June Issue

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Focus of the Month:

​​​​​Switzerland’s Unions Must Become More Transparent

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Other highlights:

The Potential of Switzerland’s Free Trade Network

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​Promoting an Effective Swiss Climate Policy

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Switzerland’s Unions Must Become More Transparent

Increasing politicization means era of opacity must end

by Haig Simonian, our external editor

By European standards, Switzerland’s trade unions are a pretty mild bunch. Germany’s train drivers are threatening (yet another) strike; Italy’s trade unionists are almost permanently grumpy; and the less said about France’s often disgruntled leftist unions the better.

But there’s more to the superficial docility of Switzerland’s organized labor movement than meets the eye. Against a background of mounting transparency, disclosure about party financing and spiraling corporate reporting standards, union financing remains murky.

The opacity is all the more striking given unions’ ever louder voice in recent critical political decisions. Concerns among organized labor about greater risks of wage dumping was central to the collapse of Switzerland’s years long talks with the European Union about a new Framework Treaty on bilateral relations. And the unions have been similarly inflexible on any further liberalization of the domestic labor market.

An ‘unholy alliance’ of left and right wing conservatives

The unions’ influence comes through their close association with Switzerland’s Social Democartic Party (SP). Being one of the most leftist socialist parties in Europe, SP politicians toed the union line loyally on opposing any greater flexibility for short term European Union workers in Switzerland during the vexed talks on the Framework Treaty. The result? An incongruous marriage of convenience between the left and the nationalconservative (and sovereignty focused) Swiss People’s Party to give up the Framework Agreement after seven long years of talks.

“There’s no publicly accessible disclosure of the annual accounts of the Swiss Union Federation, the unions’ umbrella body”, wrote Avenir Suisse Director Peter Grünenfelder in a recent guest article for the Handeslzeitung business newspaper.

“The annual report of Travail Suisse (another employees’ umbrella body) is richly illustrated, but reveals no information about financial flows. Meanwhile, the ever more radical Unia (Switzerland’s biggest trade union) discloses fat income of CHF 143 million for 2019, but leaves the reader in the dark about any details of its sources of income”, criticizes Peter Grünenfelder of Avenir Suisse.

The opacity of union accounting is all the more striking given the fact that some proportion of their funds derives, directly or indirectly, from the public sector, i.e. from tax payers. The concept of “social partnership” comprising unions, government and private business – popular in Germany, Switzerland and Austria, but relatively unfamiliar in the English speaking world – involves, among other things, setting minimum wage and working condition agreements for different sectors of the economy.

Apart from generous funding for their regular operations, the joint committees of workers’ and employers’ representatives that hammer out these rules also receive money for training and other purposes.

“At least CHF 55 million are paid out to the social partners without there – for outsiders – being any explicable service in return”, wrote the Neue Zürcher Zeitung in a recent investigative article. State funding for the unions also includes direct payments from the public purse for certain other functions, but remains extremely vague regarding the details.

Construction a case in point

Take the regular checks at building sites to ensure there are no foreign carpenters, masons or electricians earning less than the agreed Swiss tariff. Such employees are not uncommon in the trade, especially at sites relatively close to Switzerland’s borders with France, Germany, Austria or Italy.

Further direct or indirect payments may arise at cantonal or local level – though here too the details remain extremely vague.

Unia, with its 180,000 members in the industrial, craft, construction and services sectors, at least reveals that the overwhelming share of its income goes on paying its 1,200 functionaries. By contrast, direct services to members account for just 6 percent of revenues.

No one is suggesting curbing union powers, or in any way constraining the legitimate rights of individual workers to organize collectively. But if the unions are increasingly going to play politics, it is only appropriate the public should know more about their finances, especially in a country like Switzerland, with its direct democracy, where everyone has a right to know and have a say.

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Avenir Suisse is the leading Swiss think tank which promotes open-market ideas in economics, politics and society at large. Although continuing to publish on Switzerland’s domestic politics, the think tank aims to address Switzerland’s growing importance in the international community and global economy. Avenir Suisse’s English-language monthly newsletter aims to reunite people and institutions interested in obtaining regular valuable insights on Switzerland, useful in international discussions and as a source of comparisons.

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