Co-funded by the European Union

European Company Survey: What is the coverage of collective agreements?

  • The survey analysed and compared different types of collective bargaining process.
  • “Two-thirds of workers are estimated to have their wages set via a collective wage agreement”.
  • Bargaining coverage is higher in countries with sectoral collective agreement extended to non-signatory companies and workers.

Eurofound, the tripartite European Union Agency established in 1975 to deal with labour issues, periodically conducts the European Company Survey (ECS) to collect information from management and employees’ representatives on workplace practices in private sector establishments with more than 10 employees.

The 2019 investigation dealt with collective wage agreement signed or applied by companies and gathered data from 21,869 managers and 3,073 employees’ representatives in the 28 EU Member States.

The main challenge was comparing the differences between types of collective bargaining processes in each country, which depend on the industrial relations tradition and context.

The survey found out that “two-thirds of workers are estimated to have their wages set via a collective wage agreement” and that “bargaining coverage is substantially higher in countries where there are sectoral agreements and where these are frequently extended to non-covered companies or workers”.

Like previous studies, the survey compiled information on national regulations on collective bargaining. It further reported:

  • The lowest levels of wage bargaining coverage are mainly in the Central and Eastern EU Member States (except for Slovenia and Romania).
  • Medium levels of bargaining coverage (around half of the workers covered by wage agreements), in Croatia, Cyprus, Germany, Greece, Ireland and the United Kingdom.
  • Medium to high level (60% to 80% of workers) in Denmark, Luxembourg, the Netherlands, Portugal and Romania.
  • The highest collective bargaining coverage (over 80%), in Austria, Belgium, Finland, Italy, France, Spain, Slovenia and Sweden. These countries “strongly developed sectoral bargaining and use legal extension mechanisms or functional equivalents of these more extensively than other Member States”.

By examining the data, the survey shed light on the co-existence of different levels of collective agreements within the same company. There exist: 1. Predominantly company-based bargaining, 2. Company and sector level bargaining without predominance, 3. Predominantly sector-level bargaining and 4. Articulation between the two levels (depending on the topic for example, one level is predominant to the other).  The survey showed that “countries with high sectoral bargaining coverage also have a much larger overall coverage than those where company-level bargaining dominates.

According to the survey’s conclusions, the application of bargaining wage agreements implies a higher coverage of workers in terms of minimum wages and allows “maintaining people’s purchasing power to stimulate the economy, as well as the possibility of a company-specific adaptation to economic realities or productivity developments.