Social partners show strong willingness to adapt to the changing social and economic climate

Given the economic circumstances in the European Union during 2009, maintaining
jobs and avoiding redundancies were to the fore in social partner discussions
and actions across Europe in 2009, according to the new annual review of
industrial relations developments in the EU from Eurofound’s European
Industrial Relations Observatory (EIRO). The ‘Industrial relations developments
in Europe 2009', which will be presented at the 9th European Congress of the
International Industrial Relations Association (IIRA) in Copenhagen today,
highlights the most significant developments that took place in industrial
relations in the EU Member States and Norway in 2009, both at national and EU

The economic crisis that took hold across much of Europe from mid-2008 has
multiple direct and more subtle effects in 2009 on employment, labour markets
and industrial features. One key feature in 2009 has been that many governments
faced with deteriorating public finances, cut or froze public expenses. These
cuts had dramatic effects on employment in public services, central
administrations and public agencies; moreover while the number of industrial
actions seriously declined, the main actions dealt with pay cuts in the public

The impact of the crisis on industrial relations processes and collective
bargaining is substantial. Some countries, as diverse respectively to IR
systems, as France, the Netherlands and Poland, negotiated some responses to
the crisis, as per pay increase and working time. On the other hand,
traditional collective bargaining at intersectoral level failed in 2009 in
Ireland and in Spain. Finally, in a number of countries, opportunities have
been open for companies to derogate to sectoral or national collectively agreed
working conditions as pay increase for example, increasing the
‘decentralisation trend’ in collective bargaining.

The main collective agreements on pay having been negotiated before the
downturn began, little effect were expected on collectively agreed nominal pay
increases during that year.. However, the recession started to have a marked
effect on wage increases in most countries in 2009. The (unweighted) average of
collectively agreed nominal pay increases fell from 5,0% in 2008 to 4,2% in
2009. Since the inflation rate fell sharply, from 3,7% in 2008 to 1% in 2009,
average real pay rose by 2,9%, compared to 0,5% in 2008.

One main feature during 2009, has been the development of 'Short working time'
schemes (SWT) as a response to the economic downturn. These schemes include
some or all of the following elements: negotiation on reduction of working
time, pay reduction correlated, training during the time freed and governments’
support, both for compensation of earning losses and for financing training

The European Industrial Relations Observatory (EIRO) remains a reliable and
up-to-date source of news and comparative information on industrial relations
developments and trends for the key actors in the field of European social

More information - Source: Eurofound