CAWIE- Indicators on collectively agreed Minimum Wages Austria

1. CAWIE-Indicators on collectively agreed Minimum WagesAustria Kick off Meeting Leuven 23-24.1.2012 Sepp Zuckerstätter

2. The Austrian system of wage settingA very brief description • The private Sector • Who can negotiate collective agreements • How is coverage determined • How are minimum wages determined • The case of the public Sector • Description of the indicator of collectively agreed wages (Tariflohnindex)

3. The private Sector:Who can negotiate collective agreements • The rules governing collective representation and collective agreements in the private sector are set (primarily) by the Arbeitsverfassungsgesetz (ArbVG)“ (labour constitiution law).

4. The private Sector:Who can negotiate collective agreements • The law grants the Right to conclude collective agreements to the following types Organisations • Mandatory representational Bodies (“Chambers”) • Voluntary organisations after formal application to the Ministry for Labour and Social Affairs, if some representational criteria are met. • Agreements by voluntary associations always overrule, agreements by mandatory associations, if both might apply. • Some Employers (mainly privatised body's from the public sector) have special laws granting them the right to negotiate collective agreements

5. Who actually uses the right to negotiate (employees side) • On behalves of the employees the negotiations of collective agreements are almost exclusively done by the Austrian Trade Union (ÖGB) • The ÖGB is the only Union in Austria. It is organised into subdivisions taking care for specific sectors. Actual organising and negotiation work is done by the subdivision on Branch level. • Some small collective agreements in the agricultural sector are negotiated by their legal representation, the agreement applying to academic pharmacists is negotiated by a special employee association, the agreement for the public broadcasting company is negotiated by the “Betriebsrat” of the company.

6. Who actually uses the right to negotiate (employers side) • Most of the agreements on the employers side are with their mandatory representations mainly the WO Wirtschaftskammern (Economic Chambers). • Agreements are negotiated by the subdivisions on Branch level mainly of the federal chamber, sometimes also on regional level. • In the agricultural sector the legal representation of the agricultural sector is the main negotiation partner, for people employed by professionals (layers, medical doctors etc) the chamber of the relevant profession is negotiating. In non professional services, media and some other sectors voluntary associations are the partners to the agreement.

7. How coverage is determined • Collective agreements govern all employment relations with employers who are part of the negotiating employers association. Irrespective of individual union membership of the employee. (Aussenseiterregel) • By way of mandatory membership with the WK most of the private sector agreements apply to all employers in the Branch concerned. • There are two main instruments to fill the admittedly small holes in coverage • 1 Minimum Wage Tariffs can be set by the Ministry of Labour on request of the trade uion and after consultation with social partners if no employer association exists. (eg employees in private Households) • 2. Agreements by voluntary organisations can be extended to non members (Allgemienverbindlichkeitserklärung) if they encompass a sufficient share of the relevant Branch or Activity

8. The case of the public Sector • Formally: some, even so not all, of the wages in the public sector are set by law, not by collective agreement. • Practically: negotiations about the changes closely resemble the procedures of collective agreement therefore their results are treated like the results of collective agreements in the relevant statistics.

9. Coverage • Due to mandatory membership of employers, extension possibilities and steady organisational efforts of unions to negotiate collective agreements also in Branches not covered by mandatory membership of the WK actual coverage in Austria is between 95-98%

10. Description of the indicator of collectively agreed wages (Tariflohnindex) • Statistik Austria publishes an Index of collectively agreed wages starting in 1947 with only 2 Agregates, from 1966 onwards for the whole economy with varying sub-aggregates. • Base Years have been updated 1976, 1986 and 2006.

11. The indexofcollectiveagreedwages 06 (Tariflohnindex 06, TI06) • The TI06 is a Laspeyres Index. therefore based on fixed weights. • The basic unit of observation is the minimum wage in a particular position of a collectively agreed wage scheme, within a particular Agreement, i.e. a “wage-cell” • For practical reasons representative cells are selected.

12. The Index ofcollectiveagreedwages 06 (Tariflohnindex 06, TI06) • Selected and weighted wage cells are followed over time. Whenever the relevant minimum wage for the cell changes the index is updated. The index is published in monthly intervals. • One off payments which only go to employees employed at the time of the agreement and which do not enter the wage scheme on a permanent basis are not recorded.

13. The Index ofcollectiveagreedwages 06 (Tariflohnindex 06, TI06) • The same holds for additional agreements which regulate an increase in actual wages and are only relevant for Employees receiving higher than minimum wages of their respective wage group. • The index is based on monthly wages using the relevant full time standard of the agreement.

14. The Index ofcollectiveagreedwages 06 (Tariflohnindex 06, TI06) • Changes in “quality” i.e. new wage schemes fusion of collective agreements etc. are dealt with by selecting appropriate new representatives in accordance with the social partners. • For details she the Excel file.