 1970s, a network of over 2 000 regional safety
representatives (RSRs) have had the task of creating a culture of workplace risk prevention in small
workplaces and of extending the benefits of representation to SMEs.
Safety representatives have the same status and the same rights as trade union representatives. Like
local safety representatives, they are appointed by trade union organisations, but by contrast with them,
they have a larger area of supervision, either sectoral or determined through a specific agreement,
generally in a particular geographical remit. Regional safety representatives’ mandate is primarily with
SMEs with up to 50 employees (Wiklund, 2011[84]). They currently cover about four-fifths of small
workplaces (Walters and Nichols, 2009[68]). While their activities are largely government funded, trade
unions also increasingly contribute themselves to the RSRs’ budget (Wiklund, 2011[84]).
Regional safety representatives play several roles: they ensure compliance with health and safety rules
through visiting workplaces, in addition to visits organised by the health and safety services; they
appoint, train and support local representatives; they disseminate information and provide advice on
how to solve health and safety issues on the ground; they act as whistle blowers by shedding light on
emerging problems and risks; and they encourage workers’ participation in health and safety
programmes as well as regular interactions between employers and employees on this issue (Wiklund,
2011[84]; Walters and Nichols, 2009[68]).
Regional safety representatives are estimated to visit workplaces between five and ten times more often
than labour inspectors do (Walters and Nichols, 2009[68]). According to Wiklund (2011[84]), in 2009 the
Swedish Trade Union Confederation (Landsorganisationen i Sverige, or LO) affiliates’ regional safety
representatives made 74 181 workplace visits, while the Swedish Work Environment Authority did only
30 000 workplace inspections.
4.3.2. Working time
The quality of working time can be captured through two main aspects: its duration (i.e. the number of hours
worked, overtime, etc.) and its organisation (atypical schedules such as night work, weekends, and the
flexibility workers’ have to combine work arrangements with personal or family matters). The quantity of hours
worked increases the risk of poor health outcomes, notably if workers cannot properly rest and take leave.20
A good work-life balance supporting workers’ preferences is also crucial for enhancing individual well-being.21
This second aspect of working time quality is gaining ground in recent bargaining rounds with the
development of increasingly flexible non-standard forms of work, of new organisational patterns, as well as
the expansion of new technological and communication tools.
Working time can be regulated at different institutional levels, with complex relationships and references to
each other: statutory legislation usually sets general standards, while collective agreements at sectoral or
firm level further specify them or may even modify them. For instance, most aspects of working time duration
(e.g. very long hours, rest and recovery, etc.) are framed by national and international legislation (EU Charter
of Fundamental Rights, EU Working Time Directive,22 the ILO Convention 001 on Working Time), but
collective bargaining at sector and firm levels, as well as individual negotiation between employers and
employees can result in different outcomes (e.g. agreed normal working hours versus legal working hours).

186 
Furthermore, social partners can also play an active role through bargaining, advocacy and lobbying in the
definition of minimum (or maximum) provisions of other aspects of working time, such as overtime (maximum
amount of hours and negotiating extra pay), night and weekend work or flexible working time arrangements,
such as teleworking facilities (European Framework Agreement on Telework, 2002).
Working time is typically one of the areas where social partners have margins to tailor the specific conditions
to their needs, leading to significant differences across OECD countries in the definition of normal working
hours or overtime, night and weekend work or flexible working time arrangements. In France, for instance, a
series of reforms have been implemented since the 1980s (lois Auroux) to give enterprises greater flexibility
to adjust to firm-level economic conditions and constraints, giving them the possibility to set a number of
aspects of working time by collective agreements even if these were less favourable to workers (in peius) 23.
In 2008, the reform of the Working Time Law, offered enterprises the possibility to modulate weekly hours
worked over several weeks and up to one year, and adjust compensatory rest periods and extra pay
accordingly. In 2016, the Labour Law (Loi El Khomri) strengthened this decentralisation process by
introducing the primacy of firm-level agreements over sectoral ones in defining working time, leave and rest
periods; in the absence of any firm-level agreement, sectoral level agreements apply. The 2018 Law (ratifying
the September 2017 Ordonnances) went further to promote firm-level bargaining by providing enterprises
with the flexibility to adjust working time to economic fluctuations through new collective agreements for
competitiveness which should even prevail over the employment contract.
Eurofound (2016[85]) provides a useful taxonomy of working time regimes for European countries. In the “pure
mandated working time regimes”, collective bargaining over working time issues is not frequent, and
collective agreements covering working time duration and organisation are rare, as statutory legislation
covers the majority of workers (most Central and Eastern European countries). In the “adjusted mandated
working time regimes” (such as France, Greece, or Portugal), the State plays a dominant role in regulating
working time standards (in particular maximum working time duration), but these can be adapted through
collective bargaining and at various levels (sector, firm or individual). In the “negotiated working time regimes”
(Scandinavian and Northern European countries, Germany, Italy and Spain), statutory legislation is still
relevant for the definition of working time standards, but defines the general framework while standards are
mainly set by collective agreements, usually at sectoral level; such agreements can be further complemented
by firm-level bargaining on working time organisation. Finally, in the so-called “unilateral working time
regimes”, the most operational level regarding working time is the individual level, and the terms of working
time duration and organisation are usually set in employment contracts and tend to reflect the conditions
offered by the employers (the United-Kingdom).
While working time is a crucial component of working life, it is also a key variable of labour market adjustment
in providing internal flexibility to enterprises, putting its regulation at the core of economic and social debates
at national and international levels.24 The definition of working time duration, notably, and the compensation
for overtime, have been among the most frequent topics of working time regulation over which social partners
have been engaged, notably in Europe. According to the AIAS database on collective agreements in the
retail and commerce sector across EU countries (Besamusca, Kahancová and Tijdens, 2018[86]), about 90%
of collective agreements deal with weekly days and hours of work, while a few limit the number of consecutive
Sundays that can be worked. Available data on contractual working time in Italy also show noticeable
differences between legal and collectively agreed working time at sectoral level – on average, around three
weeks less of work over a year but with very large variations across sectors.25 Interestingly, recent
agreements in some OECD countries suggest that the flexibility of working time arrangements are gaining
ground in collective bargaining (European Commission, 2018[87]), possibly reflecting workers’ individual
preferences and company recognition of the negative impact of job strain on productivity (Saint-Martin, Inanc
and Prinz, 2018[2]).
In 2018, in the region of Baden Württemberg in Germany, a landmark agreement in the metalworking sector
has introduced the possibility for workers to reduce their working week from the standard 35 hours to 28
hours (while preserving the right to full-time work), but also a number of options on the extent of working time

 187
open for further negotiation at company level. This agreement provides interesting insights about a shift in
bargaining priorities towards providing greater workers’ choices reflecting their work-life balance preferences
(Box 4.3). It is also a good example of an organised decentralisation configuration which sets working time
at sectoral level, but leaves room for company-level negotiations, within a predefined set of options. “À-la-
carte models” in sectoral agreements in Denmark and the Netherlands (Ibsen and Keune, 2018[88]), or Austria
(“Free time option”) also give individual employees significant flexibility to choose between money and time.
Box 4.3. A step towards greater employee working time “sovereignty”? Individual choice
options in new German collective agreements.
In Germany, the issue of reducing working hours recently returned to the bargaining agenda in several
sectors. Interestingly, collective agreements signed in 2018 were pointing to a shift of unions’ claims for
offering greater individual choice rather than across-the-board cuts (Schulten et al., 2019[89]). The
German metalworkers’ union IG Metall and the Baden-Wuerttemberg Employers’ Association of the
Metal and Electrical Industry (Südwestmetall) reached an agreement in 2018 offering the possibility to
workers in the metalworking sector to reduce their working week from the standard 35 hours to 28 hours
(together with a proportional decline in nominal monthly wage), while preserving the right to return to
full-time work. In return, firms have obtained the flexibility to offer more 40-hour-a-week contracts to
compensate the individual right to request “short full time”. In addition, an employee choice model was
agreed allowing shift workers and employees with children or family members needing care to opt either
for the annual bonus of 27.5 per cent of a monthly wage or eight extra days of holiday a year instead
(see Table 4.1). Priority was clearly given to individuals’ preferences over working time. This followed
a large-scale survey of about 700 000 employees undertook by IG Metall, which showed that for many
employees, there was a significant gap between the contractual working hours, the hours they actually
worked and the hours they wanted to work. Other sectoral agreements in Germany have dealt with
similar claims, such as the search for a better work-life balance and more flexibility around working time.
Other sectors or regions (the Deutsche Bahn, the Deutsche Post, the local transports in Bavaria, etc.)
negotiated similar agreements proposing a wider range of options for greater “employee sovereignty”
in their choice between money or time off (see Table 4.1).
Table 4.1. More money or more time off?

Sector Pay increase Working time reduction Eligible employees
Deutsche Bahn (from 2018) 2.6% wage 1 hour a week or 6 days off per All those covered by collective
year (from 2018) agreement
Metalworking and electrical Bonus of 27,5% of one monthly 8 days off per year Employees with children under
industry (from 2019) wage per year 8, with relatives needing care or
in shift work
Deutsche Post (from 2019) 3% wage 60.27 hours annual working time All those covered by collective
agreement
Local public transport Up to 2.5% wage, Maximum of 5 additional days off All those covered by collective
+ 0.25% (employees in shift + 1 extra day (employees in shift agreement
work) work)
Source: Schulten et al. (2019[89]), “Collective bargaining report 2018: Large pay rises and more employee choice on working hours”,
https://www.boeckler.de/pdf/p_ta_jb_2018_english.pdf.

188 
Empirical research on the link between collective bargaining and working time outcomes has mostly looked
at unions’ effects on working time duration, i.e. the role of unions in limiting long working hours or
uncompensated overtime. Veliziotis’ (2010[90]) study of overtime based on the British Household Panel
Survey indicates for instance that unionised employees work fewer unpaid overtime hours than
non-covered ones in the for profit, non-caring sector.26 This is attributed in part to union protection. Using
data from the Workplace Employment Relations Survey in 2011 in the United-Kingdom, Bryson and Forth
(2017[62]) also find that unionised employees work fewer hours of unpaid overtime, and that union members
enjoy longer paid holiday entitlements.
Based on the four main working time regimes described above, Eurofound (2016[85]) finds that on average,
usual working time was shorter in countries with negotiated and adjusted mandated working time regimes,
and longer in unilateral and pure mandated regimes in Europe. The study also compared agreed working
time (e.g. the hours that workers are expected to spend on work according to agreements reached through
collective bargaining at sectoral or firm level or through individual negotiation between employer and
employee) and usual working time to assess the extent of overtime and of compliance with working time
regulations. It showed that the unilateral regime is associated with weaker compliance with working time
regulation and longer overtime. The negotiated regime, in contrast, tends to have stronger levels of
compliance with working time regulation and hence the smallest deviations from agreed provisions.
Beyond these results, evidence on unions’ effect on working time organisation is rather limited. In their
study on the value added of unions, Bryson and Forth (2017[62]) report evidence from the late 1990s, on
unions’ impact on work-life balance arrangements, notably showing that unionised workplaces tend to have
higher levels of provision of family friendly practices, such as parental leave, paid family leave, job sharing,
etc. compared with similar workplaces without unions (Dex and Smith, 2002[91]; Budd and Mumford,
2004[92]). Unions also increase employees’ awareness of such practices through information provision,
thus facilitating their use. However, options to telework or have flexible working hours were less common
in unionised settings (Bryson and Forth, 2017[62]). In his study on the link between shorter workweek and
well-being in Portugal and Spain, Lepinteur (2019[93]) finds that the presence of institutions of worker
representation were important for ensuring that working time reductions lead to welfare gains.
Figure 4.6 displays the correlation between the different form of workers’ voice arrangements and various
working time outcomes. The results show that the direct forms of workers’ voice arrangements are
associated with higher flexibility of working time measured as the possibility to take a break and flexibility
in setting one’s own working time, and with a better combination of working hours with family or social
commitments. The additional presence of a representative form of workers’ voice (mixed voice) is
consistently associated with higher working time flexibility, and better work-life balance. It is also correlated
with less long working hours (over 50 hours a week) and a better satisfaction with working time (measured
as the difference between the number of hours people work and their ideal working time duration). On the
other hand, representative only forms of voice, in the absence of direct voice mechanism are associated
with lower working time flexibility, unbalanced work-life schedules and lower satisfaction with working time
duration. These results are consistent with the previous patterns and may be partly explained by the pattern
of reverse causality identified before.

 189
Figure 4.6. Correlations between working time measures and workers’ voice arrangements
Mixed voice (direct and representative voice) Representative voice (union and non union) Direct voice
%
12
10 ***
8 ***
***
6 ***
4 * ***
2
0
-2 *
***
-4 **
** **
-6
Long working hours Can take a break Flexible working time Work-life balance Don't work during free Working more hours
arrangements time to meet work than desired
demand
voice arrangements). For further details, see Annex Table 4.A.2. *,**,***: statistically significant at the 10%, 5%, and 1% level, respectively.
4.3.3. Training and re-skilling
The skills possessed by workers and their utilisation are key drivers of workers’ performance in all
advanced and emerging economies. Returns to skills not only show up in the form of higher employment
but also of better jobs in terms of higher earnings quality, lower job insecurity and lower job strain. Having
the right skills for work and therefore getting adequate training on the job are key resources for workers to
undertake the job they are assigned to as well as to improve their career opportunities. Moreover, given
the speed of change of how work is organised and carried out, training is increasingly important to help
individuals to maintain and upgrade their skills throughout their working lives. Beyond their instrumental
role, training and learning opportunities on the job have an intrinsic value for workers as they provide
workers with a chance to fulfil their ambitions, to feel useful in society and to build self-esteem.
Adequate public policies to promote adult learning are key to allow workers to skill and re-skill themselves
over their working lives – see OECD (2019[94]) for a detailed discussion. However, social partners also play
a major role in several countries. Most adult learning takes place at work. Large companies invest
significant resources in training but medium and small firms often do not have the capacity to follow suit.
Employers’ organisations and workers’ representatives are therefore key to ensure that enough time and
resources are devoted to training in all companies irrespective of the type of firms or workers’ contract
type.
Early work conducted in the United States found a negative correlation between unionisation and
participation in training – see e.g. Duncan and Stafford (1980[95]), Barron et al. (1987[96]), but more recent
studies find a positive one as the issue of training rose on the agenda of unions – see e.g. Green (1993[97]),
Lynch (1994[98]) and Booth et al. (2003[99]).

190 
According to OECD (2019[100]) and (2019[101]), the involvement of employers and worker representatives is
potentially relevant at all stages of the policy cycle, from the identification of problems that require attention,
to the development and management of training programmes as well as their monitoring and evaluation.
Currently, unions and employers’ organisations are involved in skills assessment and anticipation
exercises in the majority of OECD countries: according to OECD (2019[100]), employers and employers
organisations are involved in exercises to identify which skills are needed in the current labour market and
moving forward in 69% of the countries; trade unions in 59% of the countries.
Moreover, almost half of OECD countries have skills councils that, among other things, conduct skills
assessment and anticipation exercises. In the United Kingdom, for instance, Sector Skills Councils, jointly
managed by both employers and workers’ representatives, produce national occupational standards,
design and approve apprenticeship frameworks, and make long-term projections for their industry so that
qualifications and occupational standards can meet future skill demands. In Canada, sector councils are
national partnership organisations that bring together business, labour and educational stakeholders
(Gunderson, 2011[102]; Gunderson and Sharpe, 1998[103]). They represent approximately half of the
Canadian workforce. Their primary role is to facilitate training and foster tripartite discussion on emerging
human resources and skills issues. Although sector councils operate at arm’s length from the government,
the federal government supports sector councils through its Labour-Management Partnerships Program
by providing funding to joint labour-employer initiatives focused on education and training. Job Security
Councils in Sweden and Inplacement Labour Foundations in Austria are other interesting examples of
social partners actively managing and designing training services (see Chapter 5 for more details).
Access to life-long training for workers can be negotiated and secured in collective agreements and is an
increasingly important issue of collective bargaining. For instance in 2016, unions in the metal sector in
Italy traded lower-than-expected wage increases for a new provision at sectoral level, ensuring a minimum
amount of employer-supported yearly training to all workers, irrespective of the company they work for.
The agreement, however, has largely failed to materialise so far, as companies, but also local unions,
struggle to implement the new possibility opened by the sectoral agreement.
In Denmark, a national-level tripartite agreement was signed in 2017 that specifically focused on adult and
continuing training. It included a series of initiatives over four years to increase and improve the access to
and the quality of adult learning. In particular, the agreement set up a new “reconversion fund” of around
EUR 53 million allowing workers to undertake further training on their own initiative (Eurofound, 2018[104]).
Yet there exists a substantial margin for improving the inclusion of training provisions in collective
bargaining: on average in OECD countries, only about 15% of firms are covered by an agreement (either
at sectoral level or at firm/establishment level) containing provisions on training.27 Although there is a large
cross-country variation, from almost no firms covered by training provisions in Central and Eastern
European countries to only about 10% in Finland or Denmark to 79% in France (Figure 4.7). Moreover, it
is important to note that firms and unions may also provide training in the absence of any collective
agreement.

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Figure 4.7. Number of firms covered by a collective agreement including training provisions, 2010-
2015
Collective bargaining coverage (% of employees covered by collective agreements)

Collective training agreements (% of all enterprises with a collective agreement regarding training)
%
100
80
60
40
20
Note: Data refer to 2015 or closest year. "Collective bargaining coverage" refers to the ratio of employees covered by collective agreements,
divided by all wage earners with right to bargaining. "Collective training agreements" refers to the percentage of all enterprises that indicate that,
at the time of the survey, collective agreements between social partners concluded at national, regional or sectoral level usually cover the
provision of continuous vocational training in their enterprise (excl. agreements concluded at enterprise level). Data for Sweden and Poland
refer to 2010 for the data on collective training agreements, and 2011 for the data on collective bargaining coverage. Average is the unweighted
average of countries shown (survey weights are used).
Source: Eurostat CVTS data (2010, 2015), OECD Database on Collective bargaining coverage.
In some cases, unions or workers’ representatives are directly involved by the management in setting
priorities for adult learning at company level or in defining the type and the content of training. Figure 4.8
shows the degree of involvement of staff-representatives in setting training policies at the company level
in European countries by firm size. Finland, France, Luxembourg, Norway and the United Kingdom show
the highest degree of social partners’ involvement. However, the chart also shows that the involvement of
staff representatives is largely confined to larger firms and, with the exception of Norway and the
United Kingdom, quite limited otherwise. European Commission (2019[105]) shows that smaller firms'
training disadvantage diminishes with employee representation.
In the United Kingdom, unions have made a specific investment in training provision by creating Unionlearn
in 2006. Unionlearn supports trade unions to help workers acquire skills and qualifications to improve their
employability. One of its key activities is the training of Union Learning Representatives (ULRs), who
encourage the take-up of learning in the workplace, help workers identify training needs and arrange
learning opportunities within their companies. Since its inception in 2006, Unionlearn has trained more
than 41 000 ULRs. It provides learning opportunities to about 250 000 workers per year, including
disproportionally high numbers of workers with no or low qualifications (Stuart et al., 2016[106]). Unionlearn
also manages Union Learning Fund (ULF) projects that are run by individual unions to promote the take-
up of learning and skills in the workplace and government provides funding for both the ULF and
Unionlearn. The investment of unions on training appears to pay off: using official establishment and
individual-level survey data, Stuart, Valizade and Bressa (2015[107]) show that over the period 2001-2013
union members were a third more likely to have received training than non-unionised employees.
Moreover, non-union members also benefit from being in a unionised establishment: 38% report a recent
training period compared to 25% in workplaces where unions do not have negotiating rights.

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Figure 4.8. Training aspects covered by staff representatives/committees by firm size

Percentage of employees, 2015
10-49 employees 50-249 employees (↘) 250 employees or more

A. Objective setting of training B. Establishing criteria for the selection of participants
% %
60 60
50 50
40 40
30 30
20 20
10 10
0 0
C. Form/type of training D. Content of training

% %
60 60
50 50
40 40
30 30
20 20
10 10
0 0
E. Budget for training F. Evaluation of training outcomes

% %
60 60
50 50
40 40
30 30
20 20
10 10
0 0
Note: Average is the unweighted average of countries shown (survey weights are used).
Source: OECD calculations based on CVTS 5 Scientific Use files.

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In several OECD countries, social partners play a direct role in managing and funding training programmes
(see Table 4.2). A particularly interesting case is that of the O&O funds (Opleidings- en
Ontwikkelingsfonds) in the Netherlands, which are financed primarily through a compulsory payroll levy
fixed by collective agreement. O&O funds provide lifelong learning to workers to keep them “up-to-date”
and ready to find new jobs in the future. The funds also promote campaigns on the importance of training,
and finance or kick-start projects on the ground. Again, a constant exchange between social partners
allows O&O funds to anticipate skill needs. In Italy, social partners-led training funds also represent one of
the most important sources of financing of adult learning (see Box 4.4). A direct role of social partners in
the funding and management of training funds can contribute to make the system more effective as social
partners can help ensuring that their own money is spent well and targeted on actual needs. However,
when social partners are fragmented and numerous, their governance may be very complicated. Moreover,
training funds based on mandatory firm contributions can also lead to an inefficient allocation of resources
and very expansive training programmes, notably if they end up subsidising compulsory training that would
happen regardless of the subsidy. Training funds can also be inefficient if the training reflects more what
existing providers are able to offer, rather than the needs of companies, particularly new or growing ones
(see Box 4.4). Evaluations and quality certifications are therefore key to ensure that training funds
effectively respond to the skills needs of workers and companies.
Table 4.2. How much are social partners’ involved in training programmes in OECD countries?
Highest level of involvement Country

1) Trade unions and/or employers finance some ad hoc training initiatives Australia Estonia Latvia United Kingdom
Chile Finland Norway United States
Czech Republic
2) Employers pay a compulsory training levy to a government fund Canada (QB) Korea Spain
Ireland Poland
3) Employers and trade unions are in charge of managing and funding training Austria France Iceland Netherlands
programs1 Belgium Germany Italy Sweden
Denmark Greece Luxembourg Switzerland
Note: QB: Québec. “Training” in this table refers both to vocational training and lifelong learning. Categories 1 to 3 are not mutually exclusive.
Countries are classified based on social partners’ highest level of engagement on average across industries. This means that countries in
category 3 might also belong to categories 1 or 2 (and those in category 2 could belong to category 1). For instance, in France, there is a
compulsory levy on medium and large firms (to finance the Compte Personnel de Formation), but social partners are further involved in the
funding and managing of training funds – hence France appears in category 3. In addition, in countries in categories 1 or 2, social partners may
also manage a training fund in one specific sector: this is the case in Spain and the United States, where social partners manage training funds
in the construction sector. However, these examples are not representative of the situation in the whole country.
1. At least in several sectors. Depending on countries, funds for training programs can be compulsory or voluntary, and they can be mandated
by law or agreed upon through collective bargaining.
Source: OECD Policy Questionnaires on Collective bargaining as well as information collected in the context of the OECD project on “Getting
skills right: promoting workforce adaptability”.

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Box 4.4. The role of training funds in Italy

In Italy, social partners manage Training Funds (Fondi paritetici interprofessionali per la formazione
continua). These funds finance workers’ training using resources collected through a training levy
imposed on employers (small by international standards, 0.3% of the payroll compared with 0.8% in
Ireland, up to 1% in France, up to 2% in the Netherlands and 2.5% in the United Kingdom). Since their
introduction in 2004, they have contributed to a significant increase in adult learning participation.
Covering almost 1 million firms and over 10 million workers, and managing over EUR 600 million a year,
today Training Funds represent one of the most important sources of financing for workers’ continuous
learning in Italy.
While a large and growing number of firms are covered by Training Funds, small and medium
enterprises as well as most vulnerable workers still remain to a large extent excluded. In 2016, only
57.1% of small firms (10-19 employees) provided training, compared to 93.3% of larger firms (250+
employees). Moreover, even those SMEs that supply training use available funds much less than larger
companies. Furthermore, as training is funded through a levy paid by employers, firms typically have a
great deal of autonomy in deciding who gets training, and often end up targeting training efforts to
groups for which training yields the highest returns: the most skilled, those in high-skilled occupations,
or younger workers with longer career prospects.
The type and quality of the training offered is also an issue. Compulsory Occupational Safety and Health
(OSH) training represents over 30% of all supported training activities in Italy, while ICT training
accounts for just above 3%. This may reflect the structure of the Italian market. Indeed the latter is
characterised by a large number of small family-led businesses, which are often more concerned about
complying with compulsory training obligations than with developing new skills (e.g. ICT) that may take
time to pay off. However, this also reflects a more general difficulty in understanding training needs and
developing appropriate plans even in the presence of generous subsidies. While some Training Funds
have taken steps to measure the impact that training has on firms and workers, a systematic effort to
monitor the quality of the initiatives and an evaluation of their effect is missing.
One advantage of Training Funds compared to publicly provided training is that social partners are
closely associated to their management. In practice, yet, the fragmentation of the Italian bargaining
system (Italy has the second highest number of employers’ organisations and trade unions in the
OECD) complicates their governance. Moreover, the involvement of trade unions remains in some
cases only formal. Despite these limitations, the Italian Training Funds represent an important tool in
the hands of social partners to invest in skills and improve the quality of the working environment.
Source: OECD (2019[108]), Adult Learning in Italy: What Role for Training Funds?, Getting Skills Right,
https://dx.doi.org/10.1787/9789264311978-en.
4.3.4. Work organisation and management practices
The organisation of work as well as management practices generally aim at reaching higher productivity
(Bloom and Van Reenen, 2007[109]; Bloom et al., 2014[110]) through influencing processes and job design.
However, they also affect workers’ job quality and union strive to be involved in their definition. Their effect
is a priori ambiguous as it depends on the actual content of the different practices and on how they are
rolled out. In particular, new work organisation and management practices may improve physical working
conditions by making work less physically demanding, safer and by giving workers more autonomy and
discretion over their tasks. Moreover, they may boost employees’ motivation, work performance and job
satisfaction. However, more efficient management practices may also come at the cost of higher pressure

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and stress. Empirical studies on the effect of management practices on job quality are rare. Among the
few exceptions, Applebaum et al. (2000[111]) find that management practices promoting participation,
incentives and skills are linked to higher wages, higher job satisfaction, lower job-related stress and, at the
company level, to better competitiveness and efficiency.
While the deployment of management practices is first and foremost the remit of managers, unions and
collective bargaining can also contribute to it in direct and indirect ways. First, the promotion of better
management practices may be a way for firms to respond to unions’ demands (Freeman and Medoff,
1984[1]). This is consistent with the relatively old theory that wage increases put pressure on managers to
find margins of profits elsewhere, including by improving companies’ productivity through more efficient
management practices (Slichter, Healy and Livernash, 1960[112]). By contrast, some authors have also
argued that management practices may have been strategically used to bypass and weaken trade unions
(Kochan, 1980[113]). The concurrent decline of trade union membership with an increase in HR and
management practices has led some researchers to study the potential link between the two phenomena.
However, a review by Brown et al. (2009[114]) has failed to identify substantive evidence to back this
hypothesis.
Second, unions may play a direct role in promoting or resisting the adoption of new work organisation and
management practices. By providing a platform for collective voice, unions may promote the adoption of
new practices to improve the working environment and even facilitate their adoption by getting workers on
board. For instance, Machin and Wadhwani (1991[115]) find a positive correlation between unionised
establishments and organisational change. While this may simply be due to unionised workplaces lagging
behind in terms of work organisation and having to catch-up at the time of the evaluation, the authors also
suggest that, by allowing for collective voice, unions stimulate organisational change and the adoption of
new management practices. With more recent data, Askenazy and Forth (2016[116]) also find that in France
and the United Kingdom, practices such as team working and functional flexibility are more likely to be
found in unionised than in non-unionised workplaces today. In fact, a review by Bryson and Forth (2017[62])
concludes that, while evidence from the 1980s suggested that unions in the United Kingdom were a brake
on work re-organisation, that does not appear to be anymore the case these days. A case study in Box 4.5
of the implementation of the “World Class Manufacturing” by the car manufacturer Fiat Chrysler
Automobiles shows the key role played by establishment-level unions in Italy and the United States in
accompanying organisational changes seen as essential by Fiat and Chrysler’s management to save the
company during the global financial crisis. By contrast, unions may resist organisational change and new
management practices, in particular those that they deem less favourable to workers or those that have
not been sufficiently discussed. For instance, union presence in United States plants has been found to be
associated with a lower rate of adoption of performance pay and appraisal (Wood, 1996[117]) as unions
resist practices that result in a higher individualisation of pay policies. Similarly unionised workplaces in
the United Kingdom are also less likely to have incentive-based pay systems in place (Askenazy and Forth,
2016[116]).
Finally, in some cases, the involvement of unions and collective agreements in the definition of work
practices has been mandated by the law itself. For instance, the Swedish Co-Determination at Work Act
of 1977 extended collective bargaining into areas of organisational and technical change in an attempt to
give unions a real say over working conditions before any final decisions are taken. In Denmark social
partners were directly involved in the enforcement of the Working Environment Act of 1975 which made it
compulsory for employers to establish a safe working environment for staff, and to engage in regular risk
assessment exercises to prevent work-related stress among employees. In Germany, workers’
representation in supervisory boards in large companies also allows workers to have a say in the definition
of companies’ strategies. Supervisory boards are in charge of appointing the top management, reviewing
its performance and giving advice on the general strategy of the company. They can also define a list of
operations where its approval is required before they are undertaken. In the coal, iron and steel industries,
workers’ representatives on the company board can also veto the appointment of the company Human

196 
Resources director (ETUI, 2015[118]). Since 2002, a European Union Directive28 established a general
framework on information and consultation according to which employees have to be consulted on
decisions likely to lead to substantial changes in work organisation, in firms with more than 20 (or 50,
depending on member countries) employees.
Figure 4.9 shows the correlation between some types of work organisation and management practices
such as autonomy (measured as the freedom to set the order of tasks, the method of work and the pace
of work), teamwork, task rotation and the self-assessment of one’s own work29 and different forms of
workers’ voice using individual-level data from the European Working Conditions Survey. The results show
that, in European countries, direct and mixed forms of workers’ voice are consistently associated with
higher work autonomy and a higher incidence of practices such as teamwork, task rotation and self-
assessment of one’s own-work. In particular, they are positively associated with workers’ autonomy
(measured as the possibility to choose or change the sequence of tasks, the possibility to choose or change
how the work is done and to choose/change the speed/rate of work), with teamwork, job rotation or with
having the responsibility for quality control. By contrast, representative-only forms of voice are not
consistently associated with a larger use of these work organisation and management practices.
As discussed before, this may reflect a selection effect on the side of employers. Indeed, direct forms of
voice can only flourish in contexts where management is willing to hear feedbacks from workers, and where
the relationship between workers and managers is characterised by a basic amount of openness and trust.
In that sense, direct voice may be considered a good management practice in itself. By contrast, as
explained above, the presence of solely representative arrangements for voice could be characteristic of
poor social dialogue contexts, where employers are mandated by law to have representative institutions,
but are unwilling to engage in direct exchanges with workers. The presence of representative
arrangements could also result from strained workers seeking representation to express their discontents,
while benefiting from the legal protections attached to representative voice. Besides, Hammer and Avgar
(2005[41]) suggest that when representative voice is born out of such discontent, it can lead management
to adopt restrictive practices in response, increasing control and monitoring and therefore further
diminishing workers’ autonomy. These explanations are all consistent with the results in Figure 4.9 which
show a negative correlation between the presence of representative-only institutions for voice and less
autonomy in terms of freedom to set the order of tasks, to define the method of work or the pace of work.

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Figure 4.9. Correlations between measures of workplace organisation and workers’ voice
arrangements
Mixed voice (direct and representative voice) Representative voice (union and non union) Direct voice
%
20
***
15
*** *** ***
***
10 *** ***
*** *** *** *** ***
5 ** **
*
-5 *
**
-10 ***
Order of tasks Method of work Pace of work Team work Task rotation Self-assessment of own
work
Collective agreements as well as different forms of voice can also help accompanying the introduction of
new technologies and ensuring that their deployment does not come at the expense of job quality for
workers (see also Chapter 5). It can also help ensure that increased work intensity, for instance, is
rewarded with higher wages or more time-off. Recent research in the British context (Bryson, Barth and
Dale-Olsen, 2013[119]) indicates that the job-related anxiety that accompanies organisational change at
work is ameliorated when employees work in a unionised workplace and are involved in the introduction
of the changes.

198 
Box 4.5. Collective bargaining, job quality and productivity: A case study of the implementation
of the “world class manufacturing” method in the automotive sector
A safer and better quality of the working environment is a primary concern for workers. It is also a
significant ingredient for firms’ performance (Saint-Martin, Inanc and Prinz, 2018[2]). The implementation
of a new form of work organisation in Fiat Chrysler Automobiles (FCA) plants in Italy and the
United States provides an interesting example of why that is the case. In 2005, the Italian car
manufacturer FIAT (later called FCA after it acquired Chrysler) adopted a new production model called
World Class Manufacturing (WCM). This model was also reportedly implemented by other large
international companies such as Royal Mail, Ariston, Unilever, Atlas Copco, and Barilla.
WCM is a methodology developed by Schnonberger (1986[120]) building on the Toyota Production
System or “lean manufacturing”, which focuses on eliminating waste and improving quality and safety
in a systematic and organised way. The methodology is based on 10 pillars. The first one is focused on
safety, with the goal of zero accidents and a stronger focus on ergonomics. Other pillars include cost
deployment and people development. The WCM also gives more responsibility and autonomy to the
workers by asking them to think about their own work and to provide suggestions. In the words of its
creator “the old division of labour concept was to divide the job into narrow elements; the unskilled
people could be hired off the street and learn an assembly job quickly with little training. The WCM
concept calls for assemblers to learn multiple job skills, data collection duties, and diagnosis and
problem solving talents, in brief: take the skill out of the job; develop the skills of the mind” (Schonberger,
1986, p. 38[120]). In WCM, workers are asked to play a more active role by providing feedbacks and
suggestions related to work organisation and the experimentation of new methods. Moreover, the
method aims at increasing job mobility to allow workers to change job and progress in their career.
A specificity of the implementation of WCM in FCA plants in the United States is that the United Auto
Workers (UAW) union has been closely associated since the beginning to the deployment of the new
method to help management get workers fully on-board and increase their active participation. At the
local level, UAW has one representative per pillar working hand in hand with the management on its
actual implementation. Moreover, UAW and FCA jointly run the UAW-Chrysler National Training Center.
The latter is funded by FCA and governed by a board composed of four representatives of the union
and four of the management. As part of the National Training Center, the World Class Manufacturing
Academy (WCMA) in Warren, Michigan is tasked with training workers to WCM methods. According to
FCA management, “the results that have been achieved in our plants could not have been realised
without the support of our UAW partners. From the leadership to the shop floor, everyone has become
an advocate of WCM and understands that it is critical to maintaining Chrysler Group’s competitiveness
into the future” (FCA, 2012[121]). According to UAW, “WCM has engaged and empowered our UAW-
represented workforce by challenging them to become more involved in driving change within our
plants. By embracing WCM, we can secure manufacturing jobs and additional investment in our plants”
(FCA, 2012[121]). In Italy, the deployment of WCM was, and partly remains, more controversial: in 2010,
it was a key part of the new agreement that Fiat asked unions to sign to secure the continuation of
investments and production in Italian establishments together with new rules on overtime, breaks and
unions’ activities. This agreement was fiercely opposed by one of the three main unions, FIOM-CGIL,
which considered it as a form of blackmail and still criticises the new working method as a form of work
intensification without sufficient rewards for workers.
Proponents of WCM stress its role in increasing productivity and job quality. Opponents retort that
increases in productivity are not sufficiently shared with workers. They also point that while physical
stressors are reduced, mental stress has increased. A survey of almost 5 000 FCA workers (Campagna
et al., 2015[122]) run by the Italian metalworker unions FIM-CISL, which signed the 2010 agreement,

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showed that safety has increased, that the quality of production has increased and that workers feel
more involved. Workers feel that a higher degree of intellectual involvement is required from them in
their job. On the other hand, they also report that WCM has increased pace by cutting small breaks,
and that work has become more stressful. Moreover, workers feel that the time to provide feedback is
still limited and the rewards for the feedback are often only symbolic. One of the main requests that
workers have is to ensure a better share of the productivity gains that derive from WCM, which partly
stem from workers’ suggestions and direct involvement. The results of another survey of workers in
Italian FCA plants run by FIOM-CGIL (Bubbico and Di Nunzio, 2018[123]), which strongly opposed the
2010 agreement, stress more these negative aspects, underlying in particular the increase in workloads
and pace and the fact that direct voice crowds out formal workers’ representative bodies, weakening
workers’ bargaining power.
4.3.5. Workplace intimidation and discrimination
Workplace intimidation (also referred to as “workplace bullying”) comprises situations where a worker is
confronted with physical violence, threats, blackmail, or verbal abuse. Discrimination refers to the unjust
or prejudicial treatment of different categories of people, on the grounds of one of their characteristics
(gender, age, race, sexual orientation, religion, physical appearance, etc.) 30. It can happen at any step of
the career path, from job application to job loss and promotion opportunities. While the attention to
workplace intimidation is relatively more recent, the causes, cost and measurement of discrimination in the
workplace have been the subject of many studies and experiments – see Carcillo and Valfort (2018[124])
for a summary of the evidence.
Intimidation and discrimination are detrimental to workers mental and physical health and worsen the
quality of the working environment. Discrimination, in particular, has been shown to increase the risk of
depression (Noh and Kaspar, 2003[125]), hypertension (Williams and Mohammed, 2008[126]), cardiovascular
disease (Lewis et al., 2006[127]), breast cancer (Oyo et al., 2003[128]), and to increase mortality (Barnes
et al., 2008[129]).
According to a 2015 Eurobarometer survey, 19.8% of employees in the European Union declare having
experienced at least one form of discrimination in that year (up from 14.8% in 2012) (European
Commission, 2015[130]).31 Age discrimination was the most prevalent form of discrimination (5%), followed
by gender discrimination (4.6%), ethnic discrimination (3.5%), religion (2.4%), disability (1.9%), sexual
orientation (1.3%), and gender identity (0.6%).32 However, this ranking is different when considering the
percentage of discriminated individuals in relevant groups at risk of discrimination: 30.7% of employees
from ethnic minorities declare that they experienced discrimination, while 9.8% of workers under 30 and
over 55 experienced age discrimination.
Intimidation appears to be more widespread. According to data from the 2015 wave of the European
Working Conditions Survey, 12.5% of employees declare having experienced verbal abuse in that year,
9.2% had experienced threats and humiliating behaviours over the last month, 4.8% had been subjected
to bullying/harassment in the last 12 months, 2.1% had experienced physical violence, 2.1% had received
unwanted sexual attention over the last month and 1% had experienced sexual harassment in the last
12 months.
Legally prohibiting workplace intimidation and discrimination is an essential first step. Anti-discrimination
law is framed by international conventions. 33 Legislation on violence and harassment at work is more
recent. For instance, a specific ILO Convention (C-190) on the issue has been approved in July 2019. The
Convention – which, in many OECD countries, adds some elements to already existing provisions –
recognises that violence and harassment at work (defined as behaviours, practices or threats “that aim at,
result in, or are likely to result in physical, psychological, sexual or economic harm”) “can constitute a
human rights violation or abuse” and is “incompatible with decent work”. The new Convention sets a series

200 
of standards to be implemented by member countries to better protect all workers, irrespective of their
contractual status, including persons in training, interns and apprentices, workers whose employment has
been terminated, volunteers, job seekers and job applicants. The Convention also extends anti-
harassment policies beyond the premises of the office or the factory, to include work-related travels and
social events and daily commutes.
Beyond legislations, however, ensuring that these laws are properly enforced through reporting, recording
and sanctioning is crucial. In that regard, workers’ representatives can play a key role by offering an on-
site resource for a worker willing to report a case of intimidation or discrimination. According to
Eurobarometer data (European Commission, 2015[130]), in 2015, 16.2% of employees who declared having
experienced at least one form of discrimination in the last 12 months said that they would prefer to report
their case to a trade union in case of discrimination (20.5% for gender discrimination, 18.2% for age
discrimination and 17.7% for disability). 27.2% mentioned going to the police, 22% would turn to an equal
opportunity organisation, and 6.5% do not know whom they would turn to. This latter statistic signal the
existence of space for progression for workers’ representatives to act as an efficient recourse for workers
in these situations. According to Ouali (2013[131]), quoting survey research carried out between 2003 and
2005 in five European countries, the vast majority of racist incidents were not reported to union
representatives for reasons ranging from fear of stigmatisation, fear of not being trusted, and fear that a
legal procedure would not result in sanctions against perpetrators.
Historically, unions have not always been at the forefront of the fight against discrimination. Bargaining
agendas used to centre on male-biased priorities (Tavora, 2012[132]) and in some cases, unions replicated
the type of segregation prevalent in society and in most organisations.34 Moreover, the issue of racism was
also generally seen as something that happened outside the factory gates (Wrench, 2015[133]). In the 1960s
and 1970s, American unions also tended to oppose migration, fearing that migrants would drag down the
wages of native workers and increase unemployment (Jacobson and Geron, 2008[134]). Still in the early
1990s, the practical responses of several European trade unions to policies and codes against
discrimination were found to be “minimal and lukewarm” (Eurofound, 1996[135]).
One source of tension is that acknowledging the disadvantage of certain groups of workers and drawing
attention to differences among union members is at odds with the traditional strategy of building union
strength by highlighting common collective interests and identity (Tavora, 2012[132]). Another difficulty lies
in the transmission of anti-discrimination strategies decided at national level to practices at the local level
(Ouali, 2013[131]; European Commission, 2006[136]).
Nonetheless, unions’ stance on workplace discrimination and intimidation has noticeably changed in the
last decades. In 1995, the European social partners signed the Joint Declaration on the Prevention of
Racial Discrimination and Xenophobia and Promotion of Equal Treatment in the Workplace, which
proposed a set of anti-discrimination measures in recruitment, selection, or training. This change reflected
wider societal transformations, as well as the adoption of national and international legislations such as
the European Union Racial Equality Directive adopted in 2000, and the Employment Equality Directive.
These laws have increased trade unions’ awareness and receptiveness of immigration and racial
discrimination issues (Wrench, 2015[133]).35 As the labour force has become more diverse, better taking
into account the interest of a diverse workforce also became an essential element of union revitalisation
strategies (Dickens, 1999[137]).
Since the adoption of that declaration, trade unions in Europe have developed various anti-discrimination
initiatives. First, unions have started to change their structure, creating dedicated departments to conduct
their equality agendas, appointing officers with specific discrimination portfolios, reserving seats to
representatives of groups at risk of discrimination on union executive boards (European Commission,
2010[138]), or encouraging self-organisation of disadvantaged groups within their structures. For example,
UNISON in the United Kingdom has been supporting black self-organisation (European Commission,
2006[136]). In Italy in 2003, the Confederazione Generale Italiana del Lavoro (CGIL) created a ‘New Rights’

 201
section aimed at coordinating efforts to better address issues linked to sexual orientation and gender
identity. Unions have also invested in the creation of auditing mechanisms and monitoring tools on
anti-discrimination issues. The British Trade Union Congress has introduced Equality Audits since 2001,
in order to draw an accurate picture of the efforts undertaken on issues of discrimination at work, to
measure progress and to identify remaining gaps. Unions affiliated to the TUC are audited and reports are
published every two years. Unions are also conducting diversity training to raise awareness among their
members.
Second, policies mitigating discrimination and workplace harassment have become objects of collective
bargaining and are now included in sectoral and firm-level collective agreements. For instance, around
30% of collective agreements in the retail and commerce sector in the European Union contain at least
one clause on equal access to training, around 40% a clause on equal promotion opportunities, close to
50% a clause on equal pay and close to 80% a clause on non-discrimination (Besamusca, Kahancová and
Tijdens, 2018[86]). Examples include clauses aimed at eliminating age bars or age-based criteria, annual
leave agreements which acknowledge the needs of a diverse workforce (notably in terms of religious
holiday), or collective agreements on diversity management (European Commission, 2010[138]). A 2003
national agreement in Belgium suggested a mechanism to facilitate the recruitment of young minority
workers (Ouali, 2013[131]). In Lithuania, the Lietuvos profesinių sąjungų konfederacija (the Lithuanian Trade
Union Confederation) (LPSK) led a campaign on the issue of age discrimination. This led to the formulation
of a set of policy recommendations (including job protection for those coming up to retirement and paid
time-off for retraining) being brought to the Tripartite Council in 2008, which was then implemented into
collective agreements (European Commission, 2006[136]). Unions have also developed tools to negotiate
anti-discrimination policies (such as the British TGWU’s Negotiator’s guide on Race Equality) (European
Commission, 2006[136]).
Third, workers’ voice mechanisms can also play a role in raising awareness about intimidation and
discrimination and provide an on-site resource to address them. Workers’ voice mechanisms can be direct
or representative (and most often workplaces have mixed systems with both), and representative forms of
voice can involve unions or not. A study in the United States showed that claims of racial and gender
discrimination are less frequent in workplaces with clear channels for workers to voice their discontents, in
particular when the race or gender of the supervisor is different from that of the worker (Bender, Heywood
and Kidd, 2017[139]). Examples of union-led workplace initiatives to mitigate discrimination and intimidation
include the provision or targeted training to groups disadvantaged on the labour market, e.g. ethnic
minorities or LGBT workers (European Commission, 2006[136]), or the establishment of dedicated
representatives (European Commission, 2010[138]). For instance the Österreichischer Gewerkschaftsbund
(OEGB -–Austrian Federation of Trade Unions) has introduced workplace youth representatives, which
role is to facilitate recruitment, to identify the needs of young members, and to influence company culture
(European Commission, 2010[138]). While there are many examples of good practices such as this one, a
2006 European Commission report found the workplace-level response to anti-discrimination issues to be
rather heterogeneous (European Commission, 2006[136]).
Figure 4.10 shows the correlations between various forms of intimidation and discrimination and various
types of workers’ voice using data from the European Working Conditions Survey. The picture emerging
from this analysis is consistent with what has been found for the other dimensions of the quality of the
working environment. In particular representative only forms of voice are associated with more intimidation
and discrimination while mixed and direct only forms of voice tend to be associated with lower incidence
of intimidation and discrimination, compared with the absence of workers’ voice arrangements.

202 
Figure 4.10. Correlations between measures of intimidation and discrimination and various forms
of workers’ voice arrangements
Mixed voice (direct and representative voice) Representative voice (union or non union) Direct voice
A. Intimidation and violence
%
8
***
6
4 ***
*** ***
***
2 ***
* ***

0

-2
***
***
-4
Bullying / harassment Verbal abuse Unwanted sexual Threats and humiliating Physical violence Sexual harassment
attention behaviour
B. Discrimination
%
2
1.5 *
**
1
**

0.5

0

-0.5
**
***
-1
Age Ethnic Nationality Sex Religion Disability Sexual orientation
background/race

 203
Higher incidence of intimidation and discrimination with representative only forms of voice are once
again likely to reflect a selection effect and not a direct negative effect of representative bodies. Workers
who feel intimidated and/or discriminated against may call on unions to set up a formal workers’
representative body to defend themselves while workers who are not intimidated or discriminated may
not feel the need. Moreover, the absence of direct forms of voice may signal the low willingness of
employers to co-operate for a better working environment. In addition, the presence of representative
bodies is likely to increase workers’ awareness and knowledge of what constitutes harassment and
discrimination and therefore to increase the reporting of intimidation and discrimination cases in the
survey.
Beyond internal reorganisation, collective bargaining, and workers’ voice, a fourth way in which unions
intervene on these issues is through awareness-raising, government lobbying and legal action.
In terms of awareness-raising campaigns, European Commission (2010[138]) highlights trade unions’
engagement with employers’ organisations, NGOs, and community associations. Campaigns range from
highlighting issues of enforcement to demanding new measures guaranteeing equality of treatment for
e.g. ethnic and religious minority, or LGBT workers. In Italy, CGIL partnered with NGOs to respond to
rising xenophobia and homophobia in Italian society, raising awareness though campaigns such as
the”‘Same blood, same rights” campaigns highlighting the unfair treatment of migrant worker s.
Unions are also invested in government lobbying in the objective of promoting legislation against
intimidation and discrimination. For instance, union lobbying through the European Trade Union
Confederation was important in securing the 2000 Equal Treatment Directive (European Commission,
2006[136]). The Lithuanian Trade Union Confederation policy recommendations to address age
discrimination mentioned above were ultimately brought into labour law (European Commission,
2010[138]). In Austria, youth employment laws were modified and protective regulations protective
regulations related to probation and dismissal expanded to young workers following the establishment
of youth representatives.
Finally, unions are sometimes engaging in legal actions to combat workplace discrimination. For
instance, the Icelandic confederation of Labour (ASÍ) launched a campaign in 2005 aimed at defending
the principle of equal treatment workers, including migrant workers, who were often paid less and worked
without social insurance in construction and food industries. Where they could not negotiate a solution
with employers, ASÍ took legal action against the companies (European Commission, 2010 [138]). In
Belgium, the Fédération générale du travail de Belgique (FGTB) and the NGOs CEOOR (Centre for
Equal Opportunities and Opposition to Racism) and Kif-Kif filed a joint complaint against the temporary
work agency Adecco, which was condemned in 2011 for having used racially oriented labels to
distinguish between candidates (Ouali, 2013[131]). In Italy, CGIL initiated legal action against the
government for failing to transpose effectively the European Union Equality dir ectives.

204 
Conclusions
This chapter has shed new light on the role that collective bargaining and workers’ voice play for the quality
of the working environment in OECD countries. Good working conditions are a primary concern for
workers. They also matter for employers as low quality jobs have been found to be associated with higher
absenteeism, more health problems, increased labour turnover and, in the end, lower firm performance.
Improving working environments is, therefore, an area where mutually beneficial solutions can be (and are
already being) found through dialogue and negotiations between employers, unions and workers’
representatives.
In all OECD countries, basic standards with respect to safety and health provisions or working time are set
down by legislation. However, unions, workers’ representatives and employers also shape working
conditions in a variety of ways. First they can negotiate higher standards (or, in some specific cases,
derogations) in sectoral or firm-level collective agreements. Second, they can negotiate provisions in areas
other than those covered by the law, such as training or management practices. Third, they can change
working conditions through regular exchanges and negotiations at workplace level, via representative
(e.g. unions or works councils) or direct (e.g. town hall meetings) voice arrangements. Fourth, social
partners affect the quality of the working environment through lobbying and negotiating legislative changes
with governments.
Data on the quality of the working environment and collective bargaining are limited and do not allow causal
analyses to be carried out across OECD countries. Some bargaining systems appear to perform better in
terms of the quality of the working environment, which is on average higher in countries with well-organised
social partners and a large coverage of collective agreements – where the number of job resources
available to workers (e.g. autonomy, training and flexibility of the working time), in particular, is higher.
When considering the role of workers’ voice, the chapter has shown that the existence of direct forms of
workers’ voice and of mixed forms of voice are both correlated with a higher quality of the working
environment. By contrast, the presence of workers’ representatives in firms where there are no parallel
means of direct exchange between workers and managers is correlated with a lower quality of the working
environment (compared with firms with no workers’ voice arrangements at all). These results are mere
correlations and the data do not allow causal links to be identified. This chapter has suggested mechanisms
that could plausibly explain these results, namely that strained workers and non-cooperative employers
are both likely to self-select into these purely representative forms of voice.
The chapter has also provided a detailed analysis with several country examples of the role that collective
bargaining and different forms of workers’ voice arrangements play in setting standards in occupational
safety and health, working time, training and re-skilling policies, management practices, and the prevention
of workplace intimidation and discrimination. The implementation of high standards of safety and health
provisions as well as training or management practices remains more challenging in small and
medium-sized enterprises and in sectors with a relatively high share of non-standard employment.
However, the chapter includes examples of how social partners and policymakers in OECD countries have
tried to extend best practices across all types of firms. This could inspire similar initiatives in other contexts.

 205
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216 
Annex 4.A. Definition and sources of Job Quality

indicators
Annex Table 4.A.1. Definition of job demand and job resource variables
EWCS questions EWCS variable EWCS coding Final
coding
2015 2010 2005 (scale 0-1)
A. Job demands
1. Hard physical conditions
Painful positions (d1) Does your job involve tiring or painful Q30A Q24A Q11A Scale 1–7 1 if
positions? Q30A<4;
(all of the time – 0 otherwise.
never)
Heavy loads (d2) Does your job involve carrying or moving Q30C Q24C Q11C Scale 1–7 1 if
heavy loads? Q30C<4;
never)
Repetitive arm Does your main paid job involve repetitive Q30E Q24E Q11E Scale 1–7 1 if
movements (d3) hand or arm movements? Q30E<4;
never)
High temperatures (d4) Are you exposed at work to high Q29C Q23C Q10C Scale 1–7 1 if Q29C<4
temperatures which make you perspire even ;
when not working? (all of the time – 0 otherwise.
never)
Low temperatures (d5) Are you exposed at work to low temperatures Q29D Q23D Q10D Scale 1–7 1 if Q29D<3
whether indoors or outdoors? ;
never)
High noise (d6) Are you exposed at work to noise so loud that Q29B Q23B Q10B Scale 1–7 1 if
you would have to raise your voice to talk to Q29B<4;
people? (all of the time – 0 otherwise.
never)
Vibrations (d7) Are you exposed at work to vibrations from Q29A Q23A Q10A Scale 1–7 1 if
hand tools, machinery, etc.? Q23B<4;
never)
Fumes (d8) Are you exposed at work to breathing in Q29E Q23E Q10E Scale 1–7 1 if
smoke, fumes, powder or dust etc.? Q29E<6;
never)
Vapours (d9) Are you exposed at work to breathing in Q29F Q23F Q10F Scale 1–7 1 if
vapours such as solvents and thinners? Q29F<6;
never)
Chemical products (d10) Are you exposed at work to handling or being Q29G Q23G Q10G Scale 1–7 1 if
in skin contact with chemical products or Q29G<6;
substances? (all of the time – 0 otherwise.
never)
Hard physical conditions = 1 if (d1 + d2 + d3 + d4 +d5 + d6 +d7 + d8 + d9 + d10) ≥ 1; 0 otherwise.

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coding
2015 2010 2005 (scale 0-1)
2. Intimidation or discrimination
Bullying and harassment Over the past 12 months, during the course of Q81C Q71B Q29D Yes/No 1 if
(d11) your work have you been subjected to Q81C=Yes;
bullying / harassment? 0 otherwise.
Age discrimination (d12) Over the past 12 months at work, have you Q72A Q65A Q29G Yes/No 1 if
been subjected personally to age Q72A=Yes;
discrimination? 0 otherwise.
Discrimination linked to Over the past 12 months at work, have you Q72B Q65B Q29I Yes/No 1 if
race, ethnic background been subjected personally to discrimination Q72B=Yes;
or colour (d13) linked to race, ethnic background or colour? 0 otherwise.
Discrimination linked to Over the past 12 months at work, have you Q72C Q65C Q29H Yes/No 1 if
nationality (d14) been subjected personally to discrimination Q72C=Yes;
linked to nationality? 0 otherwise.
Gender discrimination Over the past 12 months at work, have you Q72D Q65D Q29E Yes/No 1 if
(d15) been subjected personally to discrimination Q72D=Yes;
on the basis of your sex? 0 otherwise.
Discrimination linked to Over the past 12 months at work, have you Q72F Q65F Q29K Yes/No 1 if
disability (d16) been subjected personally to discrimination Q72F=Yes;
linked to disability 0 otherwise.
Intimidation or discrimination = 1 if (d11 + d12 + d13 + d14 + d15 + d16) ≥ 1; 0 otherwise.
3. Work intensity
Work at very high speed Does your job involve working at very high Q49A Q45A Q20BA Scale 1–7 1 if Q49A<3
(d17) speed? (all of the time – 0 otherwise.
never)
Working with tight Does your job involve working to tight Q49B Q45B Q20BB Scale 1–7 1 if Q49B<3
deadlines (d18) deadlines? (all of the time – 0 otherwise.
never)
Long working hours (d19) How many hours do you usually work per Q24 Q18 Q8A Number of hours 1 if Q24>50;
week in your main paid job? 0 otherwise.
Not enough time to get the Do you have enough time to get the job done? Q61G Q51G Q25F Scale 1–5 1 if
job done (d20) Q61G>2;
(always – never) 0 otherwise.
Work intensity = 1 if (d17 + d18 + d19 + d20) ≥ 1; 0 otherwise.
4. Unsocial work schedule
Night work (d21) Normally, how many times a month do you Q37A Q32 Q14A Scale 1–17 1 if
work at night, for at least 2 hours between Q37A>1;
10.00 pm and 05.00 am? (never – more 0 otherwise.
than 20 times)
Work more than 10 hours How many times a month do you work more Q37D Q36 Q14E Scale 1–17 1 if
a day (d22) than 10 hours a day? Q37D>5;
(never – more 0 otherwise.
than 20 times)
Unsocial work schedule = 1 if (d21 + d22) ≥ 1; 0 otherwise.
5. Monotonous tasks
Monotonous tasks (d23) Generally, does your main paid job involve Q53D Q49D Q23D Yes/No 1 if
monotonous tasks? Q53D=Yes;
0 otherwise.
Monotonous tasks = 1 if d23 = 1; 0 otherwise.

218 

coding
2015 2010 2005 (scale 0-1)
B. Job resources
1. Social support at work
Help and support from Your colleagues help and support you Q61A Q51A Q25A Scale 1–5 1 if
colleagues (r1) Q61A<3;
Social support at work = 1 if r1 = 1; 0 otherwise.
2. Management support
Help and support from Your manager helps and supports you Q61B Q51B Q25B Scale 1–5 1 if
manager (r2) Q61B<3;
Respect from immediate Your immediate boss respects you as a Q63A .. .. Scale 1–5 1 if
boss (r3) person Q63A<4;
(strongly agree – 0 otherwise.
strongly disagree)
Work support from your Your immediate boss is helpful in getting the Q63D .. .. Scale 1–5 1 if
immediate boss (r4) job done Q63D<4;
strongly disagree)
Feedback from immediate Your immediate boss provides useful Q63E .. .. Scale 1–5 1 if
boss (r5) feedback on your work Q63E<4;
strongly disagree)
Management support = 1 if r1 = 1; 0 otherwise (2005-15).
Management support = 1 if (r1 + r2 + r3 + r4 + r5) = 5; 0 otherwise (2015 only).
3. Work autonomy
Order of tasks (r6) Are you able to choose or change your order Q54A Q50A Q24A Yes/No 1 if
of tasks? Q54A=Yes;
0 otherwise.
Methods of work (r7) Are you able to choose or change your Q54B Q50B Q24B Yes/No 1 if
methods of work? Q54B=Yes;
0 otherwise.
Pace of work (r8) Are you able to choose or change your speed Q54C Q50C Q24C Yes/No 1 if
or rate of work? Q54C=Yes;
0 otherwise.
Work autonomy = 1 if (r6 + r7 + r8) = 3; 0 otherwise.
4. Training (at least five days per year)
Training courses paid or Over the past 12 months, have you Q65A Q61A Q28A1 Yes/No 1 if
provided by the employer undergone training paid for or provided by Q65A=Yes;
(r9) your employer? 0 otherwise.
Training course duration Over the past 12 months, how many days in Q66 .. .. Scale 1–6 1 if Q66>3;
(r10) total did you spend in training paid for or (one day or less – 0 otherwise.
provided by your employer? 20 days or more)
Training = 1 if r9 = 1; 0 otherwise (2005-15).
Training (at least five days per year) = 1 if (r9 + r10) = 2; 0 otherwise (2015).
5. Flexibility of working time
Possibility to take a break You can take a break when you wish Q61F Q51F Q25E Scale 1–5 1 if
(r11) Q61F<4;
Working time How are your working time arrangements Q42 Q39 Q17A Scale 1–4 1 if Q42>2;
arrangements (r12) set? (imposed – free 0 otherwise.
choice)
Flexibility of working time= 1 if (r11 + r12) = 2; 0 otherwise.

 219
..: not available.

Note: Scale 1–7 refers to (1) all of the time, (2) almost all of the time, (3) around ¾ of the time, (4) around half of the time, (5) around ¼ of the
time, (6) almost never and (7) never; scale 1–5 refers to (1) always, (2) most of the time, (3) sometimes, (4) rarely and (5) never; scale 1–6
refers to (1) one day or less, (2) 2-3 days, (3) 4-5 days, (4) 6-9 days, (5) 10-19 days and (6) 20 days or more; and scale 1–4 to (1) they are set
by the company / organisation with no possibility for changes, (2) you can choose between several fixed working schedules determined by the
company/organisation, (3) you can adapt your working hours within certain limits (e.g. flexitime), (4) your working hours are entirely determined
by yourself.
Annex Figure 4.A.1. Change in the quality of the working environment by collective bargaining
systems in Europe
Unweighted averages across countries, employees aged 15-64, 2005-15
2005 2010 2015
A. Job demands
Average number
3.5
3
2.5
2
1.5
1
Predominantly Predominantly Organised decentralised Largely decentralised Fully decentralised Average
centralised and weakly centralised and and coordinated
co-ordinated coordinated
B. Job resources
Average number
3.5
3
2.5
2
1.5
1
C. Job strain
Incidence in percentage
%
40
35
30
25
20
15
10
Note: Average is the unweighted average of all European countries shown (Survey weights are used) in Figure 4.2. For a description of the
taxonomy of collective bargaining systems, see Annex 3.A. Data not available in 2010 for Switzerland.
Source: OECD estimates based on the European Working Conditions Survey (EWCS).

220 
Annex Figure 4.A.2. Change in subcomponents of the quality of the working environment by
collective bargaining systems in Europe
Ratio of incidence (base 1 for the overall average across countries), unweighted averages across countries, 2005-15
2005 2010 2015

JD1. Hard physical conditions JD2. Intimidation or discrimination
1.8 1.8
1.6 1.6
1.4
1.4
1.2
1.2
1
1 0.8
0.8 0.6
FD LD ODC PCC PCW FD LD ODC PCC PCW
JD3. Work intensity JD4. Unsocial work schedule
1.8 1.8
1.6 1.6
1.4 1.4
1.2 1.2
1 1
0.8 0.8
0.6 0.6
JD5. Monotonous tasks JR1. Social support at work

1.8 1.8
1.6 1.6
1.4 1.4
1.2 1.2
1 1
0.8 0.8
0.6 0.6
JR2. Management support JR3. Work autonomy

1.8
1.6 1.6
1.4
1.2
1.1
1
0.8
0.6 0.6
JR4. Training JR5. Flexibility of working time
1.8 1.8
1.6 1.6
1.4 1.4
1.2 1.2
1 1
0.8 0.8
0.6 0.6

 221
Note: FD: Fully decentralised; LD: Largely decentralised; ODC: Organised decentralised and coordinated; PCC: Predominantly centralised and
coordinated; PCW: Predominantly centralised and weakly co-ordinated. Average is the unweighted average of all European countries shown in
Figure 4.2 (Survey weights are used). For further details on definitions and constructions of the indicators, see Annex Table 4.A.1; and for a
description of the taxonomy of collective bargaining systems, see Annex 3.A. Data not available in 2010 for Switzerland.
Source: OECD estimates based on the European Working Conditions Survey (EWCS).

222 
Annex Table 4.A.2. Definition of workers’ voice arrangements and measures of the quality of the
working environment
EWCS questions EWCS EWCS coding Final coding
variable
A. Workplace representation
Employee representation (wr1) Does a trade union, works council or a similar Q71A Yes/No 1 if Q71A=Yes;
committee representing employees exist at your 0 otherwise.
company or organisation?
Regular meeting (wr2) Does a regular meeting in which employees can Q71C Yes/No 1 if Q71C=Yes;
express their views about what is happening in 0 otherwise.
the organisation exist at your company or
organisation?
Mixed voice = 1 if (wr1 + wr2) = 2; 0 otherwise.
Representative voice (union and non-union) = 1 if wr1 =1 and wr2 =0; 0 otherwise.
Direct voice = 1 if wr1 =0 and wr2 =1; 0 otherwise.
Safety and health delegate or Does health and safety delegate or committee Q71B Yes/No 1 if Q71B=Yes;
committee (wr3) exist at your company or organisation? 0 otherwise.
B. Occupational Health and Safety (OHS)1
Information about health and Regarding the health and safety risks related to Q33 Scale 1–4 1 if Q33=1;
safety risks (o1) performance of your job, how well informed would (very well informed – 0 otherwise.
you say you are? not at all well
informed)
Perception that work positively Does your work affect your health? Q74 Scale 1–3 1 if Q74=1;
affect health (o2) (yes, mainly 0 otherwise.
positively – no)
Perception that health is at risk Do you think your health or safety is at risk Q73 Yes/No 1 if Q73=Yes;
because of work (o3) because of your work? 0 otherwise.
Health-related leave, at least Over the past 12 months how many days in total Q82 Number of working 1 if Q82>9;
10 days per year (o4) were you absent from work due to sick leave or days 0 otherwise.
health-related leave?
Absence resulted from How many of these days of absence resulted from Q83A Number of working 1 if Q83A>9;
accident at work, at least 10 Accident(s) at work? days 0 otherwise.
days per year (o5)
Work-related health problem, How many of these days of absence resulted from Q83B Number of working 1 if Q83B>9;
at least 10 days per year (o6) health problems caused or made worse by your days 0 otherwise.
work (excluding accidents)
C. Working time2
Long working hours (w1) How many hours do you usually work per week in Q24 Number of hours 1 if Q24>50;
your main paid job? 0 otherwise.
Can take a break (w2) You can take a break when you wish Q61F Scale 1–5 1 if Q61F<4;
Flexible working time How are your working time arrangements set? Q42 Scale 1–4 1 if Q42>2;
arrangements (w3) (imposed – free 0 otherwise.
choice)
Work-life balance (w5) In general, how do your working hours fit in with Q44 Scale 1–4 1 if Q44<3;
your family or social commitments outside work? (very well – not at all 0 otherwise.
well)
Don't work during free time to Over the last 12 months, how often have you Q46 Scale 1–5 1 if Q46>3;
meet work demand (w6) worked in your free time to meet work demands? (daily – never) 0 otherwise.
Working more hours than How many hours per week would you prefer to Q25 Number of preferred 1 if Q24>Q25;
desired (w7) work at present? hours or same
number of hours as
actually worked
How many hours do you usually work per week in Q24 Number of hours 0 otherwise.
your main paid job?

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EWCS questions EWCS EWCS coding Final coding

variable
D. Management practices
Order of tasks (m1) Are you able to choose or change your order of Q54A Yes/No 1 if Q54A=Yes;
tasks? 0 otherwise.
Method of work (m2) Are you able to choose or change your methods Q54B Yes/No 1 if Q54B=Yes;
of work? 0 otherwise.
Pace of work (m3) On the whole, is your pace of work dependent, or Q50D Yes/No 1 if Q50D=Yes;
not, on automatic speed of a machine or 0 otherwise.
movement of a product?
Team work (m4) Do you work in a group or team that has common Q58 Yes/No 1 if Q58=Yes;
tasks and can plan its work? 0 otherwise.
Task rotation (m5) Does your job involve rotating tasks between Q55 Yes/No 1 if Q55=Yes;
yourself and colleagues? 0 otherwise.
Self-assessment of own work Generally, does your main paid job involve Q53B Yes/No 1 if Q53B=Yes;
(m6) assessing yourself the quality of your own work? 0 otherwise.
E. Intimidation and violence at work
Bullying / harassment (v1) Over the past 12 months, during the course of Q81C Yes/No 1 if Q81C=Yes;
your work have you been subjected to bullying / 0 otherwise.
harassment?
Verbal abuse (v2) Over the last month, during the course of your Q80A Yes/No 1 if Q80A=Yes;
work have you been subjected to verbal abuse? 0 otherwise.
Unwanted sexual attention (v3) Over the last month, during the course of your Q80B Yes/No 1 if Q80B=Yes;
work have you been subjected to unwanted 0 otherwise.
sexual attention?
Threats or humiliating Over the last month, during the course of your Q80C Yes/No 1 if Q80C=Yes or
behaviours (v4) work have you been subjected to threats? Q80D=Yes;
Over the last month, during the course of your Q80D 0 otherwise
work have you been subjected to humiliating
behaviours?
Physical violence (v5) Over the past 12 months, during the course of Q81A Yes/No 1 if Q81A=Yes;
your work have you been subjected to physical 0 otherwise
violence?
Sexual harassment (v6) Over the past 12 months, during the course of Q81B Yes/No 1 if Q81B=Yes;
your work have you been subjected to sexual 0 otherwise
harassment?
F. Discrimination at work
Age (d1) Over the past 12 months at work, have you been Q72A Yes/No 1 if Q72A=Yes;
subjected personally to age discrimination? 0 otherwise.
Ethnic background/race (d2) Over the past 12 months at work, have you been Q72B Yes/No 1 if Q72B=Yes;
subjected personally to discrimination linked to 0 otherwise.
race, ethnic background or colour?
Nationality (d3) Over the past 12 months at work, have you been Q72C Yes/No 1 if Q72C=Yes;
nationality?
Sex (d4) Over the past 12 months at work, have you been Q72D Yes/No 1 if Q72D=Yes;
subjected personally to discrimination on the 0 otherwise.
basis of your sex?
Religion (d5) Over the past 12 months at work, have you been Q72E Yes/No 1 if Q72E=Yes;
religion?
Disability (d6) Over the past 12 months at work, have you been Q72F Yes/No 1 if Q72F=Yes;
disability?
Sexual orientation (d7) Over the past 12 months at work, have you been Q72G Yes/No 1 if Q72G=Yes;
sexual orientation?
-: not applicable.

224 
1. Scale 1–4 refers to (1) very well informed, (2) well informed, (3) not very well informed and (4) not at all well informed; and scale 1–3 to (1)
yes, mainly positively, (2) yes, mainly negatively and (3) no.
2. Scale 1–5 refers to (1) always, (2) most of the time, (3) sometimes, (4) rarely and (5) never; scale 1–4 related to w2 (flexible working-time
arrangements) refers to (1) they are set by the company / organisation with no possibility for changes, (2) you can choose between several fixed
working schedules determined by the company/organisation, (3) you can adapt your working hours within certain limits (e.g. flexitime), (4) your
working hours are entirely determined by yourself; scale 1–4 related to w4 (work-life balance) refers to (1) very well, (2) well, (3) not very well
and (4) not at all well; and scale 1–5 related to w5 (don't work during free time to meet work demand) refers to (1) daily, (2) several times a
week, (3) several times a month, (4) less often and (5) Never.

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Notes
1
See the influential report by the Stigliz-Sen-Fitoussi Commission (Stiglitz, Sen and Fitoussi, 2009[144]).
2
Gallie (2007[141]) distinguishes between “inclusive regimes” (e.g. European Nordic countries), where
policies are designed to extend both employment and workers’ rights as widely as possible in the working
age population, and “dualist regimes” (e.g. Mediterranean countries), where overall employment levels are
less of a concern, while strong rights are guaranteed for a core of workers, at the expense of poor
conditions for workers at the margins of the workforce. Yet another regime identified is the “market
employment regime” (e.g. Anglo-Saxon countries), characterised by an emphasis on minimal employment
regulation and an assumption that market adjustments will lead to higher employment levels and rewards
for workers in line with their marginal productivity. Building on the varieties of capitalism typology proposed
by Amable (2003[142]), Holman et al. (2012[143]) also propose to distinguish between different institutional
regimes of job quality, extending it to a larger set of countries. They conclude that social democratic
regimes (e.g. Nordic states) have the highest proportion of high-quality jobs, continental regimes
(e.g. Germany, France) the second highest, liberal regimes (e.g. the United Kingdom) the third highest,
and southern European (e.g. Spain, Greece) and transitional regimes (e.g. Eastern European countries)
the lowest proportion of high-quality jobs.
3
In some countries they also manage or participate in managing sickness insurance schemes
(e.g. Austria) or parental leave benefit schemes (e.g. Denmark and Italy).
4
Non-standard forms of work refers to all forms of work that are not based on a full-time open-ended
employment contract. Involuntary non-standard forms of work therefore thus refers to cases such as
involuntary temporary work. An example of union limiting the use of involuntary non-standard forms of work
is that of IG Metall in Germany, which responded to the proliferation of temporary agency work in the early
2000s by negotiating direct agreements with companies defining a maximum quota of agency workers.
These agreements often mandate the company to offer wages in line with the metalworking industry
agreement. Furthermore, worker representation structures at company level – such as works
councils – are also instrumental in discussing and regulating the use of precarious work contracts by
management.
5
The JDC model was extended in the 1980s with the addition of a social support dimension – see Johnson
and Hall (1988[145])and Johnson, Hall and Theorell (1989[154]).
6
Other interesting dimensions, such as opportunities for career advancement, or intrinsic interest could
not be systematically added due to comparability issues across countries and/or time, or due to data
unavailability.
7
The job demand “work intensity” is captured by two questions (see Annex 4.A) that relate both to working
time (“long hours”) and work organisation (“pace of work”).
8
Variation across systems is very limited when it comes to outcomes like access to Occupational Safety
and Health information, or workplace adaptation to workers’ health conditions.
9
Ideally, analyses of the effect of various forms of workers’ voice should take account of this variation in
the rights granted to representative institutions, to arrive at nuanced and precise assessments.
Unfortunately, comparative data with this level of precision is largely missing. Further data collection efforts
on this dimension are needed.

226 
10
As explained in Chapter 2, direct voice, as conceptualised in this publication should not be confused
with freedom of speech at the workplace. Rather, it corresponds to cases where workers’ voice takes the
form of institutionalised, regular meetings between employers and workers for the latter to express their
concerns. The contrast with representative forms of voice comes from the presence or absence of a
representative intermediary between workers and managers. The distinction between direct and
representative forms of voice is a regular feature in the literature – see e.g. Duran and Corral (2016[152]),
Gallie and Zhou (2013[150]), Bryson et al. (2013[151]).
11
In addition, workers in more demanding jobs are also more likely to be aware that representative
institutions at the workplace exist at all, since they are more likely to have sought their help. This could
also partly explain the results observed in Figure 4.4 and following, since workers’ access to various
workplace arrangements is captured through a survey item asking workers about the situation at their
workplace (and, therefore, depends on their knowledge of existing institutions).
12
In the European Union, the Directive 2002/14/EC requires the establishment of adequate structures for
employee information and consultation. In some countries, the establishment of workers representation is
mandatory after a certain threshold. In others, such as Germany, Greece, Portugal or Spain, it hinges on
an employee or trade union initiatives (Donaghey et al., 2013[153]).
13
The plausibility that these results are driven by the fact that non-cooperative employers self-select into
that type of voice arrangements is reinforced by the fact that workers with access to only representative
forms of voice represent the lowest category (14% in 2015, compared to 33% with no voice arrangements).
The logic here is that we do not presume a majority of employers to be non-cooperative (Source: OECD
estimates based on the 6th European Working Conditions Survey, 2015)
14
Standardised incidence rates of accidents correct for the variation in the size of various economic
sectors, characterised by higher or lower risks of accidents between countries to capture the variation in
prevention measures, keeping the structure of the economy constant.
15
Council Directive 89/391/EEC, 1989.
16
The Amsterdam Institute for Advanced Labour studies (AIAS) compiled a sectoral database of
collective agreements in the retail trade sector for the EU member states. See
https://wageindicator.org/Wageindicatorfoundation/projects/barcom/barcom and Besamusca, Kahancová
and Tijdens (2018[86]).
17
The identification assumption is that, by following the same establishment over time, changes in safety
outcomes are attributable to the union election and the election outcome.
18
Source: OECD calculations based on CVTS 5 Scientific Use files. These figures are the unweighted
average of countries covered by the data, namely: Belgium, the Czech Republic, Denmark, Estonia,
Finland, France, Hungary, Italy, Latvia, Lithuania, Luxembourg, Norway, Poland, Portugal, the
Slovak Republic, Slovenia, Spain, Sweden, and the United Kingdom (survey weights are used).
19
The ILO recommends a minimum of one labour inspectors for 10 000 workers in industrial market
economies (ILO, 2006[146]). That proportion is not reached in about half of European Union Member States
(Menéndez et al., 2009[67]).
20
Numerous studies on occupational health have investigated the impact of working very long hours on
workers’ well-being. Results suggest that working long hours impairs workers’ physical and mental health
outcomes, particularly when workers have little control on the number of hours they work and/or on their
work schedule – see the literature review by Bassanini and Caroli (2015[147]).

 227
21
For instance, Lepinteur (2019[93]) using data from the European Community Household Panel, argues
that reductions in weekly working hours introduced in Portugal and France generated significant increases
in job satisfaction and leisure.
22
The Working Time Directive (2003/88/EC) sets minimum standards for working hours and ensures that
workers are not working too long hours and have adequate rest and holidays. Article 15 also allows
Member States to apply or introduce laws, regulations or administrative provisions – and promote the
application of collective agreements – that are more favourable to the protection of workers’ health and
safety. With very few exceptions, it applies to all sectors (public and private) and to all workers.
23
This may to a certain extent have inverted the favourability principle which stipulates that a lower-ranking
agreement can only take precedence over a higher-ranking one if more beneficial to the worker for some
bargaining items
24
Notably during the 2008 economic crisis when short time schemes were introduced to facilitate labour
market resilience (for instance Chômage partiel in France and Kurzarbeit in Germany).
25
ISTAT, Contratti collettivi e retribuzioni contrattuali.
26
On the other hand, in the non-profit, caring sector, union members work more unpaid extra hours than
covered non-members because of their specific pro-social motivations.
27
The data do not allow computing the proportion of workers covered which is likely to be higher as large
firms are more likely to be covered by a collective agreement including training provisions.
28
Directive 2002/14/EC of the European Parliament and of the Council of 11 March 2002.
29
These practices have been listed among the High Performance Work Practices that foster performance
at company level (OECD, 2016[140]).
30
A specific, but not less important, form of discrimination is discrimination against union members or
union representatives. Even if union members and union representatives are protected by the right to
organise, evidence for France shows that union representatives are paid about 10% less than other
workers, while union members are paid around 4% less (Bourdieu and Breda, 2017[149]).
31
Although further analysis is necessary to determine whether this increase corresponds to improved
reporting, a greater awareness of what amounts to discrimination, or an actual increase in volume.
32
These statistics are slightly lower when using data from the 2015 wave of the European Working
Conditions Survey. In this data, age discrimination was the most frequent type of discrimination in the
workplace in 2015 (3.7% of the respondents declared having experienced it in the last 12 months), followed
by gender discrimination and that linked to nationality (2.3% each), ethnic background (1.9%), disability
(1.1%), religion (0.9%) and sexual orientation (0.6%). Eurobarometer data are reported in the text because
they allow looking at the incidence of particular type of discrimination among vulnerable groups, which the
EWCS does not allow to do. Further analysis would be necessary to assess the origins of the difference
between the two surveys.
33
The ILO Convention 111 approved in 1958 was one of the first legal instruments against discrimination.
Currently, about two-thirds of countries worldwide prohibit discrimination in employment based on gender,
race, religion or disability while only 37% prohibit discrimination in employment based on sexual orientation
(Valfort, 2017[148]).

228 
34
One of the major points of contention between the American Federation of Labor and Congress (AFL)
and the Congress of Industrial Organizations (CIO) in the era immediately after the CIO split off, was the
CIO's willingness to include black workers, who were excluded by the AFL.
35
Although they have not fully solved the issue. Researchers found that 10 years after the Directive’s
introduction, some unions in Central and Eastern European countries were adopting a “no problem here”
stance (Wrench, 2015[133]).

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5 Facing the future of work: How to

make the most of collective
bargaining
The purpose of this final chapter is to identify the role of labour relations in
shaping the future of work. The chapter discusses how collective bargaining
and workers’ voice can be flexible tools complementing labour market
regulation in fostering a more rewarding and inclusive future of work. The
chapter then reviews what type of government intervention may be required
to keep bargaining systems fit for purpose and to make the most of collective
bargaining in a changing world of work. Finally, the chapter documents how
existing institutions and social partners are adjusting to new challenges in the
labour market, as well as the role of emerging actors and practices.

230 
In Brief
Key findings
Collective bargaining and workers’ voice can help addressing the challenges posed by a changing world
of work. As demographic and technological changes unfold, collective bargaining can allow companies
to adjust wages, working time, work organisation and tasks to new needs in a flexible and pragmatic
manner. It can help shaping new rights, adapting existing ones, regulating the use of new technologies,
providing active support to workers transitioning to new jobs and anticipating skills needs.
Yet, the number of workers who are members of unions and covered by collective agreements have
declined in many OECD countries. In addition, increases in different forms of non-standard employment
in a number of countries pose a challenge to collective bargaining, as non-standard workers are
under-represented by trade unions. This under-representation reflects both practical difficulties in
organising non-standard workers and the historical focus of collective bargaining on standard
employees, but also legal obstacles to collective bargaining for some non-standard workers such as the
self-employed. Indeed, while labour law grants all salaried employees – whether in a standard or
non-standard relationship – an undisputed legal right to collective bargaining, for workers usually
classified as self-employed this right may be seen as infringing competition law. This is the case even
though the International Labour Organisation (ILO) Convention on the right to organise and bargain
collectively refers to workers in general. In this context, this chapter argues that:
 Enforcing the correct classification of workers and fighting misclassification is of
particular importance in ensuring that workers benefit from the protection and rights to
which they are entitled.
 However, a significant number of workers may still fall in a “grey zone” between the usual
definitions of employee and self-employed, where genuine ambiguity exists about their
employment status. For those workers, who share vulnerabilities with salaried
employees, and for some self-employed workers in unbalanced power relationships,
adapting existing regulations to extend collective bargaining rights may be necessary.
For instance, several OECD countries have already sought to grant collective bargaining
rights to some of these workers through tailored interventions in the labour law or explicit
exemptions to the law prohibiting cartels.
While each country’s history, situation and regulatory settings are different, this chapter argues that,
despite the above-mentioned challenges, collective bargaining systems can still play a key role in
promoting inclusive labour markets for workers and a level-playing field for all companies, including new
ones. For example:
 Social partners have developed strategies to reach potential members in non-standard
forms of work, first in challenging workers’ status and classification, but also through
lobbying on behalf of non-standard workers, adapting their bargaining practices to be
more inclusive, or engaging in initiatives aimed at strengthening these workers’ voice. In
some OECD countries, unions have adapted their legal status to allow self-employed
workers to become members, while others have created dedicated branches for non-
standard workers. New independent unions have also been created.

 231
 New vehicles for representing workers’ interests have been developing in some
OECD countries, such as Worker Centers or the Freelancers Union in the United States,
or co-operatives of workers in some European countries. Yet, while these forms of
workers’ organisations can improve links and communication between non-standard
workers, they cannot replace unions. In particular, they do not have the legal mandate
to bargain collectively on behalf of their members or the ability to deliver on negotiated
agreements. Therefore, they can complement unions rather than be a substitute for
them; co-operation between traditional and new forms of workers’ organisation is now
emerging in some contexts.
 Employers’ organisations are also being put to the test by changes to the world of work.
They have an interest in ensuring a level-playing field for their members in the face of
new competitors, who may circumvent existing labour regulations – for instance, digital
platforms often consider themselves as matchmakers rather than employers.
 Successful examples of bargaining in the temporary work agency sector (which emerged
as an innovative form of employment decades ago) or in sectors where non-standard
work is common, such as the cultural and creative industries, have proven that systems
are able to adjust to cover different and new forms of work.
 A few innovative collective agreements have also recently been signed in European
OECD countries between unions and companies – including digital platforms, but they
remain very limited. Platforms have taken some initiatives to allow workers to express
their concerns and pre-empt the introduction of new legislation on the way they operate.
Introduction
The weakening of labour relations discussed in Chapter 2 poses serious challenges for workers’ rights,
benefits and protections. It also increasingly leaves employers and employers’ organisations without a
clear counterpart for discussions on sector- or firm-specific issues. This is problematic because the need
for coordination mechanisms to overcome collective action problems and reach a balance between the
interests of workers and employers has not gone away. Furthermore, the weakening of collective
bargaining may also leave the door open to other forms of social conflict, such as boycotts or social media
campaigns, and other types of regulation, as the scope for “self-organisation” among employers and
workers on the ground is reduced.
While collective bargaining and workers’ voice face increasing challenges in a changing world of work,
they can nonetheless help address its increasing complexity and diversity. There are many examples
showing that social partners and collective bargaining systems can adjust, develop new strategies and
reshape existing institutions. In particular, they can contribute to addressing the realities of global markets,
increased competition and fragmentation of production, and ensure that all workers and companies,
including small and medium-sized enterprises, reap the benefits of technological innovation, organisational
changes and globalisation as well as face – see European Commission (2018[1]) and (2019[2]).
In this context it is important to acknowledge the potential flexibility offered by collective bargaining in
seeking solutions to issues of common concerns1 and to discuss how they can complement public policies
in social protection systems, life-long learning schemes and the regulation of employment relationships
(ILO, 2019[3]). This chapter focuses on the role of collective bargaining as a “fundamental principle and
right at work”2 and a key labour market institution that allows reaching mutually beneficial agreements
about work organisation and conditions, and provides room for interactions between social partners.

232 
However, the precise role played by collective bargaining in shaping the future of work will depend on
national institutional settings, practices and traditions (OECD, 2018[4]).
This chapter assesses the extent to which existing models remain fit for purpose, and discusses how
traditional actors can adjust to the new challenges.3 Section 5.1 illustrates how collective bargaining can
complement public policies in strengthening labour market security and adaptability. Section 5.2 discusses
adaptations to existing regulations that may be required to ensure that all workers in vulnerable situations
get adequate worker representation and access to collective bargaining. Section 5.3 discusses the
strategies developed by social partners to reach out to those in non-standard and new forms of work and
business. Section 5.4 reviews other forms of labour organisation that are emerging in some
OECD countries and their relations with the more traditional ones.
5.1. Collective bargaining in a changing world of work
5.1.1. Collective agreements can be flexible tools to address some of today’s and
tomorrow’s challenges
Through collective bargaining, trade unions (simply called “unions” hereafter) play a crucial role articulating
and pressing demands for higher wages, as well as representing the collective interests of workers more
generally and facilitating an exchange between workers and their employers on various aspects of the
working life (Freeman and Medoff, 1984[5]).
Depending on national regulatory settings as well as actual practices and traditions, unions’ access to
information, consultation and participation in decision making in the workplace can also enhance
occupational health and safety and improve work organisation – e.g. by fostering high performance work
practices, such as team work, autonomy, task discretion, mentoring, job rotation, and applying new learning
– see OECD (2016[6]) and Chapter 4. Through collective agreements, in particular sectoral agreements
that also allow covering small and medium-sized enterprises, collective bargaining can also help spreading
best practices in terms of personnel management, training, health and safety, technology usage,
insurance, or retirement packages.
When undertaken in a constructive spirit, accommodating the need for balancing inclusiveness and
flexibility (OECD, 2018[7]), and within a framework that guarantees the respect of fundamental labour rights
and a balance in bargaining power, collective bargaining can help companies respond to demographic and
technological change. Collective bargaining allows them to adapt pay, working time, work organisation and
jobs themselves, to new needs, in a more flexible and pragmatic – but yet fair – manner than that entailed
by changing labour law.
Recent agreements in some OECD countries show that new issues related to work-life balance, increased
flexibility around working time arrangement, or regulation of the use of new technological tools, are gaining
ground in collective bargaining – see European Commission (2018[1]).
In France for instance the “right to disconnect”, i.e. the right not to read and answer work-related emails
and calls outside working hours, was provided in 2014 in a sectoral agreement for business consulting,
followed by the wholesale trade sector in 2016. These agreements introduce “an obligation to disconnect
distant communication tools”. Similar provisions have been signed at firm level, for instance by the
insurance company AXA, the energy company Areva and the telecommunication company Orange. The
HR Director of Orange then published a very influential report on digital transformation and quality of life
at work (Mettling, 2015[8]). The report was the basis for a law in 2017 which acknowledged the “right to
disconnect” among the topics of mandatory annual negotiations with unions. In the absence of an
agreement, employers have to draft a charter in consultation with the works council or the employee
representatives.

 233
Similar agreements including the recognition of the right to turn off company phones or to not answer
work-related calls outside working hours have been signed at company level. Volkswagen was first in 2012
by preventing email exchanges on its internal servers between 6.15pm and 7am. AXA and the Spanish
Trade Union Confederation of Workers’ Commissions (CCOO) also concluded a similar agreement in 2017
in Spain.
There are also signs that the more general issues of work-life balance and working time flexibility are
gaining prominence in collective agreements, possibly reflecting changes in workers’ preferences and
company recognition of the negative impact of job strain on productivity (see Chapter 3).
Finally, unions and employers are engaging in “algorithm negotiations”, i.e. they are including as a subject
of bargaining the use of artificial intelligence, big data and electronic performance monitoring (“people
analytics”) in the workplace, as well as their implications for occupational health and safety, privacy,
evaluation of work performance and hiring and firing decisions (De Stefano, 2018[9]). Several collective
agreements have started regulating the use of technology not only in monitoring workers but also in
directing their work (Moore, Upchurch and Whittaker, 2018[10]).
5.1.2. Collective bargaining can complement public policies in enhancing labour market
security and adaptability
The OECD’s work on displaced workers (OECD, 2018[4]) has highlighted the significant role that collective
bargaining, in particular at the sectoral level, can play in enhancing labour market security 4 and
strengthening workers’ labour market adaptability. As evolving demands for products and services as well
as technological change are quickly affecting skills needs, social partners can provide active support to
workers displaced from their existing jobs to help them back into good jobs.
The Swedish Job Security Councils (JSCs) are one of the most notable examples of this (OECD, 2015[11]).
They provide support and guidance to displaced workers, even before displacement occurs, as well as
access to training and reskilling opportunities in the case of plant closures and mass layoffs. JSCs allow
companies and unions to trade exemptions from the “last in, first out” 5 rule for collective dismissals in
exchange for a timely6 and effective reallocation of displaced workers (Engblom, 2017[12]). JSCs are jointly
owned by employers’ organisations and unions (the government has no role). Their funding (which comes
entirely from employers) is negotiated in collective agreements along with wage increases and unions
frequently hold back on the latter to safeguard JSC funding. JSCs also illustrate the advantage of sectoral
bargaining, which allows to distribute the risks and the accompanying costs of displacement over an entire
sector. All workers covered by a collective agreement are covered by the JSC, including non-union
members. To be eligible, workers need to have worked in their company for at least 12 months. JSCs are
a complement to the Public Employment Service (PES). They can provide a top-up to unemployment
benefits as well as coaching, training and upskilling services. A similar model to the Job Security Councils
exists in Austria, where Outplacement Labour Foundations provide assistance, guidance, reskilling
solutions and practical training to displaced workers. They also provide extended unemployment
insurance, especially to those workers most in need.
Beyond supporting displaced workers, Chapter 3 has shown that social partners can also play a role in
anticipating skills needs. For instance, the JSCs’ upskilling services are partly based on a skills barometer
which they run twice a year and which allows JSCs to anticipate skills needs. In addition to “outplacement”
foundations, Austria also has Inplacement Labour Foundations which have a more forward-looking
element and help companies/sectors obtain qualified personnel in case of shortage. Because Labour
Foundations are owned by the social partners, skills needs can be identified swiftly. In Germany, a 2016
agreement in the metal, engineering and technology sector titled “Training and qualification for industry
4.0 – managing change successfully”, committed to analysing all vocational and lifelong training
programmes offered by the industry to assess their adequacy to the growing use of data exchange and
automation in manufacturing. More generally, in several OECD countries, social partners are represented

234 
on sectoral skills councils, which produce industry-specific long-term projections to ensure that current
qualifications meet future demand for skills – see Chapter 4 and OECD (2019[13]).
In a time of rapid change and despite the decline in membership and coverage, the role of social partners
in finding tailor-made solutions, managing transitions, anticipating and filling skills needs may, therefore,
be increasingly important.
5.1.3. But challenges are accumulating…
Chapter 2 has shown how, over the last three decades, collective bargaining systems have been under
increasing pressure. The rise of different forms of non-standard work in a number of OECD countries poses
an additional challenge to collective bargaining, as non-standard workers are less likely to be unionised than
standard workers (Figure 5.1). With the exception of Israel, this is the case even when controlling for
composition effects (linked to gender, age, education, industry, occupation, firm size and part-time vs.
full-time employment).7 On average, when controlling for composition effects, the ratio of trade union density
among non-standard workers relative to standard workers is not significantly higher in countries where trade
union density among standard workers is higher and is remarkably similar across countries in all three
panels.8 This suggests that the lower unionisation of non-standard workers does not depend on
country-specific characteristics but rather reflects difficulties in organising non-standard workers that are
inherent to the non-standard status itself.
Figure 5.1. Non-standard workers are underrepresented by trade unions

Actual and adjusted ratio of trade union density among non-standard workers relative to standard workers (%), latest
available year
Actual ratio (↗) Ratio adjusted for individual characteristics

A. Low union density among standard workers B. Intermediate union density C. High union density
(less than 20%) among standard workers among standard
(20 to 50%) workers (50% or more)
100 100 100
90 90 90
80 80 80
70 70 70
60 60 60
50 50 50
40 40 40
30 30 30
20 20 20
10 10 10
0 0 0
Note: Countries are grouped by degree of unionisation among standard workers. Figures refer to 2010-12 for Greece and the Slovak Republic; 2013
for France; 2015 for Germany and Hungary; 2016 for Finland; 2014-16 for Austria, Belgium, the Czech Republic, Denmark, Iceland, Israel, Italy,
Lithuania, the Netherlands, Norway, Poland, Portugal, Slovenia, Spain and Switzerland; 2017 for Canada, Chile, Colombia, Estonia, Ireland, Korea,
Sweden, the United Kingdom and the United States; and 2018 for Australia and Mexico. Average is the unweighted average of countries shown in
each panel (excepted Estonia in Panel A).
Non-standard workers are those without an open-ended employment contract. The precise categories of workers included in the chart differ across
countries (for further details see Annex 5.A). The adjusted ratio for individual characteristics is based on the marginal effect of being in a non-standard
form of work relative to being in an open-ended contract calculated from a probit regression controlling for sex, age groups, educational levels,
industry, public vs private sector (except for Ireland), occupation, firm size (except for the United States) and full-time vs. part-time employment. The
data necessary for this adjustment are not available for Estonia.
The correlation between the adjusted ratio and trade union density among standard workers is weak (0.39) and statistically significant at the 5% level
but becomes statistically insignificant (and even weaker, 0.24) when excluding Finland and Iceland.

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Source: OECD estimates based on the Labour Force Survey (LFS) for Canada, the Encuesta de Caracterización Socioeconómica Nacional (CASEN)
for Chile, the Gran Encuesta Integrada de Hogares (GEIH) for Colombia, the Finnish Working Life Barometer (FWLB) for Finland, the Enquête
statistique sur les ressources et conditions de vie (SRCV) for France, the German Socio-Economic Panel (SOEP) for Germany, the Quarterly
National Household Survey (QNHS) for Ireland, the Encuesta Nacional de Ocupación y Empleo (ENOE) for Mexico, the Labour Force Survey (LFS)
for the United Kingdom, the Current Population Survey (CPS), May Supplement for the United States and the European Social Survey (ESS) for all
other European countries not listed above (excepted Estonia, Hungary and Sweden) and Israel. For Australia, Estonia (actual ratio only), Hungary,
Korea and Sweden, actual ratios are based on data provided by national statistical authorities: Characteristics of Employment (COE) Survey for
Australia, Labour Force Survey (LFS) for Hungary, Economically Active Population Survey (EAPS) for Korea and Labour Force Survey (LFS) for
Sweden, while adjusted ratios are OECD estimates based on the Household, Income and Labour Dynamics in Australia (HILDA) for Australia, the
European Social Survey (ESS) for Estonia, Hungary and Sweden and the Korean Labor and Income Panel Study (KLIPS) for Korea.
In particular, non-standard workers face practical difficulties and legal obstacles in joining unions
(see Section 5.1.4 below). Their lower unionisation rates may also be the result of unions historically focusing
on standard workers’ needs, rather than those of non-standard ones. However, as discussed in previous
chapters, empirical evidence for insider-outsider theories arguing that unions neglect the interest of outsiders is
partial and mixed. Research based on the content of collective agreements shows that the fact that unions take
into account the concerns of agency workers does not depend on their membership composition (Benassi and
Vlandas, 2016[14])
5.1.4. …and there are legal obstacles to overcome
Beyond individual-level barriers, the organisation and representation of some non-standard forms of
employment is hindered by concrete legal obstacles. If ILO Convention 98 on the right to organise and bargain
collectively refers to workers in general9, in practice, the right to bargain for non-salaried workers is subject to
legal discussion as possibly infringing the application of antitrust regulations (Aloisi, 2018[15]; Linder, 1999[16]).
As illustrated in Figure 5.2, while salaried workers face only practical difficulties in exercising their collective
rights (see Section 5.3 and Section 5.4 below), workers in the “grey zone” between dependent employment and
self-employment – see Chapter 4 in OECD (2019[17]) and Box 5.1 below – as well as genuine self-employed
workers, who might nonetheless be in unbalanced power relationships with their employer/client, may also be
barred from bargaining collectively due to laws prohibiting cartels, which tend to consider them as “undertakings”
(Daskalova, 2018[18]).
Traditionally, the primary objective of competition law has been to defend consumers from anti-competitive
practices by sellers. When this objective came into contradiction with the labour law objective of protecting
workers, courts and legislators have intervened to clarify legal interactions. In particular, courts have detailed
the conditions under which collective bargaining could be exempt from the cartel prohibition established in
competition law. For instance, the US Clayton Antitrust Act of 1914 states that “the labor of a human being is
not a commodity or article of commerce”. Therefore, “labor (…) organizations, instituted for the purposes of
mutual help, [should not] be held or construed to be illegal combinations or conspiracies in restraint of trade,
under the antitrust laws” (§7 Clayton Act, 15 U.S.C. § 18). In EU competition law, the clarification came from
the Court of Justice in the so-called Albany case (C-67/96) – which arose from a dispute between a company
and a pension fund regulated by a collective agreement in 1999. In this instance, the European Court of Justice
also ruled that collective agreements for employees fall outside the scope of competition law.10
However, as forms of work become more heterogeneous and self-employment increases, especially in the
context of platform-mediated services, new challenges face courts and legislators. The standard approach in
antitrust enforcement has often been to consider all self-employed workers as undertakings and therefore any
collective agreement reached by self-employed workers – including those in the “grey zone” and self-employed
workers in an unbalanced power relationship – as a cartel.
In Ireland, for instance, the national competition authority decided in 2004 that self-employed actors could not
set tariffs and contract terms collectively.11 In the Netherlands, in 2006 and 2007, associations representing

236 
freelance workers in the performing arts sector and an association representing orchestras signed an
agreement that included a minimum fee for self-employed musicians temporarily replacing orchestra members.
Reacting to this, the Dutch competition authority issued a reflection document warning that the setting of
minimum tariffs by a union representing the self-employed was a price-fixing scheme contrary to competition
law.12 Following this statement, the employer association withdrew from the agreement (Daskalova, 2018[18]).
The argument that collective bargaining for self-employed workers was incompatible with competition law has
also been used in the United States by Uber to challenge a 2017 ordinance by the City of Seattle that allowed
drivers to unionise and bargain together.13
Figure 5.2. Access to collective bargaining for different forms of employment, current situation
Non-standard
Standard employment
employment
Yes
Employee?
No
Yes False
self-employed?
No
Ambiguity No
remains?
Yes
Full-time, open-ended Part-time and temporary Genuine

employees (incl. casual, Grey zone
employees self-employed
on-call and TWA workers)
Access varies depending

Yes, but with practical Limited by competition
Yes on national legislation or
difficulties regulations
court ruling
Access to collective bargaining?

Note: The figure maps standard and non-standard employment into the different categories of workers. Diamonds correspond to classification
decisions that can be taken either by the parties (e.g. stipulated in a written contract between employers and workers) or by adjudicators (courts
or enforcement agencies). Grey diamonds refer to decisions that are most often taken by adjudicators. The bottom rectangles refer to access to
collective bargaining.

 237
Box 5.1. Who are the workers in the grey zone?

In most cases where individuals are falsely classified by the parties as self-employed (e.g. in a written
contract between employers and workers), courts will be able to determine this relatively easily using
the criteria and tests that have been developed in statutory legislation or jurisprudence (see Figure 5.2).
In establishing whether a worker is an employee, courts typically look at: financial dependence; control
and subordination; the worker’s integration in the organisation; who provides the tools, materials or
machines; the regularity of payments; the extent to which the worker takes on financial/entrepreneurial
risk; the degree of discretion over the continuation of the relationship, etc.
However, there are also cases where a genuine ambiguity remains since test criteria may point in
different directions. These cases fall in a “grey zone” between self- and dependent employment.
Workers in this grey zone, who are usually formally classified as self-employed, share a number of
characteristics with dependent employees, usually resulting in an unbalanced power relationship with
their employer/client. There is therefore a case for extending to them certain rights and protections
usually granted to employees by labour law.
Countries have taken different routes to extend rights and protections to workers in the grey zone. Some
countries have identified very specific occupations to which certain labour rights and protections have
been extended. Other countries have focussed on the specific category of workers who are dependent
on one employer/client for most of their income (the so-called “dependent” self-employed).
A handful of countries have relied on a vaguer definition of an intermediate category (or “third worker
category”) to which some of the rights and protections of employees have been extended. While this
solution potentially covers a larger set of workers, it also increases the danger that the objective of
litigation is shifted down from obtaining employee status to merely obtaining worker status, and that it
could be used to downgrade the degree of protection of workers that would have otherwise been
classified as employees.
Finally, another approach consists in treating everyone in the grey zone as an employee as far as
certain aspects of labour law are concerned. In practice, this would be equivalent to defining a “residual
category” capturing those cases where employment tests fail to come to clear conclusions about
self-employment status. Although so far no country has systematically adopted this approach, it was
followed in a couple of cases by the supreme courts of both California and Sweden. The latter concluded
that, because the circumstances of the relationship were ambiguous and it was difficult to make a clear
judgement, an employment relationship would be assumed – see Chapter 4 in OECD (2019[17]) for a
more extensive discussion).
The case of the Dutch substitute musicians was brought to the European Court of Justice (ECJ) which in
2014 ruled that, while genuine self-employed should continue to be seen as “enterprises”, the so-called
“false self-employed” are not to be considered undertakings for the purpose of competition rules
(Daskalova, 2018[18]; Aloisi, 2018[15]).14 If, on the one hand, the ECJ left the door open to agreements
signed on behalf of the false self-employed (Ankersmit, 2015[19]), it also left to legislators and lower courts
the challenge of distinguishing genuine self-employment and entrepreneurship from false
self-employment.
In addition, workers in the grey zone who share some of the vulnerabilities inherent to an employee status
but are not false self-employed are still barred from accessing bargaining following that ruling. Moreover,
the ruling also forbids collective bargaining for genuinely self-employed workers that nevertheless are in
unbalanced power relationship vis-à-vis their employer/client.

238 
As forms of work continue to diversify, the question of access to collective bargaining for new
technology-induced forms of employment (i.e. platform work) and other forms of work in the “grey zone”,
such as dependent self-employment – where a self-employed worker’s income is dependent on only one
or a few clients – is a key contemporary challenge for labour relations (ILO, 2019[3]).
Indeed, extending the coverage of job-related benefits (minimum wages, health plans, unemployment
benefits, etc.) to non-standard workers (OECD, 2019[17]) or improving their job mobility prospects is not a
functional equivalent to guaranteeing access to collective bargaining. As highlighted before, collective
bargaining is not only a fundamental right, but also a flexible tool that can be mobilised by workers as well
as employers to address work-related challenges (including some that cannot be currently anticipated) at
national, sectoral or company-level.
5.2. Adapting regulations to more diverse forms of employment
In light of the legal obstacles discussed in the previous section, legislators may have a role to play to adapt
existing rules to the changing world of work and extend the legal access to collective bargaining to a larger
share of workers, notably to workers in the “grey zone” as well as to some self-employed workers in
unbalanced power relationship.
The European Committee of Social Rights of the Council of Europe has recently argued that in establishing
collective bargaining rights “it (is) not sufficient to rely on distinctions between worker and self-employed.
(…) Where providers of labour have no substantial influence on the content of contractual conditions, they
must be given the possibility of improving the power imbalance through collective bargaining”.15
Granting bargaining rights to workers in the “grey zone” and to self-employed workers in unbalanced power
relationships may not only be desirable for fairness consideration, but also for efficiency reasons. Indeed,
as discussed in OECD (2019[17])(see, in particular, Annex 4.A of Chapter 4), disproportionate buyer power
not compensated by sufficient bargaining power on the workers’ side (including when these workers are
self-employed) may lead to suboptimal employment and wage outcomes, as well as poor working
conditions (Daskalova, 2018[18]). In this context, extending the right to bargain, or lifting the prohibition to
collectively bargain on a case-by-case basis could improve both equity and efficiency of the market.16
In practice, the main difficulty is to identify some criteria for providing access to collective bargaining to
avoid giving unregulated freedom to own-account self-employed workers – that is, self-employed without
employees – to form cartels (even small ones), as this could have clear negative consequences for
consumer welfare. Typically, the numerous existing cases of, for example, plumbers or professional
services agreeing about sharing local markets or colluding to set prices should be prevented.17
Adapting regulations to allow workers in the “grey zone” and certain self-employed workers in unbalanced
power relationships to bargain collectively is part of a broader framework to protect workers and address
concerns like that of disproportionate employer market power discussed in other chapters. Giving these
workers the possibility to voluntary “exit”, i.e. to find another job (in terms of the skills they possess but also
of restrictions to mobility in labour contracts) if their “voice” is not heard would also contribute to strengthen
their bargaining power (see also Chapter 4).18
The following sections discuss some options which have been considered in OECD countries to grant
bargaining rights to non-standard workers formally classified as self-employed but who share some
characteristics with dependent employees and are in an unequal power relationship with their employer.
5.2.1. Enforcing the correct classification of the employment relationship
Ensuring a correct classification of workers and fighting against misclassification is critical to enforce
existing regulations and provide access to collective bargaining to workers who would otherwise be unjustly

 239
excluded. This has been a strategy frequently pursued by unions to include all non-standard forms of work
into existing collective agreements (see Section 5.3) as providing a first step to access collective
bargaining and a direct gateway to social and employment protection. However, even if all workers were
correctly classified, there would still be an issue of bargaining rights for those workers in the grey zone,
who cannot be easily classified, and for workers who are genuinely self-employed, but are in an
unbalanced power relationship vis à vis certain buyers, with limited options to provide services to other
buyers.
5.2.2. Tailoring labour law to grant access to bargaining to workers in the grey zone
Some OECD countries have given the right to bargain collectively to some workers in the grey zone by
including them in an extended definition of who is an employee, as far as the labour relations legislation
are concerned. This is the approach favoured since the mid-1960s in Canada, where the federal and many
provincial labour relations legislations regarding collective bargaining explicitly includes “dependent
contractors”19 in its definition of employees, allowing for their inclusion in the same bargaining unit 20 as
permanent full-time employees and usually with the same collective agreements (while it is uncommon for
dependent contractors to have a separate collective agreement from permanent employees, this is legally
permissible).21
In other OECD countries, specific categories of workers in the “grey zone”, such as dependent contractors
in Korea, parasubordinati in Italy, Arbeitnehmerähnliche Personen in Germany, workers in the
United Kingdom, TRADE in Spain or, since January 2019, any “person working for money” 22 in Poland,
are included in collective bargaining (or in the case of Spain they can sign specific “professional interests
agreements”, acuerdos de interés profesional) even if they are not formally employees.
5.2.3. Exempting specific forms of self-employment or sectors/occupations from the

prohibition to bargain collectively
A complementary policy option explored by some governments consists in lifting the prohibition to bargain
collectively for some workers who are genuinely self-employed, but are nonetheless in situations of power
asymmetry vis-à-vis their customer/employer. This is the case when self-employed workers are facing
employers/clients with a disproportionate buyer or monopsony power, while their outside options are limited
(see Chapter 4 and below). Examples of such genuinely self-employed workers who might nonetheless be
in unbalanced power relationships include for instance freelance musicians, actors, performing artists, or
journalists – for whom the possibility of lifting the bargaining prohibition has been discussed in several
countries – and granted in some.
Such objectives could be pursued either by adopting a pragmatic approach vis a vis groups of self-employed
most exposed to unbalanced power relationships or by introducing explicit legal exemptions from the
enforcement of the prohibition to bargain collectively.
In many cases, regulators and enforcement authorities have taken a case-by-case approach to avoid a strictly
procedural analysis of cases involving those workers with little or no bargaining power and exit options.
Moreover, in several countries (e.g. in France, Italy, Spain, etc.), independent unions of platform workers are
de facto negotiating working conditions for their members even if they are classified as self-employed without
any intervention from national antitrust authorities. The risk associated with this route is that it potentially
creates uncertainty since it could be reversed without any legislative reform.
Another avenue that has been followed by a few OECD countries is to introduce explicit exemptions to the
cartel prohibition for certain forms of self-employed, sectors or occupations (Daskalova, 2018[18]). In 2017,
the Irish Parliament amended the Competition Act to include voice-over actors, session musicians and
freelance journalists among the occupational categories that have the right to negotiate. Furthermore, it also
opened the possibility to access collective bargaining for “fully dependent self-employed”23 and not only “false

240 
self-employed” workers (as per the ECJ 2014 ruling – see above). Under Irish law, trade unions have to apply
for the exemption, prove that the workers they want to represent fall in one of these two classes, and show
that their request will have “no or minimal economic effect on the market in which the class of self-employed
worker concerned operates”, nor “lead to or result in significant costs to the State”.
The 2017 Irish amendment has attracted many criticisms and is currently debated in the ILO. Irish employers
as well as the International Organisation of Employers, on the one hand, expressed their concern about the
lack of clarity in the criteria used to identify “fully dependent” and “false” self-employed workers. They also
contested the lack of employer consultation in determining those criteria – currently the law states that the
government makes the decision in consultation with a trade union only.24 On the other hand, those in favour
of extending bargaining rights to self-employed workers experiencing power imbalance find the dependency
criteria too stringent (a platform worker can work for more than two platforms and still be economically
dependent). The condition of “no or minimal economic effect on the market” is also seen as a potentially
insurmountable practical limit for workers (De Stefano and Aloisi, 2018[20]).
The Australian Competition and Consumer Act also allows businesses to collectively negotiate with suppliers
or customers if the Australian Competition and Consumer Commission considers that collective bargaining
would result in overall public benefits. The Australian Competition and Consumer Commission is currently
undertaking a public consultation process regarding the creation of a class exemption for collective bargaining
by small businesses (including independent contractors). A class exemption for collective bargaining would
effectively provide a “safe harbour”, so businesses that met eligibility criteria could engage in collective
bargaining without breaching the competition law and without seeking approval from the Australian
Competition and Consumer Commission.
Legal exemptions for specific categories of self-employed also exist in other OECD countries. In 1996, the
US Department of Justice and Federal Trade Commission jointly ruled that physician networks which
“collectively agree on prices or price-related terms and jointly market their services” do not infringe anti-cartel
regulation provided that “they constitute 20% or less of the physicians in each physician specialty in the
relevant geographic market” – 30% if they are part of non-exclusive network25 – see DOJ/FTC (1996[21]).
In practical terms, targeted exemptions by sector or occupation are not always easy to define and apply; the
list may need frequent updating, and the potential reversal of exemptions is a source of legal uncertainty for
workers and businesses alike.26
In addition, as outlined before, small cartels can induce suboptimal outcomes for consumers. For that reason
any exemptions aimed at granting bargaining rights to self-employed in situations of power imbalance should
be based on a comprehensive costs-benefits analysis. One way to focus on workers in real need of access
to collective bargaining would be to prioritise exemptions to those groups of self-employed workers that are
likely to have few outside options.
Overall, granting some exemptions from the prohibitions to bargain to some self-employed in particular
sectors or occupations is an option worth exploring and evaluating further.27
5.3. How can social partners enhance collective bargaining and workers’ voice in
non-standard and new forms of work?
Beyond legal obstacles, trade unions in most countries face a series of practical difficulties to organise and
negotiate collective agreements on behalf of non-standard workers. These difficulties are partly linked to
some of the intrinsic characteristics of non-standard work, such as frequent turnover and a limited attachment
to a single workplace, and to the negative implications of these characteristics, e.g. reluctance to organise
for fear of future retaliation, or a limited awareness of bargaining rights. Both the ILO Committee on Freedom
of Association (CFA) and Committee of Experts on the application of Conventions and recommendations
(CEACR) examined various cases and circumstances in which non-standard workers were restricted in the
exercise of the right to freedom of association and the right to collective bargaining (ILO, 2016[22]).

 241
In addition, in the past, some unions may have tended to focus primarily on standard employees.28 Yet, there
are now examples of unions which are making efforts in several OECD countries to reach out to new potential
members, in particular non-standard and young workers, by adapting their strategies and changing their
structure – see Benassi and Dorigatti (2014[23]) or Durazzi, Fleckenstein and Lee (2018[24]).
More generally, worker’s voice arrangements and collective bargaining systems have demonstrated their
ability to adjust to cover different and new types of employment relationships in a number of cases. The
development of collective bargaining in the temporary work agency sector, for instance, illustrates how social
partners have addressed challenging issues such as the regulation of triangular working relations – see
Box 5.3 below and WEC and Uni Global (2018[25]). Instances of collective bargaining and workers’ voice
initiatives in the cultural and creative industry provide examples of how labour relations can develop in sectors
with a high share of non-standard workers (Box 5.2). Both cases can provide inspiration for enhancing
collective bargaining for workers in new forms of employment such as platform work, or for workers in the
“grey zone” more generally.
5.3.1. Unions are diversifying their strategies to reach potential members
Trade unions are pursuing several strategies to extend their reach to non-standard forms of employment,
and notably the most vulnerable ones. In most OECD countries, unions’ main approach to reach new
members has been to focus on challenging workers’ status (i.e. reclassifying them as discussed before).
For several decades, unions have been trying to bring non-standard workers under the umbrella of a
standard contract through judicial reclassification – see Linder (1999[16]) for examples of reclassifications
in the United States of grocery baggers, adult entertainment workers, drug testing subjects, “lessee”
taxicab drivers, fruit pickers, and truck drivers.
More recently, the issue of classification has taken a new prominence with digital platforms. In the
United Kingdom, for instance, the union GMB representing private hire drivers took the case of Uber
drivers to an Employment Tribunal, which reclassified self-employed Uber drivers into workers covered
by minimum wage legislation, and legal provisions for holiday pay and breaks. 29 Tribunals in Italy30,
France31 and the Netherlands 32 recently took similar decisions. Moreover, even before these recent
rulings, the risk of re-classification had led platforms in France and Italy to accept to open discussions
or negotiations with recognised unions or workers’ representatives (see Section 5.4.2).
Another strategy has been to lobby for public policy interventions restricting the use of non -standard
forms of employment or enhancing the quality of these jobs at either national or local level. In Korea, for
instance, trade unions and civil society organisations created the “Alliance for Nonstandard Workers” in
2000, which in 2006 succeeded in pushing the government to limit the use of fixed-term contracts and
outlaw discrimination based on employment status 33 (Fleckenstein and Lee, 2018 [26]).
Unions in some cases have also changed bargaining practices to ensure better outcomes for non-
standard workers. For instance, the Korean Confederation of Trade Unions launched its “solidarity wage”
initiative in 2013, which promoted lump-sum pay increases rather than percentage increases with the
explicit aim of “closing the wage gap between standard and nonstandard workers” (Durazzi, Fleckenstein
and Lee, 2018[24]).
Finally, unions are also exploring other ways to strengthen workers’ voice, either by putti ng pressure on
employers – as in the United States through “corporate campaigns” to gain recognition or conclude an
agreement (McCartin, 2014[27]), or by designing new means of organisation and information-sharing for
non-standard workers. For instance, the German metal-worker union IG Metall, the Austrian union
confederation, together with the Austrian Chamber of Labour, and the Swedish trade union Unionen,
launched one of the first cross-border union initiatives to support platform work with the website
faircrowd.work which provides information and advice to platform workers and in particular ratings of
working conditions on different online platforms based on surveys of workers (see Section 5.4.3 for a
discussion on the use of new technologies to strengthen workers’ rights).

242 
Box 5.2. Collective bargaining in the creative sector

In the creative sector, where the incidence of freelance work is high, issues related to collective association
and right to bargain are far from new. In the 1920s and 1930s, the status of writers in Hollywood production
studios was being argued over. Studios initially favoured hiring writers as employees, who could not claim
intellectual property rights under the Copyright Act of 1909 (Fisk, 2018[28]). But after the 1935 National
Labour Relations Act had granted employees the right to organise, studios attempted to contest writers’
unionisation right in courts. This led the National Labour Relations Board to confirm in 1937 that freelance
writers, like writers under contract, had the right to bargain (Fisk, 2018, p. 186[28]). Over time, and with
frequent detours through the courts, other crafts emulated the writers’ example in forming their “guilds”
and the phenomenon expanded beyond the film industry to radio, television and theatre. The current
system is characterised by high union density and a bargaining culture akin to that of some corporatist
European countries. Each guild engages in multi-employer bargaining in a way that resembles pattern
bargaining – the Writers’ Guild usually sets the mark for others (Kleingartner, 2001[29]). Studios now
recognize unions as useful negotiating partners (Frommer, 2003[30]).
In other cases, access to collective bargaining for creative workers depended on the introduction of
special statuses. A 1920 law allowed Austrian freelance journalists to collectively negotiate their fees
(Fulton, 2018[31]). Changes to French labour law in the 1970s granted journalists and performing artists
the status of employees for matters of collective bargaining. In Germany, the Collective Bargaining Act
of 1949 was amended in 1974 to cover “employee-like” persons; criteria defining access to this status
are relaxed for writers and journalists. In Denmark, since 2002, unions can bargain on behalf of
journalists, scenographers, and graphic designers classified as “freelance wage earners”.
Moreover, in 1980, the United Nations Educational, Scientific and Cultural Organization (UNESCO)
adopted the Recommendation concerning the Status of the Artist, which “recognises the right of artists
to be organised in trade unions or professional organisations that can represent and defend the interests
of their members” (UNESCO, 1980[32]). In response to this recommendation, Canada passed in 1995
the Status of the Artist Act, which allows self-employed artists to be recognised and certified by the
Canadian Industrial Relations Board (CIRB) as an artists’ association with the exclusive right to
negotiate collective agreements with producers.
When freelance creatives cannot access collective bargaining, trade unions and professional associations
often offer advisory recommended minimum fees or rates lists (ILO, 2014[33]). For instance, the Dutch
professional association of graphic designers (BNO) developed guidelines for minimum fees, and its
Italian counterpart (AIAP) set up a fee guide. Guidelines also cover subjects such as work organisation
and working hours. Collecting societies have been set up to handle the payment of royalties to writers,
photographers, musicians or actors flowing from copyrights legislation (Gherardini, 2017[34]). Unions have
set up lists to warn freelance workers about bad payers, e.g. the “ask-first” list set up by the British media
and entertainment union BECTU in the film industry (Charhon and Murphy, 2016[35]).
Finally, co-operatives have emerged to provide solutions to some of the challenges faced by precarious
freelance artists. Typically, these structures will formally hire artists, who thereby gain access to social
security programmes – including unemployment insurance. Pooling resources, cooperatives also guarantee
a regular pay to freelance artists, smoothing out the payment delays they frequently face. Workers are still
entirely independent in finding and managing their projects. They pay a fee equivalent to a percentage of
their earnings and can access a range of business services. Some of these cooperatives were set up by
unions (in Denmark, the Danish association of professional technicians, Teknisk Landsforbund, created the
Danish Technology and Design Freelance Bureau in 1992), while others emerged from private
initiatives – such as the Brussels-based SMart created in 1998, see Section 5.4 (Gherardini, 2017[34]).

 243
5.3.2. Unions are adapting their own organisation and structure
In several OECD countries, unions have opened their membership to non-standard workers, including the
self-employed, and have started campaigning for the rights of platform workers. In Sweden, Unionen, a
white-collar union, has been open to the self-employed since 1998. In Germany, IG Metall, the largest
trade union amended its statutes in 2015 to allow the self-employed to join.
In other countries, unions have established separate branches specifically for the self-employed. According
to a survey by the European Trade Union Confederation (Fulton, 2018[31]), the Unión General de
Trabajadores (UGT) in Spain, the Confederazione Italiana Sindacati Lavoratori (CISL) in Italy and the
Federatie Nederlandse Vakbeweging (FNV) in the Netherlands – where self-employment has experienced
a very significant increase (Baker et al., 2018[36]) – are the most notable examples.
Furthermore, some unions have also set up specific branches or union-affiliated guilds for non-standard
forms of work in general. Since 1998, the largest Italian union, Confederazione Generale Italiana del
Lavoro (CGIL), has a specific branch Nuove Identità di Lavoro (NiDIL) devoted to non-standard workers.
In the United States, the National Taxi Workers Alliance is the first member of the AFL-CIO, the US
federation of trade unions, representing independent contractors. In Slovenia, Sindikat prekarcev, which
is part of the main union confederation (ZSSS – Association of Free Trade Unions of Slovenia), has sought
to represent “non-classical workers” since 2016.
Finally, some independent unions have been created, especially in the private hire or food delivery sectors.
The most notable case is the one of the Independent Worker Union of Great Britain (IWGB), which is not
affiliated to the Trade Union Confederation but has scored a series of significant victories in tribunals and
negotiations with platforms. In Italy, food couriers have set up their own associations, which are not
affiliated to any established union but are recognised as the counterparts to food-delivery platforms. In
France, private hire drivers have set up an independent union. Similar developments have been observed
in Belgium, Germany, the Netherlands and Spain (Vandaele, 2018[37]).
5.3.3. Employers’ organisations are slowly adjusting
Employers, business and employers’ organisations are the other key actors of collective bargaining.
Chapter 2 has shown that membership to employer organisations (at least in those countries for which
time series are available) shows a remarkable stability which sharply contrasts with the fall observed in
trade union density.
Yet, according to the International Organisation of Employers (IOE, 2017, p. 46[38]), “employers and
business organisations will be affected too [by ageing, globalisation and technological development] as
the concept of dependent employment comes under discussion” and their role has to evolve from one of
support to one of provider of advice, representation and concrete solutions.
ILO ACT EMP and IOE (2019[39]) also highlight the need for employers’ organisations to improve their
representativeness, reaching out to underrepresented or emerging economic actors, and in particular
giving “a seat at the table” to small and medium enterprises. Accordingly, some existing employers’
organisations are currently trying to expand their reach to new members. For instance, the Iberico
American Federation of Young Entrepreneurs (FIJE), which covers 150 000 young entrepreneurs in
20 countries, aims to foster youth membership in employers’ organisations through networking, training,
and representation activity.
Moreover, employers’ organisations face the rapid emergence of new sectors and industries based on new
business models. The development of new businesses outside of the coordinated and organised
framework of traditional employers’ organisations creates a challenge for the latter, who have an interest
in ensuring a level playing field for their members against new competitors who may circumvent existing
labour regulations. In addition, as these new industries emerge, traditional organisations are challenged

244 
by the fact that companies can choose to associate through more informal arrangements, based on
temporary projects or issues, to represent their interests, particularly in highly local labour markets. Efforts
to reach out to underrepresented companies by employers’ organisations include the development of new
services and tailored solutions for companies whose business models does not (yet) fall under a clear-cut
regulatory framework (IOE, 2017[38]; ILO ACT EMP and IOE, 2019[39]).
Reaching a balance between the needs of their historical members and those of the new digital platform
companies, however, may in some cases not be an easy challenge for traditional employers’ organisations
(Johnston and Land-Kazlauskas, 2018[40]). For instance, platforms often see themselves as a matchmaker,
not as an employer.34 This makes identifying the bargaining counterpart more challenging.
Yet, the experience with temporary work agencies (see the discussion in Box 5.3) shows that this is not an
insurmountable obstacle if there is a will to negotiate or a threat of public intervention in the absence of an
agreement. In Italy, for instance, a group of major food delivery companies announced in July 2018 the
creation of a new employers association to represent their business and negotiate with the government
and the couriers associations. In Slovakia, Uber has become a member of the National Union of Employers
and the professional association of information technology (IT) companies (ITAS).
Beyond the difficulty of organising new entrants on the employers’ side, traditional employers’ organisations
are also threatened by the weakening of workers’ representation. In the Netherlands, AWVN, an employers’
association, released a report in 2018 where it expressed its concerns about the sustainability of the Dutch
bargaining model in the absence of strong workers’ involvement (AWVN, 2018[41]). AWVN proposed two
options to strengthen the direct representation of employees. The first option is to let employees elect their
representatives in the bargaining process at company or sectoral level (currently unions represent workers
without a formal election). For each vote, the union would receive a small fee, e.g. EUR 10, as a compensation
for the costs of bargaining. The second option is to offer newly hired employees a trial union membership for
a period of one year for free or for a sharply reduced contribution. Employers would encourage this by providing
extensive information when hiring people and unions would offer a reduced membership rate. To determine
which option works better, AWVN has proposed to trial them in a number of companies.

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Box 5.3. Collective bargaining and temporary agency work

Including non-standard workers and platform workers in particular in collective bargaining requires some degree
of organisation among workers but also a clear identification of the employer. In the case of a triangular relationship
such as the one between a contractor, a platform and a customer, it may be difficult to identify the real employer,
and consequently, the bargaining counterpart. While platforms are a recent development and, so far, limited in
scope, triangular employment relationships are not new. Temporary work agency (TWA) workers are hired by an
agency and assigned for work into a user firm (OECD, 2013[42]). However, a key difference between TWAs and
platforms is that agency workers have an employment contract, while most platform workers are (rightly or wrongly)
classified as self-employed (WEC and Uni Global, 2018[25]).
In the early stages of their development, TWA were considered as disruptive as the platforms of today and were
highly contested or even banned in a number of countries. Governments intervened to regulate the sector and
collective agreements now represent an important means of regulation of this industry in many OECD countries
(Eurofound, 2008[43]) despite very low levels of unionisation. Today collective agreements covering TWA workers
are negotiated in several OECD countries (see Table 5.1). In some countries, agency work is simply included in
the reference sectoral (or firm-level) collective agreement applicable to the user firm (for instance, in Finland or
Spain). In other countries, specific agreements are signed directly with temporary work agencies (for instance, in
Australia or Italy), either at the industry level or within agencies.
In Europe, the European directive on temporary agency work regulating TWAs introduced the principle of equal
treatment with workers in the user company in order to establish a level-playing field. As the directive opened the
possibility for collective agreements to diverge from a blanket equal treatment approach, provided certain quality
conditions are respected such as the right to an adequate level of protection, TWAs felt encouraged by the law to
engage in collective bargaining (IDEA Consult, 2015[44]). Hence, in several European countries, collective
agreements are now used as a tool to co-define the regulation of the sector. Notably, in Germany labour law allows
to derogate from the principle of equal pay when agency workers are on an open-ended contract with the agency
and paid fully in-between assignments. However, until 2008 the responsibility for regulating agency work laid with
works councils and not unions or collective agreements. Therefore, the German metal-worker union IG Metall
launched a campaign to recruit agency workers and, at the same time, set a common bargaining floor across
companies. This campaign led to an industry-wide agreement on equal pay for agency workers in the steel sector
in 2010 followed by a collective agreement for the metal and electronics industry in 2012 (Benassi, 2016[45]).
Collective agreements covering TWA work are also used to establish specific funds for training, pensions and
sickness leave (as in Belgium, France, Italy and the Netherlands), which are often more generous than those
offered to employees with a fixed-term contract. Finally, collective agreements in the TWA industry have been
used to set up specific bodies to protect health and safety at work for workers in the agency sector such as the
Dutch “Stichting Arbo Flexbranche” (STAF).
Table 5.1. Collective agreements for temporary work agency workers

Country
None or very rare Canada Czech Japan Latvia Mexico United States
Rep.
Covered by an agreement if applicable to user firm Colombia Greece Ireland New Zealand Slovenia United Kingdom
Estonia Hungary Korea Poland Spain
Finland Iceland Lithuania Portugal Slovak
Rep.
Covered by an agreement with temporary work Australia Chile Germany Luxembourg Norway Switzerland
agency Austria1 Denmark Israel Netherlands Sweden Turkey
Belgium France Italy
1. In Austria, the specific agreement for temporary agency workers applies only if the provisions in the agreement covering the user firm are less
favourable for workers.
Source: OECD Policy Questionnaires on Collective Bargaining.

246 
5.3.4. A few innovative agreements have been signed in Europe
Unions’ engagement with platforms on behalf of non-standard workers has paid off in some cases, with
the signature of a few collective agreements in Europe. In Sweden, for instance, the transportation start-up
Bzzt has signed an agreement with the Swedish Transport Workers union (Johnston and Land-
Kazlauskas, 2018[40]). In Denmark Hilfr.dk, a platform for private home cleaning services, signed a
collective agreement in April 2018 with the trade union 3F. The agreement grants platform workers sick
pay, holiday allowance and a contribution to their pension.
In Austria, the transport and services union vida announced in April 2017 the creation of a work council
(Betriebsrat) for the couriers of Foodora, which would be able to negotiate a collective agreement on
working conditions. In April 2018, an agreement establishing a European Work Council at Delivery Hero,
a publicly listed online food-delivery service based in Berlin (Foodora is owned by Delivery Hero), was
signed. It includes a provision to have employee representatives on the supervisory board.
5.4. Increased pressure and new challenges have led to the emergence of
non-traditional initiatives
The erosion of union membership and collective bargaining coverage, as well as the insufficient
representation of some types of workers and businesses have led to the emergence of other initiatives by
new actors such as platforms as well as non-traditional forms of labour organisations aimed at defending
workers’ interests. In some respects, new forms of labour movements can be considered as functional
equivalents to “traditional” unions by helping to reduce information asymmetries, collectively mobilising
workers and potentially increasing bargaining power as well as supporting litigations and class actions
(Silberman and Irani, 2016[46]). However, a closer look reveals that they also serve different, non-bargaining
related purposes and have different organisational structures.
5.4.1. A new mutualism
Notable examples of non-traditional organisations to represent workers’ collective interests may be found
in the United States with the development of Worker Centers35 (representing low-wage, and mainly
immigrant workers) or the Freelancers Union (representing high skilled independent contractors). 36 Similar
developments have been observed in Canada with the Freelance Union representing self-employed media
and communications workers or the Workers’ Action Centre, which advocates on behalf of workers in
non-standard forms of employment, in Ontario as well as in Europe, where worker co-operatives have
developed. These initiatives echo in some respects the spirit of mutual organisations that in the 19th century
represented the first form of work organisation and provided workers with basic insurances and mutual
help.37
These organisations are legally distinct from traditional unions but there may be a formal or informal
connection (Manheim, 2017[47]). Worker Centers in the United States tend to have both different cultures
and fewer legal restrictions on their activities than traditional unions and thus are viewed by some as
“organising laboratories” where innovative strategies can be formed and tested (Fine, 2006[48]). While the
traditional union movement has had mixed views about these non-union worker organisations, it has
increasingly embraced them and has invited some to join the AFL-CIO, the US federation of trade unions
(Gaus, 2011[49]).
One strategy Worker Centers have used to organise workers has been creating and/or enforcing legal
workplace standards.38 Worker Centers have also engaged in direct action against employers, often
through strikes.39 In addition, Worker Centers have used consumer pressure throughout the supply chain
to change employer behaviour.40 Service delivery, from language classes for recent immigrants to low-cost

 247
portable benefits provided for independent contractors by the Freelancers Union, are another way Worker
Centers and similar non-union workers’ organisations respond to workers’ needs.
These organisations have also used their political resources to push several pieces of legislation, leading
many companies to raise wages and standards (Fine, 2005[50]). However, for the most part, this model has
struggled to achieve scale and sustainable funding (Strom, 2016[51]).
Another type of actor has emerged in a number of countries: co-operatives organising self-employed
workers and providing them with a range of services. One of the most established is SMart, which was
founded in Belgium in 1998 as an association of creative and cultural freelance workers and then
transformed itself into a non-profit co-operative (Graceffa, 2016[52]). SMart is currently present in nine
European countries and has extended to other sectors beyond creative work. In exchange for a fee, it
provides self-employed workers with a wide range of services, including help with invoicing and the
declaration of income; getting paid as an employee (and therefore gaining access to social protection);
debt collection; salary advancement (through a mutual guarantee fund); and access to training and
co-working spaces.
SMart is based on a participatory process: all members are invited to participate in the general assembly,
and all profits are reinvested. SMart, and other similar workers cooperatives, do not usually41 bargain on
behalf of their members. Occasionally they publicly voice the concerns of freelancers and advocate on
their behalf, but this is not their primary goal. The model proposed by SMart is not uncontroversial and has
been criticised by some unions as it “legitimises grey zones” instead of fighting them (Xhauflair, Huybrechts
and Pichault, 2017[53]).
Setting aside their non-profit nature, this type of co-operative is akin to for-profit umbrella companies which
process invoices and pool risks among freelancers, offering them sick, maternity and holiday pay as well
as legal counselling. Such for-profit umbrella companies exist in several countries and notably in Belgium,
France (“portage salarial”), the Netherlands (“payroll company”), Norway (“Egenanstillingsförrettning”),
Sweden (“Egenanställningsföretag”), the United Kingdom and the United States (Arvas, 2011[54]) and they
cover a wide range of individual professionals in many sectors.
5.4.2. Platforms are also taking some action
In addition to worker-led initiatives, some platforms have also started taking action to address platform
workers’ limited access to voice and collective bargaining. As highlighted before, the risk of re-classification
as well as government initiatives have led some platforms to enter into negotiations with worker
representatives in several countries. 42 In Italy, following a government threat of worker reclassification by
decree in summer of 2018, food delivery platforms have agreed to start negotiating with rider associations
over working conditions. Although these negotiations have not yet led to concrete results, the example
mentioned above of the Danish platform Hilfr.dk shows that such negotiations can sometimes lead to
agreements.
Beyond formal bargaining, platforms have taken initiatives aimed at giving workers the possibility to
express their concerns. Uber, for example, embraced the creation of the New York City Independent
Drivers’ Guild (IDG).43 The IDG cannot negotiate on behalf of drivers, but it allows channelling their
concerns through monthly meetings with the company’s management.
Following government’s engagement with platforms to address some of the issues related to platform
work, the latter have taken some initiatives. In France, a legal provision encouraging platforms to publish
“social responsibility charters” online and as appendixes to workers’ contract is currently bei ng
discussed. Such charters would state the platforms’ policy on a variety of issues including the prevention
of occupational risks, professional development, measures to guarantee a “decent income” to workers,
as well as rules framing the communication of changes to working conditions. Along the same lines, but

248 
based on the initiative of a crowdworking platform, a code of conduct has been established in Germany
and signed in 2017 by eight Germany-based platforms.
Platforms’ initiatives have thus tended to develop outside of the realm of traditional collective bargaining
institutions rather than within them. For instance while the representation of platforms in traditional
employer organisations is still limited, dedicated associations have emerged in some c ountries such as
the Deutscher Crowdsourcing Verband in Germany. Rather than engaging in bargaining with platform
workers, some platforms have focused on offering solutions to emerging issues (around
e.g. occupational insurance) while preventing the risks of re-classification. This has taken various forms,
from setting up partnerships with professional associations (as Uber has done with the Association of
Independent Professionals and the Self-Employed in the United Kingdom) offering workers preferential
deals on various goods and services, to providing free or discounted occupational insurance covers.
This approach, exchanging benefit provision for protection against reclassification is advocated by Uber
which suggests the creation of legislative “safe harbours”, “to ensure that the provision of benefits or
training could not be used as a factor in employment classification claims” (Uber, 2018[55]). In other
words, platform-led initiatives tend to revolve around direct benefit provision driven by the risk of
reclassification. However, this approach raises the question of co-ordination between different platforms
and the portability of workers’ protection, as these initiatives are taken at the level of individual platforms.
They also raise the question of the unilateral nature, since they are not the result of dialogue between
different stakeholders (including workers).
5.4.3. New technologies can also strengthen workers’ voice
The digital technology used by platforms can also be mobilised to organise workers and improve job
quality. A good example of this is Turkopticon, an all-volunteer website that started as a class project by
two computer scientists turned labour organisers (Silberman and Irani, 2016 [46]). For the past 10 years,
Turkopticon has allowed workers on Amazon Mechanical Turk, a platform where online workers are
hired for small tasks, to review the “requesters” (individuals or companies posting tasks to be executed
by workers). It helps workers to identify “bad” requesters, who tend to pay late or never, and to find good
ones.44 Other websites facilitating the organisation of workers include Coworker.org , which helps
workers to create company-specific networks to collect data and to aggregate their demands into
coherent campaigns.
Instant messaging applications, social media groups, online fora as well as online polls play a very
important role for workers who do not share a common physical workplace and lack the ability to discuss
work issues face-to-face with each other. These technologies allow them to exchange information about
clients and tasks, warn each other about scams, discuss best practices and set informal price norms,
and to co-ordinate actions. It also provides community support. Such online communities of remote gig
workers sometimes become linked to institutionalised unions, but they also exist in contexts lacking an
institutionalised labour movement – see e.g. Wood, Lehdonvirta and Graham (2018[56]) on online
communities of micro-workers and online freelance workers in Nigeria, South Africa, Kenya, the
Philippines, Malaysia and Vietnam.
Technological innovations also open up new possibilities to protect the relatively weaker party in an
employment/contractual relationship. For instance, the platform Bitwage uses Blockchain technology 45
to make international payments of remote contractors faster and more trustworthy.
Finally, the same algorithms, big data and basic AI tools which are used by large companies to manage
human resources could also be used by unions to mine information about their members and guide their
actions. In many OECD countries, business registry data are also used by trade unionists to gauge how
companies are performing when deciding whether to ask for wage increases or for the negotiation of a

 249
new collective agreement. New data and statistical tools would allow unions to use information on the
state of business faster and more efficiently. 46
In other words, some technological innovations represent an opportunity to facilitate collective
organisation among non-standard workers. One way in which governments could help social partners
to seize this opportunity would be through the setting up of common knowledge platforms to share
practices and experiences among actors.
5.4.4. Non-traditional actors can complement but not substitute for social partners
While non-traditional workers’ organisations can help improve working conditions for a greater number
of non-standard workers, they cannot completely substitute for labour unions. Differences in new actors’
prerogatives compared to those of traditional unions include: i) the legal ability to bargain collectively on
behalf of their members and to sign an agreement; ii) the ability to guarantee the enforcement of this
agreement; and iii) the benefit (in some countries) of information and consultation rights that reduce
information asymmetries vis-à-vis employers, and play and instrumental role in the definition and
strengthening of unions’ bargaining position. Non-traditional organisations can engage in actions such
as boycotts, petitions, and thus strengthen workers’ voice; but this might not lead to an agreement.
Further, in some cases, non-traditional actors are not even interested in doing so. These organisations
are often professional associations, which are created to provide services, to coalesce individuals
around a common identity and to help with networking, but not necessarily to negotiate nor sign formal
collective agreements.
However, they might help bridge some of the perceived mismatch between the professional identity of
independent workers and traditional unions (King, 2014[57]). Saundry, Stuart and Antcliff (2012[58]) have
shown how freelance networks in the British audio-visual industry were more successful than unions in
creating a sense of identity and community among freelance workers, but lacked the resources to
achieve industrial relations successes and the legal framework to sign and guarantee the validity and
binding nature of collective agreements. By “linking networks to reservoir of expertise and influence”
(Saundry, Stuart and Antcliff, 2012, p. 282[58]), unions were able to build on them to secure progress for
these workers. More generally, new forms of workers’ organisations can coalesce non-standard workers
whom traditional unions have a harder time reaching out to, for practical and historical reasons. In that
sense, these new initiatives can complement rather than substitute for traditional actors. The
combination of efforts from both traditional and new actors is necessary to fully address the challenges
posed by the evolving world of work, and should be encouraged.

250 
Conclusions
While the practice of collective bargaining reflects cultural and social norms as well as institutional variation
and therefore differs considerably across OECD countries, this chapter argues that it can play an important
role in addressing some of the labour market challenges driven by technological and demographic changes
and increased global competition.
When social partners work co-operatively and anticipate new challenges, collective bargaining can support
and usefully complement public policies. This is particularly the case for the regulation of new forms of
work, the anticipation and meeting of skills needs, and the design of measures to help workers with the
transition to new jobs. Collective bargaining, at both sectoral and firm level can also help companies to
adapt, through tailor-made agreements and adjustments in the organisation of work to meet their specific
needs. Finally, social dialogue can help workers to make their voice heard in the design of national, sectoral
or company-specific strategies and ensure a fair sharing of the benefits brought by new technologies and
more globalised markets.
The contribution of collective bargaining to shaping the future of work crucially depends on workers and
firms being able and willing to associate and negotiate mutually satisfying binding agreements. However,
since the 1980s bargaining coverage and membership of trade unions have declined sharply in most
countries. The rise of different forms of non-standard work in a number of OECD countries discussed in
OECD (2019[17]) poses an additional challenge to collective bargaining, as non-standard workers are less
likely to be unionised than standard workers.
Unions are trying to expand their membership to workers in non-standard forms of employment and
develop new strategies to negotiate with employers. Meanwhile, new forms of collective organisation are
emerging, although they tend to serve different purposes and have different organisational structures.
Employers’ organisations are also having to deal with the development of new forms of business and the
weakening of their traditional counterparts. The examples of successful collective agreements in the
temporary work agency sector and in the cultural and creative industries, even in countries where unions
have generally low membership, show that collective bargaining can adjust to different and new types of
employment relationships.
Legislation may also need to change to take account of the development of a wider variety of forms of
employment and business, which are very different to those of 50 years ago when many of the current
OECD bargaining systems took form. It is therefore important to address the issue of worker classification
to ensure that employment contracts match the real nature of the employment relationship. In addition,
regulators and enforcement authorities need to reflect on how workers in the grey area between dependent
and self-employment and those self-employed in situations of strong power imbalance vis-à-vis their
client/employer can be empowered to negotiate and organise collectively.
This chapter has presented several national policies and initiatives taken by employers, unions and new
forms of workers’ organisation to adapt to the challenges arising from the outlook for the future of work.
Even though, for most of them, rigorous evaluation is lacking, these initiatives can still provide useful
inspiration in other contexts.

 251
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256 
Annex 5.A. Union density and forms of

employment: Sources and additional material
In Figure 5.1, standard and non-standard workers correspond, as closely as possible, to the categories
displayed in Figure 5.2 with the notable exception of part-time jobs: in general, standard employment refers
to wage and salary workers (both full-time and part-time) with an open-ended contract; non-standard
employment includes, as far as possible, casual or occasional work, job provided by a temporary work
agency or through a prime contractor enterprise (which subcontract their employees to a third part),
independent contractors, interns or apprentices, self-employed without autonomy and, for some emerging
economies, informal employment.
However, given the heterogeneity of the data sources used (see Annex Table 5.A.1), the scope of
questions available relating to the contractual forms of employment, the nature of the job and of union
affiliation (generally restricted only to workers identified as employees), non-standard forms of employment
do not necessary cover all these categories.
In four countries (Canada, Estonia, Hungary and Korea), the data available do not allow to go beyond the
simple distinction between permanent and temporary employment as defined in the OECD Employment
Database (for further details see specific definitions in Table 3 of the sources, coverage and definitions of
Labour Force Statistics in OECD countries)47 and do not include dependent self-employed.
Temporary work agency workers (in addition to fixed-term contracts or project workers and sometimes
interns and apprentices) are clearly identifiable for seven countries (Chile, Finland, France, Germany,
Ireland, Sweden and the United Kingdom) and provide a better definition of the open-ended contract
category, which in this case excludes all potential temporary work agency workers working under an
open-ended contract.
The United States is a particular case due to the use of an alternative definition of temporary jobs based
on the third definition of the contingent workers (as defined by the BLS). Contingent workers include wage
and salary workers not expecting their jobs to last and the incorporated self-employed (without paid
employees) if they expect their employment to last for an additional year or less. In addition to this criterion,
alternative employment arrangements (temporary work agency workers, fixed-term contracts, project
contracts and independent contractors) are included as such irrespective of the excepted duration of their
contract.
The informal employment, in addition to the listed categories above, constitute an independent category
for some emerging economies. In the case of Colombia, this category covers all workers without a written
contract and, for Mexico, all workers classified as in an informal job (based on the official definition TIL1
provided by the INEGI).
The European Social Survey (ESS) allows identifying the self-employed without autonomy as those without
full control on the organisation of the work to be done or the decisions about the activities of the
organisation.
The Australian survey Characteristics of Employment (COE) allows identifying the self-employed without
autonomy as independent contractors who are not able to have more than one active contract, to
subcontract their own work and are under the authority of somebody else on how to do their work.

 257
Annex Table 5.A.1. Non-standard forms of employment included in Figure 5.1.

Country Source Contract FTC Project TWA Occasional Independent Informal Self-
of limited contracts workers contractors workers employed
duration without
autonomy
Australia COE2 ● ● ● ● ●
HILDA ● ● ● ●
European countries1 ESS ● ●
Canada LFS ●
Chile CASEN ● ●
Colombia GEIH ● ● ●
Estonia LFS2 ●
Finland FWLB ● ●
France3 SRCV ● ●
Germany3 SOEP ● ●
Hungary LFS2 ●
Ireland3 QHNS ● ●
Korea EAPS2 ●
KLIPS ● ● ● ● ●
Mexico ENOE ● ● ●
Sweden3 LFS2 ● ● ●
United Kingdom3 LFS ● ●
United States CPS ● ● ● ● ●
TWA: temporary work agency workers; CASEN: Encuesta de Caracterización Socioeconómica Nacional; COE: Characteristics of Employment
Survey ; CPS: Current Population Survey, May Supplement ; EAPS: Economically Active Population Survey; ENOE: Encuesta Nacional de
Ocupación y Empleo; ESS: European Social Survey; FWLB: Finnish Working Life Barometer; GEIH: Gran Encuesta Integrada de Hogares;
HILDA: Household, Income and Labour Dynamics in Australia; KLIPS: Korean Labor and Income Panel Study; LFS: Labour Force Survey;
QHNS: Quarterly National Household Survey; SOEP: German Socio-Economic Panel; SRCV: Enquête statistique sur les ressources et
conditions de vie.
1. Austria, Belgium, the Czech Republic, Denmark, Greece, Hungary, Iceland, Israel, Italy, Lithuania, the Netherlands, Norway, Poland, Portugal,
the Slovak Republic, Slovenia, Spain, Sweden and Switzerland.
2. Data kindly provided by the national statistical office.
3. Interns/apprentices are available for this country as a separate form of employment (not shown in this table).
Note: For Australia, Hungary, Korea and Sweden, the actual ratio refers to the national estimates provided by the national statistical authorities
while the adjusted ratio is an estimate based on alternative microdata available (HILDA, ESS, KLIPS and ESS, respectively).
Contract of limited duration: contracts for which both employer and employee agree that its end is decided by objective rules (usually written
down in a work contract of limited life). These rules can be a specific date, the end of a task, or the return of another employee who has been
temporarily replaced. Typical cases are: employees in seasonal employment; employees engaged first by an agency or employment exchange
and then hired to a third party to do a specific task (unless there is a written work contract of unlimited life); employees with specific training
contracts.
Fixed-term contracts (FTC): A fixed-term contract is a contractual relationship between an employee and an employer that lasts for a specified
period.
Project contracts: fixed-term contracts where the end date is defined by the completion of a particular project or task.
Temporary work agency (TWA) workers: an employee with a contract (of limited or unlimited duration) under which the employer (i.e. the
agency) places that employee at the disposal of a third party (i.e. the user firm) in order to engage in work under supervision and direction of
that user firm through an agreement for the provision of services between the user firm and the agency.
Occasional workers: Employees who worked on an irregular basis over the year. This may include on-call workers, seasonal workers, casual
workers.
Interns/apprentices: contracts with a period of work experience offered by an organisation for a limited period of time.
Informal workers: Employees are considered to have informal jobs if their employment relationship is, in law or in practice, not subject to
national labour legislation, income taxation, social protection or entitlement to certain employment benefits. For Colombia, this category includes
all workers with no written contract of no contract at all and in the case of Mexico, this refers to the national definition of informal employment
(the so-called TIL1 measure).
Self-employed without autonomy: own-account self-employed who typically work for one (or more) client-firm(s) with limited autonomy.

258 
Annex Figure 5.A.1. Estimated trade union density for standard workers
Percentage of standard employment, latest available year
%
100
90
80
70
60
50
40
30
20
10
0
Note: Standard employment: Employees with an open-ended contract. Trade union density of standard form of employment have been adjusted
for the overall trade union density by using the share of standard workers in total union membership and total number of employees. Estimates
refer to 2010-12 for Greece and the Slovak Republic; 2013 for France; 2015 for Germany and Hungary; 2016 for Finland; 2014-16 for Austria,
Belgium, the Czech Republic, Denmark, Iceland, Israel, Italy, Lithuania, the Netherlands, Norway, Poland, Portugal, the Slovak Republic,
Slovenia, Spain and Switzerland; 2017 for Canada, Chile, Colombia, Estonia, Ireland, Korea, Sweden, the United Kingdom and the
United States; and 2018 for Australia and Mexico. OECD-31 is the unweighted average of OECD countries shown (not including Colombia,
Japan, Latvia, Luxembourg, New Zealand and Turkey).
Source: OECD estimates based on results from the Characteristics of Employment (COE) Survey provided by the Australian Bureau of Statistics
for Australia, the Labour Force Survey (LFS) for Canada, the Encuesta de Caracterización Socioeconómica Nacional (CASEN) for Chile, the
Gran Encuesta Integrada de Hogares (GEIH) for Colombia, results from the Labour Force Survey (LFS) provided by Statistics Estonia for
Estonia, the Finnish Working Life Barometer (FWLB) for Finland, the Enquête statistique sur les ressources et conditions de vie (SRCV) for
France, the German Socio-Economic Panel (SOEP) for Germany, results from the Labour Force Survey (LFS) provided by the Hungarian Central
Statistical Office for Hungary, the Quarterly National Household Survey (QNHS) for Ireland, results from the Economically Active Population
Survey (EAPS) provided by Statistics Korea for Korea, the Encuesta Nacional de Ocupación y Empleo (ENOE) for Mexico, results from the
Labour Force Survey (LFS) provided by Statistics Sweden for Sweden, the Labour Force Survey (LFS) for the United Kingdom, the Current
Population Survey (CPS), May Supplement for the United States and the European Social Survey (ESS) for all other European countries and
Israel.

 259
Annex Figure 5.A.2. Non-standard workers in the private sector are also underrepresented by trade
unions
Actual and adjusted ratio of trade union density among non-standard workers relative to standard workers in the
private sector (%), latest available year
Actual ratio (↗) Ratio adjusted for individual characteristics

%
101.1
100
90
80
70
60
50
40
30
20
10
0
Note: 2010-12 for Greece and the Slovak Republic; 2013 for France and Korea; 2015 for Germany; 2016 for Australia and Finland; 2014-16 for
Austria, Belgium, the Czech Republic, Denmark, Hungary, Iceland, Ireland, Israel, Italy, Lithuania, the Netherlands, Norway, Poland, Portugal,
Slovenia, Spain, Sweden and Switzerland; 2017 for Canada, Chile, Colombia, the United Kingdom and the United States; and 2018 for Mexico.
OECD-30 is the unweighted average of OECD countries shown (not including Colombia, Estonia, Japan, Latvia, Luxembourg, New Zealand
and Turkey).
Non-standard workers are those without an open-ended employment contract. The adjusted ratio for individual characteristics is based on the
marginal effect of being in a non-standard form of work relative to being in an open-ended contract calculated from a probit regression controlling
for sex, age groups, educational levels, industry, occupation, firm size (except for the United States) and full-time vs. part-time employment.
Source: OECD estimates based on the Household, Income and Labour Dynamics in Australia (HILDA) for Australia, the Labour Force Survey
(LFS) for Canada, Encuesta de Caracterización Socioeconómica Nacional (CASEN) for Chile, the Gran Encuesta Integrada de Hogares (GEIH)
for Colombia, the Finnish Working Life Barometer (FWLB) for Finland, the Enquête statistique sur les ressources et conditions de vie (SRCV)
for France, the German Socio-Economic Panel (SOEP) for Germany, the Korean Labor and Income Panel Study (KLIPS) for Korea, the Encuesta
Nacional de Ocupación y Empleo (ENOE) for Mexico, the Labour Force Survey (LFS) for the United Kingdom, the Current Population Survey
(CPS), May Supplement for the United States and the European Social Survey (ESS) for all other European countries and Israel.

260 
Notes
1
Collective bargaining and social dialogue are two distinct forms of action in which social partners engage.
Social dialogue includes all kind of negotiation, consultation or, simply, exchange of information at any
level between employers and workers. Social dialogue is often voluntary and can be formal (such as “works
councils” in Germany) or informal (such as informal exchanges in the workplace or declarations of intent
at national level). Collective bargaining is a formal process which is in most cases based on a (national)
legal framework defining the rights and obligations of the bargaining parties and which, following a period
of negotiation, generally leads to legally binding collective agreements.
2
As set, together with the “right to organise”, by the ILO Convention No. 98.
3
The analysis in this chapter builds on the answers to the OECD Policy Questionnaires on Collective
Bargaining (Chapter 2) updated in late 2018 to reflect the latest changes as well as on a number of
interviews and exchanges with academics, policy makers, trade unionists and representatives of employer
organisations. The last section also builds on the responses to the Questionnaire on Policy Responses to
New Forms of Work (OECD, 2019[60]).
4
For instance, in some OECD countries, the so-called “Ghent system” countries, the social partners play
a key role in directly managing the unemployment insurance system.
5
“Last in, first out” is a policy used to prioritise layoffs by seniority.
6
Workers at risk of layoff are supported well before the layoff actually occurs.
7
The patterns presented in the figure are not affected when focusing on private sector employees only
(see Annex Figure 5.A.2).
8
The correlation between the adjusted ratio of trade union density among non-standard workers relative
to standard workers and trade union density among standard workers is weak (0.39) and not strongly
significant; it becomes insignificant (and even weaker, 0.24) when excluding the Finnish and Icelandic
cases.
9
According to the ILO Committee of Experts on the Applications of Conventions and Recommendations
(CEACR), “the entitlement to these right should not be based on the existence of an employment
relationship, which is often non-existent”. The recent report of the ILO Global Commission on the Future
of Work also states that “all workers must enjoy (…) the right to collective bargaining” (ILO, 2019, p. 12[3]).
10
While economists have discussed how insider companies, i.e. companies already operating in the
market, can use the extensions of collective agreements to raise outsider rivals’ costs or increase entry
barriers – see e.g. Haucap et al. (2001[62]), – such anticompetitive behaviours result from deliberate
employers’ strategy, not from unions’ bargaining power. As such, they do not contradict legal arguments
exempting labour organisations from antitrust regulations, which consider collective bargaining from the
perspective of workers. In fact, Haucap et al. (2001[62]) argue that, in some cases, a strong labour union
can serve as an efficiency enhancing countervailing power to employers’ associations.

 261
11
Decision No E/04/002 (Case COM/14/03) Agreements between Irish Actors’ Equity SIPTU and the
Institute of Advertising Practitioners in Ireland concerning the terms and conditions under which advertising
agencies will hire actors
12
Dutch Competition Authority (Nederlandse Mededingingsautoriteit), Cao-tariefbepalingen voor
zelfstandigen en de Mededingingswet: visiedocument (Collective labour agreements determining fees for
self-employed and the competition law: a reflection document), 2007.
13
United States Court of Appeals for the Ninth Circuit, No. 17-35640.
14
This case is often referred to as the FNV Kunsten case (Case C-413/13). The case was also brought to
the ILO Committee of Experts on the application of Conventions and recommendations (CEACR) which
reiterated that Convention No. 98 “establishes the principle of free and voluntary collective bargaining and
the autonomy of bargaining parties” (ILO, 2016[22]).
15
Collective Complaint No. 123/2016 ICTU v. Ireland, decision adopted on 12 September 2018, paragraph
38.
16
In addition, as discussed in OECD (2019[17]), a current debate in the field of competition law revolves
around whether worker welfare should be included in the definition of “consumer welfare”, which guides
the action of antitrust authorities, and whether the latter’s analyses should consider welfare losses beyond
those affecting the final consumer.
17
For instance, U.S. v. Joseph P. Cuddigan, et al., U.S. District Court D.R.I., Civil Action N.3843, 15 June
1970.
18
Although when the pool of available workers is extremely large (e.g. in the case of crowdsourcing
platform workers such as Amazon Mechanical Turk), increasing exit options through competition might not
be enough. Indeed these workers have an extremely low residual labour supply elasticity – as low as 0.1
according to Dube et al (forthcoming[63]). When taking into account the supply response of all their
competitors and the fact that the pool of available workers stretches worldwide, they have little choice but
to accept evolving prices.
19
A dependent contractor is defined as follows: a) a person, whether or not employed under a contract of
employment; b) and whether or not furnishing tools, vehicles, equipment, machinery, material, or any other
thing owned by the dependent contractor; c) who performs work or services for another person for
compensation or reward; d) on such terms and conditions that the dependent contractor is in a position of
economic dependence upon, and under an obligation to perform duties for, that person; e) more closely
resembling the relationship of an employee than that of an independent contractor (Section 1 Labour
Relations Act Ontario).
20
Employers can dispute the composition of the bargaining unit (i.e. the group of employees that the
union/bargaining agent is certified to represent in collective bargaining). Such disputes will be settled by
the Canada Industrial Relations Board (CIRB) during the certification process and before collective
bargaining begins. During the certification process, the employer or union may contest the inclusion or
exclusion of any job classification or position from the bargaining unit. The CIRB will review the evidence
and determine the group of employees/bargaining unit that is appropriate for collective bargaining. In
making such a determination, the CIRB has significant discretion, and will look beyond job
titles/classifications and examines the actual duties of the persons concerned. If a collective agreement
covers dependent contractors and a dispute arises concerning whether an individual is a dependent or
independent contractor, the CIRB will also examine the evidence by looking beyond the job

262 
title/classification and make a decision. The CIRB’s decision is subject to judicial review, initially by the
Federal Court of Canada.
21
The origins of this approach were in arguments by a law professor in the 1960s (Arthurs, 1965[66]) that
collective bargaining is a way of addressing a power imbalance and, due to similarities between dependent
contractors and employees, they should be eligible for unionisation. Many Canadian jurisdictions adopted
the definition of dependent contractor in the following decade.
22
A person who works for money is either an employee or a person providing work for remuneration on a
different basis that the employment relationship as long as he/she does not employ any other persons to
perform this type of work, irrespective of the legal basis of employment, and has such rights and interests
related to performing the work which may be represented and defended by a trade union.
23
The Irish law defines precisely the two cases: A “false self-employed worker” is an individual who:
a) performs for a person the same activity or service as an employee of the other person; b) has a
relationship of subordination; c) is required to follow the instructions of the other person regarding the time,
place and content of his or her work; d) does not share in the other person’s commercial risk; e) has no
independence as regards the determination of the time schedule, place and manner of performing the
tasks assigned; and f) for the duration of the contractual relationship, forms an integral part of the other
person’s undertaking. A “fully dependent self-employed worker” is an individual: a) who performs services
for another person (whether or not the person for whom the service is being performed is also an employer
of employees) under a contract (whether express or implied, and if express, whether orally or in writing);
and b) whose main income in respect of the performance of such services under contract is derived from
not more than two persons (Competition (Amendment) Act 2017).
24
Collective complaint procedure, Council of Europe, Irish Congress of Trade Unions v. Ireland Complaint
No 123/2016; IOE submission, https://rm.coe.int/123casedoc4-en-observations-by-the-ioe/16808b127f.
25
Physicians or hospitals in a non-exclusive provider network are allowed to offer medical services outside
of the network itself.
26
For instance, in 2010 in New Zealand, following an industrial dispute in the film industry, the government
passed an amendment to the Employment Relations Act effectively preventing all workers in the film
industry (considered independent contractors) to enter into collective bargaining. The current government
has declared its intention to restore the right to engage in collective bargaining for film industry workers.
27
A more radical approach to ensure that all self-employed workers experiencing power imbalance have
the right to negotiate their own terms of employment – with no precedent in OECD countries and in conflict
with most existing regulations – is discussed in the academic literature (Creighton and McCrystal, 2016[68];
De Stefano and Aloisi, 2018[20]) and among trade unions (Fulton, 2018[31]). This consists in reversing the
current presumption that self-employed workers do not only provide labour but also services by means of
an independent business organisation that they actually own and manage – which justifies their exclusion
from collective bargaining. In this approach, the burden of proof would be shifted onto those who propose
the restriction, in particular regulation enforcement authorities. The main argument used in support of this
approach is that “the right to bargain applies to all workers with the sole possible exception of those
explicitly excluded by the text of ILO Convention No. 87 and No. 98” (notably, armed forces and the police)
and “self-employed workers are not among those excluded and, therefore, the Conventions are deemed
as fully applicable to them” (De Stefano and Aloisi, 2018, pp. 14-15[20]). A reversal of the burden of the
proof would however conflict with most existing antitrust regulations and it would likely increase the burden
for antitrust authorities that would have to check ex post the validity of a large number of agreements.
Moreover, while aimed at ensuring that all workers in unbalanced power relationship are covered, the

 263
reversal of the burden of the proof may be exploited more effectively by relatively stronger and more
organised groups of workers.
28
For instance, in September 2004, the Hyundai Heavy Industry company union was expelled from the
Korean Metal Workers’ Union (a member of the Korean Confederation of Trade Unions, KCTU) precisely
because of their discriminatory stance toward nonstandard workers (Durazzi, Fleckenstein and Lee,
2018[24]).
29
Aslam & Ors v Uber BV & Ors [2016] EW Misc B68 (ET) (28 October 2016).
30
Ruling 26/2019, Corte d’Appello di Torino, R.G.L. 468/2018. In the first instance, the judges rejected the
request of re-classification. The Corte di Cassazione will take the final decision.
31
Ruling of 10 January 2019, Cour d’Appel de Paris, RG 17/04674. Also in this case, the Cour de
Cassation will take the final decision.
32
Ruling of 15 January 2019, Rechtbank Amsterdam, case nb. 7044576 CV EXPL 18-14762 and 7044576
CV EXPL 18-14763.
33
While outlawing discrimination clearly benefits “outsiders”, strategies aimed at limiting the use of
non-standard forms of employment might backfire against “outsiders” by reducing their job opportunities
(OECD, 2014[67]).
34
The issue of the status of platforms has been the subject of a series of recent court cases throughout
OECD countries. In 2017, the European Court of Justice (case 434/15) found that Uber acts as a
transportation service provider rather than a mere technological intermediary between customers and
independent service providers and that “it exercises a certain control over the quality of the vehicles, the
drivers and their conduct, which can, in some circumstances, result in their exclusion”. In 2018, the French
Cour de Cassation (Cass. soc., 28 novembre 2018, n° 17-20.079) concluded that the power to apply
sanction and to monitor rides constituted a bond of subordination linking the platform TakeEatEasy and
the drivers working for it, which justified considering the platform as an employer.
35
Between 1990 and 2017, the number of worker centers in the United States increased from 5 to 240,
though membership is hard to estimate.
36
The discussion on the United States in this section owes much to David Madland whose inputs are
gratefully acknowledged.
37
The founder of the Freelancers Union explicitly referred to a “new mutualism” (Horowitz, 2013[61]).
38
For example, the campaign in New York by Domestic Workers United to extend basic legal protections
such as overtime pay to domestic workers; the Restaurant Opportunities Center’s efforts to end
subminimum wage work for tipped employees and their suits against lawbreaking employers; and the
“Freelance isn’t Free” legislation pushed by the Freelancers Union.
39
For example, strikes at Walmart were organised by the worker center Organization United for Respect
at Walmart.
40
One of the most successful examples of this is the Coalition of Immokalee Workers’ effort to improve
working conditions for farmworkers picking tomatoes sold by prominent retailers.

264 
41
Although an interesting example is the commercial negotiation conducted in 2016 by SMart in Belgium.
Namely, SMart negotiated as an employer, on behalf of those of its employees who were also food-delivery
riders on the side. SMart signed a convention with the platforms Deliveroo and TakeEatEasy in which they
committed to guarantee riders shifts of three hours minimum and to be paid by the hour and not by the
delivery. In addition, riders were given a formal employment contract. However, this example also
highlights the limits to this type of negotiation: it had led to a non-binding commercial convention, but
Deliveroo unilaterally decided to revert to payment by the delivery with self-employed riders in 2017
(Drahokoupil and Piasna, 2019[64]).
42
However, Prassl (2018[59]) argues that platforms remain resistant to collective bargaining in many cases.
For instance, in the United Kingdom, Deliveroo successfully fought the union recognition request from the
Independent Workers Union of Great Britain (IWGB), on the basis that workers were independent
contractors who could not collectively bargain.
43
In 2016, Uber agreed to the formation of a workers’ organisation in New York City, organised by a local
branch of the International Association of Machinists and Aerospace Workers – while drivers are classified
as independent contractors and thus outside of the provisions of the US National Labor Relations Act.
44
Other websites, such as TurkerView and TurkerHub, offer similar possibilities and are run by Amazon
Mechanical Turk workers themselves.
45
Blockchain technology is a form of distributed ledger technology that acts as an open and trusted record
(i.e. a list) of transactions from one party to another (or multiple parties) that is not stored by a central
authority. Instead, a copy is stored by each user running Blockchain software and connected to a
Blockchain network, also known as a node. Therefore, nobody can tamper with the ledger and everyone
can inspect it (Berryhill, Bourgery and Hanson, 2018[65]).
46
The Swedish white-collar union Unionen is, for instance, exploring how to use data to reduce members
churn and keep a high membership. Unionen is also testing how data on workers requests of support can
be used to “nowcast” (i.e. predict the very near future or near past) the state of a company or a region (the
intuition being that when the business goes well, the number of requests of support tends to be lower and
vice-versa). This would allow them to better target their efforts.
47
http://www.oecd.org/els/emp/LFS Definitions - Tables.pdf.

 265
Glossary
The purpose of this glossary is to provide a common understanding of the concepts as they are used in the
publication. Definitions provided below should not be taken as validated/legal ones in any specific country.
In fact, these concepts may differ across countries and industrial relations contexts.
Collective bargaining: according to Article 2, ILO Convention No. 154, collective bargaining extends to
all negotiations which take place between an employer, a group of employers or one or more employer
organisations, on the one hand, and one or more worker organisations, on the other, for:
 determining working conditions and terms of employment; and/or
 regulating relations between employers and workers; and/or
 regulating relations between employers or their organisations and a worker organisation or worker
organisations.
Collective bargaining normally results in a written document (collective agreement) that is mutually binding
for a stipulated time.
Cross-sectoral (or national) agreement: collective bargaining agreement signed by peak-level social
partner organisations, covering the entire economy, the entire private sector or several sectors.
Derogations from the law and/or from higher level agreements: opening or derogation clauses which
allow to set lower standards, i.e. less favourable conditions for workers, in a generalised way and not
specifically related to economic difficulties (in this latter case see “opt-out”).
Erga omnes: literally in Latin, “towards everybody”. In labour law, the term refers to the extension of
agreements for all workers, not only for members of signatories unions. For cases where agreements are
extended to workers in non-signatories firms, please, refer to “extension”.
Extension or administrative extension: corresponds to the act of extending the terms of collective
agreements at sectoral level also to workers in firms that have not signed the agreement or are not affiliated
to an employer organisation that signed the agreement. This also includes automatic extensions which
therefore do not need a formal legal act but rely on standard administrative practice or jurisprudence (for
instance, relating to the setting of minimum wages, working hours or social insurance contributions and
entitlements).
Favourability principle: refers to the fact that the most favourable conditions to should apply in case of
diverging standards in different agreements covering the same worker.
Firm-level agreement: company-level collective agreements between an employer and a trade union or
between an employer and an employee body, elected and/or mandated by the company’s staff. In this
report, “firm” and “company” are used interchangeably.
Opt-out clause: temporary “inability to pay” clauses which allow the suspension or renegotiation of (part
of) the agreement in cases of economic hardship.

266 
Non-standard forms of employment: refers to all forms of work that are not based on a full-time
open-ended employment contract.
Retroactivity: refers to the extension of the provisions of a newly signed agreement to a period before its
actual signature or extension (usually to the period between the expiration of the previous agreement and
the entry into force of the new one). Usually it implies the payment of arrears corresponding to the increase
in negotiated wages.
Sectoral agreement: collective bargaining agreement signed by trade unions and employer organisations
which represent workers and employers of a specific sector (e.g. metal sector, chemical sector, etc.).
Social dialogue: is defined by the ILO to include all types of negotiation, consultation or simply exchange
of information between, or among, representatives of governments, employers and workers, on issues of
common interest relating to economic and social policy. Collective bargaining, and workers’ voice, which
are the focus of this volume, are specific forms of social dialogue. Social dialogue can exist as a tripartite
process, with the government as an official party to the dialogue or it may consist of bipartite relations only
between labour and management (or trade unions and employers' organizations), with or without indirect
government involvement. Social dialogue processes can be informal or institutionalised, and often it is a
combination of the two. It can take place at the national, regional or at enterprise level. It can be
inter-professional, sectoral or a combination of these.
Social pact: a peak-level deal (for instance at national level) over a comprehensive public policy package
negotiated between governments, trade unions and/or employer’s organisations.
Social partners: representatives of employers and workers, usually employer organisations and trade
unions.
Temporary work agency (TWA) workers: a worker with a contract (of limited or unlimited duration) under
which the employer (i.e. the agency) places that person at the disposal of a third party (i.e. the user firm)
in order to engage in work under supervision and direction of that user firm through an agreement for the
provision of services between the user firm and the agency.
Ultra-activity or after-life: refers to the validity of a collective agreement beyond its termination date.
Wage co-ordination: co-ordination between and/or within trade unions and/or employer organisations
(sometimes with some role of the government) to set formal or informal objectives on wage increases or
wage freezes/cuts. Wage co-ordination can take different forms, i.e. “pattern bargaining”, where first a
sector or a region starts and the others follow; formal or informal inter- or intra-associational guidelines to
follow when negotiating; or wage increases or cuts agreed with a social pact or national agreement.
Workers’ voice: is made of the various institutionalised forms of communication between workers and
managers that offer an alternative to exit (i.e. dissatisfied workers quitting) in addressing collective
problems at firm (in this report, “firm” and “company” are used interchangeably) or workplace (in this report
“plant”, “establishment” and “workplace” are used interchangeably). It can be organised in different ways:
in this volume, instances of workers’ voice mediated through representative institutions are called
“representative voice”. Representative voice arrangements include local trade union representatives
(either appointed by the trade union or elected by the workers), works councils (usually a legally
established body elected or appointed by all workers in the firm irrespective of their membership of a trade
union), or worker representatives (elected or appointed among the workers , either union members or
independent). The prerogatives and rights of the representing entities (from information, to consultation
and co-determination) vary across countries. By contrast, when workers’ voice takes the form of an
institutionalised, regular dialogue between workers and managers (e.g. via participatory town halls
meetings, regular direct consultations etc.), it is called direct voice. “Mixed” systems of voice are those
in which both direct and representative arrangements for workers’ voice cohabit). Direct and representative
forms of voice are not substitutes: they differ notably in terms of the legal protections and rights attached

 267
to the status of workers’ representatives (such as protection against retaliation and firing, and information
and consultation rights).
Works council: official firm-level body which represents workers (often directly elected by workers and
different from unions or union branches at firm level).

COLLECTIVE BARGAINING IN A CHANGING WORLD OF WORK
Collective bargaining and workers’ voice are often discussed in the past rather than in the future tense, but
can they play a role in the context of a rapidly changing world of work? This report provides a comprehensive
assessment of the functioning of collective bargaining systems and workers’ voice arrangements across OECD
countries, and new insights on their effect on labour market performance today. The publication provides
a detailed review of existing collective bargaining institutions and workers’ voice arrangements. It analyses
the role of these institutions for employment, wages, labour market inclusiveness, as well as non‑monetary
aspects of job quality. The publication also discusses how collective bargaining can be mobilised to address
emerging challenges in the labour market, and identifies the type of government intervention that may be
required to do this. The report provides a resource for policy makers, trade unions and employers’ organisations
interested in understanding how collective bargaining and workers’ voice can be used to complement public
regulation in shaping ever‑changing labour markets.
Consult this publication on line at https://doi.org/10.1787/1fd2da34-en.

This work is published on the OECD iLibrary, which gathers all OECD books, periodicals and statistical databases.
Visit www.oecd-ilibrary.org for more information.
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Negotiating Our Way Up

COLLECTIVE BARGAINING IN A CHANGING WORLD

COLLECTIVE BARGAINING IN A CHANGING WORLD

Please cite this publication as:

ISBN 978-92-64-63974-4 (print)

Photo credits: Cover © Sidonie Milon.

Corrigenda to publications may be found on line at: www.oecd.org/about/publishing/corrigenda.htm.

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2 Collective bargaining systems and workers’ voice arrangements in OECD countries 22

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Annex Figure 2.B.1. Sensitivity analysis for Mexico 91

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Annex Table 2.B.1. Decomposition analysis: data sources 88

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Acronyms and abbreviations

ISO code Country label ISO code Country label

AES Australian Election Study

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GEIH Gran encuesta integrada de hogares

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Co-ordination in wage bargaining is a key ingredient for good labour market

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Collective bargaining and workers’ voice play an important role in preventing

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1 Overview: Collective bargaining and

Sandrine Cazes, Andrea Garnero and Chloé Touzet

NEGOTIATING OUR WAY UP © OECD 2019

1.1. How do collective bargaining systems and workers’ voice arrangements

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NEGOTIATING OUR WAY UP © OECD 2019

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2 Collective bargaining systems and

Sandrine Cazes, Andrea Garnero, Sébastien Martin and Chloé Touzet

This chapter provides a comprehensive and up-to-date review of collective

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2.1. The functions and features of collective bargaining systems

2.1.1. The functions of collective bargaining

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2.1.2. The building blocks of collective bargaining

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Figure 2.1. The main building blocks of collective bargaining systems

Level(s) of bargaining Firm Sectoral National

Degree of co-ordination No co-ordination Co-ordination

Enforcement capacity Poorly enforced Enforced and/or high

2.2. The actors of collective bargaining

2.2.1. Trade unions

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