The Social Partnership

Even if, internationally, Austria is not considered to be a special case, there is still widespread agreement on the fact that cooperation and the coordination of interests between the federations is one of this country’s distinctive features. The common definition for this type of cooperation is “social partnership”.

The federations and chambers work in close contact with one or other of the two political parties, the Austrian People’s Party or the Social Democratic Party of Austria. The considerable economic growth and rise in employment and wages during the 1950s and 1960s created a favourable basis for the exchange of economic and socio-political interests. All this contributed to the wide-spread establishment of the Austrian system of social partnership in the 1960s. If the 1970s could be regarded as its heyday, the 1990s, in particular, have witnessed a change in this system’s significance.

Social partnership is neither anchored in the Austrian constitution nor laid down in any specific act. It is rooted in the free will of the players concerned. To a large extent, it is implemented informally and confidentially and is not normally accessible to the general public.

The umbrella federations of the social partners wield great influence as regards political opinion-forming and decision-making. Their co-operation has thus often been criticised as a “secondary government”, although the political omnicompetence often attributed to the social partners has, in fact, never existed as such. The co-operation and coordination of interests among the associations and with the government have only ever applied to specific fields of politics, such as income policies and certain aspects of economic and social policies, (e.g. industrial safety regulations, agrarian market legislation, labour market policies and principles of equal treatment). In these areas, during the past decades the social partners have substantially contributed to Austria’s economic, social and political stability – evidence of which can be found in economic growth, in the rise of employment, in the expansion of the welfare state and also in the often quoted “social peace”.

Several avenues for political decision-making are open to the large national federations. A traditionally used channel is their close relationship with one or the other of the long-standing government parties, i.e. the Social Democratic Party or the Austrian People’s Party. In addition, the federations are incorporated, both formally and informally, into the political opinion-forming process of the relevant ministries, as evidenced by their participation in a number of committees, advisory boards and commissions. Even at the parliamentary level, involvement of experts from the federations and chambers is a normal practice.

Austria’s accession to the European Union has expanded the federations’ scope in that they not only have privileged access to relevant information and documentation. Of even greater importance are their possibilities for influencing the Austrian position in proposing EU legislation. All in all, by comparison with many other countries, this means that the large national federations in Austria have excellent possibilities for shaping the policies relating to their interests. However, social partnership in the true sense of the word goes beyond this: its core task consists of the balancing of opposing interests in the aforementioned political fields through contextual compromises among federations or between the federations and the government.

Since the 1980s, economic, social and political changes have become apparent in Austria, too. Evidence of this lies in reduced economic growth, rising budgetary deficits, increasing competition and unemployment, and an expanding rivalry between the political parties. Against this backdrop, it has not only become more difficult for the federations to align the different interests of their members to a common denominator: reduced turnout in elections to the chambers and the general calling into question of compulsory membership are symptoms of change. In addition, it is not only becoming increasingly difficult, but also rarer, to strike a balance between the federations’ interests. Well-known institutions, such as the Paritätische Kommission für Lohn- und Preisfragen (Parity Commission for Wages and Prices), which – particularly in the comments of foreign observers – has been widely recognised as a central institution of the Austrian social partnership, have lost some of their significance.

The changes are mainly manifest in the re-weighting of the influence of the players involved in the political decision-making process; the government has gained formative power and influence. In important budgetary, economic and socio-political questions it decides both the procedure and the core contents. Austria’s accession to the European Union has reinforced this development. At the same time, however, EU membership also entails a loss of terrain for the federations. Decisions on topics such as agricultural, competition and monetary policies are decided at EU level. Here, the influence of the federations is essentially limited to formulating the Austrian position, which is just one out of 28.

All this does not currently mean that the system of social partnership has come to an end. There are also visible signs of continuity. The privileged position of the national federations remains unchanged. In the political decision-making process a balance of interests can still be achieved. However, the influence has lessened. Not the end, but certainly changes and reforms of the social partnership, are currently on the agenda.