bargaining arrangements giving management greater scope to negotiate working
and employment practices appropriate to the circumstances of the company or
its constituent units. The development is long running, but the creation of the
single European market and its subsequent deepening through EMU has served
to reinforce it by unleashing extensive restructuring and rationalization. The
result is a growth in the negotiation of what have been called ‘pacts for employ-
ment and competitiveness’ (PECs), in which management and employee repre-
sentatives seek to handle the implications of restructuring by agreement (Sisson
and Artiles, 2000). Frequently, developments in metalworking have set the pace,
reflecting the extent to which the sector is open to international competition
and differentiated in terms of products and production processes (Marginson and
Sisson, 1998: 523). In recent years, however, sectors such as banking and insur-
ance, where competition has remained nationally bounded, have been affected.
Significantly, however, although decentralization is causing considerable
tensions within national systems, more of which below, it has not led to the
widespread break-up of multi-employer bargaining. As Ferner and Hyman
(1998: xvi–xvii) observe, ‘Decentralization has largely taken the form of a con-
trolled and co-ordinated devolution of functions from higher to lower levels of
the system’, i.e. more and more of the detail of industrial relations practice is
being filled out through negotiations at lower levels, especially the company
level. In most cases, to use Traxler’s (1995) words, decentralization has been
‘organized’ inasmuch as the company bargaining occurs within the framework
of the sector agreement; only in the UK, reflecting the very different form and
status of multi-employer agreements, has the decentralization been ‘disorga-
nized’, with sector agreements disintegrating and being displaced by company-
level arrangements. A variety of methods have been used to achieve flexibility,
such as ‘opening’, opt-out and ‘hardship’ clauses in sector agreements, along
with a shift from uniform to minimum standards.
Moreover, at the heart of the ‘centrally co-ordinated decentralization’ in
many EU countries has been a strengthening of higher-level (central) co-
ordination. Under pressure to hold back inflation and reduce public sector
deficits in line with the convergence criteria for EMU, most national govern-
ments have sought agreements with employers’ organizations and trade
unions – so-called ‘social pacts’ (Fajertag and Pochet, 2000) – on wage moder-
ation, greater labour market flexibility and reform of the system of social pro-
tection. In some cases, such as Italy and Spain, confederal-level agreements
have established new procedural roles formalizing the respective competence
of the different levels in the collective bargaining structure and simultaneously
have conferred greater autonomy on the company level, thereby allowing
scope for greater substantive flexibility (Ferner and Hyman, 1998: xvi–xvii).
Even where there has been no formal agreement, as in the case of Germany, the
macro-social dialogue has been significant in structuring attitudes.
Social pacts can be viewed as promoting ‘regime competition’ in that they
are a form of ‘renationalization’ with a view to increasing the attractiveness of
Industrial Relations in Europe 445