Social Dialogue: International best
practices and Recommendations for united Cyprus
Gregoris Ioannou
[commissioned study for Cyprus
Dialogue Forum]
1. Introduction:
Social Dialogue has been a key achievement of humanity and as a practice has now almost one Century of history in the developed world. It is a central concept both in the ILO’s Decent Work Agenda and the EU’s social model but has faced considerable strains during the economic crisis and is in need to modernize and develop further, finding the best possible mechanisms, processes and contexts in which it can be conducted. However, above all for social dialogue practices to have meaning and effect, “serious political commitment and sustained collaborative effort” is needed. There is a wide diversity of national social dialogue institutions in EU countries and there is no ideal model and “one size fits all” as these reflect historical traditions, and socio-political and economic circumstances that shape national contexts (Guardiancich and Molina [eds.], 2017).
Social Dialogue has been a key achievement of humanity and as a practice has now almost one Century of history in the developed world. It is a central concept both in the ILO’s Decent Work Agenda and the EU’s social model but has faced considerable strains during the economic crisis and is in need to modernize and develop further, finding the best possible mechanisms, processes and contexts in which it can be conducted. However, above all for social dialogue practices to have meaning and effect, “serious political commitment and sustained collaborative effort” is needed. There is a wide diversity of national social dialogue institutions in EU countries and there is no ideal model and “one size fits all” as these reflect historical traditions, and socio-political and economic circumstances that shape national contexts (Guardiancich and Molina [eds.], 2017).
Based on the current existing social dialogue practices in the GCC and
TCC and the environment in which social dialogue takes place as outlined in the
two relevant CDF Reports, this Report aims to briefly examine selected
alternative forms of social dialogue operating in other countries and a) identify
those international best practices that could more efficiently and effectively
be adopted or that could inform a united Cyprus context and b) suggest the steps that need to be taken
for this direction. The benefits, difficulties, prerequisites and implications
in this endeavor are discussed and c) the Recommendations are summed up and
specified along with some concluding remarks. The international examples
selected are drawn primarily from EU countries and rely on the most recent
research conducted by the ILO and by Eurofound on behalf of the European
Commission and the recommendations made after the study of social dialogue in
the conditions of the economic crisis.
2. Social
dialogue international best practices:
Social dialogue contexts and processes differ across countries as there
is a variety of industrial relations models (Eurofound, 2018a). Social dialogue
occurs in a bi-partite form alongside and connected to collective bargaining,
but more often in a tripartite form involving both general and specific issues
(ILO, 2017). It also operates at different levels – usually national and
sectoral but also sometimes at a regional and at an enterprise level. The
degree of its institutionalization, frequency of meetings, scope and depth of
consultation processes and actual impact on policy making varies across
countries but overall it can be said that the main tripartite social dialogue
bodies have an advisory role with the governments maintaining the leading role.
Although social dialogue has been generally weakened during the crisis
in various ways, or has been unable in many countries to play a substantial
role in crisis management there are European examples where in fact social
dialogue has been strengthened during the recent economic crisis. These are
France, Germany, Netherlands, Slovakia and Sweden (ILO, 2018). Germany and
Sweden do not have a tradition of statutory tripartism but have instead fairly
elaborate bi-partite social dialogue bodies and extensive collective
bargaining. In 2014 Germany has instituted a Minimum Wage Commission authorized
to decide on increases in the minimum wage every two years. This commission is
chaired by an appointment of the Federal Labour Minister and composed by trade
union and employer representatives and academic experts for a five year term. In
Germany, in addition to the formal channels, informal, ad hoc meetings of the
social partners took place in order to deal with the emergency situation
arising from the crisis. These “crisis summits” called by the state and
involving several relevant federal ministries, were used to present and discuss
the social partners’ views on appropriate crisis responses, started before the
crisis and continued after it (Lesch and Vogel, 2017). Ad hoc, non formalized
social dialogue in Germany has been very effective in providing responses to
the crisis such as negotiating reduced working time to avoid layoffs (ILO,
2018).
France at the other extreme end has a tradition of an active role of the
state and intervention through extension mechanisms in collective bargaining
and legislative tools. In 2007 France has enacted a new law granting the social
partners consultation rights “in relation to any government project or prior to
any draft bill on reforms in the area of labour relations, employment or
vocational training” (Karnite, 2016). Although consultation rights do not
necessarily translate into substantive deliberation, it did lead into more
frequent meetings and discussions, strengthening the form and process of social
dialogue (Freyssinet, 2017). Effectively this has institutionalized an already
occurring phenomenon, boosting it symbolically through its legal consolidation.
Unlike in many EU countries, in Slovakia anti-crisis measures were first
discussed at the country’s Economic and Social Council before being adopted
(Eurofound, 2018a). In addition the “tripartite plus” Council for the Economic
Crisis was established in 2009 playing a leading role in the formulation of the
Government’s response to the crisis replaced in 2012 by the Council of
Solidarity and Development (Cziria, 2017). Good and early planning and
professional preparation of the meetings was important in addition to the
political commitment not to interrupt and even strengthen further the social
dialogue process during the crisis period. Another good practice in Slovakia,
which has experimented with the consecutive establishment of various peak level
tripartite bodies in the last two decades in search of efficiency and according
to political dynamics, is the publication of the minutes and the holding of
press conference after national level social dialogue meetings (Cziria, 2017).
In the Netherlands, although trade unions were weakened through rising
labour market flexibility and falling trade union density undermining their
legitimacy in social dialogue, there was no rupture with past and the Polder
Model which has social dialogue at the heart of labour relations and social
policy has survived. The Dutch social partners have reached agreements during
and after the crisis on issues such as “wages; social and employment policies
(including implementation of EU Directives); industrial relations and labour
law, including collective bargaining practice and procedures; and anti-crisis
measures on competitiveness and productivity” (Dekkers, Bekker and Cremmers,
2017). Also employers and trade unions have recently accepted one seat less for
each, allowing two organizations representing the self-employed to also be
represented in the Social and Economic Council, the supreme tripartite body of
Netherlands (Dekkers, Bekker and Cremmers, 2017).
The participation of the social partners in the EU Semester can also be
considered as an international best practice, at least at the level of
intention for EU policy makers. Although in many instances more formal than
substantive and still lagging behind the more elaborate and comprehensive
social dialogue mechanisms and procedures at national level of most EU member states,
it has the potential to systematize and perhaps revitalize social dialogue
practices in EU member states, especially in those states where the crisis
undermined or marginalized it almost pushing it out of existence. Although the
emphasis so far has been procedural (Eurofound 2017) emphasis has been shifting
to social partner capacity building (Weber and Pavlovaite, 2018; Eurofound ,
2018b) which is expected to be the central dimension in the next years
(Eurofound, 2019 forthcoming).
3. Adapting
suitable social dialogue examples and suggestions for directions in a united
Cyprus context:
Although the positive contribution that social dialogue can have on the
economy and society is recognized in both communities of Cyprus and there is
already significant institutionalization of social dialogue mechanisms and
processes in both sides, there are substantial imbalances and weaknesses,
especially in the TCC (Sonan, 2018). Unlike the Republic of Cyprus which has
ratified the ILO Convention on Tripartite Consultation (International Labour
Standards) 144 (1976) in 1977 and operates since then a full-fledged tripartite
system, the Turkish Cypriot Community has a much simpler and less comprehensive
system in place. In the GCC, although a more elaborate system is in place this
has been weakened during the crisis and although some improvement took place in
the last years, social dialogue has not returned to the pre crisis levels in
terms of depth and substance. Moreover the changing environment in the labour
market already in place and the much bigger challenges that will inevitably
escort the reunification process, point to the direction of reform and
strengthening of the social dialogue context in general.
Given that labour law and labour and social policy will need to be
unified in principle and operate at the level of the federal state a series of
measures will have to be adopted in order to facilitate the transition to the
united Cyprus context and maintain the social dialogue environment at the
optimum level. Building strong social dialogue mechanisms that can oversee the
reunification process is necessary in order to deal swiftly with the problems in
the labour market and possible negative socio-economic developments that may
arise. If a well functioning bi-communal, social partner consultation system is
established from day 1, the transition can be achieved smoothly and this will
also increase stability, the sense of security and social ownership of the
reunification process[1].
Steps need to be taken in three directions:
A) Strengthening of the legal framework of social dialogue.
A) Strengthening of the legal framework of social dialogue.
Making consultation a legal
right of the social partners and an obligation of the state will contribute to
the systematization of discussions and the development of a social dialogue
culture in a United Cyprus. Especially since a new political order will be in
the process of construction after an agreement is ratified, the establishment
by federal law of a series of tripartite bodies (see below) can both, place
social dialogue on a stable footing especially in the transitional period, and
allow ownership of the reunification process assisting in its social legitimization.
In the medium term, establishing a comprehensive, well structured tripartite
system will contribute to the democratization process and effective and
socially balanced decision making and law making on labour, social and economic
policy.
B) Enhancing the autonomy,
representativeness and strength of social partners.
This requires an active
concerted effort by the state and the social partners that needs to take
various forms. First of all it requires the political commitment of the
political leaderships that the social partners will be a pillar of the
reunification process and that tripartite social dialogue will be at the heart
of the united Cyprus project. From this, it follows that measures, which so far
have not been considered, will be adopted in order to build a new effective
consultation system. This would involve legislative reforms and administrative
practices in order to protect unionization, especially in the Turkish Cypriot
Community’s private sector including stricter inspections and better
enforcement of existing laws with zero tolerance to anti-unionization practices
by some employers. It will also need to involve changes in the institutional
framework in order to improve the balance of power between the two sides in
specific industries and measures to combat the fragmentation of the social
partners. On the organizational side, and under the leadership of the social
partners themselves, the aim should be the increase in social partners’
membership density and representativeness and enhancement of expertise and
capacity of involvement in collective bargaining and social dialogue more
generally.
C) Smooth operation of the labour market
and harmonization and unification of social insurance systems.
Pre-emptive measures need to
be adopted to prevent social dumping, observation mechanisms need to be
instituted to inform the social dialogue bodies (regular as well as emergency
ones) about possible interventions to be made as issues arise and a standing
committee including experts should take over the planning of the merge of the
social insurance systems in the medium term. The pre-emptive measures could
involve the institutionalization of a national (federal) minimum wage and basic
employment benefits that would protect the most vulnerable segment of the
labour force. Beyond reducing work inequalities and allowing decent conditions
in non unionized sectors, a “minimum wage and basic benefits package” can also
serve as the starting point from where trade unions and employers can
collectively bargain at sectoral or enterprise level better deals and more
elaborate employment terms where the balance of power between the two sides
allows it. In this way protective legislation will complement collective
bargaining procedures. Measures are also needed in order to follow the
situation in the labour market as it evolves and steps should be taken for the
gradual unification of social insurance.
4. Specifying the Recommendations:
-
Establishment of a “Labour and
Social Policy Council” by means of federal legislation (that will replace
the Labour Consultative Assembly of the RoC and the Social and Economic Council
in the Turkish Cypriot Community). Using federal legislation in order to set
this peak tripartite body has both a practical and a symbolic function. On the
one hand, assigning a statutory status to social dialogue and proclaiming to
all that the state of United Cyprus is oriented towards the logic of social
partnership. This peak tripartite body should be convened regularly (2 or 3
times per year) as well as additionally on extraordinary or emergency occasions
when the government decides so. The main trade unions and employers’
organizations from both communities should be represented at the highest level
and from the state’s side the Minister of Labour heading the meetings should be
accompanied by high ranking competent civil servants. This body should operate
as the main vehicle for social dialogue on general issues of labour and social
policy and legislation at the top level. Although the government will have a
leading role, the social parties should also have the right to jointly
determine the agenda.
-
Establishment of the United Cyprus Committee
of Employment, with a special focus on issues of combating unemployment,
promoting training and more broadly overseeing the smooth operation of the
labour market. Beyond employment issues, this could also be the body in which
labour relations issues are discussed and common statements, campaigns and
agreements decided as to how a more balanced labour market institutional
framework could be promoted, representativeness enhanced, trust between social
partners built and problems with inadequate compliance with standards set in
collective agreements dealt with.
-
Establishment of a Minimum Wage
and Basic Employment Benefits Commission. This can follow the German model
outlined above with the appointment of academic experts in addition to the
social partner representatives and have a fixed term of service and a regular
bi-annual review of the national minimum wage. The benefit from the
establishment of such body is both substantive and procedural. The
institutionalization of a national minimum wage and basic employment benefits
will offer a minimum protection net for the weaker in the labour market and
prevent social dumping that may appear amidst the capital movements during the
transitional period. At the procedural level, the 5 year term appointments of
social partners’ representatives and academic experts is expected to allow the
development of mutual understanding, in-depth exchange of views and placing
discussions on a scientific basis resulting in a consensual or at least
majority decision on the bi-annual review.
-
Establishment of a Coordinating
Committee for the convergence and unification of the Social Insurance Systems.
This will need to be also tripartite in spirit but should involve experts as
well, while functionaries from the two social insurance systems of the
constituent states will also need to be part of it. Its aim will be the
systematic study of the factors and parameters affecting the convergence and
unification of social insurance, devise plans and scenarios, discuss problems
and solutions and mediate between the federal government and the government of
the two constituent states.
5. Concluding remarks:
The international examples chosen and suggestions made above are of
course indicative and briefly outlined and aim to serve the opening of the
discussion between the social partners in the two communities in Cyprus.
Successful practices abroad can only inform possible practices in Cyprus and
cannot offer any detailed blueprints. As
stated in the introduction, the examples are drawn from EU countries, in which
Cyprus belongs and in which social dialogue is most advanced. The recent
economic crisis and the strains it placed on social dialogue constitutes a
background upon which the different institutional arrangements can be evaluated
in terms of their resilience.
Through the review of the most recent trends and the paths chosen by
different countries in response to the crisis with respect to tripartism, some
general directions, given the current actual state of affairs and the
prevailing normative positions at the level of declarations by both the EU and
the ILO, are suggested. These directions are specified with concrete
recommendations about the establishment of structures and mechanisms that will
enable social dialogue escort, condition, shape and influence the transition
from a divided to a united Cyprus minimizing risks and maximizing social and
political benefits.
References:
Cziria, L. (2017) Sustaining social dialogue though the crisis: The
Slovakian experience, in Guardiancich, I. and Molina, O. (eds.) Talking through the crisis: Social dialogue
and industrial relations trends in selected EU countries, ILO, Geneva
Dekker, R., Bekkers, S. and Cremers, J. (2017) The Dutch polder model: Resilience
in times of crisis, in Guardiancich, I. and Molina, O. (eds.) Talking through the crisis: Social dialogue
and industrial relations trends in selected EU countries, ILO, Geneva.
Guardiancich, I. and Molina, O. (eds.) (2017) Talking through the crisis: Social dialogue and industrial relations
trends in selected EU countries, ILO, Geneva.
Eurofound. (2017) Involvement of
the national social partners in the European Semester: 2016 update, Publications
Office of the European Union, Luxembourg.
Eurofound. (2018a) Country profiles.
Eurofound. (2018b) Involvement of
the national social partners in the European Semester 2017: Social dialogue
practices, Publications Office of the European Union, Luxembourg.
Eurofound (2019 forthcoming) Exploring
how to support capacity building for effective social dialogue
Freyssinet, J. (2017) Social dialogue in the shadow of the State in
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trends in selected EU countries, ILO, Geneva.
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Recommendation, 1960 (No. 113), ILO, Geneva.
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tripartism, Report VI, ILO, Geneva.
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(eds.) Talking through the crisis: Social
dialogue and industrial relations trends in selected EU countries, ILO,
Geneva.
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O. (eds.) (2017) Talking through the
crisis: Social dialogue and industrial relations trends in selected EU
countries, ILO, Geneva.
Sonan, S. (2018) Social Dialogue Environment in the Turkish Cypriot Community, Cyprus Dialogue Forum
Weber, T. and Pavlovaite, I. (2018), EU
Social Partners’ project on “The European Social Fund: Supporting Social
Dialogue at National, Regional and Local Levels”, Final report, Integrated
Projects of the EU Social dialogue 2016-2018
[1] For this to be achieved, the
social partners will need to be in closer communication with the two leaders
and their teams from the negotiation stage, and be ready to come up with
detailed proposals concerning the social dialogue process of united Cyprus
immediately after the agreement is reached.
