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Collective Bargaining

The proportion of employees covered by collective bargaining in the 28 EU states plus Norway varies from well over 90% to 15%. The countries at the top of the table either have high levels of union membership, as in the Nordic countries, or have legal structures which ensure that collective agreements have a wide coverage. In the countries at the bottom of the table, company level bargaining dominates. In some countries, such as Belgium, Italy or Sweden, there are links between different levels of bargaining but in others, like Luxembourg or Cyprus, various levels simply coexist. Overall the trend seems to be towards greater decentralisation and the crisis has accelerated this.

Collective bargaining coverage

One indicator of the importance of collective bargaining is the proportion of employees affected by it – its coverage. Across the EU as a whole, more than six out of 10 employees (62%) are covered by collective bargaining, although there are important variations between countries. It is striking that some countries have very high levels of collective bargaining coverage – at around 80% or above – which are well above the levels of union density. In most cases this reflects the specific legal framework for collective bargaining in the individual countries.

Overall however, it is important to remember that in many countries, the figures for collective bargaining coverage are uncertain and, in some, the agreements signed do no more that restate existing legal minimum requirements and therefore have little impact on employees’ terms and conditions. The figures should therefore be treated with caution.

There are 10 countries at the top of the table – with collective bargaining coverage of around 80% or more – and they can be divided into two main groups.

There are three countries – Sweden, Finland and Denmark – where high collective bargaining coverage goes with high union density. Unions in effect have the strength to require that their members’ terms and conditions should be negotiated, although in Finland agreements are normally considered binding for all employees in the industry concerned.

In the second group – Austria, Belgium, France, Italy, the Netherlands, Portugal and Slovenia – the high levels of collective bargaining coverage reflect, at least in part, the legal framework in which collective bargaining takes place. In Austria the negotiators on the employers’ side include the chambers of commerce and industry to which all employers must belong, with the result that almost all employees are covered.

In Belgium, coverage is high because agreements signed at industry level automatically extend to all those employed in that industry. In Italy there is no legislation which makes industry level agreements generally binding but courts have normally interpreted them in this way.

In the Netherlands, agreements do not apply to whole industries automatically, but government action in extending collective agreements adds around 15% to bargaining coverage. The situation is similar in Slovenia, with many agreements being extended beyond the signatories. In France too, the extension of agreements by the government to non-signatory employers, combined with the legal obligation on employers to negotiate annually at company and (in some circumstances) at industry level provide a high level of coverage.

However, the case of France indicates why the figures need to be treated with care. Although collective bargaining coverage is extremely high, some agreements have rates which are below the level of the French national minimum wage and are therefore invalid. Individualised pay increases, which are not negotiated, also play an important role in setting the pay of many French workers.

In Portugal, the situation is changing as a result of the financial crisis. In the past, the government frequently extended agreements to employers who were not signatories. However, this has now been greatly limited, and combined with other changes, it seems very likely that coverage is now well below the figures in the table, which date from 2010.

Further down the table, Croatia, Germany, Greece, Norway and Spain all have collective bargaining coverage of between 55% and 70%, and in all cases there is extensive industry bargaining. However, in Greece and Spain this may change in the future (see below), and in Croatia the extension by government of some large agreements makes up for the fact that the bulk of bargaining is company based. Malta, where coverage is estimated at 61%, is unusual as bargaining there is entirely company based.

In the countries at the bottom half of table, it is bargaining at company level that predominates. Almost by definition, company level bargaining depends on union activity at company level and is therefore more closely related to levels of union density.

The level of collective bargaining

However, collective bargaining coverage is by no means the whole story. The level at which bargaining takes place and the way different levels interact is also crucial. The details of each country are set out in the individual country sections, but it is worth pointing to some of the variants on offer.

There are some countries where national level agreements set a framework for negotiators at lower levels to follow. This is clearly the case in Belgium, where there are then both industry and company negotiations, and in Norway too there is a clear hierarchy of negotiations, from confederation to individual unions to company level, although the confederations do not always take the lead. However, this pattern seems to be becoming less common. In Ireland the system of national agreements which set pay increases, among other things, for more than 20 years, effectively broke down in 2009 under the pressure of the economic crisis. In Finland, on the other hand, the pattern of national agreements making recommendations to lower level negotiators, which had lasted for almost 40 years, appeared to have finally ended in 2007 when the employers refused to negotiate a new national agreement. However, in 2011, in the light of the economic crisis, the employers again agreed to sign a national framework agreement.

In other countries, it is industry level bargaining that provides the framework. In Sweden and Denmark for example, industry level bargaining provides a basis on which bargainers at lower levels can build. And these lower level bargainers have substantial room for manoeuvre. In Sweden, only 11% of all employees had their pay entirely set by the industry level collective agreements in 2012. The position in Italy is in principle similar, with industry level bargaining providing increases which keep place with inflation, while productivity gains are to be compensated for at company level. However, new bargaining arrangements give greater weight to company level bargaining.

There are then some countries where industry and company level bargaining both co-exist and are not directly linked. Cyprus, the Netherlands and Spain are examples, where most employees are covered by industry level bargaining – normally at provincial level in Spain – but some employees, particularly in larger companies, are covered by company level agreements. (As already noted, this may change in Spain, with new legislation giving company agreements precedence over agreements signed at all other levels.) In Luxembourg, company bargaining is key in some sectors, industry bargaining in others. In Croatia most bargaining is at company level, although there are some sectors, like construction and catering, as well as the public sector, where there are industry level agreements – sometimes in addition to the company level deals.

Finally there are the countries, like the UK and most of the countries of Central and Eastern Europe, where industry bargaining has largely disappeared, at least in the private sector, and it is company level negotiations which predominate.

Collective bargaining arrangements are not static, and for some time the trend has been towards decentralisation. In some cases, this has involved employers leaving employers’ organisations completely so as to be free to set their own terms and conditions, as is the case for some employers in Germany and, more recently, for Fiat in Italy. In other cases, important parts of the pay package are left to negotiations at local level, as in Denmark and Sweden. And in others, local agreements are able to deviate from industry agreements in response to problems at company level – something many agreements in Germany provide for and which is now also possible by law in France.

Overall, the economic crisis is speeding up the process of change. In both Greece and in Spain new legislation means that employers can now legally for the first time negotiate terms and conditions at company level that are worse than those in higher level agreements, which cover them. In Romania, the national level agreement has been abolished.

One clear change over a longer timescale is that a national minimum wage has now become more typical. The seven EU member states without a minimum wage are: Austria, Cyprus, Denmark, Finland, Germany, Italy and Sweden. There is also no minimum wage in Norway.


Covered by collective bargaining (%)

Key level of collective bargaining



Industry and company



National (sets framework)









Industry – but much left to company negotiations






Industry – but much left to company negotiations



Industry (also some company)



Industry – but much left to company negotiations






National and industry



Industry – but new law gives precedence to company agreements



Industry but crisis has given greater role to company negotiations



Industry and company









Industry and company



Industry and company (varies with sector)




Czech Republic





Industry and company



Industry and company























EU average



Average including Norway



For several countries (marked *) the source is the respective EIRO Industrial relations profile. For other countries the sources are:

Austria: Collectively agreed wages in Austria: indicators by Sepp Zuckerstätter, AK Wien, 2012;

Bulgaria: KNSB;

Croatia: Industrijski odnosi u Hrvatskoj: društvena integracija ili tržišni sukob (Industrial relations in Croatia: social integration or market conflict) by Dragan Bagić, 2010;

Cyprus: The ICTWSS Database, Version 4, April 2103

Czech Republic: Structure of earnings survey 2011, Table A7, Czech Statistical Office, 2012;

Denmark: Udviklingen i den faglige organisering: årsager og konsekvenser for den danske model, by Jesper Due and Jørgen Steen Madsen. 2010, LO-dokumentation 1/2010;

Estonia: Statistics Estonia, Table WQU96;

Finland: Työehtosopimusten kattavuus Suomessa vuonna 2004 by Lasse Ahtiainen , Ministry of Labour, 2007;

France: La couverture conventionnelle a fortement progressé entre 1997 et 2004, DARES, 2006;

Germany: Calculated from Tarifbindung und betriebliche Interessenvertretung: Aktuelle Ergebnisse aus dem IAB-Betriebspanel 2011, by Peter Ellguth and Susanne Kohaut, WSI-Mitteilungen, 4/2012

Greece: Estimate by Christos A Ioannou;

Hungary: Centre for Social Dialogue (Társadalmi Párbeszéd Központ);

Latvia: Number of employees having a collective pay agreement by kind of activity in the end of October, Central Statistical Bureau of Latvia, 2009;

Luxembourg: Conventions collectives et salaires, by Alain Schäfer, Économie et statistiques, Statec, 2010;

Netherlands: Cao-afspraken 2011, Bijlage VIII Cao’s in Nederland, SZW, October 2012;

Norway: Organisasjonsgrader og tariffavtaledekning i norsk arbeidsliv 2008, by Kristine Nergaard, and Torgeir Aarvaag Stokke, Fafo, 2010;

Portugal: Quadros de pessoal 2010; Gabinete de Estratégia e Planeamento (GEP), 2012;

Romania: estimate by CNS Cartel Alfa and BNS 2012;

Spain: Estadística de Convenios Colectivos de Trabajo: 2010 Datos Definitivos Cuadro 2;

Sweden: Avtalsrörelsen och lönebildningen 2012 Medlingsinstitutets årsrapport, Medlingsinstitutet, 2013;

United Kingdom: Trade Union Membership 2012: Statistical Bulletin, Department for Business, Innovation and Skills, 2013.

The figures for the EU and EU plus Norway are calculated using Eurostat figures on employees in employment.

L. Fulton (2013) Worker representation in Europe. Labour Research Department and ETUI. Produced with the assistance of the SEEurope Network, online publication available at http://www.worker-participation.eu/National-Industrial-Relations.

ETUI Collective Bargaining newsletter

This newsletter presents up-to-date information on collective bargaining developments across Europe. It aims to facilitate information exchange between trade unions and to support the work of the ETUC’s collective bargaining committee.

Collective bargaining May 2013