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Liberalization, Flexibility and Employment Relations Change in Southern European Telecoms since the

1990s

Dr. Andreas Kornelakis Lecturer in HR Management

a.kornelakis@sussex.ac.uk

11 September 2012

IBSSPP/ J.E.Cairnes Business School Seminar NUI Galway

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Plan of Presentation

l Background/Introduction l Research Design

l  Liberalisation in IT & GR Telecoms l  Flexibility in IT & GR Telecoms

l Wage Bargaining: Divergent Trajectories l Concluding Remarks

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Background and Introduction

l  Convergence to Anglo-Saxon model of industrial relations is not borne out (Wallerstein et al, 1997; Ferner & Hyman, 1998; Thelen, 2009)

l  Wage Bargaining Centralization remains more or less stable across Europe (EC Industrial Relations in Europe 2010)

l  Instead, case evidence of different trajectories of change (Crouch, 2000; Ferner & Hyman, 1998; Traxler, 1995):

l  Research Question: How do we explain divergent trajectories

of change in wage bargaining, despite similar pressures ?

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Research Design: ‘Most similar systems’ comparison

l  Similar Cases: Italian & Greek Telecoms Sectors – Common Pressures/Challenges –  ‘Mediterranean model’ of capitalism

l Divergent Outcomes – Centralisation of Wage Bargaining in Italian

telecoms – Decentralised Bargaining in Greek telecoms

l Why?

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Liberalisation of Italian Telecoms

l  Telecom Italia born in 1994 (merger btw SIP, Telespazio, Italcable, SIRM, Iritel) IRI owned since the 1960s

l  Privatised in 1997, three hostile takeovers thereafter, now owned by Spanish Telefonica & Italian banks

l  Market Opened up in 1998 according to EU requirements

The Erosion of Telecom Italia Market Share (retail revenue)

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New entrants (fixed telephony operators): Albacom (now BT Italia), Infostrada (now Wind), Teletu (now

Vodafone)

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Liberalisation of Greek Telecoms

l OTE (Greek telecoms operator) state-owned since 1950s

l  Privatisation (shares issuing) started in 1996 and was completed in 2008 with a takeover by Deutsche Telekom

l Market Opened up in 2001 (EU exception)

The Erosion of Hellenic Telecom(OTE) Market Share (retail revenue)

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New fixed telephony operators: Tellas (now Wind), Hellas Online (now strategic alliance with Vodafone); Forthnet (currently in merger negotiations with Wind)

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The Search for Flexibility in Italian Telecoms

l  Revised job descriptions (in response to changes in technology); flatter job classifications

l  Downsizing of ex-monopoly operators (early retirement, voluntary exit, part-time work); lower wages for new entrants (work-entry contracts) in Telecom Italia

l  Flexibility for core employees: annualised hours, part-time; teleworking; on-call work.

l  Flexibility for peripheral employees: immense growth of precarious (freelance) work contracts (co.co.pro)

The Search for Flexibility in Greek Telecoms l  Performance-based pay systems for marketing staff

(sales) and technical staff (network speed)

l  Downsizing of ex-monopoly operators (early retirement, voluntary exit); abolishing job security (tenure) for new recruits

l  Flexibility for peripheral employees: immense growth of spurious self-employment (project-based) contracts (blokaki) Precariousness also for highly skilled engineers

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Centralization of Bargaining in IT Telecoms (I)

l  CGIL, CISL, UIL strategy of centralization since mid-1990s; Telecom Italia unions transformed into sectoral federations (SLC, FISTEL, UILCOM); National Strikes for single contract

l  1996: Intersind (IRI employer association) absorbed by Confindustria, and transformed into network services employer association

l  1998: Tripartite Accord, includes commitment on ‘fair competition’ in liberalized network services

l  2000: First Agreement for Telecoms Sector between peak-level unions and Confindustria; low common standards and negotiated flexibility’

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Centralization of Bargaining in IT Telecoms (II) l  1998-2002: Confederal unionists go ‘on the ground’ and

organise workers in new firms; firm-level workers able to speak with a single voice via ‘RSUs’

l  2002: Confindustria establishes ASSTEL, including all telecoms/IT companies; Lucrative compromise: getting the ‘best of both worlds’common standards at sector level and flexibility at firm-level

l  2005-6: Unions forge a ‘labour-state coalition’& put pressure to resisting call-centre firms to abide by agreement; extend coverage of national contract & press for transformation of ‘spurious self employment’into regular open-ended contracts (even if part-time); call centre firms join ASSTEL

l  2005-2009: centralisation of bargaining solidifies

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Wage Bargaining in Italian Telecoms

• Liberalization

• Flexibility

Mid 1990s Late 2010s

CentralizationCoverage

Decentralized Bargaining

Unions ‘Single Voice’

Employer Associability

Labour-State Coalition

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Decentralized Bargaining in Greek Telecoms (I) l  Mid-90s: OTE company union strategy to resist

privatization & liberalization; no plan for sectoral contract; Strikes and protest against independent regulator & government because ‘national champion loses market share’ => (implicit union-management alliance)

l  1995: SEPE trade association (OTE & big mobile telecoms); no legal competence to negotiate agreements; 2003: SATPE association created by small telephone operators => small/lg firms divide

l  2003-2008: Company unions established ‘bottom-up’ in WIND, Vodafone, Forthnet despite anti-union management; no assistance from OME-OTE; they negotiate rudimentary firm-level agreements to specify wages; but very suspicious/if not hostile to OME-OTE unionists

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Decentralized Bargaining in Greek Telecoms (II)

l  2005-6: OME-OTE union convinces right-wing government to get compensation for internal restructuring; extremely generous severance package €1.6 billion for 5,000 senior employees who get early retirement (up to 8 years earlier) => some of them become OTE sub-contractors after retiring

l  Small union (SMT) requests centralisation from SEPE => request is of course rejected

l  2006-9: OTE Exclusivist strategy: call-centre union wants to be affiliated with OME-OTE, but OTE are excluding call-centre employees on the basis that they do not have‘full-time permanent contracts’

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Wage Bargaining in Greek Telecoms

• Liberalization

• Flexibility

Mid 1990s Late 2010s

CentralizationCoverage

Decentralized Bargaining

Unions ‘Single Voice’

Employer Associability

Labour-State Coalition

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Concluding Remarks

l Despite common pressures from Liberalisation, no simple convergence => path dependence

l Domestic actors’ critical role for shaping wage setting institutions

l Do these insights hold in the context of the current Eurozone crisis?

l Domestic actors (unions, employers) vs. International actors (IMF, EU)? Multi-level games?

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Thank you!