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Labour Relations in Austria

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  1. Labour Relations in Austria Fundacion Ideas – Friedrich Ebert Stiftung February 8, 2010 – Madrid Successful Labour Relations Models in Europe: the German, Austrian and Danish Models FES - Ideas - Madrid 8.2.2010 Eva Belabed

  2. Labour Relations in Austria Labour Relations (Sozialpartnerschaft) • Have contributed to make Austria one of the richest countries in the world and still are an important pillar. • Have contributed to cope with challenges and to mitigate the impact of the crisis in Austria • But they are challenged by globalisation, new capitalism, and the subsequent shifts in power. • Confidence in Social Partners is (very) high. FES - Ideas - Madrid 8.2.2010 Eva Belabed

  3. Austria catches up … • Austria catches up and ranks high in • Wealth, Growth and Competitiveness • Living standards and quality of life • Employment (relatively low unemployment) • Public opinion: citizens satisfied, despite concerns • Attractiveness to others: migration, tourism, business leaders.. FES - Ideas - Madrid 8.2.2010 Eva Belabed

  4. … and faces (new) challenges • Globalisation and new capitalism lead to • Increasing pressure on living and working conditions, • On social protections systems, • Public Services (privatizations), • Rising inequalities… • And Austria faces (new) challenges • The crisis => Jobs – jobs - jobs • Rising inequalities, Education, Innovation, insufficient R&D, Tax structure … • Sustainable Growth Model FES - Ideas - Madrid 8.2.2010 Eva Belabed

  5. Catching up - Real GDP p.C. multiplies x 5 FES - Ideas - Madrid 8.2.2010 Eva Belabed

  6. The Economy growsbut growth rates decrease FES - Ideas - Madrid 8.2.2010 Eva Belabed

  7. Unemployment rates are higher since the 1980s FES - Ideas - Madrid 8.2.2010 Eva Belabed

  8. Incomes grow a lot less since the 1980s FES - Ideas - Madrid 8.2.2010 Eva Belabed

  9. ..and the wage share decreases with a regressive impact of taxes WIFO, Guger 2009 FES - Ideas - Madrid 8.2.2010 Eva Belabed

  10. Austria moves towards the Service Society FES - Ideas - Madrid 8.2.2010 Eva Belabed

  11. Tourism is an important sector FES - Ideas - Madrid 8.2.2010 Eva Belabed

  12. Austria is competitive and exports rise(Austria ranks 14th – 17th in WCR 2003 – 2010) FES - Ideas - Madrid 8.2.2010 Eva Belabed

  13. Taxes and Social Security Contributions grow…(Austria ranks 6th in EU on Social Protection Exp./GDP – SSR 2009) FES - Ideas - Madrid 8.2.2010 Eva Belabed

  14. ..but expenditures (still) reflect high quality public services and have a strong redistributional impact FES - Ideas - Madrid 8.2.2010 Eva Belabed

  15. Life expectancy increases FES - Ideas - Madrid 8.2.2010 Eva Belabed

  16. … and population grows - at varying rates(composition changes: older age-groups vs younger) FES - Ideas - Madrid 8.2.2010 Eva Belabed

  17. Very few strikes in Austria – except 2003 FES - Ideas - Madrid 8.2.2010 Eva Belabed

  18. Austrians have varying degrees of confidence in institutions – with Chamber of Labour ranking first Source: Market-Marktforschung, October 2008, Vertrauen ist ungleich verteilt http://www.vmoe.at/rte/upload/news_vertrauen_ist_ungleich_verteilt_.pdf FES - Ideas - Madrid 8.2.2010 Eva Belabed

  19. Austrians are more satisfied, confident and optimistic than Europeans on average Eurobarometer Nr. 72, December 2009: some contrast with other polls Comparing Austria and EU: A EU Satisfied with life 85% 78% Satisfied ec. Situation 43% 23% Confidence Government 54% 29% Confidence political parties 36% 16% Austria: • 2/3 see no impact of crisis on personal situation • 20% expect improvements FES - Ideas - Madrid 8.2.2010 Eva Belabed

  20. At the same time, they feel increasing pressure on their living and working conditions (stress >) Index of Working Climate 2009 (Arbeitsklimaindex AKOÖ) FES - Ideas - Madrid 8.2.2010 Eva Belabed

  21. And they are quite critical towards the EU – although the crisis has changed attitudes Referendum 1994: 66% in favour of EU Accession Source: ORF 2.12.2009 – Poll ÖGfE FES - Ideas - Madrid 8.2.2010 Eva Belabed

  22. How did we get there? • Despite: no significant resources, small country, lack of capital, .. • But: skills, small country (cf Nordics), institutional setup and cooperation, • Success Factors: • Political Consensus – learning from the past • Labour Relations – negotiations replace conflict • Mixed Economy: Private – Public – SGI – Welfare State • Austro-Keynesianism and Reforms 1970s • Technology Follower • European Integration and Enlargement • (New) Challenges: globalisation and new capitalism change logic and shift power FES - Ideas - Madrid 8.2.2010 Eva Belabed

  23. Labour Relations in Austria - an important success factor • From Confrontation & Conflict to Cooperation and Consensus • Institutional setup • How does it work? • Key success factors • The Social Partners – Recent Agreements • The Chambers of Labour • Challenges ahead FES - Ideas - Madrid 8.2.2010 Eva Belabed

  24. Labour Relations in AustriaFrom Confrontation&Conflict to Cooperation&Consensus • Institutions created 19th / 20th century • But lack of political and institutional conditions for cooperation (class&group interests > common goals) • Political and economic crises created a willingness to cooperate and negotiate from 1945 on • Guided by the principle of solving conflicts of interest primarily at the negotiating table rather than through industrial action (strikes, lock-outs) • To ensure economic reconstruction and social equality in the postwar-period • Discussions and temporary setback 1980s – 1990s – 2003 FES - Ideas - Madrid 8.2.2010 Eva Belabed

  25. Institutional Setup – The System • The Austrian System of Economic and Social Partnership • Works on different levels, based on different grounds (legal, voluntary, bargaining) • General level: The Austrian Social Partners • Sectoral Level: Sectoral Unions and Federations (Economic Chamber) • Company Level: Works Councils and Management • Aims: Strengthening Competitiveness and stability, preserving and improving social standards and protecting the ecological bases of existence FES - Ideas - Madrid 8.2.2010 Eva Belabed

  26. Institutional Setup – The Social Partners The Austrian Social Partners • The Economic Chamber (WKÖ) • The Chamber of Labour (BAK) • The Chamber of Agriculture (LKÖ) • The Austrian Trade Union Federation (OGB) FES - Ideas - Madrid 8.2.2010 Eva Belabed

  27. How does it work – the Framework • The Institutions: • Strong Participatory and Representative Democracy • Strong, Independent, Representative Organizations • Self-Governed (Elections) • Chambers based on law • Multi-level cooperation and interaction: • informal • voluntary • historically grown • between the organizations and with the government FES - Ideas - Madrid 8.2.2010 Eva Belabed

  28. How does it work – Basic Principles • Common long-term economic and social policy aims • E.g. growth of real incomes and wealth, social security, full employment, equal distribution of wealth, price stability ... • Dialogue, co-operation and co-ordinated action more beneficial for everybody than open conflict • No denying or ignoring of conflicts ... • ... but seeking solutions and balance of interest that benefit all participants FES - Ideas - Madrid 8.2.2010 Eva Belabed

  29. How does it work - Critical Success Factors • Culture and Political Will • "... a special kind of discussion and negotiation culture ... • Trust, common goals, balance of interests • Macro-economic perspective • Compromise as a contribution to success • ... the willingness to enforce compromises internally as well as externally, and • to represent different interests with due regard to medium-term joint objectives and the overall interests of society ...„ FES - Ideas - Madrid 8.2.2010 Eva Belabed

  30. Institutional Set up – the Chambers • Established by law, compulsary membership • Representing professional, social and cultural interests • Chamber of Labour also represents the interests of consumers, unemployed, retired workers, apprentices • Politically/financially autonomous/independent • Self-governed (elections) and largely decentralised FES - Ideas - Madrid 8.2.2010 Eva Belabed

  31. Institutional Setup – The Chambers’ Responsibilities • Go far beyond mere industrial relations, lobbying and services for members • Are engaged in legislation, administration, social security system • Have the right to evaluate legislative drafts and to submit amendments • Fulfill public tasks/providing public goods (education, working conditions, labour market policy ...) • Send members in many advisory bodies / committees • Informal negotiating and problem solving competency • Formal co-operation in social partnership institutions FES - Ideas - Madrid 8.2.2010 Eva Belabed

  32. Institutional Setup – Commissions, Councils and Committees • Parity Commission and its successors (top representatives of government and of 4 major social partnership organizations) • With 4 Sub-Committees: • Advisory Council for Economic and Social Affairs • Subcommittee on International Issues • Subcommittee on Wages • Subcommittee on Competition and Prices FES - Ideas - Madrid 8.2.2010 Eva Belabed

  33. Advisory Council for Economic and Social Affairs - Basics • Created 1963 - based on informal agreement of 4 large social partnership organizations • No legal basis, no legal personality • No own budget, no building, no staff • Publishes studies and reports on economic and social policy issues • ... containing joint (unanimous) recommendations to policy makers FES - Ideas - Madrid 8.2.2010 Eva Belabed

  34. Advisory Council for Economic and Social Affairs - Organisation • „Think tank" of 21 top experts of social partners' bodies • President chairs meetings and represents outside • Presidency rotating on 6-month basis • 2 Secretaries General: "organizational backbone" • No written rules of procedure • All activities are unpaid (costs shared by 4 organizations) • Mandate unlimited • Meetings once a month FES - Ideas - Madrid 8.2.2010 Eva Belabed

  35. Advisory Council for Economic and Social Affairs - Procedures • 4 Social Partners' presidents ask for opinion • Council establishes working group including external experts from all areas • Working group submits draft to Council • Council negotiates to formulate unanimous wording and recommendations • 4 Social Partners' Presidents sign and release • Report is published - forwarded to government and media FES - Ideas - Madrid 8.2.2010 Eva Belabed

  36. Advisory Council for Economic and Social Affairs - Outcome • Profound expert knowledge of policy oriented scientists close to real life • Aims at consensual views among all social partners about basic facts, figures and contexts • Concentrates on facts, common concern and interests • Keeping political differences out of discussion • Giving unanimous recommendations FES - Ideas - Madrid 8.2.2010 Eva Belabed

  37. The Social Partners - Recent Agreements (1) • Action plan for older employees (2008) • Elements of a long term climate policy (2008) • Safeguarding the future of the public health insurance (2008) • A modern legal basis for European statistics (2008) • The future of the labour market – 2010 (2007) • Agreement on combat against social dumping and social fraud (2007) • Basic concept for a policy for Lifelong Learning (2007) • Agreement on minimum wages (2007) FES - Ideas - Madrid 8.2.2010 Eva Belabed

  38. The Social Partners - Recent Agreements (2) • Agreement on better compatibility of job and family (2007) • New law on regulation of working time flexibility (2007) • Declaration: Fifty years of the Treaties of Rome (2007) • Proposals for economic growth and full employment (2006) • Austria 2016 – Declaration of the Social Partners (2006) • Conference proceedings: The challenges facing participatory democracy in an enlarged Europe (2006) • The macro-economic policy and the Lisbon strategy of the EU (2005) FES - Ideas - Madrid 8.2.2010 Eva Belabed

  39. The Chambers of Labour – A special institution • Created in 1920 (first request in 1872) on pressure by unions and social-democrats to protect and extend social achievments • Public body based on „Law on Chambers of Labour“ • Broad Mandate: „To represent and promote the social, economic, professional and cultural interests of workers and employees“(§ 1) FES - Ideas - Madrid 8.2.2010 Eva Belabed

  40. The Chambers of Labour –Tasks & Outcome • Participation in legislation and administration • Research & studies (think tank) • Training of works councils and union Representatives • Services for members – free of charge: information, legal advice including representation in court in labour disputes • 2 mio consultations per year • Education and culture: subsidies, BFI - BBRZ • Outcome: 1 Euro paid = 3 Euros back (total of services, OÖ) FES - Ideas - Madrid 8.2.2010 Eva Belabed

  41. The Chambers of Labour -Membership and Resources • Membership compulsory - 3,3 mio members: • Workers, apprentices, unemployed, parental leave (ex: civil servants, agriculture); interests of retirees are represented • Financed by contributions: • (0,5% of Gross Salary - max. € 19, 20) • More than 80% spent on direct services for members • advice on labour and social law 72%, • tax law 6,7%, • consumer issues 19,8%, • education 1,5%, • Staff: 2.400 (incl. Brussels Office) FES - Ideas - Madrid 8.2.2010 Eva Belabed

  42. The Chambers of Labour –Organisation & Governance • 1 Federal Chamber (umbrella) • 9 Regional Chambers • Brussels Office • Self-governed public corporations • Members elect a Parliament of Workers for five years (equal, secret, direct vote), political groups • Bodies: • President, Vice-Presidents (elected by plenary), • Governing Body, Committees, • Plenary • Staff 2.400 FES - Ideas - Madrid 8.2.2010 Eva Belabed

  43. The Chambers of LabourCooperation with Trade Unions (1) • The task of the Chambers of Labour is to advisethe voluntary professional bodies empowered to make collective agreements and the bodies dedicated to the representation of company interests, to support them in the promotion of the social, economic, professional and cultural interests of workers and employees, and to work jointly with them. (§ 6) FES - Ideas - Madrid 8.2.2010 Eva Belabed

  44. AK • Legal advice, legal and consumer protection • Information acquisition and processing • Focus of the representation of interests vis-a-vis State institutions • Membership by law • Staff of experts The Chambers of Labour Cooperation with Trade Unions (2) ÖGB • Agreements on wages and salaries, collective bargaining • Support and backup for works councils Division of labour and co-operation • Focus of the representation of interests vis-a-vis industry and sector • Voluntary membership • Struggle organisation • Right to go on strike FES - Ideas - Madrid 8.2.2010 Eva Belabed

  45. The Chambers of Labour History and Public Opinion • Created in 1920 at the request of unions (first requ.1872) • Liquidated in 1938 – re-established in 1945 • Political attacks in the 1990s led to strategic overhaul – reorientation – professionalisation – more direct services • „Referendum“ 1996: 91% of members want Chamber as a legal public organisation to defend their interests (71% participated) • Polls: Chamber ranks first in citizen‘s confidence: 80% (followed by President and other institutions) • 87% AK is important; 67% very important • 85% (very) satisfied with services FES - Ideas - Madrid 8.2.2010 Eva Belabed

  46. The Chambersof LabourSkills Development and Vocational training • BBRZ – Group, • A company built by the labour movement in 1960 • To help people getting back to work • By: skills development, vocational rehabilitation, education, training and placement • For different target groups and markets • A common task: enhance education, employment and vocational integration • Oriented upon requirements of economy and labour-market • International Activities – EU – Twinning • Staff: 4.300 (OÖ) FES - Ideas - Madrid 8.2.2010 Eva Belabed

  47. The Chambers of LabourSkills Development and Vocational training • BBRZ – group (cont‘d) • Vocational Education for individuals and companies • Vocational Rehabilitation: Prevent work-related problems, rehabilitate and reintegrate after accident or illness, • Prepare for and help with reintegration by special employment and training projects • Clients: Individuals, Companies, Regions (Länder), Communities, Social Security Institutions (PV, UV, KV), Bundessozialämter, Employment Agencies FES - Ideas - Madrid 8.2.2010 Eva Belabed

  48. Challenges for Social Partners- in Austria and Beyond • The International Dimension • Globalisation and New Capitalism change the logic and shift power • This requires new approaches to corporate, national and global governance • Cross-border, European and international cooperation need to be strengthened • Social Partners and other stakeholders need to be involved on all levels and in all organsations – including the international level • Building on existing cooperation, institutions and procedures:Cross-Border, EU-Social Dialogue, EESC, AICESIS, • The impacts of the crisis FES - Ideas - Madrid 8.2.2010 Eva Belabed

  49. How does Austria cope with the crisis FES - Ideas - Madrid 8.2.2010 Eva Belabed

  50. Unemployment increases but is second-lowest in Europe (EU-method)Source Chart 6: EU employment situation and social outlook, Monthly Monitor, January 2010 FES - Ideas - Madrid 8.2.2010 Eva Belabed