4.1 The creation of the national sectoral employers’ association in Austria
For Austria’s social services, new institutions and practices of wage setting at the national level reinforced a social field. This section will describe the formation of a national employers’ association with collective bargaining rights that then decisively shaped the social field. The next section will trace the historical struggles over the spatial scope and scale of field boundaries and practices and, in particular, how regional and local political actors opposed a nationwide collective agreement. This section’s final part considers the current state of field boundaries and practices and their impact upon the perceptions, interests and behaviour of field participants, including transnational social service providers.
Austrian social service employers formed two important organisations. In 1995, the “Bundesarbeitsgemeinschaft Freie Wohlfahrt” (BAG) was founded to represent the five largest private non-profit providers as a lobbying organisation but not to conduct collective bargaining. Against the background of increasingly widespread public procurement and outsourcing by regional governments, employers aimed to establish their own “voice” vis-à-vis political actors (Interviews 05 and 13). Further negotiations on creating a distinct employers’ association with the explicit aim to negotiate a national sector-wide collective agreement had started in the early 1990s. Finally, after protracted negotiations (see Sect. 4.2), five provider organisations created the “Berufsvereinigung von Arbeitgebern für Gesundheits- und Sozialberufe” (BAGS) in 1997. However, some large providers, such as the Red Cross and church-related organisations, did not join.
Longstanding, close personal relations between employers helped create the BAGS association. In particular, some key actors held dual (professional) roles in the employers’ organisations and the management of social service organisations. Historical linkages between political parties at the provincial and local level and certain, often large, providers limited competition and resulted in informal allocation of (parts of) service markets. Throughout the 1990s, these relations became less relevant due to the abolishment of the government’s funding system based on proportional support to providers related to political parties (Interviews 05 and 13).
The BAGS gained the legal right, in 1997, to conclude collective agreements for the private (non-profit and for-profit) providers of social services because the responsible state authority (das Bundeseinigungsamt
9) considered the organisation to be of “considerable economic relevance” in the sector due to its representativeness of employees in the sector. Trade unions supported the legal process that resulted in the BAGS associations’ entitlement to collective bargaining: “Because we also wanted the capacity to conclude collective agreements, we supported employers and we were in the senate of the Federal Arbitration Board” (Interview 13). The Austrian Caritas organisation, as the largest employer in social services (around 14,000 employees in 2015), also gained the right to conclude organisational level collective agreements, alongside other organisations such as the Austrian Red Cross and Diakonie.
Employers agreed that it would be in their interest to harmonise pay and working conditions and replace the highly fragmented and non-transparent system of collective agreements from outside the sector (e. g. commerce), and a patchy set of legal regulations on minimum wages and working conditions not covered by collective agreements. Their perceptions and interests seem to be particularly influenced by the wider institutional environment in national fields of collective bargaining that has firmly established norms and ideas of cooperation and covers almost 100% of the workers (Pernicka and Hefler
2015). In addition, employers articulated a particular interest in flexible working times that deviate from legal norms. This can only be achieved by concluding a collective agreement (Interviews 04, 06 and 13). The planned “eastern enlargement” of the EU had raised fears of the inflow of cheap labour that would reduce wages and that could only be countered by a national sectoral minimum wage (Interviews 03 and 12). Furthermore, employers wanted to avoid being played-off against each other in negotiations with regional social service funding sources. Finally, employers agreed on the need to recruit well-qualified workers and increase the attractiveness of social service professions for young people. Also, national harmonising and recognition of professional qualifications would enhance the workers’ geographical and professional mobility. Trade unions also largely shared these goals and interests. Trade union and employers representatives acknowledge that the BAGS agreement resulted from the shared understandings and the aim “to commonly create something big, something good for all” in the sector (Interview 02). They also emphasised that such a constellation of forces would no longer be feasible because of the increased importance of cost competition and austerity policies (Interview 13); the current market logic hinders practices of nationwide cooperation and coordination in wage setting.
4.2 Struggles over and counterforces against a sector-wide agreement in Austria
The negotiation of the BAGS-collective agreement took more than six years and resulted from protracted struggles between social partners that formed an inter-class coalition, on the one side, and political actors, on the other side. In addition, conflicts arose within the labour and employers’ camps. However, the fiercest opposition against a national sectoral agreement came from regional governments arguing that they could not fund a nationally harmonised system to pay a wide range of social professions. Government representatives openly preferred to improve their bargaining position by negotiating separately with individual providers. Employers’ determination to end such divisive tactics inspired their support of the national sectoral agreement (Interviews 03, 04 and 05). Interview partners note the continuance of austerity policies that are, however, not directly linked to the European fiscal and debt crisis.
Conflicts and struggles also took place among employers’ organisations. The Austrian Economic Chamber (Wirtschaftskammer Österreich, WKÖ) represents all Austrian companies, for which membership is obligatory. They opposed setting up a sectoral employers’ organisation with voluntary membership that has a higher priority in collective bargaining than organisations with compulsory membership. Recently, even not-for-profit companies became members of the WKÖ; however, most also belong to BAGS which continues to grow since its founding. Currently, BAGS (renamed into Sozialwirtschaft Österreich, SWÖ
10, in 2012) organises 367 member organisations which employ more than 55,000 workers in private social service provision (SWÖ
2016). Organisational density of employers, i. e. number of workers employed in BAGS/SWÖ member organisations in relation to all employees pertaining to the organisational domain of the association, is approximately 55%.
On the side of labour, two trade unions conclude collective agreements in social services: the white-collar workers’ union GPA-djp, which is the largest union in Austria, and the vida union, which operates in industrial and transport sectors. Because their organisational domains partially overlap, the two trade unions coordinate their membership policies in order to avoid competing for members (Interviews 02, 06 and 13). Trade union density in social services is approximately 18% with wide variation between subsectors (Interviews 02 and 13). Despite this relatively low associational power of trade unions, collective bargaining coverage in Austrian social services is approximately 95%.
Within the social services sector, the BAGS agreement, covering the largest part of employees in the sector, serves as a pattern-setting agreement for other social services organisations. However, this pattern setting has an indirect effect; large providers state that they do not explicitly refer to pay rates settled in the BAGS agreement (Interview 15). Instead, the national agreement serves as an informal, implicit, but still effective, guideline in single-employer bargaining with large social services organisations. Most employers closely follow the negotiation of the BAGS agreement and its outcomes and follow the wage increases stipulated in the national sectoral and the company agreements of large social service providers. Representatives of the SWÖ and some of the largest service providers once attempted to jointly negotiate the national sector-wide agreement and the company agreements of organisations such as Caritas and Diakonie (Interviews 06 and 15).
11 Although the attempt failed, employers continue to informally coordinate with each other in collective bargaining, indicating the existence of a field of wage setting in social services that extends beyond formally established practices of collective wage bargaining. Over time, the SWÖ agreement became relevant beyond the private social services sector. For example, a recently negotiated public sector pay system in hospitals and residential care in the Upper Austria province is oriented towards the SWÖ agreement (Interview 01). The new remuneration system for public employees in the Lower Austria province also refers to the SWÖ agreement (Interview 06).
At the same time, collective bargaining in social services became more independent and autonomous from wage setting in the public sector. Bargaining actors state that they “do not care about the public sector”. That’s a “big taboo” in negotiations (Interview 13). In fact, however, they closely observe the public sector’s pay negotiations, which always take place before collective bargaining in social services, and use the results as a benchmark: “We have always achieved pay settlements approximately as high as in the public sector” (Interview 04) or even “above the public sector” (Interview 02).
Even when interview partners were explicitly asked if actors or agreements in other countries or at the European level affect their own positions, they responded that these international events do not influence their negotiating. Despite the opening of national social services and labour markets, wage-bargaining fields do not extend beyond national boundaries. In certain segments of social services, such as stationary old-age care, transnational companies have entered the Austrian market; however, they have limited influence on service and labour markets and must accept the national sectoral agreement. Wage-bargaining actors in Austria successfully created particular normative orientations towards sector-specific views on collective bargaining; hence, even representatives of transnational social services providers adopt these views. For example, after SeneCura (part of the global Orpea corporation) opened operations in Austria, it applied the BAGS agreement and joined the sectoral employers’ association. The Austrian-led management cooperates with trade unions. This situation contrasts to other countries, such as France and Belgium, with escalating conflicts between trade unions and the Orpea management (Interviews 02, 06 and 13). The emergence of a largely autonomous field of wage bargaining in social services was fostered by socialisation of field participants towards coordination and cooperation, their power relations and the formation of behavioural and legal norms.
Despite the relative autonomy of the collective bargaining field in Austrian social services, actors feel the impact of European level developments. Both trade unions and employers closely observe policy making in the European Union and try to actively influence it via lobbying on issues such as revising the public procurement directive. They feel that this directive and other EU regulations, such as on state subsidies, indirectly influence the provision of social services in Austria. The EU directive on public procurement leaves considerable leeway in implementation by policy actors. Its use and interpretation varies widely between Austria’s provinces. Trade unions and employers note the increased importance of public bidding and procurement in certain subsectors such as labour market policies, care of disabled people and patient transport services (Interviews 04 and 10). Both trade union and employer representatives appreciate that the directive’s recent revision places more importance on quality criteria vis-à-vis cost considerations. However, they criticise the large administrative burdens, particularly for smaller providers, to prove quality standards (Interviews 14 and 15).
Austrian social partners also promote coordination and organisational structures transnationally. For example, vida and GPA-djp as well as SWÖ representatives participate in PESSIS, a European Commission project initiated in 2012. The project, expected to run until late 2017, seeks to sound out possibilities for European social dialogue in social services. The most important obstacle to European social dialogue is the lack of sectoral employers’ organisations in most European countries.
4.3 Developments of wage setting in German social services
In contrast to Austria, collective bargaining in German social services has fragmented. The formerly established rather “weak” field of wage bargaining coordination based on actors orienting themselves towards the public sector collective agreements seems to be eroding. Some authors state that public sector agreements have already lost their function as the reference point for wage regulation in social services (Kühnlein and Wohlfahrt
2006, p. 392; Grohs and Bogumil
2011, p. 309). Actors in the field take different stances towards collective wage bargaining (coordination), ranging from trade union efforts to (re-)establish sector-wide collective bargaining to private companies operating without any collective regulation of their employment relations. New policies undermined rather than facilitated the creation and reproduction of coordinating institutions and practices of wage bargaining in German social services. Therefore, the following sections outline some important political and administrative developments on the national and regional levels. The next section presents the fragmented and patchy pattern of wage-setting practices and the still ongoing struggles over the legitimacy and value of collective bargaining in social services. Because employers, i. e. social services providers, have perceptions, interests and behaviour that support competitive rather than cooperative practices to determine wages, these field participants will be described in more detail.
Legal reforms and new forms of funding social services were implemented to increase competition between providers. Many actors in the sector mention the decisive importance of the legislation in 1995 on long-term care insurance, because the reform boosted competition and strengthened the role of private for-profit providers of care (e. g. Interviews 20 and 21). The reform in long-term care had aspects that also served as a model for reforms in other parts of the sector (Buestrich and Wohlfahrt
2008, p. 20; Interview 17). Also, regulations and practices concerning the funding of social services vary by subsector and region and have a decisive impact on the sector, e. g. on the structure of providers (e. g., caps on expenses for care places may disadvantage providers with higher wages). Union representatives see a general problem in that funding social services depends on the public authorities’ resources and—in the case of some services—the statutory social security. With austerity politics, providers and employees in social services face a constant pressure to cut or at least curb costs and unions criticise that cost-efficient service provision is given higher value than good working conditions for the employees (Interviews 19 and 22).
The state authorities do not unilaterally fix the rates and framework conditions (e. g. staffing levels) for the delivery of social services; they negotiate with associations of service providers mostly at the level of the states (Bundesländer).
12 Also, the actors can lobby and exert some influence in policy making. For example, both unions and welfare associations view it as a success that the law on the long-term care insurance now states that collective agreements may not be considered “inefficient” when reimbursing social service providers. However, this can be partially counteracted. Some clients require additional social benefits to pay for their care place. These must be paid by the municipalities, who may try to place clients in facilities with lower costs. Because the municipalities must pay social benefits, they also play an important role when fixing the reimbursement rates for social service providers. They seek to keep costs low, because they must cover clients not able to pay for their care place (e. g. Interview 16). Unlike Austria, German service providers did not seek to establish ongoing cooperation to counter pressures from funding authorities. The fragmentation and non-cooperation among employers seem to be the main hindrance in the sector to more encompassing regulation of employment conditions and coordination of wage policy. Representatives of all employers’ associations see certain overlaps of interest and they occasionally cooperate and exchange information (e. g. in the minimum wage commission or in negotiations on renewed funding with state actors). However, they do not perceive stronger coordination as possible or even desirable. The open competition between providers, even within the same association, hinders cooperation (Interviews 19 and 17). Most provider associations embrace the logic of competition promoted by political actors. Because the German social services market has fewer regulations and promises high profitability, it also seems more open and attractive to transnational corporations than the Austrian one (Interview 21). However, most interview partners agree that competition from multinational companies does not add a different quality to the already existing competition in the German social services market.
EU regulation does not appear to directly influence the German social services sector because the national regulatory framework mediates EU directives. However, unions as well as employers’ and welfare organisations lobby in the EU policy-making process, e. g. in revising the public procurement directive. Also, EU regulation on public subsidies has an impact on the German social services field. Private providers have tried to use these regulations to restructure the German market in their favour and addressed complaints to the European Commission; however, from their point of view, the results were unsatisfactory (Interview 24). Non-profit providers see constant relevance in EU regulations and a source of uncertainty as to whether their funding advantages may conflict with EU limits on public subsidies (Interviews 20 and 21).
4.4 The fragmented landscape of wage-setting institutions in German social services
The German social services sector’s most encompassing organisation is the Vereinigung der kommunalen Arbeitgeberverbände (VKA)
13. It covers the public municipal part of the sector with an organisational density in its domain of close to 100%. The VKA concludes the collective agreement for the public sector (TVöD) with the Vereinte Dienstleistungsgewerkschaft (ver.di)
14, which is by far the biggest union in the social services sector. Another smaller union, the Gewerkschaft Erziehung und Wissenschaft (GEW)
15, has relevance in the sector, such as the area of kindergartens.
16 The social services sector, as compared to other sectors, has a low union density of approximately between 3 and 10% (Evans et al.
2012, p. 30). The particularly low union density among church employees has an impact on the overall union density in the social services sector. However, ver.di’s social services division has increased membership.
The church-related providers Caritas and Diakonie enjoy the special right to conclude guidelines for employment contracts via the so-called “third way”. This means that special commissions staffed with employee and employers’ representatives negotiate these guidelines. However, in some of its regional divisions, the more decentralised Diakonie has diverted from this third way and concluded collective agreements with ver.di. Many diaconal enterprises are represented in the Verband diakonischer Dienstgeber in Deutschland (VdDD)
17, founded in 1996 to promote the interests of diaconal enterprises who felt that the religiously oriented Diakonie did not represent well their business interest (Interview 17). VdDD representatives principally favour competition between social service providers—or feel that it is inevitable, because reimbursement of providers for all costs incurred is believed to be a thing of the past; however, they demand the same framework conditions for all competitors. These framework conditions should, in their view, include reimbursing costs that result from higher wages if a collective agreement binds a provider. The VdDD aims to create an encompassing framework of collective regulation for all diaconal enterprises in Germany. In order to compete with private for-profit providers who operate without collective agreements, this framework would offer the possibility for differentiated wages in different regions and subsectors (Interview 18). The VdDD also has the explicit aim to move away from the TVöD, since the structure and “ideology”
18 of the TVöD would not fit the business needs of its members (Interview 17).
Caritas-related enterprises also have a separate organisation to represent their entrepreneurial interests. However, the Caritas adheres to the “third way” more strictly than the Diakonie and it also orientates its employment regulations more closely to the TVöD than the other welfare associations (Interviews 25 and 26).
While the AWO has its own employers’ association, the Paritätische and the DRK have so-called (regional) collective bargaining communities. This, however, does not mean that the welfare associations have coherent collective agreements or guidelines for salary and working conditions that cover all their facilities. Instead, there is a fragmented landscape of regional, local and company collective agreements (if an agreement is concluded at all) (Interview 19). All of these welfare associations have decentralised structures and weak peak level governance, which allows the single facilities or regional associations to act relatively autonomously when organising their employment relations (Interview 19). A union representative noted the self-made origins of the associations’ decentralised structures. The AWO dismantled their national collective agreement in the 1990s (Interview 19). In the 1980s, several unions helped with a failed attempt to establish an employers’ association for the Paritätische in order to try negotiating a collective agreement (Interview 22). Even though some actors within the welfare associations again favour more coordination in collective bargaining, this increased cooperation could not easily be (re-)established (Interview 19).
The two for-profit employers’ associations in the sector, the Arbeitgeberverband Pflege (AGVP
19, founded in 2009) and the bpa employers’ association (breaking away from AGVP in 2015) have obvious differences but share the characteristic of weak peak level structures to some extent. These associations represent a diverse membership of over 1700 facilities in the social services sector (Interviews 16 and 24). Both private employers’ associations were mainly founded to influence the minimum wage legislation in care via the care commission
20 and not necessarily to conclude collective agreements. However, in the summer of 2016, the AGVP did plan to negotiate with ver.di concerning a collective agreement for apprentices. However, due to internal changes within the AGVP, negotiations have not yet started. The bpa employers’ association is working on its collective bargaining strategy. Both associations strictly oppose generally binding collective agreements (Interviews 16 and 24). The AGVP’s steps toward negotiating a collective agreement with ver.di could thus possibly be seen as a strategy to counter ver.di’s (and the GEW’s) attempts to conclude (regional) collective agreements with bargaining communities of different provider associations and have these declared generally binding. However, this strategy has not been very successful (Interview 19). The fierce competition between facilities in a fragmented provider landscape in combination with the restrictive funding makes it hard for ver.di to conclude collective agreements with single providers who fear to lose out in competition (Interview 19). Because the sector’s wage levels are very diverse and sometimes well below that of the TVöD, the union sometimes concludes collective agreements below TVöD-standards and then tries to raise wage levels over time. VKA sees this as a problem; such agreements could weaken TVöD and the municipal providers adhering to it (Interview 23). Ver.di acknowledges this problem and makes great efforts to transfer public sector standards to private for- and non-profit providers despite the increasing difficulties according to ver.di (Interview 19). Overall, collective bargaining is very diverse and fragmented in the social services sector. Evans et al. (
2012) have counted over 1400 collective agreements and guidelines for employment contracts in the sector. They note that collective regulation does not cover 63% of the facilities and 37% of the employees. Especially with the sector’s private companies, up to 80% of employees are not covered by a collective agreement (Evans et al.
2012, p. 29 f.). Private providers conclude collective agreements mainly at the level of single companies or facilities, if at all (Interview 16). Despite this, a public employers’ representative holds that the TVöD still has a big influence on wages in the sector.
21 The confessional associations, especially Caritas, would strongly orientate themselves to the TVöD. Other non-profit providers would also adhere to the TVöD, at least concerning basic provisions of the collective agreement (Interview 23). Most interview partners agree that private for-profit providers do not follow the public sector’s lead concerning wage levels, but use the TVöD as a reference point for reimbursement of services by the funding authorities. The resulting gap between reimbursement and wages paid provides them with entrepreneurial freedom (Interview 17). However, the private employers’ associations see the TVöD as a reference point to some extent and hold that private care companies do not pay (much) lower wages than other providers because of the fierce competition for qualified staff (Interviews 16 and 24). The TVöD also has strongly differing significance according to subsectors because the share of service providers located in the public sector bargaining arena differs between subsectors (Interview 18).
As in Austria, most of the German employers’ associations have participated in the EU’s PESSIS project. However, most employers’ associations take a cautious stance on the project. Despite exploration of closer cooperation between employers’ associations, most interview partners do not see much progress. Some also explicitly state that closer cooperation should not include the area of collective bargaining; they see the PESSIS-project as a chance for social services enterprises to be heard at EU-level with their business interests (Interview 17).