OIT - The role of collective bargaining in promoting just transitions

X The role of collective bargaining in promoting just transitions Authors / Verena Schmidt, Catarina Braga

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Authorization for publication: Philippe Marcadent, Chief of Branch ILO Working Papers can be found at: www.ilo.org/research-and-publications/working-papers Suggested citation: Schmidt, V., Braga, C. 2025. The role of collective bargaining in promoting just transitions, ILO Working Paper 145 (Geneva, ILO). https://doi.org/10.54394/OGTS039801 ILO Working Paper 145

Abstract This working paper explores the role of collective bargaining in achieving a just transition, drawing on recent literature and a sample of 512 collective agreements. An in-depth study of six country case studies from various regions highlights key themes in just transition clauses, namely upskilling/retraining workers; consultation processes, including on redundancies and early retirement; and transitioning workers to greener jobs. The study finds that while many agreements reference just transition, most only contain broad or symbolic language unlikely to drive meaningful change. However, the case studies also demonstrate that, in some industrialized countries, collective agreements have the potential to be an important tool to regulate just transition while balancing the interests of workers and employers and their organizations. A central conclusion is that the increasing relevance of just transition offers new opportunities for collective bargaining to go beyond traditional employment terms to play a broader role in the inclusive governance of work amid technological and environmental transitions. About the authors Verena Schmidt joined the ILO in 2003, and since 2016, has served as a Collective Bargaining and Labour Relations Specialist. In 2024, she began a temporary detachment with the Gender Equality, Diversity and Inclusion Branch, where she currently holds the position of Senior Specialist on

About the authors Verena Schmidt joined the ILO in 2003, and since 2016, has served as a Collective Bargaining and Labour Relations Specialist. In 2024, she began a temporary detachment with the Gender Equality, Diversity and Inclusion Branch, where she currently holds the position of Senior Specialist on Gender Equality Coordination and Mainstreaming. Previously, she worked in the ILO’s Subregional Office in Budapest and in the Bureau for Workers’ Activities, and coordinated a development cooperation project in Vanuatu and Papua New Guinea. She holds a PhD in Social Sciences from Ruhr University Bochum, a master’s degree from the University of Edinburgh, and a bachelor's degree from the London School of Economics and King’s College London. Catarina Braga joined the ILO in 2014. Since 2024, she has been a Specialist in Working Time and Work Organization at the ILO in Geneva. Previously, she focused on collective bargaining of wages. From 2014 to 2018, she worked at ILO-Lisbon, and from 2010 to 2014, she served as Secretary-General of the Economic and Social Council of Portugal. Between 2007 and 2010, she worked at the European Parliament in Brussels with the Committee of Employment and Social Affairs. Catarina began her career in the financial sector in 1999. She holds a degree in Economics from Nova School of Business and Economics (1999) in Lisbon and a Master’s in Public and Social Policies from Universitat Pompeu Fabra (2007) in Barcelona.02 ILO Working Paper 145 Abstract 01 About the authors 01 X Introduction 06 X 1 Literature review 08 1.1 Key topics on just transition in collective agreements 08 1.2 Level of collective agreements 09 1.3 Linkages between collective bargaining and just transition 10 1.4 Macroeconomic and growth policies 11 1.4.1 Principal motivations of workers’ and employers’ organizations for just transition 12 1.5 A gender perspective on just transition 13

1.3 Linkages between collective bargaining and just transition 10 1.4 Macroeconomic and growth policies 11 1.4.1 Principal motivations of workers’ and employers’ organizations for just transition 12 1.5 A gender perspective on just transition 13 1.6 Issues arising in collective bargaining processes 13 X 2 Analysis of just transition clauses in collective agreements 15 2.1 Methodological steps 15 2.2 Overview of results 15 2.3 Conclusions 17 X 3 Collective bargaining and just transition across six case studies 19 3.1 The six case studies 20 3.1.1 Germany case study: Collective agreement in the lignite industry 20 3.1.2 United Kingdom case study: Joint Environment and Climate Change Agreement 23 3.1.3 Chilean case study: Collective agreement in Santiago Metro Train 25 3.1.4 Ghana case study: Collective agreement in the agricultural industry 27 3.1.5 India case study: Collective agreement in the automotive manufacturing sector 28 3.1.6 Republic of Korea case study: Transition to electric vehicles 30 3.2 Key focus areas of collective bargaining and just transition in the six case studies 33 3.2.1 Predominant level of bargaining and coverage 33 3.2.2 Awareness among social partners on just transition clauses 33 3.2.3 Key topics on just transition in collective agreements 33 3.2.4 Principal bargaining motivations of workers’ and employers’ organizations when negotiating clauses for just transition 35 3.2.5 The strengths and weakness of current just transition approaches 35 3.2.6 Potential contribution of green bargaining on mitigation and adaptation to climate change 36 Table of contents03 ILO Working Paper 145 X Conclusion 38 Annex 40 References 43 Acknowledgements 5104 ILO Working Paper 145 List of Figures Annex figure 1. Visualization of the collective agreements in the ILO collective agreement database with just transition clauses 41

Table of contents03 ILO Working Paper 145 X Conclusion 38 Annex 40 References 43 Acknowledgements 5104 ILO Working Paper 145 List of Figures Annex figure 1. Visualization of the collective agreements in the ILO collective agreement database with just transition clauses 41 Annex figure 2. Visualization of the collective agreements in the ILO collective agreement database with OSH clauses related to just transition or environmental change 4205 ILO Working Paper 145 List of Tables Table 1. Overview of identified clauses on just transition in the sample of collective agreements 16 Table 2. Key characteristics of the collective agreements with transformative clauses on just transition 17 Annex table 1. Key words used to search the ILO collective agreements database 4006 ILO Working Paper 145 X Introduction1 This working paper illustrates the role of collective bargaining as a mechanism towards sustainable reforms aiming at just transition. It provides an overview of how recent literature has covered these issues, as well as insights regarding just transition clauses that were identified from a sample of collective agreements. It also analyses selected case studies in several regions of the world where employers’ and workers’ organizations have negotiated and agreed on just transition measures through collective agreements. Just transition involves maximizing the social and economic opportunities of climate and environmental action, including an enabling environment for sustainable enterprises, and is based on respect for the fundamental principles and rights at work and effective social dialogue, in accordance with international labour standards (ILO 2023a, para. 12). The ILO’s work on a just transition follows the organization’s 2015 Guidelines for a Just Transition towards Environmentally Sustainable Economies and Societies for All, which recognizes the link between collective bargaining and just transition, namely that social dialogue, including collective bargaining, can be an important vehicle to implement just transition at the workplace level (ILO 2015). To this end, the Guidelines state that social partners2 should:  promote the inclusion of specific environmental provisions through collective bargaintive bargaining, can be an important vehicle to implement just transition at the workplace level (ILO 2015). To this end, the Guidelines state that social partners2 should:  promote the inclusion of specific environmental provisions through collective bargaining and collective agreements at all levels, where appropriate, as a concrete way of facilitating cooperation between employers’ and workers’ organizations and encouraging enterprises to comply with environmental regulations, including but not limited to emission reductions, to meet enterprise objectives regarding sustainability and develop the training of workers and managers. (ILO 2015, para. 18(d)). This study is also a follow-up to the Conclusions concerning a just transition towards environmentally sustainable economies and societies for all, adopted in a resolution by the International Labour Conference in 2023. The Conclusions describe just transition as “the promotion of environmentally sustainable economies in a way that is inclusive, by creating decent work opportunities, reducing inequality and by leaving no one behind” (ILO 2023a, para. 11). They also emphasize that “[u]rgent action to advance just transition is an imperative to achieving social justice, decent work and poverty eradication, and to tackling environmental and climate change. The future of economies, societies, jobs and livelihoods is at stake as they depend on the planet’s ecosystems and natural environments” (ILO 2023a, para. 1). In addition, the Conclusions state that governments in consultation with the most representative employers’ and workers’ organizations should “actively promote freedom of association and inclusive and effective social dialogue, including collective bargaining and tripartite cooperation, at all levels to forge social consensus for ambitious policies and measures for a just transition” (ILO 2023a, para. 21(q)), and that employers’ and workers’ organizations should “effectively engage in social dialogue in all its forms, including collective bargaining, to share the benefits of technological progress, green transition and demographic changes and advance just transition and decent work at enterprise, sectoral

ployers’ and workers’ organizations should “effectively engage in social dialogue in all its forms, including collective bargaining, to share the benefits of technological progress, green transition and demographic changes and advance just transition and decent work at enterprise, sectoral and national levels” (ILO 2023a, para. 22(a)). 1 To ensure a better understanding of the relevance and adequacy of the just transition clauses, an ILO internal technical advisory committee was established and consulted on the project and methodology. It was composed of the ILO Action Programme on Just Transition, the Bureau for Employers’ Activities, the Bureau for Workers’ Activities, and the Inclusive Labour Markets, Wages and Working Conditions Branch. 2 The term “social partners” refers to employers’ and workers’ organizations.07 ILO Working Paper 145 A 2024 United Nations Framework Convention on Climate Change (UNFCCC) decision on the "United Arab Emirates just transition work programme", also highlights the essential role of social dialogue in advancing a just transition. The decision states that the work programme in question shall include: "Just transition of the workforce and the creation of decent work and quality jobs in accordance with nationally defined development priorities, including through social dialogue, social protection and the recognition of labour rights" (UNFCCC 2024, 31). During the 28th session of the United Nations Climate Change Conference (COP28) in 2023, the ILO and the European Commission demonstrated their commitment to the need for social dialogue in just transition by hosting a Just Transition pavilion together with the International Organisation of Employers (IOE), the International Trade Union Confederation (ITUC) and the UNFCCC, and also organized a high-level discussion that highlighted the nexus between climate change and action, gender equality, inclusion and the world of work. The concept of a just transition has been increasingly receiving significant attention from trade unions (IndustriALL 2022b; Thomas 2021; ITUC 2022a) and employers’ organizations (IOE 2022), as well as governments, international organizations and academics. This being so, this study exThe concept of a just transition has been increasingly receiving significant attention from trade unions (IndustriALL 2022b; Thomas 2021; ITUC 2022a) and employers’ organizations (IOE 2022), as well as governments, international organizations and academics. This being so, this study explores the literature around innovative practices in collective bargaining aimed at promoting a just transition in the world of work. It reviews debates on the inclusion of just transition clauses in collective agreements, focusing on their impact and controversies. An analysis of the ILO’s database of 512 collective agreements3 provides also insights into the presence and scope of just transition clauses in such agreements, and to deepen the understanding, six case studies were developed, analysing specific agreements beyond the ILO database. These case studies highlight the opportunities, challenges and rationale for negotiating just transition clauses, along with the processes and results identified by the parties involved. Together, the review, the database analysis, and the case studies contribute to understanding how collective bargaining can support a just transition, emphasizing both best practices and areas for improvement. This working paper provides a basis for discussion, further debate and research on the role of collective bargaining for just transition. 3 For details regarding ILO’s database of collective agreements please consult Appendix V. Coding and textual analysis of collective agreements, in: ILO, Social Dialogue Report 2022: Collective Bargaining for an Inclusive, Sustainable and Resilient Recovery, 2022.08 ILO Working Paper 145 X 1 Literature review

This literature review of the role of collective bargaining in the development of just transition sets out some of the key areas that have been explored to date. Although extensive literature searches in all regions were carried out, most of the literature identified and examined originated in Europe and North America, with a few contributions from Asia, South America and Africa. 1.1 Key topics on just transition in collective agreements To date, much of the literature has focused on the more general principles of just transition and how they might be embedded in different settings, including under the scope of social dialogue

ed in Europe and North America, with a few contributions from Asia, South America and Africa. 1.1 Key topics on just transition in collective agreements To date, much of the literature has focused on the more general principles of just transition and how they might be embedded in different settings, including under the scope of social dialogue in general. The examination of just transition within collective agreements – as an outcome of collective bargaining – has received considerably less attention. Nevertheless, there are useful databases4 that document what are described as “green clauses” within collective agreements. Studies that have analysed the content of collective agreements and green clauses or just transition clauses have found a wide degree of heterogeneity with regard to the topics covered (Markey and McIvor 2019; Goods 2017; Bugada et al. 2020; Chacartegui Jávega and Canalda Criado 2021). The most salient topics in the just transition clauses were: ● green pilot projects; ● training and education on just transition; ● employee green code of conduct/compliance; ● protection from extreme weather conditions; ● environmental reporting/measuring; ● recycling initiatives; ● providing financial incentives to workers to use public transport; ● whistle-blower protection in the context of environmental issues; ● right to refuse work in the event that workers deem the work to be dangerous for the environment (for example, pollution or biohazards); ● green reinvestment; and ● green procurement. Specific topics on representation and consultation of workers under the scope of environmental issues included: ● establishment and operation of workplace environmental committees; ● regional/national environment committees; ● rights and obligations of representatives of environmental committees; ● environmental consultation/information sharing; and 4 See, for example, the Green Initiatives database (Perry 2022).09 ILO Working Paper 145 ● commitment between social partners to environmental improvement. Topics such as skills, worker consultation, social dialogue and trade union representation are key areas that appear in collective agreements and are central principles that can help facilitate just transition. Another emerging topic within collective agreements is the adaptation of work practices within

● commitment between social partners to environmental improvement. Topics such as skills, worker consultation, social dialogue and trade union representation are key areas that appear in collective agreements and are central principles that can help facilitate just transition. Another emerging topic within collective agreements is the adaptation of work practices within the context of climate change, such as extreme heat, and how this may be managed (Newman and Humphrys 2020). In the past, extreme heat was primarily a concern in areas such as South and South-East Asia, Australia and Oceania, Sub-Saharan Africa and parts of South America, but now other areas, such as North Africa, Southern Europe and North America, are increasingly concerned as well. The 2024 ILO reports Ensuring Safety and Health at Work in a Changing Climate and Heat at Work: Implications for Safety and Health include several examples of collective agreements that have resulted in improved occupational safety and health protection for workers in various industries in a changing climate, including in relation to heat-related risks in the workplace. Examples along these lines mentioned in the reports include the general collective agreement for the construction sector in Spain and the national collective agreement for the construction sector and related industries in Greece, as well as a collective agreement in the shipping company UPS. The reports also refer to collective agreements that deal with extreme weather conditions, such as a regional collective agreement in the Vaud Canton of Switzerland to protect construction workers from snow, heavy rain or extreme cold. Another example is a collective agreement in Spain that aims at protecting firefighters’ exposure to carcinogens during wildfires. At the sector level, the fossil fuel extraction and energy sectors have garnered the majority of research attention, but other industries have also emerged as key areas of focus for collective bargaining and just transition initiatives, such as: ● manufacturing – particularly automotive manufacturing (IndustriALL and Just Transition Centre 2021; Galgóczi 2019); ● construction (Clarke and Sahin-Dikmen 2020; Calvert 2023); ● food production (Blattner 2020; IUF 2022); and ● transportation (Maritime Just Transition Task Force 2022; ITF 2022).

● construction (Clarke and Sahin-Dikmen 2020; Calvert 2023); ● food production (Blattner 2020; IUF 2022); and ● transportation (Maritime Just Transition Task Force 2022; ITF 2022). 1.2 Level of collective agreements Overwhelmingly, the literature cited above underscores that collective agreements in support of just transition happen at the enterprise or sectoral level. Nevertheless, there is evidence that collective agreements in support of just transition also occur at the national level (Johansson 2023; ETUC 2021; Bugada et al. 2020; IndustriALL 2022a). Similarly, there are emerging joint initiatives between social partners at the international level to introduce just transition principles. For example, in 2021 the International Chamber of Shipping, the International Transport Workers’ Federation, the United Nations Global Compact, the ILO and the International Maritime Organization created the Maritime Just Transition Taskforce during COP 26. In November 2022, the Taskforce published a report detailing how a just transition for maritime workers could be secured (Maritime Just Transition Task Force 2022). According to the Taskforce report, it is central for a just transition to develop consensus around decarbonization through social dialogue. Once consensus is reached, the focus needs to shift to recruitment, labour force attrition, and the skills and training required to decarbonize the shipping industry.10 ILO Working Paper 145 This strong and growing focus on skills and just transition is also reflected in collective agreements at the national level – for example, in 2022 a collective agreement in Sweden on skills related to just transition was signed by the Confederation of Swedish Enterprise, the Council for Negotiation and Cooperation and the Swedish Trade Union Confederation. The agreement provides “individuals who are employed or in-between jobs the right to financial support for shorter or longer training courses to develop their skills” (IndustriALL 2022a). Financial support from the Swedish Government provides significant replacement wages for current workers while they

vides “individuals who are employed or in-between jobs the right to financial support for shorter or longer training courses to develop their skills” (IndustriALL 2022a). Financial support from the Swedish Government provides significant replacement wages for current workers while they upskill or retrain for jobs in the green economy. This reflects both a recognition of, and response to, the significant upskilling and reskilling needed to meet the climate transformation, and shows that skill development is an essential part of just transition agreements. National and international agreements can also support collective agreements at the sectoral or enterprise level (Olsen 2010; Stevis and Felli 2015). However, the legality and enforceability of agreements at the transnational and international level is seen as a limitation (Fichter and McCallum 2015). While there is significant evidence of clauses and collective agreements supporting just transition in different regions and across different settings, evidence concerning the degree of coverage of these agreements is limited. 1.3 Linkages between collective bargaining and just transition X ILO fundamental Conventions on freedom of association and the right to collective bargaining Freedom of association and the effective recognition of the right to collective bargaining are prerequisites for any form of social dialogue. The Freedom of Association and Protection of the Right to Organise Convention, 1948 (No. 87), requires that “workers and employers, without distinction whatsoever shall have the right to establish and … to join organisations of their own choosing without previous authorisation” (Article 2). The Right to Organise and Collective Bargaining Convention, 1949 (No. 98), obliges Member States “to encourage and promote the full development and utilisation of machinery for voluntary negotiation between employers or employers’ organisations and workers’ organisations, with a view to the regulation of terms and conditions of employment by means of

collective agreements” (Article 4). The ILO supervisory bodies regularly emphasize the essential role of Conventions Nos 87 and 98 in enabling mature industrial relations and fostering social justice. By 2024, Convention No. 87 has been ratified by 158 Member States, and Convention No. 98 has been ratified by 168 Member States.

Note: For more on the implementation of Conventions Nos 87 and 98, see the database of the Committee on Freedom of Association (CFA).

The link created between collective agreements and just transition provides an important regulatory space for environmental and social justice issues to be interlinked (ILO 2022b; Bosch 2023). Just transition challenges are particularly significant in industries where the impact on the climate is most immediate, that is, among industries that have the largest carbon emissions. Thus, many countries with significant coal or coal-fired power industries have received the greatest attention in the literature, such as Australia (Snell 2018), China (Wang and Lo 2022), Germany (Kalt 2021; Reitzenstein, Schulz and Heilmann 2020), South Africa (Kalt 2022), Spain (Sanz-Hernández et al. 2020) and the United States of America (Hess, McKane and Belletto 2021). This is perhaps unsurprising given two interconnected factors. First, coal and coal-fired power generation are at11 ILO Working Paper 145 the centre of just transition discussions and policy due to climate action and technological shifts – primarily towards renewable energy. Second, the coal and energy sectors present a relatively higher unionization rate in some countries, and are therefore more likely to see collective bargaining between employers and trade unions. To varying degrees, collective agreements have contributed to each of the transitions already undertaken or currently in progress. As will be seen in section 3.1.1 below, Germany is commonly cited as an interesting example when it comes to collective bargaining contributing to a successful just transition. In Australia, however, collective bargaining and agreements on just transition are less common. The most

contributed to each of the transitions already undertaken or currently in progress. As will be seen in section 3.1.1 below, Germany is commonly cited as an interesting example when it comes to collective bargaining contributing to a successful just transition. In Australia, however, collective bargaining and agreements on just transition are less common. The most important factor for this is a traditio