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      The legacy of Thatcherism in European labour relations: the impact of the politics of neo-liberalism and austerity on collective bargaining in a fragmenting Europe

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            Abstract

            The ongoing popularity of neo-liberalist ideologies and the impact of state-imposed austerity measures has been having a detrimental impact on the structure of industrial relations within the European Union (EU), especially in the periphery of Europe. This report assesses these developments in the EU member states most affected by the most recent economic crisis, namely Greece, Ireland, Italy, Portugal, Romania, Slovenia and Spain. We highlight how trade unions in the countries assessed are increasingly constrained in their ability to regulate the conditions of work through collective agreements, which have systematically deteriorated, making it difficult to sustain mobilisation and negotiation strategies. This has had a deleterious effect on pay and working time. Broader austerity measures have also had a substantial impact on areas such as labour inspection, judicial processes and state mediation services, leading to heightened disorganisation of labour relations with negative effects for both workers and management. The impact of neo-liberal and anti-trade union ideas initially inspired by the New Right in the United Kingdom and the United States of America during the 1980s has played a significant role in shaping the ideology behind this shift in EU policy towards ‘weaker states’. We therefore argue that this political heritage of disorganising labour relations carries great risks in social and organisational terms for all actors concerned, especially workers and their representatives. To this end, we develop the critique of deregulation outlined in Ewing et al (2016) and argue that coordinated structures are important for questions of social justice.

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            Author and article information

            Contributors
            Journal
            10.2307/j50020018
            instemplrighj
            Institute of Employment Rights Journal
            Pluto Journals
            2398-1326
            2398-1334
            1 January 2019
            : 2
            : 1 ( doiID: 10.13169/instemplrighj.2.issue-1 )
            : 28-57
            Affiliations
            (Work and Equalities Institute, The University of Manchester)
            Article
            instemplrighj.2.1.0028
            10.13169/instemplrighj.2.1.0028
            a82553d0-9faa-4588-982c-24ab1fee2134
            © 2019 Institute of Employment Rights

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            eng

            Labor law

            Notes

            1. In each of these countries, research teams carried out interviews with government officials, trade unions and employer associations – Ireland: Tony Dundon and Eugene Hickland (NUI Galway, Ireland); Italy: Sabrina Colombo and Ida Regalia (Universita degli studi di Milano, Italy); Portugal: Isabel Tavora (University of Manchester) and Maria do Pilar Gonzalez (University of Porto, Portugal); Greece: Aristea Koukiadaki and Charoula Kokkinou (University of Manchester, UK); Romania: Aurora Trif (Dublin City University, Ireland); Slovenia: Aleksandra Kanjuo-Mrčela and Miroslav Stanojević (University of Ljubljana, Slovenia); Spain: Carlos Jesus Fernandez Rodriguez and Rafael Ibanez Rojo (Universidad Autonoma de Madrid, Spain) and Miguel Martinez Lucio (University of Manchester). Throughout the project, consultation took place with the Advisory Board. Members included the following: Stavroula Demetriades (European Foundation for the Improvement of Living and Working Conditions), Simon Marsh (European Chemical Employers Group), Guglielmo Meardi (University of Warwick), Phillippe Pochet (European Trade Union Institute), Jill Rubery (University of Manchester) and Jeremy Waddington (University of Manchester and European Trade Union Institute). The project was funded by the European Commission (VS/2013/0409) and the research covered the period 2008–2014. More detailed reports and analysis are available as a free downloadable book: Koukiadaki et al (2016). For further information please see: https://www.socialeurope.eu/2016/04/structural-labour-market-reforms-collective-bargaining-landscape-europe

            2. This focus on the so-called ‘labour problem’ hides the broader understanding and reality of the current economic crisis in terms of the deeper problems in the socio-economic system.

            3. Whilst one could argue that the origins of many of these ideas emerge from certain Austrian schools of orthodox economics, the fact is that the Anglo-Saxon New Right played a crucial part in shaping or facilitating the emergence of a neo-liberal agenda within the EU. The emergence of a focus on deregulation as a panacea for the ills of the post-Second-World-War welfare state was propagated by a range of think tanks and far-right organisations in the 1970s, seeking to undermine organised labour and labour rights (see MacKenzie and Martinez Lucio 2014 for a discussion of the evolution of deregulation across time).

            4. The point Streeck makes is that the crisis is not seen by political elites (generally speaking) as a problem with, and outcome of, the neo-liberal model and the reliance on unregulated finance capital and speculative growth and even large scale corruption as such – but of ongoing regulation and public sector presence. This insight is important because it suggests that the current response to the crisis is partly driven by an obsessive and reliant (almost morphine-like) dependency on the view that neo-liberalism is the only way ahead. Davies (2016) argues that the ‘normative neoliberalism’ of 1989–2008 gave rise after 2008 to a ‘punitive neo-liberalism’ – one that is more focused on punishment. The bureaucratisation and rationalisation of such ideas within the apparatus of the EU is such that the countries most affected by the crisis after 2008 were approached with punitive measures to resolve their problems by restricting the social state and public expenditure and reducing workers' rights, as we will see later.

            5. Davies (2016) recounts the experience outlined by Yanis Varoufakis (2015, as quoted in Davies 2016: 121) that on attempting to run through economic alternatives and sustain an open debate with the EU's finance ministers, he was met with ‘blank stares’ and a sense he had been speaking in a foreign language. The argument sustained by Davies (2016) is that the crisis has embedded neo-liberalism in EU structures even more, to the point where alternatives are seen as unsustainable and unachievable. This inevitability is clear from the way labour reforms in the countries were pushed locally and sustained by an EU discourse of inevitability and, curiously, fatalism.

            6. Bruun (2003: 23) argued back in 2003: ‘EU economic regulation so far has passed the test of accepting or respecting the national results of the collective bargaining process’, but things have been steadily changing with the emergence of a greater interest in marketization and neo-liberal approaches to employment matters. With the emergent economic crisis of the current period, the critique of labour regulation and labour rights has intensified as well.

            7. Importantly for our present purposes, emphasis was placed on shifting the procedural role of the state away from legitimising collective actions of employer and worker interest groups through the recognition of freedom of association and collective bargaining (Meardi et al 2016), and towards decollectivizing employment relations.

            8. Act 4024/2011.

            9. ‘Ratification of Mid-term Fiscal Strategy 2013–2016 – Urgent Regulations relating to the Implementation of L.4046/2012 and the Midterm Fiscal Strategy 2013–2016‘.

            10. Article 2(7) of Law 3845/2010 stipulated that the terms of occupational and enterprise agreements could derogate in pejus from the terms of sectoral agreements and even the national general collective agreement. In a similar vein, sectoral agreements could derogate from the national collective agreement. However, following reactions from the social partners, it was agreed to observe the floor of rights set by the national general collective agreement.

            11. Article 3(5) of Law 4024/2011.

            12. With some exceptions (such as discriminatory dismissal, pregnant workers, mothers with babies under the age of one, dismissal during maternity leave, or dismissal of employees who have requested parental or adoption leave), the 2009 agreement signed by Confindustria, Uil and Cisl introduced the possibility for ‘opting-out clauses’ from the national agreements in order to cope with territorial or economic crises or to foster economic growth.

            13. Article 37(1) of Law 4024/2011.

            14. The inter-confederal agreement of 28 June 2011 defined the criteria for union representativeness, provided for the general binding character of company agreements approved by a majority of unions/works councils, and extended the possibilities for company-level derogations from national collective agreements. In contrast to the 2009 agreement, the 2011 agreement provides that derogation in pejus can only take place if there are no restrictions in place in the national collective agreement.

            15. European Commission, Labour Market Developments in Europe 2012, European Economy, No 5 (Brussels: European Commission, 2012), 104.

            16. More recent data suggests that the bargaining coverage in Greece has now been reduced to 10% (Koukiadaki and Grimshaw 2016).

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