Introduction

Individualised employment relations formed a key pillar of the shift to neoliberal economic policy in the 1980s, complementing other dimensions of orthodoxy deployed across governments, public administrations and central banks in the same time. In the neoliberal narrative, market forces would ‘naturally’ and justly compensate labour for its contribution to productivity, like any other input to production. Consequently, redistributive institutions empowering workers to win more adequate wages and conditions (through minimum wages, Awards, unionisation, and collective bargaining) were dramatically eroded, or discarded entirely. Combined with welfare state retrenchment, this restructuring of labour market policy increased the pressure on people to sell their labour, and under terms over which workers wielded little influence. Since then, forms of insecure, non-standard work have proliferated globally, and employment relations have been increasingly individualised. Now, most workers in Anglo-Saxon market economies, and a growing proportion of workers in European and Nordic nations, rely on individual contract instruments (underpinned only by minimum wage floors typically far below living wage benchmarks) to set the terms and conditions of employment. Wages have stagnated, the share of GDP going to workers has declined, and inequality and poverty (even among employed people) has intensified. More recently, after years of this employer-friendly hegemony in workplace relations, successive crises (first the GFC and then the COVID-19 pandemic) have more obviously shattered traditional expectations of a natural linkage between economic growth and workers’ living standards.

After a generation of experience with this individualised model of employment relations, and with the human costs of that approach becoming ever-more obvious, there is renewed concern with reimagining policies and structures which could support improvements in job quality, stability, and compensation. Important policy dialogue and innovation is now occurring in many industrial countries, in response to the negative consequences of neoliberal labour market policies. In those conversations, institutions like collective bargaining have returned to centre stage.

By helping workers share in the benefits of economic growth, strong collective bargaining is a pre-condition for inclusive prosperity in any modern economy. In recent years, researchers, governments and international institutions like the OECD have identified myriad negative macroeconomic and social consequences of the retrenchment of collective bargaining, including stagnant wages, insecure work, inequality, and declining productivity. These impacts have been especially evident in the Anglo-Saxon economies. Empirical evidence confirms that the co-ordinated and sectoral bargaining systems more common in Nordic and European countries produce better labour market outcomes than individualised systems (OECD 2019).

Inflicting an enormous shock to both supply and demand, the COVID-19 pandemic (ongoing at time of writing) has severely disrupted global labour markets. With interest rates at record-lows, central banks worldwide deployed quantitative easing strategies, supporting governments to inject hundreds of billions of dollars to protect jobs and incomes during the initial shutdowns and resulting worldwide recession. Wage subsidies and furlough schemes were introduced in Germany, Denmark, the UK and other European countries. Canada, Australia and New Zealand also established new job retention schemes.¹ Unprecedented fiscal resources were committed to protect employment relationships, including non-standard roles. However, with governments preoccupied with this pressing health and economic crisis, virtually no major industrial relations reforms have been introduced to tackle the structural labour market weaknesses that existed entering the crisis. (New Zealand’s Fair Pay Agreements, discussed in detail in this special issue, is an exception.) Instead, in many countries (including Australia) the pandemic was utilised to justify even further neoliberal labour market ‘reform’. For example, the Australian federal government passed amendments to the Fair Work Act in March 2021 providing a statutory endorsement of employers’ use of casual employment in any role they desire.² And despite nearly two years of disease-management restrictions on labour supply, and widespread employer complaints in many countries of a purported ‘labour shortage’, there is no evidence of a generalised increase in worker bargaining power – nor any sign yet of an acceleration of sluggish wage growth. Clearly, labour market forces alone cannot be expected to facilitate a full recovery in the quality of work and compensation after the pandemic, let alone start to repair the damage of decades of neoliberal medicine. Consequently, harmful pre-pandemic distributional trends are likely to worsen without efforts to expand bargaining and union representation rights.

Against this tumultuous global backdrop, this Special Issue of Labour & Industry presents a compendium of analyses of international collective bargaining policy and practice. It draws on experiences in multiple jurisdictions including Australia, New Zealand, Canada, Germany and the Nordic nations. It presents a unique contribution to industrial relations scholarship, by combining analyses from union leaders and workplace practitioners as well as academic researchers. The Special Issue was organised by the Centre for Future Work (CFW), based at the Australia Institute and with offices in Australia and Canada. It draws mostly on research that was initially presented at a stream of panels (jointly hosted by the Nordic Policy Centre) on comparative international collective bargaining systems, conducted at the 2020 AIRAANZ Conference in Queenstown, New Zealand. By comparing specific aspects of collective bargaining systems across jurisdictions, the papers in this Special Issue provide new insights into promising strategies for preserving and strengthening collective bargaining. The papers herein take a multi-dimensional approach to revitalising collective bargaining: assessing how bargaining systems work in concert with wider national and sectoral systems to shape the quality, output, design and value of work across workers’ entire lives. These wider systems include skills and education, unemployment insurance and other social insurance policies, and industry policy – in addition to specific industrial relations matters.

The Special Issue contains a total of 13 articles and commentaries, prepared by academic researchers and trade unionists from five countries, all investigating the potential for revitalised collective bargaining structures and systems to contribute to improvements in the working lives of people across the industrialised world. The articles can be grouped into five broad themes, each of which is reviewed and summarised below.

Insecure employment and collective bargaining

One key avenue through which union representation and bargaining rights have been weakened is through the growth of insecure and non-standard work. Workers are increasingly repositioned outside of the traditional employment relationship, without statutory rights to minimum wages, protections on hours and conditions, and access to collective bargaining. In ‘Collective Bargaining in Canada in the Age of Precarious Employment’, Wayne Lewchuk documents the prevalence of insecure work in Canada. He reviews union strategies to represent insecure workers, including platform or ‘gig’ workers who are largely denied employment or representation rights. Despite mixed organising results, Lewchuk describes a relatively optimistic labour relations environment in Canada. Unions there have successfully rolled back several independent contracting offensives, and governments at both the provincial and federal level are implementing more worker-friendly labour laws.

While co-ordinated sectoral bargaining systems in European countries typically produce stronger employment and wages outcomes than decentralised systems, their integrity is not immune to the growth of insecure work, and the fragmentation of employment. In ‘Between Industry and Establishment: Recent Developments in German Collective Bargaining and Codetermination,’ Thomas Haipeter reviews how sectoral and occupational changes, and the growth in insecure employment, have affected union influence in Germany. In his nuanced review of union power across the various tiers of Germany’s IR system (industry-level sectoral bargaining, workplace-level works councils, and company-level co-determination), Haipeter describes recent initiatives by German unions to consolidate and rebuild their influence, including through greater support and coordination of the activities of works councils.

Evolution and design of sectoral bargaining systems

Several articles in the Special Issue tackle the limitations of enterprise-based collective bargaining, whereby unions are restricted to negotiating higher wages and standards one employer at a time. They also explore innovative proposals for the re-design of sectoral bargaining systems, some already underway. Attention is paid to the interaction between different levels of bargaining (enterprise, sector and/or industry), and different wage-setting institutions within industrial systems. In ‘Sector-Wide Bargaining: Problems and Prospects in the Australian Case’, Tom Roberts describes the historic evolution of Australia’s unique industrial relations system, before considering its possible reimagination. Roberts usefully dispels the widely-held myth that the history of wage setting in Australia can be simplistically broken into two distinct eras: the pre-1993 ‘centralised’ Awards system, and the subsequent period when enterprise-level bargaining took ascendancy. Uncovering Australia’s long history of hybrid bargaining and conciliation/arbitration (in which both agreements and Awards were simultaneously important), he argues that a future industrial system should allow bargaining beyond the enterprise level, while still retaining and strengthening Australia’s unique Awards tradition.

Based on a union-university consultation process, the article, ‘Rebuilding Worker Power in Australia through Multi-Employer Bargaining’ by Tim Kennedy, Ben Redford, Renee Burns and Anthony Forsyth, makes several suggestions for the design of a future multi-employer bargaining system in Australia. It considers issues such as bargaining unit definition, employee support thresholds, scope, and the legal effect of agreements. The authors also review the United Workers Union’s experience with whole-of-supply-chain bargaining: an innovative union response to the dominance of large centralised employers in the fresh food industry, which allows them to dictate contract terms to peripheral supplying firms. Finally, the authors review two recent proposals for multi-employer bargaining that have been made in the UK and the US. They reject centrally mandated bargaining units and negotiation triggers (as proposed in the UK model), and emphasise instead the importance of employee support thresholds and tests to ultimately help build union power within a multi-employer bargaining regime.

The new system of sectoral bargaining in NZ, called ‘Fair Pay Agreements,’ has sparked worldwide interest. In ‘New Zealand’s Fair Pay Agreements: A New Direction in Sectoral and Occupational Bargaining,’ Avalon Kent provides an overview of the evolution of the FPAs, and addresses key design questions – some of which were still outstanding at time of writing. These include whether participation in FPAs will be mandatory, how provisions will be enforced, and how unions best influence wages and conditions, and grow their membership base. Kent warns against emulating the top-down regulatory approach of Australia’s Modern Awards system, urging instead that the FPA system maintain a strong institutional role for unions and be grounded in active negotiations.

Exploring both domestic and international opportunities created by this new NZ system, Alison Pennington and Megan Wenlock consider how FPAs have potential to co-articulate with other laws and policies facilitating bargaining-led solutions to gendered pay discrimination. In their article, ‘Bargaining for Pay Equity: An NZ-Inspired Approach to Gender Equality in Australia’, they outline recent gender equality bargaining progress in Australia by the Community and Public Sector Union (SPSF) in the state of Victoria. In its 2020 agreement with the Victorian state public service, the union negotiated gender equality measures that were clearly inspired by the NZ experience. The authors argue that retrenchment of collective bargaining infrastructure has undermined Australia’s pay equity system. The experience in NZ suggests that widening bargaining scope is critical to improving women’s wages and conditions, particularly in government-funded, arms-length, feminised social services.

Representation and financing collective bargaining

Unions face severe challenges in expanding their wider social profile and public legitimacy on issues of wages, work and broader societal wellbeing. Rebuilding the social contract of collective bargaining and unionism will require clear collective representation rights and the existence of financial regimes that ensure their sustainability. In ‘The Contradiction of International Trends in Freedom of Association’, David Peetz undertakes a quantitative analysis of freedom of association trends across different countries. He finds that the Ensuring Integrity Bill, introduced by the Australian federal government in 2017, clearly contradicted international trends towards greater freedom of association. After identifying Australia as an outlier among democratic countries in the intensity of its restrictions on union activity and collective bargaining, Peetz explores how the neoliberal project has tried to separate freedom of association rights (individual rights) from union rights to represent the interests of workers (collective rights). Accordingly, workers in industrial economies have the right to join unions as individuals – but the effective ability of unions to boost the income and power of workers through collective bargaining is tightly restricted. Australia’s experience highlights the contradictions of this dichotomy.

Unions have always confronted the challenge of ensuring that their work to lift wages and conditions (including for workers who are not union members) is sustainably resourced, reflecting the broader ‘public good’ function of collective representation and bargaining. If the choice of contributing financially to representation and collective bargaining is left to the individual preference of each worker, what is to prevent workers from capturing the benefits of these activities (in higher wages and better conditions) without contributing to their provision? In ‘International Approaches to Solving the “Free Rider” Problem in Industrial Relations,’ Jim Stanford surveys economic literature on the causes and consequences of institutionalised free-riding. Surveying modern industrial relations systems, he identifies six broad approaches to sustainably resourcing collective bargaining – including strategies which rely on government, employers, workers and even social benefit agencies to help defray those costs. He argues one or more solutions to free riding must be in place to maintain viable collective bargaining systems. Worryingly, Australia is unique among industrial economies in having none of these financing systems in place. Stanford argues that strengthening the economic power and social legitimacy of trade unionism in Australia will require some method of preventing free riding to be advanced.

Workers’ security across the lifecycle: bargaining, skills, and social services

Skills and training will play a vital role in reorienting economies after the pandemic, supporting new industries and creating employment pathways for workers training for new jobs. But neoliberal policy embodies a harmful and inefficient laissez-faire approach to employment transitions: shifting risk and consequences to individuals, resulting in more painful transitions and undermining skills formation. Successfully responding to ongoing problems of labour displacement and skills mismatch will require strategies and institutions that support the value and meaning of work, and workers’ economic security across the full lifecycle.

The Special Issue includes three articles which consider the relationship between collective bargaining, skills and training systems, and other public and social services delivered by Nordic welfare states. In ‘The Contribution of Collective Bargaining to Employment Skills and Transitions: Lessons from the Nordic Countries’, Andrew Scott explores the success of high-quality, high-investment Nordic skills systems. These systems are underpinned by strong social partnerships with unions. He shows how the Nordic sectoral bargaining model enhances workforce skills, adaptability and innovation. He argues Australia should pursue stronger social partner collaboration – including through the creation of joint-funded training funds, and sectoral skills councils linked to sectoral bargaining agreements.

Russell Lansbury provides a history of the ‘Ghent system’ as applied in Nordic countries. In this model, social service provision is integrated with trade union representation; this duality supports the highest union density rates of any industrial countries. In ‘The Ghent System of Social Insurance: A Model for Australia?’, Lansbury considers the model’s relevance for rebuilding union voice and power in Australia.³ He is cautiously optimistic about the possibility of union partnership in social program delivery. One especially intriguing possibility would be union participation in the creation of a new unemployment insurance system (something presently absent from Australia’s social welfare framework).

Delving deeper into the Danish employment model, in ‘Collectivism and Employment Relations in Denmark: Underpinning Economic and Social Success’, Erling Rasumussen and Laust Høgedahl explore some less-recognised features which account for its longevity and success. These factors include strong employer support for Denmark’s voluntarist collective bargaining practices. The authors also document regional, domestic and international challenges which have affected the coverage and strength of Danish collective bargaining. These challenges include the rise of ‘yellow unions’ (which facilitate new forms of free riding), the practice of social dumping, and the rise of non-standard work. Despite these challenges, Rasmussen and Høgedahl find continuing strong union, employer and civil society support for collective bargaining at the national, sectoral and firm levels.

Unions, collective bargaining and industry policy

The goal of interventionist industry policies is to nurture and expand the domestic presence of industries characterised by desirable qualitative features, to support a greater number of higher-wage, more stable jobs.⁴ Our Special Issue presents two articles on the role of union advocacy in building active industry policies. In his article, ‘Industry 4.0 in Germany and Australia: Digital Choices, Human Responses,’ Andrew Dettmer contrasts the comprehensive multipartite traditions evident in Germany’s response to the technological and global challenges and opportunities of so-called ‘Industry 4.0,’⁵ with the more fragmented and business-dominated approach to these issues within the Australian manufacturing sector. Dettmer argues that decades of successful concertation among German stakeholders (with unions consistently engaged as active participants) has equipped their manufacturing sector with the capacity to effectively harness new technologies for stronger investment, skills, and competitiveness. In contrast, Australia’s broad abandonment of active industrial policy in recent decades has left it without the capacity to implement new technologies, undermining its ability to rebuild advanced manufacturing. In this context, stronger union representation and collective bargaining, if complemented by deeper engagement by unions in sectoral and national policy-making, would achieve desirable outcomes for overall economic development – not just employment relations.

In contrast, Bill Rosenberg finds a more receptive attitude to pro-active industry policy on the other side of the Tasman. Nevertheless, in his article, ‘Unions and the Evolution of Trade and Industry Policy under the New Zealand Labour Government,’ Rosenberg finds that a legacy of commitment to neoliberal trade policies continues to constrain the current NZ government’s efforts to promote a more diversified, socially beneficial, and sustainable industrial structure. Rosenberg argues that making the most of the Labour government’s promising skills, infrastructure and just transition initiatives will require a comprehensive, consistent and powerful industry strategy, as well. But he concludes this will ultimately require the New Zealand government to step away from elements of its commitments across numerous bilateral and multilateral trade agreements.

Conclusion

With the COVID-19 pandemic severely disrupting the world of work, both the opportunity and necessity to rebuild unions and collective bargaining is clear. For countries with predominantly enterprise-level bargaining (like Australia, New Zealand, the US, the UK, and Canada), the task of revitalising collective bargaining is especially urgent. Our goal for this Special Issue was to marshal new research from international sources on the evolution of collective bargaining systems in a variety of countries, in the hope of providing information and inspiration for those working to win progressive industrial relations reforms. By combining contributions from both academic and trade union authors, we hope this Special Issue serves as a useful resource for those working to develop and advance innovative proposals for the revitalisation of collective bargaining systems. We also note that several of our contributions have highlighted more encouraging trends and policy initiatives in various countries: including the relative stability of sectoral bargaining arrangements in the Nordic countries, the progressive direction of labour policy in Canada, and New Zealand’s new FPAs. We hope that these reports can reinforce the belief of labour advocates in multiple countries that a better world of employment relations is not only necessary: it is also possible.

We thank all the authors who contributed their time and talents, particularly amidst a period of turbulent personal and professional upheaval. For the union leaders and practitioners who participated in both the AIRAANZ stream and this Special Issue, their contributions were especially generous and greatly appreciated. It is also important to acknowledge the contributions of those who refereed the papers published, without whom this Special Issue could not have come to fruition. Finally, a very special thank you to Noelle Donnelly and Jane Halteh at Labour & Industry for supporting us from the Issue’s genesis in Queenstown through to publication.

Disclosure statement

No potential conflict of interest was reported by the author(s).

Additional information

Notes on contributors

Alison Pennington

Alison Pennington is Senior Economist at the Centre for Future Work, with the Australia Institute. Alison has published research on the evolution of collective bargaining, skills, industrial relations, and gender.

Jim Stanford

Jim Stanford is Economist and Director of the Centre for Future Work, based in Canberra, Australia, and Vancouver, Canada. He is Harold Innis Industry Professor of Economics at McMaster University and Honorary Professor of Political-Economy at the University of Sydney.

Notes

1. At May 2020, job retention schemes across OECD countries supported 50 million jobs (OECD 2020).

2. For more on growth in casual and insecure work during the COVID pandemic, see Stanford (2021).

3. The potential application of Nordic-style social benefit delivery within Australia was also considered by Forsyth (2006).

4. Modern arguments for active industry policy are provided by Rodrik (2008), Mazzucato (2013), and Stiglitz et al. (2013).

5. This moniker is commonly invoked to refer to the expansion of automation, robotisation, and data-connected production systems (the ‘internet of things’).