Collective agreements contribute to fighting inequality, says ILO

Collective bargaining can advance equality and foster inclusion says a new ILO report, the first of a series of flagship reports on Social Dialogue.

The higher the coverage of employees by collective agreements, the lower the wage differences are, says the report entitled Social Dialogue Report 2022: Collective bargaining for an inclusive, sustainable and resilient recovery , which is based on a review of collective agreements and practices in 80 countries at different levels of economic development and the legal and regulatory frameworks in 125 countries. Collective bargaining – the process of voluntary negotiation between one or more employers (or their organizations) and one or more workers’ organizations – can effectively reduce wage inequality, whether in an enterprise, sector or industry.

Collective bargaining can also contribute to narrowing the gender pay gap. Over half (59 per cent) of the collective agreements reviewed by the ILO study reflect a joint commitment by employers or their organizations and workers organizations (particularly trade unions) to address gender inequality by ensuring equal pay for work of equal value, providing for parental and family leave and addressing gender-based violence at work.

According to the report, over one third of employees (35 per cent) in 98 countries have their wages, working time and other conditions of work set by autonomous collective negotiations between a trade union and an employer or employers’ organization. But there is a considerable variation across countries, ranging from over 75 per cent in many European countries and Uruguay to below 25 per cent in around half of the countries for which data are available.

Role in mitigating the impact of the COVID-19 crisis

Collective bargaining has played an important role in mitigating the impact of the COVID-19 crisis  on employment and earnings, helping to cushion some of the effects on inequality while reinforcing the resilience of enterprises and labour markets by supporting the continuity of economic activity, explains the study.

The tailoring of public health measures and strengthening of occupational safety and health (OSH) at the workplace, together with the paid sick leave and healthcare benefits provided for in many collective agreements, have contributed to protect millions of workers.

Collective agreements signed to facilitate COVID-19 telework are evolving into more durable joint frameworks for decent hybrid and tele-working practices. They address issues such as changes in work organization, adequate training and costs related to telework. Some address cybersecurity and data protection.

A number of agreements “re-regulate” working time, affirming rest periods through a right to disconnect, fixing the days and hours when an employee must be reachable on the one hand, and increasing workers’ autonomy and control over their working time schedules on the other. Collective agreements also address inclusion and integration in the workforce of offsite and onsite workers, as well as equality of opportunity. Additionally, the efforts of employers and workers provided countries with the institutional capacity to absorb, adapt and transform.

“Collective bargaining has played a crucial role during the pandemic in forging resilience by protecting workers and enterprises, securing business continuity, and saving jobs and earnings. It has provided an effective means for employers and workers to agree on inclusive solutions to shared concerns or challenges and mitigate the effects of current and future crises on the economy, enterprises and workers,” said ILO Director-General Guy Ryder.

An essential tool to achieve a human-centred recovery

Collective bargaining will be an essential tool to face the fundamental changes that are shaking up the world of work. In view of the rapid growth in diverse work arrangements – including temporary, part-time and on-call work, multi-party employment relationships, dependent self-employment and, most recently, platform work performed under different work and employment relationships – several countries have taken steps to ensure the effective recognition of the right to collective bargaining for all workers, said the ILO study.

As a form of co-regulation, collective bargaining can make an important contribution to the inclusive and effective governance of work, with positive effects on stability, equality, compliance and the resilience of enterprises and labour markets. To be really effective, several priorities need to be addressed:

Revitalizing employers’ and workers’ organizations. A human-centred recovery implies that employers and workers have a voice in decisions and policies affecting them. The representative character of Employer and Business Membership Organizations (EBMOs) and trade unions – both in terms of their membership strength and their capacity to integrate diverse interests – is the bedrock of effective social dialogue.

Realizing the effective recognition of the right to collective bargaining for all workers. In view of the transformative changes that are under way in the world of work, it is necessary to strengthen the institutions of work to ensure adequate protection for all workers, including the effective recognition of the right to collective bargaining.

Promoting an inclusive, sustainable and resilient recovery. Collective bargaining needs to address inequality and exclusion, ensure economic security, facilitate just transitions, achieve working-time flexibility and improve work-life balance, pursue a transformative agenda for gender equality and promote sustainable enterprises.

Supporting the implementation of the 2030 Agenda for Sustainable Development. The role of employers’ and workers’ organizations is critical to attain SDG Goal 8 (on decent work and economic growth) and can also support other SDGs.

SOURCE: ILO