Social Partnership Agreement Definition

In 1957, after a few years of economic growth, the umbrella organization „Joint Wage and Price Commission“ was created. The Commission was set up on a voluntary basis (Hofmarcher and Rack, 2001). There is no formal organisation, no building, no budget linked to social partnership. It has grown historically and is not listed in the Austrian Constitution (Bundesverwaltungsakademie, 2014). Simply put, social partnerships exist in Austria as a means of cooperation and interaction between large organisations representing professional interests and the government (Delapina, 2008). The system not only addresses labour relations (i.e. wages, etc.), but also covers all areas of social and economic policy. Today`s health and social care systems often reflect not only the underlying norms and values that a given society may have, but also the deep-seated social and cultural expectations of local citizens (Lameire, Joffe & Wiedemann, 1999). The Austrian social security system and, subsequently, social health insurance reflect this view, as it is based on the principles of compulsory insurance, solidarity and self-management and is mainly financed by insurance contributions (Gesundheit Österreich GmbH, 2013). The Treaty of Lisbon (Article 152 of the Treaty on the Functioning of the EU) recognises the role of the social partners in labour relations and in the European social dialogue. They represent their members in consultations with the Commission and in the negotiation of collective agreements. They also sit on the European Economic and Social Committee and other organisations representing civil society.

The social partners play a key role in achieving the objectives of the Lisbon Strategy for growth and jobs by launching projects and initiatives at European and national level. Austria is generally a country more inclined to the Scandinavian model of labour market centralisation. It is therefore not surprising that it comes second only to Sweden in terms of market centralisation (and thus trade union density) (Western, 1997). This high level of labour market centralisation means that wages are coordinated across almost all sectors. Therefore, it also means that high-level federations can unite to maintain Austria`s international competitiveness by ensuring wage moderation in tradable sectors (and avoiding wage gaps in tradable sectors such as manufacturing and non-tradable sectors such as public health). The Austrian Trade Union Confederation is the most powerful social partner of the trade union movements and uses centralised collective bargaining for wage formation. Of course, at the company level, works councils are strongly integrated into trade unions, but a local tariff never compensates for a central tariff (Barth & Zweimüller, 1992). Their influence on social policy is widespread and diverse, ranging from their ability to acquire knowledge and verify legal documents, to the diverse administrative roles that make up the Austrian social system (Hofmarcher & Quentin, 2013). .

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