Social dialogue in micro and small companies in Europe

Micro and small companies constitute the backbone of private business in Europe, accounting for nearly 99% of all enterprises, more than half of total employment in the private sector and an even greater proportion of new jobs.

Despite their crucial place in the economy, there has been little research on micro and small companies, particularly in terms of the implementation of fundamental workers’ rights – such as health and safety at work – and the positive role of social dialogue in striving for good working conditions and industrial relations. 

Given this knowledge gap, Eurofound undertook a research project aimed at investigating industrial relations and social dialogue in micro and small companies.

The findings reveal that while the majority of EU countries (22 out of 28) have established regulations on workplace interest representation and formal structures of social dialogue that also include micro and small companies, the incidence of formal social dialogue structures in companies with fewer than 50 employees is generally low, albeit with significant variations between countries. national regulations in 5 out of 28 countries exclude legally stipulated formalised forms of social dialogue in micro companies. 

A key finding of the report is that social dialogue in small companies is heavily influenced by the national frameworks, cultures and traditions of industrial relations, and also reflects general conditions, such as membership of employers’ and trade union organisations or professional bodies that operate at territorial level. Furthermore, the local organisation of interests and collective practices proves to be a crucial external factor for good practice in social dialogue.

With regard to more recent regulatory changes, the report identifies contradictory trends. While two countries have lowered the thresholds for employee representation, especially on occupational safety and health (OSH) issues, two others have moved in the opposite direction. In three countries, the social partners have extended the scope of territorial- level OSH workers’ representation. There are contrasting policies regarding regulatory changes: some countries seek to lift administrative and other burdens from micro and small companies, while others aim to increase the coverage of micro and small companies by structures of social dialogue and collective representation.

The research was based on various information sources, including a review of Eurofound’s earlier research and other literature on the topic, a comparative evaluation of contributions from 28 national correspondents and 10 case studies of good practice in micro and small companies in five countries.