Commerce Sector

A collective agreement for all!

The example of the hotel, catering and restaurant sector shows the shortcomings of current collective bargaining legislation – and underlines the urgent need to reform it.

The results are grim. In the retail sector, only 38% of workers are covered by collective agreements. In the hospitality sector, the figure is just 21%. Two of the country’s largest economic sectors thus drive down Luxembourg’s collective bargaining coverage rate to just 59% for the economy as a whole and 53% for the private sector alone. That’s barely one in two employees, even though a European directive requires European countries to achieve 80% coverage.

“The outgoing coalition government’s manifesto calls for a review of collective bargaining legislation.

“Labour law has an important role to play, but it cannot regulate everything,” it says. “An important role must be played by negotiations between the social partners within the framework of collective agreements or cross-industry agreements. The relevant legislation, which dates back to 2003, will be subject to an evaluation, the results of which will be presented to the CPTE with a view to possible adaptations, taking into account the legislation which gives an important role to collective agreements (‘tariff autonomy’)”.

However, it is clear that this is not the case. The law on collective agreements has not changed. So how can we be serious about achieving the 80% recommended by the European Directive?

A look at the sectors with the lowest levels of collective bargaining coverage – commerce and horeca – reveals the extent to which current legislation penalizes the bargaining power of trade unions and hinders any desire to significantly increase coverage.

In these two sectors, where the proportion of workers earning the minimum social wage is also the highest, there is currently no sectoral agreement except for the one for the car repair sector.

At the same time, the employers’ organizations in these sectors continue to point to the labor shortages they claim to be facing. In their view, however, the reasons for this are clearly not to be found in unattractive pay and working conditions, but in a lack of motivation among potential employees, overly rigid legislation on working hours or excessive absenteeism.

In the hotel and catering sector (horeca), which has benefited greatly from state aid during the health crisis – and rightly so, with the support of the OGBL, which in particular signed a job protection plan – the OGBL contacted the Horesca employers’ association to hold an open discussion on a possible sectoral collective agreement.

While the Horesca Federation had met with OGBL representatives on several occasions to discuss short-time work and various forms of assistance, and had always stressed the urgency of the situation, its attitude was quite different when it came to discussing working conditions and wages: it did not even deign to reply to the various letters and calls from the OGBL.

Given this attitude, the question of linking the various government subsidies – paid for with taxpayers’ money, let’s not forget – to a collective bargaining agreement becomes very concrete.

Another question arises in the restaurant sector. This sector, which employs some 5,000 people and which, unlike cleaning or security services – which are very similar activities – does not have a collective agreement, is directly dependent on public contracts for its activities, for example in school canteens, “maison relais” or care facilities.

The sector is therefore directly financed by public funds – again, taxpayers’ money.

For many years, the OGBL has been trying to negotiate a sectoral collective agreement for catering staff, a project that has repeatedly failed due to the employers’ blocking principle.  A sectoral agreement would not only make the sector more attractive – which it needs – but would also resolve the thorny issue of job transfers in an environment where the employer can change overnight following a tender.

So far, however, apart from the fear of a possible large-scale social conflict, which is only just beginning to emerge, the employers in the sector have no “incentive” to break the deadlock in the negotiations. In fact, the companies can continue to pocket public money without having to provide any compensation in terms of working conditions and wages.

In recent years, the OGBL has made a number of efforts to increase the coverage of collective agreements: for example, a number of new collective agreements have been signed, particularly in the retail sector, covering more than 1,000 additional employees in the last two years.

But as long as the law on collective agreements remains unchanged, as long as there are no collective bargaining conditions attached to the granting of public aid or public contracts, these encouraging results will lag far behind the potential results that could be achieved through a thorough reform of the law.

Anyone who takes the European Directive on collective bargaining coverage seriously, anyone who claims to be serious about working towards higher coverage, cannot ignore this.