New report: benefits of multi-employer collective bargaining

A recent report, undertaken by CELSI and WageIndicator, commissioned by UNI Europa, reviews the academic literature and identifies several arguments and benefits of multi-employer bargaining.

According to their study, there are benefits for workers, trade unions, employers and society at large:

• Enhanced Worker Benefits: Sectoral bargaining leads to improved wages, better working conditions, and enhanced social benefits for workers. By negotiating collectively on a broader scale, unions can secure more favourable terms that positively impact the entire workforce within a sector.
• Strengthened Trade Unions: Multi-employer bargaining empowers trade unions by amplifying their negotiating power. Unions can leverage collective strength and represent the interests of a larger group of workers, resulting in increased influence and effectiveness during negotiations.
• Advantages for Employers: Contrary to concerns, employers also stand to gain from sectoral bargaining. It fosters a more stable business environment, eliminates the fear of competitive disadvantages, and promotes harmonious labour relations across the sector. Moreover, by offering uniform working conditions, it reduces the risk of a race to the bottom and ensures fair competition.
• Societal Benefits: Sectoral bargaining contributes to broader social and economic goals. It reduces income inequality, enhances social cohesion, and promotes a more balanced distribution of wealth within society. Additionally, it supports sustainable economic growth by fostering a motivated and productive workforce and other outcomes for the society. And most of all, multi-employer bargaining contributes to more equal societies.

Reversing a common argument

“We cannot concede to your demand as it risks being too big a competitive disadvantage.” This familiar employer response during collective bargaining negotiations to workers seeking better conditions. As this report documents, this situation changes if unions and employers embrace multi-employer or sectoral bargaining.

In traditional negotiations, when a single company grants raises or reduces working hours, employers fear the potential negative consequences it may have on their competitive edge. This concern often leads to resistance against granting favourable terms. For that reason, many unions and employers have turned to multi-employer or sectoral bargaining as an alternative. When unions negotiate not with one single company, but with many or all companies of a given sector, this argument is not valid anymore. Sectoral bargaining creates a level-playing field between companies enabling good working conditions for workers.