Finally, Table 2.3 also shows that collective agreements can be applied retroactively, i.e. before the date of their signature, in order to ensure the continuation of rights and obligations in the event of a late extension. Most OECD countries leave it to the social partners to decide on the payment of arrears. In some cases, retroactive effect applies to all companies and workers, including those that apply to administrative extensions (or their functional equivalent). This happens, for example, to varying degrees in Belgium, Italy and Spain. The inclusion of companies subject to extensions contributes to the retroactivity of the agreement harmonising the conditions of competition (and this is in line with the spirit of sectoral negotiations and the logic behind the extensions, as argued by Hijzen, Martins and Parlevliet (2019). Retroactivity is not expected to have a significant economic impact in normal times, as extensions are expected. However, in the event of a liquidity shortage, it can become a heavy burden on businesses by forcing them to pay considerable arrears in a relatively short period of time. Hijzen and Martins (2016) suggest that the negative effects of extensions in Portugal before the 2012 reform on employment were probably due to the burden of the payment of arrears by low-payment companies.  Fougère, D., E. Gautier and S. Roux (2018), “Wage floor rigidity in industry-level agreements: Evidence from France,” Labour Economics, pp. 55, pp.
72-97, dx.doi.org/10.1016/j.labeco.2018.09.001. The SEC will set minimum conditions for the sector. Enterprise-based collective agreements should follow and improve according to sectoral conditions. The SEC can also negotiate other issues in the sector, such as pensions, apprenticeship places, the abolition of zero-hour contracts and others. Minimum wage rates, travel expenses, special rates for certain jobs, increased rates for overtime, antisocial hours, night work, etc., will be matters of the SEC. ← 27. The exemption is subject to the conclusion of a company agreement with a trade union. While in the United States, extensive negotiations can take place – and sometimes do occur – current labor laws emphasize company-based negotiations, where unions negotiate with individual employers on behalf of a group of workers in a permanent establishment. For example, a union could negotiate with a supermarket chain on behalf of workers in a particular store or with a building engineering firm on behalf of janitors in a given building.
In the context of sectoral collective bargaining, collective agreements apply to each food distributor or janitor in the region. In 2018, around 82 million workers were members of trade unions in OECD countries and around 160 million were covered by collective agreements concluded either at national, regional, sectoral or company level. Union density, the proportion of unionized workers, varies considerably across OECD countries, ranging from 4.7% in Estonia to 91% in Iceland in 2018. ← 41. In the Netherlands, for example, derogations will be used with the stated aim of not jeopardising aid currently favourable to the extension of sectoral agreements. The description of the functioning of collective bargaining systems in OECD countries, presented in this chapter, is mainly based on information from responses to detailed policy questionnaires sent in 2016 to ministries of labour, employers` organisations and trade unions (and partially updated at the end of 2018). The information provided in the chapter (unless otherwise indicated) constitutes the situation in 2018. The focus is on collective bargaining practices in the private sector. In the case of institutional differences between sectors, the answers focus on what is applicable in the agreement that applies to the manufacturing sector (in case of differences in manufacturing for metallurgists). .