DRAFT POLICY PAPER
Sabina Avdagic
OSI International Policy Fellowships Program
March 2002
Introduction
Scope of the problem
Positions
of different actors
Options for consideration and preliminary
recommendations
In the immediate breakdown of the socialist system, Central Eastern
European (CEE) countries declared Western models of pluralist democracy,
civil society, and market economy to be the ultimate transformation goals.
In the context of these changes, the previous structure of labor relations
had to be modified as well. All CEE countries have introduced tripartite
forums for discussion between social partners (trade unions, employer organizations,
and government representatives), and introduced a new legislation regarding
collective bargaining, labor contracts, workplace representation of labor
interests, etc. The countries that have already undergone negotiations
about potential European Union (EU) membership have, as a part of the pre-accession
strategy, done the most in terms of changes required in the fields of social
and labor policy by implementing the so called acquis communautaire.
However, the problem is the discrepancy that exists between the adoption
of the EU directives and their implementation in practice. The paper discusses
this problem - by focusing on the Czech Republic, Hungary, and Poland -
and referring to one element of social policy requirements that have been
set out for the applicant countries, namely the social dialogue. In contrast
to the situation in the EU where the social partners have virtually obtained
the role of legislators, the CEE social partners, have had very little
influence in both the policy-making process and the accession process.
While the formal structures for the representation of organized interests
do exist in CEE countries, their functioning and effectiveness is rather
questionable. Uneven balance of power between the actors involved in the
process has created common perception that these tripartite forums are
very often not more than "talk-shops" in which governments are able not
only to bring decisions without much prior consultations, but even set
the agendas of these meetings.
Results of such practices are not only the loss of beliefs in traditional benefits of trade unionism, and consequently drops in unionization levels, but also alarmingly low rates of coverage by collective agreements when compared to the EU member states. The marginalization of organized labor, and in many instances its practical exclusion from policy making, could potentially in the long run have very serious consequences for the political stability of young CEE democracies. Furthermore, the low quality of social dialogue and the weak position of organized labor in the applicant countries could also have a direct impact on the social partners in the current EU member states, since the accession might bring the risk of social dumping.
Over the years the social dialogue has become an essential component
of EU social policy. As such, it is an important part of both legal and
institutional acquis. The social dialogue is understood to be not only
the means to achieve more equitable and just policies, but also a guarantee
for solid transposition of the acquis into practice. The implementation
of EU legislation is believed to be highly dependent on the cooperation
of all the social partners involved in (and affected by) the process. Accordingly,
the Commission has repeatedly outlined the importance of the promotion
of social dialogue in the applicant countries, and made it an explicit
requirement for the accession.
All three countries under examination have made considerable progress
in terms of transposition of the EU requirements regarding the social policy
in general, and the social dialogue in particular. Besides the basic rights,
such as the right to strike, free collective bargaining and freedom of
association, the tripartite commissions comprising representatives of labor,
business, and government have been established in the beginning of transition.
However, the functioning of these commissions has been quite different
from the similar bodies in the EU member states. While the results of tripartite
negotiations in the EU countries can effectively be translated into legislation,
in the CEE countries they do not have clearly outlined legal status. Moreover,
the influence of the social partners on the choice of the issues to be
discussed as well as on the actual decisions has been uneven, with the
government occupying the strongest position in all the three countries.
This mode of policy making has most severely affected trade unions who,
while having the right to formal participation in the process, have effectively
been marginalized and weakened. The current form of labor relations in
the CEE countries resembles a hybrid form in which two extremes operate
side by side - national tripartite arrangements on one hand, and decentralized
workplace relations on the other. The intermediate, sectoral or industry
level bargaining is either lacking or very weak. While the quality of decentralized
collective bargaining is undermined by either the weakness of unions or
their complete absence from small and medium-size companies, tripartite
negotiations offer only general guidelines which are not automatically
binding at either sectoral or enterprise level.
As far as the EU accession is concerned, this issue is – despite Brussels`
calls for the active involvement of social partners - almost exclusively
handled by the governments of the respective applicant countries. In some
instances even the results of the reviewing of the acquis have been
declared confidential by government. This lack of transparency has in effect
crippled trade unions in terms of the relevant information, and further
weakened their position in the issues relating to the EU accession. As
a result, unions are very often not even fully aware of the potential effects
of the integration on their specific sector, branch or region.
In short, trade unions from the applicant countries are in a difficult
position as they are torn between two important tasks – one the one hand,
they are expected to take on a more active approach regarding the issues
related to the EU integration, and on the other, they are still facing
adverse consequences of economic transformation and have to respond to
their members` demands regarding the protection of wages, employment, and
working conditions. The challenge they are facing is therefore twofold
– to strengthen their role in the national-level policy-making arena, particularly
in regard to social and economic issues, and to prepare themselves to actively
play their part in the accession process.
The objective of this paper is to provide trade unions with some practical suggestions regarding the following questions: How could trade unions from the applicant countries build up the capacity and strengthen their role in the national-level social dialogue? How can they use their international networks and partners to promote their influence on the social issues relating to accession? What type of cooperation with their EU counterparts would be most beneficial for preparing trade unions for their future role in European social dialogue? What type of EU projects and services could be utilized to achieve these goals?
In general, trade unionists feel helpless in influencing the agenda
and decisions of the tripartite meetings regarding both national-level
social policies, and issues related to the EU accession. Their positions
and proposals have been largely ignored by governments. Their limited achievements
feed back and further weaken both the organizational structure of trade
unions and their impact on policy making. Low unionization rates, fragmented
organizational structure, and declining rates of coverage by collective
agreements clearly show the weakness of organized labor in CEE countries.
Employer associations also suffer from organizational weakness. In fact,
they are probably the least organized side among the three social partners
involved in the social dialogue. However, they do not see the clear benefits
of the social dialogue, and largely prefer to have bilateral contacts with
the unions. At the same time, the policies followed by the transition governments
in the three examined countries have been in accordance with neoliberal
principles, and therefore have had less of an adverse effect on employers
than on trade unions.
Governments have managed to preserve the strongest position in the tripartite
commissions, and are able to dictate both agendas and decisions of these
meetings. Issues related to the EU accession are also almost exclusively
handled by governments, with extremely limited participation of the other
social partners. When confronted with criticism regarding the exclusionary
modes of policy making, governments commonly try to justify their position
by referring to the mere existence of the formal structures for social
dialogue and collective negotiations.
Finally, the EU Commission has repeatedly stressed the importance of the involvement of social partners in the accession process and the development of the social dialogue at national levels. However, since the requirements regarding social policy belong to the group of the so called soft acquis, the Commission can provide only general guidelines while the mode of social policy making depends on the practices utilized by respective national governments. It is in the interest of Commission, however, to ensure that the applicant countries develop the necessary structures for social dialogue and pursue inclusionary modes of policy making. The failure to achieve these goals might in the long run (once the accession materializes) result in instabilities on the labor market and endanger the very functioning of the European social model.
Options for consideration and preliminary recommendations
Although the three CEE countries under review have been actively working
on accession strategies to EU membership for years now, the results achieved
in the field of the incorporation of social partners (particularly organized
labor) in the policy process are far from satisfactory. It is essential
that all the actors involved in this process realize potential benefits
of a meaningful social dialogue. The experience of some Western European
countries that adopted neocorporatist modes of policy-making should serve
as a driving incentive. The active participation of the social partners
in these countries did not only create the sense of social justice and
political stability, but has improved efficiency, productivity, and therefore
the competitiveness of these economies in the world market. The review
of the current situation of the social dialogue in the CEE countries shows,
however, that there is still a long way to go to achieve similar results.
While the structures for the incorporation of the social partners exist,
they have not been meaningfully utilized. The governments of the applicant
countries still enjoy a much more powerful position vis-à-vis the
social
partners in both domestic industrial relations and the accession negotiations.
Moreover, until now, they have not shown any serious intention to significantly
alter these arrangements.
However, if the current practices prevail, there is a clear risk of
social dumping that in the long run can jeopardize the prospects for all
the actors involved. Once these countries are admitted to the full membership
in the EU, and once the principles of the free movement of labor are activated,
the bargaining position of the social partners, especially labor, from
the current Member States could be weakened through the possible reallocation
of capital and labor. Moreover, as the social exclusion is not sustainable
in the long term, the result could be political instability or a high incidence
of strikes and protests which certainly would not be in the interest of
either national governments nor the EU.
Both positive scenarios related to the altering of the existing arrangements,
and the more gloomy ones associated with the continuation of the current
practices, should serve as a driving force for the establishment of a meaningful
cooperation between all the actors involved. The social dialogue should
not be perceived as a zero-sum game in which one player wins only if the
other loses but as a process that, if based on a solid cooperation and
coordination of interests, can bring benefits to everyone. Therefore, it
is essential that the actions and programs for the improvement of social
dialogue in the applicant countries are undertaken by all the actors involved,
and also on both national and the EU level. It would be unrealistic to
expect that efforts undertaken by only one set of actors could lead to
the fruitful results unless there is a broad-based consensus regarding
the goals and objectives. But for this consensus to materialize, both individual
and joint actions of different sets of actors are necessary. What follows
is a preliminary list of possible recommendations that could serve as a
guideline for trade unions from the applicant countries and their partners
from the EU in their efforts to protect employees` interests and become
more active players in the enlargement process.
Trade unions from the applicant countries should develop a much more
concrete strategy in terms of enhancing their position within national
policy-making, but also in terms of securing their place in the accession
process and preparing for social dialogue at the EU level. Drawing lessons
from their counterparts from the EU Member States is vital. Promoting the
cooperation with the individual trade union centers across Europe, as well
as regular contacts with the ETUC and ETUI should be continued. Although
the conferences and meetings with the European social partners are useful
for promoting the awareness of general problems, discussing different models
of social dialogue, and offering various education programs for trade union
leaders, their benefits are likely to ensue only in the long run. For these
reasons, trade unions should work simultaneously on several activities
that could bring about desired outcomes. For instance, it would be useful
to establish expert groups that would outline unions’ strategy on the accession,
and present it to the government. Taking into consideration the current
lack of resources at their disposal, it is obviously difficult for trade
unions to attract such experts. However, financial constraints need not
be such an obstacle since the funds could be made available through different
schemes offered to the applicant countries, e.g. the PHARE program. Therefore,
trade unions should try to take on a more active approach in influencing,
for instance, their respective ministries of Social Affairs to take into
considerations their proposals when applying for EU funds. While the formal
structures of social dialogue can be used as one platform for achieving
such a task, more effort should be put into establishing informal networks
with different government agencies. Building the networks that operate
outside of formal boundaries can help the coordination and promote understanding
and trust between the actors.
The European social partners, in particular the ETUC and UNICE should
continue their efforts in strengthening communication channels with trade
union and employers organizations in the applicant countries. While the
programs they have launched so far represent important steps for the promotion
of the European social model, much more could be done to assist the CEE
social partners. For instance, expert teams could be delegated for each
individual applicant country to closely monitor the developments regarding
the transposition and implementation of the acquis. By gaining a
deeper understanding of problems on the ground, the European social partners
would be able to use their expertise in a more practical way. Moreover,
they could make this information more transparent by presenting it to the
Commission and requiring its assistance regarding the concrete measures
to be undertaken. More critical and in-depth reports would enable the Commission
to take on a somewhat harsher stance towards the governments of the applicant
countries during the negotiations. Repeated calls for the inclusion of
social partners in the accession process and the implementation of the
acquis
have not so far proved to be sufficient. Therefore, annual reports that
evaluate the progress that individual applicant countries make in the social
field should take a more critical stance and be based on a much more rigorous
examination of the developments on the ground. In this respect, the ETUC
and UNICE expert teams could serve as a valuable source of information.
Moreover, similar experts teams could be established within DG Social Policy.
These teams then would monitor legislative reforms and implementation in
the candidate countries. In the field of social dialogue, their attention
should be focused on the legislation governing tripartite commissions,
as well as practical functioning of these bodies (e.g. the spectrum of
issues negotiated and practical relevance of decisions made in these forums).
Such progress reports should then serve as determinants of the speed of
the accession process for individual countries.
The implementation of the above outlined recommendations is necessary
if the social partners from applicant countries - and in particular trade
unions – are to further promote the quality of social dialogue at national
level, obtain a more meaningful role in the accession process, and prepare
themselves for the active participation in the European social dialogue.
However, the implementation of the recommendations will clearly depend
on means and instruments that are at disposal of CEE unions and their EU-level
partners. It is in this light that trade unions should determine what type
of action and strategy could be implemented; how could they use EU projects
and networks to strengthen their influence in social dialogue and the accession,
and ensure the implementation of the social policy acquis; and what
type of cooperation with their EU-level partners (i.e. ETUC and individual
member states` trade unions) would be most beneficial for achieving these
objectives.
Taking into consideration the lack of material resources (as well as
expertise on the EU accession issues) in most CEE labor organizations,
the most efficient course of action is to rely on the available EU programs
for the financial support, and on the partnership with the relevant union
organizations from the EU for obtaining information, sharing experience,
and building-up administrative structures necessary for undertaking and
implementing these programs. In particular, the CEE trade unions should
consider three (rather under-utilised) EU programs as important means for
achieving the above described objectives.