Concerning collective conflicts, same experts stated, "Germany is trapped in its culture of bilateral negotiation" or "They want to play the game – Both sides need to establish and strengthen their position through that game". Another emphasized the importance of more information on third party interventions and mediation in collective conflicts: "The benefits of mediation or alternative procedures are usually only seen if participants experienced at least once themselves and experienced the advantages of mediation. All experts agreed that a wider debate would foster mediation, that mediation has the potential to strengthen the social peace, but they do not recognize that such a debate is currently going on.

## **References**

**Open Access** This chapter is licensed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

The images or other third party material in this chapter are included in the chapter's Creative Commons license, unless indicated otherwise in a credit line to the material. If material is not included in the chapter's Creative Commons license and your intended use is not permitted by statutory regulation or exceeds the permitted use, you will need to obtain permission directly from the copyright holder.

# **Chapter 8 Mediation and Conciliation in Collective Labor Conflicts in Italy**

**Andrea Caputo and Giuseppe Valenza**

#### **The case**

"*On Tuesday, the 31st of May 2017 at Atac, a strike was proclaimed from labor unions Faisa Confsal, Orsa Tpl, Sul Ct, Usb e Utl of 24 h for the public transportation, from 8:30 to 17:00 and from 20 to the end of the service time. It was the agitation expected initially on the 20th of May and then deferred. The protest would put at risk the bus, filobus, tram, metro and Roma*-*Lido, Termini*-*Centocelle and Roma*-*Nord train services. Possible repercussions would also have occurred on the night lines between May 31st and June 1st. The protest also involved personnel for parking and ticket offices and staff from the internal services. The danger of a total paralysis was averted thanks to the intervention of the neo Prefect Paola Basilone, which reduced the duration of the strike of the employees of Atac spa, with its order 'adopted pursuant to Law n. 146 of 1990,', proclaimed by different trade unions for the entire day of 31st May. The new measure limits work absence to the hours between 8:30 and 12:30. From a note of the Prefecture, we learn that it was adopted "after the unsuccessful attempt of conciliation between the parties took place in the prefecture yesterday, based on the knowledge of some critical elements for the urban public transport resulting from multiple circumstances such as the simultaneous development, in the same day, of other strikes actions, also up*

A. Caputo (B) · G. Valenza Fondazione Bruno Visentini, Rome, Italy e-mail<EMAIL_ADDRESS>
A. Caputo University of Lincoln, Lincoln, UK

G. Valenza Università degli Studi Mediterranea, Reggio Calabria, Italy *to 24 h, in the field of peripheral local public transport*—*partially affecting on the same catchment area*—*and, again, the performance of certain events included in the jubilee calendar. These factors, along with 'the foreseeable increase of the number of visitors linked to the bank holiday on June 2nd and inconvenience to vehicular traffic associated with the traditional parade planned for the Republic Day*—*continues the statement*—*cause to fear that the conduct of protest actions planned can cause a serious and imminent harm to freedom of movement. The reduction of the duration of the abstention from work allows to reach a fair balance between the exercise of the right to collective abstention from work and the right, also guaranteed by the Constitution, the mobility of citizens and other users of the Capital*".1

The case just above presents an emblematic example of the Italian situation in the mediation process regarding collective conflicts. A strike in public transport services for a 24 h period had been proclaimed by the unions, which would cause a paralysis of the Italian capital in terms of mobility.

The two parties involved were Atac, the company that manages the urban public transport services in Rome, and the workers trade unions employed in this fundamental public service. To avoid the strike, a third party intervened: the Prefect of Rome, who acted as a mediator and tried to find a conciliation between the parties involved. This attempt, however, was not successful. To avert the risk of total paralysis, the Prefect has resorted to the law n. 146/1990, which regulates the strike in essential public services, allowing an absence from work only in the morning hours, effectively reducing the strike from 24 to 4 h.

## **8.1 Introduction**

The characteristics and modalities by which most of the collective conflicts take place in Italy can find their explanation in some historical factors with social and political connotations, for which it is necessary to provide an adequate overview before entering the main theme of this chapter.

After World War II (WWII), Italy witnessed an unprecedented economic boost, which became known as the "Italian miracle." In little more than a decade, the Italian industry saw the rise of many new factories. In this context, the working class acquired its own identity and its own awareness of their role in society.

Since the early 1960s, the relations between workers and employers began to show the first forms of tension. A series of class conflicts reached their peak of conflict between 1969 and 1971 (Meriggi, 1996). For decades, complaints, claims, protests,

1Source: *Il Tempo.it*—*«The prefect reduces the 24 h strike of transport» (May 29, 2016)*—http:// www.iltempo.it/roma-capitale/2016/05/29/gallery/il-prefetto-riduce-lo-sciopero-di-24-ore-deitrasporti-1011336/. Accessed on 11th November 2016.

strikes, and demonstrations represented the "DNA" of collective conflicts in Italy. Considering this "tradition," it seems that even today, labor unrests in Italy tend to adopt approaches that aim at confrontation rather than problem-solving.

These kinds of conflict can be seen even in the characteristics of the Italian industrial relations. Since 1968, for example, the considerable shocks in the political and social context led to a precarious balance in industrial relations (with open challenges from unions in the political and entrepreneurial class power) that would only partially stabilize in the early 1990s with the signing of the Maastricht Treaty. The signing of the Treaty, in fact, forced the political system, the entrepreneurial system, and the system of industrial relations to collaborate together to find a balance between the parties involved to ensure the entry in the Single European Market (Bianchi, 2003). Further, it was emphasized that in the 90 s, the collective conflicts characters were partially "cooled" due to a decrease of the importance of workers employed in the Italian industry and the consequent growth in the services sector (Farro, 2000).

Traditionally, Italy was the protagonist of strong social conflicts between the parties involved, in which the mediation processes have often not been easy to implement. Although tensions reached in the "hottest" historical periods have now ceased, it seems that some remain salient features of that conflict. In fact, even today in Italy, there are often numerous strikes in various sectors and, as showed in this chapter, the institutionalization of mediation as a preventive solution of the conflict is more exceptional than typical; moreover, it is often left to the voluntariness of the parties and with an informal organization.

Based on the content of the annual report 2016 of the *Commissione Garanzia Sciopero*, the Italian watchdog on industrial actions, in the year 2015, labor union conflicts in Italy were more concentrated in the areas of essential public services, whether provided by public, private, or semi-public organizations. In these areas, the strike action remained at very high levels, noting an increase from 2014. In 2015, there were 2261 proclamations of strikes, which was an increase of approximately 10 percent compared to the previous year (Commissione Garanzia Sciopero, 2016) (Tables 8.1 and 8.2).

## **8.2 Characteristics of the System**

The aim of this section is to study the characteristics of the Italian system of collective conflicts, particularly how disputes take place between employers and workers. From the introduction above, it can be ascertained based on traditional Italian history, politics, society, and culture that a strike is the main tool used, throughout history to modern day, to lead a collective conflict.

This tool is in itself an "unfriendly tool." In some ways, it is "hostile" as it remains a mean to obtain rights or concessions of the workers through a collision or through the mere threat of conflict, despite knowing the impacts on society in recent years. It is also a tool that—precisely because it is based on confrontation- avoids involving any third party that could act as a mediator for as long as possible. As Bruno Leoni

said, "the strike is indeed, by nature, a manifestation of the will to take the law into one's own hands" (Leoni, 2004, p. 161).

Even today in Italy, the collective conflict between workers and employers consists mainly of strikes or at least with its threat, and in general, there seems to be some reluctance to accept mediation by involving third parties.

The Italian legal system seems to reflect the characteristics of this tradition in the system of collective conflicts. In fact, the Italian legal system lacks a general framework to govern all the complexities in collective labor conflicts.

In Italy, individual disputes between workers and employers are governed by the provisions contained in Chap. 1, Title IV of Book II of the Code of Civil Procedure. This means that the dynamics of individual labor disputes, such as conciliation, judicial proceedings, and appeals, are all regulated by a general organic regulation.

Regarding conflicts and collective disputes, there is a discipline based on a normative system of general application, however not an organic regulation. In case of collective conflicts, different solutions can arise to reach a resolution of disputes. In some cases, there are special laws governing the individual cases. Sometimes cases may lack a specific law, and therefore, the conflict is generally resolved based on power relations between the parties from time to time involved.

In Italy, regarding the collective conflicts, the mediation is not provided at the institutional level, leaving mediation to occur on a voluntary basis, as it is not mandatory. In case of collective labor, disputes are a "system based on voluntarism," per which any mediation/conciliation is voluntary between the parties. If there are "rules" that can guide the procedures for any mediation, these often depend on "praxis," and these are not binding formal laws or systems.

As seen above, the strike in essential public services represents a case of collective conflicts that are particularly widespread in Italy. In these cases, there is a requirement for mediation/conciliation; the law requires that the two parties involved in the collective dispute (typically the public entity and the specific categories of workers) attempt compulsorily to initiate a conciliation process or "cooling off" for the dispute before the strike. The ultimate goal in these cases is to prevent harm to the citizens by ensuring that these "essential" services remain available.

The Law no. 146/1990 is the law governing strikes in essential public services. It was later amended by Law no. 83/2000, which only restricts the freedom to strike and not the right to strike in essential public services. This law attempts to balance the right to strike with the constitutionally protected rights found in Art. 2 of the Italian Constitution.

The Law no. 146/1990 provides for the establishment of "injunction" (*precettazione* in Italian language), by which it is possible to issue an order whereby the parties—in order to avoid injury to citizens users of the public services—reach a conciliation in order to avoid the strike. In these cases, this can be configured by a third party acting—in essence—as a mediator/conciliator (usually a Prefect or a Minister). In its general features, it is an extraordinary administrative measure that the authorities use to adjust to strikes (typically this is the Prime Minister, Delegate Minister, or Prefect in case of a limited geographical relevance of the action). In particular, the injunction is foreseen in the cases where "there are reasonable grounds of risk for a serious and imminent prejudice to the rights of the citizens, constitutionally protected by Article 1, Paragraph 1, which could be occasioned by the interruption or alteration of the functioning of the public services in Art. 1, following the exercise of the strike or collective abstention." When conciliation between the parties is not successful, the Prefect may use the injunction to enforce a specific "address" required for the specific strike dynamic; for example, convening at the Prefecture for a new attempt of mediation, strike postponement or reduction of its duration, or imposition of guaranteed minimum levels of essential service delivery.

In essential public services and in cases of collective conflict, the law requires that there are attempts of mediation to avoid the strike, but it is well evident that there is no official figure of mediator acting in a professional capacity during the processes of mediation. The mediator de facto is the Prefect, as representative of the Government, however, the Prefect's work is essentially regulated either by their own discretion or by the will of the Government, not by a regulation that formally institutionalizes the mediation process.

When a dispute is over ordinary labor relations (that are not essential public services), in which there are claimed rights or specific working conditions, the relations between the parties are generally legally regulated by national collective agreements (CCNL). Such agreements are collective framework contracts signed by a group of labor unions and companies in a given specific sectors, which regulates the working conditions within the specific sector.

Given the relatively loose material which constitutes collective bargaining, it is quite evident that the modes to solve collective conflicts (and the possible requirements needed for mediation) between employees and employers are set freely by the CCNL. As a result, it becomes impossible to describe the contents of all CCNL,2 however, what emerges is that mediation—just like any other content of the contract—is not mandatory and can be regulated on the basis of those voluntary agreements established between parties. Therefore, mediators may also be involved, if contractually provided.

Another special case where there may be a form of mediation in collective conflicts is in those of dismissal for collective redundancies. The Law no. 223/1991 provides that in the case of collective dismissal, the parties involved are trying to mediate to find a common solution through institutional confrontation. Also, in this case, there is no official figure that acts as a mediator If there is, their actions are influenced by parameters of the case, including the workers involved, territorial reference, and scale of the social impact resulting from the conflict.

2According to data gathered by the labour union CISL (Confederazione Italiana Sindacati Lavoratori—Italian Confederation of Workers Union) by using the National Archive of Contracts from CNEL (Consiglio Nazionale Economia e Lavoro—National Council of Economy and Labour), in 2015 the total number of national collective agreements in place across different sectors was 706; specifically 42 in Agriculture and Fishing, 147 in Industrial Sectors, 32 in Building and Real Estate, 461 in Service Industries and 24 in other sectors.

## **8.3 Characteristics of the Mediators or Facilitators and the Third-Party Procedures**

The mediation is a legal institution concerning disputes between parties and the intervention of a third party acting as an official mediator. The European Union issued Directive 2008/52/EC, which has been implemented in various ways by different Member States. This directive raised specific provisions on mediation in civil and commercial matters. The European objective was to encourage Member States to adopt specific measures to promote conflict resolution between the parties, while avoiding recourse to the judgment of the courts.

Italy firstly transposed the directive with Legislative Decree no. 28/2010, showing their interest in this legal institution. Then, with a new Decree D.L. no. 69/2013, it was established that the mediation is mandatory in certain conflicts. After the Legislative Decree no. 28/2010, the Italian Constitutional Court had declared the mandatory aspect of the decree unconstitutional, but with the D.L. no. 69/2013 mediation returned as compulsory limited to the following areas of conflict (Art. 5):

The Ministerial Decree D.M. 180/2010 officially regulated the role of the "mediator," who must possess an education not lower than a three-year university degree or, alternatively, must be enrolled in a professional association and have at least 50 h of specific training on subjects concerning the scope of mediation (on mediation rules, techniques and procedures of negotiation, conflict management between the parties, and interaction and communication techniques).

This, in synthesis, is the situation that characterizes the civil and commercial mediation system in Italy. As it can be deduced, mediation is a compulsory institution that does not address matters regarding workplace conflict. An organic framework that manages the conflicts at work (both individual and collective) does not exist, and there is no official figure for mediation in such cases.

Initially, there was a proposal to include mediation for workplace disputes, however, this proposal was abandoned due to pressure from the lobby of labor lawyers, who viewed this proposal as a means of subtracting from their profession. It also seems that in the event of collective conflicts in the workplace, the unions have been reluctant to accept the possibility of recourse to a mediator. This is due to the fact that if this were required, the unions would see a substantial part of their activity and contribution be taken off them. Further, as the conflict is seen as an instrument that, under a cultural and conservative profile, is possible to be resolved by itself, unions have adopted the mindset that the role mediator is unnecessary (the principle asks, "If there are workers' unions, why do we need a mediator?").

Therefore, in disputes relating to labor matters, there is no formal and institutional body that officially acts as mediator. Mediators do exist, but they are informal and may be different depending on the circumstances (e.g. mayors, prefects, ministers, or political actors are used when there is evidence of collective conflict).

It appears that what is missing is a formal discipline that institutionalizes mediation in the workplace and the ombudsman. This can certainly be considered a gap, as a mediator is required to have professional training and comply with pre-established protocols. Currently, a figure of professional mediator in the context of collective conflicts is lacking, and the mediation processes are likely to discount a potential lack of adequate skills in conflict resolution.

In case of conflict between the parties in the labor sector, there may be processes of "cooling" of the conflict, yet the arrangements for a resolution are on a voluntary basis. In addition, the formal provisions on mediation can be found in collective labor agreements, which may provide union discussions on topics chosen by the parties; for example, a discussion topic may be in relation to dispute resolution or interpretation of the collective agreement. Collective agreements, therefore, may engage generally of non-confrontational dispute resolution mechanisms that are "inspired" by mediation principles.

As previously stated, although there may be individuals acting as mediators, it is not in a strictly official capacity. Moreover, since the collective conflicts are mainly regulated on a voluntary basis, third party can vary in different cases. In the most important cases, social partners and institutions such as ministries (sometimes regions and prefectures) can be involved.

The most advanced form of mediation found, in the context of the strike, is in essential public services. By L. 146/90, there is an obligation to establish cooling procedures and conciliation of disputes in collective agreements, which are to be completed before a strike is called. In this situation, the institutions act as mediators and are represented, in most cases, by the Prefect or a collaborator of the prefecture.

## **8.4 Description of the Mediation Process**

In Italy, a discipline of collective mediation in the workplace does not exist. Mediation is, therefore, almost always voluntary and, often, on bilateral basis. Mediation is used at the will of the involved parties or in cases of legal requirements when mediation is required by special laws.

The panorama that emerges tends to be "uneven" from the point-of-view of the legal system, which can be summarized in the following key points:

**Table 8.3** Main types of collective conflicts in Italy

The following table allows to compare the three above mentioned cases (Table 8.3).

The table shows that there is only one case where there is a mediating figure systematically acting as a third party to resolve collective conflicts, i.e. conflicts that arise from strikes in essential public services. Because it is the most representative and evolved case of mediation, in the Italian context, it was decided to take it as "case study" about the Italian system of conflict resolution. A model of this developed mediation has been outlined below (Fig. 8.1).

As seen in the model above, the procedure relative to the strike in essential public services begins with the strike notice. The trade unions, through this prior notification, are obliged to communicate the intention of striking before acting on it. At this stage, the two conflicting parties are obliged to try to reach reconciliation, in order to "cool

**Fig. 8.1** Conciliation and Mediation in the strike in essential public services

off" the conflict and avoid the strike. However, at this point, the presence of a mediator is not required; typically, when the parties meet to attempt reconciliation, the workers union take on the mediation role. It should be noted that registered Italian mediators cannot work on labor disputes, according to the law (D.L. no. 69/2013, Art. 5).

If the conciliation procedure between the parties is not successful, the strike is called. After the proclamation, the two sides are convened by a third party acting as a mediator, whose objective is to ensure that an agreement will be reached, resulting in the end of the strike. The Ombudsman is usually represented by the Government, typically by a Prefect or a Ministry, depending on the geographical relevance of the conflict. For conflicts of provincial level, local, of individual company, organization, or administration, usually the Prefect of the province is involved. When the conflict pertains the regional level, the Prefect of the regional capital is involved. When the conflict pertains the national relevance, either the "Ministry of Labour" or the "Ministry of Economic Development and Industrial Activity" is involved.

In such cases, the mediator may either act to withdraw the strike or to reach an agreement with the unions in order to provide adequate levels of essential public service delivery during the strike.

As can be deduced, the conciliation and mediation processes are mandatory, however, there are some critical issues found in this system. The parties involved in the conflict do not have the ability to choose the mediator. The Prefect generally carries out the task of mediation alone or with the help of collaborators who assume certain roles in mediation, but it is not possible create a mediation team. In terms of procedures, there are no established protocols or laws, therefore mediation procedures are generally subject to praxis that may vary depending on the circumstances.

In essence, the mediation process takes place informally; here, the task of the Prefect is to ensure agreement between the conflicting parties involved in the collective labor dispute and avoid the strike. At least, their job is to reduce the number of strikes to ensure adequate delivery of essential public service. At the end of the mediation process, a formal agreement between the parties that establishes the outcome of mediation does not seem to exist, rather the agreement is upheld by the union (e.g. by proclaiming the withdrawal of the strike), following the concessions or promises of concessions.

If the Prefect is not able to ensure that the parties reach an agreement, the union will then carry out the strike. However, the Prefect can, with an ordinance, impose that the strike follow a specific set of directives (e.g. that the strike takes place during a certain hours, thus ensuring services in the non-strike hours or require that a set number of workers to perform the essential public service while other workers strike).

## *8.4.1 Evaluation by Stakeholders*

Out of the 30 interviewed users, only 16 agreed to fill a satisfaction questionnaire (on a scale from 1 to 5) on the mediation system in Italy. The table below shows the results of this questionnaire. From Table 8.4, it can be understood how some users view the Italian mediation system.

From the interviews, we investigated the main challenges that the users faced. A few themes emerged, converging towards general disappointment in the system and the hope for the improvements in its use. In particular, the main challenges faced were:

**Table 8.4** Satisfaction of users and mediators

• Low level of mediation training in the workers unions.

Regarding the mediators, which in Italy are mainly members of the prefecture, hence government officials, gathering data was more difficult. In fact, out of the 21 participants, only seven agreed to take part in a questionnaire on the satisfaction with the system. Table 8.4 also shows that these mediators were actually more satisfied with the mediation process and outcomes than the users and are generally more positive.

In terms of the results obtained during the interviews, four main themes emerged, in particular:

## **8.5 Effectiveness of the System**

At present, instruments do not exist that allow for an evaluation of the mediation system's efficacy. If the processes of mediation are considered in the context of essential public services, one realizes that there are no laws or protocols that require effective measurement of mediation. As there are no documents that assess the satisfaction of the conflicting parties, there are no systematic documents that measure the success rate of mediations (agreement rate). Further, there are no documents that include indicators able to express an opinion on the quality of the mediation and mediator, as there are no specific forms used by the parties that allow them to express their opinion. It is not possible to use these documents, even if they were systematically drawn up, despite knowing it would help to determine costs and benefits of the mediation.

The mediation system does not require that sufficient documentation able to determine the effectiveness of the mediation system be supplied or produced. From this perspective, the Italian context presents significant delays, and unfortunately, at the moment, there lacks an adequate debate on the topic.

From the interviews, it can be understood how the system of mediation of labor conflicts depend mainly on the practices and experience of the involved mediators. The effectiveness of mediation depends largely on the ability of the mediators to communicate with the parties. This highlights the need to increase the mediation training courses to make sure that mediators develop high-level, professional skills that do not depend only on field experience. In fact, it is noted that these training courses occur infrequently; this is a weakness of the system due to its organization as a public service provided by the prefecture, which has a large number of other duties that are not related to labor conflicts.

Another important aspect related to the effectiveness of the mediation system is that the success of a mediation often depends on the knowledge that the mediator has of the territory in which it operates. The trust that the parties place in the mediator is essential, and this depends on the number of years the mediator has operated in said territory. However, the Ministry of the Interior often shifts the location of the Prefects and their collaborators every 2–3 years, and this does not allow mediators to develop sufficient knowledge of the territory, which undermines the effectiveness of the mediation system. In general, among the suggestions to increase the effectiveness of mediation, it would be important to create an office within the prefectures that deals with the mediation of labor conflicts; in such an office, there would be professions with diversified skills able to work in teams.

As such, the vast majority of the interviewees expressed the need to institutionalize the role of the mediator and give it greater, more defined powers. At present, it seems that mediation is unattractive and inconvenient for the parties involved, who see it as a formal step when taken.

The study conducted reveals the presence of a "regulatory vacuum;" if the cases where strikes in essential public services are excluded, all other cases are not regulated by law, therefore the mediator uses tools and procedures that depend on their experience, varying from case to case. The suggestion is, therefore, to promote legislative action to cover regulatory gaps and increase the effectiveness of the mediation system.

## **8.6 Conclusions**

Currently, Italy provides mediation only in civil and commercial matters. Such legislation regulates the civil and commercial mediation in all its forms and aspects, appointing a professional mediator with a suitable background to fulfill these functions; similarly, specific areas of intervention are expressively reserved for the use of a mediator.

There has been an attempt, from the legislature, to extend mediation into labor laws, specifically for the conflicts between workers and employers. However, there has been resistance from lobbyists and trade unions against such legislation. The lawyers would lose the part of their business that arose from the recourse to the "Labour Court," while the unions would lose parts of their "identity," since culturally the Italian labor union handle conflicts to achieve certain rights or concessions.

The interviewed experts have confirmed that there is currently no legislation regulating mediation on collective labor disputes. According to these experts, it would be necessary to extend the mediation beyond the field of civil and commercial matters, meaning labor.

In the Italian context, the case of a strike in essential public services represents the scope of collective dispute in which mediation is more evolved; however, it seems that the intervention of the Prefect, as it may help to add value to the process of mediation, still does not fully work, even with a completely professional background. Therefore, added value could be derived from the introduction of an official mediator.

In light of the above considerations, we have summarized the future developments and improvements desired to be seen in the current collective mediation system, listed are the following points:

**Acknowledgements** The authors thank all the experts who offered their help and expertise, through correspondence or interview, to allow this project to be produced.

## **References**

Bianchi, G. (2003). *Le relazioni industriali tra cooperazione e conflitto*.Milano, Italy: FrancoAngeli.

**Open Access** This chapter is licensed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

The images or other third party material in this chapter are included in the chapter's Creative Commons license, unless indicated otherwise in a credit line to the material. If material is not included in the chapter's Creative Commons license and your intended use is not permitted by statutory regulation or exceeds the permitted use, you will need to obtain permission directly from the copyright holder.

# **Chapter 9 Mediation and Conciliation in Collective Labor Conflicts in the Netherlands**

**Katalien Bollen**

## **The Case**1

*In organization Van der Zande, new pension plans need to be negotiated since the current arrangements cannot be prolonged on the same terms. The Works Council (WC) has withheld its consent to implement new arrangements since it is*—*according to them*—*a worsening of the existing regulation. In addition, the WC feels that it has been involved and informed too late, leading to some mistrust towards the employer. Parties decide and agree to go to the mediation office located at the Social Economic council, called the Joint Sectoral Committee.*2

*In order to prepare the mediation session at the Joint Sectoral Committee that will take place face*-*to*-*face, both the employer and the Works Council send their version of the facts to the Joint Sectoral Committee. During the face*-*to*-*face session, parties are asked to tell their side of the story. Special attention is paid to how parties communicate about and with each other. Clarifying questions are asked to explore underlying issues. In order to solve this matter, first the issues both parties agree on are identified, then communication*

1This case is inspired by and adapted from a case submitted to the Joint Sectoral Committee for mediation.

2The Joint Sectoral Committees (JSC) are installed by the Social Economic Council (SER) at broad sectorial level and can be turned to in order to mediate a conflict or disagreement specifically between employer and the Works Council. Committee members are experts in employee participation rights and are familiar with the different sectors.

K. Bollen (B)

Maastricht University, Tongersestraat 53, Maastricht 6211 LM, The Netherlands e-mail<EMAIL_ADDRESS><EMAIL_ADDRESS>
KU Leuven, Dekenstraat 2, 3000 Leuven, Belgium

*on the non*-*agreed parts is facilitated. Constant attention is paid to the way parties communicate and how they take decisions together, and members of the Committee intervene when this does not take place constructively.*

*After one long session of 5.5 h,*3 *both the employer and Works Council agree on the conditions for a new pension scheme, and have discussed the role of the WC in the organization and how to collaborate in the future. After the session, emails are exchanged to come to a correct wording of the agreement, after which the agreement is implemented in practice.*

## **9.1 Introduction**

Collective conflicts may lead to high costs for organizations, employees and society at large. In the Netherlands, employers' and employees' organizations (the social partners) as well as government work together to shape national socio-economic policies at national, sectorial, and organizational levels (Nauta, 2015). The *Dutch consultative economy* represents *a modus operandi* whereby key stakeholder groups (unions, employer organizations, government, and other stakeholders), further their common interests through cooperation and negotiation. Together they seek for integrative agreements to maximize outcomes for all. This is also known as the Polder Model (a polder being an area of reclaimed land from the sea, typically found in the Netherlands), and has a long tradition.

The Netherlands is a country of great social peace with relative few collective labor conflicts (Van den Berg & Van Rij, 2007). This is reflected in the low number of strikes,4 and days lost in strike (See Fig. 9.1), compared to the EU-25 average (Van der Velden, Dribbush, Lyddon, & Vandaele, 2014). For example, on an annual basis barely 5.7 working days per year per 1000 employees are lost to collective actions in the Netherlands (period 2005–2009) compared to an average of 30.6 days in the EU-25. These figures are in line with the statistics of the Dutch Central Office of Statistics (CBS). Mostly, strikes are declared by the unions (>80%). In 70% of the cases, the unions were also involved in the negotiation that led to the end of the strike. One in three strikes relates to a Collective Labor Agreement (CLA) conflict, only 15% deals uniquely with a salary issue.

In sum, Dutch labor relations are perceived as rather harmonious. Dialogue and the interchange of ideas are preferred above strikes and confrontations. In this climate, social partners do not feel the need (yet) to introduce a permanent agency for settling collective employment disputes.

3On average parties have one face-to-face session of 2 hours by the JSC.

4See also more detailed information on https://www.etui.org/Services/Strikes-Map-of-Europe/ Netherlands.

**Fig. 9.1** The amount of strikes and lost labor days in the Netherlands (1999–2015)

In the Netherlands there has been a strong decline in union membership over the past 30 years as well as reduction of strikes and social actions (Brown, 2014). Looking at union membership, we see until 1980 a percentage of 38, to currently 20 (Ter Steege, van Groeningen, Kuijpers, & van Cruchten, 2012). This overall decline is in line with the global trend where the role of unions shifts (Euwema, Munduate, Elgoibar, Pender, & García, 2015).

The three most important union federations are the Federation of Netherlands Trade Unions (FNV), the National Federation of Christian Trade Unions in the Netherlands (CNV) and the Trade Union Federation for Professionals (VCP). Although relatively few employees belong to a union, more than 80% of employees are covered by one of the 1100 Collective Labour Agreements (CLA's) in force (www.ser.nl). Agreements reached between an employers' organization and a union automatically apply to all employees working in the particular organization under this CLA. Organizations also have the right to negotiate a CLA directly with their own employees, without unions as intermediate. Typically this is done with the works council, being the local elected employee representation.5

Most Dutch employers (about 80%) belong to a sector-based organization that represents their interests. This percentage is far above the EU average of 55%. About 150 sector organizations affiliate to the federation VNO-NCW, the Confederation of Netherlands Industry and Employers, representing mostly larger companies. The general employers' association (AWVN) is a partner of VNO-NCW and is involved in the making of over 450 Collective Labor Agreements, mostly at midsize level. MKB-Nederland (the Royal Dutch Association of Small and Medium-sized Enterprises) represents small and medium-sized enterprises (employing up to 250 people).

## **9.2 Characteristics of the Dutch System for Collective Conflict Management**

To understand the regulation of collective labor conflicts in the Netherlands, it is important to recognize the crucial role of social dialogue at an organizational level. Elected employee representatives in Works Councils (WCs) have a key legal position when it comes to organizational decision making. These representatives often are, but do not have to be unionized. Works Councils in the private sector and codetermination Councils in the public sector regularly face conflictive issues with top management. We differentiate in this chapter therefore between two types of collective conflicts involving a group of workers each with its own regulations and legal frameworks: conflicts between management and unions on the one hand and, management and C or co-determination councils on the other hand.

At the national level, there are two structures of consultation between social partners (employer organizations, trade unions, government). The Social and Economic council (SER)6 advises the Dutch government independently on a broad socialeconomic spectrum. The Labour Foundation (STAR)7 makes recommendations to trade unions and employer organizations with regard to the working conditions within companies and sectors.

At sector level, professional negotiators representing respectively employees and employers in a sector or organization negotiate CLA's (Huiskamp, 2003). Occasionally, the intervention by mediators is included in dispute settlement clauses in CLA's. It is estimated that 25% of the CLA's provide for dispute resolution clauses (de Roo, 2002).

5The role of the works council in CLA agreements is still under debate, however it is legal in the Netherlands for employers to directly make agreements with the works council. http://metamorfase. nl/uploads/Mag-een-OR-cao-afspraken-maken-2.pdf.

6SER, Sociaal-Economische Raad.

7STAR, STichting van de ARbeid.

## *9.2.1 Conflict Between Employer and Unions*

Employers' organizations and trade unions are inclined to adopt a strategy of conflict avoidance. This may also explain the absence of permanent dispute settlement machinery (Jagtenberg & de Roo, 2002). Different to countries such as Belgium and the United Kingdom, the Netherlands have no central institute, statutory organization, or group of people appointed to mediate in collective conflicts between unions and employer(s). Informally, people often turn to a selected group of third parties, mostly experts such as academics or political and societal leaders to intervene as counsellor, scout, mediator or informer. Often these people are experts in the field of economics, finance, law or sociology. Usually these third parties are involved in a relatively late stage of the conflict.

Although the right to strike is positively confirmed by the courts in the Netherlands, there is no specific law regulating strikes. Instead it follows the European Social Charter (ESH, article 6 (4)) on this matter. According to this article, collective actions (including strikes) are allowed in case of conflicts of interest referring to disputes that are subject of collective negotiations and bargaining between employers and employees (e.g., wage increases, new CLA, social plan). There are three rules that need to be taken into account here (a) the timely announcement of a strike, (b) interests of employer and third parties need to be taken into account weighted, and (c) a strike must be the last resort. An employer who is informed, can take measures to prevent the strike or to limit its consequences. A strike is not justified when it goes against legal rules, endangers public order, national security or public health, when a solution can be reached through legal proceedings or manifest disproportion exists between the aim and social consequences of the action.

In the public sector, the Advisory and Arbitration Committee for the National Office (AAC, www.caop.nl) was established to assist the government authorities and civil servant unions in their role as negotiators (Akkermans, 1994). AAC advises or engages in arbitration or mediation to solve disputes that arise from the consultations between employers and employees.

Local entities like municipalities can turn to LAAC (Local Advisory and Arbitration Committee) when they have a conflict. These procedures are only used as last resort and rarely relied upon. Third parties active both in the public and private field, indicate that conflicts in the public sector are often more difficult to solve than the ones in the private sector, since the focus in the public sector is more on power and rights, and less on the underlying interests.

## *9.2.2 Conflict Between Employer and WC*

At the level of the organization, we look at conflicts between the employer (CEO and/or HR director) and the Works Council (WC) or co-determination council (Euwema et al., 2015; Nauta, 2015). The *WC* represents the interests of the staff in a company. It consults with management and the employer on the general organizational strategy, employment conditions and matters that have not been settled in the CLA (yet) and impact employee matters. In addition to advisory rights, the Works Council has also the right of consent. The latter implies that the employer may not implement a decision as long as the Works Council has not given its approval or the subdistrict court has given substitute approval to a proposed decision (Hofstee, 2018). The Works Councils Act8 stipulates that employees in organizations with 50 or more employees have a right to form a WC. Works Council members are paid by the employer and are often a union member. Around 70% of the companies in the Netherlands are obliged to have a WC and of those obliged, 67% has a WC in reality (Wajon & Vlug, 2017). Small companies with less than 50 employees may set up a staff representative committee.

On request, WC's can hire expertise on various levels such as legal expertise, communication skills or mediation. In case of (a potential) conflict between WC and top management, parties may turn to the *Joint Sectoral Committees* as installed by the Social Economic Counsil (SER). In 2010, 23 joint sectoral committees in the market sector were restructured and reduced to 2 committees, Market I (commercial market sector) and Market II (non-profit sector referring to the former committees of healthcare, as well as the social and cultural sector). These two committees consist of 12 members and 12 substitute members and are located at the SER. The committee members are experts in employee participation rights and are familiar with the different sectors. A third joint sectoral committee is dedicated to government institutions and located at the CAOP, Centre for Labor Relations for Civil Servants.9 CAOP is the largest knowledge and service centre with regard to labour relations within the public domain. It advises and supports various sectors, including the Dutch government, as well as education and health care sector. CAOP is an independent foundation under the supervision of the social partners, and also offers mediation services for individual labor conflicts. The Works Councils Act (WOR) stipulates that the tasks of these committees are (a) to settle disputes between WC (also other employee participation bodies) and top management; (b) to register the agreements of WCs; (c) to answer questions from WCs and top management about employee participation; (d) to give information about the Works Councils Act and to encourage employee participation in general.

In 2013, TheWorks Council Act has been revised. Till then, parties were obliged to consult Joint Sectoral Committees when they planned to go to the Enterprise Chamber (of the Amsterdam Court of Appeal). This is no longer required. Currently, parties can opt to consult voluntarily and without any cost the Joint Sectoral Committees. While earlier the committees focused primarily on giving legal advice, since 2013 the Committees in the market sectors focus on mediation and conciliation. Legal advice can still be given on request of the conflict parties. Parties may also turn immediately to the subdistrict court judge or the Enterprise Chamber. Often, these committees

8Referred to in the Netherlands as WOR, Wet op Ondernemingsraden.

9Referred to in the Netherlands as Centrum Arbeidsverhoudingen Overheidspersoneel (CAOP).

advise or mediate in the event of disagreements between employer and the WC about compliance with the provisions of the WOR. This often concerns issues related to the right of advise and consent, but it can also concerns conflicts in which a breach of trust plays a role, or when a party has the impression of not being listened to. For example in case of a reorganization: while the WC wants to be informed on the concrete next steps in the reorganization and the employee consequences, the employer prefers to wait and to decide later on whether to involve and consult the WC. This may give rise to feelings of distrust and not being listened to and the suspicion that the reorganization will be executed without consultation from the WC.

The joint sectoral committees are rarely consulted. Until 2013, the Committees handled 50–60 cases per year. Specifically, in 2011, 2012 and 2013, the committees of Market I and Market II receives 60, 67 and 49 mediation requests respectively. In 2014, 2015, 2016 and 2017 this fell to 22, 16, 24 and 14 mediation requests respectively, with an average number of 20 cases per year. Research by the SER (2016) 10 among Works Councils shows that when confronted with conflict, only 11% opts to consult the Joint Sectoral Committees. In the vast majority of the cases, WCs seek for external advice (outside the organization) from lawyers, consultants specialized in social dialogue, trainers or educational institutions, when the conflict has reached a high level of escalation, while unions are turned to less.

## **9.3 Characteristics of the Mediators or Facilitators and the Third Party Procedures**

In 1923, the Dutch government introduced the Rijksbemiddelaar (Governmental Mediator) to mediate in collective conflicts. As mediators they operated alone and often took the initiative to intervene in a collective conflict. This type of mediator disappeared quickly once employers and unions developed regular consultation schemes, and a more constructive negotiation climate appeared.

Apart from the joint sectoral committees mentioned earlier, there are no formal institutions that mediate in collective conflicts, nor specific regulations for mediation in collective conflicts. No civil servants are appointed by the government working as conciliator or mediator. This implies that potentially everyone can act in such a capacity. Consequently, a large variety of potential third parties are active which makes it difficult to describe third parties characteristics intervening in collective conflict or to trace back the amount of mediations in collective conflicts.

In case of *conflicts between employer and unions*, parties can freely choose a mediator. The only prerequisite is that both parties agree upon the mediator. Particularly in the event of strikes with a major impact, ad hoc mediators are appointed by the parties. Often these mediations take place against the background of court injunctions. The ad hoc mediators are mostly well known public figures and are turned to because of their reputation, status, position (usually politicians or labor law univer-

10https://www.bedrijfscommissie.nl/publicaties/jaarverslagen.aspx.

sity professors), their previous experience with similar cases, or their personality. Common denominators of these people are that they are perceived as experts, have a lot of experience and are respected by both parties. These conciliators or mediators are typically not affiliated with professional mediation associations. In fact, a limited number of people are asked to mediate regularly. An extra challenge for the this type of mediators is how to deal with the outside pressure of media.

In *conflicts where employees are represented by the Works Council*, various people with a different background are involved as third party, depending on the stage of the conflict (see Chap. 1 of this handbook). In Phase 1 (latent conflict) coaches, advisors and trainers for social dialogue offer training and advice. In Phase 2 (early stage conflict) legal counsellors, and trainers are asked to give primarily legal advice or to intervene informally. Third parties active in Phase 1 and 2 often engage in some way of preventive mediation in the sense that they promote constructive dialogue among the social partners. But they do not call themselves mediators or conciliators, nor are they perceived in this way by the parties. In Phase 3 (confrontation and escalation) parties generally turn to legal counsellors or union specialists. In Phase 4 (hot conflict), parties turn to judges, arbitration or court (e.g., Enterprise Chamber). Mediations by the Joint Sectoral Committees usually take place between Phase 3 and 4. Phase 5 refers to the restoration of the relationship and how to rebuild trust in each other. Interventions on this level are hardly seen. Consultant: *"Parties just contact us with an* ad hoc *question to intervene. As such we help to extinguish or limit the fire. I do not know what happens next … It would be a good idea to contact parties afterwards also to double check the effectiveness of the intervention.*"

Only a very few people acting as a mediator in collective conflicts have followed a course to become a mediator and most are not registered in the national register of the MfN.11 Judge: "*When acting as a mediator in collective conflicts, you do not need a specific mediation training. You need experience in the field, possess a great deal of creativity, the ability to think out*-*of*-*the*-*box and possess a healthy portion of curiosity.*"

## **9.4 Description of the Facilitation and/or Mediation Process by the Joint Sectoral Committee**

When a politician, judge or university professor is involved as a third party in a collective conflict, parties often expect a more evaluative approach (Who is right; What is the advice?). This will typically include a period of investigation, to understand the broader story behind the legal question. When a consultant in social dialogue, trainer or coach is asked, a more transformative or facilitative approach is expected (with

11In the Netherlands, the MfN register (Mediators Federation Netherlands) acts as the independent quality dome for mediation in the Netherlands. MfN registered mediators have completed a MfN accredited mediation training and keep their knowledge and skills continuously up to date (lifelong learning and permanent education) to keep their registration.

focus to restore or improve the relationship). Many of these third parties indicate that they engage in separate conversations with parties before the joint face-to-face session(s).

When external third parties are hired by the WC, the fees are usually paid by the employer. Mediation by the Joint Sectoral Committee is free of charge. The only prerequisite for the mediation to take place is that both parties agree to mediate. A substantial part of cases presented to the Joint Sectoral Committees are withdrawn since parties engage again in conversations and negotiations before the joint session takes place.

The mediation style of the Joint Sectoral Committees representing the Market is facilitative. This is different from the 20th century where mediation was more evaluative and took the form of hearing parties and giving them a non-binding legal advice. This advice is necessary to go to the Enterprise Chamber (of the Amsterdam Court of Appeal). In Joint Sectoral Committees of the public sector, the primary focus is still on legal advice. Here parties are asked to present their case while the committee will ask questions. Parties only get an advice once they are back at work, not immediately in the session itself.

A typical mediation procedure at the Joint Sectoral Committees in the market sector consists of following steps: Before the face-to-face session in The Hague, parties are asked to provide the Committee and the other party with a description of the problem and the question(s) they have. The Committee represents the social partners and consists of 1 employer representative, 1 employee representative and 1 neutral member. In order to prepare the meeting, committee members read the documents, discuss the case with each other, look for interdependencies and formulate questions for the face-to-face session. In case something is unclear, parties are asked for additional information. The typical time lag between a request for mediation and the face-to-face meeting is 2 months. The face-to-face meeting in The Hague usually takes one hour and a half to 2 hours. Although parties regularly are accompanied by legal counsellors, the conflict parties themselves are asked to describe the problem and to formulate their questions. Member Joint Sectoral Committee: "*We try to banish legal advisors. From the moment they step into the room, the atmosphere changes completely, with little room to communicate constructively. Our main focus is on the underlying problems and needs. And often, these cannot be found in legal documents. You can only discover the root of the problem by talking to people involved in and impacted by the conflict*."

At the start of a session a member of the Committee explains the procedure in order to manage the expectations. Typical interventions are active listening, asking questions to identify underlying issues and problems, describing what they see (metacommunication) and trying to empower people. Committee Member: '*Describing what you see as third party is very important. It helps parties to identify what is often too difficult for them to say. Specific (technical) knowledge is not that important. A reoccurring theme is how to deal with mistrust. This is often the bottleneck in collective conflicts between WC and top management*.' A caucus (one to one meeting between the parties and the committee) may be an option when emotions run high or parties do not seem to be willing to tell the full story to the conflict. The sector committees of the Market only rarely make use of caucus. The main aim of the Joint Sectoral Committee is to stimulate parties to find a solution together. Member Joint Sectoral Committee: "*It is our intention to empower people to find their own power again. When involved in conflict they have drifted away, not only from each other, but also from their selves*".

If the Joint Sectoral Committee fails in facilitating the conflict at hand, the committee issues an advisory opinion that is not binding, neither for the parties, nor for the courts. Typically, there is only 1 face-to-face session. As such this can be seen as a very speedy procedure that offers to both parties the opportunity to clarify their side of the story. When the committee assumes that the question presented is part of a bigger issue which cannot be sufficiently solved in the session, they may refer to further mediation by a mediator, consultant or coach. There is no formal list however for potential mediators or coaches parties can turn too. After the session took place, parties are send a form to evaluate the intervention.

In urgent cases, parties can ask for an emergency procedure in order to limit the time between the request for mediation and the face-to-face session. This procedure is only rarely used.

If the dispute concerns matters as listed in Article 26 of the WOR, one can decide to go directly to the Enterprise Chamber in Amsterdam. In this case, it concerns a decision by an employer whereby (a) the employer wrongly did not request advice from the WC, (b) the employer asked advice from the WC at such a late time that the advice has no influence on the decision, (c) the decision of the employer is not in accordance with the advice of the WC or, (d) the advice of the WC has been followed but some new facts have become known and that if the WC had known them this would have led to a different opnion. If one goes to the Enterprise Chamber, the focus is on the legal aspect of the case. Nevertheless, members of the Enterprise Chamber indicate that WCs regularly consult the Enterprise Chamber not solely for judicial reasons. "*In general, WCs engage in these legal actions because of other reasons than only the judicial ones. By going to the Enterprise Chamber they want to show* "*I do not accept this treatment any longer. Now it is over.*" *So the underlying topic is:* "*I want to be listened to and treated in a respectful way." This is an important aspect to work on since we deal with continuous relationships.*" Sessions at the Enterprise Chamber take usually between 2 and 5 hours. When issues appear that relate to interpersonal relations, judges of the Enterprise Chamber may refer to mediation. The judge can also refer to, or appoint, a specific mediator when asked for by the conflicting parties.

In general, there are very few rules that guide conciliation or mediation in collective labor conflicts. A common denominator is that third parties stress the great importance of **tailor-made interventions**, active listening and questioning to identify underlying problems and empathy. Member of Joint Sectoral Committee: "*It is crucial to design tailor*-*made interventions and to show empathy. You need to make sure that parties can walk out the room with their heads up high. Only this will make some room for long term solutions of the conflict.*"

## **9.5 Effectiveness the Dutch System for Collective Conflicts and Suggestions for Improvement**

Different stakeholders indicate that the system for collective conflict management works quite well. At the same time, they all agree that conflicts too often stay 'hidden' until they explode or escalate. An explanation for this could be that the Netherlands is known for its '*polderen*' which puts emphasis on the idea of interchange, compromise and cooperation. To admit that you have a conflict, is often seen as a blame. Trainer: '*We see that many people think they should be able to solve the conflict themselves. And they try to do so as long as possible. Asking advise or turning to third parties is often seen as a loss of face and this is why parties usually wait a long time to turn to a third party.*' Another reason could be that parties are afraid of the costs and time related to a legal procedure. Consequently, people muddle through often resulting in deadlock situations. In these cases, the (initial) conflict on the content has usually transformed into a relational conflict. Employee representative: "*Now the word conflict is often synonym for war and thus stays unspoken. We need to learn how to disagree constructively.*" A third reason refers to the fact that the primary parties do not know that they can invite a mediator and/or where to find a third party.

Different parties involved in the research (employers, employees, WCs, unions, members Joint Sectoral Committees, Enterprise Chamber, etc.) suggest points for improvement which may address the difficulties parties encounter when confronted with collective conflicts.

1. Clarify the role of mediation, mediators and where to find them

Although the Dutch government is in favour of mediation, no special agreements have been reached by the social partners on the use of Alternative Dispute Resolution in collective labor conflicts. Often conflicting parties are not familiar with mediation, and are not well informed about the use of mediation. MemberWC: "*To be honest, it is not clear to me (and I guess also to other stakeholders) how mediation can contribute to my particular case. I did not know we can hire mediators … I assumed we could only hire legal advice*". This is remarkable since the WOR stipulates that the WC can invite an external consultant to give training or advise on several topics including social processes, such as communication and conflict. If people are willing to turn to a mediator, they often do not know where to find a good, qualified mediator that can be trusted, and is knowledgeable about the WOR. Consequently parties do not engage in this "risky" business. In the field there is a high need for more information. As an employer representative formulates it: "*There should be a trusted source that helps us to find the right people at the right moment, including mediation. A flow chart explaining who could be contacted when, with some exemplary questions would be very helpful.*" The most natural party to take up this role might be the SER. Some unions already invest in mediation (behind de scenes), but indicate it is difficult to integrate the mediator role and the need for showing muscles when representing people which makes it difficult to make some compromises. Third parties in the field that are confronted with (potential) conflict need to be trained on how to analyse the problem and to see whether mediation could be of added value to get to a solution.

#### 2. Clarify the role of the Joint Sectoral Committees

Currently, perceptions and expectations on the joint sectoral commissions are diffuse. Many stakeholders still assume that Joint Sectoral Committees give legal advice and engage in arbitration, which is currently not the case. The Committees should be more clear on what they offer and the SER could strengthen its role in the field. Employer representative: "*The SER should profile itself as an expertise center in collective conflicts both in theory and practice. This implies strengthening and broadening its current role*." For instance, the fact that the secretary of the SER gives advice on how to deal with a difficult situation or conflict is unknown to most parties. Now, works councils regularly hesitate to turn to the Joint Sectoral Committees as they are afraid how their employer will react when finding out employees turned to a Joint Sectoral Committee, or they believe the employer will ignore the agreements made during the session. Another suggestion is to make a mediation session obligatory when a mediation request is made by one of the parties. Member WC: "*Currently, parties still have the option to decline participation in mediation. This is a pity. For a WC it might be really difficult to get hold of the employer or the top management. If there is no other way to push them to the table, the only option is to go to court. In my opinion, parties lose in this way many opportunities to have a decent talk*" (Here you can find a short movie that illustrates the mediation process as it takes place in the Committees for the Market Sector https://www.bedrijfscommissue.nl/).

#### 3. More attention for preventive measures and care after the intervention

The law on WCs in the Netherlands made provisions for the investment in training for WCs. Every year the SER draws up targets amounts for the training of the WC. Members of theWC are entitled to training. The employer is obliged to offer members of the WC the opportunity to receive training of sufficient quality for a number of days per year during working hours while keeping pay as they deem necessary for the fulfillment of their duties. Since the reform of this law in 2013, WCs have to claim budget from the employer. One of the consequences is that people tend to follow less courses or training. This is especially the case in smaller organizations. Union representative: "*Before the reform of the WOR law, we provided three full days of training. Now we provide a half day training with a focus on the legal aspects. All training on the level of social skills has been removed.*" Currently, there is a need for more training on social skills both on the level of how to communicate constructively with each other, but also the employer, and how to function as a group (Works Council). This can be seen as preventive mediation. If one knows well his role, as well as how to communicate constructively, this may prevent future problems and conflicts. In these trainings, it would be good to involve on a very regular base the employer or top management. Member Joint Sectoral Committee: "*In many cases, a re*-*occurring theme is the lack of trust and respect which affects communication in a very negative way. There is much room for preventive measures. People need to learn* *how to communicate, how to negotiate and how to reach out to each other in case of problems. They need time to exercise this on the work floor when things are not going wrong yet.*" Also, parties see room for improvement for the period after a conflict and direct intervention. Third parties are rarely asked to facilitate trust rebuilding, nor do they offer their service for this.

#### 4. Invest time and money in participatory bodies like the Works Council

Both top management and employees need to understand the importance of a strong WC with a high level of knowledge and expertise (Nauta, 2015). In some cases top management tends to perceive the WC as a loss of time and money. More time needs to be invested in education to inform people (top management and HRM) on the role and benefits of a good, knowledgeable WC (management courses, HRM courses). Employers could also get coaching on this level. Currently, employers confronted with insecurities or uncertainties, tend to go to a lawyer. At the same time, Works Councils need to be trained in how to be constructive and critical towards their management. They also need to realize what position they can and want to have. The current decrease in training is a potential threat to the knowledge level and know-how of the WC.

5. Control mechanisms

Although the law provides in participatory bodies, there is no controlling institute that checks compliance with the rules regarding participatory bodies or what the effects are of going to the Joint Sectoral Committee or Enterprise Chamber on the working relationshipe between the employer and the WC. A good option would be to invest in an internal coordinator who controls this.

6. Potential threats

The law on WCs in the Netherlands (WOR) aims to offer a framework to improve constructive dialogue. In theory there is a strict division between 2 types of collective conflicts related to the parties involved: unions on the one hand, or the works council, representing the employees on the other hand. Each has its own responsibilities and legal position. In practice, this distinction is becoming less clear. Not only are many members of the WC trade union members, but there is also an increasing trend that issues that would be dealt with by the unions, end up at the level of the WC (e.g. CLA's closed with the works council). This is especially the case in companies with a low level of unionization. This puts a lot of pressure on the WC to solve complex issues, which they are possibly not up to.

## **9.6 Conclusion**

The system for collective conflict management in the Netherlands including the crucial role of Works Councils, is unique. When investigating the role of mediation in collective labor conflicts, our results show that a formal system for mediating collective conflicts where the trade unions are involved (CLA related conflicts) is lacking. Parties tend to search in their own networks for mediators, or turn to well-known public figures because of their reputation, expertise, or position (usually politicians or labor law university professors). Although there are some provisions for mediation for the collective conflicts related to the Works Council (Joint Sectoral Committees), the role of mediation in collective conflicts is currently limited and should be increased next to more legal provisions.

**Acknowledgements** Hereby I want to thank sincerely all the interviewees who participated in the interviews as well as the organizations that facilitated the research and conference: SBI Formaat, SER, CAOP, SomZ.

## **References**

Wajon, I., & Vlug, P. (2017). *Naleving van de Wet op de Ondernemingsraden: Stand van zaken begin 2017*. Rotterdam: Numansdorp.

**Open Access** This chapter is licensed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

The images or other third party material in this chapter are included in the chapter's Creative Commons license, unless indicated otherwise in a credit line to the material. If material is not included in the chapter's Creative Commons license and your intended use is not permitted by statutory regulation or exceeds the permitted use, you will need to obtain permission directly from the copyright holder.

# **Chapter 10 Mediation and Conciliation in Collective Labor Conflicts in Poland**

**Barbara Ko˙zusznik, Małgorzata Chrupała-Pniak and Michał Brol**

#### **Case 1—Collective conflict in the Polish unit of an international company**

*In the Polish subsidiary of the company, the trade union has been rejecting management's decisions for years. In this particular conflict, the union demanded a higher share in bonuses for line workers and a different meal plan. The management sought a mediator to help resolve the dispute since there was an imminent threat of a strike. At first, the mediator had a meeting with the management, an HR department employee and a lawyer, with the aim of collecting information about their negotiating position. Then, the mediator met the trade union representatives also in order to gather information regarding their negotiating position. Both parties' positions and their individual expectations were very divergent. Negotiators were chosen, and legal, economic and HR arguments were prepared. The parties were trained for multi*-*stage negotiations. After this process, the strike alert was cancelled, a settlement was reached and a collective agreement was signed.*

#### **Case 2—The bus drivers' strike**

*Mediation can be undertaken by various persons, and a bus drivers' strike in the Municipal Transportation Company in Kielce in August 2007 may serve as an interesting example. As a result of the failure to reach an agreement with the City Mayor, the crew of the Municipal Transportation Company went on to strike*

B. Ko˙zusznik (B) · M. Chrupała-Pniak · M. Brol University of Silesia, Katowice, Poland e-mail<EMAIL_ADDRESS>
© The Author(s) 2019 M. Euwema et al. (eds.), *Mediation in Collective Labor Conflicts*, Industrial Relations & Conflict Management, https://doi.org/10.1007/978-3-319-92531-8\_10

*under the motto of "Stop privatization at the workers' expense". Having the prospect of a takeover of the company by an international organization (Veolia Transport Polska), the workers demanded to be guaranteed a package of social services, including employment security, decent pay and the modernization of the bus fleet. On the eighteenth day they reached an agreement, the municipal transport company was converted into an employee*-*owned company and was guaranteed the monopoly of Kielce's public transportation. The mediation was undertaken by a local bishop who got engaged in solving the conflict in the face of previous failures* (*Sieczkowski; Sukces biskupiej mediacji, strajk MPK zako´nczony;* Wach, 2007).

## **10.1 Introduction**

The specific characteristics of collective labor conflicts in Poland are related to the ownership structure of Polish companies. Frequently the company management is not a direct party in a conflict, rather it is the company owner, e.g. State Treasury (education, health care system), a parent company based overseas, or territorial self-governmental authorities (transport, water supply). This context often leads to stagnation and prevents conflict resolution. Apart from the structural problem, also the perception of the role of mediators is noteworthy. Parties may come to an agreement when choosing one, but afterwards it may result in applying for a mediator to be appointed by the Minister (to prevent either of the parties getting the feeling that "their own mediator" has been chosen). There are also collective conflicts which are mediated by a local authority or someone considered as impartial.

The Central Statistical Office of Poland1 published another edition of the Yearbook of Labor Statistics in March 2016. Additionally, recent reports of the Ministry of Family, Labor and Social Policy show the data on mediation in collective conflicts. Reports indicate that the National Labor Inspectorate registered 1698 collective conflicts between the years 2014 and 2016. Most cases were registered in Mazowieckie and Sl˛ ´ askie Voivodships, in such branches as industrial processing, health care, social assistance, production of energy, mining and exploration, and the transport industry (Statistical Yearbook of Labor, 2015). Of these 1998 cases of collective conflicts, only 211 used mediations and/or facilitated negotiations.

On the other hand, during this period only 23 cases collective conflicts were finished after the negotiation stage and the parties signed an agreement after negotiations (that is, before mediation). This means that ca. 1, 5% of the collective conflicts ended in agreement after negotiations. At the same time, in a high percentage of cases (188

1The data illustrating collective conflicts in Poland come from statistical yearbooks of the Central Statistical Office (2016) and reports published by respective ministries responsible for labor and social policy (2014–2016), as well as interviews conducted with mediation parties (2016–2018).

cases, 11%) the parties didn't agree and strived for a strike, so they were forced to try mediation. The disparity in between the registered collective conflicts and those which ended after negotiations may suggest that the majority of conflicts remain in suspension (2014—187; 2015—1096; 2016—181), despite not going to strike or reaching an agreement. This situation, considering the persistent lack of agreements between conflicting sides, poses the threat of recurrent collective conflicts in the future, as issues seem to have not been fully solved.

Social dialogue in Poland is closely related to its history, the period of social and economic transformation, the post-socialist legacy and the structure of the system of trade unions (Ko˙zusznik & Polak, 2015, 2016). The unions are the second biggest community of the non-profit sector in Poland (after the Roman Catholic Church). Currently, there are approximately 20,000 trade union organizations registered in Poland, of which about 60% are active. Meanwhile, the level of unionization according to recent data is at 5–11%,2 which is one of the lowest in the EU (Feliksiak, 2017; Go´s-Wójcicka & Sekuła, 2015).

The system for managing collective conflicts in Poland was established May 23, 1991 with the Act on Resolution of Collective Disputes.3 Under this Act, a collective dispute between workers and an employer may refer to (1) working conditions, (2) pay, (3) social benefits, (4) trade union rights, or (5) freedoms of workers. Thus, the Act includes a number of specifications of general topics falling within the legal definition of a collective conflict. It is not permitted to manage an individual workers' demand as a collective dispute if it's feasible to process it through a body for resolving workers' claims (a labor tribunal). It also means that all industrial actions regarding the reorganization of a company, its development, policy, ownership changes, management structure, the election of authorities, to name a few, cannot be the subject of a collective conflict in the eyes of the Act.

Here is an example of a real conflict which was not considered currently applicable to the statutory regulations as it didn't fall within the legal regulations.

#### **Case 3—The reorganization of a big Polish company**

*A collective conflict occurred in one department of a big company. The workers were deeply displeased with a decision about the reorganization of their department, a decision made by the previous management and executed by the current management. This decision entailed the transfer of the unit to another city. Even though it meant a significant change in the working conditions, following the Act on Resolution of Collective Disputes, the situation was not qualified as a collective conflict. This meant that the statutory regulation*

2The unions report higher level of unionisation, but recent survey on a representative sample of adults indicate that only 5% respondents declare affiliation to trade union (Feliksiak, 2017).

3Journal of Laws of 2015, entry 295. The provisions of labor law in Poland are divided into collective and individual. Collective conflicts regulate the so-called collective labor law as opposed to individual conflicts regulated by the labor code.

*mechanisms were not applied in this case. The employees were transferred but remained deeply regretful, lost their trust in the management and were left with the conflict which remains unsolved…*

At the same time, if the conflict issue results from a collective labor agreement or any other agreement in which a trade union has participated, then such an agreement should be previously terminated by a dismissal notice. The wording of these provisions causes a number of issues to not be covered by the statutory definition which in fact constitute causes of collective conflicts are, and consequently they are excluded from the scope of this legal regulation.

In the Polish studies conducted within the project covered in this handbook, most respondents indicated the limitations of the Act's provisions while they simultaneously emphasized the need to implement changes to existing regulations in Poland so as to include the actual diversity of collective conflicts (e.g. in a situation of a company's restructuring, ownership changes, providing an employment guarantee or redundancy packages for employees).

Parties in a collective conflict are workers—represented by a trade union- and an employer or employers who are represented by an employers' organization (Kurzynska, 2008). Within the meaning of the Act, as referred to in article 3 of the Labor Code, an employer can be an entity, i.e. an organizational unit (also an entity without legal personality), or a physical person if they employ other workers. In organizations where there is more than one trade union organization, each trade union is entitled to represent their interests in collective conflicts. In the event of a lack of unions in a company, the Act provides that "on behalf of workers in a workplace where a trade union is not acting, a collective dispute may be dealt by a trade union organization as requested by the workers to represent their collective interests."

Under the Act on Resolution of Collective Disputes, mediation proceedings are obligatory, that is, they must be conducted following a negotiation deadlock if employees' are calling a strike. This means that the mediation proceedings must always precede the announcement of a strike decision. The obligatory nature of mediation is perceived by most of the research participants as a weakness of the Polish system. Experts emphasize that a number of disputes are subject to mediation without the aim of reaching a real agreement, rather to avoid being accused of breaking the law in case of employers, and in case of the trade unions, to create an opportunity to undertake industrial actions such as strikes. One of the interviewed mediators said: "*Mediations on the basis of the law are pretended, because mediations should be voluntary. Now, mediations are only the other element of the dispute; employers approve them because they want to obey the law and Labor unions because they want to strike*".

In accordance to the provisions of the Act, collective conflicts are managed through negotiations, mediations and arbitration proceedings. Negotiations, mediations and arbitration proceedings constitute separate stages of resolving collective disputes at work. A strike is considered a final attempt at settling a collective con-

**Fig. 10.1** System of Social Dialogue in Poland

flict in case of a lack of agreement between parties, as a tactic of employees to gain a better negotiation position. An alternative to strikes in the event of a mediation failure, is voluntary submission to the proceedings before social arbitration boards, which occurs very rarely in Poland. Recent data from 2014 confirms that proceedings before social arbitration boards in courts practically haven't existed during the last decade.

## **10.2 Characteristics of the System**

The Social Dialogue System in Poland in accordance with the spirit of multi-level governance system consists of the Social Dialogue Council as a national forum for tripartite dialogue. "The tripartite dialogue engages employee representatives, employers and the government in the discussion about public issues, projects of legal solutions and other decisions made concerning the interests of the employers and employees" (Social dialogue) (https://www.mpips.gov.pl/en/social-dialogue/). At the regional level are the Voivodship Social Dialogue Councils. Sectorial dialogue also presents the tripartite formula. Employees are represented by trade unions and councils of employees; employers are represented by an employers' organization (Fig. 10.1).

Moreover, organizations associating mediators and social arbitration should be also indicated, though there's a relatively low development level in Poland. On the other hand, at the level of social partners, there's considerable fragmentation

**Fig. 10.2** Collective conflicts and mediation process in Poland

and political involvement of trade union organizations. Further, the system of the employers' organizations is quite stable and there's a relatively poorly developed system of mediators' organizations for solving collective conflicts. The differentiation between court mediators and mediators in collective conflicts also contributes to citizens' confusions about the system.

Our research confirmed that mediation is considered a mandatory stage of conflict which allows the workers' side to proceed with a strike call. Strikes have been registered and monitored during the past years in Poland (Krajewska, 2018). Furthermore, also the number of conflicts has been reported, specifying those conflicts which, thanks to negotiations and mediation, were settled, or for which a report of divergences was signed and the case was brought before social arbitration (Lukawska, 2008). The statistics and publications prepared for social reporting and accounting are supplementary to scientific research, which presents a wider context of collective conflict resolution in Poland.

The interviews and studies conducted for the NEIRE III project present a more individualized approach for the parties in collective conflicts, as well as mediators and policy makers.

Figure 10.2 presents the process for collective conflicts from the start till the stage of strike or arbitration. A collective conflict ends after an agreement or a court settlement is signed, or it remains suspended. There is no time limit for these conflicts, that's why many conflicts remain unsolved and/or suspended.

The Act on Resolution of Collective Disputes determines that a conflict is collective when requirements are met with regards to a larger community, a clash and its relation to work (Zoły´ ˙ nski, 2013). Following such definition, a dispute is an example of a real conflict existing between employees and an employer. It is formed along with the aim of gaining improved conditions for workers (all workers or part of the workforce) and an employer who refuses to meet their demands. An employee representative stated: "*The current system reinforces "artificial" local disputes. In fact the problem concerns all of the country*—*(e.g. the system of healthcare and education). The dispute at local level doesn't solve the general problems*".

## **10.3 Characteristics of the Mediators and Third Party Procedures**

Under the Act, formal mediation starts if a stage of negotiations has been completed and the party initiating a dispute maintains the claimed demand. The conflict is managed by a person who guarantees impartiality, who is referred to as a mediator. Polish legislators prescribes the so called Multi-Steps-ADR, a path from less formalized towards more formal conflict resolution procedures. The Act does not specify the participation of any independent/informal institutions as third parties, such as consultants.

## *10.3.1 Choosing a Mediator*

The parties can establish the possibility of allowing the consultant to solve a conflict. If a mediator claims that the resolution of a collective conflict requires a detailed or additional fact relevant to the subject of a dispute, he notifies the parties of that. Moreover, if it is necessary to establish the economic and financial situation of a workplace in relation to the demands in a dispute, a mediator may propose an assessment to be made in such cases. The author of the assessment actually does not participate in the mediation process but provides relevant documents for it. The system also allows combining mediation with other alternative ways of solving collective conflicts. When a mediation is not successful and the party initiating the conflict will not use its right to strike, then that party can request a solution from the Board of Social Arbitration. The Board of Social Arbitration is composed of the chairman—a judge—and 3 members appointed by the parties. The industrial conflict is recognized by the board at a regional court dealing with cases in the scope of labor law and social insurance, and in the case of multi-employer industrial disputes, they are arbitrated by the Board of Social Arbitration at the Supreme Court.

The role of mediator may be taken by a person or a group of people. Some argue that it is better not to engage a single mediator who also for example conducts consulting activities, and prefer a collective body, such as a conciliation committee. However, in most cases of collective conflicts, the parties appoint one mediator. During the mediation period, mediators are entitled to take a leave off work (up to 30 days a year).

## *10.3.2 Remuneration*

Remuneration cannot be lower than the amount specified in a regulation of a competent minister responsible for labor matters. A mediator is also entitled to have transport and accommodation costs reimbursed as per an agreement with parties to a collective conflict. It is to be noted, however, that the amounts prescribed as minimal are quite low in comparison to the hourly rate which may be obtained by lawyers, psychologists and other specialists. As our experts stressed, these amounts have not been indexed for over 10 years so the professional mediator position is not an attractive one.

The Act provides that only a mediator who is trusted by the parties may be the third party. The mediation concludes with an agreement signed by all parties (including the mediator), and finally, a mediator appointed by the minister (in case the parties cannot appoint one) may not be cancelled by the parties. They have to submit an application to the minister for doing so, while in other cases parties may cancel a mediator if he loses their trust. In the event of mediations which don't end in agreement or only a partial agreement and a report of divergences, these actions are also accompanied by a mediator. Apart from that, there are no other protection mechanisms for a mediation process. Mediators acting as third parties should provide the mediation process in accordance with the so-called Working Standards for Mediators (Kawalec, 2009).

Since February the 5th, 2018, there are 206 mediators on the list of the Ministry of Family, Labor and Social Policy, broken down into individual voivodships.4 The names of mediators associated in professional mediators' associations are also available (there is no obligatory professional self-government of mediators in Poland). There is also a possibility to use the list of mediators accredited by employers' organizations. The difference is that in general they act in disputes with business partners, and not only in collective disputes. The list of mediators is established by the minister competent for labor issues in consultation with trade union organizations and employers' organizations. From the interviews we understand that this list is however not checked by parties or updated.

The above figures do not reflect a complete picture since every person who safeguards impartiality in the opinion of conflicting parties may become a mediator and such a person does not have to be on the list of registered mediators. The research participants, in particular from a group of policy makers, stressed the need to professionalize the position of a mediator in the near future. Up to date, the people acting as mediators did their work without the need to demonstrate their additional qualifications or experience.

A mediator is appointed by the parties in a particular case. If the parties do not reach an agreement regarding the choice of a mediator within 5 days, further proceedings are conducted with the participation of the indicated mediator, upon request of either party, from the minister's list of mediators. No information is given as to how frequently this list is updated. Interviews with the mediators confirm that the list is out of date.

4The respondents complained that the list is rarely updated. In 2018, there were 206 mediators in the list in February, but at the end of May only 80 remained.

## *10.3.3 Appointment of Mediators*

The act does not determine any specific requirements for a mediator. Thus, a mediator doesn't have to possess particular professional qualifications, e.g. to be a lawyer or to complete a course or training in the area of mediation, although, undoubtedly, legal or economic knowledge or practical skills as to how to conduct mediation should be taken into account when selecting a mediator. The most important aspect is impartiality and the likelihood to be accepted by the parties. This person cannot be related to either of the parties nor to the people representing them, in such a manner that it could result in challenging this person's impartiality.

Some mediators are partly associated to the chamber of mediators or arbitrators and to other professional associations. According to the current working standards set for mediators, they are required to raise their qualifications, but it should be treated not as a statutory requirement but only as a recommendation. Mediators have access to training, for example courses or post-diploma studies, which are organized by different organizations (universities, associations, foundations, ministry, etc.).

Our studies confirm that, as a general rule, mediators are people with legal, psychological, sociological or industry-specific education (medical, mining, technical etc.). The interviewed mediators had 20-years professional experience on average and 10-years' experience conducting mediations. Mediators often hold managerial positions in trade union organizations or work in HR units of companies, and they can be employed by both private and public companies. When they act as mediators they get time off work and they carry out the mediation process according to the act or the contractual agreement. The observations supported the assumption that Polish mediators' strength is based on their professional competences and expertise. However, the statutory authority of mediation is quite weak and therefore, sometimes conflicting parties do not take mediation and mediators seriously. Thus, in the respondents' opinion, the professionalization of the role of the mediator in social conflicts should be provided in the near future.

## **10.4 Description of the Facilitation or Mediation Process**

The findings confirm that every mediator uses his or her own strategy. Some of them start with meeting each party separately, then they organize a joint meeting during which they outline the causes and dynamics of the conflict, and then, they help parties reach a consensus. Other mediators stated that if they did not observe real willingness to reach an agreement by the parties, they would terminate the mediation process. Some mediators (especially with psychological background) pay special attention to the sources of the conflicts (e.g. a dispute over values, a dispute of interests, etc.) and attempt to transform their differences into perception issues since parties are more likely to find an agreement in these cases.

During every step of the mediation, including meetings, presentation of positions and exchanging of expectations, agreements and minutes should registered. This is done to document all evidential reasons in the event of being used in possible further legal proceedings. A mediator who works under an employment contract is entitled to be off work throughout the duration of the mediation process. During that period, a mediator is not entitled to receive his regular remuneration for his regular employment contract.

A remuneration condition for a mediator from the ministry's list is laid down by the relevant regulation. On the other hand, mediators who are selected outside of the ministry's list have their remuneration and reimbursement of travel and accommodation expenses regulated by an agreement between the parties. The regulations apply the principle that the mediation proceeding costs—which are composed of remuneration for a mediator and his travel and accommodation costs—are to be incurred by both parties in equal parts, unless a different division of costs is agreed. Additionally, there is the Workplace Card and the Collective Dispute Card for statistical purposes (for the Ministry of Family, Labor and Social Policy). An interviewed employer said: "*the mediation system is very rarely used. The mediations don't bring profit to the law offices, that's why lawyers do not develop these forms of coping with collective conflicts. On the mediators list we find names of people who do not work as mediators*".

The parties may also withdraw the power of the selected mediator and choose another one at any time during the mediation process. This decision is at their own discretion. The Act regulates that in case of mediations conducted by a mediator from the ministry's list, the parties cannot cancel him. Our study shows that it's a common practice that one party indicates three candidates and the other one also puts forward three candidatures, and it occurs that the names of mediators are the same on both lists. Each party may refuse mediators proposed by the other party, ask for another mediator, or propose their own. Our findings confirmed that parties are more likely to request help from local authorities, rather than from a list of mediators. The mediator usually works individually. It is a matter of a mediator's experience and depends on the nature of a dispute itself. There are also mediators working in pairs or in groups of three (e.g. bringing in a psychologist or a lawyer creates a possibility of invoking content-related specialists). However, in most cases there is one mediator, but if he fails to meet the expectations, then there is a change (e.g. if he was not suitable for solving conflicts in a given field—there is no information available in this respect).

## *10.4.1 Starting the Mediation*

Mediation proceedings may be conducted according to the rules applicable at the negotiation phase. Thus, it is important that all actions are taken in good faith, respecting the interests of the parties in conflict, as well as respecting the interests of these workers who are not directly involved in the collective conflict. Mediators act under a general formula of mediations which includes the essence of mediation (impartiality and neutrality of a mediator, confidentiality, voluntary participation, monitoring of the content of an agreement by parties). There are individual rules for contacting parties to provide information about a meeting—by post, by phone, responding to additional enquiries. As a general rule, there is an individual kick-off meeting with each party and then, they have a joint meeting. Explanations are given about the mediation process (the so-called mediator's monologue), and a favorable atmosphere is created.

## *10.4.2 The Mediation*

The Act does not include specific solutions in respect of a mediator's rights, however, as it results from the essence of mediation and existing residual regulations, such rights may be divided into three types: organizational, analytic and research, and postulated ones. A mediator is granted the right to control the course of proceedings by establishing a schedule for meetings and monitoring their course. Initially, a mediator may establish the course of the mediation procedure with parties, and determine jointly with them when and meetings take place, including separate meetings (caucus). This also includes arrangements regarding the recording of the mediation meetings, and how to inform workers of a course of negotiations by parties. Then, there are rights for mediators to have access to all relevant documents, to analyze the claims and positions of the parties, the genesis of the conflict, and the course of negotiations. In some cases, the mediator may request or ask an additional expert to develop opinions and test the mediation process.

The postulated rights consist in a possibility to attract parties' attention to the need to make detailed and additional arrangements regarding the subject of a dispute or to make use of experts' opinions, e.g. economists or lawyers. Mediation can go on from a few hours to a week, with no legal time limitations.

## *10.4.3 Ending the Mediation*

Mediation proceedings are finished by concluding an agreement or signing a report of divergences. Both the signing of an agreement and the report of divergences in the event of failure to reach an agreement, are executed with the participation of a mediator. The legal regulations in force do not contain any guidelines regarding the content of an agreement. The agreement binds parties and constitutes a source of labor law, within the meaning of article 9 of the Labor Code. In the event of failure to reach an agreement through the mediation procedure, the Act imposes an obligation to draw up a report of divergences with the participation of a mediator. A report of divergences should contain clearly formulated positions of the employer and the trade unions and it should also include information related to the course of the mediation and a difference of positions that prevented parties from reaching an agreement.

If a mediator fails to involve the parties in actual negotiations, he may, and should, finish his mission. It is to be noted that the legislator does not determine a time period for the mediation proceedings. Their duration depends on the parties' will and a mediator's assessment. The mediation should be conducted as long as there's still likelihood to reach an agreement, from the perspective of its participants. A report of divergences is drawn up if the mediation fails. A report of divergences may exclude some matters, and leave the remaining ones to be reconsidered at a negotiation level. It is possible to suspend a collective dispute (if it's is not covered by the employment law), which enables unions to save face, and it is also convenient for the management board which must excuse themselves before the supervisory board. Another option is to stop the mediation, referring back to the negotiation phase when a mediator is in a way. Another technique that mediators can use is to disagree to sign a report of divergences—giving some time for parties to discuss how to avoid a strike.

## **10.5 Effectiveness of the System**

The interviewees are not in accord whether there is any documentation of success. As mentioned earlier, only few collective conflicts are subject to mediation, and there is no clear record of the agreement level. The respondents confirm that it is hard to assess in an unambiguous way whether mediation ended in success or failure. When mediation is only a formal condition to declare a strike, it may mean a short-term success of workers. Nevertheless, the evaluation of the situation may change in the long run. Success should be measured by a final outcome including profits and losses seen from the perspective of both parties to the conflict. Courts and mediation centers were indicated as being in possession of such documentation. Nevertheless, all the respondents unanimously expressed that the satisfaction level of mediation and the level of trust are not documented, although in the case of the latter, it can be dealt with at an individual level (collecting opinions about particular mediators) and at a group level (reported lack of confidence of employers towards active trade union members). It appears that there is no actual form of evaluating the mediation and mediator/mediators.

Certainly, it is possible to indicate numerous cases of collective conflicts in which the mediator's work turned out to be a key player for reaching beneficial solutions. We can also find a number of professional mediators and persons advocating for mediation and understanding the idea of dialogue—both among employees and employers. There are still specific drawbacks and shortcomings of the mediation system in collective conflicts, which has a considerable impact on its effectiveness. According to the research subjects, the mediation procedure should be introduced at an earlier stage, not after negotiations are over. In this context, it appears that mediation today is too formal, as specified by the Act. The biggest weakness is the fact that mediation is activated at a specific stage because the Act provides so. This causes that in the current situation strikes do not occur, but disputes between employees and an employer remain in suspension for years and may trigger consecutive conflicts in the future. In the view of our respondents, mediation should be introduced (also) at the initial stage of a dispute. Another weakness is the limited number of situations which are formally considered collective conflicts. In such situations, mediation—if it is introduced—plays a role of a promotor of the dialogue culture and is not subject to the statutory regulation. Moreover, conflicting parties and mediators focus their attention on making the mediation procedure more flexible so that it could be possible to work with a co-mediator depending on actual needs.

Some corrective measures have been taken. In September 2016, the Labor Law Codification Commission preparing changes to existing regulations regarding both individual disputes (regulated by the Labor Code), as well as collective conflicts (regulated by the Act of Resolution of Collective Deputes) was established at the ministry level. The Commission's task is to recodify the norms of individual labor law and to codify collective labor law according to the requirements of a changing labor market.

## **10.6 Conclusions**

From the total of 1700 registered collective conflicts (2014–2016) (Krajewska, 2018), negotiations and mediations were provided in only 11% of cases and then in only 23 cases the parties reached an agreement after negotiations. Thus, there is a strong need to improve particular elements of the system and the dialogue culture. Mediation costs money and as long as the parties have to pay the mediator's labor costs, they won't hire them. Currently, there are no legal regulations regarding the compulsory fund created by employers to cover mediation costs.

On the other hand, the court in legal proceedings encourages parties to reach an agreement, which is an incentive for parties to show their efforts to reach an agreement, and also encourages the use of mediation.

An important question would be how to get parties interested in mediation. It might be helpful to know how long it will take to finalize the case. What is needed is a wider knowledge about mediators' professional competences. Even among specialists, there is no conviction about the legitimacy of using mediation. Some of them treat mediation rather as a hobby and not as a profession that could be a permanent job. Mediators operating outside the area of collective disputes are sometimes considered as those who are taking clients away from lawyer's offices. This suggests there is a lack of mutual understanding of parties' needs. Mediation implements one of the functions of employment law—the irenic function. However, if the obligation of mediation is imposed from above, to some extent the idea of mediation is contradicted. A good idea could be to introduce a direct regulation regarding mediation in the Labor Code (for example, extending a catalogue of methods indicating how to enforce claims by workers).

The applicable Act in Poland comes from 1991, from the onset of the transformation period of Polish economy and is no longer adequate to current conditions, which contributes to the ineffectiveness of the mediation system. In a number of industries, conflicts are handled with indirect decision-makers, e.g. the minister of health or education, and not with direct decision makers, as for example the company director. This poses an obstacle for reaching an agreement, regardless of using mediation or not.

Collective disputes are most often of financial nature, as seen in the conflict involving the Polish Teachers' Association regarding middle schools, which has a wider context. Some disputes are of formal nature—for example the teachers in conflict with the government must first handle the conflict at local level, which is affected when, for example, the city mayor supports their activities and postulates towards the government. Our study shows that on the list of registered mediators, information about their profession and experiences is lacking, i.e. specializing in health care system (it is unnecessary to clarify the operating rules in this individual discipline).

The subjects are aware that there's a value-creating aspect to mediation in such that no one loses or wins—both parties are equally 'winners' and 'losers'. It is value added in the working environment, since these persons may still work together and it is beneficial for the working environment. Mediation emphasizes the educational aspect—there is no time for that in court proceedings. On the other hand, the legal fees in court mediation might exceed the costs of conventional ADR's. It might be appropriate to increase the number of trainings for both parties in conflict, focusing on more modern approaches to social issues and employment law, since one of the sources of conflict is the lack of knowledge. As for mediations not regarding collective disputes, it is necessary to align the legal environment and the issue of pay for mediators. It would be also important to promote mediation not only for collective disputes, but also as a method for resolving other types of conflicts. There is a need for institutional improvement, a change in the law, such as defining what a mediator can or cannot not.

There is no monitoring of how the conflict between the parties develops. Strikes are a form of indirect information about failed mediation. Some issues have been elaborated through practical operation, but they are not standardized; there is no definition for mediators and their legal powers. The competence level of mediators is not equal and the lists of mediators are not updated (for example, some of them are inactive but still appear on the list). One respondent would like mediators to have a bigger impact on the outcome of the mediation, and to have some possible sanctions to be imposed by the Minister of Labor on employers who are not cooperative in mediation.

Employers are sometimes unprepared for mediation and in some cases appear as arrogant, as expressed in the interviews. A mediator should have the possibility to report about such cases. Problems and conflicts may be similar for different employers, but at the moment there's no option to negotiate regulations that affect them all, which means that mediation must be conducted separately for each work establishment, even if there is the same management body/owner (e.g. Governor of Voivodeship/city mayor). Wouldn't it be easier to negotiate such discrepancies with the government in order to resolve them at national level, for the benefit of the whole country?

An additional issue which might appear, is the gender bias, regularly perceived towards female employee representatives. These are not always respected, and take serious, despite their better preparation and knowledge than other parties at the table. It is also worth considering the functioning of alternative methods for settling disputes in workplaces where trade unions don't operate. How could workers be represented in places where there are no trade unions? The respondents also pay attention to the fact that there are psychological barriers in the Polish society regarding mediation, for example a lack of openness in communication and a low level of trust. To be able to apply mediation with a broader perspective, a change in the society is also needed.

**Acknowledgements** The authors would like to thank Aleksandra Cichos for her help in gathering data for Study 1.

## **References**

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# **Chapter 11 Mediation and Conciliation in Collective Labor Conflicts in Portugal**

**Andreia Pinheiro, Ana Margarida Passos and Alan Stoleroff**

#### **The Case**

*In 2016, a trade union made a request to DGERT for conciliation in a dispute. The reported conflict involved a union and an employers' association, and was based on a review of a collective agreement that had not been revised since 2008. The request was motivated by the fact that a set of practical changes had already been implemented but had not been previously formalized within the collective agreement*.

*When the parties started to negotiate, the employers' association revealed that it wanted a more flexible organisation of working time and was willing to concede wage increases in return. These became the focal points of the negotiation. Although at the beginning of the process the parties were both reluctant and the employers' association presented a very rigid position, after three meetings they decided to move on to direct negotiations. When they came back for another conciliation meeting they were ready to close the procedure and sign the revised collective agreement*.

*In this case, the role of the conciliator was crucial in pointing out the importance of having a collective convention rather than the mere application of the Labor Code, which would be unquestionably further apart from the sector's reality. Eventually, the parties recognized the added value of reaching an agreement and found out the way to agree on the controversial terms*.

A. Pinheiro · A. M. Passos (B) · A. Stoleroff

ISCTE—Instituto Universitário de Lisboa, Lisbon, Portugal e-mail<EMAIL_ADDRESS>
## **11.1 Introduction**

Over the last four decades, since the acquisition of basic democratic rights in labor relations, the Portuguese industrial relations system has evolved steadily (Barreto & Naumann, 1998; Stoleroff, 2000). In fact, the success of its institutionalisation, after a revolutionary upheaval and in the context of the consolidation of a constitutional democratic political regime and gradual recuperation of civil society, can, to some degree, be deducted from the pattern and evolution of labor conflict and the role of third party intervention.

In the very early stages of Portuguese democratisation, following the revolutionary period of 1974–75, labor conflict was endemic to the emerging pattern of labor relations. However, since the deep economic crisis of 1983–85 and the organisational restructuring of the late 1980s and 1990s, the level of conflict has continuously decreased. Even with spikes of strike activity, most notably during the recent crisis years, the average level of open conflict has tended to fall. An explanation of this evolution would require looking at many factors and variables (Costa, Dias, & Soeiro, 2014) and it is within this context that third party intervention should be examined.

During the period between 1986–2016 (represented on Fig. 11.1), strikes reflected an average number of lost working days per worker of less than 2 days, being 1 day the most common duration of a strike. In most recent years this number has been increasing, reaching a value of 1, 8 days in 2016, equalling values from the early years of this century (source: Pordata).

Most recently, Portugal experienced another serious crisis, associated with the international financial crisis and the sovereign debt crisis of the Euro Zone, that had significant implications in all sectors of the economy. Between 2008 and 2014 GDP fell sharply and unemployment rose to record heights.

The country was forced to seek external assistance from the IMF, the European Commission and ECB in April 2011, submitting to an adjustment programme, defined in a "Memorandum of Understanding" with this Troika, that ended in June 2014. During the Economic and Financial Assistance Programme a set of "austerity

**Fig. 11.1** Strike frequency—1986–2016

**Fig. 11.2** Trade Union affiliation density. *Source* Costa, Dias, and Soeiro (2014)

measures" was implemented with the purported aim of reducing the deficit (from 11.2% at the end of 2010 to 4.4% at the end of 2015 and 3% in 2017; Source: Eurostat).

The budgetary constraints were felt most intensely in the public sector generally and in the public administration more specifically (Stoleroff, 2013). Amongst the measures applied to public employees were pay cuts, the suspension of the 13th month vacation pay, a freeze on hiring and career progression and the receipt of Christmas allowances in twelfths. However, the MoU contained other measures aimed very broadly at reducing workers' rights and led to revisions of the Labor Code to facilitate dismissals, reduce compensation for dismissal and limit the coverage of collective bargaining.

The labor movement responded with strike actions, including various general strikes (Campos Lima, & Martín Artiles, 2011; Costa et al., 2014). However, despite the increase in values registered during the crisis, especially between 2011 and 2014, it never came close to the values presented in the 80s and 90s. Most notably, strikes became endemic in the transport sector, which had a major impact on people trying to reach their daily workplace. The strikes with greater expression were probably those carried out by Metropolitano de Lisboa, but almost every transport company suffered strikes during the period of crisis.

Another aspect influencing the level of collective conflict is the significant and gradual reduction of union affiliation, as can be seen in Fig. 11.2. In conclusion, we can state that the number of strikes at company and workplace level, on the whole, continued its decline, while there has been a slight increase in sectoral disputes such as in transport and education sectors.

Currently, Portugal is undergoing a period of economic recovery, showing significant improvement in economic and financial indicators. As to be expected in a period of recovery, labor has been more assertive, particularly in the public sector, which has been marked by a series of strikes with significant participation, namely in Health and Education. It remains to be seen how recovery will affect the militancy and bargaining power of unions in private sector collective bargaining, which is where conciliation and mediation are most relevant since it is the source of most requests for intervention.

## **11.2 Characteristics of the System**

Work-related conflicts can be addressed by both the Ministry of Justice, when these are individual, and the Ministry of Labor, when conflicts are collective. In this chapter we are only focusing on the procedures associated with collective conflict resolution, which includes conciliation, mediation, arbitration and prevention processes. A large part of the information presented here is based on legislation, the Labor Code (*Código do Trabalho*), the website and documents produced by DGERT (Directorate-General for Employment and Labor Relations), an interview conducted with DGERT's Chief Executive, the interviews conducted with the mediators and various users of the system and the CES (Economic and Social Council) website.

In order to clarify the concepts, collective conflicts of rights are based on the interpretation or enforcement of an existing contract, while collective conflicts of interests refer to *crisis situations in direct negotiation*, where the parties are not able or not willing to continue negotiating until they reach a balanced solution between the interests they both represent (Fernandes, 2012).

In Portugal, the legal system tends to promote intervention in collective labor conflicts (Fernandes, 2012) and their management is regulated by basic recognized parameters, such as the freedom of trade union organization and action; the recognition and guarantee of the right to strike; the freedom to choose between negotiation procedures; the existence of imperative boundaries on the content and timing and sequence of formal negotiation procedures; and the provision of optional or voluntary methods for conflict resolution.

Collective conflicts stem from disagreements regarding the updating, revision or enforcement of an existing contract and its clauses or the negotiation of a new contract. In the case that a party to a collective conflict requests the intervention of a third party, the Labor Code stipulates three standard procedures: Conciliation (Artºs 523–525), Mediation (Artºs 526–528) and Arbitration (Artº 529). There also exist procedures for the prevention of collective conflicts which involve the DGERT as third party. This latter function does not appear in the Labor Code, but rather derives from the DGERT's Organic Law, approved by the Regulatory Decree nr. 40/2012 of April 12th (Artº 2, 4 c).

The competent public entity involved in conciliation, mediation and prevention processes for the public and private sectors is the DGERT, which is a division within the Ministry of Labor, Solidarity and Social Security. It operates through two delegations for professional relations, one for the south (Directorate of Services for Professional Relations of Lisbon and Vale do Tejo, Alentejo and Algarve—DSR-PLAA) and one for the north (Directorate of Services for Professional Relations in Northern and Central Regions—DSRPNC).

The services provided by DGERT are free of charge to the parties involved, facilitating the access to this collective conflict resolution service and helping to promote collective bargaining.

The relevant responsibilities of the DGERT are in:

Arbitration, unlike the other three processes, involves issuing a binding decision/sentence by the arbitrator or arbitration committee. Decision takes place following examination of the opposing parties' claims and grounds for them, with or without hearing them directly. The key criterion of arbitration is equity, which means it is a question of defining the right solution to the conflict, within the lines set by the parties' final positions. As stipulated in the Labour Code, arbitration may take three distinct forms: mandatory arbitration, necessary arbitration and arbitration for the definition of minimum services.

The competent public body in the case of arbitration processes is the CES, the Economic and Social Council, which is the public organ for consultation and tripartite concertation in the economic and social field. In this context, the main roles of the CES are to organize and maintain the required lists for the purpose of appointing arbitrators (Presiding Arbitrators, Employer Arbitrators and Worker Arbitrators), to select the arbitrators when necessary, to guarantee the payment of arbitrators and experts and to provide the technical and administrative support to the functioning of the Arbitration Court.

There is a possibility for the conciliation and mediation procedures to be carried out by an entity other than the DGERT, that is, to be carried out by anyone to whom the parties assign this responsibility to, usually an external lawyer. In this case, the rules provided by the Labour Code become supplementary. The Ministry services must nevertheless be informed of the beginning and end of the process. In the specific case of mediation, there is also a possibility for parties to jointly request the minister responsible for labor to appoint a personality from the Presiding Arbitrators list (CES) to be a mediator in the conflict. If the minister agrees and the personality accepts the nomination as mediator, the costs are covered by the Ministry of Labour.

1The Labor Code requires employers to inform the DGERT, coincident with notification to the representative organizations of the employees, of an intention to dismiss. Collective dismissals involve situations where a company with less than 50 employees intends to dismiss 2 or more employees or where a company with 50 or more employees intends to dismiss 5 or more workers. Collective dismissals must be justified due to the closing of company units or economic, structuralorganizational or technological changes.