Opting Out of Pay Devolution? The Prospects for Local Pay Bargaining in UK Public Services

Abstract : Throughout the 1980s, government ministers strongly advocated the decentralization of pay determination in the public services. Despite this exhortation, by the end of the decade rates of pay and salary structures were rarely determined at workplace level. This paper explores the resilience of national pay determination and considers whether it will survive the radical restructuring of public services initiated in the last few years. The analysis focuses mainly on the health and education services, arguing that distinctive organizational, occupational and political characteristics of the services still constrain the devolution of pay bargaining. In the face of tight budgets and the recent introduction of pay restraint, service managers have sought to make paybill savings through unilateral changes in work organization rather than through devolved collective bargaining.     

Decentralization in the NHS: Prospects for Workplace Unionism

The substantial changes that are taking place in the organization of the UK public sector are transforming traditional patterns of industrial relations based on centralized and institutionalized collective bargaining. Whether the trade unions can successfully respond to this process will be of prime importance for the future development of industrial relations in the public sector. The paper considers recent evidence of the impact of decentralization on union organization in four hospital units. The research findings suggest that there is a growth in union activity as a result of the process of decentralization, but that the effectiveness of unions is likely to vary considerably between hospitals.     

The Rise of Experimentalism in German Collective Bargaining

This paper addresses the debate on union strategies by analysing industrial relations change in three of Germany's most internationalized sectors: chemicals, metalworking and construction. It characterizes two logics of change in German industrial relations: a battlefield logic and an experimentalist logic. It demonstrates historical trends towards centralization of wage bargaining in each sector before looking at recent pressures for decentralization and flexibility. In chemi‐cals, the social partners control decentralization. In metalworking increasing flexibility is characterized by a mismatch between the national‐level union and the district‐level employers. Finally, the construction union seeks to replace the centralized bargaining system with a state minimum wage.     

Collective Bargaining and Wage Dispersion in Europe

The level at which collective bargaining takes place is usually considered important in determining wage levels and wage inequalities. Two different situations are considered: a first in which bargaining is only ‘multi‐employer’, and a second in which it is ‘multi‐level’, in the sense that workers can be covered by both a ‘multi‐employer’ and a ‘single‐employer’ contract at the same time. The purpose of this paper is to analyse the impact of these different institutional settings on pay dispersion. The study is carried out using the European Structure of Earnings Survey, which is a large dataset containing detailed matched employer–employee information for the year 1995. The countries analysed are Italy, Belgium and Spain. The empirical results generally show that wages of workers covered by only a ‘multi‐employer’ contract are no more compressed than those of workers covered by both ‘multi‐employer’ and ‘single‐employer’ contracts. This implies that where workers are not covered by single‐employer bargaining, they receive wage supplements paid unilaterally by their employers.     

Collective Bargaining and the Evolution of Wage Inequality in Italy

Italian male wage inequality has increased at a relatively fast pace from the mid‐1980s until the early 2000s, while it has been persistently flat since then. We analyse this trend, focusing on the period of most rapid growth in pay dispersion. By accounting for worker and firm fixed effects, it is shown that workers' heterogeneity has been a major determinant of increased wage inequalities, while variability in firm wage policies has declined over time. We also show that the growth in pay dispersion has entirely occurred between livelli di inquadramento, that is, job titles defined by national industry‐wide collective bargaining institutions, for which specific minimum wages apply. We conclude that the underlying market forces determining wage inequality have been largely channelled into the tight tracks set by the centralized system of industrial relations.     

Collective Bargaining and Within-firm Wage Dispersion in Spain

This paper analyses the effect of collective bargaining on within‐firm wage dispersion for the case of Spain. What is relevant in the Spanish case is to compare the effect of the two basic levels of bargaining (firm and sector) on wage dispersion. By using the Oaxaca–Blinder decomposition, this paper concludes that collective agreements at firm level have a negative effect on wage dispersion. At the same time, firms that have signed these types of agreements show greater wage dispersion than those covered by agreements at the sector level, owing to the positive and compensating effect of firms’ and workers’ features.     

Collective Bargaining Coverage under Trade Unionism: A Sociological Investigation

Does high union density lead to high collective bargaining coverage? Since collective bargaining is seen as the raison d'être of trade unions, this is often assumed to be the case; some observers think that union density is ‘a floor’ below which collective bargaining coverage is unlikely to fall. With its very high union density, Denmark is a case in point. This article investigates the collective bargaining coverage issue in the Danish case, based on an individual-level employee survey with 1720 respondents. Collective bargaining coverage is shown to be much lower than union density, and some methodological issues in this connection are considered. In order to find some possible explanations for this surprising finding, the question of variance of collective bargaining coverage between groups of employees is discussed in the light of theories of service society and recent research results and theories. The impact of central variables is investigated through multivariate analysis, and it turns out that by far the most important variable predicting an employee's collective bargaining coverage is a variable mostly neglected in comparative analyses: occupational status. Salaried employees have a much lower collective bargaining coverage than manual workers in Denmark, and some possible reasons for this are given.     

Decentralization and Pay Reform in Central Government: a Study of Three Countries

Over the past decade central governments of the UK, Sweden and Australia have been engaged in significant reforms in the way they pay their employees. These reforms have generally taken the form of the decentralization of pay bargaining and the individualization of pay. This paper details the policies that have been implemented in central government in these countries and presents some preliminary results on the effects of these. While the actual implementation has varied quite substantially across the countries and the analysis of the outcomes must be regarded as preliminary, there is some evidence that the reforms have led to an increase in earnings dispersion.     

Unions and Collective Bargaining in the Wake of the Great Recession: Evidence from Portugal

Against the backdrop of its industrial relations architecture, characteristic of the ‘southern European group’ and intimately linked to the recommendations of the Troika, this paper examines four key aspects of Portuguese collective bargaining. First, it provides definitive estimates of private sector union density for that nation. Second, it models the determinants of union density at firm level. Third, it yields estimates of the union wage gap for different ranges of union density. The final issue examined is contract coverage. The received notion that the pronounced reduction in the number of industry‐wide agreements and extension ordinances of late is to be equated with a fall in coverage is shown to be a chimera, the number of workers covered by new and existing agreements remaining largely unaffected by the economic crisis. The reduced frequency of new agreements and extensions is instead attributed to downward nominal wage rigidity in low‐inflation regimes.     

Macroeconomic Constraints, Social Learning and Pay Bargaining in Europe

This paper argues that European integration has constrained the discretion of industrial relations actors. The result has been not the widely predicted institutional fragmentation of collective bargaining, but a change in the functioning of these systems. At the same time, widespread 'social dumping' on the part of firms and member states has not materialized. The paper argues that the 'race to the bottom' thesis gives insufficient weight to the socialization mechanisms attached to the European integration process. Thus macroeconomic constraints and social learning processes are co-mingling with one another in European industrial relations.     

Decentralization of Collective Agreements and Rising Wage Inequality in Israel

This paper presents a systematic analysis of the decentralization of the Israeli system of collective bargaining and its contribution to the rise in earnings inequality. We quantitatively analyze all collective agreements that were signed between 1957 and 2003, and present the scale, scope, and timing of five dimensions of decentralization. The findings suggest that decentralization started in the mid‐1970s when national agreements were less likely to be extended to nonunion employees; it was intensified in 1975–1980 when nationwide industrial agreements were supplanted by occupational and local agreements. Decentralization became fully consolidated by 1987 when peak‐level agreements covering the entire private sector were no longer signed. We then present evidence (including time‐series analyses that control for union density and macroeconomic indicators) that the process of decentralization, especially the decline in the use of extension orders and the proliferation of local agreements, explains a significant part of the sharp rise in earnings inequality in Israel during 1970–2003.     

Canadian Strike Replacement Legislation and Collective Bargaining: Lessons for the United States

Opponents of U.S. and Canadian strike replacement legislation contend that restricting the use of strike replacements significantly alters bargaining power and increases strike activity. This article uses data on Canadian manufacturing collective-bargaining agreements to investigate these hypotheses. Although a general ban on strike replacements is found to be associated with longer strikes, little evidence is found to suggest that banning permanent strike replacements significantly influences strike incidence, strike duration, or negotiated wages.     

Police Pay and Bargaining in the UK, 1978–2000

Police pay and conditions in the UK are governed by a unique mechanism, the Police Negotiating Board. This paper reviews the circumstances in which it was set up and examines the outcomes, relative to other public service workers, over the first twenty years of its operation. Recent developments highlight the role of ministerial intervention and raise questions about the relationship between the PNB negotiating system and working practice at police force level.