The 2008 pay bargaining round looks set to be a difficult one in many European countries, with workers' expectations fuelled by mounting inflation, falling unemployment and rising company profits, while governments and employers call for wage moderation in a climate of economic uncertainty.

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European Employment Review
   QUICK LINKS NEWS  |  FEATURES  |  MORE FROM IRS...   
  THE EDITOR'S MESSAGE Issue 410  
  DIFFICULT WAGE ROUNDS AHEAD

The 2008 pay bargaining round looks set to be a difficult one in many European countries, with workers’ expectations fuelled by mounting inflation, falling unemployment and rising company profits, while governments and employers call for wage moderation in a climate of economic uncertainty.

As we report in this issue of European Employment Review, pay is a central theme of the industrial relations agenda across Europe in 2008. Germany, Europe’s largest economy, has experienced pay moderation in recent years, but unions are now seeking to break the shackles, a development that the European Central Bank fears may feed a wage-price spiral. The first major deal in 2008 has produced a 5.2% rise in the steel industry, a substantial real increase that employers are at pains to isolate from the wider pay round.

To take another example, preliminary talks over a new national pay deal in Ireland have revealed a major disparity between union demands for increases above the rising inflation rate and calls for moderation by employers and the government, which are alarmed by a perceived threat to the country’s competitiveness in a rapidly changing economic environment.

Pay is rising steeply in many central and eastern European countries, as their economies boom and unemployment falls, although in most cases wage levels remain far below those in western Europe. There are often particular pay tensions in the public sector, with workers seeking to catch up with their private sector counterparts as governments tighten their budgets - as we report from Poland this month, this is resulting in high levels of conflict in some cases.

XpertHR Mark Carley,
Editor,
European Employment Review

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  NEWS

EU social partners: Partners asked to negotiate on EWCs

On 20 February 2008, the European Commission invited EU-level representatives of trade unions and employers to open negotiations on updating and improving the way that European Works Councils operate, with a view to revising the existing EU Directive on the subject.

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France: Purchasing power legislation adopted

A new law "in favour of purchasing power" was adopted by parliament on 31 January 2008 and published in the Official Journal on 9 February. It allows employees, under certain circumstances, to trade in time-off entitlements for pay, thereby increasing their working time and earnings.

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Germany: Steel settlement brings substantial real pay rise

In the first major pay settlement in the 2008 bargaining round, the 85,000 workers in the west German steel industry have secured a 5.2% pay increase from 1 March, in a 13-month deal that will run until 31 March 2009.

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Ireland: Difficult start to national pay talks

February 2008 saw the opening shots in negotiations over a new national pay deal, with trade unions clashing with employers and the government over wage moderation, and demanding action on temporary agency work and employment rights as a precondition for an agreement.

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Italy: Negotiations start on reform of bargaining system

On 21 February 2008, trade union confederations and employers’ organisations opened negotiations on a reform of the Italian collective bargaining system. They have agreed that the first issues to be addressed will be a simplification of the number of collective agreements; the duration of agreements; the relationship between agreed pay rises and inflation; and the tax system.

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Spain: Average 3.3% pay increase so far agreed for 2008

According to ministry of labour figures, by the end of January 2008, pay agreements for 2008 had been signed covering 4.5 million workers, providing for an average wage increase of 3.27%.

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RELATED ARTICLES ON XPERTHR

EU: Consultation on restructuring and EWCs

EU: Commission sets out employment legislation agenda for 2008

France: Further relaxation of 35-hour week proposed

France: Overtime pay exempted from tax

Germany: Challenging 2008 pay round ahead

Ireland: Towards 2016 accord signed

Ireland: Agency work causes controversy

Ireland: Benchmarking body recommends no increases for most public services staff

Italy: Chemicals deal sparks row over decentralisation of bargaining

Italy: Unions call for action on low incomes

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  FEATURES

France: Labour market modernisation agreement signed

In January 2008, France’s main employers’ organisations and four of the five principal trade union confederations signed a ground-breaking national agreement on "modernisation of the labour market". The accord, which will now be implemented by government legislation, seeks to balance a greater degree of flexibility in "hiring and firing" for employers with greater security for employees as they move between jobs during their career.

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Poland: Pay in the spotlight

With the economy booming, unemployment falling and skills shortages mounting, pay is a central issue in Poland in 2008. After wages rose by an average of 8.6% in 2007, the upward trend is set to continue in 2008, and a wave of pay disputes is building in the public sector, as workers try to catch up with the private sector at a time when public finances are being tightly reined in. Recently published statistics shed light on underlying pay inequalities.

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Spain: Family-friendly agreement signed for savings banks

An innovative new collective agreement for the Spanish savings bank sector, which will be in force until the end of 2010, provides for a range of paid time-off rights for family reasons, shorter hours for parents, and unpaid leave of up to three years to care for children or disabled relatives. Other provisions of the accord include inflation-linked pay rises and a job-creation commitment by employers.

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RELATED ARTICLES ON XPERTHR

France: Unions and employers sign labour market modernisation deal

France: Employers seek ambitious reform of employment contracts

EU Council: Common "flexicurity" principles adopted

France: Disappointing retention rates for new employment contract

France: Social dialogue law adopted

Poland: Figures reveal positive labour market trends

Poland: Customs officers take action for higher pay

Poland: Government increases minimum wage by 20%

Poland: Tax officials threaten action over pay

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