we see once again that collective bargaining and social dialogue offer tailor-made solutions to the immense challenges posed by a volatile economic situation and geopolitical uncertainty

In the current highly volatile economic and geopolitical situation, collective bargaining is seemingly thriving. IndustriAll Europe’s affiliates are at present very actively engaged in negotiations across Europe. And despite high uncertainty, they are reaching agreements at national, sectoral and company-level to help bridge the crisis.

However, extraordinary times require extraordinary solutions. Collective agreements can only compensate a part of the inflation. They are not enough to redress the volatile energy prices. Trade unions are therefore asking governments to step in and provide political instruments, especially to address the peak of energy prices. This is urgently needed because the spike in energy prices and other living costs is leading to a sharp rise in the number of working poor in Europe, particularly in countries where collective bargaining structures have been decentralised following the 2008-09 financial crisis.

While trade unions are demonstrating their readiness and capacity to act quickly and resolutely as more and more workers struggle to make ends meet, it is high time that employers show their responsibility. Trade unions demand an end to tales of the ‘wage-inflation’ spiral and call on employers to agree to pay rises to restore purchasing power and a healthier economy. Data shows that inflation is driven by energy and commodity prices, not wages. Rather than warning against wage-driven inflation, employers should reflect about the impact of record dividends and executive pay packages!

Recent collective bargaining developments from selected, European countries

• In Germany, trade unions are adapting their strategies to the current fluctuating situation. In the chemical sector, IGBCE reached a short-term agreement, valid for seven months, winning a one-off payment of 1400 euros for workers. IG Metall has just reached a deal for steel workers in North-Rhine Westphalia with the highest pay rise in 30 years. On top of a 6.5% increase, there will be one-off payments of 500 euros and apprentices will receive 200 euros. Lump sum increases of fixed amounts for all will give a relatively higher increase for workers with low wages.
• The social partners in Finland have also immediately adapted to the current volatile context, as they have recently made a creative deal by negotiating an agreement in two stages. This means that they will meet again at the negotiating table earlier than normal, at the end of 2022, in order to compare pay and inflation and adjust these to the real situation.
• Romania is the perfect example of why sectoral bargaining is highly needed. Strong unions manage to win impressive company-level agreements, but these benefits cannot be extended to the whole sector and supply chain, leading to massive inequality among workers. FSLI Petrol Energie has won a 10% wage increase, but this cannot be extended to the rest of the sector because social dialogue law limits negotiations. Similarly, Metarom has won a 14 % increase that cannot be extended to the whole sector.
• In Austria, trade unions negotiate sectoral agreements at the national level and have achieved solid increases of nominal pay in 2022. Wages go up by between 4.5% and 5.9% with variations between sectors. It is still not enough to fully compensate for the record high inflation. Therefore, trade unions call on the government to mitigate the effects of the rising inflation, demanding: a price commission composed of the social partners to monitor the situation; the increase of pensions in line with inflation; a social balancing compensation that consists of a 6% pay rise; and direct payments to households.

Isabelle Barthès, industriAll Europe Deputy General Secretary, comments:

“As experienced during the COVID-19 pandemic and other previous crises, we see once again that collective bargaining and social dialogue offer tailor-made solutions to the immense challenges posed by a volatile economic situation and geopolitical uncertainty. We observe that in countries with strong unions and social partnerships, collective bargaining is possible, and successful, despite the uncertainty. Creative outcomes are being reached in agreements that ensure win-win solutions for workers and employers.

Employers and policymakers must join trade unions’ quest to find the best solutions to overcome the current inflation and cost of living crisis. Workers cannot be left alone to pay the bill. Austerity must be avoided at all costs to prevent an economic disaster.”

Contact: Andrea Husen-Bradley (press and communication), Patricia Velicu (policy adviser)