Analysis: Collective agreement systems define local bargaining in some European countries

Ministry of Economic Affairs and Employment 26.4.2016 11.13
Press release
In some European countries, collective agreement systems set the framework for local bargaining. Legislative arrangements and deviations are rare. However, wages can in some ways be bargained individually for different professions and tasks. Where wages can be agreed locally, a minimum level has usually been ensured with an act on minimum wages or the terms of a collective agreement.

The above facts were revealed in an analysis published by the Ministry of Employment and the Economy on 26 April 2016. The analysis looked into the local bargaining systems, development and special features of seven EU member states. 

Analysis linked to preparation of Competitiveness Pact

In February 2016, Minister of Economic Affairs Olli Rehn issued a task to assess the local bargaining practices of seven EU member states. The report is linked to the preparations currently ongoing in Finland for an agreement between labour market organisations.

- Promoting local bargaining is included in the Government's key projects related to employment and competitiveness. By increasing our knowledge base on international agreement systems and the nature of local bargaining, the analysis supports the goals of the Government's key projects, says Minister Rehn.

- The Government's aim is to encourage different parties in working life to create procedures for local bargaining in workplaces and to see that the prerequisites for local bargaining are supported through legislative efforts. The analysis gives background information for the Government, states Minister of Justice and Employment Jari Lindström.

Agreement systems becoming more decentralised

The analysis revealed that, after global competition increased in 2008, negotiation processed have become more decentralised and more flexible across Europe. National agreement negotiations have become sectoral or company-specific, and sectoral negotiations have become company-specific. There are signs of changing into a more centralised system in Estonia and Lithuania.

The analysis includes a general description of the system level of local bargaining and a background description of the development of collective agreements. The analysis looks into the roles of agreement systems and legislation, the agreements on wages and working hours and the relevance of normal and crisis situations in deviations. The countries in the study are Sweden, Denmark, Germany, the Netherlands, Ireland, Austria and Spain. Information was gathered mainly through Finnish embassies.

The scope and characteristics of local bargaining in some European countries

Further information:
Heikki Räisänen, Research Director, Ministry of Employment and the Economy, tel. +358 29 50 47118
Markku Rajala, Special Adviser to the Minister of Economic Affairs, tel. +358 50 345 8490
Juha Halttunen, Special Adviser to the Minister of Justice and Employment, tel. +358 50 574 0236